What is product differentiation?

Product differentiation is the process of identifying your product’s unique features and making it stand out from similar products on the market. The goal of product differentiation is to show your target audience the unique value of your product so they choose it over a competitor’s.

Successful product differentiation helps brands:

  • Build brand loyalty: Your product’s unique value is what can drive repeat purchases.
  • Gain a competitive edge: When your product is different from that of your competitors, your target audience is more likely to choose your brand.
  • Sell at a higher price point: Differentiated products are more valuable because they offer distinct features or benefits, so people are willing to pay more for them.

Based on the features that make a product stand out, there are 3 types of differentiation:

  1. Vertical: Focuses on objective features like quality or price
  2. Horizontal: Focuses on subjective features based on personal preference
  3. Mixed: Reflective of complex purchase decisions that are a mix of vertical and horizontal factors

How to differentiate your product

By highlighting what makes your product special, you can capture your target audience’s attention, drive sales, and achieve better marketing results. Follow the steps below to differentiate your product:

1. Identify your target audience and their needs

Differentiating a product involves highlighting its most discernible difference in value, which requires a deep understanding of your target audience.

Conduct research to investigate your audience’s demographics, preferences, shopping behaviour, and challenges. The data you collect can help you adjust your marketing initiatives accordingly and present your product’s characteristics to the right crowd.

You can compile data on your target audience through:

  • Forms: Use embedded, pop-up, and fly-out forms on your website to collect contact information and subscriber preferences.
  • Competitive research: Find out how the competition positions similar products to understand your offer’s distinguishable features.
  • Run product quizzes: Send a quiz to your existing audience to find out how your products may be personalised to their needs. This works especially well for health and beauty brands.
  • Polls and surveys: Ask your social media followers to provide info on their preferences and shopping habits, or send surveys via email and SMS.
  • Customer interviews: Schedule chats with your most loyal customers to find out what they value the most from your brand.

2. Craft compelling messages

Once you’ve deeply understood your target audience, translate those insights into compelling messages. To effectively differentiate your product and capture your target audience’s attention through your marketing initiatives, focus on these key strategies:

  • Showcase key benefits: Highlight the specific ways your product solves your audience’s problems.
  • Test and refine: Don’t just assume what works—experiment with different messaging approaches through A/B testing or surveys to determine what truly resonates with your audience.
  • Write persuasive copy: Create headlines, body copy, and subject lines that clearly communicate the value and benefits of your product to your audience. Use strong action-oriented calls to action (CTAs) to encourage conversions.

3. Monitor and adjust

Monitor relevant sales and engagement metrics to determine if your audience recognises your product’s value. If you aren’t satisfied with the numbers, conduct another target market research to learn how to appeal to your audience.

Product differentiation is a flexible process—you can change it as you update your product, allowing you to adapt to evolving market trends and customer preferences. Continually monitoring and adjusting your strategy ensures your product’s unique value proposition resonates with your target audience.

To understand how your customers feel about your product, use Klaviyo Reviews. Make changes based on feedback, segment customers by their reviews, and deliver tailored messages that resonate with your customers.

With Klaviyo Reviews, you can easily set up requests for customer reviews as soon as your products get delivered. What’s more, you can showcase these across all your marketing channels to boost conversion.

Ready to differentiate products with laser-sharp precision? Sign up for Klaviyo today.

Additional resources