How to differentiate in a commoditized market

Differentiation in today's market is one of the biggest challenges companies face. Here are four steps you need to take to stand out from your competitors.

Differentiation – meaningful, relevant differentiation – is one of the great marketing challenges for professional services firms. And with the advent of automation technology and AI, it’s not only easier for new service providers to enter and crowd the market, the provision of those services is easier, faster, and in some cases, requires little specialization.

In this article, I’ll discuss how differentiation works in a commoditized market, and how to get started on a differentiation strategy today. There’s no one-size-fits-all solution — but I can show you how to locate the insights that you need to develop a powerful set of differentiators, and advise on a few of the finer points of the game.

What Is Competitive Differentiation, and Why Does It Matter?

Competitive differentiation is a process that gives buyers a compelling reason to select your firm. It focuses on the one (or more) firm characteristics that key competitors either lack or don’t discuss — but that your customers care about.

In the selection process, buyers face an array of service providers, most of whom appear to offer roughly the same services. They all say more or less the same things about their proprietary processes, great people, and commitment to quality service. They often even look alike, from their logos to their colors to their clichéd stock photos.

It is a small wonder that the firms with either the best name recognition or the lowest cost are going to be selected. After all, what else do buyers have to go on?

The answer is differentiation. In a commoditized market, differentiation helps firms stand out in a way that is relevant to the concerns and priorities of their audience, and in a way that proves what matters most, particularly in a crowded industry – expertise.

A Playbook for Competitive Differentiation

Step 1: Target Your Key Audiences

There are many ways to identify your audiences. At its most basic, your list might look like this:

  • Existing clients
  • Prospective clients
  • Influencers
  • Prospective partners
  • Prospective employees

If you have a very diverse client base, you might want to further subdivide your audience, such as by industry or even role (CEO, CISO, etc.).

Step 2: Make an Initial List of Differentiators

Develop a list of characteristics that you believe sets your firm apart. Don’t try to address all the things your firm does; rather, try to highlight just those features that make it different. If you’ve done some research, carefully go over the findings. Look for any ways that you are different. Keep each differentiator a single, simple idea, without jargon.

Step 3: Start Vetting Your List

Hopefully, you now have a lengthy list of differentiator “candidates.” It’s time to vet them — a ruthless process that few of them will survive. That’s a good thing, because it’s quality that counts — and even one great differentiator can have an enormous impact. Run each candidate through these three tests:

  • Is it true (or you are working to make it so)?
  • Is it relevant to your target audience?
  • Can you support it with evidence?

Next, ask three more “reality check” questions of any candidates that are left standing:

  1. Can any key competitor claim the same thing? Be honest — because if the answer is yes, you won’t really be setting your firm apart.
  2. Is it truly different? When composing differentiators, it’s all too easy to write something that sounds really great — but that merely describes your firm, without setting you apart.
  3. Can you support it with a substantial amount of evidence? If not, give it the boot.

How many differentiators should you end up with? Most Hinge clients end up with 3-6 — but some come out of the process with just one or two. But no matter how many differentiators you have, usually only one or two are true, defining differentiators — those unique qualities that people will associate with your firm.

Step 4: Rank Your Differentiators

List your differentiators in order of importance, starting with the differentiator you most want people to associate with your firm. As you do, keep these two criteria in mind:

  • How important is it to your top audience – the decision makers?
  • How strong is the supporting evidence?

Conclusion

Today’s government buyers are faced with the unenviable chore of selecting the best firm from a vast, sea of nearly identical options. Differentiation makes their job easier.

Of course, it helps firms like yours, too. If you’ve struggled to find interesting or original ways to describe your firm, differentiators give you the elements of a better story. They are also your first step toward positioning your brand in the marketplace and helping your target audience develop a true preference for your services.

And while not every firm has a feature that is totally unique, in a commoditized market, it’s crucial to at least identify an aspect of your business about which you can build a compelling story — one that nobody else is telling.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.