How to stand out in a world full of brands saying ‘We’re better'
Being "different" solidifies your product as the go-to option for specific use cases.
Positioning your product as a different alternative forces your customers to make a choice. Claiming your product is a better option forces your customers to make a comparison.
Whether you're a market leader or contender, positioning your product as a different alternative will help you open up doors to more customers.
At most of the places I've worked, we've often been tasked to focus on comparison with competitors. The management thinks the more features the better - but how many of these features are must-haves, and how many are nice-to-haves?
If all solutions in the market have the same core features, customers will inevitably end up choosing the one selling at a cheaper price point.
This leads to companies competing on price - a race to the bottom for both the market leader and its contender.
The gambling industry
Look at the gambling companies. They compete by offering more features, more bonus bets and better odds.
Years back, I worked at one and it was ridiculously expensive it is to acquire a sign-up. And that wasn't even a deposit. Yet apparently this was (probably still is) the industry norm.
Whilst my manager and the guy who ran ads were away, I took the liberty to run ads for a fighting event between two YouTubers; KSI and Logan Paul. No other competitors in the market were offering odds on this event. Colleagues were sceptical, but we ended up having the lowest cost per sign-up acquisition ever.
Their deposit value was lower than average (since they were of younger demographics with lower disposable income), but back then the whole marketing team was KPI-ed solely on sign-ups, so I had exceeded my targets, alone. As someone who had never gambled in his life before.
Not to mention NSW had just introduced new advertising regulations the same month I launched my ad campaign.
This has been one of my fave case studies in my portfolio.
Meal kits and Ready-to-eat meals
Look at the Meal kit and Ready-to-eat meal categories. They compete by offering more menu varieties, covering wider product ranges, and selling at cheaper prices. The first two aspects would have increased the business's operational costs (sourcing supplies, storage, potentially additional equipment etc.)
However, like the fast food industry, customer loyalty is often non-existent here. To-date, I have yet to meet someone who “swears by” Hello Fresh and will only ever order from Hello Fresh and not any of the other meal kits.
This is because they’re all the same. None of them positions themselves differently. Therefore price often comes first into consideration within this category, then other factors such as quantity, quality, variety and delivery, before finally, the branding.
For these businesses that can’t differentiate their positioning, whoever nails distribution first, wins. Hence we’ve seen the trend to go from DTC to Retail in the last couple of years.
I'm a fan of finding different use cases to sell the same thing. It applies to both digital and physical products.
Having worked at Youfoodz, I learnt the profit margins were thin. The massive redundancy at Youfoodz in 2019 was a wake-up call for me to look beyond revenue. To develop a T-shaped skill set factoring in the actual costs of a sale (salaries, operations, overheads, taxes etc), and more importantly, to revisit business fundamentals.
Hot Pot Club - Our bootstrapped project
I sold hot pot kits for a while after resigning from an agency.
Hot Pot Club was going up against:
Customers ordering UberEats
Customers dining out
Customers not knowing what hot pot is
Customers eating at hot pot restaurants
Customers buying hot pot groceries themselves
For audiences 4 & 5, we wouldn't have been able to position ourselves as "different". We sourced our ingredients from the same suppliers as these hot pot restaurant franchises. (Similar to the bubble tea industry, we learnt there are only a handful of licensed importers here in Australia.)
So we went to market by targeting audiences 1,2 and 3. Presenting ourselves as a different alternative for date nights (at home), family dinners, and dinner gatherings.
We sold around 150 kits without any monetary discounts (offered free shipping & free bubble tea ice cream for the first 3 runs, offered free mochi donuts for the subsequent 3 runs). Of these 150 kits, more than 60% of the customers purchased hot pot as a date night alternative.
They explained we had educational videos on our website and social, we had made sure to include a step-by-step guide on the delivery box and on our website - all indicated it’d have been a different type of experience.
While date night at home (food for 2) is our least profitable kit, we’d still have broken even our CAC (customer acquisition cost) for most of the customers by their second order. (Payback period unknown - estimated to be by the 3rd month as external factors such as ethnicity and seasonality affects the frequency of orders.)
We didn't manage to sustain and scale due to increased product, logistics and operational costs (we decided to wrap up in late 2021 before hyperinflation arrived in 2022). But I'd like to think marketing wasn't our downfall - as we had some amazing videos, customer reviews and organic traffic with minimal time spent on this aspect.
I sometimes wonder whether the outcome would have been different if I had spent more time on marketing and unit economics. And less time on operations. (Not that it was an option for a high-touch business anyway.)
A few other examples
Sharing a few more examples before I wrap up this post:
BeforeYouSpeak coffee went to market by positioning itself as a different alternative to pre-workout. If I recall correctly, they made over $1M USD in the first year.
Then later, they sold the same product with a different positioning - as a beauty elixir for females. Not just a "better" coffee option. They doubled their sales in the second year.
Qualtrics wanted to move away from the increasingly saturated survey software category, so they willingly gave up their market leader position on "survey tool" but called themselves an "Experience Management" (XM) platform.
The Farnam Street blog positions itself as "Noise cancelling headphones for the internet". They presented themselves as a different alternative to blogs covering as many topics, hacks and tactics as possible.
MorningBrew positions itself as a witty, 5-minute-to-read daily newsletter covering Wall Street and Silicon Valley news. Less is more.
Basecamp published free books way before demand-gen exploded in popularity and marketers started ungating content. They marketed their category first, brand after. (Which is an article in itself.)
Being "different" solidifies your product as the go-to option for specific use cases. Different helps you stand out in a world filled with brands competing on being “better”.
Until next time,
Josiah
Thank you so so much for this Josiah!
I'm actually burying myself in your newsletters for hours now. But, on to the next one.