AMA: Cisco Product Marketing Leader, Elizabeth Grossenbacher on Competitive Positioning

There are many reasons why a price war could happen, and without more context into the market/players, it would be hard for me to say. It’s true that for nearly all transactions in the B2B world, budget is a top priority for buyers. That doesn’t mean it should come down to price. At various organizations I’ve been at (Cisco, Twilio, and a few start-ups), we have won multiple competitive deals while having a premium-priced product. When we won despite being the more expensive product, it’s because we hit home on our differentiators, which we knew were meaningful to the customer. Here are some reasons why salespeople end up in price war with competitors: 1. Differentiation is not apparent or meaningful enough to the customer. What to do? Do some customer interviews to find out what would move the needle for customers to change the conversation away from price and more to value. Reshape your competitive positioning with a customer-first approach. 2. Sales people are not trained on existing messaging/competitive positioning. What to do? Conduct a messaging/training day with sales people. Consider “certifying” salespeople with a pitch program (work with sales leaders for this one). 3. It’s not easy for customers to say "yes" to your product. What to do? Work with your sales team to develop or enhance your Proof of Concept (POC) or demo. Make sure your customer sees the demo when you articulate your differentiator. The demo/POC should be extremely obvious in how it illustrates your differentiator. Give them reports to share with the buy-team that prove your differentiators in the form of KPIs. Does your product save resources? Prove it in the POC. These KPIs will be useful in justifying your price. From my experience, if the value is proven (and customers have existing budget to afford your product), then you can't lose.

The fundamentals of customer-first competitive positioning do not change with the business model. All competitive positioning should use the following framework: 1. What’s the customer’s pain/problem? 2. How are existing vendor (specific to your segment, i.e., self-service) aiming to solve this problem? 3. Why is each vendor's approach beneficial to the customer? 4. How does your product solve the customer’s problem? This is where your differentiator should come out. 5. Why is your approach better for the customer’s problem? 

The answer to this is all about segmentation and understanding what customers in that segment care about and what their unique pains are relative to other segments. Once you have that, the approach to competitive positioning is the same. You start with that customer pain/problem, then articulate how your product solves that pain, and why it’s better than the alternative. Using your Shopify example, you would first need to analyze “customer care-abouts” for each of the respective audiences: enterprise and small business. The framework you use for competitive analysis will be the same for both; however, the inputs (the customer care-abouts and competitors) will be different.

Competitive analysis should be a priority in the following environments: * When you’re actively losing market share or your win-loss rate is decreasing. * When your sales team is struggling and having head-on battles with competitors to win deals. * When prospects are asking about the difference between your product and a competitor’s… and your sales team can’t answer it. * When your company is looking to expand into a new market and you need to know which competitors may already be in that space. * When you’re launching a product or feature... Even light competitive analysis should be part of every launch. Sales people need to be enabled on how the new product or feature compares to existing alternatives on the market.

Everything is a marketing story when it comes to communicating with customers. ;) Competitive positioning should be an output from competitive analysis. If you’re not seeing your competitive positioning resonating with your audience, then you need to go back to your analysis. I’ve often found that PMMs approach competitive analysis from a feature-comparison perspective. While that can be helpful, it is not the full picture. It’s far too limited, and you cannot create a strong story from this. When you approach competitive analysis from a customer’s problem/pain, then you’ll create the competitive positioning that resonates. Check out my answer to THIS QUESTION to learn more about how I approach competitive analysis with a customer-first perspective.

This question blends market strategy with competitive strategy. Yes, it’s common to pursue industries that align with your GTM strategy. (Pro-Tip! Check out my AMA on GTM strategy here). In doing so, you’ll run into competitors who’s GTM strategy may be similar to yours. That could include industries or geo-locations. If you’re just starting your competitive analysis from scratch, then prioritizing competitors who show in your target market is a great place to start. However, don’t stop there when deciding which competitors do go deep on with your analysis. Prioritization of competition should start with data from sales and customers. Which competitors are coming up in deals? Which competitors do your customers ask most about during sales calls? You need to answer these questions during your competitive analysis and before your can prioritize where to spend your time across competitors. Pro-Tip: Include your sales team in the decision making when prioritizing which competitors to analyze first or with the most detail.

Market intelligence + competitive intelligence = a full picture of how your organization fits in a market. Market intelligence is tells us what's driving decisions, actions, and budgets for customers. Think about it like supply and demand, and what is driving the demand or supply. Market intelligence helps define the GTM strategy or informs a marketing plan. Learn more about GTM strategy and market intelligence, check out THIS QUESTION from my AMA on GTM strategy! Competitive intelligence is based on specific vendors and how those vendors meet customer needs. It is really important to understand HOW they meet the customer's need from a technical perspective. No marketing fluff here. Competitive intelligence helps your sales team articulate their value to customers, helps product marketers produce stronger competitive positioning, and it helps product teams prioritize roadmap features. 

Both competitive positioning and general positioning start with the customer in a specific target market and the problem they face. Dig deep into the problem and understand why it hurts so bad. General Positioning: In general positioning, you’re articulating how your product fits in the overall market (including partner vendors, competitors, etc.). It gives context to the customer in regards to how and when they would buy the product. Competitive Positioning: In competitive positioning, you're helping the customer understand how your product differs from other vendors. Example: McDonalds (bear with me on this, obviously I am not a McDonalds expert!). In General Positioning, we can say that McDonalds offers fast and tasty food to super hungry folks who are in a hurry and don’t want to get out of their cars, but they want something they are familiar with anywhere they go. They don’t want to spend time thinking about the menu options. This defines the market category for McDonalds and gives context to customers regarding how and why they would buy burgers. In Competitive Positioning, McDonalds articulates to customers how consistent they are relative to competitors, and that a customer can get that same tasty BigMac in San Francisco just as they can in Tokyo thanks to their commitment to a global menu. Unlike competitors, who may not be able to offer the same level of consistency due to their supply chain and logistics practices and overall approach to offering fast and tasty burgers. Try this exercise for Competitive Positioning! Now you get to act like the customer and compare options. WEAR THE CUSTOMER'S SHOES! What's the problem you're trying to solve? How does each vendor attempt to solve the problem? Dig deep into HOW they do it from a technical perspective. Then determine what’s the value as a result of the “HOW” for each vendor. At the end of this exercise, you’ll see the differentiator for your own product. Use that differentiator as an input to craft your competitive positioning.

Remember to use data from the sales team and customer conversations to determine which competitors to focus on. Your positioning should be based on how each vendor attempts to solve the customer’s problem. Start with identifying what is the problem your customer is trying to solve. Then, go through each key competitor and understand how they help the customer solve that problem. Think like the customer! Why would a customer choose your competitor? Then follow this same process for your product. Pro-Tip! Use my Google Doc Template to get started! 

Competitive positioning should not be “seen” in the market. The positioning is meant to be an internal guidepost for your own company. However, your marketing team may want to leverage your competitive positioning to create competitive takeout campaigns. Here are a few excellent examples of that: * Competitive landing pages that target competitor customers. These landing pages are highly targeted, with high quality content. They should articulate your value and differentiator. Bonus points for including a customer quote+logo for why that customer switched from the competitor to your product. * Using customers' voices to share why they switched. Pick a few well-known customers that recently switched from a competitor’s product to yours. Invite that customer to speak on webinars or conduct joint PR pitching to the media. Create a story around the value that the customer was only able to get with your product. You could even create a sales campaign around this to try and get prospects to take a call if their competitor/peer recently switched to your product. * Leverage 3rd party validation. Analyst firms such as Gartner, IDC, and Forrester put out reports that may feature your product as superior to other vendors. Create a campaign targeted at customers of your competitors that articulates your value and differentiator. You could do something similar with awards your product has earned from relevant associations.

I’ve seen product teams and sales teams get so beaten down by focusing too much on competitors. Here are the top 3 biggest mistakes I’ve seen. 1. Companies get too caught up in feature comparison. The value is totally lost here. What to do? Ensure your sales team has a competitive positioning story that articulates HOW your product provides value and WHY this is better for customers in the long run. 2. Sales teams talk too much about competitors and not enough about their own product’s value to the customer. Again, the value of your own product is lost. What to do? Engage with sales leaders to conduct a training on competitive positioning and give them tools to talk about your product's value. 3. Internal teams are more obsessed with competitors than they are customers. This is the biggest danger by far. In doing so, product teams and marketing teams make decisions based on fear of a competitor rather than a customer-driven insight. I've seen resources (money and people) dedicated more for competitive intelligence rather than customer intelligence. If you already have the customer intelligence, then that could be a very helpful. But if you're already lacking in that department, then you're wasting time and chasing a competitor when you should be talking with customers. What to do? Be customer-obsessed, not competitor-obsessed.

1. Customer interviews! Happy customers are very willing to spend time with PMMs and share what they have learned about competitors. 2. Listening to sales calls. In addition to sitting on calls, I love tools like Gong where I can use AI to quickly access insights! Plus, it’s hard to make time to sit in on calls. Using tools like Gong can help you get the research done faster. 3. Sales data. Use reports from whatever tools your sales team uses (i.e., Salesforce reports). From here, you can see which competitors you’re seeing most in certain industries, use cases, segments, geos, etc.

First, take a step back and understand why you would need to participate in AR activities. Is it for PR? Product validation? Make sure you partner with your AR/PR team to align on the strategy for how you intend to leverage analyst relations and reports from these firms. If market/product validation is your goal, here are some approaches to consider: * Engage directly with these firms to explore opportunities. Analyst firms have other reports they use in industries where there is no Wave or MQ. I suggest setting up a call with the top analyst firms you want to establish a relationship with and ask them if they are conducting any reports, i.e., Gartner has done reports such as “cool vendors” in various industries. * If you have the budget, you can also commission analyst firms to create a sponsored report on your behalf. * Consider how you can leverage Gartner Peer Insights for customer insights and proof-points, which is free to use. Learn more about that here. * Seek out awards that may be given to vendors in your market by other entities or relevant associations. * If you do not have the budget, lean very heavily into the most well-known customers you have. Establish these customers as beachheads in target markets. Double-down with PR, speaking engagements, etc., with these customers. Consider submitting your product for awards in various industry associations that may be relevant to your product.

Here are my top 3 go-to's for this one... 1. Recruit a top salesperson to record some sound bites leveraging your positioning. Take the recording and make it available on your sales enablement database. Email the link with a blurb to salespeople. You could also include this in any internal monthly emails that go out to salespeople. 2. Present your positioning at sales kick-off event (typically at the start of the fiscal year). 3. Hold a meeting where you present it to salespeople and invite them to attend. Pro-Tip! Get buy-in and support from sales leaders who make it mandatory for salespeople to attend.