Point of Difference Analysis: An Effective Marketing Technique

Marketing
  • If you want to succeed in a competitive business, your points of parity are the minimum you need to determine and establish. Points of parity refer to industry standards that make your business legitimate in its respective industry.
  • Once you've established your points of parity, the next thing to do is differentiate what makes you different from everyone else, i.e. your points of difference. This is what gives your business a competitive edge.
  • Read on to learn more about why points of difference are so important when it comes to selling your business.

I often feel that business owners view marketing as just day-to-day advertisements and communications. This is as wrong as it is short-sighted.

What marketing do I need to do when selling my business?

There are some strategic marketing techniques used by multinational companies that make a huge difference when applied to a mid-sized business before a sale.  

If you are selling a mid-sized business, just one or two of these techniques can increase your sale price by millions of dollars.

The sale of your business can be one of the most important events in your life. The dream is to place the business in the hands of a well-capitalised and committed buyer who will take your life’s work to the next level of success. 

In the background, however, is the fear that you will not be able to sell it for enough to pay out the bank, fund your retirement or launch your next business project.

What is point of difference in marketing?

One marketing technique you can use to boost the value of your business is the Point of Difference (“POD”) analysis.

To be an attractive takeover targeting bigger, strategic buyer, you need to show you have a competitive POD that can be leveraged five, ten or a hundred times more by an acquirer.

A competitive POD is one of the main reasons someone would want to buy your business.

You do a POD analysis to show a potential buyer that buying your business is a faster, cheaper and less risky proposition than developing a similar POD itself.

What is a point of difference (POD) analysis?

A POD analysis is a method of isolating your company’s unique points of difference.

  • A POD is an attribute that makes your products and services different from your competition in a way that is unique and valuable to your customer.

In truth, most competing products have a lot of similarities. Often times, a point of difference can boil down to a perceived or emotional difference that arises in the mind of the consumer. 

What is an example of POD analysis?

An example of POD we always use is in the tyre category:

  • Product: Michelin Tyres
  • Attribute: Superior tread, steel radial          
  • Benefit: Better grip, better control    
  • POD: Security, safety

Now, contrast this with Michelin’s top competitor, Pirelli:

  • Product: Pirelli Tyres
  • Attribute: Superior tread, steel radial          
  • Benefit: Better grip, better control    
  • POD: exciting, fun to drive.

Michelin appeals to families, whilst Pirelli, with its rich history in car racing, appeals to motoring enthusiasts. I noticed at the Grand Prix this year, that the control tyre for all Formula One cars was Pirelli. 

For Michelin to come from its own POD of “security and safety” and achieve the perceived POD of “exciting and fun to drive”… well, it would probably be cheaper to simply buy Pirelli.

What is the POD of your business? Does it make your business standout as unique and valuable?


Ben Killerby

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Corporate Advisor and Legal Counsel for Saxon Klein, a corporate advisory firm in Melbourne.


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