Differentiation is, literally, what separates you from your competition. It’s why your customers will only buy from you, no matter what the other guys are offering. When you hit just the right differentiator for your target audience, you’ll convince them that they can only get their desired outcome from you.
What is differentiation?
Differentiation is what makes your product unique and valuable for your target audience. It’s what sets you apart. Grabs attention. Says to the world “I’m the only place you’ll find THIS!”
It can take many forms. Price can be a differentiator (“best value!”, “Cheapest rates!”). Quality can be a differentiator. Brand names and social cachet (aka. “perceived value”) can be differentiators. The fact that your product is on Oprah’s “Favorite Things” list is a differentiator. Features can be differentiators, but features can also be easily copied by competitors (which means if people love a feature, it won’t be a differentiator for long). Longevity, even, can be a differentiator (“Dine at London’s oldest restaurant”). It can be your company ethics, your founder, your driving philosophy, even your personality.
Most importantly, the differentiator you choose to highlight in your value proposition and marketing should be something no one can take away from you.
How to differentiate yourself in a crowded market
The first step towards finding your differentiators is to make a list of what sets you apart.
Do not – DO NOT – settle for the lazy answer: “My product really isn’t that different from anyone else’s.”
I’m appalled by the number of times I’ve heard that from entrepreneurs and business owners. It’s never true. So if that’s your gut response, tell your gut to “shush!” It doesn’t know what it’s talking about.
Because even if you’re selling ubiquitous, mass-produced jewelry, you can still be “America’s diamond store since 1924.”
If your shortlist of what sets you apart is a little too short, here are a few ideas on how some of the most successful e-commerce companies are differentiating themselves.
Take a Stand
One of my favorite stores that differentiates itself so powerfully is Patagonia. I don’t own a single Patagonia item – I’m not its target audience. But I love their company and have written about it many, many times because of the way they differentiate themselves by taking a stand on issues I care about. They’re unabashed environmentalists, even nicknaming themselves “The Activist Company.” There are thousands of hiking and outdoor recreation equipment brands that sell backpacks and windbreakers, but this is the only retailer who makes you feel part of something larger when you buy from them.
Pick a Fight with the Big Guys
If you want to stand out from the competition, try comparing yourself against them. Blatantly. In a big way. Think of it this way – if they were doing everything you do better, you wouldn’t be in business. That means you have an edge. It’s time to tell people what it is.
This landing page is particularly clever because it differentiates itself from other app stores, while pointing out what makes those app stores so frustrating. Then it provides a solution.
What are your customers wishing they could “break free” from?
Try this: How would you improve the copy on Lyft’s home page?
What this does well is that it makes a time-bound promise (very effective) and addresses a primary concern of its target audience: Safety. It also adds a dash of “social proof” with “see why 9 out of 10 rides end with five stars,” which tells people that they can reasonably expect to be happy with the service. But I think they could do better, don’t you? Here are a few of my suggestions; see if they match up with yours.
Wouldn’t you be more likely to convert if that page said:
- Catch a Ride in Less Time than Other Services (we timed it!)
- We’re the Safest Ride Service Around (see why)
- Our Drivers are Happier – Our Customers are too (Hear from our drivers about why they love Lyft)
I included that last one because Uber, Lyft’s main competitor, has been having an image problem with how they treat drivers. It’s always fun when you can jab a competitor’s weak point, without naming names of course. Stay classy.
Say Who You’re For
Often, the issue with declaring a differentiator stems from an unwillingness to define your audience. Who is your product for?
“My product is for everyone!”
WRONG! Please, please, unless you are the world’s largest online retailer of toilet paper, never say this. Because it’s almost never true. It might not even be true of toilet paper, now that I think about it.
Googling… ah, there it is. That is some well differentiated toilet paper.
So if toilet paper – a product that really is for everybody – can find a way to differentiate itself in a crowded, established market, you can too.
So what’s stopping you?
It’s probably fear.
Business owners tend to stick to their guns on niche-resistance because they’re afraid that by saying who they’re for, they’ll be reducing the number of people who will buy their product. But the reality is that you’ll attract more people, not less, when you identify your niche and own it. You’re declaring a specialty, and I don’t know about you, but when I have a problem to solve, I’d rather see a specialist in that problem than a general practitioner. Right?
Here’s an outstanding value proposition that clearly states who the product is for and why you want it. Notice its sub-headline: “FreshBooks is the only accounting software…” that. That is their value proposition, right smack dab in the middle of their home page.
FreshBooks’ new home page tightens up the verbiage a bit. Both are good, but I really love the “designed for you, the non-accountant.”
My only criticism: I wish “Powerful Features” was more specific, and that “Organized in the Cloud” stated a benefit, like “Secure Access Anywhere.” They should test this.
Own Your Size
Small e-commerce businesses have big advantages over their larger competitors. They’re able to offer more personalized service (see next point), but more importantly, they’re uniquely able to create personal connections. Take Stewart & Claire for example – it’s a small company owned by a married couple who began with one goal in mind: To create a better lip balm than they ones they were using. Their small-batch lip balms are made from natural ingredients, like pure essential oils, and come in fun flavors like “Old Fashioned” and “Autumn with Ginger.”
Cocktail-flavored lip balm is a brilliant idea in itself, but what hooked me into signing up for their emails is the whole story behind this super-cute couple, and the ongoing story they share on their super-cute blog. I feel like I know these people. Like we could be friends. Big companies can’t manage that, try though they might.
Being small also means that you become your customer’s one-of-a-kind discovery. If your ideal customer is a connoisseur of the finer things in life, that is exactly what they’re looking for.
Bring Service to a Whole New Level
Everyone says they have great customer service. Many people claim to have “the best.” But don’t be afraid to kick this promise up a notch. What if you had “Fanatical customer service”?
This idea might be found more in software-as-a-service right now, but those trends tend to toddle over to e-commerce.
How is “fanatical” customer service any different than the vanilla kind? I like this definition from the 2006 Forbes article by Wiley Cotton: Get Fanatical About Customer Service.
“Flummoxed but determined, Spada asked himself: How can I get more out of my existing customer base? His answer: fanatical customer service. That meant doing whatever it took to get the job right. The idea is not exactly profound–until you realize all the ways you could be providing great service but you’re not.”
It’s not a new idea, but I believe it was the ancestor of a more recent philosophy of providing an exceptional customer experience: Customer Success. Customer Success is about taking a proactive approach to finding out what your customers need to be successful with your product, and helping them get it.
Notice the call to action at the very top of this home page: “Want to grow your best beard? We’ve developed the ultimate guide.” That is a fantastic example of customer success in e-commerce – after all, you can’t use a beard comb if you don’t have a thick, manly beard to comb through.
Maybe you’ve got your eye on becoming the next Amazon and your products are more varied than, say, beard products. Maybe you sell everything from firewood to popsicles. You can still have a pop-up chat box with live help available to answer questions and help your customers understand how to use your product and what other products they might need to get the best results.
Do Business a Bit Differently
Some e-commerce companies are finding great success by going with a subscription-based model. Yes, e-commerce meets SaaS, for the best of both worlds.
Companies like The Dollar Shave Club, Birchbox, and Barkbox all offer collections of related, niche-targeted items that customers subscribe to receive every month. This model must work, or Amazon wouldn’t be getting on the bandwagon (and it is). You don’t have to switch to subscription-only to differentiate yourself; but what if you added a subscription service for frequently bought items bundled together?
Now that you have some ideas – a few more words of advice
Value propositions and differentiators are living, constantly evolving things. Don’t be afraid to switch things up and test variations to find the very best differentiator for you and your audience.
And keep in mind, the best differentiator isn’t a unique product or a new gimmick – it’s the ability to deliver an emotionally compelling experience.
So go wild. Get crazy. Be creative. List out everything you can think of that might make your product and business different from the other guys.