Your company has to differentiate itself from its competitors. It must have a better value proposition on the criteria that its customers deem important.
If you don't differentiate yourself, two things will happen:
Your customers will choose on price
Your customers will be more attentive to the problems of your products.
Let's see why…
Differentiate or your customers will choose on the price
Differentiation on the price is not good for your margins. To attract more customers, you will have to lower your rates over and over again. The one who wins will be the one who knows how to best optimize their cost structure. At this little game, Amazon is extremely strong in e-commerce. E-commerce in general is doing well by offering cheaper prices. The customer will see in the store, then he buys online.
“Price wars” are found in many sectors today. Travel has been particularly affected. An area that “sells the dream” lets its customers choose their holiday on price only. That's too bad.
The development of low cost offers in many sectors symbolizes the lack of differentiation of many companies. Low cost offers are developed by new players who create corporate structures that allow them to lower prices and take market share from existing players.
Consumers are looking for the right plans and alternatives. But business marketing is also involved. Your customer does not buy your product by necessity only. His desire and your marketing have created this need. Some companies are very good at the game by knowing how to differentiate themselves.
Differentiate yourself or your customers will be attentive to the defects of your products
Without differentiation, your customers will take the cheapest product. But in addition they will be demanding.
The customer will compare in detail the offers and the slightest technical problem and the slightest inconsistency. At the same price, the consumer will not forgive anything, he'll go to the competition!
Internet has allowed the proliferation of discussion forums where your customers will decrypt all your flaws. The Internet is a tool, not the culprit. The real problem is the lack of differentiation of too many companies.
Apple, one of the most beautiful company in terms of marketing strategy, has to make its products into cult objects (I hardly exaggerate!). The IPhone, for example, is in a saturated market of smartphones that is accustomed to price comparisons, numerous discussion forums and the hunt for flaws. And yet when a consumer buys an iPhone he doesn't even think to compare it to other smartphones.
When the Apple products have a defect, the customer is able to forgive. If the product is not differentiated and has been chosen on price, it will receive bad referrals and a bad word of mouth.
You probably know about small businesses that like Apple know how to offer something superior: a bakery, a restaurant…
It is essential to think about your differentiation and to base it on your customers’ expectations.