Don't Be Better than the Competition
Saturday, June 7, 2008 at 05:56PM Last week I was visiting with a customer, an online seller of branded sports apparel. Someone in the meeting noted that when speaking of the competition she completely ignored other brands, focusing on the other channels selling her product.
We asked why and and she said "The gap between [her brand] and its potential is far greater than the gap between [her brand] and it's competitors." I thought that so well encapsulated my feelings about dealing with the competition that I would share it here.
Competitive analysis is a standard product management task and necessary sometimes. Sales people and prospects ask for feature comparisons. And when your product is closely comparable to another or when you are the discount brand, checklists can be useful for positioning. In my experience, though, much greater market success comes form staking out your own territory.
Think about it this way: would you rather have a conversation with a prospect about whether your feature list is longer than the competition's or about the benefits the prospect will derive from your product? Which of those conversations would allow you to charge more? If you're concentrating on market needs rather than competitive checklists, you have a chance at that second, more profitable conversation.
Similarly, would you rather spend your development efforts on duplicating the competition's every feature so you can say "yes" when asked if you have it, or would you rather concentrate on building the features that will solve your customers' problems? I'd much rather be thought of as great than as just better than someone else.
Building value that responds to market need puts you in partnership with your customers. They come to you to solve their problems. Getting into a checklist war with your competitors just invites your customer to look at you and the competition in the same way - to hold you both arm's length.
So don't be better than the competition. Be great.
Reader Comments (6)
Recently I was at a piano competition with my fiancée, who is a professional piano teacher. The competition rules allow for no first place, or any place for that matter, to be awarded. It isn't a competition to beat the other participants but rather a competition against a standard. In effect, could they take their product (the piece being performed) to its potential?
I very much like the idea of working toward my potential and not just to beat the competition.
To focus on your competition is to lose focus on your customer. In the technology adoption lifecycle, there is only one market where the focus on your competitors is useful. Everywhere else it is a trap. You actually have to do it and once you're hooked, you have to quit.
Your competition will not be in the same place as you are in the market. So following your competitor might mean facing backwards.
If you are the market leader, lead. If you are the technology leader, lead there. If you are anyone else, follow the leader. The market leader defined the category, the necessary to play features and benefits.
The market leader will be following the customer with an eye towards consuming 50% of their market cap. Their market cap isn't yours. Yours might show up sooner than theirs. The market cap drives the need to lead the customer.
When you sell, you sell value, not features. To understand and justify the value you are selling, you classify your features into a collection of points of difference, points of parity, and points of contention.
Points of contention are those points where your claim of value does not match your customer's perception of the value. You will have to clarify your value proposition to increase the value so the point of contention becomes a point of difference.
If you focus on your competition, you will end up with points of parity. This will push you into a price-based sale. Price-based sales can kill your company.
Points of difference arise out of competitive comparisons, and out of vision or product leadership.
This classification system is relative to your next best compeitor. That competitor might be an aggregate, but not an average of the competitors in your market. It is also relative to the prospects perceptions of value.
You might want to think of points of parity as being outsourceable. Architecturally, you'd put an adapter pattern between each of them and your application. Move points of parity to your complementors, so you can stay focused on points of difference.
Vision and strategy are different. Strategy is a forecast from where you are today. Strategy is linear. Vision moves the target from the linear, and thus pulls an organization in a different direction. Vision is nonlinear. Vision is disruptive. Vision changes your organization.
You can find points of difference in both vision and strategy.
Bruce, it's been WAY too long since I've stopped by your blog, but I'm glad I did. This post is just amazing and I wish I'd seen it earlier as it hits on the exact point I've been trying to make at my company for a few months now. Really inspirational. Time for me to add User Driven back to my RSS reader.
Bruce, thanks for the great post! I'm glad I came across your blog and look forward to receiving updates via RSS. Cheers! -Brad
Differentiated customer VALUE will always win out on a purely differentiated feature basis. Know your customers, what they want, and how you can provide more value to them. For product managers or product marketers, features come secondary in consideration, so I love this post!
Cheers,
Justin