This post was originally published on May 29, 2024 on LinkedIn

Have you ever played that game where you have two similar images and you need to find the differences between them? My toddler loves this game and would play it on repeat, if we let her. But she adds a twist to it: she points out the similarities too.

Let's apply this concept to your business. When was the last time you compared your products, marketing and consumer value proposition to those of your competitors? Did you find more similarities than differences? Did you even look for the similarities?

Often, I meet professionals who are convinced that what they put into the market is completely unique. Sometimes this is true, but more often, it’s not. They truly believe in their uniqueness, but their perception doesn’t always align with reality — a phenomenon I refer to as the "Differentiation Fallacy."

What is the Differentiation Fallacy?

The Differentiation Fallacy is when we mistakenly believe that our products, marketing and/or consumer value proposition are more distinct from our competitors’ than they actually are.

Why is this Problematic?

Believing that our offering is more unique than it is creates a big blind spot – one that makes us vulnerable to strategic convergence. As a reminder, strategic convergence is when competing companies start mirroring each other's strategies and practices. It turns unique selling points into industry standards, and ultimately diminishes potential profits for everyone caught up in it.

Signs of the Differentiation Fallacy

Here are some things to keep an eye out for: 

• Overemphasis on Minor Differences: Touting minor differences as if they are game-changers. 

• Ignoring Similarities: There’s a reluctance to readily acknowledge the commonalities shared with competitors.

• Dismissing Contrary Opinions: Critical feedback or dissenting opinions on the uniqueness level are ignored or dismissed internally.

• Reverse Engineering Thrives: Stats and data points are crafted into narratives that “prove” the significance of the uniqueness. 

• Reacting to Every Competitive Move: Every competitive move is treated as an immediate threat in need of a swift response.

What to Do Right Now to Break Free from the Differentiation Fallacy

If you notice the above signals, here is a simple place to start: Get clear about your similarities with competitors.

Why?

Because a definitive list of the similarities you and your competitors share will be one of your best tools to see blind spots, challenge assumptions and identify opportunities to be truly different.

How?

Follow these three steps for you and your primary competitors:

1. Evaluate the Product: You don’t need an exhaustive list of every technical detail, but consider anything noticeable to an average consumer. Compare product quality, design, efficacy, ingredients, features and portfolio mix. Also look at customer service and any onboarding or unboxing experiences. 

2. Evaluate the Marketing: Do a visual comparison to assess marketing across companies. Collect and layout visual elements such as the brand and logo, advertisements, product imagery, the websites and social pages—plus pricing and promotions. When you’re able to see everything together, it’ll be easier to discern each company’s positioning, target audience and tone.

3. Evaluate the Consumer Value Proposition: Based on what you collect in the two steps above, write out a simple consumer value proposition statement – or elevator pitch – for each company, including your own. This side-by-side comparison of the value each company delivers to consumers will be the ultimate gauge on the depth of your differentiation. 

By taking these steps, we can gain a clearer, more accurate understanding of how we are similar to those in our categories. Once we know how we’re similar, then we can refine our strategies to genuinely stand out in the market. Those differences will become so easy to spot, that even a toddler can find them.