Killer Differentiators

 

Killer Differentiators – Jacky Tai and Wilson Chew

Necessity is the mother of invention!

Necessity was really the reason 'Branding' was invented 4000 years ago. Cow owners had a pressing need to distinguish their cows from one another. They created a branding iron that had the logo of the owner. This was red heated and was used to burn a unique mark onto the cows rumps. It was simple and it worked. Since then the need or Branding grew rapidly along with the civilization.

Products are made in factories but brand images are created in minds. The question is, how?

Businessman is like sunlight. Customers are like piece of paper that the sunlight needs to burn through. In itself sunlight can’t burn though a piece of paper. The sunlight gives millions of kilowatts of energy but despite that, the best that the sunlight can do to the paper that has got exposed to it for a long time is to turn it yellow, perhaps. For the sunlight to burn a hole in the paper, it needs to be focused by something like magnifying glass. The magnifying glass is the differentiating idea!

FWMTM syndrome: Creating USP (Unique selling proposition) is in a way making differentiator. Xerox forgot what made it famous (FWMTF) and that’s the reason it got ousted from the market. After the photocopying machines they made, fax machines, computers, scanners, laser printers and host of other things. So don’t follow the Xerox’s footsteps after it became successful. Do what it did before   it became successful.

The USP needs modifications: People tend to think that the old things are outdated. They get excited when a new-fangled concept comes along. After a while, the buzz and the hype surrounding that concept dies down and it becomes less relevant.

The differentiator needs to be desirable and defensible:

There is a saying, “You snooze, you lose”. It works the same way in branding. If there is a differentiator that is desirable and you don’t grab it immediately, then chances are that it will be gone by the time you realize that it is a desirable differentiator. If the differentiator isn’t defensible it will be immediately taken by your competitors.

Quality is a must, but not a good differentiator:

From a brand point of view, when everyone stands for quality no one actually stands for quality. With the same quality perception, the customer will buy the product that is the cheapest. In today’s marketplace, sameness is not an asset, it is equivalent to the Kiss of death.

Remember that even if a customer buys a cheap product, it expects quality. Even if a phone is given free by your mobile service provider, you would still get upset if that phone doesn’t work properly.

Service is a good differentiator but tough to maintain

Service quality is tough, not only for your competitors to replicate but is difficult for you to replicate and maintain for long. The toughest part in quality service is its consistency. A product can be made to be consistent in terms of looks, feel, function performance and other important parameters but with service, that’s hard. Even delivered by the same person it can vary from time to time. Put it down to human nature. Therefore, using service as a differentiator should only be done if you can achieve higher service quality than your competitors and replicate that consistently.

Desirability:

Not all the differentiators are equally desirable.  Mercedes, the beginner in the automobile industry had got associated with the brand image of luxury. BMW- Performance, Volvo- safety, Toyota – Reliability. The cars that came later had a disadvantage, but managed to stay in the competition because of the differentiator. Following are companies with their differentiators:

Volvo                    – Safety

Mercedes-Benz                - Prestige

BMW                     – Performance

Toyota                  –Reliability

Kia                          –Affordability

Lexus                    –Refinement

Audi                       – Style

Mazda                  -Sporty

Alfa Romeo        – Sexy

Land rover          -4 x 4

 Is being the next generation that important?

These days people have almost pathological need to be in the forefront. They’ll check for everything that is new. So if you are new, you get looked over. By being next generation…

·         Gets your brand noticed.

·         Makes it risky for the customer not to buy from you.

·         Gives you a deadly weapon against the competitor.

When you are the next generation brand, your job is to make everyone obsolete including you. Work on making yourself outdated by launching versions 2.0, 3.0….

 

Can service brands be differentiated?

Yes!

Find out if there is a difference in the way you serve?

Is it in demand?

Then work on communicating it to all the customers. Without communicating the service differentiator the idea will not create the magic.

 Like people brands also have personalities. Many brands have been successfully using personality as their differentiator

Harley Davidson –The Rebel’s brand

Microsoft            – The Nerd’s brand

Apple                    – The cool people’s brand

Maruti Suzuki    – Paisa Wasool brand

 The opposite Position

Even if you are strong number 2 brand, taking opposite position from the number 1 brand can be very effective. That’s what BMW did to its competitors in the luxury car segment. BMW labelled the others as sitting machines because they were very luxury, very opulent and very soft. So BMW cleverly took the opposite position by being the “Driving machine”. Then Audi came strongly and took the opposite position from both the brands in terms of design and style and built a strong and rapidly growing brand. But once you found that opposite position, you need to stick to it. For example if Mercedes decides to be green instead of being prestigious, what should BMW do? Stick to its position. Don’t change. Change confuses people. Although Green suddenly becomes one of the most important criterion for car buyers, BMW should still be the ultimate Driving machine but one that is also environment friendly.

 Specialization as a differentiator:

When you specialize you become good at what you do and the message spreads. Comparatively the Specialists tend to have smaller revenue than the generalists but tend to make more profits. Many strong brands started as specialists and once they became big they started diversifying.

 Preference as a differentiator:

Preference is a powerful differentiator because the people who prefer you can make your brand strong. For eg. Oral-B tooth brush says on its website, ”The brand most Dentists use worldwide”. Some coaching institutes, promote themselves saying its toppers academy. Toppers prefer them.

Rational idea is to understand the market segment before showcasing your brand as a preference. If 70%of the market belongs to segment A, one should reach the A category and show yourself as their first preference.

 Heritage as a differentiator:

Don’t squander your heritage. If you are fortunate enough to have heritage on your side, make use of it. Show your brands progression from the beginning; remind the world how you got to where you are today. But make sure that you:

·         Update your heritage

·         Make it relevant to today’s market and customers

·         Make it exciting.

 What to do with the differentiating idea?

Finding a differentiator isn’t easy. Once you’ve found, the job is even harder. The differentiator is like the raw material. It needs to be refined, polished and packed before it can be used. The process involves three critical steps

Validation            : Your entire team should agree to have the differentiator as the most effective.

Dramatization    : Lucrative packing, Slogans of your service USPs everywhere are few examples.

Communication                : Understand the customer touch points and reach them.

 

Disclaimer:

Have used the useful points from this book of Jacky Tai, modified it to streamline my experience. The summary is written simply to preserve the good points from this book that can be read over and again to make the use of it in practical practice.

 

Vinay Wagh

 

 

 

 

 

 

 

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