This post was originally published on November 7, 2023 on LinkedIn
Do you know how King Tutankhamun’s tomb was initially discovered?
The year was 1922 and an employee working for Howard Carter—the archeologist credited with discovering the tomb—tripped on a rock. Except it wasn’t a rock. It was the start of a buried staircase leading down to the tomb. At the time, the Valley of the Kings had been extensively excavated. Yet Carter and his crew found unspeakable treasure when they dug a little deeper.
Differentiation on the Surface
"Differentiation" as a term is regularly thrown around in the business sphere. It’s most commonly tied to three realms: business strategy, brand differentiation and product differentiation. While these are extremely important, these represent only a part of what’s possible when it comes to carving a niche. If we restrict ourselves to thinking about differentiation in these three dimensions alone, we’re missing out on a wealth of untapped potential to propel our growth.
Business Strategy vs. Brand Differentiation vs. Product Differentiation
To lay the groundwork, let’s briefly clarify differentiation across the three most common fronts:
In terms of a business strategy, differentiation represents the blueprint for setting ourselves apart in the marketplace across the entire business.
Brand differentiation is crafting an identity that's unmistakably ours.
Product differentiation are the features and experiences that make our offerings distinct from others.
But we’re not here to talk about these well-trodden paths. This article is your guide to the roads less traveled, the other powerful levers ready to be pulled for differentiation.
Six Untapped Differentiation Levers Worth Digging Into
What within our company can we use to create a competitive edge? The answer: every corner of the enterprise is fertile ground for differentiation. It's not just the broad strokes but the nuances that can set us apart. Here's how some trailblazing companies are already charting this territory:
Vision, Values and Mission
Consider this trio as our company's declared impact on the world. To create a competitive advantage, pick the one thing that intrinsically motivates you above all others, and then go all in. Look at apparel company Everlane. They mastered this form of differentiation with their unwavering commitment to radical transparency. From their factory practices to their pricing—they publish a true cost breakdown for each product—it’s clear to see that they are setting themselves apart within their niche.
Profit Model
Differentiation can also be created through how we earn, price and collect money. If you want to pull this lever, consider things such as price, pricing strategy, revenue sources, payment mechanisms, etc. Netflix has done this time and again. Initially, they set themselves apart in the movie rental industry with their subscription offering. They then went a step further by introducing a new base sales unit (i.e. subscriptions to on-demand streaming) and fully upended content consumption because of it.
Sales and Distribution Model
Our sales and distribution model can be a potent differentiator. Think of this lever as how consumers literally access your offerings. It includes elements such as geographic coverage, operating hours, reliability, exclusivity, etc. Amazon made this a core driver of their competitive advantage by being one of the first companies to promise 2-day delivery. Not only did they ultimately secure an enviable market stronghold, but they also reshaped—and continue to shape—consumer expectations for e-commerce as a whole.
Service Model
The customer service model offers ample ground to differentiate, especially if we think beyond the post-purchase experience. I consider this lever to represent any one-to-one interaction with a customer. It can be as they search our website, when they checkout, when they learn how to use our product or when something goes wrong. Zappos wrote the playbook on this (literally) by fostering a culture that emphasizes hospitality at every step of the consumer journey, even if it meant helping a customer buy a pair of shoes from a competitor.
Marketing and Advertising
Our marketing and advertising represents how we present ourselves to the world. What we say, how we say it, the visuals we use, and the mediums we choose—is a powerful differentiator. While the immediate goals may vary from campaign to campaign, the ultimate objective is to drive resonance. P&G does this remarkably well: consistently creating deep emotional connections across diverse audiences. The first Always "Like a Girl" commercial still stops me in my tracks.
Operating Model
The way we align our resources, operations and relationships can be a silent but mighty differentiator. Take Toyota for example. The lean manufacturing system they developed from the 1940s to the 1960s didn't just improve product quality and reduce costs; it enabled them to outpace competitors in meeting consumer demand for reliable and affordable vehicles. Not to mention, their Toyota Production System revolutionized process philosophies worldwide.
What's Next? A Differentiation Deep Dive
Now that your mind is (hopefully) excited to create a stronger competitive edge, what should you do next?
Pick one of the six levers and reflect on what you are doing today. Are there ways to increase your consumer value proposition if you challenged the status quo?
Map what competitors are doing. Where do they converge, and can you use that to your advantage?
Let your imagination run wild as you think of new and unexpected ways to create more customer value through your selected lever. What would you do if you could do anything?
Enjoy these steps as you move ahead with an expanded view of differentiation. With these six paths in mind, your company will not only stand out but stand above in the eyes of consumers and competitors alike.
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