Differentiation

What does differentiation mean, and when and how should you pursue it? As a general rule of thumb, differentiation is required in a crowded market. It’s the idea of creating specialized products that gain competitive advantage with a particular segment of the market. Differentiation makes a product or service more desirable to your target market. It helps your offering stand out vs. the other options available; creating a stronger appeal for your target customer.

Do you always need a point of differentiation? In short, no, and this depends primarily on the maturity and level of competition in your market. In a rapidly growing market, where all the demand has yet to be fully satisfied and there is still some ‘virgin territory’ to be conquered, there’s usually enough space for multiple players – even if they are targeting the exact same consumers with the same offering.

Differentiation does not necessarily mean the difference between your immediate product and others; it can also pertain to the greater nature of your business or your processes. (For instance, think of Fair Trade products, or non-animal testing: these make excellent attributes for differentiation while they don’t present a discernible difference in the product itself).

There are entire industries that have been tainted with a bad reputation such as real estate, financial services, chiropractors, dating coaches, etc. In such cases you’re not just looking to differentiate yourself from a certain set of competitors, but from the entire greater industry.

Another consideration is that of consumer behaviour and the typical path to purchase. In circumstances of first come/first serve, consumers display little consideration behaviour and differentiation is not all that necessary. In fact, sometimes it’s preferable for your business to resemble another one or carry the connotations of a certain industry. This is often the case when it comes to services that are urgent in nature (plumbing, repairs, etc.) or more generic commodities.

There is some debate about when and how strictly points of differentiation should be set. Some marketers think this should be done at the very start. In reality, however, a differentiation angle does not need to be set in stone from day one. In today’s data driven world, you will learn over time which particular attributes your customers appreciate, and what distinctions your customers actually pick up on and value. In other words, it is perfectly acceptable to start off with softer differentiation and a more general, commoditized product or service, and once your true customer archetype emerges; pivot towards it.

Which Points of Differentiation Should Be Used?

There are a number of dimensions by which you can achieve differentiation. For example, you can address:

1. 1. Product: Emphasizing features, the quality, durability, technical aspects or style
   2. Customer service: The ease of ordering, speed of delivery, installation, customer onboarding, or in how you handle repairs, customer consultation and maintenance.

• Processes: e.g. sourcing of raw materials & staff, contributions to causes, etc.

1. Personnel: Competence, responsiveness, communication skills, or their sheer courtesy
2. Channel: Access to certain sales channels, or mastery of them
3. Image: Quality and distinction of customer-facing media assets; including websites, events, and campaigns. (This is usually what marketers are compelled to start with, as it’s the most tangible and apparent facet of your marketing strategy.)

With all these factors and more, it’s worth mentioning what qualifies as an element of differentiation. An element of differentiation is worthwhile if it is distinctive, objective and unique. It should also speak to the superiority or the favorability of your brand and your products. It also needs to be easily communicable to your target audience. 

Lastly, your point of differentiation should strive to make a positive connection between you and your target audience, without creating alienation amongst others. In other words, leveraging politics, clear agendas, or activism can serve to create more damage in negative publicity than it serves to increase your appeal.

Positioning

Once a segmentation strategy and personas are clearly defined, now comes positioning. Positioning is simply about creating a distinct, unique competitive position in the target customers’ minds. In other words, what does your audience associate your brand with; and how do they view your products and your business?

Again, this can vary across many dimensions:

• • Product attribute: Volkswagen – Think Small.
  • Product benefits: Dollar Shave Club: Shave Time. Shave Money.
  • Product use: Have a break, have a Kit Kat
  • Competitor aspects: Rent-a-car: We Try Harder

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