“Overoptimization can lead to undifferentiation,” as Rory Sutherland says.
Over-reliance on SEO has left many businesses undifferentiated and vulnerable as Google has introduced more algorithms that reward user behavior.
In this follow-up Memo to my article about crafting SEO strategies, I want to offer differentiation as an alternative to the common “out-execute” approach.
Most companies try to publish more content, build more links, and ship more technical optimizations to beat their competitors. But I see that approach being less successful these days:
Out-executing only works in head-to-head races and is only possible for new market entrants with massive budgets.
It drives up costs as competitors need to invest more resources for marginal advantages.
It leads to more “sameness,” with content and user experience merging across several market players.
The best way to compete is to do things differently.
In Favoritism, I observed that Google gives “brands,” companies with popularity that doesn’t just come from rigorous advertising but a differentiated product – a lot more visibility in Search than aggregators and affiliates.
So, how can you differentiate yourself, and how does differentiation translate to SEO?
Image Credit: Lyna ™
Why
For tech companies, differentiation is the only way to compete.
Most markets converge on a winner-takes-it-all situation, with maybe a second place that has a business.
Classic literature often describes competition via price or services in commoditized markets like consumer goods, airlines, gas stations, or fast food chains.
But in tech, commoditization and price competition is a race to the bottom, at least in the long term.
Companies with strong differentiation typically see higher profit margins because they can charge for perceived value or scarcity. They gain more market share and stronger brand awareness and loyalty.
Examples of differentiated companies:
Apple: Reliable products in an integrated ecosystem that provides a seamless user experience.
Tesla: Cutting-edge technology like autonomous driving features and wide charging network.
Netflix: Personalized recommendations and unique content.
Airbnb: Diverse and unique stays and experiences.
Dyson: Innovative engineering and design.
Netflix has much higher gross profit margins (~15%) than Comcast or AT&T (~5-10%).
Airbnb achieved an average of 20% gross profit margin compared to Marriott’s 12% or Hilton’s 12%. It’s hard to figure out, but it’s worth it.
Not every company can be Netflix or Tesla, and not every company has to be.
Differentiation is relative to the target market, no matter the size. As long as you’re different and provide value, you stand out.
How
April Dunford put it best: “Positioning defines how your product is the best in the world at something that a well defined audience cares about.”
Here’s another way to say it: Value proposition comes from satisfying the need. Differentiation comes from exceeding the want.
Differentiation can happen on three levels: