Differentiating Your Brand When Everyone Else Is Racing Towards The Middle


Achieving growth in an environment where competitors are often quick to copy your best innovations is challenging at best, and there is often a narrow window of superiority until the only thing you have to differentiate yourself from the rest of the pack is a clever advertisement.

How you set yourself apart from the pack is often a moving target, and successful growth requires an investment in continuously building brand differentiation.

A structured, disciplined, ‘stage-gate’ innovation process is critical for any brand and company. But it is insufficient to rely on that process alone to yield surprising solutions that will delight consumers and customers and keep you one step ahead of the competition. Perhaps the most essential element of any disciplined process is the first Discovery stage. If there is no true insight, spark or real innovation there, the remaining steps to get the new product or service to market don’t much matter.

I have found Customer Lifetime Value (CLV) to be indispensable in challenging the thinking for growing any brand/company or product/service. It helps ensure that you are not merely ‘optimizing’ the core and ‘racing to the middle’ along with all of your competitors.

CLV has the ability to really challenge thinking about some very strategic issues:

  • What business you are in
  • What value you offer to your most important consumers/customers
  • How you can delight your consumers beyond your current ‘paradigm’ or category definition

CLV forces a Copernican shift that ensures your consumer/customer is at the center of what new innovations you are considering. Just as Copernicus formulated a model of the universe that placed the Sun at the center of the universe, in the same way, we must place consumers at the center of our innovation thinking. It is not about what a company can do or make – but rather how we can provide a superior solution for our most important customers.

While we may hear a lot about this consumer focus in the CPG space, I was delighted to hear a B2B website developer talk about the importance of designing a website to be prospect focused – making it clear that the supplier understands the prospect’s challenges, not a site that just talks about what the supplier does.

The goal of CLV is to predict the net profit attributed to the entire future relationship with a customer. What intrigues me is beyond the disciplined math (i.e. CLV = m*L – AC) needed to calculate the projected lifetime value. Rather, I use the CLV construct to consider three key challenge areas:

  • Why do my highest value consumers remain loyal and what can I learn from them about delighting others?
  • How can I expand the value of my product or service at different life-stages of the user?
  • Is there an opportunity to trade up or trade down competitive users, yet still remain true to my brand promise and margin expectations?
Why do my highest value consumers remain loyal and what can I learn from them about delighting others?

It may help to think about segmenting consumers into those who are most important (i.e. ‘Platinum level’ customers), defining what makes them so and understanding differences versus the less loyal customers (e.g. ‘Gold’ or ‘Silver’ level). With that, you can consider a number of questions:

  • What makes Platinum level consumers different?
  • How and why do they interact with and value my brand or company more or differently than others?
  • What might I do to get the ‘Gold’ or ‘Silver’ level customers to turn ‘Platinum’?
  • How can I further delight the Platinum level customers?
  • What more might they want, need (and be very willing to pay for) from my company/brand?

This may involve spending time with your core consumers, including observing them using or consuming your product or service; asking and probing on some of the ‘whys’ of their behavior; and politely interacting with them in a retail environment. There are unique tools available beyond focus groups – such as mobile reporting and diary keeping that lets you know real time what your core consumers are using and doing (and why), and where and how they are shopping, and why.

How can I expand the value of my product or service at different life-stages of the user?

Looking objectively at when (and why) a platinum consumer FIRST starts using your product/service, and when (and why) they STOP using might shed some light on growth or increased penetration with current and new consumer segments, and new ways to market to them more effectively. This is a great way to challenge your own paradigms about your offering and your ‘core’ consumer – and the role your product or service play, or could play, in their lives.

Is there an opportunity to trade up or trade down competitive users, yet still remain true to my brand promise and margin expectations?

While there is an understandably healthy obsession with enhancing products and services to charge more, there can be better margins in scaling down an offering. Marriott recognized a need for clean, safe hoteling without all the bells and whistles of a Marriott or Marriott Suites – so Courtyard and SpringHill Suites offer good value – albeit for a different customer. This can uncover some great opportunities to engage and delight different consumer groups – while still leveraging current brand equities.

Taking a “build it and they will come” philosophy doesn’t work in today’s hyper-competitive environment , especially in areas where barriers to entry are rapidly crumbling, and consumers are better informed and less loyal than ever. Having a great product or service is just the beginning. Putting the customer’s lifetime value at the center of your innovation plans will go a long way towards enabling growth and encouraging long-lasting customer relationships.