On Differentiation

How do you differentiate your offering in a fiercely competitive market?

How do you demonstrate the difference that matters to your prospective customers?

As competition intensifies in your space, it gets harder to differentiate your product.

Unless you’ve got a defensible patent or copyright or trade secret, your competitors will be copying your features and functions as fast as you come up with them.

Particularly in the market for sophisticated software and technology products, customers may struggle to understand exactly what products do or how they work. When customers lack relevant expertise, your competitors can easily claim that their products do whatever yours do — “We’ve got a big data set. We’re fully interoperable. We do cutting-edge analytics.” And so on. Any “differentiators” you can list as bullets on a PowerPoint slide won’t set you apart from rivals who will simply cut and paste. Customers confused by competitive claims either go with gut instincts (which often work against you) or pull back.

In markets where you can’t definitively differentiate your products, the challenge is to differentiate the partnership you’re offering customers, to show customers some unique promise of working with you to solve their problems and grow their business.

Of course, you don’t prove the value of a partnership by talking about it. Your competitors will also claim to be “trusted advisors.” But customers judge a partnership by the experience they have working with you — and that work begins with your first sales call.

Customers listen for your perspective. Behind your marketing materials, features and functions, what do you know about their business and their challenges? They aren’t really interested in how your technology differs from your rivals’. They want to know how your approach to their problem can help them do business differently. So they wonder: How deeply and broadly do you understand the puzzle they’re trying to solve? Do you understand how they’ll actually use your solution and how it fits with their other solutions? Do you understand the goals and concerns of all the people affected?

It’s important to understand the point of view your competitors are bringing to customer conversations so you can tell customers, “We see it differently.”

More critically, can you offer insight, a fresh way of thinking about their problem, an aha! moment? This insight often comes in the form of a better question than the one the customer is asking, a question that reframes the problem and switches their point of view, a question that points at root causes or hidden connections or bigger issues. (Remember, if the customer were asking the right question, he would have already solved his problem.)

When the customer experiences insight in a conversation with you, when they’re digging beneath their current understanding to something deeper, they decide that you understand the puzzle better than they do. They begin to trust your judgment and see value in the partnership. They trust you with information that will help you build a value proposition and make a sale.

When you understand the problem and potential solutions better than your competitors do, you can have a conversation they can’t have — and that differentiates you.

A prospective customer is also trying to discern your guiding principles — how do you work with partners? How do you learn and innovate and create value? Seeing your principles in action helps them judge the promise of partnership.

Are you genuinely curious and interested in their business and in the puzzle they’re trying to solve? Again, it doesn’t really matter what you or your competitors say about your principles. The questions you ask and how you listen and what you do with the information they share shows customers how you do business. Genuine interest differentiates you from competitors who would rather do all the talking.

Are you empathetic and understanding? Do you get what they’re trying to do and why it’s hard? Do you really understand where they’re stuck and why they haven’t been able to solve the problem themselves and what it might take to get them over the hump? This ability to learn quickly and connect with their concerns will distinguish you from the crowd. It’s a critical differentiator in markets for complex software and technology solutions.

When you engage a customer with curiosity and empathy, when you’re humble and generous in conversation, you’re modeling an approach to consultation they can trust. They experience your respect for them and their expertise (after all, they know their business much better than you do) and your intention to create value in partnership. They see you giving them their rightful role in the partnership, and they will teach you how to sell to them.

Finally, you can differentiate yourself through your protocols and practices. You build trust by showing up reliably, by anticipating their questions and concerns and communicating clearly. A prospective client is always wondering: How easy would you be to work with?

So when a customer asks: How are you different from your competitors?

You could list the functions and features you think set you apart. Rest assured, your competitor will have the same bullets in her next sales presentation.

You could tell them that our data sets are more comprehensive and that our analytics based on better science. The customer will nod politely and glaze a bit.

You could tell the client how we work differently, how we really listen and respect them and want to be their trusted advisors. But talk is cheap and easy to copy.

Or, if the question comes after a conversation (or two) in which you’ve been curious and empathetic; if you’ve shown up reliably, humbly and generously; if you’ve asked questions that helped them get to deeper understanding of their puzzle and fresh insight; you might simply ask them: “What would you say? What difference have you seen?”