“If only we had something like theirs to offer, we could sell a lot more…”.

If you work in Marketing in a B2B product company, you probably hear a similar sentence in every quarterly and annual business review. Usually this comes from Sales, although I remember hearing it from Product people as well.

Sometimes they are right. Your product may be lagging the competition in a certain aspect. Maybe it’s time to address it and close the gap. But as a marketer you view it from a different angle: “How can we differentiate our product, rather than make it similar to others?”.

Product differentiation is the key to answering the ultimate customer question: “Why should I buy from YOU?”. According to Carrol M Kopp on Investopedia:

“Successful product differentiation involves identifying and communicating the unique qualities of a company’s offerings while highlighting the distinct differences between those offerings and others on the market.”

In practice there are many ways tech companies differentiate their products. I sat down to recall some of the best practices that I encountered while working in the marketing trenches of B2B companies in various industries.

1. Emphasize ease of deployment and common usage

It is difficult to keep it simple. Take Apple for example. We admire simplicity, yet most companies continue to launch products that are complicated to deploy and use, as articulated in this blog by George Brooks.

If you are lucky enough to work in a company that figured out and mastered simplicity your job as a marketer becomes a lot easier. I spent four years in the videoconferencing industry during the previous decade, and although the industry has seen significant advancements over two decades, only in recent years Zoom succeeded in finding the holy grail. They made videoconferencing easy to use, affordable, high quality, and interoperable with all common end points including mobile. This is why Zoom’s recent phenomenal growth since the pandemic outbreak hasn’t surprised me.

Still, companies like Zoom are the outliers. Many of us in B2B Marketing are dealing with complex technologies and products that include lots of features and options. When this is the case, what you can do is identify the most popular features and options in use by customers. In some companies you can find it through available data. In other companies you must do the leg work among users, or talk to people in your company who are working closely with customers. Then you can focus your product marketing on demonstrating ease of deployment and usage of these most popular features/options.

Sure, some customers need and use your advanced complex features and Marketing needs to address them as well. But unless these advanced users bring unusually high revenue, it is better to put an emphasis on the benefits gained by the most common usage.

2. Map your competition from the customers’ point of view

Who are your competitors?

Sounds like an easy question. Ask any marketer, product manager, salesperson or executive in a given company – and most of them will identify their company’s direct competitors. These are the companies that offer products that are similar to yours or at least from the same category.

In fact, you need to look at it from a wider perspective. Do your customers have to buy a product from your product’s category and cannot do without it? If it is a must, then your direct competitors are the only competition you face. But very often this is not the case – it’s not a must, and your customers have at least two more options: one is to sit on the fence – not buy anything; the other is to use the same budget to buy something completely different from another category that answers other needs.

For example, let’s say you sell cloud data storage solutions for enterprises. You compete on the enterprise IT budget. But the enterprise’s CIO can decide that the IT budget should be spent on other types of solutions such as cyber security, servers or AI solutions. These are indirect competitors because they compete with your product on the same budget.

What can you do to address indirect competition and customers sitting on the fence? You first need to prove the customers’ need for a product from your category. Your messaging needs to establish the pain-need case and the priority to fix it before pitching your product as a solution.

How do you know a company isn’t there yet? They dive straight to their product. In every company I worked with at least some of the competitors made this mistake. If you do it right, it helps you stand out.

3. Tailor your value to the customer

In most B2B companies the sales enablement material created by Marketing is built to address a wide range. Take for example product presentations. You get large decks that include almost everything to cover the main product capabilities for different types of customers.

In reality every customer is different, and there are different relevant audience within the customer. Some salespeople take a subset of the material that is most relevant and get along with it. Others struggle with tweaking the messaging to address their specific audience. These are the good cases, because sometimes they just take it as is and never change it, regardless of who they meet with.

I used to ask every sales person I met with at work to contact me whenever they felt our sales material did not fully address their audience for an upcoming customer meeting. Only a few of them took advantage of this offer. In those cases we worked together. We discussed who they intend to meet with, what are their specific problems, and what parts of our offering we want to showcase to address their problems.

In fact, this practice is supported by research. Tom Pisello from Evolved Selling Institute describes it is his article “How to Differentiate? Research says to Leverage a Business Value Approach”. He describes a recent survey done by Forrester Research, asking buyers an open-ended question: What most differentiates a vendor or supplier from their competition? The responses were grouped and sorted manually into categories. These are the top three:

28% – The ability to match relevant capabilities to specific problems

26% – Being prepared on my business, my role and what is valuable to me

14% – The economic value and/or capabilities of the offering

The numbers speak for themselves. If you want to differentiate you need to adopt a business value approach and address the unique problems of your customer. It required extra work and effort, sometimes in short notice, with no guarantee for success. It is also not scalable, you cannot do it for every customer. But this is part of what it takes to win more deals, especially in product categories with long sales cycle.

4. Market service as a competitive advantage

In tech companies that develop and sell products – products get the limelight. Yet even in a product company, service can become your competitive edge. It almost goes without saying with regards to Customer Support. But what I’m talking about here is Professional Services (PS). Not all companies have PS in their business model and go-to-market. But if you have a mix of product-service model, good PS is one of the things that will set you apart from the competition.

Michael Skok, Venture Partner at Harvard Business School, talks about this in detail in his article:  Services as a Competitive Advantage: 7 Golden Nuggets and 7 Deadly Sins to Get You Thinking.

That article was intended for startups, but most of the points are also valid for more established and larger companies. In short, PS makes the most valuable difference in the post-sale implementation. It ensures your customers continue to get repeat success and scale of the initial deployment, and increases the customers’ Life Cycle Value (LCV).

From a marketing point of view this is something worth noticing and acting upon. From my experience, the natural tendency in Marketing is to focus on the PRODUCT and undermine the SERVICE. Why? Because usually Marketing teams work closely with Product and Sales. Product managers are focused on product releases, and Sales teams try to close the sale of products to new customers. But good CMOs and Product Marketers know that Professional Services are a key to product updates, service renewals, upsells, and long-term customer satisfaction.

PS teams spend more time with the customers than anyone else in your company, including Sales. As a result, connecting between Marketing and PS people – Project Managers, Engineers – can yield great marketing material. Think of customer reference stories, real product use cases, application notes and demo videos. These are all proofs of your product’s continuous value to customers. It is something that your competitors will need to work hard to produce, if they can at all. In addition, if a significant portion of your company’s revenue comes from PS, Marketing should create dedicated PS material.

5. Use radar charts and short comparison tables

Marketing and Sales people are trained to put the attention on the company’s products and their positive value for the customer. They avoid mentioning the competition unless the customer brings it up. In reality every product has pros and cons. When you face direct competition with similar products, your Sales people need relevant ammunition to fight and win the battle.

This is the reason many Marketing and Product teams spend time and effort on competitive analysis. The expectation is to produce competitive presentations and battle cards. It’s always a good idea to know the enemy and be prepared. But there are two problems with doing that:

• Creating and updating the competitive material takes significant resources.
• The competitive presentations and battle cards are tagged as Confidential/Internal. Therefore, they cannot be shared with customers and partners.

Instead, what I found to be effective are two visual competitive tools. If you have done your competitive research homework, they are relatively simple to develop and update. They can be shared with partners and customers, and they create a memorable impact.

a)     Radar Chart

The purpose of radar charts is to stir the conversation towards the sweet spots. The sweet spots are the areas that customers care about and where your products have a clear advantage over the competition. To create a radar chart you choose only a few product attributes and capabilities – usually five or six. You mark your product from 0 to 5 in relation to each attribute . Then you do same for each competing product. You get a table that looks like this:

Once you have this table it is easy to create the radar chart in Excel. You can read How to create a radar chart in Excel, written by Allan Murray. The result may look like this:

It is a good idea to create two versions of the diagram: One with “Competitor A/B/C…” in the legend; another with the Competitors’ real names. The first can be shared externally. You can present the second when you know who you compete with on a deal.

What it comes to show is that your product’s radar coverage is larger, meaning it is superior to the competition in the context of these attributes.

b) Short comparison table

Some people prefer to see the comparison of main attributes in a table format. For these cases I tend to go with a short and simple table format. It uses graphic icons instead of numbers and text. It may look like this:

The green/red icons are Yes/No – do they have it or not. The black/white circle is the parallel of the 0-5 marks in the radar chart, showing just how good of a coverage it has in each attribute/feature.

Obviously both the radar chart and the comparison table are subjective, not objective. YOU choose which attributes to put there and YOU give the marks based on your perspective and knowledge. The customer knows it of course. But Sales people still love it because it helps them stir the conversation towards your strengths. Keep it short and memorable and do it wisely. For example, give your competitors a few good marks in one or two attributes where they truly deserve it. It increases the impact ss long as your product comes out on top in total.

Summary

Product differentiation is necessary to address the question “Why should I buy from YOU?”. B2B Marketing teams in tech companies differentiate their products in many ways.

These are some of the best ways I encountered in practice:

1.      Emphasize ease of deployment and common usage

2.      Map your competition from the customers’ point of view

3.      Tailor your value to the customer

4.      Market service as a competitive advantage

5.      Use radar charts and short comparison tables