AMA: Splunk Sr. Director, Product Marketing - Observability, Michael Olson on Competitive Positioning

Great question. I'd encourage you to think about pricing and packaging as powerful tools for competitive differentiation. In any economy, selling on value is a winning strategy. But in this economy, the B2B buying criteria pendulum has swung, from top-line growth as the #1 priority now to bottom-line operating efficiency. Companies that are exploring packaging (including bundling strategies) as a way to remove friction from the buying process and deliver more value without a commensurate increase in their customer's TCO are thinking about it the right way. When I've been responsible for product packaging, my goal is to make it frictionless for customers to expand use cases and adopt new capabilities. Expansion leads to more value, and value leads to more stickiness. Onto pricing, Southwest, Spirit Airlines and JetBlue have historically differentiated based on value, undercutting competitors on price while packaging "features" accordingly to align to buyer needs. They carved out share targeting the segment of consumers who care less about premium upgrades, checking a bag, in-flight meals or fancy snacks. I will say though, I flew Southwest on a business trip last week and the pretzels were amazing. :-) But it can go the other way, too. Sometimes pricing can be used as a lever to reinforce perception as a premium brand. Häagen-Dazs is objectively more expensive than almost any other nationally-distributed ice cream brand in the U.S. But its target customers are willing to pay that markup based on a perception of quality, and Häagen-Dazs has leaned in to that by positioning itself as a super premium ice cream brand. One of the many ways AWS differentiated from VMware in its early days was based on its billing model, offering an innovative "pay-as-you-go" consumption model that felt like a breath of fresh air in an era when recurring subscription models were eating the lunch of perpetual licenses.

Short answer: a lot. And unless you are either 1) truly bringing new-to-the-world products to market or 2) already the clear, undisputed market leader in an established category, it's essential to pick your head up and pay attention to how competitors message themselves. Putting yourself in the shoes of your buyer, a lot of B2B vendor messaging tends to sound the same. Too many value propositions are watered down to the point of becoming too generic ("grow revenue", "reduce costs", "minimize risk") or so vague as to lose credibility, curiosity and persuasion. The result is that buyers tune out, are unable to differentiate your product from competitive offerings, and resort to making purchase decisions based on things like primacy bias or price alone. If you're marketing a premium product or are a challenger in your category, that's not a recipe for success. My team takes great care to ensure that our strategic narrative and the messaging we're activating in market sounds different from how competitors talk. Some examples of where to put this to practice: * Framing the customer problem in a different way. This may entail identifying a fundamentally different customer problem than what your competitors target. Or employing challenger sale techniques to reframe the problem in the minds of your buyer and show how there's actually this other thing you may not have thought of which is fundamentally the real issue, and you've been focused on symptoms vs. root causes. That reframe, if done well, can be a powerful way to stand out from the crowd, earn credibility, and get customers to buy in to your vision. * Spending time de-positioning the status quo and establishing why traditional approaches to solving the problem (i.e. incumbent or competitive products) fall short. I've spent a lot of my career marketing challenger products in new, emerging or existing categories, where it's really important to unsettle buyers and make them realize that there's a better way. * Describing the promised land or desired outcome differently. Typically, what I've found works here is to avoid being too reductive in how you describe desired outcomes. Unless I'm building messaging for the c-suite, I like to create messaging that comes in at a lower altitude, zeroing in on a more specific, tangible value proposition in support of higher-level outcomes like "growing your business", "improving digital customer experiences", "cutting costs", "stopping breaches", "resolving incidents faster", etc. As an example working at an observability company, we talk (publicly, I might add) about "taking the toil and guesswork" out of troubleshooting and "spending less time in war rooms" as a more specific, visceral way of saying "reduce mean time to resolution" (the latter of which is something EVERY vendor building software for IT Operations or Engineering buyers talks about). * Ensuring that our competitive positioning or answer to "why us?" is defensible, with product evidence and customer proof to back it up. The rule of 3 is a powerful thing. I often find it works best to have one main unique selling proposition which is the single big, grand reason why a customer should choose you over the competition. Then we back that up with 3 outcome-oriented differentiation statements which show how we pay that off. For each of those differentiation statements, it's useful to include punchy messaging on key product capabilities that are unique or comparatively better than competition at achieving the outcome, as well as relevant and specific customer stories. Remember that the best product doesn't always win on its own and become category queen/king. Clear positioning and compelling, credible messaging can make up ground and help you compete.

I'm not an expert, but here are 3 practical ways that I make time for competitive research as part of my day-to-day work. 1. Competitor websites, mailing lists and product documentation. I get a lot of value from reading the Products and Solutions sections of competitor websites, subscribing to their blogs, and reading their product docs. Web content gives you a high-level understanding of their messaging and key capabilities. Product documentation provides more depth on how their products work to identify gotchas or competitive deficiencies. Blogs and mailing lists give you a sense for how they're marketing themselves, their thought leadership, and new innovation they're launching. When I've taken on a new job, one of the first things I do is visit competitor websites and sign up for their mailing lists, usually by downloading a gated asset off their website. 2. Peer reviews (Gartner Peer Insights, TrustRadius, PeerSpot, and hey, don't sleep on Reddit, friends). These are useful to get real-world voice of the customer feedback on competitive product offerings. While it's possible for vendors to game the system a bit by incentivizing customers to submit reviews, generally speaking, I find peer reviews helpful to hear how a customer is using a competitive product, in their words. Reddit is also an extremely underrated source of competitive insight. Go find the right subs that are relevant to your category or use Google search to your advantage. Reddit is the #1 way I research consumer products in my personal life, and it's a great tool for competitive research in my work life as well. 3. Analyst inquiries. If you have access to an analyst community, friendly analysts who cover your space are a great source of competitive insight. I use inquiries to get insights on competitive product offerings, positioning, and pricing. Whenever I've hosted an analyst advisory day, I always ask the analyst to prepare a SWOT analysis in advance for my company and our main competitors (as they see it; I don't guide here). If you're a B2B product marketer and work in a category with a Gartner Magic Quadrant, Forrester Wave, IDC MarketScape or GigaOm Radar, those are also useful tools to read up on competitor strengths and cautions. One thing I want to say here that I believe separates great product marketers from good product marketers. A good product marketer understands competitor strengths and weaknesses, how their product compares, and why they win. Great product marketers go a step further, becoming experts in how competitors position themselves, how they go to market, including the ideal customer profiles and segments they target, where they have strong product-market fit vs. not, and how they balance product-led vs. sales-led GTM strategies. This type of strategic market insight can set you up for growth and leadership opportunities. The PMMs who make it their job to have a POV on these things are capable of going on to become GMs for their business or product line.

Other than building a good product that solves real problems for customers, positioning is probably the most important thing to get right, because it's so strategic and foundational to how you go to market. At its core, positioning is an internal construct. It’s what you tell yourself internally to align on your strategy, the perceptions you want to create, your differentiated role in the market, and your relevance to your customers. I think about 5 main inputs when shaping positioning: * Market Category – the space in my customer's mind where our company and/or product fits. This is the frame of reference for our buyers. * Target Audience – our ideal customer profile + the buyer and user personas who are a good fit. BTW, I think of ICPs and personas as different but related things. ICPs are an output of market segmentation and reflect the characteristics of companies and/or teams that make a good fit for your products. Personas are the actual people in those companies/teams who buy and use them. * Competitive Alternatives – how our target audience would try to solve this problem if we didn't exist, and why they'd fall short (de-positioning the status quo is so important). * Value Proposition – the main problem we solve for your customers, and the key benefit we provide. * Differentiation – how we're unique or comparatively better than alternatives. While not critical, I also find that it can be useful to document the market perceptions of my company that we want to create, shift or reinforce. I like to describe this in a set of From > To statements. This is particularly useful if you are expanding into an adjacent market via acquisition or new product development, or as you're repositioning your company to respond to changing market dynamics.

Let me share the elements I've found to be most useful for competitive positioning materials like battle cards. While this may be geared toward a sales team, if done well, much of this content can be repurposed for other activations like competitive web pages and competitive replacement campaigns. * Competitor overview – A high-level overview of the competitor, their product offering(s), how they position themselves, and their pricing. * Quick dismiss – A short (3 sentences or less) articulation of why the competitor falls short, written exactly like you'd want a sales rep to say it out loud if asked by a customer "why shouldn't I go with [competitor name]?" * Why us – A short (3 sentences or less) explanation of our differentiation, written exactly like you'd want a sales rep to say it out loud if asked "why should I choose you?" * Competitor strengths and weaknesses – I like to structure this as a 2 column table for easy synthesis. * Trap-setting questions – these are useful discovery questions with which to enable your sales team, to help them steer customer conversations into areas of competitive advantage. * Objection handling – a FAQ anticipating negative things the competitor might say about our product, and how to respond. * Why we lose / when to walk away – this is important to provide some real talk with your sales team. Speaking as a former sales person (not a good one, I'll add), sometimes it's just as important to know when to qualify-out a prospect as it is to qualify them in. Understanding where we lack product-market fit or where we're not well-positioned to win against a competitor builds trust with the sales team, and helps them focus their time on highest-probability-of-success opportunities. * Customer wins – examples of customers that chose our product over the competitor and why.

It's a great question. So much of my thinking on competitive positioning focuses on enabling my sales teams to be able to differentiate in competitive sales cycles. But what if your company relies on a product-led / self-serve see/try/buy/adopt GTM? I still think you need the same level of synthesis on what makes you unique or comparatively better than competition, but the activation is different. Instead of competitive battle cards for a sales team, you need to be thinking about standing up public us vs. competitor web pages on your site, getting them indexed by search and paying for paid search placement until you climb up the organic rankings. Instead of NDA-protected customer story slides in sales decks, you need to be thinking about public case studies that include specifics on why your customer chose your product over competitors, which competitors you replaced, the use cases in which they're using your product, and the value they've realized. Instead of customer reference calls, you need to be thinking about peer reviews and leveraging product usage telemetry to nurture your most active, sticky customers and ask them to submit peer reviews or advocate on your behalf, perhaps speaking at relevant industry events and conferences about their use cases and how they chose your product to enable them. In the free tier of your product or your free trial, you need to be thinking about in-product messaging and experiences that showcase how your products uniquely enable the use cases your customers care the most about. Embedding prescriptive demo videos, tutorials/how-tos, and substantive customer stories/proof in context can go a long way toward answering the question "why us?", even if your prospects never interact with a sales rep.

Generally speaking, I think buyers are skeptical of "first", "only" or "best at" claims from vendors. I prefer to take a softer tact in messaging by acknowledging competitor strengths while then pivoting to a gentle but firm delivery of what makes us different ("they do a good job at X, but our customers typically choose us when they need Y"). Even subtle messaging to introduce your differentiators like "here's what makes us different..." instead of "here's why we're the best solution" tend to play better as a consultative selling technique and introduce less skepticism. The Force Management folks who created the Command of the Message sales methodology have a good framework for crafting competitive differentiation. Differentiation falls into 3 categories: 1. Unique - these are capabilities or outcomes that no one else in the market can deliver. Because products tend to commoditize as markets mature, unique differentiators are more common in new and emerging categories than established ones, and they tend to be short-lived. But if your product truly does something meaningful for customers that no one else can deliver, capitalize on it while you can until competitors close the gap. 2. Comparative - these are outcomes or capabilities that other competitors may be able to claim, but that your product is able to do better/faster/cheaper/with less risk. To make these defensible and credible, you need to be specific in describing how your product pays off the outcome differently from competition, then translate that to what that difference means for customers, and prove it with some real-world examples (customer stories, demo videos, etc.). 3. Holistic - these focus more on company vitals that build customer trust in your viability and partnership, rather than the strength of your product capabilities. Things like your financial posture, resilience, customer support, services, and how your sales teams show up as a partner all contribute to holistic differentiation. I'd also encourage framing competitive differentiators in an outcome-oriented way. Customers don't live in our world; we live in theirs. You need to be outside-in here and translate product capabilities or differentiating features into why they matter to customers, and the outcomes/value they enable.

I shared a similar response to a separate question, but positioning is such a nebulous and somewhat vaguely understood topic by product marketers and product managers, that I'd love to help. Here are the 5 main inputs I think about when defining positioning: * Market Category – the space in your customer's mind where your company and/or product fits. This is the frame of reference for your buyers. * Target Audience – your ideal customer profile + the buyer personas and user personas who are a good fit. * Competitive Alternatives – how your target audience would try to solve this problem if you didn't exist, and why they'd fall short. * Value Proposition – the main problem you solve for your customers, and the key benefit you provide. * Differentiation – how you’re unique or comparatively better than alternatives. April Dunford is probably the most authoritative positioning expert and I'd encourage reading her book Obviously Awesome or checking out her blog. She has a positioning matrix template which contains some similar elements as what you see above. One hot take I'd also offer up. You likely are familiar with the positioning statement template Geoffrey Moore pioneered, which goes like this: For < target customer> who <describe the need>, <our product> is a <category> that <key benefit>. Unlike <alternatives>, <our offering> <differentiation>. I love Geoffrey Moore's works and Crossing the Chasm may be the best business book ever written. But I'd steer you away from this positioning statement template. I've created many positioning statements in my career using this format, only to never look at them again. April Dunford has written about why the positioning statement lacks durability, and I've come around to this point of view after too many false starts creating positioning statement shelfware myself. I'd boil it down to this – positioning is an incredibly strategic and consequential subject. I'd argue it's the most important thing to nail outside of having a good product. Trying to shoehorn positioning into an oversimplified 2-sentence Mad Libs is a surefire way to cut corners and reduce clarity. The whole point of positioning is to create clarity around why you exist, the category in which you play, and your differentiated value. So don't shortchange it with a reductive template.