2.6 Points of Parity and Points of Differentiation
Points of Differentiation
Companies care obsessively about how they compare to their competition, and continuously look for ways to get a competitive advantage. These measures fall into the category of points of differentiation, or things that a company does differently from its competitors.
Points of Parity
It’s also important to look at the points of parity in your industry. These are things which are done by all competitors in an industry because they can’t realistically win over consumers without them. What are the points of parity in your market? What things does your company have to offer in order to even begin competing?
Example - Smartphones
For instance, let’s look at the smartphone market. In order to compete, all companies must offer a phone with certain points of parity. The phone has to be able to text, use wifi, connect to bluetooth, call people, and download apps in order to even be considered by a consumer.
However, you don’t buy a phone because it has wifi capabilities. You buy it because it has the points of parity AND you like the points of differentiation it offers. For smartphones, points of differentiation could be flexible screens, edge display, increased memory, faster operating systems, or a better camera. Apple seeks to differentiate itself by having a sleek operating system that connects seamlessly with your other apple devices and can even link with other iPhones.
Advertise Points of Differentiation
In strategy, you need to assure that you are doing well on the points of parity, but you market your points of differentiation. If you advertise that “customer satisfaction is our most important goal,” you probably are advertising something that all companies in your industry practice. This won’t set you apart. This won’t sell more product. This simply says, “We’re good enough to be in the same market with everyone else.” Instead, focus on what makes your product more attractive to a segment of the consumer base.
A few exceptions to this rule exist, but hopefully you can avoid them. If your company has historically failed to provide a point of parity feature, you may have to advertise that feature in order to restore customer confidence in your brand. For instance, Nature Valley granola bars were historically so hard and crunchy that they were practically impossible to chew. When they finally fixed the problem, they ran an ad campaign making fun of their previous granola bars and showing customers that the new granola bars were soft on their molars. Essentially, advertising points of parity is only a good idea if you are an extremely weak competitor that needs to convince people that you are good enough to be in the market or if you have historically failed to provide a point of parity necessary to your industry.