Finding Your Differentiation Angle

Guest writer McKenzie Folan shares three insightful strategies you can use to stand out from competitors.

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September 10, 2019

Identifying what makes your product different from competitors will help you carve out your own niche in the market. Here’s some tips on how to stand out.

Separating yourself from competitors is integral to the success of your business, especially when entering a market that already has established players with large market share. Entrepreneurs often want to do it all, striving to have the best features, lowest price, best service, etc. I’m here to tell you that sometimes less is more. Identifying the one or two key ways that you can successfully differentiate yourself from competitors and focusing on those will help you carve out your own niche in the market. There is no “one size fits all” differentiation strategy, but make sure you identify one that customers truly care about and will make their decisions around. Here are a few potential options:

Change the Way Customers Use a Product

Can we redesign something in the market and fundamentally change the product through innovative technology?

Apple took this differentiation strategy when it released the iPhone in 2007, attempting to force customers to rethink how they use their cellphones. Not only did Apple include the most sophisticated touchscreen technology ever released, but they replaced old school keypads completely to widen the screen, enhanced web access, and improved camera quality. Phones now became iPods, cameras, portable DVD players, and much more all in one, allowing Apple to rapidly gain share in a market that was seen as quite saturated. Competitors followed suit soon after, attempting to develop their own touchscreen phones, but Apple earned a first mover advantage that they carry with them to this day.

Target a Specific Customer Segment

Is there a certain customer segment I can target that has different needs than other customers and would benefit from a more customized product?

Intuit TurboTax provides a great example of differentiation based on target segments. They offer specifically tailored products for multiple different segments, including individuals, entrepreneurs, and small businesses. At a high level, TurboTax’s solution simplified the complex process of doing taxes by guiding the user through a series of questions. However, TurboTax took this a step further recognizing that tax needs differ based on the customer profile, and they designed solutions to target specific customer segments, understanding that customers really care about this customization. A “one size fits all” solution would not have been nearly as successful, leading TurboTax to be the market leader in tax assistance software.

Focus on Customer Service

How can I tailor my customer service model to attract more customers than competitors with similar offerings?

Chick-fil-A is widely recognized for their superior customer service, earning the #1 ranking in American Customer Satisfaction Index’s fast food category for the past four years in a row. On their website, you’ll find a quote from Chick-fil-A founder S. Truett Cathy claiming, “We should be about more than just selling chicken. We should be a part of our customers’ lives and the communities in which we serve.” Customer service is a cornerstone of the business with each customer greeted with a smile and left with two words everyone who’s been to Chick-fil-A is all too familiar with: my pleasure. While Chick-fil-A also has high quality food and clean stores, they’ve clearly differentiated themselves on service, which keeps their customers coming back.

While these are three common differentiation strategies, there are many possible options. First take the time to really learn about the competitors in the market and the products that they are offering. Then talk to customers to identify key gaps in their offering, which in turn will help you determine how you are able to differentiate yourself. Picking one or two key differentiators will likely yield higher success than spreading yourself too thin attempting to win on every product / customer dimension. Remember that you must differentiate yourself on the area that really matters to your key customer segments. If the customer doesn’t care, it won’t be a differentiator.


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