A simple, often overlooked marketing principle is this: differentiate yourself by establishing a new category of product or service. This approach, of course, ties into the principle of segmentation because it relates to the needs of a particular target group, but is still very much overlooked. Making use of this principle and clearly communicating the new category of service you are providing can save you lots of marketing dollars while also attracting new clients due to an enhanced positioning. Often it is a simple add-on that makes all the difference – you don’t have to change your core business, just adapt a little, having a clear idea of the preferences of your target group(s). You can try out different things and monitor your customers’ reactions as you go.
As one important guiding principle, consider that people want a solution to their problems rather than a product. Most of the time, your product represents part of the solution but other elements may be missing. Help your customers to close the gap and you won’t have to worry about a lack of demand.
Also consider that in modern life most basic needs are satisfied already, so people want to associate the products they buy with a certain philosophy of life, a certain lifestyle or a given set of values. So even seemingly small, intangible details can go great lengths to help customers get a sense of attaining their desired lifestyle. Your options include creating a certain atmosphere in your store or a certain style of communication in your service business.
So simply think how you could establish a product, or fine-tune an existing one, to make it more appealing to a clearly defined target group.
Examples abound:
- PayPal – With the arrival of PayPal, a totally new way of realizing payments online was established. Through innovation, by thoroughly understanding customer needs while thinking out of the box at the same time, the inventors of PayPal essentially created what is sometimes called a “Blue Ocean”, that is an entirely new field of business without any relevant competitors.
- L’tur Last Minute Travel – This German tour operator company started selling last minute travel at flexible and discounted prices during the eighties, while many companies were stuck in an increasingly competitive environment, limited to offering standard packages with fixed prices in thick printed travel catalogues. With the rise of online marketing the market panorama has changed but today, L’tur is still the brand most strongly associated with last minute travel in the German travel market.
- Car sharing in Germany was initially established by a company in Berlin in 1988, thus inaugurating a completely new way of organizing mobility within the city. Seven years later, the number of companies offering car sharing already had risen to 51. Since then, the number of providers has more than doubled to a 110, constituting a sizable market that was virtually non-existent until the mid-eighties. Of course, the innovation is not based on technology – cars were around all the time – but on creating a viable sharing model.
But let’s face it, not everybody can establish completely new companies or services like these. Fortunately, there are also many examples where smaller changes can lead to unexpected positive results:
- Establishing a child-care service that allows mom and dad, as the only place in town, to shop hassle-free while they visit your store;
- Opening the only hotel in a vacation spot that serves the LGBT community. Alternatively, you could redesign your hotel to be barrier-free for impaired persons or adapt your services to a certain type of vacation, like honeymoons.
- As an Asian restaurant, you might consider offering cooking classes so that people can prepare Asian dishes at home, and selling Asian foods alongside it (as counterintuitive as this may seem, as long as you stick to providing good quality Asian food in a nice atmosphere, maybe setting some trends in the process, people will return even though if occasionally they might be inspired to try something on their own at home). The cooking classes can also represent an opportunity to demonstrate how well organized and clean your staff and kitchen is, earning you additional kudos and raising transparency and customer satisfaction.
- A car dealership can provide a number of services to enhance the core business of selling and maintaining cars, considering that most customers want mobility, peace of mind and a sense of identity that comes with owning a particular brand of car. Possibilities include providing a free replacement vehicle in case of repair, offering free courses on safe driving, organizing motoring events (like an off-road event for four-wheel-drive vehicles) as well as offering efficient emergency assistance during weekends or holidays. As a car dealer, you could also partner with a local school, organizing courses that help children learn about safe behavior on the streets, or make agreements with tourism providers in the area to facilitate weekend excursions, such as a booklet with discount coupons.
- Being the only insurance agent in your area that attends clients in foreign languages could give you an important advantage.
- A tour operator can include a donation for a community project that is being visited during a tour, in the overall package price. While this idea is not new at all, it still might represent an innovation in the context of a particular destination, giving the company, its partners and clients, an advantage over businesses just doing the usual thing. As the saying goes, in the land of the blind, the one-eyed man is king. Your idea doesn’t have to be extraordinarily innovative… just a little better than what is regarded as common standard.
- As a website provider, you might add free advisory services for your customers. Most people request a website to market their services, so if you have close ties to a particular target group – say, small local producers of bio food – as well as a deepened understanding of their unique necessities and challenges, you might give them additional advice on how to bring their product to the market, naturally with the website developed by your company as the centerpiece of all marketing and sales efforts.
A little creativity can go a long way to help you identify new characteristics that enhance your product and re-position it as a new category, adding value for existing customers or attracting entirely new ones. Give it a try!
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