Competing for customers
Hi, I’m James. Thanks for checking out Building Momentum: a newsletter to help startup founders and marketers accelerate SaaS growth through product marketing.
In SaaS, we compete against alternative solutions every day. They might be your mainstream competitors, niche providers, bums-in-seats, agencies, outsourcers, in-house technology, or any other number of categories.
One of the questions I get asked a lot is, where do competitors fit into the positioning process? Shouldn’t we evaluate our competitors and their messaging early on, to make sure we differentiate? But also so we can steal things from them? What are they doing that we should be doing? How do we stand out against them?
However, my belief is that we should reframe the narrative away from competing against providers, to competing for customers. The onus should be on understanding our customer and building the process to win them.
In this post:
Competitors in the positioning process
The positioning process I’ve developed – that I call Customer-Led Value Positioning – starts with who your customer is.
The reason for this? As we know, the definition of positioning is “to occupy a space in your customer’s mind”. How are you going to do that if you don’t know what else is going on in their head? Key to this is understanding their broader mindspace – their personal, professional, and business responsibilities.
Competitors in positioning become more interesting when you think about the alternative solutions customers use to meet their needs.
In my persona research template, we ask how interviewees have attempted to solve their challenges before. Often, answers to these do include competing products – but sometimes a whole host of other ways people have tried to overcome their pain-points.
By using the alternative solutions your customer is thinking about as a starting point, we’re already focusing on a much more niche and actionable set of insights than just ‘other products in a broad vendor-defined category’.
And then as we go through the positioning process and understand the value our customers are seeking, we look to competitive differentiators. Often, these are features that only we can provide – but as you’ll see in the linked post, the higher up the B2B elements of value pyramid, the more valuable attributes are intangible and experiential.
So if we are:
Starting with our customers and the solutions they have in mind
Understanding exactly what our customers want
Determining how we differentiate with a mixture of tangible and intangible attributes
… then why do we need to think about competitive positioning?
Play offense and defense
At multiple points through the buying journey, our customers make multiple choices that depend if our product will be part of their final evaluation set, where they actively consider our solution against others with a purchase in mind.
But our competitive positioning needs to start way before the evaluation phase. We need to stand out and influence our customer’s thought process, to position our product as a must-have, and others as second-rate solutions.
We can do this through content and through awareness-level tactics, but it needs to be baked into your positioning.
Tip: if you haven’t already, create an eBook on “What to consider when evaluating [category] solutions” right now.
And when we get to the evaluation stage, we need to proactively and reactively message within the competitive context, as well as focusing on the broader customer value and how we meet their tangible needs.
Especially in sales conversations, we need to be playing two games against our competitors all the time:
Offense: Proactively detailing where competitors fall down, how we’re better suited to the customer’s needs, and why our value is more important to the customer than that offered by others
Defense: Predicting the attacks that competitors might make, explaining the reasoning behind those attacks (whether rooted in reality or in wishful thinking), and reshaping the customer’s idea of what’s important
Competitive messaging
These games need to be played in the language of our customers, in the context of what’s valuable to them – all based on our understanding of their jobs, pains, gains, and triggers, and the resulting value they hope to achieve.
Your top-of-funnel positioning needs to speak directly to the needs of your customer, subconsciously setting the scene to help your potential customers understand the landscape.
This doesn’t mean using phrasing like “the only all-in-one solution”. Can you message that differentiation with more context instead?
This is where unconventional wisdom really comes into play. What is the revelation that only you have foreseen and understood? What elements of value are you uniquely positioned to play and own, and why? What does the customer want to achieve that can only be achieved effectively and successfully when working with you?
Example
I worked with Shipamax, a SaaS machine learning tech startup to update their positioning. We discovered that buyers valued flexibility to run multiple processes with different types of documents through one provider. And that competing solutions were inflexible, requiring a lot of manual setup to process new types of documents. And so we landed on our tagline:
At last, deliver data entry automation across your entire business.
This spoke not only to what the customer valued, but how they differentiated in the market.
Competitive positioning
I think we should move away from a narrow approach to competitors, and embrace a more open approach that focuses on who our customers are, and what they’re trying to achieve.
From there, it’s easier to understand the alternative solutions they might consider so we can proactively position our value and competitive differentiators to influence the customer.
Then, we can play offense and defense against competitors in marketing and sales conversations, and even in how we set and execute product and business strategy.
Let’s stop competing against providers, and compete for customers instead.
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