Sometimes I think that one of marketing’s biggest principles — the importance of product/service and brand differentiation — reflects one of its biggest paradoxes. It seems that effective differentiation is either so dumbly simple you don’t even think about it, or so challengingly difficult that no matter how hard you try, how much money you spend, and how many hours you brainstorm the concept, you can’t find the magic formula.
In part, this is because differentiation flies against many of our natural perspectives except when we are fortunate and have the experience to come up with (and work hard to develop) the ideas or concepts that are truly unique and have value, emotional appeal, and relevance to potential clients.
Yet, often the differentiation is right under our noses — because, while we accidentally developed the unique collection of features that define the differentiation — the market realizes them, and accordingly gives us business. In other words (allowing for the very important aspect of repeat and referral business), most of our ‘new’ business probably results from the qualities that differentiated us in the first place. The exercise then becomes discovering these qualities, and enhancing/improving or revising them to make them more effective. And, yes, the latter process is not really differentiation but improvement.
I’ll spend this week outlining various aspects of the differentiation challenge borrowing (with proper attribution) insights from other sources, and adding my own interpretations.
Differentiation success example 1 — The initial NP5 US Immigrant Visa Lottery
It was 1987, and the US had just introduced something called the non-preference immigrant visa lottery. The concept was an effort to allow immigrants from many countries who had almost no chance to obtain an US green card because of lack of family connections to obtain the coveted document.
The US State Department announced that applicants should send a note with very basic personal information to a post office box in Washington DC. The rules stated that an individual could apply as many times as he/she wished, there would be no fee for the initial application, and the first 10,000 applications received after 12:01 a.m on the set date at the post office would get the visa. You could not hand deliver or courier the application, and if you were “too early” your application would be denied.
I realized a couple of interesting points. First, while you needed to use the postal service to mail the applications, there was nothing stopping you from going to the relevant post office and stuffing the mail in the front door slot (or at the postal counter) on the appointed day. Second, since you could apply many times, reasonably, you could set up an arrangement to drop letters in the mailbox each hour or 30 minutes from the afternoon to the 12:00 midnight deadline, on the hopes that some of them would clear the sorting process at the right time.
Finally, since no signatures were required on the application document, it would be possible to take orders by phone (this was before the Internet, but I’ll get to that later).
There was certainly plenty of media interest in the story, especially when line-ups started forming around the US embassy and consulates across Canada with people trying to get information about the visa lottery. I joined the embassy lineup to get the official documentation, to make sure that the offer I had in mind complied with the rules — including the list of nationalities eligible for the program.
So my new pop-up business was born. I placed ads in the “personals” section of newspapers across Canada and hoped for response. Initially, a few orders trickled in. Then the news media got interested. (We helped this along with some news releases, but most of the inquiries came independently.)
In one case, the reporter for a newspaper in Edmonton, Alberta called the US embassy after speaking with my colleague. The consular official told the writer that “this sounds like a perfectly legitimate idea to me.” Now we had the unofficial endorsement of the US State Department. The reporter called back to say his newspaper’s switchboard was lighting up like a Christmas tree with readers trying to find us.
To say the least, it was a crazy week, especially the day or two before the deadline. Finally, we packed up, headed to the airport, and flew to Washington — with some media outlets asking us to make live calls from the post office. It was pandemonium there. The US Postal Service reported more mail had been processed at that postal station in a single day than had ever been handled in its history.
I made about $5,000 for my week’s work. I also ended up getting a Green Card (which I let lapse, but that is another story). But the idea was new and different for one year only.
Notably, a couple of years later, in the very earliest incarnation of the Internet, when online newsgroups were forming (this was before the world-wide-web) some US lawyers decided to advertise their variation of the US immigration lottery service by blasting the forums with their commercial message. This was the first significant example of spam.
Clearly, at least my original business idea met all the differentiation tests.
- It was new and unique, at least within the Canadian market (though certainly I wasn’t the only person with the idea);
- I didn’t plan it to be differentiated — nor did I initially expect the news media would pick up the story. But we seized the opportunity when it occurred;
- There was no need (nor time) for fancy marketing strategies, but we hit the jackpot when journalists decided that my crazy idea made sense. Of course, there was evidence that the idea would be interesting, in part because of the media coverage already given to the lottery;
- If we had delayed, thought, planned or structured the business, we would have lost the opportunity; and
- In the end (and not long after our experience), the idea became so over-worked that the primary method to market it was through, yes, spam.
In the next post I’ll explore some of the prerequisites for effective differentiation.