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Product Differentiation: A Guide to the Do’s, Don’ts, and Companies that Get It Right

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Buy a game differentiation guide

Postby Kagagore В» 01.02.2019

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There are many ways a company can differentiate their product depending on the maturity level of the business, available internal resources and the nature of competition within the market. Overall, however, companies with a strong focus on innovation will find the best success with product differentiation. But companies that have a roadmap that includes investing in research and product development will usually benefit from marketing around what makes their product unique.

A product differentiation strategy is also particularly valuable for the company that is just beginning to build out its brand. At this stage, they have not yet had the opportunity to establish emotional connections with the audience or earn the loyalty of customers. So, finding ways to instead establish uniqueness and superiority in comparison to competitors can be the best way to get a foot in the door.

First, and most obvious, product differentiation can help you stand out in the market by focusing on the features that set your product apart from your competitive set. By highlighting the things that make your product different, you set the stage for a conversation that gives you the upper hand right from the beginning. Takes the focus off price. Clarity about how your product stands apart enables you to avoid competing solely on price, a scenario that is often very challenging for new and growing companies.

Creates brand loyalty. Ultimately, differentiating your product is an exercise in drilling down to the specific problem your product addresses and the specific way it solves that problem. Being able to clearly articulate and consistently deliver on this promise is a surefire way to create rabid fans who will stick with you and recommend your product to others. While there are many benefits to taking a product differentiation approach, there are some risks as well.

Internally, there is the chance that you can differentiate your product too much either by going too far with a particular message or niching down so deeply that you exclude an important subset of buyers.

If your differentiation angle is either too far out in left field or too hard to believe as in, sounds too good to be true , it will fall flat with your audience. In addition to the nuances of getting your USP right internally, there are also some external threats that can derail your product differentiation strategy:.

There are many different ways to differentiate a brand, but most options fall into one of the following five broad categories:. Features: Customers are generally willing to pay more for a product that not only solves their problem, but does so faster, more simply, or more economically than any other product.

The proprietary element might be a customer-facing component or part of the development process. Either way, it gives your product an edge by being inimitable. The trick to making this approach work is to be sure you can deliver on that promise. What is it like for users to engage with your product? What does the interface look and feel like? How intuitive are the workflows? Superior design that finds new and better ways to facilitate tasks can go a long way toward not only helping your product stand out, but also creating strong brand loyalty.

Fast response, in-depth support, a vibrant community—these are all intangible aspects of your overall product experience that can make a big difference in how customers perceive and value your company. On the flip side of the positive ways to apply a product differentiation strategy, there are also a few common pitfalls to avoid. Though some of these approaches might seem viable on the surface, a closer look reveals that trying to differentiate around these areas is rife with risk.

Customers demand quality, so making it the central theme of your messaging can fall flat. Nothing will kill your customer relations like a broken promise. Resist the urge to make unrealistic or unprovable claims, and provide proof whenever possible. Be careful not to inadvertently alienate potential customers by appealing too exclusively to a narrowly defined demographic. A strong product differentiation strategy is especially important for SaaS companies because the marketplace is fiercely competitive and always evolving.

Here are six well-known SaaS companies that have leveraged smart product differentiation strategies to great advantage:. When it was originally conceived in , Dropbox differentiated itself by being the first of its kind—a user-friendly way to solve the growing problem of how to share files with colleagues.

Its simple, drag-and-drop interface was immensely superior to the existing option of using FTP and local file servers. Building on that initial foundation, Dropbox increased their appeal and defended their leading position by adding features that used virality to expand their customer base and further engage their core users.

By delivering a simple and effective solution that solved a very real need almost before people knew they needed it , Dropbox established themselves as a giant in the cloud sharing services space. By combining features such as centralized infrastructure that enables data aggregation across all systems, apps, and services with a stripped-down and simplified user experience, Datadog delivers exactly what its users want—an easy and efficient way to get their job done.

Soon after their initial launch, they leveled up their game in a big way with their proprietary SmartScan technology, which completely changed the expense management process by making it entirely paperless. This innovation was so powerful, that employees started installing and using the Expensify app without employer permission.

They liked the app that much. This product-led, bottoms-up approach to growth proved to be a powerful tool for the company, allowing them to raise additional capital and expand their team to meet the growing demand. In addition to smart features and innovative technology, Expensify also offered a simple and easy user experience paired with a freemium offer that made the solution almost irresistible.

The intuitive interface provided a seamless and nearly effortless way for users to complete the formerly dreaded task of filing expense reports. Slack has become the darling of teams who collaborate.

Their always evolving platform delivers all the bells and whistles that busy, creative teams need: video chats, file sharing, and so much more. And to expand their feature set, Slack integrates seamlessly with more than 1, third-party apps, giving users almost limitless ways to collaborate and communicate. This wealth of tools and options drive performance that allows teams to get things done more quickly and easily than they could using email. The centralized and searchable collaboration space saves users time and effort at every step.

While software that allows users to create and launch surveys, quizzes, and other form-based content may seem like a commodity, Typeform has managed to differentiate themselves with a brilliant combination of design and customer service. Easy to make. Everything about the brand speaks to this aesthetic. To support the viral loop, Typeform invests heavily in retention because happy customers create new customers. There are six teams working to ensure customer success: support, education, customer experience, customer outcome, sales and operations.

Every one of these teams is focused on delivering the best customer experience and success possible. ZipRecruiter became the 1 rated job search app by giving its users innovative features that make a difference in the real-life experience of looking for a new gig.

Sometimes, however, the features you leave out or remove are just as important as the features you launch. This means getting a firm handle on what other products are available and how they are positioned in the market.

Spend some time reviewing the marketing materials of your closest competitors. Visit their websites, read their ads, see what their thought leaders are saying in articles and on social media. See if you can define the following for each competitor:. What is the one thing you can do better than anyone else? How are you solving a problem faster, more simply, or more efficiently? The goal of this exercise is to achieve the highest levels of brevity and clarity possible. Andy Raskin, an industry leader in strategic messaging and positioning, refers to this as the promised land.

The Promised Land is the North Star that guides everything that everyone does in your company, and should always be the thing that you are ultimately pitching—on your website, in sales conversations, in recruiting discussions, and with potential investors. After doing all the legwork to understand your market, identify your unique advantage, and craft compelling messaging to convey that advantage, the last step to successfully differentiate your brand is to go the extra mile when it comes to the customer experience.

The Risks — Where Product Differentiation Can Break Down While there are many benefits to taking a product differentiation approach, there are some risks as well. Ways to Differentiate There are many different ways to differentiate a brand, but most options fall into one of the following five broad categories: Features: Customers are generally willing to pay more for a product that not only solves their problem, but does so faster, more simply, or more economically than any other product.

Common Mistakes On the flip side of the positive ways to apply a product differentiation strategy, there are also a few common pitfalls to avoid. SaaS Companies Who Differentiate Well A strong product differentiation strategy is especially important for SaaS companies because the marketplace is fiercely competitive and always evolving.

Here are six well-known SaaS companies that have leveraged smart product differentiation strategies to great advantage: Dropbox Features Performance Design When it was originally conceived in , Dropbox differentiated itself by being the first of its kind—a user-friendly way to solve the growing problem of how to share files with colleagues.

Slack Features Performance Design Slack has become the darling of teams who collaborate. Typeform Design Customer Service While software that allows users to create and launch surveys, quizzes, and other form-based content may seem like a commodity, Typeform has managed to differentiate themselves with a brilliant combination of design and customer service.

ZipRecruiter Features Design ZipRecruiter became the 1 rated job search app by giving its users innovative features that make a difference in the real-life experience of looking for a new gig.

See if you can define the following for each competitor: How do they describe their product? What terms and phrases do they use? Do they fit into an existing category, or are they trying to create their own? What do they stand for? If you had to pick three words to associate with the product, which three words would you choose? What are they promising? What value do they claim to deliver? What unique attribute or outcome are they flaunting? Which features and benefits are they highlighting?

Are there certain bells and whistles that they talk about more than others? Who are they talking to? Are they addressing a specific audience? Do they customize their language and topics based on certain demographics or segmentation? What is the brand personality? Are they quietly knowledgeable? Highly technical? Kyle Poyar. You might also like Brian Balfour has seen, been responsible for, and taught exponential user growth since the early s.

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