I was looking at gift guides recently and noticed that so many ads look the same. They all featured offers that were price driven and the lack of distinctiveness was striking.
The sheer number of options from which people must choose got me thinking about competition in retail. How can any of us compete?
Most of us face one of the following three challenges when it comes to sales - ads that look too similar to the rest of the market, pricing promotions that cut margins, and a crowded market with so many options that standing out feels impossible.
This is where relative differentiation comes in. Relative differentiation is simple; it’s the idea that your business can deliver value to your customers in a way that is different than the alternative.
Your marketing makes promises to your customers all the time, even when you don’t realise it. It might suggest you offer the best service, the best selection, or perhaps the lowest prices.
Ask yourself, why do any of these things matter? Are they valuable? Are they important to your potential customers? Is this something you do better than your competition?
Relative differentiation
Relative differentiation explains your value to your customers in a very specific way using three easy to remember Cs: customers, company, and competition.
Think of it in question form: What do our customers want that we can deliver better than our competition? The Northern Territory does this in its campaigns to get people to travel: “The Top End. Different From the Bottom End.”
That’s relative differentiation. We are the north, not the south. The Northern Territory can offer a unique experience that the south of Australia can’t.
Relative differentiation is positioning. Your position is the promise you make to your market about factors that you think you can win on.
What does your customer want that you can deliver better than the competition? Examine the position Abercrombie & Kent adopts as a travel company that combines ‘comfort and authenticity’ in the most desirable locations. Why does this matter? Most of us want to be able to relax on holiday. Many people I meet want to go ‘where the locals go.’
Abercrombie & Kent makes the promise that it can fulfil this desire. How? The business offers holidays that are comfortable and authentic and its been doing it since 1962. These ads tell the audience what Abercrombie & Kent will do while using its experience to put distance between itself and the competition. The implication is that the competition lacks the experience to deliver. That’s a position that a business can compete on.
Follow through
The idea comes alive when you communicate it consistently to the right people.How do you do this? Bennett Winch, a UK leather goods company, does it by being specific in their targeting.
Focus on the right customers. Bennett Winch sells $AU1600 duffel bags. The tagline says the products have “the capacity for adventure.” By design these bags aren’t for everyone. They are specifically for men that want to feel adventurous but have the money to spend on a high-quality leather bag.Mercedes Benz is another company that is great at this. “The best or nothing” says it all.
“Compared to us, everyone else is rubbish.” Mercedes Benz stands up as the best. That’s a strong position and this idea sticks because the company has used it consistently for years.
Prospects need to hear your message multiple times before it breaks through. Use your point of differentiation with emphasis in each area of your marketing. Combine media as often as you can because it will give your store the impression of scale, underlining the difference you are building on.
Summary
You can put this to work in your business with three steps.
First remember the importance of knowing your market. Focus on what matters to your customers. Look at the example of Abercrombie & Kent. The business is offering comfortable and authentic vacations to a market that wants that.
Ask yourself important questions, such as what does your customer want that you can deliver better than your competition? Look at the example of the Northern Territory’s tourism campaign. The promise is to offer an adventure in the north that you can’t get in the south.
Finally, share the message far and wide. You can’t overdo this. Lack of awareness is the most significant danger so use multiple forms of media. Find ways to get your message everywhere.