Differentiate or Die: 3 tips to stay alive

Isn’t it amazing when you read a classic business book and the messages still resonate, many years after they’ve been published?  Recently, I wrote a summary of Relationship Marketing, which was published in 1993, where the points were still relevant today. This is another summary of a book that could have been written yesterday.

Are you wondering why I’m still writing book reports after high school? Don’t worry about it…

Differentiate or Die was written by Jack Trout – 16 years ago in 2000. His main argument was that we lived in an “over-communicated society,” where too much information was being sent to consumers. (Do you think there’s more information out there today, than in the year 2000? – of course you do. ) Anyway, he claimed that “positioning” was the only way to get through the noise.

So how does one get through the noise in an “over-communicated” society? Targeting. Trout wrote that having a targeted, focused, approach to the consumer enabled messages to cut through the noise. The next time you hear someone say that personalization and segmentation are new trends, tell them to google Jack Trout.

At a high level, Differentiate or Die is a how-to-guide that offers differentiation strategies. Trout suggested that companies have to think about differentiation in 3 key ways:

  1. Being everything to everyone undermines what makes you different
  2. Ignoring market conditions makes your difference less important
  3. Staying in the shadow of larger competitors is a path to failure

Everything to everyone

If you ignore your uniqueness and try to be everything for everybody, you quickly undermine what makes you different. The example he gave was Chevy. Once the dominant good-value family car, Chevy tried to add “expensive,” “sporty,” “small,” and “truck” to their identity. Their “differentness” melted away as did their business.

  • Today, Chevy is ranked 20th (Best Car Brands) according to Consumer Reports. The top five are Audi, Subaru, Lexus, Porscshe, and BMW.

Let’s focus on the leader; Audi was living in the shadow of Mercedes Benz and BMW, so how did they position themselves to compete (and thrive) in the luxury market? They didn’t try to be everything to everyone. They focused on a segment. Audi targets luxury-car buyers in their 20s, 30s, and 40s, making up about 48% of Audi’s U.S. customer base.

Within that segment, Audi  positions its brand as a leader in technology: “Innovation through Technology and “Truth in Engineering.” If you’ve seen their commercials, it’s clear to see that the message is for younger people who want to “break from script.” This is a direct attack at their larger competitors in the luxury vehicle business: BMW and Mercedes. (Also hitting on point #3 above)

  • Here is the commercial in case you haven’t seen it: “Scripted Life

“Positioning dictates that you find unique and meaningful points of differentiation and use them to competitive advantage.” Trout

Audi is a great example that when you find unique and meaningful points of differentiation, it’s a competitive advantage and their top ranking in the 2016 Consumer Reports report is evidence. They weren’t trying to be everything to everyone, but rather, own a segment 20-40 year olds…

I can’t here you

“Ignoring market conditions makes your difference less important.” Trout

If you are marketing driven, instead of market driven, you lose. You have to know what your consumer is thinking, doing, buying, reading, tweeting, etc. Once you lose the pulse of your consumer, your messages are falling into a black hole.

As Trout points out, we live in an over-communicated world (since the year 2000). Please don’t add to the noise pollution. In order for your messages to be differentiated, they have to be meaningful, unique, and defensible (MUD).

Are you afraid of shadows?

To Trout’s third point…

“If you stay in the shadow of your larger competitors and never establish your differentness, you will always be weak. Consider Westinghouse. They never emerged from the shadow of General Electric. Today Westinghouse is no longer with us.”

Let’s not let the facts get in the way of a good story (Westinghouse is still around today). Trout’s point is that you have to pick a fight with the big guys, just like the Audi example above. Here are his four tips:

Differentiation:

  1. Make sense in context and start with market place (market driven not marketing driven)
  2. Find the different idea
  3. Have credentials
  4. Communicate your difference

Main points:

  • You cannot own the same attribute or position that your competitor owns
  • Have a history: heritage has the power to make your product stand out
    • There is a psychological importance of having a long history

Differentiate or Die is a classic business book and it’s much more than marketing strategy. Top management has to be in charge of making sure that differentiating strategy is generated, communicated, and maintained. Something as important as “differentiation” can’t be left up to marketing people and ad agencies (no offense); it should be a top down strategy.

Thank you for your attention; if you’ve read all the way to this point, you’re in the top 40% (most viewers read only 60% of an article)

Since this is a “book report” of sorts, reader grades are greatly appreciated. If you like it, share it; if you don’t like it, comment and say why.

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