Looking through the differentiation lens: a one-sided and misleading perspective

I suspect after recent discussions on this platform, some marketers might have put differentiation back on the agenda. If I were a brand manager, differentiation would be the first concept I would throw out of the window. Below I lay out my arguments.

First and foremost, focusing on differentiation stimulates thinking to look at the world through a certain lens. That lens, as I will explain below, does not correspond with the evidence we consistently find across categories. Let’s pick the flaws apart one by one.

How you look at brand growth

Focusing on differentiation stimulates thinking that brands that are differentiated most, have the most growth potential. The more different you are, however, the higher the chance you are attractive to customers with a specific need. But the room to grow expands as you are more attractive and relevant to as many category buyers as possible. Many marketers fear that being attractive to everyone must result in a bland stuck-in-the-middle brand. But if we compare big and small brands, we simply see that big brands are more associated with more attributes than small brands. So, looking for the ‘white space’ in the positioning plot will hurt rather than nurture your brand.

How you look at targeting

In that line of reasoning, focusing on differentiation stimulates focusing on customers that fit best with your brand and thus stimulates narrow targeting. When you look at the data, however, you’ll find that customer profiles of different brands are far more similar than they are different. And the bigger the brand, the more the customer looks like the average category buyer. So, if you want to grow big, don’t be more selective in your targeting, but less. There is no waste as long as you target category buyers.

How you look at brand perception

Focusing on differentiation stimulates the idea that brand perceptions lead to purchase behaviour. A so-called ‘I love my mum and you love yours’-analysis (thank you Byron Sharp for this insightful analysis) usually shows that customers exclusively knowing and using brand A perceive their brand similarly as customers exclusively knowing and using brand B. Above, people that don’t know the brand, think very little of it. This strongly suggests that it is purchase behaviour that causes brand perceptions rather than the other way around.

Also, focusing on differentiation stimulates thinking that buyers need a special reason to buy your brand. But as mentioned before, big brands are more associated with more attributes. That clearly suggests that instead of giving buyers one or two special reason to buy your brand, rather remove barriers not to buy your brand.

How you look at competitors

Focusing on differentiation stimulates thinking the brands that are most like you are your most important competitors. Most brands in most categories, however, compete in line with penetration (Duplication of Purchase Law)*. That means your most important competitors are always the biggest brands in the category, not the ones that are positioned most like you.

How you look at examples

Focusing on differentiation stimulates looking at successful cases in which the market leaders are ‘clearly’ differentiated. The question, however, is always whether it was the differentiation that caused (at least part of) the success. Apple, for example, can be celebrated for their ability to differentiate themselves from competitors, but this iconic brand does an excellent job on many other terrains, such as making superior products, creating phenomenal packaging, and launching very creative and recognizable ads. So, you might see many examples of successful & differentiated brands, but they are a bit of an opportunistic collection if you disregard the many examples of successful & undifferentiated brands and the unsuccessful & differentiated brands.

In conclusion

Long story short, looking at the world through a differentiation lens might seem like you are setting a clear path, but you will be swimming against the current most of the time. If I were a brand manager, my first priority would be building fame and doing so by making high value, attractively looking products, reaching lots of categories buyers, being associated with what people look for in the category, looking unmistakably like my brand and doing all that very consistently. It is how great brands were always built and it aligns with the data patterns we always find.

Are there exceptions? Well, of course, there will always the outliers. But then you need to decide: are you spending your precious time and budget on something that works for 99% of the companies out there, or are you betting on that 1% of which you have no clue why they are an outlier in the first place?

*see How Brands Grow (Sharp, 2010), Chapter 6.