What are some common mistakes that companies make when trying to differentiate their products from competitors?

The biggest mistake is to focus on what the competitor does versus what the customer cares about. Don't start with what the competition is doing or not doing, start with what specific customer needs are not being met by the current players, and find better ways to serve them.

Another common issue is to be too reactive to the competition and following competitors into whatever new shiny thing they believe will give them an edge. Again, looking at what the customer wants and why they want it will give you a better competitive edge. A great way to do this is by using a jobs-to-be-done framework to identify current and future market needs.

Finally, many companies try to be the best in all markets for all customers and look at their competition as "every company that does X". If you try to be the solution for everyone, you end up being good at nothing... focus on a particular market with specific players and find your edge there, before venturing elsewhere.

1. Lack of deep understanding of the target audience: Differentiation should be based on a thorough understanding of the target audience's needs, preferences, and pain points. Like everything in product marketing- it should start with your customer. Building parody features or postioning to copycat a competitor is a fast road to a dead end.

2. Neglecting to communicate the value proposition clearly: Even if a product has distinctive features or benefits, failing to communicate them clearly to the target audience can lead to missed opportunities. Invest in strong messaging and marketing efforts to effectively convey the unique value proposition to customers, ensuring they understand how the product differs from competitors.

3. Inadequate market research and competitive analysis: Insufficient research and analysis can lead to an incomplete understanding of the competitive landscape. Without a deep understanding of what competitors are offering, how they position themselves, and the changing market dynamics, it becomes challenging to identify and execute effective differentiation strategies.

4. Focusing solely on product features rather than holistic customer experience: While product features play a role in differentiation, focusing solely on them may overlook the importance of delivering a holistic customer experience. Companies should consider factors such as customer support, ease of use, brand reputation, and emotional connection to create a differentiated experience that sets them apart from competitors.

5. Ignoring evolving customer needs and market trends: Markets and customer preferences are dynamic, and failing to adapt and stay ahead of changing trends can hinder differentiation efforts. Companies should continually monitor customer needs, market trends, and emerging technologies to identify new opportunities for differentiation and ensure their product remains relevant.

6. Lack of consistency across the entire customer journey: Differentiation should extend beyond the product itself to encompass the entire customer journey. Inconsistencies in branding, messaging, customer support, or user experience at different touchpoints can dilute the intended differentiation. Ensuring a consistent and cohesive experience throughout the customer journey strengthens differentiation efforts.

The biggest mistake I have seen marketing teams make when trying to differentiate their products from competitors is to "differentiate" by renaming industry-accepted terms and capabilities for the sake of being different vs. showcasing what is that you offer, how are you different, and why that should matter to customers.

Another mistake I have seen many companies make is to believe a feature list comparison on a website suffices to claim you are different vs. a key competitor. Most customers do not purchase software or product for their features but rather for the experience and capabilities it offers.

I think everyone forgets about "status quo" and "no solution" competitors. These two more often than not - make up the vast majority of whitespace / addressable market for a company. We get excited by stories - which are told by our competitors. The problem is they are distracting to us and our market. Focus on the people who are doing things the old way or have not yet made up their mind. Convince them by focusing on why YOU win. What makes you different. What are the 5 things your product does better than anyone else. Not what you do compared to others in a feature by feature comparison. Ultimately what's best for a customer is unique, personal and not tangible. People buy from people they like - and competition can get ugly if approached with bias and FUD. Resist the low blows too - that is JV stuff and no one is here for that.

The BIGGEST mistake companies make with positioning is not including the entire company in the exercise and making it just a marketing exercise. The next mistake I’ve seen is not talking to customers and keeping the positioning discussion internal.

A common mistake I see is immediately going from "positioning" to "features." What your product does is far less important than what it helps your customers do, and chances are not every button and knob make your customer feels like they have superpowers! Instead, I try to use the Google product marketing adage when crafting positioning: Know the user. Know the magic. Connect the two.

First, know your user. Then, describe how your product is magic for them - not just what it does different that competitors. If you focus on that, then you don't need to get down in the weeds of every single feature.

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.

I can think of several common mistakes companies make when trying to differentiate their product. However, I'm going to focus on a few key ones:

1. Overemphasizing features instead of benefits. AI is a great example of this. We hear a lot of buzzwords like "AI-enhanced" and "AI-powered." AI is a feature, not the end goal. Customers aren't really interested in the technology itself per se; they care about how it helps them. If your messaging doesn’t clearly articulate the tangible benefits—how your product solves their problems or meets their needs—you’re missing the mark. The focus should always be on the value your product delivers, not just the flashy features.

2. Neglecting the customer perspective. It is so easy to get caught up focusing on what we believe sets our company or product apart, without truly understanding what customers value most. This can create a dangerous misalignment between what you’re offering and what your customers are actually looking for. Don't just rely on analyst reports, the news, or other third party sources - your competitors are using those sources too. Talk to your customers - and those you want to be your customers. Take the time -it will pay dividends.

3. Look alike messaging: As consumers or business evaluators, we often visit different companies’ websites and find that their messaging all sounds the same. To stand out, it’s crucial to identify and clearly communicate your unique value proposition. Make sure it’s front and center in all your external channels. Ask yourself, "Why us? Why now?" If your answers could apply to your competitors (or vice versa), it’s a sign that more work needs to be done to differentiate your message.

4. Competing on price trap. Sure, being price competitive matters, but if your primary differentiator is being the cheapest option, you risk turning your product into a commodity. This approach can erode your brand’s value and severely impact your long-term profitability. Instead of just focusing on price, it's important to highlight the unique value and benefits your product offer.

5. Failing to adapt over time. Markets shift, and customer needs evolve. If your differentiation strategy remains static, you risk becoming irrelevant. To stay competitive, continuous innovation and adaptation are essential. This also involves staying aware of what your competitors are doing and how they’re responding to your messaging—not to obsess over them (we should obsess over customers!), but to stay informed and be ready to adjust your approach as needed.

6. Underestimating the importance of emotional appeal. Differentiation isn’t just about logic; it’s also about the story and connecting with customers. Strategies that evoke positive emotions and resonate deeply with customers tend to have a much stronger impact.

As you move forward and evaluate your current differentiation strategy, it comes down to a few key points: engage with your customers, refine your approach, and ensure you’re setting yourself apart in a way that truly matters. Stay flexible, stay competitor-aware and customer-focused.

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.