Differentiating: Your Black Jellybean
Introduction
You have three types of competitors: direct, indirect and apathy. The latter two can be overcome with great copywriting and irresistible offers, whereas often the former can be eliminated completely.
For example, a financial planner has direct competition from other financial planners, indirect competition from “do-it-yourself” investors or property investment and, of course, the option to do nothing other than to spend all income on lifestyle.
However, you only have a direct competitor as long as your product or service (hereafter I’ll refer to both a “product” and a “service” as “product”) is either the same as others or perceived to be the same. This is referred to as a “commodity” product.
Please note that having a commodity product is not the end of the world. There are plenty of examples where a company has won the battle for market share with products that were similar to others. Thinks Coke versus Pepsi. In these cases it’s mostly the marketing, including distribution, that made the difference.
To further illustrate the importance of effective marketing, there are even more examples of world-beating products that died because of poor marketing, as well as examples of inferior products beating superior ones. Think MacDonalds versus your local gourment burger shop. However, whilst it’s true that having a commodity product is not the kiss of death, it’s equally true that all of your marketing becomes easier and more effective when your product is desirably different from others.
And that’s where the Black Jellybean comes in: If there is a bowl of jellybeans on a counter, I’ll be the guy picking out the black ones. It’s the aniseed that I like. And in the ad hoc surveys I’ve done, about 30% of the population love Black Jellybeans and most of the rest will avoid them like the plague.
A Black Jellybean product is one which has stong appeal to your Ideal Client (see Article2) but is unattractive, or even repellent, to everyone else. For example, at the 80-20 Center our Ideal Client Profile is: “English speaking business owners who are digitally comfortable and who want an effective, step by step process to create a new client marketing machine.” My Ideal Clients love the efficiency of webinars and video-conferencing and don’t want or need to travel to my office. They appreciate that they are saving time, money and energy by logging into a training or a coaching session a matter of seconds before we are due to start.
I also understand that there are business owners who fit my Ideal Client profile other than being “digitally comfortable”. In other words they want what I’ve got but they need me with them in 3D, which I’m not prepared to do. I prefer to help business owners from my little slice of heaven sitting next to one of the most beautiful beaches in the world, rather than driving, parking, flying, catching taxis etc. No contest.
Much of the rest of this part deals with differentiating product features. If you’re stuck with an existing commodity product or service (e.g. you bought a franchise) and it’s not practical to change, then there’s no need to despair! There are other ways to create competive advantage and still more ways to create a Black Jellybean.
1. Better sales, marketing and distribution systems: offlline, online, testimonials, guarantees, trial offers, free giveaways, bundled offers.
2. Better pricing options: more aggressive pricing, low deposit, spread payment, incremental purchasing (one component at a time).
3. Better packaging: eye-catching stand-out design, appealing logos.
4. More effective team members: smarter recruitment systems that attract the smartest and most motivated employees and contractors and systems to maximise productivity and retention.
5. Better suppliers: faster, more flexible, better back-up, more responsive.
6. Better information systems: financial, customer relations management, key data tracking.
7. More distribution outlets and/or referral centers.
Some people are stuck with a commodity product and others are stuck with the public perception that they are offering the same as their competitors.
For example, the owner of a retail franchise for bread may have competition from an opposition brand just across the road that offers a very similar range of products with similar pricing. In that case the ability to create a variation from the standard range or standard pricing is very likely prohibited under the licence agreement.
It’s similar for some professional service providers. For example many surveys have confirmed that veterinarians are highly regarded and trusted by the general public. The downside of that is that they are mostly perceived to offer a similar level of professional advice and service.
So, if you have either the reality or perception of having a product/service that’s similar to competitors, how do you beat them?
The simplest way is to have vastly better customer service, including complaints procedures. For example, with city-based veterarian clients, my advice has been consistent: equip all team members who have contact with pets and “pet parents” with systems that allow them to quickly know the name of the pet and if possible, their owner. The former is vastly more important than the latter.
Then the training begins. Train staff to greet each pet like a long lost friend. Make a fuss, pat or stroke them (watch your fingers though!) and demonstrate affection so the owner feels that you care.
Will all clients (the humans) respond positively to such a fuss? Nope. But 80% of them will. And that includes 80% of the competitor’s clients who have been treated professionally but have demonstrated an indifference to individual pets.
Similarly, when Bob Ansett started Budget Rental cars in Australia he was competing against giants like Avis, who not only could match Bob’s rental rates but, critically, had the rights to station themselves at every major airport in Australia. Bob built Budget to a $400 million business by implementing the strategy of better customer service.
Clearly, a customer service strategy is a medium to long term strategy that does not deliver immediate market share. You have to wait for customers to both experience being messed around by the competitors who don’t give a toss and experience your own business, that evidences care and concern. But whilst it may not deliver results immediately, if you have a commodity product and you can’t compete on price due to a lack of economies of scale, then you MUST go down the road of superior customer service or some of the other options mentioned above.
Please note that I’m not trying to be all things to all people. At the 80-20 Center I offer only marketing expertise and the management expertise that’s necessary for sustaining the benefits of marketing effectively. We don’t do logistics, supply, planning, I.T., HR etc. We’re the go-to-place if you want to “Get more clients, make more money, have more fun”.
And so, when you combine those two factors: that I’ll only work with “digitally comfortable” clients and that I don’t offer a generalist “one stop shop” approach, a lot of people prefer to go elsewhere. And that’s fine with me, so long as I’m appealing to my Ideal Client.
Bottom line: it’s a big mistake to bend yourself out of shape trying to be all things to all people. You’ll go nuts trying to cover all of the needs in the market place, you’ll dilute your marketing message to the point of blandness, and you’ll spread yourself too thin in regard to product development and value delivery.
Note that it’s a different scenario once you’re dominating a Beachhead (see Article 2). Once you’ve captured enough market share then it’s time to expand either your region, your product range, your Ideal Client Profile or a combination thereof.
Before that happens, stay focussed on getting your marketing working exceedingly well. And if you can’t achieve that then find another Beachhead. Expanding prior to having your systems well sorted will simply magnify and multiply your problems. Biting off more than you can chew means that you’ll end up choking. Like Napoleon marching on Moscow, or Hitler on Stalingrad.
A Strategic View of Differentiation
Have a think about your product and see if you can figure out which market space you’re operating in - which will either be Green, Yellow or Red Space. You can probably see that I’m using the analagy of a traffic light system and, just like on the roads, your business progress is likely to be commensurate with your category i.e. if you are in Red Space then growth is probably at a standstill, if you are in Yellow Space you’re probably slowing down but if you’re in Green Space it’s “go, go, go”.
RED SPACE: SAME
Red Space Characteristics:
Crowded
Supply exceeds demand
Product selling in reducing numbers
No significant product differentiators
Price wars, lower margins, profit squeeze
Red Space Examples:
Most car manufacturers
Most PC manufacturers other than Apple
Most business coaches and consultants
Most milk products
Most pharmacies
Most gyms
Most butchers, newsagents, cafes
Most veterinarians
Most medical centres
YELLOW SPACE: BETTER
Yellow Space Characteristics:
Still very competitive
Margins better but tight
Focus is on being “better” as opposed to “different”
Competes for existing demand
Yellow Space Examples:
Some banks and insurance companies offer easier to use websites or better customer service
Some cafés offer better quality food and drinks than those in Red Space
The mega-big stores offer a bigger range and the perception (often not true) of lower prices
GREEN SPACE STRATEGY: DIFFERENT (BLACK JELLYBEAN)
Green Space Characteristics:
Uncontested market space
Creates /captures new demand
Problem changes from demand to supply
Market niche dominance
Green Space Examples
If you’re in this space you have a product that is entirely different from your competitors. For example when Apple launched the iPhone it was so different that if eliminated direct competitors overnight. Of course anyone could buy a mobile phone from a different brand but those competitors were now indirect. Notwithstanding the fact that Samsung have, at the time of writing, out-Appled Apple with their Galaxy range, the introduction of the iPhone was one of the most pheonomeonally successful product releases since the creation of the first wheel.
Note that it’s not enough to simply be different. To be in Green Space a product must also be desirable. For example Ford Motor Company launched its “Edsel” in 1957 and it was both different in design and technologically advanced - with a "rolling dome" speedometer and a “Teletouch” transmission shifting system in the center of the steering wheel as well as ergonomically designed controls for the driver and self-adjusting brakes.
The Edsel was certainly different. However, after a massive and lengthy pre-launch advertising campaign, the public went to Ford dealerships in the droves. And those droves left again without buying. In short, the Edsel was a flop because, whilst it was different, it was undesirable because people saw it as too big, too weird and too expensive.
Other examples of Green Space products at the time of their launch include:
The “Flip” video camera: the main feature of this camera is that it was featureless, thus making it the simplest and easest camera on the market.
The Model T Ford: When the Model T was launched there were over 500 automobile producers in USA at the time; all making complex luxury high end cars, with lots of leading-edge but complicated engines and suspension, that regularly broke down on the early rough roads. By contrast the Model T was very basic, cheap and durable and came in any colour you liked, so long as it was black. It dominated the marketplace from 1908 through 1927 and, at its peak, every second car on the road in USA was a black Model T Ford.
Clandestino Roasters: When I’m writing and I want to get out of my office I drive past approximately 30 cafes to have coffee at fresh food market “Belmondos”, home to Clandenstino Roasters and café. I order a double shot espresso from their ever-changing menu of freshly roasted beans imported from plantations all over the world that I’ve never heard of (“Mbale?”). Each cup contains a new flavor sensation and comes with full written description of the plantation, it’s owner, the altitude, processing method, means of transportation (one plantation is so remote the beans must be transported out by donkey) and much more. The head barista is so passionate about coffee that he frequently comes over to tell me more about the roasting process used and asks what I think about the espresso I’m sipping. Belmondo has changed what, for most, is a commodity product, into a Green Space product. A cup of coffee at Belmondo is 50 cents more than other cafés and that further reinforces their positioning as being a premium brand.
Quick Beauty House: Originating in Japan, and then expanding to Singapore and Hong Kong, the Quick Beauty House lives up to the promise inherent in its name by offering women “10 minutes Just Cut” haircuts.
They cut the cost of a haircut from an industry average of $36 to $10 by eliminating all time-costing processes such as shampooing, re-washing equipment (they use disposable combs and towels) and reception counter (they use a traffic light system to indicate free chairs and soon-to-be free chairs) but the biggest barrier to entry that they demolished was the time it takes for a haircut: from one hour to ten minutes.
Bikram Yoga: A hybrid of Hatha Yoga but set in a sauna-like room with 40 degrees Celsius (104F) and 40% humidity and 26 postures each performed twice, plus two very weird breathing exercises. The participants may be flexible but the program is not, with each asana being performed at the same part of the sequence every single time. People either love Bikram or hate it, but it’s taken off around the world and is a great example of a Black Jellybean Green Space product that’s eliminated direct competitors.
More general examples include:
bespoke tailors
premium-priced gourmet products
luxury taxi service
a swimming school exclusively for “little people”
fly-fishing for women recovering or suffering from breast cancer
sub-orbital satellite that collects data at 80% less than normal cost
a marine seat for coast guard or similar that reduces the impact of hitting waves at high speed
a gourmet, organic, Greek style yoghurt in a family size pack
Please note the “Black Jellybean” nature of many of the above examples. Most women want to take their time and enjoy their haircut. Most coffee drinkers simply want a decent coffee and won’t pay an extra 50 cents for it. “Flip” alientates anyone who wants more creative control over shooting videos.
How to test your Black Jellybean Idea
In a word: “cheaply”. “Field of Dreams” was a 1989 movie starting Kevin Costner as novice farmer Ray Kinsella who hears a voice that whispers, "If you build it, he will come", and sees a baseball diamond. He then builds the baseball diamond and over time an increasing numbers of ex-baseball players can be seen on the pitch playing. I say “ex” because they are all dead i.e. ghost players.
Some people in business think that if “If I build it, they will come”. This is a BIG mistake. Figure out a way to test the marketing whilst sinking in as little time and money as possible. It may be true if your name is “Apple” or “Nike” and you can sink 50 million into creating the most amazing store in your industry on the planet but I suspect most readers have a more modest budget. Contrast the following true stories.
My entrepreneurial friend Mike O’Hagan had an idea for a smart phone app. He paid a Pakistani web developer to put up a one page website, hired two Filipino tele-marketers to contact prospects in the USA, direct them to the website and see if they could sell the app and obtain credit card details. The response was very positive but note that at this stage the app was not developed! The total investment to test the idea was less than $500. Only once Mike knew that the product would sell, did he develop it.
The second example is with a retired engineer who sank around $500,000 into modernizing a popular 1960’s exercise apparatus. He paid for the design, had various proto-types produced and eventually had container loads manufactured before even selling one item. That business crashed and burned.
I once heard an internationally famous marketer describe big companies who spend millions on advertisements that contain no offer as “dumb, stupid and crazy”. His point was that if you are going to spend that much on advertising it would be better to include a “direct response offer”.
He may be right.However some big brands only have their brand as the significant point of difference. Other than the label a Gucci handbag could easily be mistaken for a Prada handbag and vice versa. Take the label off a pair of Calvin Klein jeans and are they really so different from Diesel? Brand advertising is for big companies who want to stay in Green Space regardless of having a product that at best would otherwise be in Yellow Space.
Key Points
A Black Jellybean product has features that your Ideal Client will love but others may dislike.
If at all possible, create product features that are different from your competitors but still desirable.
You can create an advantage with a commodity product by offering better customer service, packaging, pricing, promotions, distribution etc..
Action Item
List the features and benefits of your product/service and place a tick next to every feature that is unique e.g. “guaranteed 12 hour delivery time”, “100% fresh fruit” etc. Note that you must be specific e.g. “better customer service” is not detailed enough whereas “24/7 support desk access” is much more powerful. You are looking for at least 3 ticks and the more you can add the better.
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