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Points of Parity

Now you are probably beginning to think about, and maybe even feel good about, all the points of difference that make your brand stand out. But while you've been busy thinking about how to make your brand stand out from your competition, your competitors are also busy developing points of difference that make them stand out from you. This is where the idea of a point of parity comes in.

Most simply, a point of parity is a point of difference a competitor has over you that you need to counteract. Sometimes points of parity are "table stakes"—characteristics you need simply to enter or compete in the market. Other times points of parity are advantages that competitors have been able to gain that are highly valued by customers.

It takes a strong person to admit to their weaknesses, and strong brands must admit their weaknesses, too. This is why great brands use not only points of difference to show where they stand out, but also points of parity to show where they are trying to be as good as their competition.

But highlighting a point of parity doesn't necessarily mean that you need to turn it into a key strength for your brand or that you need to beat your competitors at it. You shouldn't feel like you need to turn all your brand weaknesses into strengths.

In fact, one of the key things to understand about points of parity is that they don't represent places where your brand needs to be the best. Instead they highlight places where your brand must simply be good enough, so that, given the amazing points of difference you have in other areas, someone will still choose your brand over the competition.

Well-played points of parity are one of my favorite brand positioning tools. Points of parity are the jujitsu maneuvers of brand positioning, with the amazing power to nullify the strengths of opposing brands, while focusing energy back on the differences that make you stand out.

Make sense? Let's look at an example.

Wal-mart Versus Target

Wal-mart is one of the most intimidating competitors in retail. Over the years, they've developed a key point of difference around everyday low prices that is almost impossible for competitors to match. Their enormous size and efficient operations give them incredible pricing power with the ability to beat the prices of almost any competitor. Wal-mart has used this strength to become, based on annual revenues, the largest corporation in the world.

Faced with a massive competitor like Wal-mart, many companies would curl up in a ball and prepare to die. Yet Target, the second largest discount retailer in the United States, has actually prospered in this tough environment, ranking #30 in the Fortune 500 in 2010.

How has Target done it? I believe a large factor in their success is the combination of a very strong point of difference around design and fashion, coupled with great execution on a point of parity around price.

Is Target always the cheapest? No. As I've said previously, it's pretty difficult to beat Wal-mart on price. But are Target's prices "good enough" that, given how much better designed many of their products are and how fashion-forward much of their clothing is, many people in certain demographics choose to buy from them instead of Wal-mart? Absolutely.

Target is not trying to beat Wal-mart on price. They are simply trying to create enough parity around price that their point of difference around fashion and design becomes the deciding factor for many consumers.

It is a great example of using a point of parity and point of difference well together, and it's a 1-2 punch that has worked very well for Target.

The point of parity is one of the most overlooked tools in the brand positioning tool chest, but it can be one of the most powerful, especially when used in combination with a great point of difference. In Chapter 4, I walk you through an exercise that will help you uncover the best points of parity for your brand.

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