Gain a Competitive Advantage with a Category of One

One of the most effective ways for a company to gain a competitive edge is through the business strategy of a category of one. It allows businesses to differentiate themselves from competitors, build a strong and loyal customer base, and achieve long-term success. By doing this they are creating a category which has no competitors – they are the only offer in this category, thus the name “category of one“.

This article will explore how to create a category of one, the pros and cons, and what it takes to keep it going.

What Is a Category of One?

A category of one is a business strategy in which a company offers a unique and innovative product or service that has no close substitutes or competitors. This allows the business to establish itself as the leader in its market. 

For this strategy to be successful, the company must communicate their unique selling proposition with strong advertising and branding efforts and consistently deliver on the promise of their unique product or service. 

By successfully creating a category of one, a business can gain a significant competitive advantage over would-be competitors.

What Are the Benefits to Creating a Category of One?

There are several benefits to creating a category of one for a product or service including: 

  1. Competitive advantage. The main benefit of creating a category of one is that it can result in a significant competitive advantage allowing a business to charge premium prices.
  • Protecting profit margin. It also helps a business protect its profit margin. If the product has no close substitutes and can charge a premium price, that helps maintain a healthy profit margin and leads to long-term financial success.
  • Strong customer base. Establishing a category of one helps to build a strong and loyal customer base. Long-term customer relationships can represent a steady stream of revenue for the business.
  • Reduced price comparison. Because your product or service is unique and has no close substitutes, customers cannot compare it to other similar products or services based on price. This can make it easier for the business to charge a premium price for its product or service without facing as much price competition from other businesses.
  • Brand recognition. Again, because the product or service is unique and has no close substitutes, it is more likely to be remembered and recognized by consumers. Being more memorable to consumers can help attract new customers and increase sales.
  • De-commoditizing what you sell. Offering a unique and unparalleled product or service can help the business avoid being seen as just another commodity in the market.

What Are the Potential Drawbacks of Creating a Category of One?

While creating a category of one can provide many benefits for a business, there are also potential challenges and drawbacks to consider. Developing strategies ahead of time for dealing with potential drawbacks will greatly improve the chances of successfully implementing a category of one strategy.

  1. Investment. Creating a category of one can require significant investments in research and development, as well as the cost of marketing those differences to consumers. This can be expensive and may not always result in a successful product or service.
  • Responsiveness. With such a narrow focus, the business may have limited options for adapting to changes in the market. This can make it difficult to remain competitive and maintain a position as the market leader.
  • Limited Expansion. Because the business is associated with a specific product or service, consumers may be reluctant to accept new offerings from the business, limiting the potential for growth and increased revenue.

How Does a Business Create and Maintain a Category of One?

To create a category of one, a business must decide how they want to set themselves apart from the pack and then effectively communicate that message with a recognizable brand identity that is used consistently across all marketing and communication channels. 

Use the following steps as a guide for creating a category of one for your business:

  1. Identify a unique selling proposition. The first step in creating a category of one is to identify a unique selling proposition for the product or service being offered. This could be something about the product or service itself, such as an innovative feature or extraordinary benefit.  Or it could be something about the way the product or service is delivered, such as an unusual customer experience.
  • Differentiate from competitors. Once the unique selling proposition has been identified, the next step is to differentiate the product or service from its competitors. Highlight the differences in marketing materials and make sure the product or service is positioned as something apart from other similar products or services in the market.
  • Establish a strong brand. Building a strong brand is important for developing a category of one. Create a consistent and recognizable brand identity, such as a logo, color scheme, and messaging, and use it across all marketing efforts. This will help establish the company and its product or service in the minds of consumers and make it more recognizable.
  • Maintain a high level of quality. Finally, maintaining a high level of quality for the product or service is crucial for maintaining a category of one strategy. The brand must consistently deliver a high-quality product or service that meets or exceeds customer expectations. That builds customer trust and loyalty and ensures that the product or service remains the best option in its market.

Using Product Innovation to Create a Category of One.

To use product innovation to create a category of one, a business needs to continuously introduce new and innovative features to its product or service. This could involve adding new capabilities to the product, such as advanced technology or unique design elements. Or they might improve on their existing product, such as increasing the durability or reliability.

A great example of a category of one product is Cirque de Soleil. Cirque de Soleil is a Canadian entertainment company known for its unusual and spectacular circus performances. The company was founded in 1984 and has since become one of the most successful and innovative entertainment companies in the world.

One of the reasons for Cirque de Soleil’s success is that it created a category of one for itself. Its performances are unlike any other circus shows, combining elements of circus arts, theater, dance, and music to deliver a truly unique and unforgettable experience for audiences. This has allowed the company to differentiate itself from other circus performers and establish itself as the leader in its market.

Furthermore, because there are no close substitutes or competitors for Cirque de Soleil’s performances, the company has a significant competitive advantage. Consumers looking for a unique and high-quality circus experience have no other options, so they are likely to choose Cirque de Soleil over any other circus company. This allows them to command a premium price for performances and maintains their position as a market leader.

By continuously introducing new and innovative elements, and touting those changes in their marketing materials, a business will have the best chance at maintaining its competitive advantage and being able to command a premium price.

Using Service Innovation to Create a Category of One.

What does service innovation look like when creating a category of one? Much like the offering of a product, services must also innovate and introduce new benefits. This might be adding new services or capabilities to the service such as personalized experiences. Or, it could involve improving existing elements such as increasing the speed or efficiency of the service.

By continuously introducing new and innovative elements to the service, a business can differentiate itself from its competitors and establish itself as the leader in its market. This can help the business maintain its competitive advantage and command a premium price for its service.

One example of a business using customer service to stand out from the pack is Zappos. Zappos offers a range of services to ensure that customers have a positive experience, such as free shipping and returns, a 365-day return policy, and 24/7 customer support. By prioritizing customer service, Zappos has built a loyal customer base and has become a successful business through its excellent customer service offerings.

It’s in the Details.

If the benefit or feature of your product doesn’t jump out at you as the logical foundation for your category of one strategy, have no fear. Put your intended idea under a “microscope” and look at the details. What can you pull out to expand on? Can you find a flaw that you can use as an opportunity to not only improve, but to set yourself apart? This is how innovation and change are made.

You may have several ideas for what can set you apart. Scrutinize each one and determine which cannot be easily replicated by the competition. This will give your category of one strategy the best chance at success.