Do you need differentiation?
- Do you really need to differentiate in order to survive?
- If you have been doing fine until now, why change?
- Apparently you have found a market for your products with a certain quality and functionalities at a certain price.
- A price that your customers want to pay as they find it reasonable enough to buy.
Compare the opportunity cost of being different with the costs involved of being different.
Opportunity: Will you sell more if your products or solutions are different?
Cost of being different: What will be the cost of designing, producing, marketing and selling a product or a solution that is quite different?
In your marketing and during every sales process, you will need to explain the difference and convince your potential customers of the benefits provided by the difference. That will be consuming money, time and effort.
Lost sales: if people don’t understand or miss to see the benefit, sales will be lost.
Marketing the differentiators is hard to do
Of course being different gives you the opportunity to explain, stand out of the crowd and break away from the average or the mediocre.
If you have been heard or if your messaged gets passed on, people might listen or retain your message.
If not: then you stand no chance with your very different, unique and outstanding solution.
The questions are:
- Will the audience be listening and will they understand your differentiator?
- How much effort and costs will go into explaining the differences and the related benefits?
- Will they buy?
It will be harder and more difficult to explain the specific features, functions and benefits, than to tell what the audience wants or expects to hear. This allows them classifying your solutions or products in a certain category: that’s easy and convenient.
Understanding something new demands an effort. And it cannot be classified easily.
Even if they pay attention, they still can misinterpret and draw the wrong conclusions.
In case a business has a requirement or a demand, the decision makers or influencers will make a short list of solutions and solution providers, where your much different solution might not fit in anymore. Thus being left out of the short list as being too different.
There are more risks involved in being a differentiator than go with the flow.
Example of differentiator problems
A good example of differentiator was the Dyson Vacuum Cleaner with differentiators:
- No bag
- Constant suction
- Higher cost of purchase – lower cost of operation due to the no bag
James Dyson wrote a book about it: Against the Odds (autobiography).
It took years before the product was designed and it took a long time for addressing the right market:
- Originally the Dyson vacuum cleaner was intended for the High Income and it had a first success in Japan at a premium price.
- In the end the Two Income Families have bought the vacuum cleaner in large quantities.
The High Income families had cleaning ladies and thus didn’t care about the dust bag or the constant suction.
The Two Incomes Families had to vacuum themselves and running out of dust bags or less suction causes an interruption in their cleaning work.
The Dyson vacuum cleaner turned out to be a big success, but how many other solutions or products that are different turn out not to be successful at all?
To be different or not
It is well known that two shops with similar products in a street sell more than one, as it gives the buyers the opportunity to compare. Thus why be different?
People like to compare similar solutions and products.
Thus why would you want your products or solutions to be different altogether?
- The total price of being different can be too high: development, production, marketing and selling.
- The risks involved of technology failure and marketing failure.
- The incomparability problem: your different solution doesn’t compare with the other solutions in the market.
Having a market offering similar to the competition might be the best solution in many cases for most companies.
Standing out from the crowed is hard and challenging work and involves many risks.
Being different could be highly successful or a very big waste and loss: in most cases nothing in between.
If you have a ‘me-too’ product, you will need:
- Your marketing or your pricing need to make you stand out from the crowd.
- The best lead generation solutions to get the most and the best leads of your market.
This could turn out to be better than being a differentiator.
Do you have ‘me-too’ or differentiator products or solutions?