Differentiation is still the name of the marketing game. Distinction in service, image, and promise allows a brand to occupy a piece of a customer's busy mind.
More importantly, differentiation gives the brand's raison d'être, its reason for being that causes customers to think of it when they are ready to shop. And when customers do shop, this is the brand that goes into real and virtual shopping carts.
Unfortunately, differentiation today is under siege.
Increasing customer and shareholder demands and the influx of new lower-cost competitors have CMOs and CEOs caught in a "do more and more" strategic paradigm. At a time when they should "do less, better," they are frantically adding more products, line extending brands, and adding endless features to products and services.
The result is complexity. And complexity stifles organizations and confuses consumers.
Differentiation Requires Sacrifice
Several big brand marketers have fallen on their own swords in their effort to drive growth.
I have been a big fan of Kellogg's since I was an account executive at the Leo Burnett Advertising Agency. The name Kellogg's stood for healthy breakfasts, and for decades, marketers worked hard to fortify that stellar reputation. That good work established Kellogg's Special K as a healthy, nutritious breakfast for diet-conscious women.
But with a stagnating top and bottom line, Kellogg's decided to spread its corporate wings. It is one thing to diversify, as per its acquisitions of Keebler and Pringles, but quite another to exploit a valuable brand asset by slapping "K" on products that fail to build or live up to Kellogg's Special K's core positioning.
This is the opposite of sacrifice—this is sacrilege.
I see the rationale for nutritious granola and cereal bars, but the launches of cracker chips and flatbread breakfast sandwiches under Special K goes too far.
Special K Cracker Chips contain 110 calories per 30 gram serving. This is marginally less than Frito Lay's 127 calories for the same weight. Flatbread sandwiches may be 40% less calories than McDonald's version, but they are still a combo of cholesterol, fat, and sodium that won't do you any good.
If you want differentiation, you have to answer this question: What am I prepared to sacrifice to get it?
No one does this as well as California's In-N-Out Burger. While McDonald's has been building up its menu items to well over 100, In-N-Out is keeping its menu simple:
- Three types of beef burgers
- Soft drinks
That's it. If you want chicken, salad, pizza, or wraps, get out of the line-up to the counter and go elsewhere.
Profit by Doing Less Better
In-N-Out Burger understands strategic sacrifice. "Doing less better" is its culture; it is also the cornerstone of customer service—it even extends to geographies.
This privately owned company has been in business since 1948. Is it hell-bent on expanding to every state in the Union? No. A total of 80% of its 290 outlets are in California. It never franchised. And going public? Blasphemy.
The reward of sacrifice is in the numbers: superb profitability and sales per outlet at the top of the fast food industry that includes McDonald's.
Differentiation in branding and strategic single-mindedness doesn't mean the relationship you have with your customers has to be boring. There are endless ways to engage without giving up on your brand's core positioning. The drums of the long-serving KISS concept continue to beat in this complex business world. Those who embrace the notion of "keep it simple" and "do less but better" come out on top.
Promising service is easy. Airlines, telecoms, and credit card companies promise customer satisfaction all the time... Do they deliver it?
In the high-tech and information-age sectors, consumer and customer insight is the precursor to product and service differentiation. Successful companies don't stumble upon insight. Inquisitive marketers burrow for it and conceptualize it. Then they act upon it.
Great marketing becomes the cultural glue that binds every department and every employee to the vision—always has, always will.
Continue reading "Businesses Can Profit by Doing Less—but Better" ... Read the full article
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