But you get great design at affordable prices. You can simultaneously use differentiation and low-price strategies. I'm a former champion of optimization and experimentation turned business builder. The customer experience is how customers perceive their interactions with your company. It’s inoffensive and, thus, beyond criticism. Consumers love a leader. Hotels clean your room, change sheets every day. This is when you double down on a single attribute—you’re known as the best for one aspect or use case. In red oceans, it’s impossible to use both differentiation and a low-price strategy simultaneously. Odds are, you’ll eventually need to move upmarket as you need margins to fuel your growth and hire better people. Look at what Dave Gerhardt did with Drift when he was the VP of Marketing there. Now he’s at Privy, and while most folks have no idea what Privy is, they already have a favorable gut feeling about it because of Dave’s personal brand. People perceive those businesses to have more knowledge, experience, or understanding of their area, giving customers a reason to choose them. It’s not a line of copy one writes. If you want to see sameness in action, just look at hotels. In eight years, it has grown more than 4,500%. I buy CXL Institute because I think of myself as a go-getter who’s going places. Differentiation strategies are based on providing buyers with something that is different or unique, that makes the company’s product or service distinct from that of its rivals. Blue ocean strategy is about pursuing both differentiation and low cost, while traditional competitive strategy differentiation is achieved by providing premium value at a higher cost to the company and at a higher price for customers. As Basecamp’s founders wrote in Rework, pouring yourself into your product is a powerful way to stand out from the crowd: If you’re successful, people will try to copy what you do. Being hot or experiencing tremendous growth can get your product or company some altitude; once you’re there, you can figure out something else to keep you aloft. You need to match it and go far beyond to avoid the sameness trap, or have a completely different take on it. This is about tooting your own horn. You don’t need to be the founder or CEO to use a personal brand for differentiation. Zappos did it with customer support. Of course, being first is one thing; staying first is another. When you ask people to recommend a tool, you inevitably hear the biggest, most popular names in the category—not necessarily ones that score best on a spreadsheet. Sometimes, people don’t know you’re the leader, so make sure they know. The fact that people know it exists is everything. Sameness is the default for most companies today. Peep, I think majority of the companies end up same on value prop in order to accommodate keywords for SEO. (This works only if the competition can’t match that due to your unit economics or a structural advantage.). Mailchimp is number one in email marketing. You focus solely on the customer—not the competition—as you’re the only one in the market. The differentiation has to come from places other than features. Sure people want it, in principle. Market penetration/popularity of a brand contributes significantly toward people liking a brand and thinking it’s good. The revenue gained was translated into similarly branded music and mobile phone devices, and tablet PCs, which all use linkable operational software. It includes actual physical and perceived differences, of which the latter can be acquired through advertising. Ready to take a hit on SEO for the sake of differentiation? Differentiation leadership focuses in providing perks that add value for consumers, while higher prices are a sort of “make up” for their higher costs. Product differentiation is probably the most visible. It’s hard to predict how it’ll play out. USAA is a highly touted and specialized (military) financial services company that has $155 billion in assets, $30 billion in revenue, and $2.5 billion in profit from a consumer base of only 12.4 million. The more people know you exist, the more people like you. That’s what a breakaway brand does—you take an existing category and redefine its use case. Hostile brands are unapologetic about aspects that some might consider shortcomings, even flaunting their flaws. Efficiency: A business strategy allows you to effectively allocate resources for your business activities, which automatically makes you more efficient. Or heat map (mouse tracking) tools. If you’re an email marketing upstart with no significant differentiation from Mailchimp, it’s extremely difficult to make it (unless you have a lot of money to spend, which probably won’t save you anyway). I buy Patagonia because I believe in sustainability, and I care about the earth. Reverse brands. 2. Scott Brinker maintains the marketing technology landscape project. A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. History has the power to differentiate your product. Do people really get how it works (other than “freeze your fat off”)? Often, they go for the obvious—stuff like “easy-to-use” email marketing. Take the Freshworks example, I am assuming they are targeting the keywords ‘Email Marketing Software and ‘Email Campaigns’. Another implication of product differentiation is that very often, it brings brand loyalty into the picture. The bar is quite low. Find an opposite attribute that allows you to play off the leader. It’s just so much easier to relate to another human rather than an entity. As soon as Snapchat Stories caught on, Facebook copied it. I can explain some key differences if you really want me to, but “they’re all pretty much the same” is 98% accurate. Inject what’s unique about the way you think into what you sell. B. Maté has been reporting on creative industries since 2007—covering everything from Fashion Week to the latest artist to wow the Parisian art scene. If you’re already an established, well-known brand in a mature category, differentiation is less of an issue. Somebody can and will be cheaper. They probably are very similar to you and that's…, What did you do last Sunday? Service Differentiation – This includes not only delivery and customer service, but all other supporting elements of a business such as training, installation, and ease of ordering. You could say that people expect free shampoo, and you might be right. A strong brand is your best, most sustainable long-term marketing asset. Heritage. Make your products in a special way. Maybe you could compete on battery life, but if you make a better battery, you can ride that wave only so long. Walmart and Southwest have used pricing as differentiation, but they have the structural advantage to do so sustainably. It feels safer to choose Optimizely over a smaller A/B testing tool. Competitors can never copy the you in your product. The language they use is vanilla, the product/service they offer like any other, and the marketing message is identical to that of their competition. Innovative stuff does poorly in focus groups and user surveys. Red Wing Shoes were the primary suppliers for the U.S. Army during both World Wars. Only category connoisseurs could highlight some functional differences between the shoes. The differentiation strategy is one of the three main marketing strategies, along with the low-cost provider strategy and the focus strategy. Pilot is payroll for international employees (differentiated against Gusto or ADP). They fight for existing customers and prioritize existing demand. This is the “more doctors smoke Camels” and “dentist-recommended toothpaste” type of differentiation. Tylenol has been doing the “#1 Doctor Recommended Brand” for decades. Where a category connoisseur sees differences, a novice sees similarities. People often recommend tools that they’ve never used but see all the time (e.g., Salesforce, Intercom, Hubspot, Drift, Optimizely, etc). And the market leaders make the most money. The easiest way to think about differentiation is to think about giving people a reason to choose you over others. And, as a consequence, they are willing to pay premium prices for them. 3. Her experience stems from a marketing background, with more than 12 years of experience consulting fashion-forward entrepreneurs. Things have finite value, but the meaning we attach to stuff—the stories we tell ourselves about it—have exponential value. Being original means doing the hard work of thinking for yourself. Wynter is the only messaging research tool. So, reverse brands remove certain aspects from a product that customers might expect and add in new, unexpected things. The marketing classic Differentiate or Die offers ideas for eight types of differentiation (commentary provided by me): 1. However, Reverse positioners assume that although customers do want something more than the baseline product, they don’t necessarily want more features. It wasn’t always like that, but you can’t really build or sustain a competitive advantage on screens anymore. Copying is easy. Let me tell you why that is, and how you can differentiate. Hire verified expert Last Updated 16 Jun 2020. Allergan’s CoolSculpting has been growing like crazy these past years. Mailchimp even gets recommended by people who’ve never used it—because they’re number one. Pay attention to the “jobs to be done,” the end goals of the user. While U.S. furniture stores have steadily lost out to retailers like Walmart, IKEA has become the largest furniture store in the world (and second largest in the United States). A safe and boring marketing strategy churns out safe and boring stuff. 6. When Drift entered the already crowded market of live chat tools, they didn’t say, “We have this feature that makes us different.” They called the whole game something else—”conversational marketing.”. As such, the main aim of any differentiation strategy is to … Product differentiation may take the form of features, performance, efficacy (or the ability of the product to do what it is purported to do), meeting specifications, or a number of other criteria. It can be a commanding force because there’s a natural psychological importance to having a long history, one that makes people secure in their choices. They stood out. Others are experts—folks who know this category intimately. 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