What if there really isn’t much difference between you and your competitor? If this is the case, and you aim to be a profitable and growing business then it’s time to refocus your strategy so that you can be more differentiated and create value for your consumers.
To be undifferentiated is not sustainable. You need to be able to create value for your customers in order to charge a price that reflects the value you provide, but if your competition can also do this, then there’s no reason for them not to jump in on your turf.
Without differentiation a brand is a commodity and you end up competing on price
When your brand is considered a commodity, it means you are competing to sell the same thing as everyone else in your industry. You offer the same service or product and have access to the same channels. And once that happens, it becomes extremely hard—if not impossible—to raise margins over time or grow profitably unless some other factor comes into play and gives one business an advantage over others.
If there isn’t much difference between you and your competitor, then it may be time for some soul-searching about how and why people choose to buy your product over another. You need to get ahead by creating more value for clients than anyone else does.
First, assess whether or not your perception of the difference is accurate and valued.
Is your perception of the difference between your brand and competitors accurate? This can be a tough question to answer, but it’s important. If you’ve been in business for a long time, it may be hard for you to see the forest through the trees. You might even have grown attached to some irrelevant aspect of your business that isn’t really an advantage over your competitors—but which nonetheless feels like one from where you’re sitting.
It’s also possible that you are under-estimating the difference, and therefore missing opportunities. One of my recent clients experienced this meaning they had an opportunity to differentiate more than they previously thought possible—ultimately, this could lead to greater customer loyalty and brand loyalty over time.
If there are real differences between your business and others’, then highlight them! But if there aren’t major differences (or if what seems like a major difference isn’t really one), then you need to put in some strategic thinking time.
Second, if there really isn’t much difference, it’s time to refocus your strategy
If you need to stand out versus your competition you need to rethink you brand positioning strategy. A strong branding strategy requires careful identification of the external environment you are operating within and comparing these to your internal benefits. Your core benefits require a consistent delivery across everything you do, from advertising, to the products and services you offer, and even through to the office environment your employees to work in.
When you’re identifying the benefits of your product or service, think of it in terms of benefit layers. Start with a focus on people’s functional needs, and then move to their emotional needs and then to societal needs that set you apart. Before you make any changes, however, determine the difference consumers value, then it’s time to determine how you want customers to perceive your business as compared with others in its industry niche.
The bottom line is that differentiation is what’s most important
The reality is that every business, whether it’s in a mature industry or not, needs to build brand differentiation. This is what branding strategy is all about: understanding the marketplace and then being able to provide value to your customer by either having or being perceived to have something that your competitors don’t. You can find out more here or contact us for a free consultation to see how we can help create a unique value proposition that will allow you to charge a higher price and attract more loyal customers.