The truth is you need to both differentiate and be distinctive. You actually can’t do one without doing the other.
This is a modern myth, which needs either squashing or at least clarifying. It stems from what we believe is a partial reading of an excellent book called How Brands Grow: What marketers don’t know by Byron Sharp. How Brands Grow captures in one place much of what we think about brands and makes some very pertinent and sensible recommendations.
However, we think there have been some modern mythmakers who have latched on to a couple of its conclusions for probably their own purposes. The book argues that brands grow because they are associated with a few things that really distinguish them in the minds of consumers, not one differentiator. And effectively it also argues that brands that spend a lot of money on marketing also grow best.
The latter conclusion is very persuasive to people in advertising agencies and of course in marketing departments who are facing greater scrutiny on effectiveness of spending and even shrinking budgets. It must seem like a lifeline at a time when big brand owners are questioning whether traditional advertising agencies can give them the help they need in the modern world.
It’s the wording of the myth – distinctiveness matters, differentiation doesn’t – that worries us.
First of all, let’s try to get some definitions agreed. Because part of the problem is that people are using different meanings for the words ‘differentiation’ and ‘distinctiveness’. In fact, the way people are giving meaning to these words reminds us of the discussion between Humpty Dumpty and Alice:
‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean—neither more nor less.’
‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’
‘The question is,’ said Humpty Dumpty, ‘which is to be master – that’s all.’
At the moment, it seems that the ‘master’ meaning for some people in marketing is Byron Sharp’s:
Differentiation (a benefit or ‘reason to buy’ for the consumer) and distinctiveness (a brand looking like itself) are different things.
He then goes on to say:
This isn’t just semantics, as any lawyer or judge will tell you. Distinctiveness (branding) is legally defensible, while differentiation is not (other than time-limited patent protection).
Well, we think these are in fact fine splitting of semantic hairs. If you go to any dictionary or thesaurus, you will find that differentiation and distinctiveness are closely associated (in fact a dictionary definition of differentiation is ‘the action or process of differentiating or distinguishing between two or more things or people’ and a dictionary definition of ‘different’ is ‘distinct’).
Branding has always sought to differentiate, and it has done so by being distinctive.
The truth is you need to both differentiate and be distinctive. You actually can’t do one without doing the other.
Roberto Goizueta, who was one of Coca-Cola’s most successful CEOs, famously gave his three rules for successful brand building:
Differentiate, differentiate, differentiate.
Brands exist by law to differentiate one supplier from another. That is why we have trademark law. It ensures that appropriate differentiation is legally defensible, allowing any supplier to protect their trade against imitation or counterfeiting by another. It also ensures that any purchaser (customer or consumer) is buying or using a bona fide good or service.
If we were to give an order and more meaning to Goizueta’s three rules, the first would be to differentiate through your brand name. You have to create a brand name that nobody else in your market can copy. It has to be that different. It has to be different from any generic terms that apply to your market or should be allowed to be used by anyone to describe distinctive aspects of their goods or services. So, if the distinctive aspect of your delivery service is speed, you nevertheless could not register and protect as a trademark the word ‘fast’ or ‘speedy’. You would have to add another word to it or create a neologism like ‘Fastrak’ or ‘Speedline’. Anything to differentiate it from the generic term which other companies who could show that their delivery service is also fast should be allowed to use.
That’s why so many companies develop or choose such distinctive names. They need to be genuinely different from anything else: Ocado, Amazon, Xerox, Fatbrain, Moonpig. Then you can more easily protect your business and your consumer by law.
The second rule of brand differentiation would then apply to all the other aspects of the brand’s identity or expression: the logo, the colours, the imagery, the packaging shape, the copylines etc. In the end, people need help through brand differentiation to find what they are looking for quickly on the shelf or on the street (think of those Golden Arches). Branding can even help people choose because they prefer one colour or one image to another. Some people like red and some like blue. Or it can help to signal and segment a product for different users. Coke is red, Diet Coke is silver. For many years, Unilever produced the Head & Shoulders shampoo brand targeted at men who were concerned about dandruff. Eventually, they decided to launch a version targeted at women. There wasn’t a huge difference in the formula. They changed the fragrance and crucially differentiated it by packaging colour – they made it pink for women, differentiating it from the original blue which remained broadly for men. This kind of differentiation helps consumers quickly to find you, recognize you and remember you.
We can all think of brands that we recognize and thus are able to differentiate purely on their logo alone. In fact, so distinctive because so different are their logos, that we don’t even need to see the whole logo – one letter or one half of the logo will give us the clue we need. Just a sight of the top of those Golden Arches viewed 500 yards in the distance will have a child pestering parents for McDonald’s. We’re sure you can think of many (that chunk out of the side of the Apple logo, any of the three letters of IBM, the D of Disney). In fact, there are board games and online games based entirely around guessing the logo. That is differentiation. It’s also distinctiveness.
The third rule of differentiation would be what we would call the ‘meaningful’ differentiation, the reason you buy or prefer a brand because of something that they do which particularly appeals to you. And this is where the overlap with genuine distinctiveness occurs.
Most people choose to fly Ryanair because of price. But it is not the only low-cost carrier and sometimes it might not even be the cheapest on any given route. But low price is a distinctive part of the Ryanair brand. It might not differentiate them technically or legally in the way that the Ryanair brand name and associated trademarks do, but it distinguishes them so significantly that it contributes to an overall sense of difference in the market that gives people a reason to buy them.
One of the other reasons why pricing distinguishes Ryanair is because generally they do it better than others. And being ‘better’ or at least being perceived to be ‘better’ is a differentiator. In the automotive industry, German cars have a perception of being better ‘engineered’. BMW, Mercedes-Benz and Volkswagen have collectively benefited from the decades of focus on quality performance through engineering and also from the general perception that Germans are good at high-quality engineering and production. Some of these perceptions can be tested and proved. It was Karl Benz who, in 1879, first patented the internal combustion engine and then in 1886 received a patent for his first automobile. Fortune magazine wrote that the German automakers’ brand strength was founded on their focus and commitment to engineering excellence. For example, BMW had a goal of building every vehicle with a 50–50 weight distribution. And Fortune also noted that ‘Engineers occupy a high pedestal in a country that prizes technology and craftsmanship.’ So the culture of the country supports the perception of the customer.
The main reason we chose Ryanair as an example, though, is because it is not a consumer product brand. And many people often associate brands with consumer products. When in fact brands are, as we explain in Chapter 18, not just packaged goods.
Byron Sharp refers to meaningless distinctiveness rather than ‘meaningful’, by which he means that people like a brand simply because they like it. They might summon up some post-rationalization of their preference but essentially it’s an emotional choice. Sometimes the choice may have been made in childhood so long ago that they cannot remember why, let alone when they first chose the brand. Many of us, for example, have a favourite breakfast cereal or chocolate bar which we have had since we were kids. Just like our favourite sports teams or celebrities.
Football clubs are also brands, and for many of us our choice of our favourite football team is largely accidental or emotional either by birth or because the team had a player we liked or a strip we liked. There is a Plymouth Argyle supporter who was born in Birmingham and has no relations with Plymouth at all. But when he was five years old, he saw the Plymouth Argyle club badge (the Mayflower ship that carried the Pilgrim Fathers to America) and liked it so much that he liked the team. He has supported them ever since because he liked their logo. Now that is brand loyalty. And it is probably a good example of meaningless distinctiveness.
We don’t really like the phrase ‘meaningless’ distinctiveness because it suggests that an irrational or emotional motivation is not ‘meaningful’ or valuable. We’d argue that emotional motivation is extremely rational; it might not be logical, but it is extremely rational. Fear, love, hate, kindness all stem from perfectly rational responses to situations or people. Nostalgia, a sense of personal identity and a sense of belonging to or a shared way of looking at the world with others are all also perfectly rational for human beings.
But we very much agree with Sharp – even if we don’t like the term ‘meaningless’ – we buy emotionally and then justify our purchase rationally. And to buy emotionally, we need to see, appreciate and recognize something that is distinctive.
Oscar Wilde once said, ‘There is only one thing in the world worse than being talked about, and that is not being talked about.’ That is very true for brands. It is now more important than ever to be distinctive and to be recognized and recommended for being distinctive, for being remarkable. To be, in one of our favourite phrases, ‘top of mind and tip of tongue’. According to research by the Ehrenberg-Bass Institute (from which the book How Brands Grow emerged), customers are spending less time thinking about the subtle differences between brands, and instead are interacting with the brands they find interesting and distinctive. But there is no surprise there. Did any of us ever spend lots of time contemplating the relative uniqueness of Coca-Cola over Pepsi Cola?
There were, famously, blind taste tests conducted during the 1970s and 1980s, which PepsiCo repeatedly used to demonstrate that more consumers actually preferred the taste of Pepsi to Coke. Consumers were given glasses of unbranded cola and asked to rate which they preferred. Apparently, Pepsi outscored Coke because Pepsi’s formula produces a taste which is a little softer and sweeter on the palate. But slap the respective branding on the cans, stick it on the supermarket and local store shelves and millions more will still buy Coke. Not least because Coke, being the bigger brand, has more marketing muscle and money. Pepsi even recruited David Beckham to be its brand ambassador, but that did not change the situation.
The fact is people know what is distinctive, familiar and recognizable about Coke, they know what they are going to get even if they can’t logically explain it clearly and comprehensively. The distinctiveness of the Coke brand, enshrined in the protectable differentiation of its trademarked brand identity, outperforms the differentiation offered by Pepsi’s apparently ‘better’ taste.
Our approach to choosing our brands based on an overall sense of their distinctiveness rather than a series of specifically differentiated features and benefits applies to every sector. From your local supermarket to your online retailer. From your airline to your automobile. Are you more prepared to consider the contrasting claims of alternative brands than you used to be? Do you like having brands compete for your attention? Or do these questions never trouble your thoughts? The truth is we never had much time to interrogate these differences and increasingly we have less time and more choice and, in this context, being memorable, being distinctive is the only thing that matters.
As consumers we have never spent our time thinking deeply about the various claims to differentiation with which companies bombard us. Rather, when contemplating a brand, we have always connected with a feeling or an association, something distinctive underpinned by a specific set of features or benefits. Something that made us feel good and would give us things to talk about.
What has changed is the relentless focus, energy and imagination now demanded of brand owners to remain distinctive and therefore remarkable and re-purchasable.
In the debate about this confusing myth we prefer to distinguish between what brands ‘own’ and what they ‘occupy’. What brands own is what differentiates them legally. Brand name, logo, logotype, colours etc. And possibly some associated patented technologies such as the swipe feature on an Apple phone’s screen (though these have a limited life).
Brands build distinctiveness by what ‘space’ they occupy in our minds. Volvo is no safer than other major motor manufacturers but if you were to ask a group of middle-aged car drivers what the attribute is they most associate with Volvo, it’s likely to be safety. That is because for years they focused on communicating that to car drivers.
As with owning a house, you own the freehold (or leasehold). But a distinctive home is what you occupy – the way the house in which you live is designed, built, decorated and filled with fixtures and fittings. All of those create the distinctive character of the house and can be changed or even lost. The legal title to living on that plot of land endures even when the house collapses.
Successful brands focus consistently on an image and an experience that they want to be recognized and valued for by customers or consumers and indeed by other groups of people, especially employees. Apple does not ‘own’ creativity, cool design and human-or user-friendly products. Samsung can lay claim to these things too. But Apple has created a distinctive brand around these attributes by the focus they have put on them. The clean monochromatic styling of their products and stores, the signature graphic and product designs, the tone of voice (‘Hello’, ‘Designed in California’), the informal, friendly style of their people, the emphasis on entertainment, the ‘wow’ effects they bring at launch. All of these form a distinctive impression of the Apple brand which most of us would struggle to articulate clearly but which we all know and recognize and with which many identify.
In the same way, Nike does not ‘own’ in any legal or otherwise proprietorial sense the ideas of ‘exceeding your personal best’, of irreverence, of performance, of energy. Adidas and Nike both have high-performing athletes on their books, they both make products with sports science and technology-inspired features, and they both make impressive adverts which feature ordinary people and stars. And other brands like O’Neill, Converse, Puma and Reebok are all capable of doing and talking about similar things. But Nike has occupied that space in our minds by relentless focus, by a clear artistic and design ethos that brings an edge to all their branding, by their audacious marketing and of course by their readiness to spend money to support it. As a result, they have emblazoned on our minds three things they really do own: the Nike name, the swoosh logo and the slogan ‘Just Do It’.
So, to be remarkable, where do you focus and how do you do it? The answer lies in three simple principles. These principles are ones identified in the book On Purpose: Delivering a branded customer experience people love. The book recommends that if you want your brand to remain relevantly distinctive and be part of consumers’ consideration and conversation, then it needs to stand up, stand out and stand firm.
Stand up – means having a purpose or cause, which brand owners pursue consistently and talk about constantly. A purpose that they believe will deliver true value to and improve the lives of their customers or consumers and the world in which they live.
Stand out – means that they dramatically differentiate and distinguish their brands from competitors by intentionally delivering a repeatable and remarkable experience across all channels or touchpoints for their customers or consumers.
Stand firm – means they create, maintain and develop the appropriate culture to ensure sustainable and authentic delivery over the long term.
In Chapter 5 we give a couple of examples of brands that have built highly distinctive associations in our mind through their relentless focus on these key principles, well-known brands like Ikea. Here, to illustrate the point about distinctiveness, we’ll take one example from a sector about which consumers rarely have anything good to say – banking. In 2010, Metro Bank became the first new UK high street bank to launch in almost 150 years. It has fast become one of the sector’s most positively talked about businesses and one of its most successful.
Metro Bank understands that first you have to know what it is you want to be remarkable for. You have to champion what matters most to your customers and build your offer around that. During the last decade of the previous century and the first decade of this, banks were increasingly withdrawing from the high street, closing branches, investing less in the experience of many of those branches and encouraging more online and telephone banking. They were also increasingly developing new financial products and more complex financial services, straddling retail, corporate and investment banking. It became difficult to know what the focus of these banks was. It certainly did not seem to be the customer, judging by the dissatisfaction of many customers with their banks.
Metro Bank came to this market with a purpose and a simple clarity. They were going to be branch-led because they believed bank branches had a role to play in a community and thus in a customer’s life. A report by Mintel appears to support their belief. It recorded that 84 per cent of customers liked to go to their bank branch either frequently or regularly, with 25 per cent saying they would not even consider a bank that did not have a branch. Metro also decided to focus on the products that matter most to customers. They focus on current accounts, savings accounts and credit cards for customers or companies. They have a clear sense of who their core customer is: an average person who wants to go to a bank that is easy to do business with. They were going to champion customers and they were going to make people ‘love going to their bank’. Metro Bank uses language customers can remember; it is ‘a bank that puts you first’. In fact, it doesn’t talk about customers; it talks about fans, a simple premise that is revolutionising UK high street banking.
To get people talking about you, you have to do something worth talking about. Metro Bank doesn’t offer the most competitive rates of return, but it purposefully invests in what its customers most value. It has done so by looking at what was wrong with traditional bank branches and creating something directly opposite to that. Old bank branches opened at a time that suited banking (9am–5pm Monday to Friday, Saturday mornings if you were lucky). Metro has convenient opening hours for its customers (8am–8pm Monday-Friday, 8am–6pm on Saturdays and they are even open 11am–5pm on Sundays). Old banks had stern-looking staff behind glass windows (presumably to protect the staff as much as the money). Metro has friendly staff who walk around the store and sit at open desks. Applying to open a bank account at an old bank involved an agonisingly long process of paperwork, references, and waits while checks and double-checks were conducted. Metro Bank offers instant account opening – you can walk into a branch and come out within an hour with a new bank account ready to use. Old banks were about as family-friendly as a morgue. Metro Bank lets dogs in (even providing water bowls) and kids can play on a Magic Money Machine. Its branches are easy to find and easy to do business with.
Metro Bank knows that it is not for everyone and it is comfortable with this. It knows that delivering a remarkable customer experience requires a business to make choices. Its systems are designed to empower staff. It has a simple service ethos: it takes one person to say yes to a customer and two to say no. Staying true to its promise is yielding significant results. It puts an emphasis on service style and attitude in its recruitment and encourages informality and fun within its culture.
Adhering to these principles and supporting them with PR and social media means its customers have done much of the talking for them. Metro Bank has spent less than £100,000 in conventional advertising in six years but has brand recognition of 82 per cent. It helps that it sees its big, bold, modern-looking, highly branded stores as living advertising billboards on a high street.
Metro Bank has grown in less than a decade to be an influential force in the banking industry and an increasing presence on the high street; with deposits of £11.7bn and a loan book of £9.6bn, 55 branches and 1.2million customers. When you consider that the Mintel study cited earlier indicated that the main banks have lost over three million customers, it seems that Metro’s focus on being distinctive and different is paying off.
So, it’s not that a brand needs to be distinctive rather than different. It needs to be both. But it needs to focus on what will make it genuinely distinctive and keep focused on delivering that consistently. The combination of that plus the constancy of protecting the brand identity that it owns, and which genuinely differentiates it, makes it remarkable.
Robert Stephens, the founder of Geek Squad, which quickly became the leading provider of domestic IT services in the USA, says: ‘Marketing is the tax you pay for being unremarkable.’
Brand owners should ask themselves how much ‘tax’ they are paying.
Byron Sharp, How Brands Grow: What Marketers Don’t Know, Oxford University Press, 2010
Shaun Smith and Andy Milligan (2015), On Purpose: delivering a branded customer experience people love, Kogan Page, 2015