Strong form of differentiation #2: Reduce risk to your client.
Remember that weak forms of differentiation are claims that almost any of your competitors can credibly make. “We have a great process.” “We have a great team.” That kind of thing…
If you actually can reduce risk to your client, that really does set you apart from your competition and I encourage you to make sure your marketing reflects this differentiator.
Let’s talk about the types of risk you might be able to reduce. (I’m not a project management expert. I just want to give you some ideas for how you might use risk reduction as a strong differentiator in your marketing.)
Failure: I’m constantly astonished every time I search around for the latest stats on failure rates for IT projects. It’s bad and it never seems to get better from decade to decade.
The failure baseline seems to be: around 1/3rd of IT projects succeed, the rest go dramatically over time and over budget at a cost to the US economy of $50-$150 billion/year. Somewhere around 75% of IT projects are expected to fail.
I’ve seen this from the inside. I was once part of a $1MM project where the client pulled the plug $800k into it because they lost confidence in the team I was part of. Ouch.
Are you able to reduce the risk that the project will fail?
Low performance: The Apple iOS App Store is littered with apps that shipped, work basically OK, but perform extremely poorly from a business perspective. In fact, every software project runs the risk of shipping, meeting spec, but failing to achieve the desired business outcome. That’s the risk of low performance.
Are you able to reduce the risk that the project will perform poorly from a business results perspective?
Low morale: This is a bit unconventional, but I consider morale a big potential risk. Keeping morale up during a lengthy project is a way to lower risk. Can you lower this type of risk?
I’m going to throw out some ideas about how you might reduce the risks above. Some of these might apply to you right now, some might not, and some might be capabilities that you can develop over time:
- Better project management
- Better ability to say no to bad ideas or persuade client to avoid risky decisions
- More relevant experience in your client’s market vertical or a specialized problem domain (helps you spot trouble sooner, etc.)
- Better research, design, or testing capability
- Better communication
- Elastic capacity to handle changing project demands
- Better attitude in dealing with your clients (not kidding about this one)
Those are just a few of the things you might do to reduce risk for your clients.
You’ll notice that some of them overlap with the weak differentiators I called out earlier in this series. That’s because weak differentiators tend to focus on inputs (your “great team”, for example) rather than outcomes. The inputs are all about you. The outcomes are all about your clients. The more you can keep your marketing anchored in your client’s world (their needs, their problems, their language, their worldview), the more effective it will be.
That brings up my last point: when talking about risk in your marketing, keep the language focused on outcomes and your client’s world. Or at least fame the conversation by focusing on your client’s needs before you start explaining the inputs you use to reduce risk.
Finally, if you really can reduce risk, how can you prove that to your prospective clients? Can you cite a project success rate? A percentage of on-time, on-budget projects? If you can, or if with some legwork you could, then do that. It’s one thing to make a claim, but it’s entirely more persuasive to back it up with numbers.
I said that “The more you can keep your marketing anchored in your client’s world (their needs, their problems, their language, their worldview), the more effective it will be.” This only works if you’re very clear about exactly who your clients are. Get help with that clarity here: http://thepositioningmanual.com.
Tomorrow I’ll dive into the “easier to work with” strong differentiator,