Article - Marketing 101 - Differentiation

READ: 2 mins
AUTHOR: Robert Craven

“Why should people buy from you when they can buy from the competition?” How many times have I asked that question and got a rubbish answer?

It is time to get to grips with Marketing 101.

Marketing is about two things:

• Segmentation
•  Differentiation

Most agencies get segmentation – it is all about who you are targeting and the unique set of circumstances they face, and the issues, problems and challenges they are trying to overcome to get what they want.

Differentiation is slightly trickier. Give me a pound for every time an agency mumbles about the agency space being commoditised and “how at the end of the day we are all the same.”

All that may be true, but you do need to stand out from the crowd.

And you could do this by highlighting the difference between you and your competitors. Difference in a meaningful way (for your potential clients). Having 10 toilets is not a differentiator unless you are selling to the toilets industry!

Let’s pause and return to the theory. There are “two fundamental forms of competitive advantage”:

• low cost/price or
• differentiation
  (See https://hbr.org/2015/04/there-are-still-only-two-ways-to-compete).

That’s it.

I am sorry but “we are as good as the rest but we cost less” or “we deliver awesome value for money” isn’t a sustainable strategy. Nearly everyone says it and what happens when someone with deeper pockets comes along?

Likewise, too many agencies say something like “what differentiates us is our people” or “what differentiates us is our processes”. Well, that is fine as far as it goes. But:

• If these are true differentiators, then why aren’t they the most important thing on the website etc?
• Is it true? Or is it just an unsubstantiated claim (eg great customer service, better than the rest, fastest growing agency in the UK)?
• Does it matter? Is it relevant? Does anyone care? (eg winner of the Barnstaple Agency of the Year, dog-friendly)

Hence the need to differentiate on separating yourself apart from the competition.

So, how to differentiate? Well, a broad strategy (eg the payment model) may not be sustainable as it is so easily copyable. However, a narrow strategy (only working within a certain sector/platform/technology/part of the supply chain) may do the job.

So, let me remind you of why you might want to differentiate.

• Most generic strategies end up competing on price and that is the last place you want to be.
• Differentiating means you stand out from the generalists.
• Your specialisation makes you more effective and allows you to charge premium prices (jack of all trades and master of none etc).
• It is easier to be a big fish in a small pond.
• You probably know more about your niche than the potential clients in the niche because of your position.
• It is easier to foster your reputation, authority and loyalty.
• Finally, you are not competing on price alone.

Following a differentiation strategy is not rocket science but few agencies work through the process. That’s why 99% of agency websites are identical. That’s why agency customers cannot tell the difference between agencies. That’s why clients can screw you on price. Or rather why you end up screwing yourself on price.

So, a topic fresh out of Marketing 101 isn’t dealt with by the very people who should be exploiting it for their clients. Ironic.

Let me tell you, the agency landscape is ready for some fresh ideas. Too many agencies saying the same things in the same ways. It is sloppy and lazy and not very profitable. And your clients feel the same way.

I can assure you that the best agencies are not better than you at doing agency work. They are better at marketing themselves. Marketing is not a battle of the product, but a battle for the mind of the customer. And that is where differentiation comes in.

After all, why should people buy from you when they can buy from the competition?