How to Turn a Competitor's Strength into a Weakness

Welcome to the positioning show where we discussed topics related to the practical application of positioning for marketing, sales, and product teams. I'm April Dunford, a consultant, author, and the world's leading expert on positioning for BAB technology companies. Welcome everybody to another edition of the positioning show. With me, April Dunford, hey, how's everybody? How are you doing? Great to be back. I've talked about this topic a little bit in my newsletter, but I thought it would be a fun one to talk about on the show with you folks today because I know you like to listen to things rather than necessarily read things. So I thought this would be a fun one to do. What I wanted to talk about is a concept that I used to talk about this in a conference talk. I used to have a conference talk called Marketing Jiu Jitsu and it was all about how to turn your competitor's strength into a weakness. Now, if you're listening to this and you actually do Jiu Jitsu and that's not what that is, hey, don't complain in the comments because they don't do martial arts. You know, I'm just kind of rolling with this. Anyways, it's all about how to turn your competitor's strength into weakness. I got thinking about this early in my career because a couple of times I worked at companies where we talked about a thing specifically as a strength and we pointed out the equivalent thing over at the competitor and we kind of made fun of them and said, look, we can do this and look at them. They suck at that. And this is our strength and that's their weakness. And then the funny thing is then we got acquired and it turned out for their customers, it was actually a strength and not a weakness. And I could think of two specific examples of this. One was we had a thing that really empowered end users. So there was this thing where IT was the bottleneck and we had a feature that allowed the end users to be able to get out a lot of data and do a lot of stuff without having to ask IT permission to do it. We were selling into line of business kind of end users and they loved it. And so we talked about all of this in this grade and with the other guys you'd have to go to IT and they would have to run a process for you and isn't that bad. And we beat the competitor a lot on that feature. And then what happened was we got acquired and it turned out our competitor never sold into the line of business. In fact, they were almost always selling into IT. And IT got really stressed out about products like ours and they were all worried about security and governance and what was going to happen with all this data. And so in the one market we were in, that was a real strength and the other thing was a weakness. But then when we flipped over to the other side, we were selling to IT. All of a sudden we never talked about that because IT people hated it. And in fact, the company we were competing against their big strength with the IT department was nobody could touch anything. You had full government governance over everything. Everybody had to come through IT and they loved the fact that IT was a bottleneck. So that was one. The other one was a case where we thought we competed against this big company, which was IBM. And we had this thing and we used to make fun of IBM's product because there was a drop-down menu that if you clicked on it, it had 59 things on it. And we used to make fun of IBM. We're like, isn't that a terrible user experience? Like you actually had to scroll on the drop-down thing. There were so many things. And ours was so elegant. It was really easy to learn and users loved it. And when you clicked on that drop-down menu, there was three, four choices. That was it. And so people, you know, really easy to use, easy to get up to speed, easy to learn the product. The other guys were just too complex, too many things going on, too much support for weird edge cases and things that users were never going to have to do. And we really thought that was an advantage to us. And then, yeah, then we got acquired. And so later on, I ended up at IBM. And I watched Sales Engineer do a demo of this exact same product, except the Sales Engineer was selling to very, very big companies and selling to a very senior technical person inside a very big company. And he clicked on the same drop-down menu and scrolled at it and said, look at that flexibility. Like this thing can do anything and you're not going to have to custom code it. It's all there. And the senior person went, wow, that's great. So, anyway, sometimes you've got this thing that you think is a real strength and maybe it is in a particular market, but it turns out in another market is maybe not so much of a strength. So, with that as my preamble, that's what I wanted to talk about today. So there's a handful of things. So, the first one is I want to talk about market leader versus challenger. So I spent about half my career working at little, little wee startups and the other half of my career working at these big multinational companies. And it's interesting how we would position in the two different cases. So in my opinion, being the market leader is always a position of true, true strength. And the main thing you've got going for you, if you're the market leader, is you're the safe choice. So you can look at lots of markets out there today where, you know, like, let's take Salesforce in the CRM space. They're very much a safe choice in that market. You could argue about whether or not they're the best product for every single segment, but if a customer comes and picks Salesforce, they're not, they're not going to get a lot of argument from other folks inside the company. And they can say, look at Salesforce, they're the leader in the market. They're bigger. They're more than double the market share of the other folks in the market. And you're just not going to get in trouble for picking Salesforce. Whereas if you're going to pick something that's not Salesforce, you've got to kind of make the case. If you're the market leader, this idea of you being the safe choice, the easy pick, if you are demonstrably the market leader, you should always make that claim because it's very, very strong against challenger brands or anybody else in the market. I've seen companies that are clear market leaders in their market and they don't actually use it to their advantage in their marketing. And I think you're missing a trick. Like if you're the market leader, you should claim market leadership. You should also defend market leadership against companies that might be growing. Maybe they're spending a lot of money on marketing and they're getting a lot of visibility in the market. They might start pretending that they're the leader in the market or making some noises. Like we're growing faster or we're nipping at their heels. You should vigorously defend your turf. If you watch Salesforce, I think they do a very, very good job of this of defending their market leadership in the places where they're leaders. So I think that's one thing. If your market leader, the strength of that is the safe choice, you should vigorously defend that. The other big advantage that a market leader has is they generally support the broadest numbers number of users and the broadest sets of use cases. And certain customers will like that. So if you've got a multinational company that wants to use you across regions and divisions and countries for a lot of different things, generally the market leader is better at that than a challenger. A challenger generally is stronger in a sub-sagment but can't do this broad case as much as the market leader can. So if you are the market leader and you serve this broader set of use cases, broader set of users and you can do that stuff, you should claim it, you should stake your claim to that. That's a real strength for you. Now interestingly, if you're not the market leader, that doesn't mean you're stuffed. There's lots of things that you can talk about that the market leader can't. And the most common thing is the market leader because they have to serve this broader market is generally kind of crap at serving the edge cases because they got to serve everybody. And so if I look at, so for example, again, if I come back to Salesforce and CRM, just because it's an easy example, as they moved up market and are now arguably the world's greatest enterprise CRM, you can see there be an opportunity to do that. And a little open space at the lower end of the market for a challenger to come in because there's a lot of frankly bloat there. There's a lot of features and functionalities that the low end of the market doesn't need. And this higher end of the market is much more attractive for Salesforce. There would also be all these specialized cases like certain verticals or certain types of customers would have needs in a CRM that it just wouldn't be worth it for Salesforce to build every little weird little feature that this weird little niche market needs. So there's an opportunity there then for you to come in and say, look, those guys are great, but not for you and trying to establish a beach head in a sub segment of the market. Position, the big guys as being general purpose and not specialized enough to meet the needs of a certain market. So I've talked about this example before, but early in my career I worked for a company where we very specifically focused on CRM for investment banks. At the time Salesforce didn't exist or when they did they were very small, but there was [BLANK_AUDIO] big company, which was the sales force of its time called Sebal, they were the general market leader, but we established a beachhead by going in and meeting the needs of this very specific niche market. And our plan was, once we had established ourselves there, we were going to branch out from that. And I think we did that very successfully and we managed to beat them even though they were much, much bigger than us, much more full featured than we were much more established, much safer choice outside of our niche market. But once we had two or three key accounts that were referenceable in there, we actually did a really good job of competing against them. Here's the other way you can fight back against the market leader and something for the market leader to think about is potentially a weakness, often what you'll see is these new companies come in and because they don't have the technical debt of the market leader which has been around for ages and has this big code base that they can't just whip in there and build new features every week and do a lot of things without potentially breaking things somewhere else. A challenger brand can often come in and out innovate the market leader and then in effect position the market leader as legacy or slow to adopt new technology. We often see this in markets when the leader gets so big and is serving so many spaces and the code base actually becomes so massive and it's so difficult for them to implement new things. Something really game changing will come out and then the leader simply cannot adopt that technology without having to blow up the whole code base and leave themselves open for somebody new to come in. If you're the market leader now you got to be careful about this and that's why you'll see some of the big established brands in the market right now are pouring a lot of money into AI for example because if there's a perception that they can't take advantage of all this cool new AI stuff that's coming down the pipe that's going to leave them open to a competitor that shows up and says look we can do all that stuff. They're the legacy thing where the new new AI infused whatever AI first thing and you can come and do that. We saw some of this in the shift to the cloud that there was things that were built specifically not for the cloud to run in a data center and then there was a shift to the cloud and the way you want to optimize something for the cloud is actually really different than the way you want to do it in house. You see competitors like for example snowflake coming in and saying we're a data warehouse for the cloud we're our country for this we do a bunch of things that frankly Oracle could not just reverse engineer their stuff to go do that in the same way we can and so we'll see this market movement. I think there's again positives and negatives to be in the market leader and I think if you're on one side of the other I think you can sort of do this to move to have leadership be a strength or a weakness depending on what you want to talk about. So that's the first one. Here's the second one that I see a lot is a company is selling an individual tool versus a suite of things together. Now in my experience there's advantages and disadvantages of being one or the other. So let's talk about that. So if you are a suite or a platform that's a bunch of things together there's a bunch of advantages to that. So first of all there's is the advantage of look right now you know if you've got individual tools you're going to buy each one of those tools from a different vendor and if and then you're going to have the work of integrating these things together. Now if something breaks so first of all I've got the hassle of purchasing you know these five separate things and they don't all work nice together and then I get the hassle of making them all work together and then what if something breaks oh no well I'm going to call one and they're going to blame it on the other guy and then I call someone else and they blame it on the other guys so I could make the case that having this thing be a platform or even a suite is way better than having to deal with individual piece parts. So if I was the platform of the suite I'd say look dealing with one vendor is easier you're going to have way fewer integration hassles if it's a true platform you might be able to get into the value of the platform so you know everything shares data everything shares contacts you do something here automatically knows what's happening over there. So there's a lot of good things that happen when this thing is truly a platform truly integrated all comes from one vendor that you're never going to get to if what you're doing is integrating a bunch of piece parts together. So if that's you and you're a suite or a platform I would lean into that because that's an advantage over somebody that's selling a piece part tool if you can get the customer to think about look this isn't just this one tool this is this whole thing you're trying to get a certain business process done wouldn't it make sense to buy all this stuff together if the if you are the platform vendor and you can widen out the aperture there and get your customer thinking bigger you can win against these individual tool players. Now if you're an individual tool all is not lost to worry there's lots of ways that you can win too. So so here's a handful of things to think about so often when you're up against a platform or even a suite not all the pieces are good man like this is all of them pieces there's always the you know the the the underserved not paid very much intention to crappy part of the suite and often you can come in and say yeah man you can get it all from one but what you're getting is not very good when it comes to this particular functionality. So if this is business critical are you really willing to adopt this thing which frankly kind of sucks. You know just so that you have one throat to choke if something goes wrong so so that's one thing to to point out like often tools vendors are really best to breed on this stuff and so you can come in and say look we eat sleep and breathe this thing this is feature number 259 for our competitors and if you really care about this you should come and get it from us because we know best practices we know how to do this stuff we you know you're going to get way more from us you're going to get from the other guy so that's the first thing it's you know it's it's some players and parts of the platform kind of suck. The second thing and a lot of vendors worry a lot of buyers worry about this is vendor lock in so I know when when I worked at IBM and we were selling a piece part things against vendors that were trying to sell you the whole stack this idea vendor lock in was very powerful we're like yeah yeah you can go with the other guys and they're going to sell you soup to nuts the whole thing all packaged up together but what happens if you want to replace one little piece of that you can't you're all locked in you're going to replace the whole thing and so now they got you do they give you a price increase what are you going to do now you're going to suck it up that's what you're going to do and so some we I found that big customers were often very worried about vendor lock in if they had smart buyers on the IT side a smart buyer on the IT side didn't want to put everything in one basket and they didn't like the idea of you know somebody like Oracle coming in and just selling them absolutely everything and so they would often bring in some piece part vendors just to keep things competitive and to make sure that they weren't getting jammed on the price for everything so there's that here's another thing it and often how a best to breed tool vendor comes in is you know the platform vendor is trying to get the customer to think about this problem in a bigger way often the tool vendor comes in and says look man you're you're not trying to solve all these problems right now you're just trying to solve this and if you just solve this is is going to be faster you come and buy us we're just going to solve this one point thing we're going to get it in we're going to get it integrated we're going to teach everybody how to use it in a way we go if you go for this whole platform thing well now you got all these piece parts this is way bigger change management the deployment is going to take you way longer it's going to be way harder for people learn how to use the tool because now they're not just changing one little thing or change of 15 things and so if you are the tool vendor in this case you can come in and say look deployments going to take longer adoption is going to take longer time to value with us is going to be way higher let's just solve this problem you worry about all those other problems with the other platform thing is going to solve and you can do that later so that's another thing where you can beat them and then kind of related to that is often deploying the whole bigger platform thing just ups the risk of the project and we know that psychologically in B2B perceived risk is a deal killer and so if the customer is worried about the risk of the project failing or the risk that users are not going to use the thing and you know it's not going to deliver the value it said it was going to deliver this broader definition of the project makes the risk of the project much much higher so you can come in and potentially say look we're not trying to forklift everything we're changing one little thing this is going to be fastest going to be easy and you know what the risk of this project going sideways is way way less than that's a reason to pick us. So that's the second thing if you're you know in this platform suite versus a single tool vendor you know it's funny about the tool thing I worked for this company a long time ago maybe 20 years ago and I had this boss and he really didn't want us to be a tool vendor we wanted to be a platform and so we we acquired a couple other little products and we put the things together we were in the process of building this platform but we were used to talking about our stuff as a tool and he used to do this thing that if you were in the meeting and you said all the thing was a tool and you used a word tool he would he would pound on the table and say we don't say that around here tools are for tools and now I can't say a tool without thinking that I'm really programmed but I'll tell you I've seen lots of companies that sell a point solution tool against a platform and do that very very successfully so tools are not always just for tools. Here's the last one that I see a lot which is we have a situation where we've got a competitor that is either given the thing away for free or has a free version or the competitor has this very very very low-cost thing and and we cost more and so you know how do we fight in both situations. So let's take the low-cost thing first like the you know the big advantage the low-cost thing is it's low cost man it's easy on the budget so I mean that's the obvious thing like if you chose them to do this you can talk about how it's easy on the budget whatever whatever often when these things are low-cost they're selling directly to end users and one of the big advantages they have is that the price point is it's it's free or very low cost and the end users can adopt the product without having to get manager approval. Sometimes this is a real strength in the market I worked with a company that sold the solution to higher education and they had always sold to administrators and that was their bread butter and their value prop was really oriented towards administrators and administrators love their stuff but the professors and teachers were the actual users of the product and they didn't always love it as much as the administrators because you know the product was really designed more for administrators having control over this stuff and at some point they had a competitor come in with a with a lower-cost thing and a thing that was free for the professor to start using and that was how they successfully broke into the market was appealing to this other going straight to the end user and just skipping the management level and going straight in and then having those end users sort of advocate internally for the thing to be adopted so I think that's something to think about if you're in the key you know if that's your if that's your motion you're the low-cost cheaper thing I would be thinking about it my selling into a different end user am I empowering a different champion in the deal and is that how I'm going to win over this thing. Now just because the thing is free doesn't mean we can't compete with it man and and I've had many situations back when I was in in-house VP marketing or we competed against something that was free or very low cost and we beat them so bad so there's a lot of things. First one is support sucks for free products man you can't afford to do support in a way that often a big enterprise wants and so if you're up against a free product you want to always have that discussion what happens when something goes wrong what happens when your end users need some help what happens when your manager needs some help like who's going to be there and if this thing you know if there's no support of the support for this thing you know there's no service level agreement for how fast you're going to get back or anything else and if this is mission critical at all you're going to want to actually pay some money to make sure we have some support so that's that's the first thing. The second thing kind of comes back to this point I was making on the first time that you know often we're talking about manager value versus end user value so I'm thinking about a situation where I worked in a company and we were selling against a product that had it was very product led growth motion and so they were they had a free thing that they had the end users adopt for free and then there were some paid add-on things that an end user could slap the company credit card down and pay for these extra things. We were not selling to end users at all we were selling the managers up above and and we came in and really nailed manager value versus end user value. Now in our opinion the thing was good for end users too and end users liked it but we didn't sell to them and it was not our business to sell to them. Our business was to go across go up up to the manager level and our value proposition was all about visibility and control did the managers know what we're what was going on could the managers control what was going on and the reality was when they had this it's wild west of end users doing individual things the answer was always no they didn't know who was using this thing and who wasn't uses this thing they had no visibility they had no way to control it so we often came in over the top and even though there was lots of end users that were using individual little point free things well we would just get rid of all of that and replace it with ours because those individual end users didn't have a lot of power in this deal the manager had a lot of power so we nailed the manager value and beat the free thing that was that had really nailed the end user value but hadn't really thought about the manager value at all. I think you see situations now especially with these product like growth companies where they managed to do both and I think that's super powerful you have the free thing comes in underneath and then you have a sales team that comes in over top and nails both if you can do that that's amazing and now you're guarding against both I've seen lots of situations where you know there's one company selling here one company selling here and it's a matter of you know who has power in the deal and who can make the deal happen but if you're fighting against this free thing down here and you know one of the ways you can do it is you can really nail this manager value and then the main thing I think you know free versus something that's more expensive even if you are serving the same buyers or the same users you know often the thing just delivers more value than the free thing does and so you often what you want to do is segment the market focus on the customers that really care about the value that they can get from this paid thing and not so much to ankle-biter clients that are just like you know what this thing isn't all that important us we don't care if it's really great we don't care if there's no support we're fine with the freebie thing and instead you're focused on a part of the market that is like look this is mission critical for our business we need support we need this extra value we need these extra features we needed to work in all these different ways that the free thing can't so you leave the bottom of the market to the free guys and you just don't compete down there you don't waste your time you don't have your sales reps trying to sell down there and you focus strictly on the part of the market where you can win regardless of the fact that you cost maybe ten times or or a bajillion times more than the free thing that happens to be out there that's it there's probably other ways that you can do it but that's those are the three things that I see a lot so that's all I got for you today hey thanks so much for listening this is kind of season three for me in this podcast which I find is kind of surprising I never really thought I would end up doing this podcast for so long if you're enjoying this podcast you know what I'd love I'd love if you left a review or left it a rating it's hard for people to know if people you know listen to podcasts or don't so you know if you're in the Apple podcast you could just smash the like button of the rating button that I would really appreciate it and I think it would help other people discover this podcast too anyways that's it for me today thanks so much I'll see you next time hey thanks so much for listening if you're listening to this podcast and you're thinking to yourself hey my company could you some help with positioning maybe we should talk so as a consultant I work with tech companies but very specifically B2B tech companies that have a sales team I don't really have a size requirement I work with very very large businesses but I also work with growth stage companies that are as small as 10 20 30 million revenue the work I do with companies is focused on getting a very tight definition of how you win in the market and then taking that and translating it into a really compelling story that clearly answers the question why pick you over the other guys if you're interested in learning about how we might work together you can visit aprildoneford.com/consulting thanks again for listening