It seems every time one company discovers something that works well, others race to copy the idea. Professional services, airlines, wireless communication, and insurance are just a few examples of industries in which major brands have become nearly indistinguishable from one another. According to the WPP and Millward Brown 2015 “BrandZ Top 100 Global Brands” Report, which studied brands from 2006 to 2015, differentiation is the single most important contributor to a brand’s success.
The top 50 brands in the world achieved an average Difference Score of 139, while the next 50 scored an average of 96. To be fair, the importance of differentiation is not a new idea. While these concepts all have merit, they do not alleviate the need for differentiation. Simply put, differentiation directly affects a brand's short-term profitability and long-term viability.
Specifically, when customers see brands as interchangeable, they make purchase decisions based primarily on price, which inhibits a company's ability to command premium pricing. This translates to lower product margins and reduced profitability. Additionally, customers are less loyal to brands they feel are undifferentiated. Yet despite the undeniable advantages of achieving differentiation, brands cannot seem to get out of their own way. Several years later, Deloitte confirmed that customers saw several categories of products as homogenous, ignoring labels for the cheapest item on the shelf.
Rather than focusing on the ideal customer experience, companies should think in terms of brand experience. Brands should seek to create touchpoints along a customer journey that are consistent with and inspired by the brand positioning. Doing so paves the way for individual brands to consider what they want their interactions with their customers to look like. It also provides customers the benefits of distinctiveness and variety, enabling them to choose the experience that is most meaningful to them. Customers want to feel like people, not mass-marketed demographic numbers. Advances in technology, along with more creative and sophisticated marketing practices, make it easy to customize experiences, so there is no reason not to provide customers with personalized offers and experiences that make them feel appreciated. Customers can easily spot disingenuous brand tactics, and they understandably resent them. Instead, touch customers in areas where the brand’s presence makes sense. It makes sense, it feels genuine, and it stays true to Uber’s brand positioning. Instead, they should pursue long-term, transformational brand-inspired growth. Next, lean on the brand to see where new opportunities might lie. That same environmental company might do well in other areas pertaining to relevant social issues. Finally, test new opportunities with small steps to validate their usefulness.
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