I was recently pondering how effective an attempt at differentiation like this would work:
"You should choose us because we aren't like everybody else: we have terrible customer service."
Hey, at least there's an attempt to create a compelling differentiation in that statement. It certainly has a greater impact on the prospect then: "We're different because we have excellent quality and superb customer service." Oh really?
This problem, an inability to have a compelling message for the prospect, is rampant throughout the business world.
Here's an example from Dan McNicholl, CIO of General Motors, referring to IT VARs:
Don't attempt to offer every kind of solution to his organization or sound like any other solution provider, McNicholl says. Like most other CIOs, McNicholl says he's heard the same lines time and again. "We have the most innovative people; we have the most dependable methodologies; we have the most competitive prices. It's like a record after a while," he says. "None of them have created a reason, other than price, for me to choose them. Pick a dimension you want to compete on, and build your brand and focus on it. Otherwise, I'm going to pick you on price."
P.S. While my opener was meant as tongue-in-cheek, there is a restaurant, which sadly I can't track down the name of at the moment (yes, even via Google), that I recall reading about a bit back and is known for good food and absolutely horrendous service. It has turned the latter into their badge of honor (and which inspires word-of-mouth I'm sure). They intentionally make the service as horrible as possible because customers actually come to see if the stories are true (to be treated poorly). Customers would actually be disappointed if they didn't leave with a waiter telling them to "piss off", etc.
The point: The important part is that, whatever your compelling differentiation is, it ought not be half-ass or you risk diluting (and maybe even destroying) its effectiveness. It also needs to be congruent with what you actually are (and are not). It matters less what it actually is and more that it is real, noticeable, and intriguing.