Why Differentiation with a capital "D" is misleading - a plea based on the Tesco case.

In a former post Why differentiating positionings don't matter much I have already talked about why meaningful differentiation is an overrated - or misunderstood - concept. This post was largely influenced by this book here: "How Brands Grow"

In today's post I would like or explain my doubts in a more concrete way - by using a famous example:
The Tesco brand, which back in the days has been and for some still is the poster child of successful re-branding and superior service design.


The Tesco case.


















Tesco have reinvented themselves in the 80ies/90ies and ran some legendary campaigns in the UK.

In the colorful circle below You can see a description of the Tesco company brand - with its main message "Every little helps" and it's implications for doing business. As already mentioned this one of the really big cases in branding history and people (in Europe) still say "Tesco" when you ask for THE retail case to learn from. Tesco's main idea was to make "constant improvement, guided by customer orientation" the core of their company & brand. Basically, they strive to create the most satisfying shopping experience at an affordable price.

Now, what is interesting about this case is that it is almost completely lacking originality, or let's say "differentiation" as we normally use this word. Yes, the Tesco experience is quite a distinctive one - especially because they steadily innovate it. So is the advertising style. But the Tesco proposition is astonishingly generic. "Every little helps" is a good understated expression of something absolutely basic to the category: Customer Service in all its aspects and the will to improve it.


"Generic"

When you read the single imperatives & attributes derived from "Every little helps" you might be astonished. If it was not Tesco but one of those less glamorous clients you probably would cry out "but that's generic, everybody could say that".
Some examples: "The staff are great", "The prices are good", "I can get what I want", etc.
There's obviously nothing specific there. If it was not Tesco, you would assume it's just the usual marketing bs.

All this raises a question: is our understanding of differentiation and its importance maybe wrong?
I believe it is.

But what is our usual understanding of what we call "Differentiation"? With a capital D, that is.

I believe what we mean when we say "Differentiation" is: "others don't have it". If you really want to kill ideas you would even go for "others cannot even have it in future, because ONLY we can".
By setting such standards we simply ask too much of the core idea and too little of ourselves.


Asking too much of an idea.

Obviously, we want a brand or an idea to be unique. But what is really unique in this world? Hardly anything is. Of course there are cases showing considerable differentiation - you might even call it niche behavior - like e.g. The Body Shop, HSBC or Cirque du Soleil, Wii. But the world is full of other examples similar to Tesco who were able to standout and be superior despite a seemingly generic basic idea: Here are just some further examples: Coca-Cola’s "Happiness", BBC’s "Real Journalism ", Whole Foods’ "Fresh and Healthy", even the ingenious Avis’ "We try harder" (which was striking only because its bravely reason to believe "We are second.")
Let's put it that way: just count how many UNIQUE brand ideas you had in your lifetime.

Asking too little of ourselves.

I believe we often avoid thinking about the issue at hand in favor of talking about it with colleagues and clients. In such - mostly confrontative - conversations "differentiation" is rather used as a means to undermine the other guy's arguments. "Differentiating vs. not" becomes a criterion to kill ideas & ads. (Almost never the ones chosen instead really are differentiating in the end.)
Or let's put it less defensively: differentiation is a concept we use as a criterion to choose ideas in a very simplistic way. Basically we build a digitally split version of the solution space: 0 = non-differentiating, say won't work even if relevant & credible, 1 = differentiating, say will work if relevant and credible.

Another way of making it too simple for ourselves is our personal motivation when we crave for something truly differentiating. We crave for a miraculous notion that reduces hard work. Something that is so ingenious that we won't have to fight the fight of details and little steps, ultimately that we won't have to compete - ideally not at all. Although this is true for a truly differentiated, unique business (see Aaker’s notion of competitors being not even considered) - it doesn't stay true for long, since other player start copying your uniqueness, thus destroying it.
And here we are again: not really differentiated, trying to play "The Original" card.
This wish is especially often dominant on the agency side and even more in planning departments. The further you are from daily business the more you believe in a stroke of genius, some sort of a paradigmatic turn. I do as well. But we should be aware of the hidden motivations behind this wish: we simply do not want to make our hands dirty by thinking through the nitty-gritty and executional side of business success.

The Tesco case shows that it doesn't have to be the basic idea that is differentiating. Perceived differentiation can come from the way how a more or less generic idea is executed. E.g it starts with the way the brand slogan is written: "Every little helps" is nice because of the execution of the core idea "Constantly improving customer experience". It's also not the idea of having a great assortment that creates competitive advantage but the actual manifestation of this idea - week by week.
Same is true for lots of brands and campaigns. Let's take Old Spice for instance: "Masculinity" is really nothing a scent can own in men's perfumes market. It's the execution that creates the differentiation.
Same is true for Avis’ reason to believe "We are second.", which is an executional way to play "Customer Dedication.", not the brand proposition itself.

Towards a more realistic concept of "differentiation" - no capital "D"

Having said all that, I would suggest the following corrections to the concept of differentiation:

  • for established brands, differentiation is the least important of the Holy Trinity: relevance, credibility, differentiation. For challenger brands with small market shares this might be not true, I must admit.
  • differentiation is a continuum, not a Yes or No: ideas are more or less differentiating, and almost never truly unique. differentiation from just some of the competitors might be enough. differentiation to some degree might be enough. The mere perception of differentiation might be enough. 
  • differentiation does not at all have to happen in the idea itself, it can take place in the execution (both in comms or in service/product design)
  • differentiation should be thought of as creating & nurturing assets attributed to the brand;
    instead of thinking of it as creating a line of difference from other brands. If you are able to ensure attribution to your brand you don't have to think of others having or not having something similar.
  • differentiation is a good means to cut through the comms clutter in the market and should be seen as such: as a means to overcome certain barriers, not as an end in itself. Just remember: it could easily be replaced by sheer omnipresence and spendings. Relevance and Credibility could not. At least not in a free market.
  • what counts in the end are customers who like what the brand offers and move seamlessly through their purchase cycle to actually buy the offerings. differentiation certainly might help here and there in that cycle because it fosters awareness and attributability of perceptions and mental schemata. But that's about it.
If you have a brand people perceive as "different", a brand that has a very distinctive brand story, that's perfect. If not - do not worry too much about being somehow different. Rather ask yourself: is the brand really really good at something that is relevant - and if not, what should it be?

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For those of you interested in a more scientific analysis of this issue - here's a presentation of some statistical evidence of the marginal role of "meaningful differentiation".