From Interruption to Engagement

Making Differentiation Make a Difference is a recent article by Patrick Barwise and Seán Meehan at Strategy and business

Barwise and Meehan say

What’s wrong? When companies are so preoccupied with fiddling with individual products and brands, they lose sight of the value they can create for themselves, and for consumers, by raising the bar for the entire category. If Crest, Exxon Mobil, Tide, Citibank, or Marriott disappeared tomorrow, most American consumers would at worst feel slightly inconvenienced by having to switch to an indistinguishable alternative (how different is Pepsodent, Shell, All, Chase, or Hyatt?). But how would they feel if an entire category — toothpaste, gasoline, detergent, consumer banks, or hotels — disappeared? That would have an effect on their lives they’d notice.

I am sure we can think of UK equivalents. For example Shell retrofitted its European gas stations to meet customer requirements and realized a double-digit increase in sales and return on capital.

In the wireless world the fortunes of Orange and One2One can be compared financially.

Orange and One2One, another startup, received their licenses at the same time. Both were well capitalized, and they were equally regulated. Neither had a technological advantage over the other. But while One2One stuck with the practices that gave the mobile phone service category a bad reputation among consumers — many calling plans, confusing billing approaches, and quirky networks — Orange sought to change them. In 1999, both companies were sold: Orange to Mannesmann and One2One to Deutsche Telekom. Orange fetched £20 billion, a premium of £13.1 billion over One2One’s price.

Orange I would agree have worked very hard at simplyfying, and enhancing the value it offers its customers. Its not perfect, nothing is, but being customer focused, and generating significant customer advocacy, will drive growth for companies.

I think there are many ways for many different types of companies to significantly differentiate themselves in todays crowded marketplace.

A brands palpable sense of its higher purpose must be communicated to its customers. Service or enhanced value offerings that simplify, enable, or that help customers navigate information are key.

The opportunities afforded by richness and reach of digital platforms in conjunction with other forms of media can deliver that differentiation.

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