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Differentiate or die

Differentiation is key to brand creation and brand management, and depends upon a fine balance between analytics and creativity

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Differentiate or die

  1. 1. Differentiate or die - if we do not, computers might as well do our jobs!<br />If you do not differentiate every marketing action you take, a computer can do your job better – and faster - today! Our ability as marketers to balance insights, experience and analytics with creativity, makes us able to add differentiated value to business. Often, the analysis itself will be the same for any brand in a given product or service category (i.e. like market segmentation), it will be the application by a given brand that will set the one apart from the other. That application must first and foremost differentiate. <br />Great differentiation depends upon the right analysis and insights, combined with intuition and creativity. <br />Without differentiated value that translates into a superior equity value or profit margin for a given brand, we are not leveraging our marketing resources better than any other company. In a world where value is created by leveraging the same resources better than rivals, marketing “same-ness” has no place. <br />Yet, marketing can only differentiate so far without substance, and when it does, it will not be sustainable. Truly differentiated brands start with high degrees of substance, often visible and tangible. In fact, the more tangible it is, the better. Alessi products make it fun to do normal kitchen chores like boiling water for tea, or making coffee. It makes it fun to set the table for dinner. It transcends the borders of “normality” and adds really well designed functional products, with a sense of fun and quirkiness. It turns ordinary experiences into exceptional ones. The design of Caterpillar products make them look strong, masculine and sturdy, hence the reason why it easily transcended the category of earth-moving equipment into related industrial applications and even fashion wear. Caesarstone surfaces are strong, beautiful, flexible and come in a range of colours and textures that are mind-blowing – it can be used in any space and on any surface where fashion combines with durability: despite many cheaper and similar products, it leads the category with regular innovation. To cite the example everyone uses, Apple delivers well-designed products that are fun and easy to use – and they are visibly different. Here the brand experience becomes a major differentiator, where it starts with physical performance delivery, and then translates into an emotional bond – or as some may call it – “love” for the brand. <br />In all these instances, differentiation has created significant brand equity – and a committed consumer that is prepared to pay a margin for these brands as they believe they offer higher value than less differentiated brands. <br />In many such products, the difference is visible and tangible: it looks different and delivers a different functionality and user interface. That is the foundation of differentiation. The exponential emotional benefits only exist because the brand delivers superior functionality.<br />Yet, differentiation remains the exception rather than the rule. <br />In my opinion, few marketers do differentiation well – in fact, many do not even use the term “differentiation” in their “language”. Yet, it is one of the cornerstones of branding: branding is about elevating a given brand above the generic product or service offer of the category. If it were not for branding, all offers in a given product or service category would be indistinguishable from one another - that is the basis of commoditization. If every product or service is the same in what it offers the consumer “why pay more” for a given one? Even though it may “work” in the short term, it is unlikely to “work” in the long term. <br />In a universe of brand and marketing communications clutter, product and service parity - and an increasingly informed consumer - differentiation is often over-looked, resulting in a sea of mediocrity, where everything is “ok” and generic, but few things are “exceptional”. When looking at most advertising, as an example, it often advertises the category far more than it advertises a given brand. As an example, we still see more people shaking their heads of shiny and flowing hair in shampoo commercials, than we are told why a given brand is better than its rivals. In car advertising, most show fairly standardized “beauty shots” of cars, even when stylistically the car is not unique. Most mobile phone companies still show people using their phones, as though people do not know that is what you do with a phone company. Arguably, such campaigns add very little real value to a brand, unless you are the brand leader. If you are not the brand leader, at worst such campaigns may even assist the brand leader more than the second or third tier brand. I have seen how campaigns that are generic get confused: where consumers ascribe the campaign to the leading brand. When this happens it means a total waste of marketing resources – and on top of that, an opportunity cost. Yet this is more the norm than the exception. This very same principle applies to all output of marketing: most are generic, not differentiated. Most products themselves are the same in what they offer the consumer, yet brand owners and marketers believe, for some miraculous reason, they will be successful, regardless. They will only be successful as long as the market growth – hence demand - is so high that it masks mediocrity. When the market stagnates or declines, un-differentiated brands are the first to suffer. And more importantly, their profit margins suffer. Many will say the best measure of differentiation lies in the margin a consumer will pay above the average of the category: this makes differentiation measurable and tangible. <br />The very same principle applies to most other marketing output. Brands increasingly have Facebook pages, without realizing that having a page has now become generic, it is what you do with this page in content terms, that is significant: people will only engage with the brand if its adds value to them in some way. To create impact in an over-crowded marketplace, you need to stand out from the crowd, and you only do that in two ways: spend far more money than everybody else - or be much smarter than everybody else by creating exceptional content people want to engage with. <br />In an era where brands stand and fall because of their inherent integrity, and where there is “no place to hide” for weak or average brands, differentiation is the most significant yardstick for marketing activities. On top of that, most brands experience significant resource constraints, so it has to take care to do things that are significant. The exponential loss experienced by average brands through un-differentiated actions is high. <br />Consumer brand value is based upon a “fluid” balance between value and price. If this equation becomes unbalanced, it results in a loss of either brand equity or business for the brand. Un-differentiated marketing and product or service delivery can do nothing to elevate the value-side of the equation. Amidst many brands competing for the same consumer dollar, it places the brand at a competitive disadvantage. Value is created when every step of the consumer value chain is considered and optimized. <br />Brand management is about building incremental brand value in all you do, and building incremental consumer value in all you do. If any marketing action does not do this, it has little ability to excite the consumer or grow the value of the brand. If marketing gets reduced to “average-ness”, computers will be better and faster at doing our jobs: they hold significant advantages in access to information and processing speed. <br />Generally, I have seen it takes hard work to differentiate – not only from marketers - from the entire business. How often have I heard marketers tell their agencies their brand is exactly the same as those of competitors, so the agency must create “magic” that will differentiate the brand. This is a very simplistic – and unsustainable – way to create differentiation. <br />Differentiation must be engrained into the DNA of a company: it must be the acid test of how companies work. <br />So, differentiate – or die!<br />