Harvard’s Michael Porter famously said that there are exactly two ways to compete: Cost leadership and differentiation.
Are you Walmart or Amazon? No? Then differentiation seems like the way to go.
Practical example: If you own an independent flooring store, and a Home Depot opens up half a mile away, do you really think you’re going to beat them on price? Time to start thinking about playing a game you can win.
The trouble is, many products, services and brands have no real point of difference. Which means they’re in trouble. If you’re not different, you’re dying.
So here are five “first principles” – mindset, not tactics – to help you stand out:
1. Oddly, the goal is not “difference.” The goal is value and meaning.
Willy-nilly difference isn’t that hard to achieve. The problem is it doesn’t compound.
Shock value isn’t that hard to achieve. The problem is it doesn’t repeat.
Meaningful difference is what we seek. Meaningful difference results when we improve lives, consistently.
To create meaningful difference, don’t just ask “How can we be different?” Ask “How can we serve?”
2. Differentiation is not something you find. It’s something you create.
By all means, find out how your consumers see you. Sometimes, they’ll surprise you by pointing out strengths you didn’t know you had.
But don’t stop there. Differentiation is an active, ongoing thing, just like branding and culture. It’s something you build and iterate. It’s something you do, and that you’re never done doing.
It’s easy to copy a feature. It’s difficult to copy a value chain. It’s nearly impossible to copy a team of people on a mission.
If you’re willing to do the difficult things, you’ll increase your chances of standing apart.
3. In branding, as in life, what we do matters more than what we say.
80% of airline advertisements are interchangeable.
That’s because 80% of airlines are interchangeable. Their business models are essentially identical. They’re not really doing anything different.
But when you do something different (like Southwest Airlines), you’ll have a story worth telling (like Southwest Airlines).
If you’re having trouble developing a remarkable ad, it may be because you’re starting with an unremarkable product.
4. “Best” is relative.
The Target loyalist is not the Walmart loyalist, who is not the Whole Foods loyalist. Different people value different things.
So it’s noble, but impractical, to ask “How can we be the best?”
Ask this instead: “How can we be the best at what matters most to a certain group of humans?”
If you’re the best choice for a particular someone, your difference will be baked right in.
5. Be precise with your Who. Be creative with your How.
The more precisely you define your Who, the better you can serve them. Go “narrow and deep” here.
Your How is where you get to color outside the lines. Often, difference is not in what you do (“we make beer”), but in how you do it:
- “We brew according to strict German purity laws.”
- “We only make IPAs, but in 15 varieties.”
- “We draw inspiration from Latin American brewing and cuisine.”
- “We play at the outer edges of traditional brewing, and we’re going to share our experiments with you, even the failures.”
If you’re a challenger brand, this principle is a strategic imperative. Large brands tend toward “an acceptable experience for the broadest possible market.” So you can successfully challenge BigCo with “an exceptional experience for the smallest viable market.”
These are the principles – the starting points to help us create brand difference that matters.
In my next post, I’ll share the common traps that stand in the way of differentiation and value creation – and how to avoid them.
About Matthew Fenton: Matthew is a former CMO who helps brands to focus, stand out and grow. Since founding his consultancy, Three Deuce Branding, in 1997, he’s helped hundreds of brands to achieve “brand clarity.” His consulting services and speaking engagements help brands to focus on what matters through positioning, strategy and ideation. Contact Matthew here. He’s based near Portland, in Oregon wine country.
Copyright 2020 – Matthew Fenton. All Rights Reserved. You may reprint this article with the original, unedited text intact, including the About Matthew Fenton section.
