Differentiation you can feel

Mike Sievert posted on one of my favorite topics:  brand differentiation and corporate strategy.  I think Mike gives a good round-up of positioning alternatives.  An excerpt below, full text here.

I think of differentiation on four dimensions (see illustration).

To me, differentiation happens on the four dimensions of Product Offering, Customer Connection, Business Model, and Availability. The best companies sustainably out-pace their competition in more than one dimension, or else, really dominate in the one dimension that is most important in their category. In the illustration above, the oval denotes the position of a company that is very undifferentiated in product or customer connection, but very differentiated in business model, leading to sustainably low costs, and in availability. In this case, which might represent a computer company such as Acer, the company reinvests cost advantages to create distribution (availability) advantages.

In contrast to that example, some companies focus on product differentiation. Clearly, product differentiation remains an important dimension. But in my view, it is changing in nature. Today, product differentiation is less and less about rational features and more and more about intangibles. Products that are well differentiated make us FEEL something.

One cannot lead in all differentiating factors.  See Porter.  Companies seem to constantly be looking at the greener grass in their competitors’ yards, rather than tending their own.  Whatever you choose to distinguish your company, do it so well that no other will dare invade your territory.

Regarding Mike’s point about differentiated products making us feel something, I think that is a great benchmark.  A new ThinkPad makes me feel more capable.  The sign-in book at the Crunkleton (a bar in Chapel Hill) makes me feel that I belong.  If non-JIF peanut butter enters the house, I feel betrayed.  A premium is earned by all of those.

Easy to say, hard to do.  This deserves another post.  Short version:  1) actually care about your customers,  2)  listen to and talk with them,  3) surprise them with something they care about,  4) stick with it for a long time.


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