How to find differentiation in a sea of sameness

Everyone knows that it’s better business to stand out from the crowd. That’s why we have brands. But differentiation turns out to be a tricky subject (as we’ve discussed here and here). What looks like a fascinating and important difference to us may turn out to be a total yawn for customers.

Don’t waste time looking in the wrong places for the wrong kinds of difference. To stay on track in your search for meaningful differentiation, start with these six hiding places:

1. Customer needs. Understanding what is important to customers should be the first place to look for points of difference, but this often gets considered later in the strategy process – if at all. Looking at customers first ensures that you work backwards from customer needs and align offers accordingly. Working the other way – starting with a product and then defining customer needs around that – leads to confirmation bias, sunk costs fallacy and other conceptual errors.

2. Brand assets. What can you offer customers that is remarkable and arresting? What do you do well – better than your competitors – and why do you do it? Things that are interesting to customers are likely to be simple, basic and easy to grasp so it’s best to think big here. Resist the temptation to search out minor differences in product features. Customers care about those things far less than you might think. Try looking beyond products themselves to the customer experience. Focus on your core brand purpose and what’s really at stake for customers.

3. Brand personality. If purpose is the “why” of your brand, personality is the “who”. You could argue that for brands like Apple, BMW, Virgin and Caterpillar personality is at least as important the brand’s value proposition in creating differentiation that grabs customers. Probably more so. For B2B companies especially, it’s who you are that determines if customers trust and respect you.

4. Perceptions. There’s what you believe you are offering to customers, and then there’s what they see you to be offering. Not necessarily the same thing. This can work to your advantage in cases where customers pick up on some attractive aspect of your offer that you failed to consider. But more likely, you’re being over-optimistic about how well customers understand you. The point is, if you don’t get close to customers and learn how they think and behave, you’ll never know.

5. Competition. By all means know what the competition is up to and what customers think about what they’re doing. But best not to get too caught up in one-upping the other guy. Your relationship with your own customers is a better place to focus resources and attention. If you can really impress and captivate customers, competitive differentiation will take care of itself. And if you can redefine your category so that you’re the only player, you can get rid of competition altogether.

6. The future. More brands die from “rear-view-mirror disorder” than any other cause. Look what happened to Kodak, Sears and Toshiba. The nice thing about looking ahead is that while the past has a sameness about it, the future looks different to each of us. So by looking forward it’s much easier to find or invent fresh new ways to stop customers in their tracks.

There’s a common thread running through all of the above. Differentiation that makes a difference lives in the hearts and minds of customers, not inside your company or product. That’s where to look.