Differentiate… or accept being average

“A product which fails to differentiate itself from other products in the same market can expect no better sales than any similar product.”

This little thought crossed my mind, and I think it is fairly true.  So what are these factors differentiate a product between it and its competitors?  These are the ones that immediately came to mind:

  • Appearance
  • Usability
  • Effectiveness
  • Availability (often coupled to awareness)
  • Awareness
  • “Coolness” (social attractiveness) (or the hipster anti-trend)
  • Price
  • Quality (perceived or otherwise)

I’m sure it is possible to come up with counter-examples for each of these, but in general, I think this hold true. Allow me to elaborate on each factor.

Appearance

The bulk of the fashion industry seems fixated around this one. If a product looks different than its competitors, it visually stands out from competitors.

An example of this that I’ll never forget is an assignment I had in elementary school. Our teacher had us create our own breakfast cereal box (not the cereal inside of it, just the box). Her point was to prove how advertising works – things that are flashy or bright stand out. If everything is flashy and bright, than the one that isn’t is more likely to stand out. Basically, something must be visually different in order to stand out. If all products have an approximately equal appearance, it essentially becomes visual noise, and nothing stands out.

The same could be said about any of the other sense – touch, taste, smell, or sound: if there’s a significant difference, it stands out.

Usability

If a product is easier to use than competitive products, that’s a selling feature. A prime example of this could be iOS vs. Android tablets. Huge amounts of effort have been put into making iOS easy to use. If a 90 year old grandma or a 2 year old kid can pick up a tablet and figure out how to do something on it in a short period of time, that says something about the product. This doesn’t necessarily mean that one is entirely superior (or the other entirely inferior), but usability is a selling point.

Another great example here is the Nest thermostat. Compared to other programmable thermostats, it seems like a much easier to use product. I’d honestly love to rip my existing thermostat off the wall and replace it with something else. The user interface was definitely created by engineers who didn’t have a clue about usability.

Effectiveness

If usability is how easy (or hard) it is to use a product, effectiveness is how well it actually works. A prime example here is mosquito repellent spray. If all other factors are equal, but if one repels mosquitoes better than the other, there’s a very reasonable chance that the better repellent will sell better, provided that people learn that it does work better.

The great thing about the internet is that finding information about how well a product actually works is, in some ways, easier than than it ever has been before. This assumes that online reviews can be trusted, which is a whole other topic of discussion. Between reviews on sites like Amazon, people posting video reviews on YouTube, and personal blogs where people talk about actually owning and using things, there’s a glut of information out there.

Availability

If a product isn’t available, customers will likely choose a competing product (again, if all other things are considered equal). Your customers shouldn’t have to spend inordinate amounts of time trying to find your product. Buying something shouldn’t have to be a treasure hunt.

Awareness

I think this is where a lot of advertising falls into – making people aware of a product. If you’ve heard of Product A before, but you’ve never heard of Product B, there’s a very good chance you’d rather go with A (assuming you didn’t hear anything bad about it). This really comes down to brand awareness. If people don’t know you are there, they won’t choose you.

I find it somewhat interesting when you see a dozen different products being sold online, but only a few have reviews. I think, to a certain extent, it is a bit of herd mentality. If you see that someone else has chosen a previously untested product, and it worked out well for them, you’d be likely to follow. It’s always easier to follow than it is to lead.

“Coolness”

There are many consumers out there that will choose a socially attractive product over other ones, just for the sake of social standing. In some respects, I have to give credit to Apple. They’ve made it “cool” to own a MacBook and to have white headphones – and they’ve done this in an interesting way. Look at how often movies or shows feature Apple computers. They are easily recognizable from a distance, and appear very often in movies and shows.

Another interesting example I’ve heard here is Audi during events like the Emmy Awards. I don’t know how they did it (maybe by offering free cars or free rides?), but it became the ‘cool’ thing to show up to the Emmy Awards being driven in a large, dark, German sedan. I’m sure Audi sold a goodly amount of cars because of this.

Price

If two products are the exact same, people will almost always choose the less expensive option. (There are a few people out there that think that quality is directly tied to price, but these people shouldn’t be your target market – unless you are selling overpriced HDMI or audio cables). If you can’t compete on anything else, beat your competitors on price.

Quality

Quality can be a huge differentiation between products. In almost any market, there seems to be a wide variety of products of differing quality – everything from wearable computers to fresh produce. It never makes sense to go with a lower quality product if the price is the same. More on this below.

Legalities

If choosing one product over another is easier to do because of existing laws, breaking into such a market will be more difficult. A classic example of this is Tesla’s sell-direct approach. Rather than going through the dealership model, Tesla allows a customer to buy a car directly, over the internet. Many U.S. states have laws which state that manufacturers can’t have stores that sell vehicles directly to consumers. Because of these existing pro-dealership laws, it is considerably more difficult to buy a Tesla in these areas. There’s essentially an existing legal barrier to customers who want the product. If laws exist such that it makes buying a give product more difficult, it acts as a deterrent to customers.

Getting People to Make the Switch

People won’t want to switch from a competing product unless there is some compelling benefit to switching. The greater the benefit to switching, the more likely it will happen. The cost of switching must outweigh any disadvantages to staying put.

Similarly, huge advantages in one category can outweigh small disadvantages in other categories. For example, if I can easily go to the nearest corner store and buy a beverage there, rather than having to go hunting through the jungles of the Amazon, even if the Amazon beverage tastes better, I’m probably just going to go to the corner store. I see this happen often enough in my home town (a small farm town). There’s very few imported cars – the bulk of them are largely Ford, Chevrolet, and Dodge/Chrysler. This is because the nearest Toyota/Kia/Honda dealership is at least a 45 minute drive away. Many people aren’t willing to go the distance to investigate other products. It’s just easier to go to a local dealership and find something “good enough” there.

Balancing Between Categories

Part of difficulty comes from finding a balance between things. It’s entirely possible to have the highest quality product in the world, but if it is priced out of the stratosphere, no one is going to buy it. If a product is amazingly cheap, but fails to perform the given task, there’s a likely chance that whoever is selling it isn’t going to be selling it for very long. (Fool me once, shame on you. Fool me twice, shame on me).

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