Startup Messaging: Should You Differentiate Against Your Competitors?

Startup Messaging: Should You Differentiate Against Your Competitors?

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: Take into consideration what the customer already knows about the market Highlight how your solution is better than what prospects perceive to be alternatives Be focused on value (not features) Diving into each of these – here are some things to consider: 1/ Test...

Are You Ignoring Half of Your Sales Funnel?

Some days I feel like there are two types of B2B companies: those that only worry about their sales funnel and those that only worry about their marketing funnel.  Ideally these need to be tracked as one integrated pipeline. The Back End Camp: It’s all about selling Most of your classic B2B software companies selling big ticket items would fall into this camp.  These folks will have weekly pipeline reviews with every single sales rep in the organization religiously and could tell you at any moment of the day exactly what the monthly forecast is.  Interestingly, these types of organizations rarely spend much time on the front of the funnel – i.e. what’s happing with prospects and leads, the exact things that ultimately become opportunities that end up in that glorious pipeline.  In these organizations, “sales is everything” and what happens to create opportunities isn’t nearly as important as what happens after the opportunity has been created.  These companies generally have a good grip on short-term revenue forecasting but longer term trends sometimes catch them by surprise. The Front End Camp: It’s all about marketing These are more new-school companies that are well-schooled in in-bound marketing tactics but usually do some out-bound stuff as well.  Just like the folks in the above group can tell you exactly what the monthly sales forecast is, these folks can tell you exactly how many hits the website is getting, their email open rates, their conversion rates from visitors to sign-ups, etc.  Where there is zero direct sales involvement (i.e. low dollar value deals where the entire transaction takes place online without interaction...

Marketing ROI: 5 Reasons You Aren’t Measuring it

AMR published a study of marketers in North America that showed that only 50% of marketers formally analyze metrics to judge ROI.  To me that’s a stunning statistic.  Only 50%!?  I’m a bit of a numbers nut, I’ll admit it.  I blame my engineering background.  But seriously, half of the marketers out there aren’t tracking any metrics to determine what’s working and what isn’t? I got thinking about it.  Why wouldn’t you want to measure any metrics to track ROI?  Here’s what I came up with: 1/ You don’t want to spoil the purity of your artistic vision with all of those icky “numbers” – Some days I wish I was an artist and I didn’t have to worry about pesky things like revenue and profit and feeding my children, so I could just concentrate on the beautiful-ness of my lovely marketing. Yeah, OK, no I don’t. 2/ You don’t think it can be measured – I hear this one a lot and frankly I just don’t understand it. Yeah, OK, there might be the odd small thing you are doing that you can’t track but seriously people – you’re driving people to your website, don’t you care how many convert?  You’re trying to get folks to call you, doesn’t it matter how many of them actually buy?  You are running specials and promotions, but you don’t care how many take you up on them? 3/ Your executive team never asked you to measure it – This might be a good reason except that one day you’ll get a new CEO who asks where your metrics are and you...

Startups: 10 Reasons Customers Won’t Switch to Your Product

It’s easy for startups to fall into the trap of thinking that customers will switch when given the option of a clearly superior product.  The problem is that switching is often much harder for customers than startups realize.  Having a clearly better product is only one piece of the puzzle. Here are 10 reasons customers won’t switch to your product even though they understand the value of it: Migrating from the existing product is too expensive/time consuming – I put off migrating this blog from Typepad to WordPress for 6 months because I didn’t have the time to do it.  How much better would a photo sharing site have to be to get you to move your stuff off of flickr? I spent years marketing databases and data integration products.  If you want to give an enterprise IT guy a heart attack, tell him you need to migrate a gig or so of data from one platform to another. Skills – It took your potential customers a while to learn to use the stuff they have today and even if your product is much easier to use, the time investment required (even it it’s just their guess of what it might take) to learn it might be enough to turn customers off. Enterprise lock-in – Startups underestimate the power of an enterprise license agreement to stop even a small department from choosing to use a different tool from the corporate standard.  You may be able to fly in under the radar of a CIO that’s standardized on Microsoft or Oracle or IBM in a small department but the moment...

Selling vs. Buying: A Marketing Wake-up Call

Last week I posted a New Marketing Framework which sparked a set of interesting conversations about how marketing is changing.  I believe that marketing needs to shift its focus from selling to helping customers buy and product marketing has a big role to play. The categories of marketing we’ve used traditionally have been very focused on “selling”.  The big 4 marketing groups-Branding, PR, Communications, and Product Marketing, reflect this inside-out, sales-oriented thinking.  Even at startups traditionally “marketing” has meant communications.  PR was outsourced to an agency and product marketing was assigned to product management where it was generally ignored.  Helping customers buy has not been a major focus for marketing. The world has changed a lot, particularly around how customers discover and evaluate products.  The result is a big shift in control of the sales process toward prospects and away from companies. For this reason marketing now has to shift from selling toward helping customers buy.  Here’s what’s changed: We don’t believe advertising (in fact we don’t believe much of anything companies tell us)- There was a time when if a company said they the best at something, we believed it.  But those claims weren’t always true so now we don’t believe what companies tell us anymore. Customers can broadcast to the world – They might be happy, they might be upset but they now have a way to broadcast their stories without going through any media gate-keepers. Prospects can easily communicate with each other – Before, during and after the sales cycle, potential customers can ask each other questions and learn about your offerings and your company in...

Top 5 Customer Retention Marketing Tactics

The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20% (from Marketing Metrics).  Research also shows that a 10% increase in customer retention results in a 30% increase in the value of the company (from Bain and Co.)  Anyone working at a SaaS business knows that churn and customer renewals are critical metrics for the business.  Yet, many marketing plans are so focused on customer acquisition that they largely ignore customer retention. (note: I did a more recent post on this topic here: Customer Retention: 7 Ideas for Marketers) Here are some ideas to help you kick-start your customer retention marketing: Regular Communication with Customized Content and Special Offers – This is the cornerstone of any good customer retention program and careful attention should be paid here.  Most companies have some sort of newsletter to communicate with existing customers but fewer are actively making offers to their current install base that are customized according to what is already known about the customer.  This can be as simple as offering an upgrade at a special price to tiered discounts or preferred access to support or other resources. Customer service – Poor customer service accounts for 70% of customer loss.  Marketing should take that number very seriously and work with the support team to deliver content that can help service folks do their job.  In my experience many thorny customer service issues stem from a mismatch between the offering functionality and customer expectations.  Marketing can create content that can set customer expectations for functionality and performance to make sure there is...
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