ALLEN.COM Strategic Marketing Tools for Business

Over the next two years, how will your budget change for social media marketing (Twitter, Facebook, MySpace)?
Increase significantly
Increase somwhat
No change
Decrease somewhat
Decrease significantly
No budget for social media marketing

  • E-mail invitations
  • Accept credit cards
  • Track RSVPs
  • Manage membership
  • Online Event Registration & RSVP

    Home > Articles

    Tip the Scales in Your Favor With Product Differentiation

    We've all seen the explosive growth in the number of "me too" Web sites. These sites are frequently criticized because nothing to differentiates their products from those of their competitors.

    It's easy for a consumer to decide which product to buy when there are clear differences between products. But what can you do if your offering is similar to your competitors'? Try creating a difference in the mind of each customer.

    Many factors go into making a purchase decision, and some carry more weight than others. Consumers are frequently thought to buy products based primarily on emotional appeal. However, customers now research many types of consumer products on the Web. Even low-priced products are being researched more extensively than ever before.

    A good example is toothpaste. It has gone from a commodity product with superficial advertising to promotions based on differentiation features that deliver specific benefits. For example, at last count Crest toothpaste has nine different products for different consumer needs. It's still an emotional decision, but the product information has become quite detailed to target differentiated products to market segments.

    Differentiating a product separates you from your competitors so the market will see you as delivering unique benefits. But you don't want to be too different. If you present a totally new business concept, it's possible that the market won't be able to compare you to your competition, which means you won't be considered in the product evaluation process.

    For most people, electric cars are not "real cars" because they can't go to all the places traditional cars can travel to. In fact, they aren't called cars -- they're called "electric vehicles" or EVs. What was the slogan for GM's EV1? It was "A Different Driving Experience." It's so different that it appeals to early adopters looking for a unique driving technology that helps the environment.

    I think EVs are great, and I look forward to a time when they have moved through the technology adoption cycle and are commonplace. But in the meantime, EVs represent a product category that has differentiation written all over it, from the name of the product to the reasons that people buy it.

    Can existing products be bundled together to create a new product that makes it more convenient?

    Recently, a friend of mine went shopping for a car and wanted a blue four-door sedan of a particular make and model. At one point, he had to choose between two equally good cars, a green four-door and a blue two-door model. At that point, he had to decide which feature was more important to him. He now drives a green four-door car.

    Purchase decisions are seldom this simple.

    Whether you sell to consumers or in a B2C or B2B environment, customers are always looking for ways to make their purchase decision easier.

    Most consumers can quickly decide which features are most important and come to the right purchase decision. However, when companies evaluate complex products, it is sometimes up to an evaluation committee to determine which features are important so vendors can be rated.

    Here is an example of a software vendor evaluation worksheet that shows how two vendors were evaluated. Vendor #1 received the highest rating because it has the most extensive commands. However, it didn't receive the highest total score because the customer values other features more. If Vendor #1 can learn more about how the values were determined, it has a chance to influence the value of that feature — which can turn a lost sale into a win.

    Vendor #1
    Vendor #2
    Extensive commands
    Ease of use
    Total score

    Score = Value x Rating

    It is sometimes possible to take advantage of the differences between products by changing the way the prospect views the importance of various features and benefits -- and not change the product itself. For instance, on your Web site, it's frequently possible to ask questions such as:

    • What is the general use of the product being considered?

    • Which features are most important?

    • Are you starting to research products?

    Once you gather data about what's important to the customer, your site can emphasize the value of product features that differentiate you from your competitors. This can be done by using profile data to change the order of links, to highlight features that appeal to the individual, or to tailor content.

    Take a look at what differentiates your product or Web site, then make sure you're promoting those differences effectively:

    • Learn what the customer feels is important.

    • Paint a picture of the benefits that will appeal to customer emotions.

    • Highlight your differences with tailored information.

    In the few minutes a visitor spends on your site, lead him or her to the product information that can lead to a sale. Product differentiation can help you add weight to your features in "high-value" areas -- and tip the scales in your favor.

    Cliff Allen is the co-author of the book One-to-One Web Marketing; 2nd Ed., published by John Wiley & Sons, and has consulted with companies on strategic marketing for 20 years.

        | Articles | About | Contact | Blog |
       Have a question? Call us: (310) 650-3599   |   Copyright © 1995-2011 Cliff Allen | All rights reserved.