Key Learning Outcomes

  • Understand that your customers are your business’s main priority.
  • Determine what your customers want and why they buy from your business.
  • Identify your products’ and services’ points of difference and assess if they pass the “so what?” test.
  • Obtain some tips for passing the “so what?” test from our scenarios and examples.

Article

Once you have defined your points of difference, it is important to make sure they pass what we call the ‘so what?’ test. Too many businesses can rattle off a list of their points of difference without much thought as to what their customers actually want or why they buy from them.

Theodore Levitt, a world-renowned economist at the Harvard Business School and editor of the Harvard Business Review for many years, is considered one of the founders of modern marketing. In one of his most famous works ‘Marketing Myopia’, Levitt posed the question “what business are you in?” This article, first published in 1960, looks at how businesses and even industries can collapse when they fail to consider the customer as their number one priority. In the article he outlines how the railroad industry was once an economic powerhouse that declined due to the failure to understand the basic need of the customer – transportation. This need for transportation did not decline over time, in fact it grew; however, the industry allowed competitors, such as airlines, to fill this growing need. They allowed other industries to take their customers away as they failed to understand that they were in the business of transportation rather than the railroad business.

One of Levitt’s famous examples that is still quoted in marketing courses today, relates to drill bits. He asks the question, “if you are selling drill bits what is your customer actually buying?” Levitt suggests not the drill bit but the hole that it makes. If you take this further you are not in the ‘hole’ business but if the holes are being used to join things together with screws then your business is the ‘joining business’.[wlm_ismember]

It is important to think about what your customer is actually buying from you and what need you are fulfilling. Too often, we get caught up in the features of what we are selling without thinking enough about why the customer is buying it. It is essential to look at your points of difference to make sure they pass what we call the ‘so what?’ test.

As a first step, write a list of your points of difference. These will be the things about your business you will state if someone asks you the question, “why should I choose to deal with you?” Once you have your list, look at each point individually to see if it passes the ‘so what’ test.

Let’s look at an example of a business that recently won an industry award, which is regarded as a point of difference. This is potentially a great point of difference as no other competitor can use this for as long as the award period lasts.

Scenario 1

Client:

“Why should I choose to deal with you?”

Business:

“Because we have just won the industry’s top business award.”

Client:

“So what?”

Business:

“Well it shows we are the best.”

Client:

“So what?”

From the client’s perspective it is not enough that you have won an award. You have to be able to clearly outline what the benefit is to the client.

Scenario 2

Client:

“Why should I choose to deal with you?”

Business:

“One of the reasons is that we have just won the industry’s top business award. What this means for you as a client is that you can be confident that you are dealing with the industry leader. We were judged not just on our results but on how we conduct every aspect of our business. So when choosing us you know that you are choosing the highest quality of product and service currently available.”

In this second example the business has clearly outlined some benefits to the client. They can be confident that they are dealing with the industry leader, and in addition they have added weight to the argument by mentioning what the award was judged on.

Another example might be when businesses uses technology or systems as a point of difference. As a client, quite often we do not care how the job gets done; we are more interested in the result. Think about when you send a parcel. Do you ask the post office how the parcel is going to get to the recipient, and what systems they will use to guarantee its arrival? Probably not, because what you care about is that it is going to arrive in good condition and on time rather than how it is going to be transported.

Scenario 3

Client:

“Why should I choose to deal with you?”

Business:

“Because we use the latest 5.0 technology.”

Client:

“So what?”

Business:

“None of our competitors have upgraded yet; we are the first to install it.”

Client:

“So what?”

Once again, this might be an excellent point of difference as no competitor is currently using this new technology. However, unless there is a clear benefit to the client they will not see the value.

Scenario 4

Client:

“Why should I choose to deal with you?”

Business:

“We are the only business that can offer you the latest 5.0 technology. The benefit to you as a client is that we are able to process your orders 30% faster than with the older technology. Additionally, when using 5.0 we are able to send you SMS alerts on your order progress which will enable you to communicate more effectively with your customers.”

By adding to the dialogue, you can see that there are now some clear benefits outlined for the client, such as faster order speed and also the SMS alerts allowing for the client to offer their customers a superior level of service.

When using points of difference, you must remember that you need to match your points of difference and dialogue with what is important to the customer. This may vary among your client base. So for example, for one customer, speed of ordering may be the most important thing but for another it may be having the order filled 100% before shipping. If you are not sure about what your clients want, we have several articles that may help in this section of the website.[/wlm_ismember]

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