Few businesses enjoy the privileges of monopoly power in their chosen fields of operation. Most markets are increasingly global, increasingly crowded and, therefore, increasingly competitive. In order to achieve commercial success companies need to do something different as Greek shipping magnate Aristotle Onassis recommended, they need to “know something that nobody else knows” in order to stand out from the competition.
Unique Selling Propositions
Faced with competition, the strategy for most companies is to differentiate. This involves offering customers something that the competition cannot or does not offer a Unique Selling Proposition (USP). The concept was developed by US advertising executive Rosser Reeves in the 1940s to represent the key point of dramatic difference that makes a product salable at a price higher than rival products. Tangible USPs are hard to acquire and hard to copy, which is what makes them unique.
Companies must distinguish their product or service from the competition at every stage of production from raw material extraction to after-sales service. Products such as Nespresso coffeemakers and Crocs footwear, and service providers such as majority Asian-owned hotel group Tune Hotels, are all heavily differentiated, each having a strong USP.
The primary benefit of uniqueness, however it is achieved, is greater customer loyalty and increased flexibility in pricing. Differentiation guards products and services from low-priced competition; it justifies higher prices and protects profitability; and it can give businesses the competitive advantage needed to stand out in the market.
By definition, not all products can be unique. Differentiation is costly, time consuming, and difficult to achieve, and functional differences are quickly copied “me too” strategies are commonplace. Touchscreen technology was introduced to the cell phone market as a point of differentiation for Apple’s iPhone, but is now a feature of most smartphones.
Differentiation often does not remain a point of difference for long. With functional uniqueness being so elusive, marketing guru Philip Kotler suggested that companies focus instead on an Emotional Selling Proposition (ESP). In other words, that the task of marketing is to generate an emotional connection to the brand that is so strong that customers perceive difference from the competition. For example, while the design and functionality of Nike and Adidas sneakers are distinct, the differences are so small that they amount to only a marginal difference in performance. The products’ differences are, however, magnified in the perception of the consumer through marketing and the power of branding uniqueness is achieved through brand imagery, promotion, and sponsorship.
Apple achieved differentiation in the fledgling digital music market by combining easy to use software with well designed hardware and a user interface that integrated the two. The product itself the iPod portable music device was functionally little different than existing MP3 players, but combined with the iTunes software to create a unique customer experience. This experience is Apple’s ESP, which the company promoted with its “Think Different” advertising campaign
Standing out
One company that has achieved uniqueness is the British fashion label Superdry, which has grown to include more than 300 stores in Europe, Asia, North and South America, and South Africa. Drawing a novel, international influence from Japanese graphics and vintage Americana, combined with the values of British tailoring, Superdry quickly established a strong position in the hypercompetitive clothing market from its launch in 2004. The business started life in university towns across the UK, a positioning that gave the brand a youthful appeal. Despite limited advertising and abstaining from celebrity endorsements, Superdry’s popularity rapidly grew. The company’s distinctive look quickly caught the eye of celebrities (a jacket worn by soccer player David Beckham became one of its best-selling products, and Beckham himself became an unoffical talisman of the brand), providing free publicity.
Superdry focused on offering clothing with a fashionably tailored fit and attention to detail (even down to garment stitching). Worn by offduty office workers, students, sports stars, and celebrities alike, the brand was able to appeal to a broad customer base. Most differentiation strategies involve targeting one segment of the market; Superdry chose to target them all. The brand’s unique blend of fashion with ease of wear, comfort with style, and the presence of mysterious but meaningless Japanese writing, has proved a difficult mix for competitors to replicate.
As many companies discover, popularity can be the enemy of difference. While Superdry clothing has become increasingly ubiquitous around the world, its uniqueness and difference have declined. The challenge for Superdry, like all companies, is to protect its uniqueness while also expanding its reach to stand out from the crowd, while welcoming those crowds into its stores.
Differentiation can occur at any point in the value chain. Standing out is not limited to products or services it can occur in any number of internal processes that translate into an improved customer experience. Swedish furniture retailer IKEA, for example, differentiates itself not only through contemporary design and low prices, but through the entire customer retail experience. The company’s low prices are achieved, in part, through its selfpicking and self-assembly retail model the customer experience involves picking products from the company’s vast showrooms and warehouses and then, once they have transported the goods home, assembling the furniture.
Even the way IKEA “guides” shoppers on a one-way, defined route through its showrooms is unique. While this tactic encourages spontaneous purchases, it also helps to reinforce IKEA’s points of difference customers are exposed to predesigned rooms and furniture layouts that emphasize the brand’s contemporary style. Price is kept low since fewer store assistants are required to direct customers around the store.
Different but the same
Paradoxically, familiarity can also be a source of differentiation. The entire McDonald’s organization revolves around providing almost identical fast-food products, with the same service, in identical restaurants the world over. This familiarity differentiates McDonald’s from unknown local offerings, and from other global competitors who cannot maintain the same degree of consistency across their operating territories.
In a market in which rival companies promote the uniqueness of their products in ever-louder and more complex ways, consumers have become increasingly savvy when it comes to distinguishing reality from rhetoric. While differences do not have to be tangible the evidence shows that an Emotional Selling Proposition (ESP) is often enough the challenge for businesses is that points of differentiation do have to be genuine and believable. Developing an emotional connection with the customer requires that the differentiation is understood and consistently delivered throughout the organization. Well defined core principles that celebrate a company’s uniqueness should inform the customer experience a every point of contact difference has to be believable, and it is only believable if it is dependable.
ontested in the courtroom. Every industry has leaders and followers what separates them is that the leaders are usually those with the most defensible points of differentiation. Whether in features and functionality, brand image, service, process, speed, or convenience, uniqueness must be established and communicated for a company and its offerings to stand out in the market. The key to longlasting success is making that differentiation sustainable.
