Does this process win you customers? The differentiation test

Key takeaways

Which processes create competitive advantage? Usually only two or three in an SME: the ones customers mention when they explain why they chose you. The differentiation test asks three questions of each process. If it passes, keep it and invest in it. If it fails, it is a candidate to outsource, however important it feels.

• Do customers mention it when they recommend you?
• Would doing it twice as well win more business?
• Do rivals do it noticeably worse?
• Two or three yes answers: keep it in-house.

What is a differentiating process?

A differentiating process is one where your way of doing it is part of why customers buy from you. A builder's site supervision, a clinic's first appointment, a distributor's same-day dispatch. Most other processes, such as paying suppliers or recording absence, matter but do not win customers. Customers expect them done properly and never think about them.

• Which business processes should you outsource?
• Core vs non-core activities: what to keep in-house

How do you run the differentiation test?

Ask three questions of each process, using evidence such as reviews, win and loss reasons, and what customers say on calls. Do customers mention it? Would doing it twice as well win more business? Do rivals do it noticeably worse? Two or three yes answers mark a differentiating process.

• Read your last 20 reviews for process mentions.
• List why you won and lost recent deals.
• Ask three customers what nearly made them leave.

• Customer feedback loop: turn complaints into fewer contacts
• Comparative advantage: the real case for outsourcing

Why keep differentiating processes in-house?

Because a provider will run them to the standard you specify, and your advantage comes from doing better than the standard. You also need to keep learning in these processes, which is hard when someone else does the work. Outsource the admin around them instead, so your best people spend more time on the part that wins customers.

• Outsourcing to focus on your core business: what changes
• Skilled staff stuck doing admin? What it costs you

When can a differentiating process still be outsourced?

When the advantage comes from speed or availability rather than expertise. A firm that wins on answering every call within three rings may run that better with a managed team that covers every hour. The test is whether a provider can deliver your advantage to a written standard you can check.

• Customer-facing processes: outsource with care, not fear
• Can you measure it? The test every outsourced process needs

What does this look like in practice?

A pattern we see: owners think five or six processes differentiate them. Reviews usually mention two. The others are important but invisible to customers, which makes them candidates to move.

• See client work
• BPO Solutions for UK businesses

Differentiation checklist

Use evidence, not instinct, for each answer.

• Search reviews for mentions of the process.
• Check win and loss reasons for the last quarter.
• Ask customers what they value most.
• Score the process 0, 1 or 2 on non-differentiating.
• Record the evidence beside the score.

• The process selection score: outsource, split or keep?
• A business process register: map every process once

Next step

Run the test on your five busiest processes and send us the results. We will tell you which we would keep and which look like admin dressed up as advantage.