Differentiate or Die
Book Review: Differentiate or Die by Jack Trout (Second Edition)
If someone asked you what set your product or brand apart from the competition, would you answer “quality” or “customer orientation?” If your answer is “yes,” you might be in for a rude awakeing…
I’m not a huge fan of single concept books, but Differentiate or Die: Survival in Our Era of Killer Competition focuses on perhaps the most important concept in branding, and provides a wealth of real-world examples. First published in 2000, this edition has been updated with new examples throughout the book.
The premise of Differentiate or Die is simple enough: for a brand or product to survive and thrive, it must build an identity different than its competition. This may seem obvious, but Trout describes plenty of real-world business failures resulting from not differentiating a new product from its competitors, or from a successful brand losing the difference that created their original success.
One of the most useful parts of the book is a series of chapters that examine factors that are good differentiators, and factors that aren’t. Surprisingly, quality and customer orientation rarely work as good ways to differentiate a product or brand only rarely. Why? Typically, these differences are ephemeral, and gaps in quality or service can be rectified by competitors quickly once it’s clear customers are paying attention.
Similarly, price is often not a good long-term difference creator because it’s too easy for competition to match lower prices. Even when there is a real cost difference due, say, to new manufacturing technology, entrenched competitors may well choose to match the price rather than lose market share. Occasionally, of course, a brand can capture the “low price leader” position in the mind of consumers – Wal Mart, for example – but few are able to sustain that differentiation over the long haul.
What DOES work to differentiate a product? Trout has multiple chapters devoted to effective branding tools. Being first is one such factor: a brand that can believably claim to be first in a market has a substantial advantage.
Leadership is another effective tool, according to Trout. Consumers love a leader. The good thing for brands wanting to claim leadership is that one can do so in a variety of ways. A company can choose the last six months or the last five years to compare sales, depending on which creates the greatest appearance of leadership. If a company isn’t the sales leader, perhaps it can quote a respected survey showing it is best. Perhaps the brand is a laggard in the overall market, but is a leader in one specific segment. Historically, much of Coca Cola’s marketing has focused on its leadership as “the real thing,” and neuromarketing studies bear out the potency of the Coke brand. Regardless of the exact measure of leadership, any such claims must be specific and credible to work.
Although the book claims to be updated throughout, a few of its examples are clearly long in the tooth. Examples of great product successes, for example, include Lotus Notes and Palm Pilot, both of which are now nearly invisible. Another spot in the book suggests that “Esther Tyson” (the fowl futurist?) might be a good expert to quote if she liked your brand. I also found the index to be particularly useless, as I was unable to locate references even to specific names I knew had been discussed.
These quibbles aside, the key message in Differentiate or Die remains as important today as it was in 2000. Brands MUST create a difference in the minds of consumers if they are to survive, and this difference must be real and sustainable. Existing brands must be careful to maintain the difference that made them successful, or find a new one. The natural tendency to expand the product line and target customer base can inexorably wear away at differences that originally separated a brand from its competition. A key benefit of this book is the large number of examples Trout provides to back up his points. If you need to argue the need for differentiation within your company, reading Differentiate or Die with its wealth of examples will be like strapping on a bandolier of bullets for your next confrontation with those who would dilute your brand.
I agree that Trout has a good and actionable point. But I’ve always found that in addition to understanding differentiation in this “best practices / effective in general” way, each company must build differentiation based on how they solve a need for their target customer.
Before there is brand awareness, value consciousness or any of that, there is a need. It’s what sets a customer in motion to seek out something to fulfill that need. Every customer experience starts with a need worth solving. If you demonstrate how you’re the best solution for the need (NOT we were first and they were second), you’ll be differentiating yourself right from the start.
Trout’s ideas are a great base, but we must build upon it with needs-based differentiation to maximize performance. You might like this related thinking (& resources): http://www.ceforprofit.com/2009/08/whats-your-front-domino/.
I certainly agree, Linda, that differentiation based on a customer need is no doubt far more powerful than if it were based on a more arbitrary factor. Probably any differentiation is better than none. but marketing is all about meeting needs.
“Leadership is another effective tool, according to Trout. Consumers love a leader. The good thing for brands wanting to claim leadership is that one can do so in a variety of ways.” – I think it may not be worthwhile for companies to base their differentiation tactics on this element, precisely because it isn’t reliable. As you said, any brand could be a leader, depending on the perspective it takes. Think of all the “Car of the year awards” given by all auto magazines. 5 cars can’t all be the best car of the year, so won’t consumers feel lied to if a company promotes this stance? I think sometimes, not being the leader can help differentiate you, as is the case with Avis. They’re able to exlpoit their number 2 position more effectively, in my opinion, compared to the option of proclaiming to be No. 1 in the last six months. What do you think?
Trout actually mentions Avis a few times, noting that they leveraged a weaker market position into a competitive difference. In essence, they were saying, “It’s logical – we’re #2, so we HAVE to try harder!”
Leadership is just one kind of differentiation. I have to give the Avis marketers a lot of credit, though – I don’t recall any other advertiser exploiting a #2 position that well. I’ve occasionally seen campaigns for even smaller players in a market who emphasize that because they are small, they can provide more personal service.
Thanks for stopping by, Bogdan.