Differentiation is about using customer feedback to forecast, envisage and expect customers’ needs and wants. You can do this better than your competition because you have dialogue and feedback that they do not.
You need to see the company from the customer’s viewpoint, seeing it from their angle, customers are not concerned about their value to the business, they just want to have their problems solved – they are looking for solutions.
When differentiating customers by their needs, the term needs encompasses their wants, what they prefer and would like, needs and wants are not differentiated from each other. What a customer needs is the motivating energy behind customer behavior.
Business need to understand that product benefits and features are not the same as needs. Customers will want, need and request certain benefits and features from products but they are focused on the product not the customer. Needs on the other hand are customer based and focused. Many different individual consumers will purchase identical products in order to fulfill separate needs.
Customers need to be placed in to different categories and grouped based on their needs. It would cost companies too much money to treat each distinct customer in a different way; businesses are capable through mass customization which is the modular production of an offering to produce a custom output. Mass Customization is the customization and personalization of products and services for individual customers at a mass production price, thus making it efficient and cost effective.