Outbound Wiki

Competitive differentiation

Explaining the meaningful difference between an offer and the alternatives a buyer could choose.

Competitive differentiation starts with the buyer's choice. Map the alternatives the buyer can keep, then connect your difference to what changes in the buyer's work or risk. Many forms of differentiation give buyers information without changing how they think about the decision.1 Strong differentiation shifts the focus from the seller to the buyer and asks, "What changes for this buyer because of the difference we make?"2

Map the alternatives

Build the comparison around the full decision the buyer can make today. That gives you a field to investigate before writing any positioning.

A buyer's alternatives include competing vendors and the status quo processes already in use.3 Identify the common alternatives, find their gaps, and position your value proposition around how you fill those gaps.4

Ask what the buyer uses today, what they have considered, and what they would do if they changed nothing. Listen for the process they would keep, since it can block a deal as easily as a named vendor. The map is ready when you can describe each alternative in the buyer's terms and say where it falls short.

Find a defensible difference

A useful differentiator has to survive comparison. Test each proposed difference against the problem the buyer is trying to solve.

A defensible differentiator is something a competitor cannot do that you know matters to solving the problem.5 Start your internal work by asking, "What are our defensible product differentiators?"6 Then ask, "What about our offer will really help us differentiate and make it harder for others to imitate?"7

Map each differentiator to the part of the buyer's process where it applies.8 If you cannot say where the difference changes the work, keep investigating. Each difference should have a clear problem, a clear point of application, and a reason the buyer should care.

Turn the difference into buyer change

A difference becomes useful in a call when the buyer can attach it to a consequence. Translate the product language into the way the buyer evaluates value and risk.

Winning against difficult competitors requires understanding what the buyer values, how the buyer defines risk, and why the difference between options justifies action.9 Connect your differentiators to the buyer's strategic and financial priorities.10 Ask, "What's the perceived value in that vendor versus yourselves?"11

Ask what would change if your approach replaced the current one, and keep listening until the buyer describes the consequence in their own language. If the buyer cannot see why the new result improves on the existing process, explain the problems in that current solution before describing the benefit.12

Teach during discovery

Discovery lets you make the comparison useful before the buyer reduces it to a feature list. Bring a point of view the buyer can apply to their own process.

Differentiate by teaching during discovery because competitors ask similar questions.13 Spend as much time researching what you can teach as you spend preparing your questions.14 Describe competitive differences using the terms customers use.15

Tie the teaching to the differentiator you mapped earlier. Explain enough of the approach for the buyer to remember why it matters. Differentiation helps make the seller memorable.16 The comparison is working when the buyer starts using your language to describe the problem or the choice.

Handle a feature gap

A feature objection tells you that the buyer is comparing approaches. Find out what the feature is meant to accomplish before defending what you have.

A prospect may say that a competitor has a feature your offer lacks.17 Ask what outcome the feature would support and how the buyer would judge success. Explain why the company invested its differentiation elsewhere and why that choice benefits the buyer.18 You can also explain that your approach accomplishes the goal in a different way.19

Feature parity across every competitor is unnecessary when you connect your differentiators to customer priorities more effectively.20 The buyer should be able to evaluate the goal, the risk, and the result of each approach instead of comparing feature names alone.

Compare choices before price

Once the buyer has a comparison they can use, make the added value explicit. A claim about being different has to become a reason to choose.

Ask the buyer to share the competing proposal so you can compare the offers on an apples to apples basis.21 Work out the additional value your offer provides above the competition.22 If the buyer rejects the lower priced competitor, determine how much more value your offer provides.23

Present differentiated options so the buyer has to make a tradeoff based on their priorities.24 Keep the discussion anchored to the change the buyer said they wanted. The buyer should be able to explain what the extra value buys them and which priority drove the choice.

Make the conversation carry the difference

The product starts the comparison, and the sale can decide it. Treat the way you explain the difference as part of the offer the buyer is evaluating.

When a buyer sees solutions as fairly equal, the quality of the selling becomes the differentiator.25 Clearly explain the specific differentiators in the competitive situation.26 Use the buyer's stated problem and priorities to choose the detail you give them. A clear explanation should help the buyer repeat the difference to another person without your help.

What not to do

These mistakes leave the buyer to perform the comparison alone. Remove them from the call plan before you reach a competitive decision.

  • Do not assume the buyer will recognize that your benefits are better than the current solution. Explain the problems with that solution first.12
  • Do not turn differentiation into a catalogue of every feature. An effective value proposition stays easy to understand and explains what makes the offer unique.27
  • Do not enter negotiation before asking the buyer to confirm that you are the vendor of choice and explain why.28
  • Do not stop at competitor weaknesses. Build the case around buyer value, buyer defined risk, and why the difference justifies action.9

Tool for this

Turning your website into sales arguments

Intedat has a useful take on this step. You give it your website and it reads it into a profile: what you do and for whom, your services, pricing model, certifications, references, what sets you apart and the easy first step you offer. The intro emails, the follow-up and the call script are then written from that profile, so they read like your business, and you edit them before anything goes out.

Open Intedat

Sources

  1. 1
    “The problem is that many forms of differentiation give buyers information without changing how they think about the decision.”
  2. 2
    “Strong differentiation shifts the focus from the seller to the buyer. The question isn’t, “How are we different?” It’s, “What changes for this buyer because of the difference we make?””
  3. 3
    “In other words, your competitors are not only the competing vendors/service providers in your market, but also the “status quo” processes that your prospects are using.”
  4. 4
    “It’s your job to figure out what the most common competitors are. So you can highlight its gaps, and position your value proposition around how you fill in those gaps.”
  5. 5
    “a defensible differentiator. So something I know that 15.5 or CultureAmp can't do that”
  6. 6
    “And so we start with what are our defensible product differentiators?”
    Hall of Fame: Chase Macaione

    30 Minutes to President's ClubBack to the text

  7. 7
    “What about our offer will really help us differentiate and make it harder for others to imitate?”
  8. 8
    “You should be very innately aware of where your specific differentiators apply to each part of that process.”
  9. 9
    “Winning against difficult competitors requires more than knowing a competitor’s weaknesses. Sellers need to understand what the buyer values, how the buyer defines risk, and why the difference between options matters enough to act.”
  10. 10
    “Winning against competitors requires sellers to connect differentiation to the buyer’s strategic and financial priorities.”
  11. 11
    “What's the perceived value in that vendor versus yourselves?”
  12. 12
    “four washes, you don't realize that any of those benefits are any better than your current solution.”
    Sell Playbook: Value Propositions on Cold Calls

    30 Minutes to President's ClubBack to the text

  13. 13
    “Number two is differentiate by teaching in discovery. Your competitors are asking almost”
  14. 14
    “a competitive advantage. So my advice is spend just as much time researching what you can teach”
  15. 15
    “one, speak in the terms of what your customers see,”
  16. 16
    “And so you really have to get into the differentiation pieces because that's what's going to make them be memorable.”
    How to Run Demos That Actually Convert | Alex Kane

    30 Minutes to President's ClubBack to the text

  17. 17
    “When someone says, your competitor has this feature, but you don't,”
  18. 18
    “reason why we invested our differentiation here. And here's why it's going to be a win for you.”
  19. 19
    “We just have a different way of doing it.”
  20. 20
    “Like, that's fine. I don't need to offer feature parity to everybody. I just need to be better at”
  21. 21
    “the competitor's proposal with you so that you can truly compare apples to apples.”
  22. 22
    “what is the additional value that we're bringing above the competition.”
    How To Become Dangerously Good At Negotiation

    30 Minutes to President's ClubBack to the text

  23. 23
    “And now we say, okay, so then it's just a matter of figuring out how much more value”
    How To Become Dangerously Good At Negotiation

    30 Minutes to President's ClubBack to the text

  24. 24
    “Essentially what I'm doing is I'm just forcing them to make a trade-off based on what's most”
  25. 25
    “What you don't want to underestimate is the fact that when a buyer sees two solutions as fairly equal, the differentiator is how well you sell.”
  26. 26
    “Step number two is clearly explain this is where we're different, X, Y, and Z.”
  27. 27
    “It doesn't get into the details of every single feature, but it's easy to understand and gives us enough information to understand what makes Shopify unique.”
  28. 28
    “you is let me know that I'm your vendor of choice and tell me why I'm your vendor of choice. That”