Earlier this year I conducted research to understand how consumers defined trust in the context of their relationshps with businesses, and the impact of trust in firms on customer relationships. An unexpected finding from that research emerged regarding the idea of differentiation.
I doubt I’d get much argument that competitive differentiation is an important goal of marketing. But based on the research, I’m beginning to conclude that many marketers are deceiving themselves into thinking that their firm is differentiated in the way that they think it is.
We asked consumers about a series of attributes regarding banks — things like “is easy to do business with” , “responds quickly to inquiries”, “rarely or never makes mistakes” — 16 attributes in all. We asked them how important each attribute was in determining their level of trust in banks, asked them to rate “banks in general” along these attributes, and then asked them to rate “their primary bank” on the attributes.
Here’s what we found:
- The more important an attribute is to someone, the more highly they rated banks in general on that dimension.
- In addition, the more highly they rated banks in general on an attribute, the more likely they were to ascribe that attribute to their primary bank.
What these findings suggest is that consumers are predisposed to believe what they do about banks, not just as a result of what the bank actually does, but what’s important or unimportant to them. In other words: Differentiation is in the eye of the beholder.
This is important (and not just to bank marketers) because marketers’ attempts to differentiate and position their firms often start from the perspective of what the firm (thinks it) does well. These efforts may fall short of differentiating the firm in the minds of consumers who don’t consider that attribute to be that important to them.
In addition, if the differentiating aspect is important to a particular consumer, then it’s possible that they ascribe that attribute to all firms in the space — making it harder for any firm to adequately differentiate itself.
I hope that, at this point, you’re not as confused about all this as I am making myself (and I’m the one writing it). But the bottom line conclusion is clear: You might not be as successful in your efforts to differentiate your firm as you might think you are.