For me, differentiation is about creating customer preference by having a clear message about what you do and for whom and what you don’t.
But this brings up an important issue.
Your differentiation can be shallow or deep.
What do I mean by that?
Well shallow differentiation is based on having a marketing message which is distinct and differentiated from your competitors and valued by your customers.
Deep differentiation goes further. It also have a distinct and differentiated marketing message but the differences between you and your competitors ripple through everything your business does so that the business delivers a unique customer experience.
Shallow differentiation has a clear promise, deep differentiation consistently delivers on that promise.
The difference is critical to your long term success since a promise kept creates satisfied customers who are eager to buy again. A broken promise leads to disappointment and a need to keep finding new customers.
It comes back to how you look at differentiation.
Shallow differentiation comes from seeing it as a marketing and sales issue – the responsibility of the Sales & Marketing Director or the Chief Marketing Officer and their staff. It’s a criticism I have of the USP concept created by Rosser Reeves.
Deep differentiation comes from seeing it as a general management issue where the responsibility belongs to business owner, the chief executive officer, the senior management team and everyone else in the business who has a responsibility to deliver on the promises made to customers.
In shallow differentiation you tell your customers.
In deep differentiation you tell your customers and your employees.
I shudder with horror when I read some blogs and see differentiation as one small topic in a list of marketing tactics.
How you differentiate your business is the key strategic decision in your business.
It’s not something to do quickly and think “I’ve done that. I can now cross it off my to do list and move on.”
Shallow differentiation can require some difficult decisions. For example it’s often difficult to narrow your focus on a particular customer niche or specialisation since it means saying “no” to many opportunities.
Deep differentiation requires hard work. Yes that four letter word you should never mention because it puts some people off.
But that’s good.
Differentiation is the source of competitive advantage which has the potential to lead to long term improved profitability.
But the key phase is “sustainable competitive advantage.”
The easier it is to copy, the sooner you are back in the undifferentiated world of commodity products and services.
Shallow differentiation is easy to copy. At its heart, it is just a marketing promise so it’s easy to see and easy to do.
Deep differentiation is hard to copy. It’s embedded in the activities, the routines, the skills and the culture of the business. The impact of deep differentiation is easy to see but it’s hard for a competitor to diagnose and even harder to copy. You only get deep differentiation if you go through a differentiation process.
Back to my original question…
Is your differentiation shallow or deep?
If on reflection you think it’s shallow, then you’ve got more work to do to make sure that the essence comes through in the business activities. If you don’t, then any differentiation advantage you have will be short lived because your business is based on foundations of sand.
What do you think about the concept of shallow or deep differentiation?
Paul Simister is a business strategy coach who helps small business owners to profit from differentiating their businesses, being distinctive in the eyes of their customers and standing out in a crowded marketplace.