No two businesses are the same. But what makes yours different from the rest? This article will help you answer that question.
What is product differentiation and why is it important?
Let’s start at square one, with a definition. Differentiation is the desirable, exclusive benefit(s) that sets your business, product or service apart from the competition. It’s one of the cornerstones of your external marketing communications such as your website, brochure, ads, etc.
Most markets are highly competitive. Walk down the aisle of any big box store and you’ll see how competitive the consumer market can be. And it’s not much different in the B2B arena.
When one company introduces a highly innovative new product or feature, others follow quickly. Consequently, the competition for the customer’s attention intensifies. Your offering has to stand apart from the competition.
Warren Buffett was right when he said in his characteristic straightforward manner, “Your premium brand had better be delivering something special, or it’s not going to get the business.” He’s talking about differentiation.
Ask the right questions
Let’s take Mr. Buffett’s observation one level deeper. Do that by asking several key questions about your business. Asking these questions will lead you to the core of your differentiation strategy.
– What void in the marketplace do you fulfill? – Tesla was one of the very first companies to dedicate itself to producing electric vehicles only. It filled the large void of American car companies by leading the development of this technology. However, the market is catching up quickly. Tesla will need to continually innovate and find other voids to fill if it’s going to continue succeeding at differentiation.
– What can you guarantee about your product or service? Companies that stand behind their product send a clear message to prospective buyers: you can count on our product to last. Not every brand can offer that, which makes it a compelling differentiation opportunity.
– What do people hate about your industry that you can fix? – What can you do better, faster or more reliably than anyone else?
To answer these questions, you’ll need to analyze your primary competitors. Objectively list their strengths and weaknesses. Focus on identifying the gaps between your offering and theirs. Be brutally honest.
Think like a customer
When it comes to differentiation, it’s imperative that you think from the customer’s perspective. Think deeply about how customers see your brand in comparison to competitive brands. They choose the one that understands their challenge and offers a unique solution.
Think in terms of the following two factors.
- Meaningful difference – the benefit has to be important to the customer. And every good marketer knows what’s important to their target market.
For example, Lang Technovation Company, a leading supplier of workholding and automation products to the machining industry, markets high end vises that promise to assist manufacturers in achieving more efficient work processes. Their differentiation is focused on fast set-up times and easy operation. They back it up by positioning their brand in a highly competitive market as the original.
- Truly Unique or First To Market – Are you the only company offering a certain feature, process or technology? Or can you lead the competition by being the first to offer something important?
Evol®, a brand of Conagra Brands, Inc., helps protect the environment by being the first brand to introduce Carbonfree® Certified Carbon Neutral single-serve frozen meals. The company “commissioned a third-party life cycle assessment to measure the carbon footprint of its eight Certified Carbon Neutral frozen single-serve meals, and is offsetting the carbon footprint with investments in renewable wind energy and forest preservation projects…”
Without product differentiation, your offering gets lost in the crowd. Stand out by asking yourself and your team the right strategic questions. Do the due diligence of understanding the customer’s pain points and how your product or service uniquely solves their biggest challenges or desires. Wouldn’t you want to do business with a company that offers something meaningfully different from the rest?
I mentioned differentiation is one of the cornerstones of your marketing. The other cornerstones are clarity and evidence. Marketing has impact when all three are factored into your strategy.
Need to discover your brand’s differentiators? Contact us, we have the tools to help you.