How To Differentiate Guides

I’ve been interested in the big question of “how to differentiate an accountancy practice” since 1981.(This article was first posted on my Differentiate Your Business blog in July 2011 but I believe it is still very relevant.)

That was when I was in the last year at University studying Economics and Accounting and I started looking for a job as a Chartered Accountant trainee.

At that time the profession was dominated by the Big Eight and Price Waterhouse and Coopers & Lybrand were head-to-head competitors, KPMG were known as Peat Marwick Mitchell, Arthur Andersen were seen as the brash newcomers and Spicer & Pegler (a name I always liked) were just outside the big eight.

I must admit the big ones did seem to be pretty much the same although there were two common preferences amongst my classmates – Peats (because they were the biggest) and Price Waterhouse (because they were the poshest).

Being different, I turned down job offers from both and was one of four to join Neville Russell (now Mazars) in Birmingham in 1981, mainly because they seemed less stuffy because they had a young, female staff partner and because they offered plenty of small business accounts work which for me meant variety and contact with entrepreneurs while still offering the full training support.

I left Neville Russell and the accountancy profession in 1985 with ACA after my name and since then, I’ve been looking at the accounting market with interest as an outsider. At one stage in my consulting and coaching career (since 1995) I thought I’d take advantage of the qualification and branded myself as a chartered accountant, even though I didn’t do accounts and tax because it added credibility to my strategy and financial management services. All it did was cause a lot of confusion and I quickly changed.

“Accountancy Practices Can’t Differentiate Themselves – Accountancy Is A Commodity Service”

If that’s how you think, then you’re right.

You won’t be able to differentiate yourself as an accountant because you won’t make the decisions needed to create a clear position in the market.

There’s no argument that the tangible output of an accountancy assignment – in terms of the set of statutory annual accounts and the various tax returns – are going to look remarkably similar because the formats are prescribed and many of the details will be the same.

The numbers may be very different.

It’s like the old joke of an employer interviewing candidates for the job of company accountant.

To test their skills and professional opinions, he devised an exercise where each accountant had to go away and calculate the profit for the period.

The first went away and came back with the answer, “the profit is £567,387.” The entrepreneur looked at the very detailed calculations and the very conservative assumptions that supported the profit figure and made certain judgements about the candidate.

The second came back quickly and said “profit is around £600k” and presented the entrepreneur with a “back of the fag-packet” calculation with some broad assumptions. This time, the judgement of the entrepreneur was very different.

The third took the bit of paper with the exercise on it and before he stood up, he leant forward and asked “what profit do you want it to be?”

The Big Impact An Accountant Can Have On A Business

You and I know that the impact of one accountant compared to another on a business is much than some calculations,decisions on accounting policies, assumptions and judgements.

The underlying numbers can be affected even more by the advice given by the accountant to the business owner, either directly or indirectly through referrals.

The impact of a good accountant compared to a weaker accountant can be seen in the profit, cash flow and tax paid by the business and in the money that finds its way to the business owner’s personal bank account.

The Professional Accountancy Bodies Are A Commoditising Force On The Profession

It’s inevitable but the role of the professional bodies like the Institute of Chartered Accountants In England & Wales is to keep standards high and that narrows the opportunities for differentiation.

You have to do certain things in a certain way because it’s required. And accountants who don’t are disciplined, fined and even expelled from membership.

This is a grievance for me personally because I have a practising certificate from the ICAEW because I “give financial advice” even though I don’t provide any of the standard services Chartered Accountants do.

The Big Marketing Advantages Accountants Have Which Hinders Differentiation

Accountants have two big advantages which help them to attract clients which other professional service providers don’t have.

1. The output of the accountancy service in terms of accounts and tax computations are required by law and they are too complicated and scary for the vast majority of business owners to do on their own.
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2. The work has to be done every month (PAYE returns), every quarter (VAT) or every year (accounts and tax assessments).

Effectively accountancy is a compulsory purchase and it’s one that business owners have to make each year.

Just like banks, accountants keep clients, even if they are not particularly happy, because of customer inertia. It’s seen as too much trouble to change.

So if all accountants appear to look virtually the same, and the professional bodies keep standards high, the business owner may as well pick one at random – often based on convenience – and if the fees seem reasonable based on the effort of talking to more accounting firms, decide to become a client.

Of course the client doesn’t look at the decision the right way because he or she doesn’t factor in the inertia issue.

The difference between the £1,000 free from accountant A or £1,300 fee from accountant B is only £300 but over ten years, it becomes a £3,000 difference assuming fees don’t change. A 10% increase in fees per year increases the difference significantly.

The Downside Of Client Inertia

If a client thinks that “all accountants are the same” or more negatively, “all accountants are as bad as each other” then there is little incentive to change.

Clients can even test the water by looking in Yellow Pages or taking a look at competing firms websites. Unfortunately what they are likely to see is a lot of the same phrases being used time after time – see Marketing Bingo For Accountants

It’s a case of “better the devil you know”.

And that makes it difficult for an accountant to attract clients which are already established businesses unless the client is extremely unhappy with the incumbent, has a new, special requirement which the existing accountant can’t handle or is being pushed hard by a third party to move to another (often better known) firm of accountants.

So many of the new clients an accountancy firm are start-up businesses who have very little money, are unsure what an accountant does, are unable to tell a good accountant from a bad one and are daunted by the big fees for uncertain value.

And the accountant is unsure of the business start-up. Even if the talk is big, will it succeed and grow into a substantial business which justifies an investment of time and attention?

Differentiating Your Accountancy Practice – Creating A Positive Reason For Choosing You As The Accountant

In contrast, if your accountancy practice is differentiated from competitors, you provide a positive reason for some clients to choose you rather than your competitors, both for start-ups and for established businesses.

Even better, the established businesses may be relatively happy with the service they get from their existing accountants but your differentiated offer of services is strong enough to motivate them to change and to pay a premium price to work with you.

Attracting Some Means Repelling Others – Nobody Buys OK

There are only four levels:

• You can be worse than your competitors – and obviously you don’t want that.
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• You can be the same as your competitors – this is the big problem because many accountants are perceived as the same.
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• You can be better than your competitors – it’s an easy claim to make but much more difficult to prove. You can taste all the different types of tinned tomato soup and eventually decide that Heinz is best but you can’t do it with accountants. You can get testimonials to say something along the lines of “XYZ accountants are much better than our previous accountants and we wish we’d changed years ago” but it’s a very limited comparison.
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• You can be different from your competitors – and communicate those differences to your target market.

But being different is a bit like being a magnet. You attract some clients but repel others.

One of my popular sayings is that “nobody buys OK”. People don’t buy an average product if something better is available in some dimension of customer value.

Accountancy services may be the exception that proves the rule. Many small business owners do buy OK and put up with it year after year because they can’t see that anything better is around.

How To Differentiate Your Accountancy Practice

I use the seven big questions of business success as the basis for thinking about how to differentiate one business from it’s competitors.

These questions are who, what, where, when, how, why and how many and are designed to move attention away from the profit killing question “how much do you charge?”

Can Accountants Differentiate By Who?

The who dimension of differentiation can be applied to:

• Who are your clients? Are they different or special in any way?
• Who are your employees? Are they special in any way?
• Who are your suppliers? Is a supplier unique to you in the local area?
• Who are you and your fellow partners? Are you or can you be a celebrity in some way so that clients feel privileged to have you as their accountants?

It has always struck me that a very easy way for accountants to differentiate their practices is by type of client.

“We provide accounting and tax advice to small manufacturing businesses…” or

“We provide accounting and tax advice to subcontractors…” or

“We provide accounting and tax advice to privately owned retailers…”

I see this kind of differentiation by who regularly in the coaching market and it works very well.

People like dealing with specialists because it makes them feel special. It’s a hit directly in the marketing bullseye.

Of course specialising in one type of client means ignoring or at least discouraging other types of clients.

It significantly weakens your positioning if you cop out and say “we provide accounting and tax advice for independent retailers but if you’re a service business or manufacturer we’d be happy to have you as a client.”

Don’t laugh… it’s the type of think that I’ve seen and it becomes anti-marketing i.e. it actually puts off your target market.

While I think about differentiating by who, I should mention the accounting umbrella organisations (I don’t think I’m supposed to call them networks) like AVN and PROBIZ.

In my opinion they are both positive and negative forces for differentiation. Where membership has geographical restrictions, then being the PROBIZ representative can be helpful because you are the only one. I live close to the West Bromwich Albion football ground which is covered with PROBIZ Tax signs.

But across the membership it is another commoditising force. One PROBIZ accountancy practice offers same products and services as another.

How Accountants Can Differentiate By What

What is the answer to the basic question asked by clients of “what do you get for your money?”

The core services are accounts preparation, tax preparation and tax advice but many other services can be included.

Some accountancy practices have differentiated so much by what that they’ve stopped being general practice accountants and instead are tax specialists or insolvency practitioners which can then create their own sub-specialisms.

Others have taken focus from the differentiation by who and developed specialist services for their niche markets. If you concentrate on retail businesses, you can see how you can develop very focused services based on your unique insights into the problems and issues of the clients.

Claiming to be a specialist means that you’re very knowledgeable about the subject.

Not compared to your clients who know little but to your competitors.

This means that you can make a big mistake in claiming to be a specialist in too many things unless you have the scale of a PWC or KPMG and you really do have a narrow specialist (or department) in just about everything.

If you’re a small firm and have few resources, then the broader your coverage, the shallower will be the perception of your expertise. It’s the opposite of a recent PhD who knows all there is about a tiny field.

Differentiating Your Accountancy Practice by When

I’m not sure there is much scope in this dimension of differentiation for accountants since it refers to when the service is available (think all night chemists) or how fast the service can start or finish.

Having said that I’m shocked by accountancy practices who offer a management accounting service or part time FD service and think it’s OK to get the monthly accounts out by the end of the fourth week of the month. Experienced industry based accountants know that a lot has changed by then and the only value of old numbers is for trend purposes.

Differentiating Your Accountancy Firm By How

To be honest for basic compliance work, clients don’t care how you produce their statutory accounts and tax returns.

The effort that goes into providing the service is invisible to them and that is one of the reasons why they complain about high fees. While having the accountants in on site can be irritating, at least business owners get to see the hours being put in and even want a reasonable number of questions.

How can be more interesting with specialist services, even if the client doesn’t really understand the process.

Think tax schemes. The end result may be similar but one tax saving scheme may fit much better with the business owner than another.

Or a service like SystemBuilder from AVN members which is software which helps you to document and formalise systems following the E Myth idea. I haven’t seen SystemBuilder in practice and have no idea about the numbers but something that has been used more than 1,200 times would be much more appealing to me as a client than a proprietary system for one accountancy practice which has been used three times.

The other “how” which is important to accountancy practices and the clients is how you charge, since Ron Baker’s value pricing ideas have been so popular. For the client fixed fees gives certainty and for the accountancy practices who use it, fees often increase and cash flow improves since you can introduce monthly direct debits during the year rather than waiting for payment after the service is provided.

Differentiating By Where Is The Classic Way For Many Rural Accountants

Once you get out of the cities and big towns, the choice of accountants is often easy because there is only one in the local area.

Of course differentiation become an issue if another one moves into the territory – perhaps a breakaway by one or more partners of the existing firm.

One of the nice things about having competition is that it gives you something to be compared against and that can help you to look good.

The human brain finds decisions easiest to make if there is a choice – not too big a choice – but it’s much easier to decide if something is good or bad based on whether it is better or worse than something similar.

Differentiating By Why You Became An Accountant

The why differentiation dimension is an interesting one because people are attracted to people with passion or a cause.

My story about why I’m a small business advisor and passionate about helping small business owners make more money relates back to one of my first accounting assignments and a small transport company which didn’t make it through the early eighties recession. I really liked the owner and he was kind to me as a raw novice and i wish I knew a small fraction of what I know now because it could have made a big difference.

Perhaps you have an interesting story which shows that accountancy is not just a way to earn a living but something that you care passionately about.

Differentiating By How Many

Our focus here is to focus on the value element of the value for money to provide a reason for engaging your accounting firm instead of a competitors.

It’s the same idea as a bottomless cup of coffee or eat as much as you want at your favourite Chinese restaurant.

I’ve already mentioned fixed fee pricing as part of the “how” differentiation but the call our accounting, finance and tax helpline as many times as you want in the year as part of our service can provide important reassurance to some clients.

Small businesses are all to wary about the money clock running up a big bill when they talk to professional advisers and they may have been stung by a lawyer, consultant or previous accountant. That creates a problem. It stops many asking for advice they need and it stops you deepening your relationship with the client and referral opportunities.

There Are Many Different Ways To Differentiate An Accountancy Practice

I realise this is a long article but I have really just scratched the surface of what can be done with the 7 big questions approach. It’s also important to realise that what you can do to differentiate your business depends on what competitors do at the moment, what they might want in the future and what clients and potential clients want.

Some clients will just want a cheap and cheerful service. I’m like that with banks.

Others want and need much more and provided there is genuine value in what you do (i.e. the benefits to the client far exceed the fees), they will be willing to pay.

As you think about how you can differentiate your accounting firm, please realise that differentiation can be shallow or deep.

Shallow differentiation is jazzing up your marketing communications a bit to make your firm sound special or unique.

Deep differentiation is taking the differentiation concept and making sure that it is reflected in everything you and your staff do consistently and reliably.

Advice On Differentiating Your Accountancy Practice

If you’re based in the UK and you have a small accountancy practice or you’re planning to start one, I’d love to help you to differentiate your business. Give me a call on 0121 554 4057.

It can be difficult to recognise what makes your business special because you take so much for granted and you may miss the WOW factor.

What Makes An Accountancy Firm Special To You?

It would be great if you could share your thoughts on what differentiates one accountant from another by leaving a comment.

If you’ve already differentiated your accountancy firm by one or more of the dimensions I’ve gone through, I’m happy for you to do a bit of self promotion by sharing your niche, speciality, story etc. Just don’t try to keyword spam the comments because I won’t publish.

I believe that any business which faces competition will benefit by focusing on how it can differentiate itself away from competitors and that particularly applies to travel agents.

Every business has three big risks:

1. Demand risk – do customers want what you are selling?
2. Competition risk – are there plenty of customers but are they attracted to competitors (or close substitutes) rather than to your business?
3. Capability risk – if you identify a promise or offer which is attractive to customers and which cannot be easily copied by competitors, can you deliver on it consistently?

In recent years travel agencies have become vulnerable to demand risk and competition risk because of a failure to communicate a customer proposition which gives the customer great value and which creates differentiation from those offered by other travel agents.

If you differentiate your travel agent, you give certain customers a strong positive reason to use your agency although the very act of making your business more attractive to some people is likely to make you less relevant to others.

The simple fact is that no one buys OK or average unless they are in a big hurry and don’t care too much about outcomes. That’s certainly not the case for personal holidays and while business trips may be planned in a hurry, the executives usually have the budget to care about quality and convenience.

The Strategic Threats To Travel Agencies

It’s worth thinking about threats to your travel agency business along two dimensions.

Some threats affect all travel agents, others affect your particular competitive situation.

Factors affecting the general desire to travel

1. Terrorism – the reluctance to travel after the September 11th atrocities was understandable as aeroplanes were used as a terribly destructive weapon.
2. Economic decline – less disposable income means an inevitable reduction in either the number of trips individuals will take, the length of the trip or indulgence budget for the trip.
3. Health epidemics – swine flu and Asian flu were two of the latest scares which made travellers reluctant to get on planes.

Factors affecting the specific reason to travel with your agency

1. General affects that are specific to your niche. A terrorist attack, civil unrest or health scare in your specialist niche will impact you severely although there is a PR issue since threats can be magnified in the popular media. Movements in exchange rates can also make your territory much less attractive. Greece outside the Euro would be a cheap destination for UK travellers but the weakness of sterling makes the entire Euro zone expensive.
2. A new competitor who either does what you do but does it cheaper or one who offers a more attractive value proposition/offer to customers.
3. Damage to the reputation of your own agency or an important travel operator partner.

The Internet & Its Impact On Travel Agents

The development of the Internet has made many travel agents who were selling standard tours from the big agencies irrelevant because they weren’t adding enough customer value.

There’s no need to go into an High Street agent, wait for attention and then sit down and go through the booking process when you’ve already made up your mind where you want to go and when.

Instead you can do it direct by going to the tour operator’s website, filling in your details and entering your credit card number to pay. It’s usually easy, simple and quick. I did it myself a few weeks ago when I booked a Thomson trip to Italy.

Even worse the Internet with sites like TripAdvisor and the low cost airlines has made it much easier to put your own trips together. It’s what we used to do before my health got messed up but at the moment an “easy holiday” is a big plus.

The success of the Internet has reinforced two forces which threaten independent travel agents:

1. Suppliers believe they don’t need intermediary travel agents since they can market direct to the public
2. The public believe they don’t need intermediary travel agencies because they have direct access to the travel operators, airlines and hotels and a plentiful supply of information.

While the Internet favours the consolidators and the big name tour operators, it also gives the opportunity for specialist travel agents to flourish since it makes them available outside of the local community.

The Big Opportunity For Travel Agents

It’s easy to get gloomy about the travel agency industry and the number of high street travel agent stores that have closed in recent years.

But there is still one big plus factor.

People love to go on holiday and as probably their biggest annual expenditure outside of eating and a place to live, it’s important that they get to make the right decisions on their holidays – where to go, when to go, how to get there, what to do when they are there…

The financial collapse of various elements in the travel industry chain of supply and other emergencies help to highlight the benefit of working with a travel agency. As a traveller, it’s not your problem to get you back because that responsibility lies with the travel agent.

I was due to fly out to Majorca in 2010 just after the Icelandic volcano erupted and closed down air travel across Northern Europe. Fortunately the ban was lifted a couple of days before we flew but we went out with some trepidation as there was talk of an even bigger eruption.

Online bookings has grown fast in recent years but it’s not necessarily a great experience for customers.

“Satisfaction with online bookings is decreasing as only 49% of online bookers feel it’s enjoyable to book a trip online, down from 53% last year. 24% of people feel it’s more convenient to research travel offline, versus 20% last year”. survey

The role of travel agents is changing. As a customer it used to feel that it was very much the big operators pushing package tours out at consumers but the opportunity for agencies now lie in advising and helping customers to get the best holidays they can by using their expert knowledge, contacts and information sources.

What Value Can A Travel Agent Create For Customers Who Can Book Online?

Before really getting into the issue of how to differentiate your travel agency, lets take a good hard look at the business from the customer’s perspective.

This is essential because it’s the customer who will make the choice of going to a travel agent, of putting the holiday together entirely on their own or by buying a package holiday directly from a tour operator.

First there is a huge amount of information online for holiday makers but the sheer volume carries its own costs for the consumer:

1. It can take a lot of time – and for information addicts, there is always more that can be researched. Planning a holiday and getting the fine details can start to feel like hard work.
2. It can be confusing – there can be a lot of contradictory information. You can see that if you read the TripAdvisor reviews of even well known and well established hotels.
3. You don’t know who to believe. I love TripAdvisor as an information source and have found it fairly reliable but we know that independent reviews get rigged, just like they do on Amazon. The difference is that a book which is duplicitly marketed may waste £20 pounds and a few hours before it’s discarded, a bad choice of hotel can waste thousands and use up precious weeks of annual holiday entitlement. Booking a holiday is a big decision and you want to get it right.

Searching for a holiday online is frustrating. I haven’t yet found a flight website that gives me the flexibility I want to make it easy to find my options and that’s before trying to link it to my preferred accommodation.

Holiday bookings often suffer from the precise problem – just like an accountant who tells you that you made a profit of £97,276.17 last year when £97k or even, “just under £100k” are the numbers your mind can deal with.

When I’m booking a holiday I know approximately where I want to fly to – but often the region rather than a specific airport in the region – approximately where I want to fly from – think of expanding circles going out from my home in terms of travel time – where I want to stay or visit – but if it’s a tour, not necessarily in what order – and approximately when I want to go.

That’s a lot of vagueness and uncertainty which falls flat with Internet websites but works OK when I can brief a travel agent with something along the lines of “I want to tour the Garden Route in South Africa for two weeks-ish starting in the second of third week of September, flying from a Midlands airport, Manchester or Heathrow with a couple of nights at Boulders Beach and at least four nights game watching for a budget of about £2,500 per person and I don’t want to go back to Shamwari.”

That brief makes perfect sense to me and explains why I’ve used to same specialist travel agent for six trips to Southern Africa in the last ten years. Sometimes my briefings have been even vaguer  along the lines of “I don’t mind when or where we go except we can’t travel the first week of the month but we want to have a great chance to see cheetah, bat eared foxes and plenty of elephants and it’s always nice to see more leopards.”

Back comes a proposal and I may quibble about the occasional suggestion but overall the holidays have been FABULOUS.

A good travel agent helps you out if you get into trouble.

Staying on the theme of my Southern Africa holidays, the first time we went, my back went into spasms and I could barely move and this was coming up to the game watching section – the big reason why we wanted to go to South Africa. With one phone call we were able to change our itinerary, stay at the one place longer until I was able to travel and then extend the next place which was near and  ditch the more onerous travel including a flight to a wilderness safari.

Another time our flight from Heathrow was cancelled and we didn’t get to our first destination until 24 hours later than expected. While we couldn’t get our time back, the hassle of letting everyone know and keeping the hire car rental etc was done for us.

A third time, floods caused the Crocodile River to overflow and closed one of the entrances to Kruger and we were able to switch accommodation around so we didn’t have to waste hours travelling.

A good travel agent puts specialist knowledge to work for the benefit of clients.

A bad travel agent can mislead you by providing false information (to make sales) either deliberately or by accident or can add as little value to the holiday as the shop assistant who scans your purchases and takes the money.

Customers Get The Travel Agents They Deserve – Travel Agents Get The Customers They Deserve

I haven’t delved deep in Zen philosophies but I do believe that what goes around, comes around.

If you as the travel agent treat your customers as commodities – as fodder with the cash to give you some money then don’t be surprised if those same customers don’t appreciate the services you provide and treat you as just another travel agent.

In contrast a client who involves you deeply in the planning of their precious holiday and values your advice deserves the best you can give. Your expertise adds value to the client and they appreciate it.

How To Differentiate Your Travel Agency

I use the 7 big questions of business success to help create business differentiation and they apply to all kinds of companies.

These questions are who, what, where, when, how, why and how many.

Let’s take a look at how they apply to differentiating one travel agent from another although I won’t be able to go into the full complexities of the process.

Differentiating Your Travel Agent By Who

Who can apply to the travel agent owner, the staff of the agency or the type of customer you want to attract. It can also refer to any exclusive arrangements you might have with particular tour operators.

The first who to focus on is the who of your customer.

Are you appealing to a particular type of customer or a customer with a particular interest?

The rich and affluent are always a good market to target because they’ve got the money to spend. One parent families or families with disabled members will have special needs which make it much more difficult to get the right help, advice and support from normal travel agents.

Are you acknowledged as an expert or a campaigner in a particular field? People are attracted to celebrities – Neil Armstrong trips to the moon would resonate with me because I know he’s been there.

Are your staff specialists and passionate about what you sell? If you specialise in skiing and mountaineering holidays then if your staff are experienced mountaineers and skiers, they will quickly build rapport with your target customers, pass on tips and be very credible.

An important element of differentiating by who is based on building up trusted relationships so it’s important that there is consistency. A high staff turnover will destroy this trust factor or concentrate client attention on you, the owner.

Differentiating Your Travel Agency By What

Closely related to differentiation by who is differentiation by what in terms of specialist positioning.

You have four combinations:

• general who and general what – all types of holidays for anybody who has the money to buy
• general who and specialised what – mountain adventure holidays for all types of customers
• specialised who and general what – trips for the affluent all around the world
• specialised who and specialised what – holidays for patients on kidney dialysis – I found myself investigating these organisations in 2010 when I had acute kidney failure and was on dialysis three times each week. Fortunately, my kidneys have recovered enough to come off dialysis but it looked like I needed a very specialist travel agency service.

Some times it pays to have an incredibly tight niche, other times it pays to concentrate on the who or the what. Ideally you want to design your travel agency so that it a) has repeat clients and b) generates referrals to take the pressure off having to find new customers all the time.

In helping you differentiate your travel agency business, I’m speaking from the position of an expert in differentiation with an interest in travel agents. A competitor may be an expert in the travel agency marketing with an interest in differentiation.

A really specialist combination would be a differentiation expert who specialises in travel agents although that is often a contradiction since it can lead to industry recipe solutions.

The appeal of a specialist is very high so what can you specialise your agency on?

What also refers to what you do?

For examples do you sell package tours, put together customised itineraries or even act as a tour operator and create packages for clients?

Using Where To Differentiate Your Travel Agents

In my differentiation process, where usually relates to where you are, where the customers are, where you can find customers and whether customers come to you, or you go to customers or whether data can be communicated digitally.

With travel agents, where can also relate to where you customers want to travel to.

Location is a very obvious way to niche and in many ways belongs as another factor in the who and what combinations.

You can specialise in all type of holidays for all types of people going to one destination e.g. Australia

Or a very tight definition – safari holidays for disabled travellers in South Africa – if there are enough people looking for holidays in the niche.

Differentiating Your Travel Agency By How

How refers to the processes you use and what you require clients to do.

You could have a highly customisable website that spits out options or you could offer a very tailored solution.

Because people are focused on their own self interest, clients and customers don’t care about how you do something until you make it relevant and meaningful to them.  Saying you use the XYZ booking system is irrelevant until you say that you’re the only travel agent authorised to use the XYZ in your area and it guarantees that your clients will pay the lowest price or we’ll give you back three times the difference.

Differentiation of Your Travel Agency By When

One of the big attractions in booking holidays by the Internet is that it is open 24/7 while a high street travel agent may only be open from 10:00 am to 5:00 pm which isn’t very convenient for the holiday makers who have to go to work.

When can apply to extended opening hours – from noon to 8:00 pm may be much more convenient for many employees.

When can also refer to the time between booking and the holiday. Your travel agents could specialise in late bookings for the urgent needs and for those who can’t plan ahead with any certainty.

Have A Strong Why To Differentiate Your Agency

Why do you own and manage a travel agency and why does it do what it does?

People are attracted to businesses with a strong purpose e.g. The Body Shop which had very different views on the way beauty products should be tested and sold.

This sense of mission or crusade can create excitement and passion that moves from you to your staff and then to your customers.

Your purpose can be to promote the good (the wonders of nature) or to stop the bad (tourism may save the tiger and the orangutan from extinction in the wild by bringing in much needed tourist money.)

Or you could link your business to a wider charitable cause e.g. holidays for orphaned children.

Differentiating By How Many

The purpose of differentiating is to shift focus away from the lowest price and towards better value for money.

That can often be interpreted as a better product or something unique but it can also be more quantity. The example I often give is the bottomless cup of coffee.

There is an economics issue with this “how many” concept which you need to be careful of. One positioning could be “the agency that gives you eight nights away on holiday for the price of seven.” If you carry the cost of the extra night’s accommodation, it will be expensive but what if you can talk your preferred hotels into supporting the promotion because their occupancy rates are low on the eight night. I realise the idea does work for the package tour operator which needs to work like clockwork – same things each week at the same time – but it could work for more personalised markets.

The 7 Big Questions Of Differentiating Your Travel Agency

I’ve given you a few ideas based on the 7 big questions – how, what, where, when, why, how, how many – and you can see that there are plenty of ways to differentiate your travel agent from your competitors.

Your Differentiation Can Be Shallow Or Deep

This is an important concept because some see differentiating and finding your USP (unique selling proposition) as a marketing issue.

I think it’s much more important than that. Unless you’re very lucky, your differentiation strategy needs to run through everything you do.

It’s the difference between having your agency differentiation shallow or deep. Shallow differentiation is based on a marketing promise that sounds good and different and creates buyer preference but…

and it’s a BIG but…

it’s not backed up by the underlying business. While clients may be attracted to the idea of a specialist travel agency, it doesn’t mean that they’ll stay happy if they don’t benefit from the expert knowledge you and your staff should have.

What Makes A Travel Agent Special To You?

It would be great if you could share your thoughts on what differentiates travel agents from each other.

Do you have a really close relationship with one travel agent like I do with my South Africa agency – thanks Ginny and all at Cedarberg. They are not perfect but they have found some amazing holidays for me that will live in my memory forever.

I thought I’d use a recent experience as a customer to write about hotel marketing strategy and in particular how to differentiate a small hotel or bed and breakfast establishment.

Hotel Marketing Strategy – General Thoughts Before I Get Specific

The 7 P’s of marketing are useful for thinking about your hotel marketing strategy with the marketing mix of product, price, place, promotion, people, physical environment and process but I generally prefer to work with the 4 M’s of marketing.

• Market – who are the customers you want to attract to your hotel?
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• Message – what is the special reason why they should visit you rather than anyone else?
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• Media – how can you communicate your compelling message, your irresistible promise to your target market?
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• Mindset – how can you make sure you have the right approach to your marketing so that it’s positive for guests and effective for you?

In my experience of marketing for many businesses, there’s too much attention on media and not enough on market, message and mindset.

Your marketing success for your hotel depends on my Six Step Profit Formula:

1. Finding a starving crowd – if your hotel is in a location that no one wants to visit, you’re making things difficult from the start.
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2. Having an irresistible promise – a strong message to market match
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3. Getting as many relevant eyeballs on the offer – you want as much of your market to see your message repeatedly – people rarely make snap yes or no decisions but instead think “that’s looks nice”, then next time “that looks interesting” and then “I should find out more about that” in a gradual move to a buying decision. A weak message stops you climbing this ladder of customer commitment because it is dismissed immediately.
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4. Delivering on your promise with a great customer experience.
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5. Asking for the second and subsequent purchases – this may be adding dinner to bed & breakfast, staying a second night  or coming back in the future.
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6. Encouraging the customer to refer your hotel or B&B to family and friends and to write a favourable comment on websites like TripAdvisor.

My Experience Looking For Hotels & B&B’s & The Impact Of Hotel Marketing Strategy

A couple of weeks ago I came back from a short break in North Wales – four nights at three small hotels or bed & breakfast (B&B) places.

That meant that I had to make three buying decisions about which places to stay at and as I was looking through the options, I was thinking about what I wanted and how the individual establishments market and differentiate themselves.

I believe many people are prepared to pay extra for something special – the boutique hotel concept – but if they don’t see it, the pressure comes onto the price of the rooms.

As always, it is interesting to look at these purchasing decisions in some detail and hopefully it will help hotel owners and managers to create better marketing strategies with more  differentiated and interesting options. It would also be great if you’re outside the hotel industry and you shared your own thoughts on hotel marketing and differentiation in the comments.

My Holiday In Wales – A Look Into My Hotel Buying Decision Process

This may seem long-winded but it’s a really important process for understanding how guests make decisions so look for clues about different segments and special interests.

Illness has limited our holidays recently and North Wales appealed because it’s quite local, there’s plenty of interesting things to do, it’s beautiful and it has special memories for us.

I knew I wanted to go to Abersoch on the Lleyn Peninsular for two nights. It’s small resort with two lovely beaches. I wasn’t too sure about the other places although I had good memories of Betws Y Coed, the gateway to Snowdonia and Beaumaris with its early 14th century castle.

I cheated to help narrow the choice I used Tripadvisor to look at Abersoch and looked at the top few hotels and B&Bs. Such sites show the growing power of social media and recommendations from people like me who want to have a nice stay.

Since I much prefer small to big places to stop and look for character and personal service, I don’t differentiate between a small hotel and B&B.

I went from Tripadvisor to the websites of the individual businesses and the choice was pretty clear – it had to be the Venetia which describes itself as a restaurant with boutique accommodation.

I used the websites to confirm my impression from the TripAdvisor reviews. As a general comment, I think hotel websites need to work harder to put over a feeling of uniqueness and differentiation. There is a tendency for glossy brochure style websites that on first impressions look good but leave little lasting impression. This is a weakness is hotel marketing strategy.

Venetia Abersoch

What appealed about the Venetia?

• Rave reviews from Tripadvisor – 43 out of 46 were 5 stars.
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• Convenient location – that’s particularly important to me at the moment because I get so tired with little physical exertion.
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• Parking for everyone with a room
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• High quality restaurant – again this was number 1 on TripAdvisor – it rains in North Wales so it is great to be able to have great food available very conveniently and while we planned to eat in one night and out the other, we enjoyed our meal so much the first night, we ate there again the second.
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• It looked super stylish on the website, living up to the “boutique” image.

The only downsides were that

• It was a bit pricey although cheaper than Portmeirion where we’ve stopped before and I thought about stopping this time. Now that place is truly differentiated and it’s super to walk around the famous village when all the “tourists” have gone home.
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• They only had a room free for the middle two nights and that meant that we needed to find two other places to stay when I’d have preferred to split it two and two.

We booked at the Venetia about a month ahead and then left it for three weeks before deciding on the other accommodation.

Ty Gwyn – Betws Y Coed

The obvious thing for the first night was to break the journey and Betws Y Coed is an interesting place to be for a few hours to browse around the gift shops – the outside adventure places aren’t really us.

Interestingly the choice of the stylish boutique B&B of Venetia meant that I was looking for a different experience here.

TripAdvisor was again my starting point. It’s so much easier to get an independent view about places before I resort to the hotels own websites through Google because of the lack of distinction.

My choice this time was Ty Gwyn, a 17th century coaching inn with a good reputation for food.

So what appealed about Ty Gwyn?

• It was number 1 in TripAdvisor for hotels and number 2 for restaurants. The weather forecast was predicting was predicting light rain so eating in was appealing.
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• It was so different from Venetia
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• It was surprisingly cheap – without the TripAdvisor reviews I may have been so suspicious I’d have ignored it as too cheap – but there is a lot of competition in the area.

Now that I’ve been I can report that the food was very good but the room was quite rightly the cheapest of the three places we stopped in and the service, whilst not bad, wasn’t up to the standard of the other two places.

Victoria Cottage – Beamaris

The final place we decided to visit was Beaumaris and to keep the variety high, I was tempted away from a restaurant with rooms and more towards a homely B&B. I knew Beaumaris was small and packed with great places to eat.

This time I chose Victoria Cottage, again after turning to TripAdvisor because it seemed so nice although again it was the number 1 rated B&B. This time we are stopping in somebody’s home but the welcome we received was particularly warm and friendly from both the two legged and four legged hosts.

Overall Thoughts On How To Differentiate A Small Hotel Or B&B – The Essential Element In Your Hotel Marketing Strategy

Having thought carefully about the decisions I made – which of course had to be approved by the boss – there are some general characteristics or key success factors that are important and some things that provided the competitive edge.

Your hotel marketing strategy needs to focus on deciding the factors that make your hotel different from your competitors and then communicating these factors. You also need to have the team of people and processes to consistently deliver on your marketing promise.

Order Qualifiers For Hotels

General characteristics  or what I call order qualifiers

• Places with character – this immediately ruled out anywhere big although interestingly in the holiday I’m now booking, I making the exception that proves the rule
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• Location – I was looking for something convenient and quiet which can often be trade-offs
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• Car parking on site or very near – travelling for 3 nights meant we had little luggage but that didn’t mean I wanted to carry it far.
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• Good breakfast
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• Good TripAdvisor reviews – it is coincidence I think that all three were rated number 1 in their location – but the social proof of having more good reviews than bad is important to me. Mind you some people do seem to whinge about the littlest things.

Order Winners For Hotels

The second category are what I call order winners.

• Overwhelming positive reviews on TripAdvisor – there was so much evidence that I felt very lucky to get in at Venetia which only had five rooms. It’s the only time I’ve ever been asked “Are you the driver of the other Porsche?” sadly the answer was No.
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• The history of Ty Gwyn.
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• The friendliness and warmth welcome at Victoria Cottage and the little Westie. I knew we’d be missing our dog like crazy by the fourth night.

I was surprised how much I wanted a contrast between the places we stayed at. Thinking back, I think it helps to keep the memory of the holiday alive when the hotels and B&Bs don’t blend into each other.

Asking For The Second Purchase – The Next Essential Element Of Your Hotel Marketing Strategy

Both Venetia and Ty Gwyn offered dinners with good reputations and both asked for commitment to eating in when I booked the room, emphasising that there were only a few tables available. Both were busy.

None of them made contact with me afterwards to check that I was happy, to ask for a TripAdvisor review or to ask if I was likely to go back or recommend to friends. This is a big opportunity lost for feedback and is a weakness in hotel marketing strategy.

Now that we’ve stayed at the hotels, the big question is “Would we repeat the experience?”

A big yes to Venetia in Abersoch, probably for Victoria Cottage in Beaumaris provided we can have the same room – it’s very nice to have a view of the sea and the castle through the same window – and probably not for Ty Gwyn although I wouldn’t have any hesitation about eating there again.

What made the difference?

First the personal greeting.

Both Victoria Cottage and Venetia knew our names before we arrived and used them when they were talking to us. It’s a little thing but it’s surprisingly effective and it does increase the connection.

Second, the rooms had more character and were a better size. Our room at Ty Gwyn was small, next to the bar and therefore a bit noisy. They also had lots of rules which were a bit off-putting.

Will we actually go back?

That’s partly up to the B&Bs and how they deal with follow-up marketing to their customers. They’ve got my email address but will they use it to give me a reason to go back and keep them top of the mind. We’ve stayed in all three towns before but I couldn’t tell you where we stopped and nothing looked familiar.

Your Hotel Marketing Strategy – Differentiating A Small Hotel Or B&B With The 7 Big Questions Of Business Success

The 7 big questions are what, who, how, when, where, why and how many and are designed to shift attention away from “how much is the price?”

Let’s see how they can be quickly applied to the hotel marketing strategy.

Differentiate Your Hotel By Where

Where is easy to understand (although to change). Where is the hotel in relation to the other main attractions in the resort? Is it close to the beach, the restaurants and bars, the shops and the major sights?

Where can also refer to the building itself and whether there is anything special about its history or design. I mentioned Portmeirion earlier which is a remarkable architectural treat.

Differentiate Your Hotel By What

What is the basic offer – what are customers getting for their money? What’s in the room to make it special? The breakfast? The general rooms of the hotel and the grounds? What else is on offer from the hotel apart from the basic B&B?

Differentiate Your Hotel by Who

Who can refer to three different groups – the customers, the staff and the owner.

Is the hotel designed to meet the special needs of a particular group of people? Romantic couples, families, business people can all have particular needs – the large four poster bed, the children’s playground or even crèche or Internet access in every room and meeting rooms for private conversations.

The who of your customers can move from the general to the specific. The Goring Hotel became famous around the world when Kate Middleton stayed there the night before her wedding to Prince William. Who wouldn’t want to stay in a hotel – or even the suite – fit for a future Queen? As a guest, I know it gives me a warm glow to think that I’ve stayed in the same place as someone famous.

Who can refer to the staff, either in particular or in general. Perhaps the chef has a great reputation or the barman can create just about any cocktail ever created. Or perhaps everyone in the hotel is really friendly and caring. I know everyone claims it but one of the reasons why I love certain cruise companies is because of the Filipino staff who are so lovely.

Who can also be the owner who may be a celebrity or character who creates preference for some buyers – and may drive others away. Perhaps not a Basil Fawlty…

Differentiate Your Hotel By Why

Why refers to why the hotel or B&B exists. Sure you want to make money but perhaps there’s a bigger purpose which explains the type of guests you target or you may link some some charity or cause. Perhaps your hotel has been designed to create a tiny carbon footprint and everything about it is very environmentally friendly.

Differentiate Your Hotel By When

When offers limited scope for a hotel since the opening hours and service hours are fairly standard. There are exceptions which would turn off the mainstream but perhaps it’s party central and with guests dancing to the small hours of the morning, a full cooked breakfast served until noon would be much better than stopping at 9:30.

When could refer to the age of the building and give it a sense of history and authenticity.

Differentiate Your Hotel By How

How might be about the special ways you do things that others take for granted. Perhaps you make your own bread and milk your own cows… and guests can join in if they want. When I was young, I used to love staying at farmhouses rather than in hotels because I could have contact with the farm animals.

Differentiate Your Hotel By How Many

The final big question to use when differentiating your hotel is how many. For families, how many in a room could be important or the ability to have connecting rooms. It may be an eat as much as you want breakfast with a buffet rather than the one rasher of bacon and one sausage that others offer. Or drink as much as you want with the dinner.

Don’t Have A Lazy Hotel Marketing Strategy

There are plenty of options to find ways to differentiate a small hotel or B&B if you think carefully about the type of customers you want to attract and what they want to have close to the perfect customer experience.

The Importance Of TripAdvisor In Differentiating Your Business

I can understand why people in the industry hate TripAdvisor but as a consumer I love it and so do many others.

First, it does much of the buying decision for me. By ranking the hotels and B&Bs I know that I can start my selection process by looking at the top few with vacancies in my date range. It makes the buying process easy.

Second, I’m escaping from the marketing speak which I see on hotels’ websites which has a nasty habit of making them sound the same (see Marketing & Advertising Bingo) and I believe most of the reviews are from real people who have stayed at the hotel or B&B. Sure I know that TripAdvisor can be abused with biased reviews but often the sheer weight of numbers creates a lot of conviction.

Third, I get more idea of what makes a place special because certain themes keep reoccurring in the review comments. If you read “fantastic breakfast”, “amazing breakfast”, “best breakfast I’ve ever had”, “breakfast including delicious home made Danish pastries as well as an excellent cooked meal” I come away with the strong impression that breakfast is going to be a treat. And that’s important to me.

Using TripAdvisor In Your Hotel Marketing Strategy

Since TripAdvisor is so important to marketing and differentiating your hotel, how can you use it to your best advantage?

You may not like it but it exists and it’s in the top 250 most popular websites in the world and getting more popular according to Alexa.

First, you have to start off by designing a customer experience which is remarkable so that people are excited about the very idea of it.

Second, you must deliver consistently on your promised experience… and perhaps even exceed expectations although that can sometimes be tough and creates a battle you’ll eventually lose because it’s not essential – see Airlines Suck But We Still Fly. In this age of social media people love to share something exceptional.

Third, check that people had a good time and that your guests enjoyed their stay. If they didn’t a) apologise and b) try to find some way to make amends. If they did, then mention that you’d love to read their feedback on TripAdvisor. Don’t push it but if people have had a good time, they will make a commitment and follow through.

Don’t be tempted to cheat by organising fake reviews or knocking the competition. If I feel the marketing promise has been broken, I am much more likely to write a negative review and I’m sure other guests feel the same.

Your Hotel Marketing Strategy & Differentiation Can Be Shallow Or Deep

This is an important concept because some see differentiating and finding your USP (unique selling proposition) as a marketing / promotional issue.

I think it’s much more important than that. Unless you’re very lucky and there is something remarkable about your location or building, then your hotel differentiation strategy needs to run through everything you do.

It’s the difference between having your hotel differentiation shallow or deep.

Shallow differentiation is based on a marketing promise that sounds good and different and creates buyer preference but…

and it’s a BIG but…

it’s not backed up by the underlying business. While guests may be attracted to the hotel, it doesn’t mean that they’ll stay happy while they are they. As an example, think of how an estate agent speak puts a positive spin on just about anything but reality is often different.

Advice On Differentiating Your Hotel Or B&B

If you’re based in the UK and you have a hotel, guest house or B&B or you’re planning to start one, I’d love to help you to differentiate your business and develop your hotel marketing strategy. Give me a call on 0121 554 4057.

It can be difficult to recognise what makes your business special because you take so much for granted and you may miss the WOW factor.

What Makes A Small Hotel Or B&B Special To You?

It would be great if you could share your thoughts on what differentiates small hotels and B&Bs and what makes a place look special before booking and after you’ve stayed by leaving a comment.

A few years ago we stopped at the lovely Croft Cottage in Ludlow because they had a badger set in a small woods in their grounds (an example of differentiation by what) and neither of us had ever seen a live badger. Since we go on safaris to southern Africa, we wanted to see British wildlife.