Brand Differentiation: 5 Strategies That Are Overrated!
Photo Credit: Michael Prewett
Surprise and differentiation have far more impact than noise does.
A few years ago, I was working with a client that was struggling to differentiate themselves from the competition in their industry. They make a good product, but aren’t industry leaders. They solve customer problems, but aren’t true innovators. Their pricing is slightly above average, but they can generally deliver their product to customers in a shorter timeframe. What they believed they did well was customer service. This was accentuated by the fact that the industry leader was known for below average customer service. My client was determined that this was their differentiation...but was it?
All brands look to achieve a competitive advantage through some type of differentiation. That differentiation is the way brands are positioned in the minds of consumers. And, there are virtually endless ways in which brands can separate themselves from their competition. Jack Trout wrote a great book about it, Differentiate or Die. So, I’m not the first to create a list. You can find numerous suggestions from all types of experts. However, I would argue that some of the more common ideas that make frequent lists, are overrated or downright bad for most brands. Here they are:
1. Provide Great Customer Service
I’m certainly not suggesting organizations shouldn’t provide great customer service. They should. And most think they already do. That’s the problem with Customer Service as a differentiator…it is a cost of entry. Customers expect…even demand good customer service. A recent study showed that 82% of consumers will consider leaving a brand due to a bad customer experience. Unless you’re Zappos where your entire culture centers on customer service – sometimes at the expense of profit – one small slip up could have major costs. The other problem is that even if you’re good at it, Customer Service is secondary factor in decision-making. Price, product-reliability, or even social status will have a greater impact on consumer purchasing decisions. My client didn't want to acknowledge this.
2. Be the Low-Price Leader
It’s true that the primary driver of US purchasing decisions is price. All things being equal, why would a consumer pay more? But unless you can scale like Walmart, Amazon, or Alibaba, someone will always beat your price, or at least match it. If you remember, in the 1980s, Walmart offered low-priced goods Made in the USA. But they began losing share to stores offering cheap imported goods. Their positioning, and purchasing strategy changed.
OK, so maybe you’re in a niche industry where Walmart is a non-factor. Perhaps you’ve invested in manufacturing efficiencies that allow cost control. Great! Position yourself around innovation and efficiency, and let price be a by-product. Generally, organizations that position themselves as the low-price leader don’t have anything else to offer the consumer. Too often, maintaining that positioning means compromising quality.
3. Position Yourself as #2
You’ll work harder. You won’t take your customers for granted like the big guys. You’re still in touch with the consumer. Honest. You don’t even want to be #1. OK, you see where this falls apart, right? There are only a few reasons companies position themselves as #2, and they all come down to, “we really want to be #1, but we’re just not good enough yet.” Furthermore, if you are fortunate enough to become #1 someday, you will have spent considerable time, effort, and brand equity telling consumers why they should now choose your competition.
4. Be The Expert
If you aren't an expert, your brand will eventually show it. But being viewed as THE expert only works if you’re first-in. Otherwise you’re not the expert, you are simply “someone who has some knowledge”… just like every one of your competitors. It’s also difficult for many organizations to be aware of, or acknowledge the point where they are no longer the expert. A recent client is a great example. This client offered a variety of services – some very creative, some very technical, some pure fulfillment. They struggled to carve out a niche brand where they would be viewed as the expert, not just another of many providers. They consistently highlighted all the things they had the ability to do, believing they were the expert in each area. You can’t be all things to all people.
5. Align Yourself with Leaders
This is more limited as to whom this may be applicable. Unfortunately, by aligning your brand with the positive aspects of a leader, let’s say a country (German engineering, Swiss craftsmanship, Japanese electronics, etc.), you also risk aligning your brand with the values and actions that may not be viewed as positively by consumers, and you have no control over when the tide may shift. Additionally, if you align your brand with a personality, their character affects the perception of your brand. Think of any number of entertainment and political leaders that have been connected to allegations of sexual harassment or abuse, or even icons like Coco Chanel and her recently discovered ties to the Nazi party.
So, what does work? Well, as I often say (and which causes a predictable eye roll from my wife) “It’s a combination of things.” Numerous variables, including organization size, industry*, maturity, culture, leadership, etc. have an impact. There are seemingly endless ways to differentiate your brand. Some strategies are successful for some organizations and may fail for others. And some of the strategies above will work for some organizations. The key is to be authentic. That will resonate most with consumers. Here are a few strategies that have stood the test of time:
1. Be the First in a Category.
Pure innovation. As my favorite book, Positioning, says, “The first person, the first mountain, the first company to occupy the position in the mind is going to be awfully hard to dislodge.”
1a. *Define a New Category.
Since #1 can be difficult, think differently. Until Miller created a low-cal beer, there was no “Light Beer” category. Before Red Bull, there was no “Energy Drink” category.
2. Stand for Something. Building your brand on shared values with your target audience is one of the strongest differentiators. Brands like TOMS, Equal Exchange, and Patagonia understand the benefit of shared values.
3. Provide a Unique Customer Experience. Be fun. Be memorable. Offer something to the customer that they don’t typically find from similar providers. Big brands like Southwest, Disney, and Apple do this well. That doesn’t mean smaller brands can’t do it too.
Good luck on your distinctive brand journey. If you have any other questions about differentiating your brand, give us a call or connect with us on social media.