People will pay for a brand, innovation or something of value to them. How can similar products be so different in price and value? And specifically, how can you standout from the crowd? We suggest to differentiate your offer you need to be better, different, cheaper or a combination: whatever will appeal to your customers. For most companies one of the biggest challenges is to create a personality, something people can relate to with the company, or even as regards your product. Some of the bigger companies have teams devoted to just one product. In an age of increased competition what is the first thing most companies do to promote their products? Well, it is not to reduce prices, certainly not initially.
Branding and Innovation
The simple answer is branding. Branding is a combined effort of the company which is projected through marketing, design and all other efforts to the consumer. Not all brand leaders need to be innovators but many are, and enjoy considerable benefit with their brand as a result. Innovation can be in areas outside of core product or service which benefit the brand, such as innovative distribution or IT services.
And when a brand is an innovator, the results can be powerful. Autumn 2016 saw the final Great British Bake Off season on the BBC and it once again top the ratings charts. It is a highly successful show. Is it the presenters? Mary, Paul, Mel and Sue. Or the format created by Love Productions? I have thoughts on that later. But the main point of my blog is, it’s better to lead, to come up with an inspiring “new” idea than to copy. This may seem obvious, but bear with me a little… people are addicted to the new. But “new” things are extremely rare, most creations being a re-invention or a confluence of ideas. Many new patents or inventions are subsequently claimed to have been influenced by the inventors meeting, seeing or inadvertently producing others’ ideas.
Why can’t imitators, just copy expensive products and services and undercut them on price? Sometimes they do, successfully, which is what healthy competition is about. A brand leader has certain advantages over imitators, the leader:
– is an innovator across the marketing mix of product, promotion, pricing, process, people and distribution
– develops expertise and knowledge on the experience curve within the market
– establishes supplier relationships which are challenging to imitate
These are not impossible to deal with for new entrants. Protection with patents and IP are always exciting to the market place and investors. It is however a continual investment brand leaders need to make into the company and brand through new ideas, products and innovation which protects its position against imitators.
Your Innovative Offer
Coming back to the BBC’s Bake Off Team. What people see on the screen, in fact hear and feel – Channel 4 will not be able to copy that. But good luck to them and the production company. I respect Channel 4 and the innovative creative industries in this country. In this very specific situation, I think the brand here is a whole combination of elements, the essence of which is Mary, Paul, Sue and Mel and the goodwill of their fan base. I doubt it will transport if dissected.
Alternatives to the Genuine New Product
I recently attended a fantastic CIM event given by two leading professional services firms in Bournemouth, who admitted that what they offer whilst best-in-class, is similar to a number of other suppliers. And clients can find similar services online offered by others. This is a real challenge in the service sector, and in fact most areas of business. Even a new product supplier will get caught up by competitors pretty soon as the innovation curve taught us in business school. Does this inevitably mean a retreat to lowest cost? Well, there is a choice of winning business by being different, better or cheaper but these three variables can be used specifically against direct competitors, and you would first identify a specific customer to know, their problem, how you are helping them with your solution and the value you bring to them. This will determine what price you can charge. In the case of the professional services firms at the CIM event, they can charge a good fee due to a quality team, excellent customer service and positive client relationships. Business very often comes to the firms via referrals on a peer-to-peer basis.
Differentiate your Offer
The attraction of a new and innovative service is always going to appeal. However, we can’t all have new IP, or a genuinely new product. But we can be different. Standout from the crowd to differentiate your offer by being better, different, cheaper or a combination: whatever your customers wants.