Points of Difference -
Michael Porter would remind us that “the key to your competitive advantage is not about being better than your competition, but about being different than your competition”. This is why so many brand consultancies and brand managers alike obsess over developing points of difference, giving your customers unique reasons to prefer their brand. But, first, it is important to understand that points of difference should come straight from your identity—your personality, physique, relationships, culture, values, etc. If it is simply what your customers want to hear, and is not true to your identity, employees will struggle to follow through with supporting your difference, and customers will quickly call you out. However, it’s impossible to emphasize all of your unique differences, even if they are all true to your identity. As Michael Porter would say, trade-offs are the linchpin to any successful strategy, and that couldn’t be more true when it comes to communicating your points of difference with a value proposition. Your value proposition can only emphasize a 2-3 points of difference, at most, and should act as the pillars behind your competitive advantage. Consider some of these discount retailers: Target (fashion for less), Walmart (lowest prices with wide variety), Dollar Store (convenience and price). Even if low prices is part of your identity, it may not be a strong enough point of difference if you are up against these discounters. But PODs are only half the battle in articulating and communicating your competitive advantage. We must review another crucial concept that is too often overlooked—points of parity.
Points of Parity -
While points of difference, act as the most compelling and unique reason to choose your brand, points of parity, or POPs, are the other half of the equation. A point of parity is a “must have” dimension of the category and can be just as strategic as a point of difference. If there is a key “must have” dimension in the category on which your brand is perceived to inadequately deliver, your brand will not be considered as an option in your customer’s mind. This means you have no chance of winning – no matter how compelling your point of differentiation is. Points of parity can be leveraged as both a defensive or offensive maneuver against your competitor, and fall under one of three areas: Category, Correlational, and Competitive.
Category Points of Parity - “Table Stakes”
Category POPs are generally what come to mind when we hear the term. They represent necessary—but not necessarily sufficient—conditions for brand choice. AKA “Table Stakes”. They exist minimally at the generic product level and are most likely at the expected product level. Consumers might not consider a bank truly a “bank” unless it offered a range of checking and savings plans, safety deposit boxes, traveler’s checks, ATM access, and other such services. Keep in mind, however, these POPs may change over time because of technological advances, legalities and consumer trends.
Correlational Points of Parity - “Contradiction”
These are the potentially negative associations that arise from the existence of other, more positive associations for the brand. One challenge for marketers is that many of the attributes or benefits that make up their POPs or PODs are inversely related. In other words, in the minds of consumers, if your brand is good at one thing, it can’t be seen as also good on something else. For example, consumers might find it hard to believe a brand is “inexpensive” and at the same time “of the highest quality.”
Competitive Points of Parity - “Break Even”
These are the associations designed to negate competitors’ Points of Difference. If a brand can “break even” in those areas where its competitors are trying to find an advantage and can achieve its own advantages in some other areas, the brand should be in a strong—and perhaps unbeatable—competitive position. In our earlier example of discount retailers, while you may not be able to beat Walmart prices every time, it will be important to overcome this point of parity liability. The solution? Change your liability into a point of parity (POP). In other words, keep your prices low enough in comparison to Walmart to ensure you aren’t excluded from your customer’s competitive frame of reference.
Deepening your Competitive Advantage
While it will be critical to support the corporate brand’s POPs and PODs, it is just as critical to deepen your competitive advantage over time. The two most common strategies of developing and maintaining your PODs and POPs are called Laddering and Reacting.
Laddering will deepen the relationship with our customer by intensifying the meaning of our differences. This is why it is critical to understand the full marketing ladder of your product or organization; in due time, the customer will want more. The “ladder” allows your brand to move from being positioned as a functional benefit to a more powerful benefit throughout its life span.
Reacting on the other hand is the active monitoring of your competition and the ever-changing needs of customers. This way, you can ensure you don’t overlook an opportunity to serve your customer’s need or a overlook a liability proposed by a competitor. For instance, you may find that your customer’s tastes change from cookies and crackers to more healthy alternatives, or your competitor may begin to build a product that threatens your point of difference. In this case, you may need to react with a more aggressive approach to advertising or product extension to remind your customer of your point of difference. In more threatening situations, it might be time to look at repositioning or revitalizing your brand with new points of difference and new points of parity.