Differentiation Part 1: How well does your challenger brand differentiate?

A better question, perhaps, is ARE you differentiated at all? In reality, most companies are not.

In large part, this is because most business owners don’t really understand the concept of differentiation in branding. Without differentiation, all businesses that sell the same product or service would be in direct competition with one another. That is, of course, precisely where many businesses find themselves – stuck in the middle of a sea of sameness with no discernible difference between themselves and their competitors.

Bottom line, this lack of differentiation means your customers have absolutely no way to decide whether they should buy from you or a competitive company, leaving them only two ways to make that decision:

> Are you cheaper than everyone else?
> Are you geographically closer – more convenient – than anyone else?

Of course, neither of these are “differentiators” around which a business can logically be built. With no plan for differentiation, though, many companies have to resort to selling at thinner and thinner margins – a death spiral from which many companies can’t recover.

A new logo does not define your challenger brand

Back to the central premise, though – that most companies don’t understand what constitutes differentiation and the impact it has on their brand or success. Early in my career a client said to me “we need a new brand; can you guys do a new logo for us?”

Unfortunately, most agency professionals can tell you it’s not unusual for their clients to think a new logo equals refreshing the brand. Even more unfortunately, there are some marketing and ad agency professionals who think the same thing.  (Personally, I think ad agencies should be licensed.)

To understand the basics of differentiation, it helps to first understand what it is NOT. Here are some common mistakes companies make regarding differentiation:

•  Thinking that your product makes you different.
•  Thinking your senior staff’s years of “experience” makes you different.
• Thinking that “experience” means you don’t need customer research.
• Thinking you can “work harder” and “be better” that your competition.
• Thinking you can make a “better product” and “customers will find us.”
• Thinking that a new tag line is the answer.
• Thinking a “catchy” new headline on last year’s ad will set you apart.
• Thinking a new ad or marketing collateral is all you need.

Even if you are moderately successful, making any of these basic mistakes can limit the success you have as a company. You’ll never really separate yourself from the competition, and customers will likely be loyal to you only until a brand comes along that resonates with them at a deeper level.

How can you make sure your challenger brand resonates?

Well, it won’t happen because of an event, or a new logo, or anything you say in a tagline or because of how cheaply you can sell your product or services. Real differentiation is not a product or service, nor is it the result of management experience or expertise. Real differentiation is the result of the ongoing experience your customers have when dealing with your brand — an experience they choose to repeat, or not, based on how their needs and expectations are met.

If another company does this better, your customers won’t have any reason to value you for it, unless you happen to be cheaper. Differentiation must make you stand out from competitors and compel customers to choose you for a reason other than price or location. If they value you enough to become your advocates, then you’ve truly succeeded. How will you know when this happens?

Stay tuned to see part 2 on Tuesday to learn how customer loyalty impacts your challenger brand.