How can you differentiate your products and services?

Meaningful differentiation

Differentiation is defined as, ‘a marketing strategy that strives to distinguish a company’s products and services from the competition.’ It can be essential in making a business competitive, but it’s not as black and white as you may at first think. Your products and services can be differentiated from those of the competition in any number of different ways, but just because you are offering something different, doesn’t mean that it is necessarily going to give you a competitive advantage. Effective differentiation means being not just different, but better… and better in ways that are important and meaningful to your customers.

Competitor benchmarking

A good place to start is to look at what your competitors are offering. By matching their product or service proposition, you can take away their differentiation and negate the competitive advantage that they had over you. If you can overtake them, you gain the competitive advantage that they once enjoyed, and if it’s something that their customers valued, it can be a great opportunity to win some new business at their expense.

It’s all about perception

Customer perception is all-important when it comes to differentiation. If the customer believes that something is better and it influences their purchase decision in a positive way, then it’s effective, even if in reality the benefits are minimal.

An important step in this process is therefore to understand what would be of value to your potential customers. This could be the features and benefits of the products you are offering, but could equally be focussed around customer service. If you can offer shorter lead times, longer guarantees, or more reliable deliveries, these could all be enough to make a customer choose your business over your competitors.

Innovate to differentiate

The more innovative your differentiation is, the better. Once you know what your customers value, use this as a focus for your product development teams. The more innovative you are, the harder it will be for your competitors to keep up… and if you keep on innovating, you can always stay one step ahead.

Price competition is a slippery slope

Differentiating on price alone is a slippery slope. There is always someone who will cut corners and offer an apparently equivalent product for a cheaper price. Price competition is a downward spiral that can devalue the whole market and erode margins. There are seldom any winners in the long run. For me, differentiation is all about finding ways to command a premium in a competitive market, and avoiding price competition should be a key objective.

Create your own brand

In many markets, and particularly those where there is little brand recognition, creating your own brand for bought-in products can be an effective way to avoid price competition. If you can go a step further and make some aesthetic tweaks to those products so that look a bit different, the opportunity for customers to price match can be significantly reduced.

Shout about it

Once you have established your points of difference in the market, it’s important to make sure your potential customers hear about it. This could be a market-wide advertising campaign, or something more targeted, depending on the nature of your business and the market in which you operate.

Here to help

Our experts at 49Red have years of experience in helping businesses to find meaningful differentiation from their competition. We can help you find and implement the right solution for your business and then make sure your potential customers hear about it. Whatever you need, we are here to help with cost-effective, no-nonsense marketing. Contact Hugh Moss on 07808 365214 or email to find out more.

This is the fifth of six blogs under the title ‘Five steps to post-pandemic business success’. Follow 49Red on LinkedIn or visit our website at to see more.