My emphatic answer to this question is YES! Although we are all providing similar services, use the same vendor base, have similar technologies, etc. I still believe some amount of differentiation is possible. Why? Well, if Evian can do it with water then why can't a localization company distiguish itself among peers?
Each company has its own unique aspects, be it a vertical specialization such as life sciences or legal translation. Each company has its own history (or not), unique set of employees and unique client base. The uniqueness in any of these areas can be exploited and communicated that will give the target audience a feel for your organization, company ethos or methodology that distinguishes your company from another. Standing out in your unique way gives potential clients something to latch onto when evaluating potential suppliers and will help you stay in their minds. Several companies I've worked for in the industry have done a reasonably good job of capitalizing on their unique qualities--from superior processes to years of specific experience to being the cool new kid on the block. All took advantage of what made them slightly different from very similar competitors and all have very good market recognition.
IMO there are two reasons companies in our industry generally don't do this.
First, their overall business strategy is unclear, either because they are trying to be all things to all people, or they simply haven't thought about areas on which they wish to concentrate. If the LSP doesn't have a clear idea of its identity, then the market is unlikely to have one either.
The second is a lack of marketing acumen. Very few LSPs have a dedicated marketing person and marketing is done on an ad hoc basis, with sales people (who feel the lack of marketing most accutely) filling in the gap instead. This can potentially lead to your company having a number of marketing activities that can be contradictory or even dentrimental, depending on the level of competency of the sales person. They will always step in where there is a vacuum, but this is neither professional nor desired.
There are some good reasons for this, since a dedicated marketing person costs money. Many companies are simply too small to have the luxury of a full-time marketer. However, outsourcing some marketing activities is something I would highly recommend. There are many, many freelance marketers available who will work on specific things such as writing a press release or marketing piece. Others can provide a limited amount of ongoing marketing support on a retainer, which can be negotiated depending on the level of service desired.
Once your identity is established, the marketer's role then becomes one of generating qualified leads (the primary function of marketing) for your sales people to work and ultimately close. Today's marketers have more tools than ever--many very low in cost--that can help get your message out and generate leads for your sales people to close. But that is another conversation which I will leave for now.
