An Order of Magnitude Better
In 2002, psychologist Daniel Kahneman won a Nobel Prize for research conducted with his late colleague Amos Tversky on and around the idea of loss aversion. The duo concluded that most people will not accept a $100 bet where there is only a 50% chance of winning.
In fact, the potential gains must be “two to three times the potential losses before most people will find a $100 bet attractive.”
Loss aversion leads to a bias for the status quo in customers. This status-quo bias, Kahneman and Tversky concluded, means that most potential customers will not adopt a new product unless “the gains it promises far outweigh the perceived losses from switching away from a familiar solution.”
Which is all to say, that differentiation isn’t the business of being different. It’s the work of demonstrating why we are an order of magnitude better than the alternatives.
Most companies and products focus on key selling points (KSP). These are more lightweight than differentiators. Key selling points are features and benefits phrased optimally to unlock the customer’s psyche. Key selling points are an important part of the marketing equation.
But, they are not true differentiators. Differentiators are things that separate a company or product from the pack in a definitive way. Often when we ask clients and teams about their differentiators, they rattle off a long list of things they are good at. And usually, they are indeed good at those things.
We find it enormously useful to remind ourselves of Kahneman and Tversky’s work when this happens. What is a deep advantage that we have and can exploit to address a customer’s intense need an order of magnitude better than alternatives?
The answer to this question should be one thing, or two at most. There aren’t many true differentiators out there to be had in the first place.
Clients often complain once they start seeing real success that competitors have started copying their language, vocabulary, and marketing messages. This is unsurprising. In an era of cheap and readily available A/B testing, everything starts to look like everything else.
What can we claim, do, or say that they simply, positively cannot?
Not all successful companies have true differentiators, and not all massively successful ones have them to start.
Yet behind every market-dominating company is a differentiator or two that makes their product truly an order of magnitude better than alternatives. These companies identify their advantage early and exploit it often.
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At my firm JDI, we make precedent-setting science companies well known and understood. Learn more at: www.jones-dilworth.com