The differentiation trap: please stop making this mistake

The other week, I wrote about two of my favourite business words: “really” and “actually”. But now I want to rail against one of my most hated words:

“Just”.

As in, “isn’t this just…?”, or “aren’t you just talking about …?”.

This is quite personal because I get this quite a lot when sharing strategy ideas. Basically the pattern is 1) I say “try this [rare strategy technique]”, and then 2) someone chirps up saying “isn’t this just [general idea that everyone knows]”. The answer is invariably “no, it’s not that”, but generally the difference is subtle enough that it’s a reasonable question.

Today I want to address one of the most pernicious “justs” that I receive time and again, which is this one:

“Isn’t this just differentiation?”.

Ahh differentiation. A great word which is horribly misused 95% of the time. I can see why people think this is what I’m often talking about. For example I’ll regularly say things like “the market doesn’t notice better, it only notices different”. And of course I’m constantly encouraging you to find ways to be different from your competitors.

Isn’t this, therefore, “just differentiation”?

No. It really really isn’t. Let me show you why.

“Differentiation” is typically used to describe a “difference in product”. It’s very closely related to its other nefarious cousin, the “USP”. People think that because they have a differentiated product, or a clear USP, they have solved their strategy issue – but invariably they haven’t.

This is because strategy is not about having a differentiated product.

Strategy is about offering differentiated value.

To illustrate this, imagine if someone launched a round chocolate bar, in a sea of rectangular ones. That person would be well within their rights to claim they had “clear differentiation”. After all, everyone else’s bar is rectangular, theirs is round, what could be more different than that! They’d probably tell you it was their USP too.

And yet do we think that idea would take the market by storm?

Very doubtful. Because despite its differentiated product, it doesn’t offer any differentiated value. It’s still just a chocolate bar. It still does the same job as other chocolate bars. It’s still bought for the same reason as other chocolate bars. So strategically it is, in fact, the same.

Differentiated value is not about the product, it’s about what the customer gets from the exchange. The value / benefit they accrue. The value of an IKEA chair is not “a flat-packed chair”. That’s just saying what the product is. The value of an IKEA chair is “a stylish home at an affordable price”. The product is merely a tool to deliver that.

Honestly any idiot can create a differentiated product.

Just change the colour, the shape, the features, whatever. There are a million ways you can change any product to make it different. But if that doesn’t generate differentiated value for the customer then it’s pointless.

So can you see how “differentiation” is not actually the game?

Your product differences may well be a crucial factor in giving the customer fresh value, but until you’ve figured out what that is and why it works, it doesn’t mean much.

If you find this distinction between product and value to be a bit subtle, then here’s a cool little ChatGPT exercise for you.

Give it this prompt:

“I have a [insert category] business. One difference we have with our competitors is [insert your product difference]. Please give me 5 potential forms of value that difference might yield for our customers.”

It will give you a pretty solid answer, which should quickly tune you in to the difference between product and value. This isn’t to say any of the things it says will be good ideas, or readymade strategies, but it’ll get you thinking in the right direction.

So in conclusion, whenever you find yourself “justing”, take a beat. Because you might be right. You might well be looking at something which is just a convoluted version of something you already know.

But then again, you might not. And there might be something you need to learn right there.

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