Alex Goldfayn had a great post this week called Death by Differentiation that got me thinking about competitive positioning and startup marketing.  Alex, a marketing consultant, laments that many of his clients are too focused on differentiating themselves from their competitors:

These companies have focused their marketing on smaller, peripheral features which differentiate them from the competition. So that instead of focusing their message on the 80 percent of the product or service that speaks to mainstream consumer interest, they instead focus on the 10 percent that makes them different from competition, which mostly matters internally.

Thinking about how I would apply this thinking to startups, I found myself agreeing and disagreeing with the post.  On the one hand, I agree that vendors often care far more about tiny differentiating features than prospects do.  On the other hand, if all the solutions in a market deliver the same particular point of value, doesn’t that value become expected or assumed?  And (as is the case with many startups) if I’m entering a market with an established competitor, don’t I have to focus on what makes my offering different because my prospects will always be comparing us?

In my opinion, how you articulate your value to customers should describe what makes you better, it’s just not always in the way you might think. Your messaging needs to:

  1. Take into consideration what the customer already knows about the market
  2. Highlight how your solution is better than what prospects perceive to be alternatives
  3. Be focused on value (not features)

Diving into each of these – here are some things to consider:

1/ Test Your Assumptions (Don’t Assume Your Key Value Points are Already Known)

Alex makes this point in his post and he’s right – prospects don’t know your product (or your competitor’s product) the way you do.  Vendors often assume that customers are much more savvy about offerings on the market than they really are. You will have to get out and talk to a bunch of prospects to determine what points of value they assume everyone has, and which are things that they need to be educated on or haven’t really considered yet. Your focus should be on the latter.

2/ Know Who you Really Compete Against (the Competition Isn’t Always Your Competitors)

When the market is not very mature, often the products that offer solutions similar to what you do, aren’t really the main alternative in the eyes of the customers. For most startups “do nothing” is the toughest competition you will face and in those situations you need to articulate why prospects should consider buying your category of solution at all.  The difference between what you and your competitors deliver is pointless if the prospect decides that that she doesn’t need either of you! Often the biggest step toward winning is simply getting in the game. Positioning against your competitors in this case would be at best pointless, and at worst could be giving credibility to competitors that the prospect might otherwise not even be aware of.

3/ Focus on Value (Prospects Don’t Care About Features)

It’s natural for vendors to focus on the features we have that our competitors do not.  We focus a lot of time inside the company on designing, developing and delivering features.  For prospects however, features don’t matter in the slightest.  It’s the value that those features enable that’s important.  Focusing on that will automatically change the way you describe your product delivers in a way that answers the question “Why should prospects care?” Notice that we are asking why prospects care, not why your development team cares. Value is the reason you decided to deliver those features in the first place.

Competitors don’t always matter but competitive alternatives do and your marketing needs to address the value that you can deliver within that frame of reference.  That is not at all the same thing as focusing your messaging on the handful of features that you have that other vendors in your space do not.