Do you fully understand what differentiation means when it comes to your marketing efforts, and ultimately your success? I just read an amusing anecdotal blog post from the powerhouse legal recruiting firm of Major, Lindsey & Africa. Entitled “Tales from the Inside: Do You Think I Should Send a Thank-You Note?” It tells the story of how three candidates for a desirable in-house position were differentiated by the simple fact that one of the three took time to send hand-written thank you notes after each interview, and the other two did not. Guess who got the job?
In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products as well as a firm’s own products. The concept was proposed by Edward Chamberlin in his 1933 Theory of Monopolistic Competition.
The objective of differentiation is to develop a position that potential customers see as unique. . . .
Differentiation primarily affects performance through reducing directness of competition: As the product becomes more different, categorization becomes more difficult and hence draws fewer comparisons with its competition. A successful product differentiation strategy will move your product from competing based primarily on price to competing on non-price factors . . . .
Most people would say that the implication of differentiation is the possibility of charging a price premium; however, this is a gross simplification. If customers value the firm’s offer, they will be less sensitive to aspects of competing offers; price may not be one of these aspects. Differentiation makes customers in a given segment have a lower sensitivity to other features (non-price) of the product.
The anecdotal blog post illustrates how simple it can be to develop differentiation in some cases. However, any good law firm management consultant or marketing professional will tell you that development of differentiation for lawyers and law firms may not be so easy. It depends on so many factors, such as whether you have a niche practice, what unique qualifications exist at your firm, and so forth. Sometime a firm must make purposeful changes to develop differentiating factors.
Your takeaway from all of this is that being different (in a good way) from your competitors, will always help you stand out in the crowd, and enable you to compete for work on a basis other than cost.