All products are equal but some are more equal than others
“From complex engineering solutions to commodities bestowed upon us by nature, there is absolutely no product or service you cannot differentiate, charge a little bit more for, and make more money on.”
The title of this article is inspired by a famous line from George Orwell’s award-winning allegorical novel, Animal Farm, “all animals are equal, but some animals are more equal than others.” In Animal Farm, as it is in capitalist economies, those that strive for equality soon find it to be an illusion, as there will always be people with more privileges than the majority.
And individuals with more privileges generally stand out – even in face-only photographs! I came across an interesting study, The Visibility of Social Class From Facial Cues, published in the Journal of Personality & Social Psychology (May 2017). The summary of the study, also published by the University of Toronto in July 2017, is that about 70% of the time, people can tell high income-earning individuals apart from those that earn far less … just by looking at their passport photographs!
In our fiercely competitive world, having a product or service that stands out of the pack enables profit maximisation.
From complex engineering solutions to commodities bestowed upon us by nature, there is no product (or service) that business leaders cannot project in the marketplace, offering an opportunity to charge a little bit more.
With the right signals to the market, a commodity such as water can stand out, creating an opportunity got businesses to charge more. That is why a customer will walk into a store and pick a smaller bottle of Voss Water (0.85 litres) which costs about USD40, over a slightly bigger (1 Litre) bottle of Evian water which costs about USD2. Voss can pull that off because their products stand out from the pack. There is a perception of “more value” attached to their products even though both quench thirst.
Economists call the art of making your products stand out differentiation. You differentiate your products and services by creating a sense of uniqueness with your customers. And they must be willing to pay a little bit more for it, despite the existence of close substitutes. The extra value the product/service adds could be real or imaginary, and that doesn’t matter so long as customers are willing to pay a little more.
The lever here is the value perception by your customers; they need to perceive the value you are adding during this pandemic, so they leave your competitor’s products & services and go for yours, which is more expensive.
Despite economic slowdowns, there are ways businesses can differentiate their products, making them stand out. Making them preferred. And creating an opportunity to charge a little bit more, thereby increasing profits.
a. Provide Extra service – since the COVID-19 pandemic, more customers are reluctant to step out. Perhaps you need to improve ease of accessing your products & services – offer home delivery, offer contactless delivery, contactless payment if you are presently cash-based, etc.
b. Improve your product quality – a slight improvement in the input of your product could help you charge customers more, so you are better off financially, even after deducting the cost of improvement
c. Review your price– If you are unable to improve the quality of your product and the demand for the product is elastic (i.e., a slight decrease in price results in a more significant increase in quantity demanded), consider a slight drop in price – that is also differentiation via pricing strategy
d. Improve your packaging – A recent research in Karachi, Impact of Product Packaging on Consumers Buying Behavior, concludes that “Packaging is the most important tool in the marketing of any product.” A simple better look than competitors’ products could increase your sales. Recall “The new, improved Super Blue Omo.”
e. Highlight hitherto ignored features of your products – mentioning the uniqueness of your products is a signal of more value which some customers may be willing to pay for, e.g., a bakery that bakes daily can begin to say, ‘Oven-Fresh Bakes Daily.’
f. Highlight flaws in features of your competitors’ product – And if you are the only bakery that does not use Improvers in your area, you may say, “we are the only Bakery in Richmond that supply freshly baked bread daily – No improvers added”
These are some of the tactics businesses can improve profitability by standing out of the pack. Undoubtedly, all products may be equal, but some products are more equal than others.
About the Author:
Akin Monehin is a thought leader, speaker, business leader & strategist. A 2015 recipient of Choiseul Institut France/Forbes Afrique’s Award of Top 100 African Business Leaders under 40 Years old, he hosts two (2) thought leadership conversations on YouTube, “Make or Mar Moments” and “After 5 at 5”.
He is also the host of the podcast, “Pathway to Greatness”. He is privileged to have worked in over 10 countries, including French and Arabic-speaking and leading organisations like British Airways, Virgin Atlantic & Nigeria LNG Ltd. He currently works for an International Oil Company (IOC) and is a business owner. Views expressed in this article are personal and do not represent the views of any institution he is affiliated to.