You’re not leading your business just to make it the same as your competitors.
No, you want it to be better. To be different.
Being different helps you stand out from your competitors. It helps you win deals and withstand pricing pressure. It helps you define yourself.
But being different today may not be enough. To truly stand out, you need to be distinctive.
Why Distinction Matters
Businesses that achieve true distinction enjoy several key advantages:
1. They become the standard by which competitors are measured.
Most companies blend in. Some have noticeable differences. But truly distinctive businesses rise far above the rest with exceptional excellence, setting a new benchmark in their category.
2. They foster deep customer loyalty.
Distinctive businesses don’t just attract customers—they create fans. Their customers don’t compare alternatives because, in their minds, there is no real alternative.
3. They compete on value, not price.
Businesses that lack distinction often rely on price as their main differentiator, making them vulnerable to pricing pressures. Those with clear, tangible differentiation can avoid this trap. However, the ultimate advantage lies with businesses that are not only different but distinctive—where customers recognize the premium value and would consider choosing a lower-priced competitor as a costlier mistake.
Yet, because we are immersed in building our products, we may value our offerings more than our prospects do and unwittingly become blind to recognizing opportunities to make our business truly distinctive.
Don’t fall so much in love with your baby that you miss how to make others fall in love too.
The Path to Distinction
Creating a distinctive business doesn’t follow a single formula, but you can start by answering three essential questions:
1. Where are you today in the mind of your ideal customer?
Think of differentiation as a spectrum. At one end, businesses are interchangeable with their competitors. In the middle, some stand out with clear differences. At the highest level, a select few are unmistakably distinct.
So, view your business the way your ideal prospect might. Would you say it’s largely indistinguishable from other options they might consider, different in some ways, or truly distinctive?
2. What truly sets your business apart?
Identify the key differences between your company and competing alternatives. What do you do better than anyone else? Where do competitors outperform you? More importantly, ask:
Do these differences create significant economic value for your ideal customer?
If not, you have work to do—but also a powerful opportunity to create a more distinctive business.
3. What kind of distinction are you building?
One of the reasons businesses lack distinction is because they have not intentionally chosen where they will be excellent. Deciding (or reaffirming) your strategic distinction is critical.
Business experts have long debated the best models for differentiation. One influential framework, introduced by Michael Treacy nearly thirty years ago, defines three main types of excellence from which a distinctive business can be built:
• Product Leadership – Companies that lead with innovation and superior products (e.g., Apple).
• Operational Efficiency – Businesses that excel in cost-efficiency and logistics (e.g., Amazon).
• Customer Intimacy – Firms that deliver highly personalized, customer-driven solutions (e.g., Nordstrom).
More recently, Daniel Priestley expanded this by splitting Operational Efficiency into two components, price and convenience, as shown in the side bar.
In Treacy’s view, companies should have competency in each of the areas, but leaders should choose one in which their company should excel. Those that fail to make a conscientious choice to lead their companies in one of the dimensions of excellence become undifferentiated from their competitors.
4. What must be done to make it even more meaningfully different?
Once you’ve chosen the path of distinction, how will you ensure your company is aligned to make it a priority? One way to do that is to ask this question before you and your team make any significant business decision: How will what we are considering make us more distinct in a way that matters to our customers?
Every decision that doesn’t affirm your brand promise, risks eroding it.
Creating a truly distinctive business is challenging, but the payoff is immense. I don’t need to tell you how much harder this is to do when you lack sufficient understanding of your customers.
And fixing that, in itself, may be the best first step you can take to make your business distinct, not just different.
Leary Gates is a Coefficient Partner, working with our clients to develop market and brand strategy. Reach him directly at leary@coefficientagency.com.
.png)