How do you measure the impact of product differentiation on your sales performance?

1 Market share

Market share is the percentage of total sales in your industry or category that your product accounts for. It is a direct measure of how well your product is competing against other alternatives in the market. To measure the impact of product differentiation on your market share, you need to track how your market share changes over time and compare it with your competitors. A higher or increasing market share indicates that your product differentiation strategy is effective in attracting and retaining customers.

2 Customer loyalty

Customer loyalty is the degree to which your customers are loyal to your product and brand, and are willing to repurchase or recommend it to others. It is an indirect measure of how well your product differentiation strategy is creating value and satisfaction for your customers. To measure the impact of product differentiation on your customer loyalty, you need to use metrics such as retention rate, churn rate, repeat purchase rate, referral rate, and net promoter score. A higher or improving customer loyalty indicates that your product differentiation strategy is building strong customer relationships and loyalty.

3 Price premium

Price premium is the amount of extra money that your customers are willing to pay for your product compared to similar products in the market. It is a measure of how well your product differentiation strategy is enhancing your product's perceived quality and uniqueness. To measure the impact of product differentiation on your price premium, you need to analyze how your pricing strategy affects your sales volume and profitability. A higher or increasing price premium indicates that your product differentiation strategy is enabling you to charge more for your product without losing customers.

4 Customer satisfaction

Customer satisfaction is the extent to which your customers are satisfied with your product and their overall experience with your brand. It is a measure of how well your product differentiation strategy is meeting or exceeding your customers' expectations and needs. To measure the impact of product differentiation on your customer satisfaction, you need to collect and analyze feedback from your customers using surveys, reviews, ratings, testimonials, or social media. A higher or improving customer satisfaction indicates that your product differentiation strategy is delivering value and delight to your customers.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?