Five brand differentiation strategies that can make a business (and one that can break it)
Across our many years in branding, we’ve seen brands flourish and others fade into oblivion. The deciding factor? The power of differentiation.
Brand differentiation makes a brand stand out from the crowd by emphasizing what makes it uniquely valuable to its customers.
It’s a strategic process that — when done right — allows you to connect with your audience on a deeper level.
WHY BRAND DIFFERENTIATION MATTERS
It’s quite simple – differentiation cultivates loyalty. When customers relate positive (meaningful) experiences with your brand, they’re more likely to stick around, even when competitors offer similar services or products.
FIVE BRAND DIFFERENTIATION STRATEGY EXAMPLES THAT CAN MAKE A BUSINESS
There are many ways a brand can differentiate itself from competitors and build brand loyalty. Which differentiation strategy resonates with you?
- Product quality
Picture this: every time a customer uses your product or interacts with your company, it delivers — no fuss, no mess-ups, no frustrations. When this happens repeatedly, people start recognizing your brand and its products for quality and reliability.Product quality IRL: For this one, I’m coming back to one of my fave brands, Apple (I’m creative, what can I say?). Apple’s Unique Selling Proposition (USP) is strongly based on quality, with praise for their high-end design on all levels (product, interface, packaging, brand). This commitment to quality has helped Apple build a strong brand image and a loyal customer base. It’s unlikely its existing customers are going anywhere soon. - Customer Experience
A brand can also stand out by delivering a seamless, hassle-free, and even joyful customer experience. This means ensuring that everything — from the moment a customer hears about your brand to after-sales care — is nothing short of amazing. By putting a big smile on every customer’s face, a brand builds loyalty and gets people talking about how great they are, driving further business growth. Outstanding customer service is always a winner.Customer Experience IRL: Disney is a prime example of a brand that differentiates itself on customer service. One of its staff mantras is ‘Always Go Above and Beyond’, which sees initiatives like the ‘No Strings Attached‘ vouchers that staff can gift to customers to help rectify the rare times someone has a bad experience in one of the Disney Parks. - Brand values
When a company differentiates itself through strong commitments to social and environmental issues, it’s not just about selling products or services anymore. Instead, it’s about connecting with customers with those values and beliefs. This connection creates a powerful bond, helping the company differentiate itself meaningfully.Brand values IRL:Outdoor clothing company Patagonia’s brand differentiation is deeply rooted in its commitment to environmental sustainability and social responsibility. One of its slogans, “100 Percent Today, 1 Percent Every Day” (giving 1% of profits to good causes and 100% on Black Friday sales), reflects its dedication to effecting change and its core belief that caring for our planet is not in conflict with running a successful business. Other brands will find it hard to compete with this. - Design and innovation
Companies focused on design and innovation — whether launching new products, improving existing ones, or adopting or pioneering new technologies — will stand miles apart from competitors that are slower to adapt or evolve.Design and innovation IRL: When people think of a Dyson vacuum, they immediately recognize the distinctive, sleek design and associate it with powerful, efficient performance. Plus, Dyson continually innovates with major technological advancements — from bagless vacuum cleaners to bladeless fans and even hair dryers and curlers. This dedication to design and innovation has firmly positioned Dyson as a market leader, demonstrating how this product differentiation strategy can work. - Brand story
A compelling, authentic, and emotionally resonant brand story can capture consumers’ attention and humanise the brand, making it more relatable and memorable. A brand story can also convey the company’s history, mission, values, and vision.Brand story IRL: Aussie fav “Who Gives A Crap” disrupted an entire sector through differentiating on brand story combined with brand values. The ethical toilet paper company took a bog-standard (sorry, not sorry) product and made it desirable simply by focusing on its sustainability and social responsibility mission. This powerful storytelling is a competitive advantage that is very hard to replicate. The above strategies fit into a vertical and horizontal differentiation framework. Vertical differentiation is about quality, with brands distinguishing their products based on an objectively ‘superior’ attribute. Horizontal product differentiation focuses on variations in style, taste, and other more subjective preferences.
THE BRAND DIFFERENTIATION STRATEGY THAT WILL BREAK YOUR BUSINESS
Did you notice that we haven’t spoken about pricing yet? There are some exceptions to this rule (I’m looking at you, Aldi), but generally, a brand or product differentiation strategy based solely on price isn’t sustainable in the long run. Here’s why:
- If you compete primarily on price, you’ll likely find yourself in a race to the bottom. Lower prices lead to smaller profit margins that are not sustainable, particularly if you can’t achieve the high sales volumes needed to offset these lower margins
- Competing on price alone will inevitably lead to an undervaluation of your brand’s products or services. If customers are taught to focus solely on price, they can easily overlook other aspects of the product, such as quality, service, and convenience
- A differentiation strategy based on price won’t provide a strong barrier to competition. Competitors can easily undercut prices, cancelling out your brand’s primary differentiating factor.
When it comes to brand differentiation, our advice is to forget price as a driving factor of your brand identity and instead focus on aspects of your brand that can’t be easily replicated, and that will resonate deeply with your target customer.
HOW TO CREATE EFFECTIVE BRAND DIFFERENTIATION
Crafting a successful brand differentiation strategy is an art and science combined. It requires understanding a consumer’s emotional needs and employing data-driven tactics to deliver resonating products and services.
Differentiation isn’t a one-size-fits-all approach. Instead, you need to understand your target market thoroughly, identify what they value, and determine how you can meet or exceed their expectations uniquely.
Differentiation isn’t about being different for the sake of being different; it’s about being different in ways that add value to your customers, giving you a competitive advantage.
Creating a genuine brand and product differentiation is hard. It’s a challenging journey that requires a deep understanding of your market, a keen eye on evolving trends, and a readiness to take calculated risks.
However, the rewards of successful differentiation – customer loyalty, market standing, and sustainable business growth – are well worth the effort.
So get in touch today – we’d love to hear from you.
Written by: Kiri White
Published: June 27, 2023