Differentiate Your Product

4 Ways to Differentiate Your Product or Service

In 2004, the largest social media sites were MySpace (with 86 million users) and Friendster (with less then 10 million users). It seemed that the social media niche had been filled. MySpace was growing rapidly. So was Friendster. However, it didn’t take Facebook long to dominate the market. Facebook surpassed its previous rivals because if its simple, clean, standard appearance. By 2010, Facebook had 400 million users with MySpace trailing behind at 125 million users and Friendster trailing even further with 8.2 million users.


Features can be differentiated in three ways:

  1. The product does a “better job” for the customer.
  2. The product does “more jobs” for the customer.
  3. The product does a “unique job” for the customer.

It can sometimes be enough to improve a single feature, as long as that feature is the best on the market. For example, the iPod, only does one job and not even a unique job. It plays music, just like Sony’s Discman. The iPod did do that job in a more convenient way, qualifying it as “better.” Instead of carrying around several CDs and a fanny pack, a user could just put the iPod in their pocket and go. It could also store and play 500 songs.

It can sometimes be enough to do more jobs. The iPhone didn’t necessarily make better calls or offer better reception, and phone service is not unique. However provided more features that customers wanted. “There’s an app for that” soon became commonplace among smartphones.

It can sometimes be enough to do a unique job. Even though Build-a-Bear doesn’t necessarily result in a better stuffed animal or have a broader variety than others, its customizable build is absolutely “unique.”

Quality or Reliability

Customers often care more about quality reliability than any power, variety, or new technology. No one ever bought a vacuum because it could suck up a tennis ball, use 60 attachments, or claimed a patented power switch. Customers buy vacuums to clean well and clean for longer than 6 months. Kirby vacuums were successfully sold door-to-door even though they were 5-10 times the price of a Walmart vacuum. Customers knew that it would last for 8 years. Companies with high quality and high reliability develop strong reputations. Toyota is one of them. In getting you where you need to go, a Toyota Corolla may not do a “better job” or “more jobs” or a “unique job,” but the car will last for years with minimal repairs.


Many sellers recognize that they can increasing sales by improving convenience. Coke and Pepsi have enormous distribution channels and an unparalleled vending machine network. Customers aren’t going to drive across town to buy a Coke, but they’ll walk 50 feet to a vending machine or pick some up with the rest of their groceries. Starbucks has also embraced this model. In major metropolitan areas, Starbucks has a store on what seems be every corner.

Brand Image

Brand image is necessary for all differentiation. It is also the option of last resort. When all else fails: advertise. Some products succeed more because of their public presence than their intrinsic value. Ken Garff may not sell better cars than its competitors, but its aggressive billboard campaign along I-15 shout a recurring theme: “We Hear You.”

Next Steps

Differentiation strategies are unique for every company and can be challenging to pinpoint. An outsourced CFO can help you establish the financial value in each of your options.