How to Create a Point of Difference (POD) for Your Internet Business

One of the people that I look up to in the internet marketing field is Sugarrae. She’s been a successful affiliate marketer for years and the flagship content on her blog has been invaluable in my journey to become a full-time online marketer. Her article, How to Survive the Affiliate Evolution, has been especially helpful. Even if you’re not an affiliate marketer, you can learn a lot from her principles.

One of her main points in the article that stuck with me was to differentiate yourself from the crowd. She wrote:

Treat your affiliate site like any real business and develop a point of difference. Sorry guys, it’s up to you to figure out how to do this. But, I can promise you that spending some time on doing this, on creating a POD, will be the single biggest thing you can do to keep your resume dusty and on your hard drive.

…the POD is always the foremost thought in my mind.

Now you’ve probably heard this advice before. There are many similar terms for POD that basically mean the same thing. For example, you may have heard of creating a USP (unique selling point), developing a hook, or becoming a Purple Cow. The main point is that standing out from the crowd is a fundamental principle for building a successful online business.

But as you can see in the above quote, she said it is up to us to figure out how to create our own POD. She didn’t give any instruction on how to do this.

So, I thought I’d build upon her advice with some tips and principles for creating an effective point of difference for your site.

I did some brainstorming, looked at others’ sites, and thought about my own experience. Here’s what I came up with.

Understand Your Competitors

If you want to be different, you need to know what’s already out there. One of the first things I do before entering a niche is research the high profile sites. I look to see what they are doing well and try to stay out of those areas unless I can do it better or add a unique twist.

For example, I have a collectible card game blog with a web app that tracks the card prices on Ebay. Other sites were tracking prices of popular retail stores but from my research, no one was tracking eBay prices. Many people look to eBay for deals so I received a good amount of new visitors when I launched the app. Furthermore, I increased my bottom line by a good amount since I am an eBay affiliate.

Scratch Your Own Itch

I got this idea from 37signals, an innovative web software firm. Their principle is to create something that is useful to you. If it is useful to you, then there are probably many other people that will find it useful.

In the past, 37signals did web design work for clients. They looked for a project management app to help them manage their projects and clients. They couldn’t find anything that met their needs, so they built their own program. Their clients loved the program and wondered if they could buy it for their own business. Out of this situation, 37signals was able to leave client work behind and start developing and selling web software.

Find Out the Unmet Needs

One of the best ways to build a viable business to meet the unmet needs of a community. If you research a niche deep enough, you’re bound to find some unmet needs.
Spend some time browsing through forums, Yahoo Answers, Twitter, blogs, and other online social media hangouts. Take in the conversation and see which questions keep coming up. If you can answer those questions in an effective manner or provide a solution, you will create a lot of value.

For example, I manage an online degree site called The Best Degrees. I found the most popular higher education forums and lurked in the online degree sections for a couple of days.

I soon learned that many people were looking for a list of online degrees for different areas of study. While the online degree industry is a fast-growing market, I had not found any sites that list out all the possible options for degrees in a specific field. In other words, there seemed to be a great need for a comprehensive online degree directory. Also, the forum members were looking for colleges with low tuition rates.

Therefore, my team and I are creating an online degree directory and ranking the degrees based on price. We hope to meet the needs of prospective online students who want to see all their options for schooling and who don’t want to pay a lot for an online education.

Combine Multiple Ideas

I found out about this principle from Brian Clark’s excellent post, The Content Crossroads: Supernatural Success at the Intersection of Ideas. In this post, Brian talked about how innovation can come from combining different ideas and concepts – even the ones that may seem unrelated at first glance. By making these connections, you can create an effective POD.

Consider The Personal MBA. Josh Kaufman, the owner of the site, took the MBA degree and turned it on its head. He realized the return of investment for MBA programs was becoming questionable because of the inflated tuition costs. Therefore, he created a much cheaper alternative. He combined the book reading list with self improvement, personal finance, higher education, and business to create a do-it-yourself program that allows you to gain a top-notch business education without setting foot in a classroom. His site gets a lot of traffic and he’s releasing a book at the end of the year.

The movie and startup industries are a great place to look for examples of good combinations. I got the following examples from Made to Stick, Lightspeed Venture Partners Blog, and Venture Hacks:

  • Speed = Die Hard + bus
  • Alien = Jaws + spaceship
  • Hotel Rwanda = Schindler√≠s List + Rwanda
  • Dogster = Friendster + dogs
  • YouTube = Flickr + video
  • Songbird = Firefox + media player
  • Grockit = massively multiplayer game + online learning

Now, making connections won’t automatically give you a good idea. You still have to evaluate your ideas and then implement the best ones well. But if you’re struggling to come up with fresh concepts, combining multiple things is a good way to fight creative droughts.

A simple way to apply this strategy is to look at what’s working in other niches and then apply the best ideas to your niche. Just make sure those ideas are not saturated in your industry.

For example, your niche may not have a social news aggregator like Digg. You could create a Digg clone and attract an audience of news sharers. Or maybe no one has started a private forum in your industry. You can corner the market by launching the first one and cater to people that want a community with a high signal-to-noise ratio.

Even the ubiquitous list post is not used very often in some niches. I was surprised to see that the top online degree sites did not have well-researched “top 10” lists. Therefore, I made lists a big part of The Best Degrees and they have become a solid revenue source.

Go Deeper

This method, which I also call “the brute force method,” is my favorite one because it’s very hard for your competitors to copy. Also, it greatly improves your business. However, it may take a lot of effort and time.

Basically, you develop so much knowledge about your domain that you can’t be ignored in your industry. In his book Talent is Overrated, Geoff Colvin researched the top performers in different industries and found that they were characterized by a deep knowledge base of their niche. On the other hand, the mediocre performers had much less knowedge.

Colvin argues that if you know a lot about a niche, you can create useful concepts and products that would be impossible for a non-expert to emulate. This may seem like common sense but still many people enter niches with only a beginner or intermediate level of expertise and wonder why they have low traffic. The make money online niche is a common example. You don’t have to look far to see that there is a huge knowledge gap between the top sites and the average ones. I’ve made a living online in the last three years, but I hestitate to jump into that industry because there are so many people that have much more expertise than me.

Developing an expert level knowledge base takes time. You will need to read extensively and gain a lot of experience. But for some of you, you may already have expert knowledge. For example, you have a music producing blog and back it up with years of experience as a music producer. Plus, you’ve read many books on the subject. By sharing your expertise, you can quickly stand out from the crowd and attract an audience.

If you don’t have the knowledge base, you will need to pay your dues and begin the process of learning and gaining experience. This takes time but it is a great investment that will pay off in the future.

If you can combine your knowledge with other skills, you can overcome the knowledge gap of your more experienced peers. I’m starting an info product business with one of my best friends in the construction industry. He’s only been in that space for five years. However, he has a bachelor’s degree in journalism and a master’s degree in education. We hope to gain an advantage by leveraging the skills he learned from college as well as my marketing skills.

In some niches, you don’t have to be a full-blown expert. The key is being ahead in expertise compared to most of the top sites in your niche. For instance, I don’t have that much knowledge about the online degree space even though I’ve learned a lot in the last couple of months. But most of the top sites in the space are surprisingly mediocre. They are filled with rehashed boring content.

My guess is those sites were created by people with marketing skills who just want to make money since higher education is a lucrative niche. However, they don’t seem to have the passion and expertise to produce compelling content. Therefore, I believe there is a lot of opportunity for growth as long as I continue to learn and grow in my understanding.

Over to You

What are some other ways to develop a POD? How have you developed a POD for your site?

If you’re struggling to create an effective POD, feel free to introduce your site in the comments and other readers and I can give feedback.

This is a guest post by Dee Barizo. He is a search specialist and an affiliate marketer based in Texas. His latest project is The Best Degrees, an education site about the top online degrees based on quality and price.