Notes

How to Differentiate Your Product When You Aren’t (Really) Different

Differentiation is about setting your product apart from your competition. But what if your product isn't really different?

• 10 min read

Product differentiation communicates the unique qualities of your brand or product to distinguish it from your competition.

But what if your product isn’t unique?

Today plenty of products go to market without unique features. In the early days of B2B software, it was common to have features that no one else had in the market. Differentiation was reasonably straightforward. You would identify the unique benefit your feature provided for customers and craft a positioning statement around it.

In today’s technology landscape, differentiation with features is rare — everyone has similar functionality.

For example, you probably own a smartphone. Maybe you even own an Apple iPhone like more than 50% of U.S. consumers. But can you tell me the difference between the screen resolution on your iPhone versus a Samsung Galaxy? Are they even different?

Your opinion of that question is likely influenced by brand differentiation more than the unique qualities of either phone. Do you know how many pixels are in a Retina display? Or how that’s different than the screen on a Samsung phone?

It’s easier than ever for competitors to copy your product. But does that mean you shouldn’t build a great product? Nope.

It just means that a great product is table stakes.

Companies that are beating their competitors have a great product and build a unique market position.

Here’s how you differentiate your product from the competition in 2022:

  1. Target a niche market segment
  2. Tell a differentiated story
  3. Provide valuable education
  4. Build a community around your vision
  5. Cultivate a partner ecosystem
  6. Amplify employee advocacy

Each takes time to build. But don’t get intimidated—that’s the point. Your competition cannot easily duplicate your work.

Let’s explore how you can differentiate your product even when your products don’t have any unique features.

Target a niche market segment

The first mistake many companies make is targeting too large a market. When you’re trying to please everyone, you please no one.

Success starts by narrowing in on a niche in the market that isn’t being served well by current solutions. If you’re familiar with Geoffrey Moore’s book Crossing the Chasm, you might recognize this approach by another name – “land and expand.”

You may have to niche down a few times to find the right fit in the market, progressively narrowing in on a smaller and smaller customer niche each time.

But wait, you might ask, don’t I want a bigger audience?

Eventually, maybe you will. But not when you are struggling to gain traction with your first customers. The more specific and targeted you can be with your positioning and messaging, the more your product will resonate with your customers.

I think ConvertKit is an excellent example of the niche-down approach. When Nathan Barry started the company, he targeted anyone who needed email marketing. As a result, he was up against heavyweights like MailChimp, ActiveCampaign, and others. And he was failing to gain traction.

Instead of giving up, he narrowed his market to target professional bloggers and worked to address their problems. He gradually expanded to other digital creators as he gained traction with bloggers. Today the business operates at over $100,000 monthly recurring revenue (MRR).

Check out Nathan Barry’s Twitter threadc for more about his journey building ConvertKit.

Tell a differentiated story

When trying to differentiate your business, the most crucial question is not “what makes our product better than others?” Instead, it’s “why should customers care?”

The most successful businesses don’t just sell products; they tell stories and motivate customers to buy into their vision. Instead of discussing what features make your product so great, talk about why it matters. Great stories are never about your products or services. They are about how people use your products and services to improve their lives.

If you are a B2B company, tell the story about how your customers use your products or services uniquely. If you are B2C, tell the story of how consumers use your products or services to improve their lives.

Whatever story you tell, ensure it provides a unique point of view on the market you are targeting. For example, how do you understand the market? What is your unique take on how to address challenges within your space?

Drift is an excellent example of how this can work in practice. They offer chatbots for customer service. But instead of focusing on automation, they invented a new category for their product named “conversational marketing.” They worked to build leadership within that term and created a stronghold in the market despite competition from other vendors in the space.

Check out this HubSpot blog post with examples of 10 companies that brilliantly differentiated themselves from the competition.

Provide valuable education

Educate your audience about the trends and challenges you see in the market, how they can solve their problems, and how to get the most value from your product to solve those challenges.

The key is to help your customers. Whatever you create (blog, video, ebook, podcast, etc.) should help your customers learn something new. You can even take this further and provide certification or verification that they have learned a specific skill. For example, how to use your product (Microsoft Azure Fundamentals) or a particular set of skills (HubSpot Inbound Marketing).

My favorite example of education is Buffer, especially in its early days as a company around 2012–2016. Their blog consistently published valuable content about social media strategy and tactics. Then they shared it via newsletter and social media.

Personally, Buffer’s blog was invaluable when I was starting a career as a social media manager. At that time, there were no college programs or classes for digital marketing. And there weren’t that many other people who had much experience yet either. Nevertheless, we were all learning on the job. Buffer filled a gap by breaking down trends from their data and offering actionable tips daily.

Build a community around your vision

You need to do more than publish content on your blog. It would be best if you found ways to connect with potential customers one-on-one to understand their problems and how you can help.

One of the best ways to do this is by building a community around your vision. Find where your audience interacts online or in person and gradually join the conversation. If you’re already creating valuable educational content, it should be easy to chime in as questions arise. Eventually, you’ll want your audience to buy in and start sharing your vision.

Remember that a community can be centralized (Slack, Discord, Facebook Groups) or decentralized (conversations and hashtags on social media).

Different companies take different approaches depending on what they want to accomplish. For example, Nike, REI, and Starbucks have massive audiences online. As a result, they can rely on social media to amplify their brand messages and drive conversation around their brands. (The REI #OptOutside campaign is a great example – people opt-in and interact around it every year.)

Other brands rely on bringing people together in a centralized space. For example, developer communities often organize around Slack or Discord as a place to discuss problems and share ideas – the VueJS community is a great example.

Cultivate a partner ecosystem

In addition to building a network with your customers, you should try to recruit partners who share your vision or philosophy. There are three main ways that partners can help differentiate your product:

1) Provide value-added services Partners function as an extension of your organization. By partnering with other companies, you can offer added value to your customers by leveraging their expertise. For example, your partners could provide anything from training and support to custom development and integration services. By providing additional services, partners can help your customers realize the full value of their investment in your product.

2) Provide product extensions and integrations Partners can provide extensions to your core product, adding new functionality and features that complement what you build. Integrations help customers build seamless workflows that address their specific use cases.

3) Generate co-sell opportunities In addition to extending functionality through integrations, partners can generate new sales opportunities by selling your product and theirs together as a bundle. Selling together is especially effective when the two products are complementary rather than competitive (e.g., CRM + marketing automation).

Once you start noticing how common partnerships are in the market, it’s hard to stop seeing them everywhere. One recent example I came across recently as a business owner was a bank – Novo. They help small business owners get started with business checking accounts.

Novo has built a partner ecosystem that helps new business owners get started faster. They offer discounts and integrations with critical partners like Quickbooks for invoicing, Stripe for collecting payments, and HubSpot as a CRM. New customers get access to these additional perks. By building a partner ecosystem, Novo helps drive business for their partners and helps keep customers invested in using Novo as their bank of choice.

Amplify employee advocacy

You automatically extend your reach when your employees advocate for your brand through their social ecosystem.

But more importantly, you can increase trust.

Customers often look to your employees as the best source of information about your company and products. According to research from Edelman, 68% of consumers say they trust technical experts from a company over the CEO or marketing material.

So why do customers trust employees?

  • They know more about your company and your products than anyone else
  • They know what your product can do – and what it can’t do
  • They know your competition and category and how you fit in
  • And most importantly: they know what matters to your customers

To succeed, you must first build a culture of trust and sharing. Unfortunately, most companies try to buy some software, implement it, and then give up when employees are less than enthusiastic about it.

A winning example, however, is Refine Labs.

The entire company is active on LinkedIn, sharing insights and commenting on posts about demand generation. Their success isn’t the result of fancy tools — the company’s CEO, Chris Walker, built advocacy into the culture through his leadership, hiring, and coaching of the team. It’s part of their core identity.

The result? A differentiated brand

The strategies above take time and a dedication to implement. That’s why they are so successful. Unfortunately, most companies fail to sustain the needed work to build a differentiated product and brand.

So now that you better understand how to differentiate your product, it’s time for action! If your product has no unique features, you can use the strategies above to differentiate your product and company from the competition.

And if you do have some unique features? Well, don’t stop promoting those just yet! You can still use these strategies to show off what makes your company special.

Let me know what you think on Twitter and LinkedIn. Thanks for reading!

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