How do you distinguish yourself from your competitors?

For those of us who develop software there is a tendency to focus primarily on features.  We’re geeks, we love features, so we assume that’s where we should focus most of our energy.

But features are not the primary reason customers buy a product, and more importantly, features are very easily copied by competitors.  We add a great new feature, our competitors soon add it.  They add a cool new widget, we soon add it.  Over time this interchange produces products that share so many similarities that consumers find it difficult to distinguish which application is better or even different.

You don’t have to be in software to suffer this phenomenon.  Most businesses, even service companies, fall into this trap.  How do you distinguish one web design firm from another when both of them produce equally great sites?  Both firms offer compelling designs, they both write standards-compliant code, they both offer similar services, and their pricing is competitive.  So how can one web design firm stand apart from another?  Let me throw out a concept I’ve been chewing on recently:

You can only offer an advantage to your customers if what you do is not easily copied by your competitors.

If what you do is easy to imitate you’re going to have a very difficult time distinguishing yourself.  For software companies, you’ll never gain a competitive advantage focussing primarily on features.  Yes, of course you have to develop a capable product, so features are important in that they determine what a user can do with your software, but this is secondary to focussing on your strengths; defining and building attributes that let you stand alone in your class.

Although I’ve only recently begun to think deeply about this issue for our company, here are a few things that I believe distinguish us from our competitors and are difficult to imitate:

• EllisLab, as a company, is highly accessible to our customers.  There are no access barriers.
• EllisLab is committed to growing organically, in a natural, sustainable manner.  We do not believe it is in the best interest of our customers to try to grow unnaturally fast.
• ExpressionEngine is the only publishing platform that has the ease of use of a blogging tool yet allows the power and control of a full-featured content management system.
• ExpressionEngine is the only PHP publishing platform that is 100% transparent, allowing any site design to be incorporated into it, without any need to interact with PHP.
• ExpressionEngine has the fastest, most committed, technical support of any publishing product on the market.
• ExpressionEngine has the best security record of any product in its class.
• ExpressionEngine releases new “builds” faster then any other product in its market.  These ensure that the software is incredibly bug free and secure.
• CodeIgniter is the only web application framework on the market that runs on any version of PHP, in any hosted environment, and is thoroughly documented from top to bottom in a tutorial style format.
• Our communities are among the most helpful and civil of any on the internet.  We work very hard to keep the riff-raff out and the tone and quality of communication at a very high level.  This requires constant vigilance and participation, and is not something that is easy to copy.  It has taken us years to build our community.
• EngineHosting is the only hosting company designed from the ground up for the particular needs of people hosting dynamic, database-driven websites.
• EngineHosting is the only hosting company offering affordable plans that runs load-balanced, process-separate clusters.  Even our cheapest plans are incredibly scalable.

If you are in business, how do you distinguish yourself from your competitors?  What do you do that can not be imitated?  And more importantly, are you communicating those things with your audience?