Are performance predictors, points of differentiation?

Consumers do not typically assess an offering in isolation. Instead, they consider an offering in relation to alternatives based on their own predetermined minimum requirements.

Points of parity* are the minimum expectations for a given product or service to be considered within a specific category or industry. Prospective customers require that these points of parity exist in a product or service offering before serious consideration is granted, and it is deemed a legitimate contester for the consumer’s share of wallet.

Failure to ensure your product or service includes your target markets' specific points of parity, is likely to result in your offering not being added to their “short-list” of potential providers.

As an example, you may be planning to introduce a new mobile telephone that includes video conferencing, allowing both callers to see one and another via their mobiles whilst carrying on a conversation (importantly, this is an example of a point of differentiation). Obviously this innovative feature would appeal to a large section of mobile phone users, and result in significant demand.

But, as you can see, this one feature is clearly not enough to ensure widespread consumer take-up. Without critical points of parity such as the ability to send and receive calls, send and receive SMS messages and store contact names and numbers the new product would be unsuccessful.

Importantly however, points of parity alone are not enough. In other words, points of parity are a necessary evil, but are not sufficient for consumers to use as the grounds for a final purchase decision. This is where performance predictors which are also points of differentiation come into the picture.

For example, promoting a client success statistic such as Nicorette's ActiveStop program which claims that smokers are 4 times more likely to quit smoking by using the ActiveStop program than with will power alone^. This success statistic is a point of differentiation for Nicorette (it is also a performance predictor). And if a competitor were to introduce a client success statistic that is perceived to be 'better' by smokers wanting to quit, then Nicorette would need to innovate and improve their results or change their point of differentiation (and performance predictor) to focus on another area.

* The term 'points of parity' is credited to Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002); cited in "Three Questions You Need to Ask About Your Brand," Harvard Business Review, September, 80 (9), 80-89.

^ Source: www.nicorette.com.au [Accessed 28/02/08]