Six Ways To Stand Out From Your Competition

A difference is worth establishing when it meets at least one of the following criteria:

• Valuable: the perceived benefit exceeds the cost
• Important: delivers a benefit critical to success
• Distinctive: unique or offered in a distinctive way
• Superior: better technology, faster
• Emotional: ties to a core emotion — love, hate, desire
• Communicates: understood and visible
• Preemptive: cannot be easily copied
• Affordable: customers can pay the higher price
• Profitable: contribution (margin times volume) exceeds cost of difference

“Differentiation means standing out in a hyper-competitive world.”

There are six primary ways to differentiate, including product, service, channels of distribution, relationships, reputation/image, and price. However, not all differentiation strategies are equally effective, and some methods may be more important to invest in than others in order to stand out from the competition. Read on to learn more about these different strategies and the key advantages and disadvantages associated with each one.

Product Differentiation:

Product differentiation is probably the most visible. It includes actual physical and perceived differences, of which the latter can be acquired through advertising. 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. This is the general area that most B2B marketers — and probably most consumer marketers as well — spend the majority of their time and dollars.

Service Differentiation:

Differentiation of service includes not only delivery and customer service, but all other supporting elements of a business such as training, installation, and ease of ordering. To many, these seem like the simple components of a business — the blocking and tackling or the foundational elements that do not require sophistication. But think about a business like McDonald’s. Like their Big Mac or not, they know how to differentiate on service. With very few exceptions, you will get the same product and the same service at a McDonald’s in Texas that you will get in Georgia, Connecticut, or California. And in each location, the fries will be cooked the same, have the same amount of salt, and be served up equally as fresh from the fryer.

Distribution Differentiation:

Channels of distribution can also be an effective means of differentiation. Distribution can provide coverage or availability, immediate access to expertise, and greater ease of ordering, and higher levels of customer or technical service.

Relationship Differentiation:

An often overlooked means of differentiation is through company personnel. Employees, associates, or team members with customer interface can provide and demonstrate competence, courtesy, credibility, reliability, and responsiveness. Responsible for executing day-to-day client-facing communication, they are the linkage between the product and customer. If that linkage breaks down, the business is destroyed.

Image/Reputation Differentiation:

Some businesses set themselves apart by their image either as part of another differentiation avenue or as a separate strategic path. Normally, image is created by other forms of differentiation such as high levels of service, superior product quality, or performance.

Price Differentiation:

Successfully competing on price requires recognition that every customer has a different price they would be willing to pay for your product. Segmentation and differentiation allows a business to come close to maximizing the potential revenue by offering each segment a differentiated product at a different price.