Differentiation in the digital age
How companies can stand out from the crowd
Digitization and globalization have brought us many social advantages in recent years and decades. As consumers in particular, this has made many things cheaper, easier and faster in our everyday lives. Global supply chains and international networking have made the distances between people seemingly smaller. Any information we are looking for, any product we are interested in, we can quickly and easily find and compare the pros and cons of – all from the comfort of our couch on our cell phone. For companies, however, this permanent comparability means a new challenge. How should a manufacturer position itself correctly in order to stand out from the mass of search results with its own product? The answer may be easier than you think.
The simplest method of differentiation
No matter what product we offer, online we can all be compared with just a few clicks. An alternative supplier is quickly found – even for my product. That’s why we as entrepreneurs must do everything in our power to clearly demonstrate to the customer already on the digital path that our solution is better than that of the competition. In the digital age with its global oversupply, however, a “better” product has become a very subjective term. For many customers today, better often just means different.
This is most clearly illustrated by concrete examples: Would you say that iPhones from Apple are better than smartphones from Samsung? Some tech-savvy readers could probably philosophize for hours here or explain exactly why one is better than the other – but these opinions are subjective and often diverge widely in practice. The same example can be carried out with almost all known consumer products.
- Is an Audi really better than a BMW?
- Is a handbag from Prada really better than one from Louis Vuitton?
- Does McDonalds have better food than Burger King?
- Is a vacation in Thailand better than a vacation in Mexico?
Depending on who you ask, you will get different answers. But what all these products have in any case undeniably in common is that they are definitely different. And definitely different from the customer’s point of view. Any child can immediately tell the difference between the products of one company and another. Nike didn’t invent better running shoes, one made them differently. Pepsi didn’t invent a better Coke, they did something different. Uber didn’t invent a better cab, they made it something different. You don’t have to reinvent the market or your product, just making it seem different is enough.
All these “different” products are already easy to associate in the customer’s subconscious and are linked to numerous symbols such as the logo or brand of the respective company. As a result, these products and companies are clearly positioned in the market and in the mind of the consumer. A customer can therefore immediately differentiate them and classify them as important or unimportant for himself. This possibility of lightning-fast differentiation is necessary in the short-lived era of social media profiles in order to prevail against the ever-shorter attention span of consumers.
After all, just being “different” these days often means already being “better,” or at least is used as a subjective synonym. The Internet offers a multitude of people who gather around certain topics, for example in forums or certain groups on social media. If our product is different, we can tailor it more precisely to the target group in question and in turn contact them more easily. If there is consistent demand in our market, as long as our products are different, they will automatically attract some attention. By offering a product with high value and also presenting it “differently” in the market, functioning differently or looking differently, we can use it to address our customer base in a differentiated way in the digital world – even with minimal differences in the actual product.
This simple form of differentiation can already be a very helpful step in driving sales and growth for a company. Especially because “being different” in the digital world can often be presented more clearly than has been the norm in the past with very little effort. Therefore, analyze your market and how exactly the competition is performing there.
What is already expected by customers, what would only and could be a surprise from the customer’s point of view? Always try to show in a clear way that your company and product are different. Pay attention to details like graphic design and the exact customer journey your customers go through when they contact your company. It is always about the overall appearance of your company, and less about the individual products or their features.
New possibilities for differentiation
Digital marketing allows us to provide quick and clear feedback on how our messages are perceived in the marketplace. In order to differentiate ourselves as a company, new opportunities arise through effective digital marketing combined with a professional outward appearance to the customer. Companies can thus position themselves better in their market and secure their respective position. This in turn allows new, strategic opportunities for further growth and expansion. Previously, there were only three ways for companies to establish themselves as market leaders. These were as follows:
- One offers the best price.
- One offers the best quality.
- One offers the fastest implementation/delivery.
In pre-Internet times, you had to focus on one of these three fields to stand out from the competition in the long run. Today, however, not only do you have these options to differentiate, but digitization has created a whole horde of new options in which a company can specialize. Chris Anderson’s principle of the “long tail” in markets has revealed just one of many doors that were closed in the days before digitization. In this context, individual companies concentrate on a large number of niche products which, although they hardly generate any sales figures individually, generate a profitable business model in the mass. Amazon, for example, is one of the most valuable companies in the world today, but de facto offers nothing that a competitor could not imitate. So how then has this company managed to successfully differentiate itself?
In the beginning, Amazon had based its business model precisely on the long tail of the market by selling books: Instead of focusing on bestsellers for a broad audience, as most bookstores do, where physical inventory is limited, Amazon offered an incredible selection of titles and authors. Because sales took place online and customers were also willing to wait a week or more for delivery, the book didn’t even have to be physically in stock but could be referred or purchased on demand, depending on how the order was received. The selection of books this made possible dwarfed any physical bookstore. For example, a customer looking for a book that was published years ago and was not very popular would be unlikely to find it in a local bookstore.
This is precisely the market that Amazon serves, and it has conquered its place as the world’s largest book seller. The selection for this niche market was almost endless, causing the sales of books to skyrocket. Soon Amazon became the go-to place for books. Here, Amazon served a part of the market that had previously gone completely unnoticed. The individual books, which in any case hardly made a circulation, were of no interest to the traditional book trade. Here, everything revolved around the bestsellers with fast turnovers on the shelves. Out of an enormous number of titles that sold sluggishly individually but achieved incredible sales in their entirety, Amazon eventually became the market leader – with a part of the market that had previously been left out. Amazon didn’t need patents, nor was it the first online retailer. But it did make bookselling different and also saw potential where no one else had seen it before. Selling books became different as a result.
An effective and optimized sales process that provides customers with first-class advice and a buying experience can already be another method of differentiation. In Amazon’s case, the next differentiation was a first-class and absolutely secure shopping experience as a customer in times when many were still skeptical about the Internet. Again, they hadn’t invented anything special in the process – but they very much offered the customer a different experience.
We have to understand that in the times of oversupply in which we live today, differentiation does not necessarily have to mean an improvement in product and service. Differentiation today can also simply mean being “different” – a different experience when buying, a different way of solving the existing problem. Apple products, for example, are almost indistinguishable from conventional smartphones or laptops in terms of technical details. In some cases, even the other manufacturers have more performance for the same money – or even for less money. How has Apple become so successful when comparable products are available at better prices?
Because Apple’s products are definitely one thing, different.
Nowadays, the Internet plays a decisive role in purchasing decisions for customers and is in many cases the first port of call when it comes to finding information as the basis for a decision. Another way to be different is to present ourselves as a company more transparently to the outside world than the other competitors on the market. By giving customers more information, we can again make the buying experience with us a different one.
Which product we offer and which market we serve with it plays an ever smaller role in the digital world.
The more important questions are rather:
- How do we stand out from the rest of the search results and content?
- What makes our external appearance special?
- What do we show, what can we do, what do we do that no one else does?