You’ve noticed two or three (or 10) businesses making millions online selling the same products as each other. You do a little research and see how easy it is to get access to this particular product wholesale, save up some money to have an ecommerce website designed, and decide you’re going in the business of selling this online product too. I mean, why not? If they can make millions off of …let’s just say …widgets, then so can you. Right?
Personally, I’m not really into jumping into an industry that’s already saturated but that doesn’t mean we haven’t run into dozens of clients who make good money in highly competitive industries. It maybe a little lot harder because there’s so much competition out there but that doesn’t mean you can’t earn some extra cash.
Some examples of highly competitive ecommerce businesses that are hot right now are:
- Women’s Clothing
- Women’s Shoes
- Men’s Grooming Products
- Hair Extensions
- Beauty Products
- Roller Boards/Hover boards
- Diet Tea
- Waist Trainers
If I haven’t talked you out of going this route then good for you, but there is something that you need to consider before opening your virtual doors and that’s a concept that will make your rough journey of competitive product sales a lot easier: Point of Difference.
Point of Difference
Point of difference also known as “product differentiation” or “unique selling proposition” is defined by Wikipedia as:
“The way in which the goods or services of a company differ from its competitors. The indicators of the point of difference’s success would be how can the goods or services provide benefits to consumers, and having the consumers positively and strongly associate with the particular brand instead of other brands within the competing industry.”
Establishing a point of difference will allow you to create a unique product or service and give your brand a distinct voice, allowing customers to pick you out from the crowd.
The most important benefit to establishing a Point of Difference is that if done properly, it allows you to own a particular conversation within the community that buys your product or service. The company can then focus upon the niche, targeting a large portion of a niche market rather than a tiny portion of a much larger market.
Here are some examples of points of difference for potential or existing brands in highly competitive industries:
Point of Difference Example #1
Industry: Hair Extensions
Point of difference: Textured Hair extensions
Expanded: A brand touts itself as the first or only company that exclusively sells textured hair extensions targeting black women who don’t chemically treat their hair
Point of Difference Example #2
Industry: Women’s Clothing
Point of difference: Personalized Virtual Styling Sessions
Expanded: A company adds a virtual video styling service to its website targeting women who want to dress like a celebrity without celebrity money.
Point of Difference Example #3
Industry: Waist Trainers
Point of difference: Personalized diet plan upgrade
Expanded: A waist trainer retailer adds a personalized diet plan upgrade option based on an online questionnaire that can be packaged with every waist trainer sold.
As a marketer and marketing coach, I always try to get our clients to commit to a point of difference, if they haven’t already done so, because otherwise we have very little to say to talk about to the prospect in the marketplace. We simply can’t justify ourselves in the market. If someone else is selling what we are offering, then really why are we here?
A point of difference gives us a purpose and ultimately allows us to make the argument for the sale a lot more effectively.
If you have figured out what your point of difference is then great! I’m so proud of you! If you haven’t yet and you feel lost, hopeless, and discouraged, don’t fret, relax, and I’m going to give you some great resources that will get your juices flowing.
How to Establish your Business’ Point of Difference
The first and second laws of Al Reis and Jack Trout best selling book, “The 22 Immutable Laws of Marketing”, respectively are:
- The Law of leadership: Its better to be first (in a category), than it is to be better.
- The Law of Category: If you can’t be first in a category, then set up a new category you can be first in.
If you interpret ‘category’ in the passage as your ‘industry’ and interpret the ‘new category‘ as your ‘your point of difference”, then, boom, you have created a new category. If we use the first example of Textured Hair Extensions, then this company can brand itself as the first retailer of hair extensions exclusively for women with curly hair. This allows the company to niche down and own the conversation around curly and textured hair, which no one is talking about, rather than swim in a sea of businesses discussing the same conversation of Hair extensions as a whole. (FYI, someone is already doing this textured hair extension thing, and they are doing extremely well, so find another niche point of difference)
Complete this questionnaire to help yourself start to develop your company’s point of difference
- What are the key terms and words that are frequently used in your industry?
- What are the qualitative words that customers use when describing your product favorably?
- What are your customer’s common questions and concerns when searching for information about your product or service?
- What are your customer’s common questions and concerns when searching for information about your company’s industry?
- What do you currently do differently or better than your competitors?
Use Google’s keyword planner tool to get keywords or key phase ideas around your product (google “keyword planner tool” if you are not aware of it and get familiar). The results you get here are words and phrases that may give you some good Point of Difference ideas that people actually care about, rather than alienating your customer-base with an obscure Point of Difference.
Here are some rules to help you find a great point of difference for your business
Rules for Establishing Your Point of Difference
Your point of difference should be unique.
Your Point of Difference has to be something that no one else is doing. If others are doing it then it’s not different, so you need to do your research and find out if someone else is doing what you want to do.
Your Point of Difference can help you find a niche but not entirely.
Finding a niche is great, but be sure that there is a market for the conversation that you are going to own. Again, do your research to find out if the market exists and if people will care once you start the conversation around your new category.
Your Point of Difference can speak to the experience around your service.
Your Point of Difference can involve your product or service directly but it can also involve the experience around your service, such as delivery method or application technique. Don’t just concern yourself with what directly your product provides; think outside the box.
Your Point of Difference Must Be Profitable
When establishing your point of difference be careful not to get so extravagant in your ideas that it eats away at your profit margin. Although your Point of Difference may make your product or service more attractive, and you may sell more, don’t forget that pricing rules still exist and you still need healthy profit margins if you want to be successful.
I hope that I helped you to see the importance of Point of Difference. Be sure to take your time when making your decision and enjoy the ride.