A successful differentiation has two defining characteristics: (1) It is not imitated by your competitors, even though (2) it brings you unmistakable success with consumers.
Impossible, you say? Not quite. I am about to reveal to you the unexpectedly simple and wonderful secret of successful differentiation. Here it is: Do not look for it around the core benefits of your product category; rather, think "off-core differentiation."
"Core benefits" are the benefits that the consumer already expects to receive from a product like yours. This is the list of what's important to the consumer. "Core benefits" are more than the essential product benefits. The core benefits of today's cellular phones include much more than the possibility of conducting a conversation while you're in motion. Everything that the consumer has already come to expect from products in your category is included in the core benefits. These are the benefits that all of your competitors offer, because they constitute the essence of the product and it is impossible to compete in the market without them.
That is precisely why if you really invest your efforts and are truly brilliant and innovative and make a major breakthrough in improving core benefits—do you know what will happen? They'll imitate you at warp speed. That's what will happen. You must understand that in that case, your competitors can't allow themselves not to imitate you. You'd do exactly the same thing.
Many companies have learned this the hard way:
- Starbucks thought that its coffee shops would be cozier and look more like a neighborhood hangout if all their chairs weren't all identical and if they had easy chairs and sofas. What a great idea! Today, you'll find it in almost every coffee shop in the world.
- Colgate Palmolive combined all of the known beneficial characteristics of toothpaste and created Total. The innovation caught on completely. I would dare to say that there isn't even one manufacturer in the world that hasn't imitated the idea, first and foremost Crest from P&G.
- Volvo created its brand around a central core benefit: safety. It did everything humanly possible! Invested limitlessly! And succeeded—especially in convincing their competitors that it is very important to invest in safety. Today, no one will tell you that safety is Volvo's differentiation.
I could go on and on, but I think you've already gotten the message. So what should you do?
To create a differentiation that won't be imitated, you have to think beyond the core benefits that are (already or even just in potential) considered important in your market. It works time after time. The companies that have succeeded in maintaining their differentiation over the years and weren't imitated even though they were making tremendous profits are those that innovated in qualities beyond the core benefits of their market.
A Naked Differentiation