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When we do branding, we spend a great deal of time, and many tools, getting to understand the client’s differential advantage. Now, it’s generally pretty easy for folks to understand things like color palette, type palette, photography palette, voice, tone, music…all the sensory components of the brand. But it’s sometimes a little harder to grasp differential advantage. So, here’s what it is.

Differential advantage is the set of benefits you are able to provide profitably, every day, within your normal operation, that are relevant to the purchasing decision of a significant portion of purchasers of your category, that your competitors cannot duplicate as routinely or as profitably. In short, it is your home field advantage.

A great example (which we, sadly, did not develop) is FedEx. They built their entire business on a “hub” concept, where all packages came to, and departed from, a central hub (Memphis, I think). This unique operational feature enable them to deliver any package, from anywhere in the Continental United States, to anywhere in the Continental United States, over night. Thus the differential advantage, as tag line—when it absolutely, positively has to be there overnight.

This differential advantage was a leverage point for FedEx to own the premium niche of overnight business delivery. Although they now do a lot of other things—international delivery, ground delivery, KINKO’s—and although others now do overnight delivery, FedEx was able to leverage being first in this niche to build an entire brand on the overnight position.

We branded with a bank in Texas, who looked around and saw that there were a lot of banks in Texas, but not too many FROM Texas. Now, that may not mean much in Alabama or South Carolina. But Texans Loooooove Texas. So, we were able to build an entire differential advantage on the fact that they were from Texas, and their direct competitors weren’t. Blue bonnets are magic, you know.

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