RELEVANCE of a differentiator
It is important that the brands must be different in a way that they are relevant to the customers. However it is difficult to find differentiating factors that are relevant these days. To be different is easy. To be different in a way that are relevant to your customers will have most CEOs wide awake late into nights.
Let me try to explain. Lets say we have a company that makes Radio Frequency Identification ( RFID ) sensors and this company c an make its sensor read with 99.9 Per cent accuracy. The nearest competitors sensor can read only 98.7 per cent accuracy. The first company actually has a performance advantage (and performance leadership is actually a good differentiator)- and this is significant in products or service categories that are performance sensitive, like medical scanners or microchips.
Is 1.2 per cent difference relevant to customers? It may well be, although the difference is small, depending on who the customers are. If the customer is a maximum-security prison that needs to know exactly where all the inmates are at any one time, then 1.2 per cent could mean a world of difference. If the customer is a logistics company that ships low-value items like rubber ducks, then 1.2 per cent may not be all that relevant. There are categories in which 1.2 per cent margin is the difference between life and death. There are categories in which it is irrelevant.
You need to find out if your point of difference is relevant to customers. It may be relevant to some but not to others. Since you can’t please them all, I suggest that you pay more attention to what is relevant to your best customers.
Next article will show desirability and defensibility as criteria for evaluating a differentiator. check this space soon.