I’m often surprised when you as an aspiring entrepreneur, looking for investors, tell me your solution is so innovative that you don’t have to worry about differentiating it from competitors, and customers will flock to it without a real marketing campaign. Unfortunately, what I see in this Internet age is information overload, and new product differentiation is harder than ever before.
In this context, based on recent feedback, over 30,000 new products get introduced every year, and 95 percent fail, primarily because they don’t stand out over existing alternatives. Thus I recommend that every new business owner needs to really develop and execute a strategy for getting noticed in the marketplace, no matter how unique and impactful they see their solution.
Here are some suggestions for winning strategies that I see in use today:
Enlist experts and influencers to make your case. Customers today feel they are too savvy to believe your marketing pitches, so they look around to see what other credible people are saying about your offering. These include recognized social media influencers, industry experts, and even early customers. Perception is better than reality.
For example, when Children's Place was looking for brand awareness for their solution, Kidpik, they found the best way to reach the target audience of young girls was by enlisting a small army of pintsize social-media stars, rather than conventional advertising.
Focus your marketing on real customer value. Skip the old-fashioned marketing hype, such as “leading the market,” “next generation,” and “more user friendly.” Concentrate on providing real data demonstrating value and return in actual scenarios, from existing customers. Case studies, supporting videos, and giveaways still work well in this regard.
For auto owners, Discount Tire has found that repairing simple tire punctures free and checking inflation gives real value to customers, who then return when it’s time to replace worn out tires, or bring in the car for other maintenance. I now use them exclusively.
Target most relevant customer segments first. Don’t confuse and dilute your potential customer base by weakly trying to appeal to all. As an example, a high fashion customer has little in common with a bargain shopper, so don’t even try to appeal to both. For maximum impact, hone your differentiation strategy even before you build your product.
The first step in this regard is to define your target market, and size the opportunity for growth and potential. As an investor, I often see entrepreneurs with passion for their innovation, who haven’t realized that their market is highly fragmented or limited.
Personalization is the ultimate differentiation. If you can allow customers to personally configure the product they get, you should highlight this ability for memorable differentiation. Today’s generation of customers assign value to uniqueness, flexibility, and a perfect fit, so this is a competitive advantage you can highlight with credibility.
Of course, it’s still a requirement to balance the cost and scalability of personalization against the value of this differentiation. On the other hand, it's easy to overlook the value of personalization because it either seems too simple or too complex to bother.
Grow customer relationships versus transactions. In today’s ease of global communication, people buy from people, not from companies. By actively participating in social media and customer support channels, you can differentiate by building advocates and loyalty. Actively ask for feedback, and provide rewards for participation.
Show your commitment to a higher purpose. Customers today are more socially conscious than ever before, which is a great trend. Find a social or environmental issue where you can make an impact, and make that your differentiation. This also works well in getting a greater level of engagement and productivity from your own employees.
Remember, the days are gone when you could assume that “if we build it, they will come,” no matter how innovative your solution. Effective product differentiation requires a continuous marketing effort and strategy, to find a place in the hearts and minds of your targeted customers, and drive the growth and success you always dreamed of for yourself and your business.
*** First published on Inc.com on 12/15/2021 ***