In my recent post on the books behind Dark Matter Matters, I mentioned Dr. Kevin Keller from Dartmouth. Kevin is the author of Strategic Brand Management, which placed #3 on my list. But in addition to being an author and professor, Kevin is also a long time friend of Red Hat. He has helped us work through some of the most challenging corporate branding and positioning decisions we’ve faced over the past six or seven years.
I thought it might be nice to pass along some favorite lessons that I learned from Kevin over the years, many of which we have put into practice at Red Hat. In this post, we’ll cover 2 of the key elements behind good brand positioning: Points of Parity and Points of Difference.
There’s a working definition of points of parity and points of difference in Wikipedia here, but I hope the explanation below will appeal more to average folk who aren’t as into the marketing-speak.
What is a Point of Difference?
A point of difference is exactly what it sounds like– it is something that makes you different from your competition (oh, and it also has to be something your customer actually wants).
It’s pretty easy to start figuring out your points of difference. Start by asking yourself:
“Why do people buy my product or service?”
Think of as many reasons as you can why people buy stuff from you. If 1) you can’t think of any good reasons or 2) no one buys stuff from you, positioning might be the least of your worries. Try bankruptcy. Or a new line of work.
Once you have a list of possible reasons people would want to buy stuff from you, ask yourself the follow-on question:
“Why do people want this stuff from me instead of from my competitors?”
My guess is you will start crossing some things off the list your competitors deliver just as well as you or better. Be honest. Think like a customer, not a proud corporate citizen.
Hopefully you will still see a few things left on the list. These are the true things that differentiate you. If you don’t see any defensible differentiators left, you may have uncovered a positioning problem.
I think this way all of the time now. I am a 100% certified positioning nerd.
Example: I walk into a new Mexican restaurant a few weeks ago with some of my co-workers. There are a lot of Mexican restaurants within 5 minutes of our office. So why did I pick this one? Here are some possible points of difference this restaurant might have from its competitors (yes, I actually did this in my head):
1) the salsa is better
2) the queso dip is better
3) the ambiance is better
4) the prices are better
5) it is more authentic
Well it turns out none of these things were true for this place. The food was average. The service was average. The ambiance was average. Prices were the same. It was no closer or further away than 5 other Mexican places. The only point of difference it had going for it was that it was new. And being new is not a sustainable point of difference.
Will I go again? No. Does this place have a positioning problem? Yes. It will be out of business in 6 months, unless it uncovers some sort of unique positioning that differentiates it from its better established competitors (Late night tequila shot contests? Mariachi lessons? Let’s get creative, people!)
What is a point of parity?
Most simply, a point of parity is a point of difference that a competitor has over you that you need to counteract. In many cases, you won’t even be able to compete in the market unless you can nullify this advantage that your competitor has. Don’t get me wrong, you don’t need to become better than them at this particular thing, just good enough that, given your rockin’ points of difference in other areas, your customers will still choose you over them. For example:
I could go to Armadillo Grill for Mexican food for lunch today or I could go to Baja Burrito. The ambiance sucks in both places. The food is a bit better at Armadillo Grill, and the salsa is definitely better. If a bunch of other people agree with me, and start going to Armadillo Grill instead of Baja Burrito, the nice folks at Baja might have to consider improving their food and salsa so that they are can achieve parity with Armadillo Grill.
The Baja folks have a pretty sweet point of difference against Armadillo Grill– they are right across the street from NC State campus, in walking distance from the dorms. Their location is a great point of difference, but they could probably be doing even better business if they achieved parity with Armadillo Grill on their salsa. OK, now I’m hungry. Who wants Mexican?
So why do you need to think through your points of parity and points of difference? You’ll find that if you know where your brand value proposition is strong and you know where it is weak (and your competitors are strong), it becomes pretty easy to craft a solid brand strategy.
Shore up the weak spots. Make your differentiators clear. Rinse, and repeat regularly so you can be sure you are keeping one eye on the competitive threats to your brand position at all times.