The Sad State of Differentiation and What to Do About It
I recently attended a webinar hosted by Gartner’s Technology Research Director, Hank Barnes (@Barnes_Hank), about “The Sad State of Differentiation and What to Do about It.” While the webinar was focused on the IT industry, I found the key take-a-ways transferrable to marketers in any industry, regardless of whether they are promoting a product or a service.
A failure to differentiate can be costly, and it is happening all too often. Buyers are frustrated and confused by most messaging and it was shocking to hear Barnes point out that 52% of buyers surveyed (n=359) find it difficult to understand the differentiation of most IT providers. Likewise, a mere 24% of buyers think that most IT providers are effective in differentiating themselves from their competitors. If a product or service is not well differentiated, as Barnes points out, the burden is on the customer to figure out what differentiates it.
The sad part is something marketers need to come to grips with: If you don’t have the luxury of being a well-known brand, differentiation is a major challenge; though even well-known brands that choose to sit on their laurels expecting to ride the wave of brand differentiation entitlement risk having lesser known brands muddy their waters by mimicking them.
Barnes named the following enemies of differentiation in his presentation:
- Weak brand positioning
- Unrealistic competitive understanding
- Mimicry/bandwagon jumping
- Broad targets, early sales struggle
- Product comparisons
A Local Example of Saturation
Having spent a significant portion of my career in healthcare, marketing two major Massachusetts Academic Medical Centers (AMCs), I am familiar with tight competition and lack of differentiation. The healthcare industry in Massachusetts, particularly in the Boston area, is home to some of the best healthcare providers in the world. If you are in need of tertiary or quaternary medical care, Boston is a good place to be.
But from the perspective of the healthcare provider, the market is saturated. Major AMC’s like Mass General, Tufts Medical Center, Beth Israel, Brigham and Women’s, Children’s Hospital and Boston Medical Center are all located within a stones-throw away from each other and their positioning is quite similar. They all make the same claims and use the same buzzwords in advertisements, web copy and other collateral. “World-renowned,” “multi-disciplinary,” and “cutting-edge” are a few of my favorites that have been run into the ground.
Hospitals have very broad targets, so bandwagon jumping can be common as consumers rely heavily on reputation and word of mouth when choosing a hospital for their care. Since it’s difficult to cut through the clutter and understand differentiation among major AMCs in Boston, I’ve yet to see any one hospital crack this nut without already having major market clout (even if they’re all excellent at what they do).
Learning to Target Appropriately
A number of problems stem from having too broad a target audience. Stating simply that “our product is ideal for any business looking to grow their bottom line” isn’t going to differentiate your product. Barnes advises that organizations hone in on who they want to sell to – those that will benefit most – and develop positioning around those potential buyers. But it’s necessary to also look beyond the product. In the hospital scenario mentioned above, a Boston AMC could potentially focus its messaging around the excellent post-discharge service that dramatically reduces readmission rates, given today’s Accountable Care Organization (ACO) care delivery model. For IT providers, Barnes mentions the possibility of focusing on a product implementation and service approach or overall customer experience.
The take-a-way here is for marketers to focus their energy on the targets that will hear and understand the messaging the best – casting a net too broadly won’t increase your impact, but may instead just confuse and frustrate the potential buyer.