When your product/service offering offers little differentiation vs. the competition, you need to be creative and strive for “Peripheral Differentiation”
Marketers are well aware that all successful marketing is rooted in differentiation. If you want to convince a potential customer to choose your product or service, you have to “give them a why”. This is all fine if your offering has unique characteristics that you can detail to prospective customers. But what happens when you have to compete in a product category that has little or no differentiation? How do you convince customers to choose your product vs that of the competition? When
Trying to Differentiate on Price
Some companies choose to “be different” based on price. Their answer to the “why” question is “because our product is less expensive”. In this instance the “best case” scenario is you get the customer’s business, but it is at a compromised margin. This could also lead to a downward spiral when your competitor decides to drop their price and a “race to the bottom” ensues. The harsh reality is that you cannot effectively differentiate on price. As the old saying goes, what business you gain on a nickel you can also lose on a nickel.
Focusing on Your Company – Not The Product
Another common and usually unsuccessful tactic is to downplay the product itself. The goal is to try to focus the customer on the company itself. Messaging may contain vague “reasons” to choose your company, such as:
- Choose us, because we care!
- Proudly Serving the XYZ Community
- We are Committed to Quality
- Our Selection is Second to None
Each of these statements is meant to provide some reason for customers to choose your company, but they usually fail. Customers just don’t care about these things.
A Different Approach – Peripheral Differentiation.
Rather than insult customers with tired slogans that carry little tangible value, try a different approach. Peripheral Differentiation is a way to deliver meaningful value to customers with often very little expense to your company. Strive to deliver solutions to challenges customers face in the situations that relate to your product, i.e, peripherally. A couple of examples are listed below:
- A photographer who faces stiff competition for wedding packages can offer “Let us help you plan your wedding with our guides/checklists”
- Facing extreme pricing pressure from online providers, a pool supply company can schedule weekend seminars for customers with tips on proper chemical use.
- An industrial paper supply company can build a strong network of contacts in the business community to share with local printers who consume their paper products. The printers will appreciate the referrals and hopefully reward the paper supply company with orders.
These are just a few examples of thinking beyond the products themselves and asking the question “in what ways can I offer my customers help in using the product better, or helping them with challenges they face.
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