AMA: Matterport Head of Product, Preethy Vaidyanathan on Product Differentiation

Product differentiation is not about a feature laundry list; it is about ensuring you are addressing a key business problem. So instead of starting at we need to build features A, B, and C that our competitors don't have; start with the business problem. Then ask how we can leverage product differentiation to reach the business goal faster, better or cheaper. This way it ensures you are solving the underlying cause and not just the symptoms. * If you are in a 0 to 1 category, the main business problem to address is educating the market that there is a problem worth solving and you are the solution. * In a crowded marketplace, there may be existing leaders whom you want to take market share away from or you may be defending your leadership positioning. There are many inputs you can consider (target customer, market, competition, geo etc) in product differentiation; starting with the business problem as the main input will arm you with the right goals to move your company forward.

Here is a general framework that you can leverage to customize to fit the specific needs of your product; whether it is hardware, software or service offering; entering a new geo or disrupting an existing market. Start with the customer. Create a list of current and potential customers; so this should include current customer types and the customer types that the product strategy is looking to address. For each customer type, a general framework to consider is the buying and usage journey: 1. What are the buying journey highlights that create customer benefits and competitive differentiation? This can include feature benefits; but important to also consider pricing and packaging differentiation. Is there a try-before-buy differentiated packaging approach to deploy? 2. How can differentiation help with first-time user experience? It's not always about adding features but also reducing friction to first use that can be the differentiation. 3. Repeat user experience differentiation How can continued product usage drive sustained benefits and differentiation for your customers? Can the customer gain new insight when they come back to use your service? This is going to be key for renewals and upsells. As a bonus, the GTM plan can leverage the same framework to create differentiated experiences across the marketing funnel: awareness, consideration and conversion.

It's a company problem and will likely need a cross-functional team effort to troubleshoot and solve the issue. In the diagnosis phase, I can't stress this enough - it's important to spend sufficient time understanding the problem before moving to solutions. Sometimes as product leaders, this is the hardest thing to do, which is to sit with the problem before jumping into fix-it mode. * Start with where this problem occurs; is the misalignment happening with your clients, industry press, analysts or more broadly across all of the above * Find the source and rate severity of the misalignment. Is this a perception issue created by your competitors that when your Company Sales and Marketing folks engage with your potential customer, it is easily fixed? Or is this misalignment causing a larger business impact Once you have adequately identified the misalignment areas, source and severity of impact, treat the solutioning process very similar to your roadmap prioritization exercise. What should be fixed, in what order, by when and what cross-functional steps are needed to execute.

Looking at a long list of competitors’ features as a catchup list can definitely be daunting. This is a futile race because while you are playing catchup, the competitor will continue to keep moving ahead. Instead, turn this into an asset by looking at the adoption/usage of your competitor's features by customers. We all know not all features are created equal; leverage the incumbent customer base, and get insights into which features are used the most by customers. It's also important to use this information as one input source in addition to your own customer, and market research to determine your company roadmap plan.

In this case, be competitor-aware, but customer-focused. You don't have much control over what your competitor’s teams are doing. However, what you can drive is focusing on delivering business results for your customers and getting your internal company teams to work with your customers to publish these stories, case studies and testimonials. With this approach, your new customer prospects may evaluate you and your competitor and at first, might think you both offer the same features. However, you can now easily turn the conversation from features to driving outcomes. You will have your customers publicly highlighting how you helped them succeed; which is what your prospects want to achieve. By focusing on consistently winning for your customers, you can shift the narrative from feature to business value.

Differentiation is not just a product team responsibility. However, as a product manager, you can help connect the dots from product differentiation to customer adoption and business value. Product feature differentiation is the internal metric. As a product manager, you focus on competitor feature matrix tables, technical deep-dives, SWOT analysis and more. However, the external more important metric is customer focus and sustained business value. Focus on differentiated features that drive customer value, pricing and packaging that drive market share, and GTM execution that puts winning for customers and partners as the top priority.

One important ingredient is tying how product differentiation helps drive business value like brand recognition, product usage or increased sales. This connection between differentiation and business outcome can be overlooked because it may not be a straightforward exercise to draw causation conclusions. One strategy to deploy is to think of leading-indicator measurement (vs. lagging). Few examples: * Increased sales are a lagging indicator. However, can you measure how product differentiation helped shorten the time window from the first sales pitch to the customer pilot or POC (leading indicator) * A faster time to recruit for beta programs with a differentiated offering could be used as a leading indicator for product adoption * Can you measure improving time-to-first action or time-to-value as a leading indicator for product adoption As product managers prioritize not just thinking about feature differentiation but also how to measure the impact of this differentiation. 

Focus on alignment. Aligning differentiation into the product development process, cross-functional team members, go-to-market planning and goal setting. This will ensure that there are collective voices across the teams highlighting differentiation as a strategic investment and helping influence your exec teams. Here are a few tactics you can deploy: * Leverage your core differentiation pillars in product activities. Roadmap communication, product launch demos, buy/build/partner analysis, beta program etc. * Build alignment with your cross-functional partners across Sales, Customer success, BD, and Marketing to leverage product differentiation in Sales enablement, Partner communication and GTM planning activities. * If your company uses Objective Key Results (OKRs) or another goal-setting framework; PMs can leverage this to tie product differentiation investments to company goals This will ensure it's not just the product teams who think about differentiation. However, leverage differentiation as a strategic and sustainable bet for your company’s success.