[Guest Blog] What differentiates your product from the competition?
If you sell a similar product or service to that of another company, what is it that makes yours stand out? In other words, if the functionality is the same, why should anyone buy yours? In short, what is your or your product’s unique selling point, or USP? Here are some suggestions.
Price is a big factor in education, for obvious reasons. Unfortunately, the price is more prominent than the possible true cost.
To take a very simple example, let’s say there are two products, which we will call, imaginatively, Product A and Product B. Product A is priced at £100, and Product B is priced at £50. These products are exactly the same as each other in terms of what they do.
However, the price of Product A includes a training session for the whole staff and a lifetime guarantee. Product B comes with a getting started guide and the option to buy an extended warranty.
On the face of it, Product A is more cost-effective in the long run (unless it’s so simple to use that training is unnecessary, and you don’t need an extended guarantee of any kind). But in my experience, it’s very hard to convince the people who hold the purse strings that Product B is likely to come with hidden costs, in the form of technical support. A quick back-of-the-envelope calculation suggests that an hour of an IT technician’s time is around £27 (including on-costs). Clearly, after two hours’-worth of training or technical support, Product B is more expensive than Product A in real terms.
One way around this is to focus on the pricing model instead.
Consider how you structure the price of your product or service. Pricing per user may appear attractive at first, especially if the price is low. However, a price of, say, £1 per pupil per annum starts to look expensive once the size of the school and the cost of its other products or services are taken into account.
Some companies price according to whether a school is primary or secondary, while others price in tranches.
I came across a company recently that has just two prices: free, for a limited feature set, and a one-off cost for the works.
Another option, of course, is to have a basic price with various add-on services that the school can purchase as necessary. This is usually more attractive than a one-price-fits-all approach, but be careful: if there are too many options and variations it can be hard for the (potential) customer to figure out which one is best for their needs. (As an example of this, in other industry, take a look at the numerous subscription options and deals offered by newspapers and magazines. It can sometimes take an inordinate amount of time to work out, with the aid of a spreadsheet, which “deal” is the least expensive in the long run!)
If you’re unable to compete on price, which is often the case in a market where there are lots of similar products, perhaps you can compete on service instead. For example, some companies will send you continual updates about where your product is, or what’s happening. On one occasion, I had to take my Macbook laptop to a local shop for repair. Cue a stream of text messages: “Your laptop has been sent to our workshop”; “Your laptop has been received by our workshop”; “Our engineers have now started testing your laptop, and so on. In all, the repair took around a week, and I didn’t spend a moment wondering where the laptop was or what, if anything, was being done to repair it.
A variation of the service approach is to link it to price. For example, the standard price enables a customer to obtain technical support by email, whereas the premium price gets them support via live chat (with a person rather than a bot).
One thing you could do is throw everything except the kitchen sink into the technical features of a product. For some educational institutions, this will be just the ticket, especially if it is seen as a form of future-proofing, whereby more features can be implemented as the need arises.
A variation of this is to incorporate the idea into your pricing structure. Most mailing list companies do this sort of thing. For a particular price you can email up to, say, 5000 users; for a bit more you can still email only 5,000 users, but you also benefit from features like segmentation or more detailed reports.
Sometimes the value of your product to the customer is about more than the price or the technical specifications. I once recommended an interactive whiteboard that wasn’t as fully featured as a rival product but had a very active teachers’ forum where ideas and lesson materials could be exchanged. That brings us back to the concept of hidden costs. What teachers miss out on in terms of features in my recommended product, they gain from access to free lesson ideas and resources that other teachers have created. Thus, if you have a large and active user base that can be a great selling point in itself.
Make it easy to change to your product
To some extent, the education market is “sticky”: once a school buys into a product or service it’s a lot of hassle to change. If this is the situation you’re facing, that is trying to break into an established market, consider making the transition easy. For example, transfer of data from the established product to yours, or training centred on the similarities and differences in the way the established product and yours works.