December 2012

Think Your Product Is Different? Think Again.

When was the last time you went to the market to buy a tube of toothpaste? Last week I went to buy a new tube and was totally and completely stumped. My local supermarket offers sixteen different versions of Crest, ranging in price from $5.99 to $2.99. Did I want the Baking Soda and Tarter Whitening, or the Tarter Protection, or the Compete Multi-Benefit with Deep Cleaning, or the Complete Multi-Benefit with Whitening, or the Mint with Scope? Crest is not the only brand that has segmented its offerings to death. Colgate offers eight lines; Tom’s has 6 lines and Aqua fresh has 10. Do I, the consumer, understand the difference between the brands or the sub-categories in each brand? Nope. So how do I choose? I look for something in the medium price range, figuring the cheapest might not be very good, and knowing I don’t need to spend top dollar to get what I want, clean teeth. Has your product or service become like toothpaste, full of features that mean nothing to the consumer, features that might even overwhelm your potential customer? Is there any way for your audience to tell the difference between you and your competitor other than price? If your answer is sure, “We care more.” Or, “Of course, our customer service is superior.” I would suggest you start packing your bags now because that is exactly what your competitor is saying. So, you ask, what can I do to create meaningful differentiation in my offerings? I would suggest that you start out by understanding what differentiation means in today’s complex marketplace. I can think of no better way to do that than by reading “Different Escaping the Competitive Herd,” by Youngme Moon, Chair of the MBA program at the Harvard Business School.
In this excellent book, Doctor Moon sets the stage by explaining what is wrong with so many businesses attempts to differentiate. “Business has been reduced to the artful packaging of meaningless distinctions as true differentiation.“ She goes on to point out that we live in a world where, “Only a connoisseur can see the subtle differences in features between competing products,” and worse, “a novice will only see the similarities.” I guess that makes me a toothpaste novice. What about your potential customers, are they novices or connoisseurs when it comes to your product or service? If they’re like me, then practicing this kind of ” Heterogeneous homogeneity, “(great phrase isn’t it?) with your offerings “ in a persistent attempt to root out overlooked consumer pockets,” will only lead you down “an expensive route to commoditization.” Doctor Moon’s insights can save you from falling into the trap of “heterogeneous homogeneity.” Her first and most important insight is that you must be willing to stop “being a member of the herd. “ “The minute you capture comparative differences on paper the natural inclination for businesses in the comparative set is to focus on eliminating those differences rather than accentuating them.” The brands that succeed she points out, “Are the ones who understand the rules so they will also understand the urgency to break them.” Doctor Moon gives the reader three different avenues of differentiation to explore, and cites success cases in all of them. She is careful to make it clear that there are no rules in the world of differentiation and that sometimes a blended approach is best. She cautions that you have to be brave to go down the road to true differentiation. “The truth is that sustainable differentiation is rarely a function of well roundness. It is typically a function of lopsidedness. The same can be said of excellence because excellence on any extreme almost always involves trade-offs. “ Do you want to offer an excellent product or service? Do you want to stop selling toothpaste and start blazing trails towards selling unique products and services such as iPhones that you talk on while waiting in line at Starbucks, which is not a coffee house but a social hub? If so, come back next week and learn what you can do to create real and sustainable differentiation for your offerings.
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