Too Hung Up on Differentiation?

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I was speaking with a colleague about branding and the concept of differentiation. His perspective was troubling to me. In sum, he said: “Differentiation is overrated. We’re too hung up on trying to differentiate ourselves from the rest of the pack. What’s important is matching up as well as possible what you do best with what customers want most. You can spend a lot of wasted energy trying to differentiate and claim a position, but this won’t necessarily drive growth. Just perform for your customers, damn it!”

Hmm… I don’t know. What do you think? Is differentiation overrated? Do we spend too much time and effort trying to distinguish ourselves and either lay claim to or reinforce a particular positioning?

Are we wasting our time trying to unearth what Brad Van Auken suggests is the sweet spot of our brand?

In a word, my answer is NO!

Differentiation is critical. You want to be somebody rather than just another business in the lumped-in-with-everybody category. Diligently doing what you do best to meet what people want most is honorable work, but the problem is that your competitors are engaged in the same exercise. Everybody is working hard to meet market expectations.

If you want to be noticed, if you want an edge in building demand for what you’re offering, then you need to differentiate. You need to communicate, in a unique and compelling way, why the market should consider and choose you over everybody else. Not attempting differentiation is essentially the same as resigning yourself to commodity status.

I believe every business can differentiate itself in some way that’s important to customers.

For example, you may find yourself in an industry where all businesses are innovators and are trying to own that position. BUT remember, it may not be how innovative you are, but how you deliver upon that promise of innovation that’s important to customers.

“Okay, so you’re a technology leader. That don’t impress me much. I want to work with the innovator who can help me get out to the market faster than my competitors.”

“Okay, so you have the most advanced technology available. That don’t impress me much. I want to work with the innovator who is the best at helping me apply the technology to make my products better.”

“Okay, so you are on the edge when it comes to new technologies. That don’t impress me much. I’m running a multi-billion dollar business here and don’t have time to fool around. want to work with the innovator who can deliver new and intelligent solutions that can be trusted to work.”

For me, this whole question prompts me to wonder if some of us underestimate the PERCEPTION of value. Remember, value isn’t just real dollar value, but also perceived value. You want customers to experience and perceive that they are getting more value from you than from your competitors. Building a perception of difference is important because, as we all know or should know, buying decisions (yes, even in the B2B space) are not built on cold rationality alone. Buyers base their decisions on a wide variety of variables, from performance attributes to the like-ability of people behind the brand choice. Don’t you want to clearly communicate a compelling reason for buyers to choose your brand over competitive alternatives?

The one thing I will readily acknowledge is that the magic of branding is not so magical anymore. Buyers are much more aware of how branding works and how it’s supposed to work on them, as Kevin Roberts has rightly pointed out. The result is that buyers are much more skeptical and discerning. This means, I believe, that if you are going to differentiate, your position must be believable and credible.

I want to hear from others on this question. Is differentiation overrated? Should the focus lie elsewhere? Or do you see it as I do… that differentiation is a critical building block when it comes to clearly communicating why buyers should choose one brand over competitive alternatives? And even if you embrace the notion of differentiation, what are some of the problems you see with differentiation strategies?

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8 responses to “Too Hung Up on Differentiation?

  1. thefinancialbrand

    Anyone who says “differentiation isn’t important” had better be prepared to compete on price. When people can’t see any discernible difference between you and the competition, the only thing they have left to compare you on is price.

  2. My industry was absolutely trapped in competing on price…or what we like to call “the spiraling vortex of death”. Breaking away from that and really “saying” and focusing on what we would stand for has helped us stay stable in this economy. The interesting thing was that we chose to focus on some really basic things rather than creating something groundbreaking. We compete for the entertainment dollar, but we chose to create experiences that were simply clean, safe, friendly and fun delivered at a value.

    • I like what you say, Julia, about “focusing on what (you) stand for”… that’s a large part of what branding is all about: standing for something instead of everything… and building up an expectation or set of expectations that matter to the people you care about. Thanks for sharing your story.

  3. Where I come from now, the world of small-time, small-town retail, nothing will ever matter as much as individualized customer service. I think this simple, traditional effort gets lost in the corporate view of new logos and positioning statements, which I made my living on for 3o years. But now, as a small-time buyer and seller of imported goods, I know that nothing matters as much as a personalized effort to know your best customers and care about delivering exactly what they want. I realize that in the world of commodities, this takes on a whole different, price-driven aspect, but don’t ever underestimate the value of knowing each important decision-maker, knowing what they value, what they care about, and just speaking to them as a person. Pick up the phone and let them know that you care about what they care about. Goes a very long way to developing loyalty that no logo or “positioning” can beat.

  4. Greta, you and I go back a long way. I’ve benefited tremendously from your good thinking and keen business sense. Once again, well said! Of course I agree on the importance of showing customers that you understand what they value and that you care about delivering that value so they can succeed. We can’t ignore this fundamental. It’s the bread and butter of good business, don’t you think? I hold to the value that good positioning can deliver… but it’s easy to nod my head to what you’re saying. A spectacular “positioning” will only take you so far. We all know business success is not built on positioning alone; it’s built on delivering the value you promise. Fail that test, fail that test repeatedly, and you’re sunk!

  5. I know it seems obvious, to pay attention to individual customers, but in my current life, I find that vendors and suppliers often don’t take that extra step to make the customer feel valued or attended to (which is why I’m in the process of switching my credit card processing right now). This function could easily be handled by a low-level (low-cost) employee who just calls or emails periodically to make sure everything’s going OK and to discover unmet needs. The personal touch, delivered in line with the brand position, will be the true differentiator in the future, IMHO. Marketing people can sit in conference rooms all day long, dreaming up brilliant ideas (been there, done that), but what the customer cares about most is that someone is paying particular attention to THEM — big, small, strategic, or not. That’s what the future of business will be built on. The side benefit is that you can hire and train entry-level people who will understand and care about your business at the personal level, thus helping to alleviate the unemployment problem while training future leaders who understand the lifeblood of what makes you successful. I know these are old ideas, but being on the customer end makes me sure they are the real differentiators.

    • I like your thinking, Greta. It’s a much more personal and human way of doing business. Positioning can help a brand stand out, be recognized, provide a context in which to think about that brand, etc., but it can’t make a brand be trusted or even loved. You can’t build emotional connections through a positioning.

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