I was walking my dog the other day and looked up, higher than average. I pass this community garden often, but never paid close attention to the sign. It’s not just any community garden. It’s a pollinator garden. Yes, it’s beautiful for us humans to enjoy, but I love that it’s especially for birds, bees and butterflies.
My brain was in “work” mode, so it immediately struck me how the importance of differentiation seeps into our regular non-business lives. That garden has a key differentiator that serves a special purpose: It helps the bees and butterflies solve a problem, which is providing material to propagate plants. Ok, it’s silly, because bees can’t read, and they’re just flying around with their little instinct radars up to find the plants, but the basic premise is there.
If you’re not paying attention to what makes you you, a lot is being left on the table
In business–no matter how small or large–differentiation directly affects a brand’s short-term profitability and long-term viability. I even pick my dry cleaner, bottle shop, one-man yard service and fried chicken restaurant based on the unique experience they provide that solves my ‘problems’ in the way that I like.
When customers perceive brands as interchangeable, two things tend to happen:
- Purchase decisions to devolve to price. This means lower margins and reduced profitability.
- Loyalty destabilizes. If something is basically commoditized, why would you make the extra effort to stick with one over the other? When this is the case, high customer churn results in lower revenue and reduced market share, allowing competition an easier grab on your opportunities.
The more differentiated your service or product is, and the better it solves your target audience’s problem PLUS aligns with their values, the more likely they are to become repeat or referring customers…naturally leading to growth.
Where do I start?
With the “why”. “Why does your organization exist?” The answer to this should be linked to your company’s mission, vision and values. It is the light on your path in the direction of your differentiation.
Simon Sinek, who led a TED Talk based on his book Start With Why—the third most popular TED video of all time–concluded “…people won’t truly buy into a product, service, movement, or idea until they understand the WHY behind it.”
Ask yourself what your organization / product / service does better than anyone else. Be specific and honest.
Don’t stop at a feature. Push to express the benefits to your customer and why it matters in their life.
…Then the “who”
Understand what motivates your key target audience. What are their needs, and why? What are their fears, pain points and drivers? How is your offering a solution to one of their problems? How are you accomplishing this in a way that’s different from your competitors?
Offline, people connect on values. It’s what friendships, partnerships and marriages are based on. So why should a brand’s relationship with its customers be any different? HOW can it be any different?
In this 2020 Consumer Culture report, 21% of Boomers say buying from brands that share their values and ideologies is important. With Gen Xers, this number jumps to 50%. And with Millennials: 62%.
When you can understand your ideal customer’s beliefs and core values, you can relate to them in meaningful ways–establishing a strong foundation for a loyal relationship.
How to communicate your differentiator
Let’s say you have a home cleaning company. Telling your target audience that your point of differentiation is “a fresh, clean home that is personalized to your wants” is a great point of difference, but acknowledging that “You spend all day taking care of everything and everybody else; it’s important for you to feel taken care of when you come home.” expresses why you’re in business: To help them feel cared for. The emotional motivator behind your “why” is where your audience can connect because it is a core value to them.
What differentiators to avoid
Feature-based differentiation. Features or attributes are often too easy to replicate. Your differentiator should be something genuinely proprietary (perhaps patented), something you can innovate to stay ahead of competition, or an experience that only your company can deliver.
Price-based differentiation. Someone, somewhere, somehow, will always do it cheaper.
Quality. In some unique cases this may be do-able, but overall, “quality” has become the Charlie Brown teacher wah-wah-wah of a marketplace, and it’s becoming increasingly mandatory–not a cool-to-have.
Practice brand self-awareness regularly
Competition can eat away at differentiators over time, so it’s necessary to revisit your “why” against your ideal customer targets, in the context of your evolving competitive landscape, from time to time. Your differentiation may be similar to competitors, but how you communicate emotionally and inspirationally it is what really helps you stand out.
Download this short guide to help inform your team’s thought process through this compelling exercise.