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The Myth of Differentiation

by Mike Schultz  |  
June 17, 2008

Few would question this simple truth: Businesses must differentiate. Growth, profit—survival, even—hinge on their ability to set themselves apart from competition.

Professors Terrell and Middlebrooks of the Northwestern University's Kellogg School of Management and University of Chicago Graduate School of Business, respectively, say it well:

Service companies need to dare to be different. To find a leadership position in the market...and then to lead. The key strategy is to be different from competitors.... They break free from "be better," internally oriented initiatives to "be different," externally oriented strategies. Being different is grounded in providing customers with unique value that they cannot get from any other competitor.1

They go on to cite McKinsey as their first example.

The "need" for differentiation is so well accepted, it's considered simplistic to even make the case for differentiation. Why make a case for something everyone already knows?

Much of the differentiation conversation therefore centers more on how to do it and how strongly to do it. (Terrell and Middlebrooks go as far as to say you should position yourself so far opposite competitors that they coin the nifty term "oppositioning" to describe it.)

That we need to be differentiated at all... accepted without further thought.

I disagree. Put some further thought in it. Most everything I've read and heard about differentiation is wrong. I suspect the same is true for you.

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Mike Schultz is president of RAIN Group, a leading sales training and consulting company. He helps companies around the world unleash the sales potential of their teams. Mike is bestselling author of Rainmaking Conversations: Influence, Persuade and Sell in Any Situation and Insight Selling: Surprising Research on What Sales Winners Do Differently. He also writes for the RAIN Selling Blog.

LinkedIn: Mike Schultz

Twitter: @mike_schultz

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  • by Craig Park Tue Jun 17, 2008 via web

    Minor point, but "One is the loneliest number" is from One by Harry Nilsson

  • by Craig Park Tue Jun 17, 2008 via web

    All good points; however, it is possible to differentiate from the "expected" norm (value) by offering the unexpected (and more valuable). As an example, an architecture/engineering firm that provides early planning/feasibility/economic models that allows client to better site or organize their buidlings/ higher value that the expected design services.

  • by Mark Nagurski Tue Jun 17, 2008 via web

    Hi Mike,

    I can't agree with the stance that differentiation is a myth, largely because I don't believe there is an inherent choice between striving to be better and striving to be different.

    Being better IS a point of differentiation.

    Moreover, the examples used don't suggest a problem with differentiation, but rather that paying lip service to being different is pointless.

    The consulting firm and law firm you mention are, in fact, doing the exact opposite - using many of the same platitudes that every other business uses - as opposed to actually positioning themselves differently.

    As bad as those platitudes sound, they don't negate differentiation as a concept - marketing is of course more than what goes on your website or print ad. No doubt the most effective differentiation comes through actions, reputation, personality and 'stories told that [bring] companies to life' - something your examples support well.

    i.e. Where Dr Phlox differentiates himself may not be in the methods he uses - he's not a different kind of dentist - but rather in his ability to make people feel at ease, trustworthy performance, track record etc....

    As you rightly point out those are the kinds of things that lead to trustworthy referrals and word-of-mouth. Why? Because in a world of fly-by-night businesses, track record is differentiation. Where customers are used to being treated like numbers, good old fashioned personal care is differentiation. Even his location (accessibility) in the next town is differentiation.

    Put them in writing and they'd sound cliched but they are what differentiates Dr Phlox - without them he'd be the same as any other dentist.

    "So what is it that clients are, indeed, looking for? "

    I'd agree with every point you make in the list but I'd also argue that each one of them provides a clear opportunity to differentiate yourself from the competition - by being better in those areas and claiming them as your ground.

    Everyone says they offer reliability - the one company that offers a 100% no questions asked money back guarantee differentiates itself from the others and 'owns' reliable.

    Differentiation is about creating a clearly defined reason(s) for your prospect to choose you over another business or the status quo.

    Surely differentiation on those terms is essential - the myth is that simply saying 'we're different' actually makes a difference.


  • by Dusan Vrban Tue Jun 17, 2008 via web

    E X C E L L E N T ! Even though you have (intentionally?) missused the point of differentiation a bit, I love the overall "think again" concept of this article. Reminds me of some 90's overall messages in the companies statements: "Satisfied customer is our mission". Really? Is it your mission? Or have you just coppied that from somewhere and don't really know why?

  • by Mark Wed Jun 18, 2008 via web

    This article didn't convince me that everything I've read and heard about differentiation is wrong. It did demonstrate that many people do a poor job of differentiating their organization in ways that are meaningful to their target audience.

    IMHO, focusing on being unique misses the point. The point is to get the prospect to take a specific action. Prospects take action when they believe that doing business with you is a) somehow worth the time to do it and b) likely to be somehow better for him or her than doing business with your competitors.

    While the long list of bullets in this article contains all good things, using it as a checklist seems to me to have high potential to lead to more messaging dross. Most marketers would be much smarter to stop tweaking their messages and materials for a time, and instead use the time to do whatever work they need to do to understand what's valuable to their target audience. Only then can they make a clear, concrete connection between what the people in the target audience value most and what their firm offers.

    I realize that sounds very Marketing 101. But, it's an essential step that too few marketers do, and even fewer do it well.

  • by Sebastian Franck Thu Jun 19, 2008 via web

    The "rather unique" consulting firm in the quote is "World Consulting Group. Your consulting firm in Columbia Missouri". Rather small world, I'd say. My point? Beware of writing dross, because on the net, it's there for all to find.

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