{"id":29073,"date":"2018-02-20T10:43:09","date_gmt":"2018-02-20T10:43:09","guid":{"rendered":"https:\/\/greatdemo.com\/?p=370"},"modified":"2026-09-15T19:55:24","modified_gmt":"2026-09-15T19:55:24","slug":"terrific-competitive-differentiation","status":"publish","type":"post","link":"https:\/\/greatdemo.com\/terrific-competitive-differentiation\/","title":{"rendered":"Stunningly Awful vs. Truly Terrific Competitive Differentiation \u2013 What, When, and How"},"content":{"rendered":"
\n
\n

Stunningly Awful vs. Truly Terrific Competitive Differentiation \u2013 What, When, and How<\/h2>\n<\/div>\n<\/div>\n

Competitive Differentiation:\u00a0 vendors want to differentiate, vendors try to differentiate, but most vendors fail to meaningfully and successfully differentiate, in the opinion of their customers.\u00a0 When done poorly, differentiation can be stunningly awful; when done well it can be truly terrific!\u00a0 <\/span><\/p>\n

Let\u2019s explore\u2026<\/span><\/p>\n

What Is Competitive Differentiation?<\/span><\/h4>\n

Most vendors define this as \u201ccapabilities that we have or do better than our competition\u201d.\u00a0\u00a0 Pretty straightforward, right?\u00a0 But do customers share this definition?\u00a0 Likely not.<\/span><\/p>\n

Customers are looking for solutions that fit their perception of their current and expected future needs.\u00a0 A vendor with capabilities the meets these current and future needs exactly is clearly the best choice, everything else being equal (such as price).<\/span><\/p>\n

With that in mind, a vendor who seeks to \u201cdifferentiate\u201d by simply presenting capabilities that another vendor lacks is at risk.\u00a0 What if the customer doesn\u2019t see the need for these additional capabilities?\u00a0 What if they don\u2019t care or, worse, can\u2019t use them?\u00a0 Then these additional capabilities become a liability.<\/span><\/p>\n

For example, let\u2019s say you are shopping for a new set of kitchen knives.\u00a0 At the store, you are looking at several knife sets and the sales person steers you to one particular set of 10 knives, saying, \u201cThis set is better because it has 10 knives \u2013 one more than most \u2013 plus a sharpener, so you can keep all of your knives razor-sharp.\u201d\u00a0 The other sets on display only have nine knives.<\/span><\/p>\n

Sounds like a win, right?\u00a0 However, it turns out that your knife block only has room for 9 knives and no place for a sharpener.\u00a0 You are concerned that the extra knife and sharpener will end up rattling around in a drawer \u2013 and possibly be a hazard.\u00a0 Differentiation has occurred, but not positive differentiation!\u00a0 The larger knife set is perceived as \u201ctoo much\u201d and possibly \u201ctoo expensive\u201d (if it costs more than the set of 9) or \u201ccheap\u201d if the price is the same as the set of 9, since the perception will likely be that each knife individually is worth less.<\/span><\/p>\n

The world of software is similar.\u00a0 Let\u2019s say you are looking for a tool that helps you to address availability problems with your website.\u00a0 You\u2019ve decided you want something that sends you an email message with an appropriate link when a problem is imminent, so that you can click the link that logs you into the system, find the root cause, and address the problem.<\/span><\/p>\n

    \n
  • Vendor 1 does an excellent job doing Discovery with you \u2013 and then presents a demo that specifically shows email alerts and the ability to drill down and find root causes.<\/span><\/li>\n
  • Vendor 2 does a good job doing Discovery with you \u2013 and then presents a demo that shows email alerts and ability to drill down and find root causes, and\u00a0also<\/em>\u00a0shows you a system dashboard while describing why dashboards are so wonderful.<\/span><\/li>\n<\/ul>\n

    Who will get the order?\u00a0 Shouldn\u2019t Vendor 2 get your business?\u00a0 After all, they have what you need plus a fabulous dashboard.<\/span><\/p>\n

    You give the order to Vendor 1, however.\u00a0 Why?\u00a0 In doing Discovery with you, Vendor 1 learned that you hate to have to open a pile of applications and review dashboards.\u00a0 You explained that you\u2019d much rather only have to pay attention when a problem is pending \u2013 and email alerts are your preferred mode of receiving this information.\u00a0 Vendor 1\u2019s demo was right on target.<\/span><\/p>\n

    [Interestingly, Vendor 1\u00a0also<\/em>\u00a0had dashboard capabilities, but elected\u00a0not<\/em>\u00a0to show them, since you had communicated your strong dislike of dashboards.\u00a0 Turns out that both vendor offerings were essentially equal in capabilities, but Vendor 2 showed a capability you didn\u2019t want or couldn\u2019t use:\u00a0 Negative differentiation.<\/span><\/p>\n

    Note also that Vendor 1 asked a few additional questions in Discovery \u2013 with respect to how you want to\u00a0consume<\/em>\u00a0the alert information \u2013 and uncovered your dislike of dashboards:\u00a0 Vendor 1 achieved some additional positive differentiation through the more complete Discovery work.<\/span><\/p>\n

    In spite of the above rather sad scenarios (for the knife sales person and Vendor 2), most vendors view differentiation in terms of the features and functions of their offerings.\u00a0 \u201cOurs has this, and theirs doesn\u2019t\u201d or \u201cOurs does this better than theirs does\u201d.<\/span><\/p>\n

    Positive feature- or capability-based differentiation\u00a0only<\/em>\u00a0takes place when the customer\u00a0agrees<\/em>\u00a0that the capability is beneficial in their specific situation \u2013 when the customer visualizes using the capability sufficiently often and\/or the problem the capability addresses is sufficiently important to solve.\u00a0 Otherwise, the extra features and capabilities are perceived as making the offering too complicated or too expensive:\u00a0 \u201cWe don\u2019t need the Cadillac; we just want the economy car version\u2026\u201d<\/span><\/p>\n

    When to Differentiate?\u00a0 All the Time\u2026!<\/span><\/h4>\n

    From the customers\u2019 perspective vendors are \u201cdifferentiating\u201d, positively or negatively, with every contact, every meeting, and every deliverable.\u00a0 Let\u2019s explore possible\u00a0negative<\/em>\u00a0differentiation first.\u00a0 How do you feel about:<\/span><\/p>\n

      \n
    • Vendors that cold call you \u2013 repeatedly?<\/span><\/li>\n
    • Vendors that take forever to answer your email inquiries \u2013 or ignore what you asked?<\/span><\/li>\n
    • Vendors that leap right to showing you a \u201csolution\u201d, without sufficient Discovery?<\/span><\/li>\n
    • Vendors whose demos look complicated or confusing, in spite of having a pile of \u201ccompetitive differentiators\u201d?<\/span><\/li>\n
    • Sales people that speak ill of their competition?<\/span><\/li>\n
    • Sales people that are \u201ccagey\u201d about providing pricing information?<\/span><\/li>\n
    • Vendors that over-promise and under-deliver?<\/span><\/li>\n<\/ul>\n

      Interestingly \u2013 and sadly \u2013 the list above is what\u00a0often<\/em>\u00a0occurs with typical, traditional vendors and sales people.\u00a0 Most of us as customers perceive these items as unpleasant and they contribute to an overall negative impression.\u00a0 Unwittingly, perhaps, these vendors and sales people have differentiated negatively.<\/span><\/p>\n

      Let\u2019s look at the same list again, but with a different approach to each item:<\/span><\/p>\n

        \n
      • Nurture or \u201ctrickle\u201d marketing activities (as opposed to cold calling).\u00a0 [For extra credit, contemplate the intent of this article\u2026!]<\/span><\/li>\n
      • Rapid, specific responses to email inquiries.<\/span><\/li>\n
      • Thorough and intelligent Discovery \u2013\u00a0before<\/em>\u00a0presenting solutions.<\/span><\/li>\n
      • Crisp, focused, engaging demos of the Specific Capabilities needed by customers.<\/span><\/li>\n
      • Sales teams that are clear and honest about their own offerings\u2019 strengths and limitations.<\/span><\/li>\n
      • Clear and transparent pricing information.<\/span><\/li>\n
      • Building a vision of how the customer will move from their current (painful) state to their desired (glorious) future state with the solution in place and operating.<\/span><\/li>\n<\/ul>\n

        Generally speaking, these activities are viewed favorably by customers.\u00a0 Vendors that follow these processes are\u00a0already<\/em>\u00a0differentiating positively in comparison with \u201ctraditional\u201d vendors.<\/span><\/p>\n

        In addition to the observations above, there are (at least) three major opportunities to differentiate, positively, in sales interactions with customers:<\/span><\/p>\n

          \n
        1. During Discovery<\/span><\/li>\n
        2. During demo delivery<\/span><\/li>\n
        3. During discussion of implementation and beyond<\/span><\/li>\n<\/ol>\n

          Let\u2019s examine each\u2026<\/span><\/p>\n

          How to Differentiate<\/span><\/h4>\n

          During Discovery:<\/span><\/p>\n

          This is one of the most effective ways to out-flank your competition.\u00a0 Do Discovery with a\u00a0bias<\/em>\u00a0towards potentially differentiating capabilities you offer (and your competition lacks or doesn\u2019t do as well), such that those capabilities become part of the customer\u2019s vision of a solution.<\/span><\/p>\n

          The use of \u201cBiased Questions\u201d is a terrific and highly successful technique of introducing capabilities that you believe should be important to your customer, but the customer has not yet requested those capabilities.\u00a0 They may (often) be unaware that such capabilities exist.<\/span><\/p>\n

          Here\u2019s a quick example:\u00a0 Let\u2019s say that your offering provides alerts in the form of email messages when certain thresholds are reached (as many offerings do) \u2013 but in your case, you can also set alerts based on\u00a0approaching<\/em>\u00a0a certain threshold.<\/span><\/p>\n

          During Discovery, you might say, \u201cSome of the other organizations we\u2019ve worked with that had situations\u00a0very<\/em>\u00a0similar to what you\u2019ve outlined so far, found that the ability to set alerts based on\u00a0approaching<\/em>\u00a0certain thresholds enabled them to take action\u00a0before<\/em>\u00a0problems grew large \u2013 and they were able to save hundreds of thousands of dollars as a result.\u00a0 Is this something you might\u00a0also<\/em>\u00a0find useful in your practice?\u201d<\/span><\/p>\n

          Your customer responds, \u201cWhy yes, that sounds really great \u2013 and I can see how we could use that.\u00a0 Wish we\u2019d had it before!\u201d<\/span><\/p>\n

          This capability has now become a Specific Capability desired by your customer \u2013 and you can prepare and plan to demonstrate it accordingly.\u00a0 Since your competition can\u2019t offer the capability, but only the simple alerts, you have successfully positively differentiated.<\/span><\/p>\n

          Let\u2019s explore this a bit further.\u00a0 The \u201cBiased Question\u201d method has three elements that make it a successful and compelling approach:<\/span><\/p>\n

            \n
          • The Similarity:\u00a0 Your first step is to establish a relationship between your current prospect and other organizations \u2013 particularly those that are perceived by the prospect as being similar to them.<\/span><\/li>\n
          • The Capability:\u00a0 You describe the capability itself and its advantages and potential benefits.<\/span><\/li>\n
          • The Reward:\u00a0 You describe what rewards other, similar organizations have realized through the use of the capability.<\/span><\/li>\n<\/ul>\n

            Finally, you test to see if this capability also sounds interesting or particularly useful to the customer.\u00a0 If it does, you have successfully and positively differentiated.\u00a0 Look for as many opportunities to differentiate during Discovery as possible so that you set yourself up as the dominant or preferred vendor \u2013 the only vendor that can provide the capabilities now desired by the customer.<\/span><\/p>\n

            During the Demo:<\/span><\/p>\n

            Most vendors try to differentiate during demos \u2013 and very often end up \u201cbuying it back\u201d.\u00a0 This is an intriguing problem inherent in software sales.\u00a0 From the perspective of most vendors, offerings with more capabilities should be better for the customer, right?<\/span><\/p>\n

            Nope!\u00a0 Have you ever heard customers say, during price discussions, \u201cWell, you showed us a bunch of stuff we\u2019ll never use, so either take those capabilities out or reduce the price.\u201d\u00a0 The customers\u2019 perspective is that they are buying much more product than they need (\u201cCadillac vs. economy car\u201d), so they demand a price discount as compensation.\u00a0 This is known as \u201cbuying it back\u201d \u2013 a very sad situation for the vendor!<\/span><\/p>\n

            A more elegant and wise approach to differentiate during a demo is to use Biased Questions when you believe you may have uncovered an unmet need or other opportunity.\u00a0 The process is the same as using Biased Questions during Discovery, but in this case you can also offer to demonstrate the capability (if the customer would like to see it).<\/span><\/p>\n

            During Discussion of Implementation \u2013 and Beyond:<\/span><\/p>\n

            Traditional sales people (and sales teams) are done with their sales cycles when the purchase order arrives, leaving implementation to their professional services team, partner organization, or the customer.\u00a0 Stronger sales people and sales teams develop a vision\u00a0with the customer<\/em>\u00a0of the steps and process of moving the customer from their current problem state to completed implementation \u2013 the \u201cgo live\u201d date.\u00a0 (Some sales methodologies call this process developing the \u201cTransition Vision\u201d).<\/span><\/p>\n

            The truly terrific sales people and sales teams carry this further out into the future \u2013 to the point where the customer has his\/her first small win, small victory, or initial ROI.\u00a0 This is also the point in time when the customer can become a real reference.\u00a0 What a wonderful way to positively differentiate!<\/span><\/p>\n

            Beyond the Software<\/span><\/h4>\n

            But wait, there\u2019s more\u2026\u00a0 In earlier articles and blog posts I recommend (rather strongly) against inflicting corporate overview presentations on your customers.\u00a0 Interestingly,\u00a0some<\/em>\u00a0elements from typical corporate overview presentations can be harvested and used to differentiate very nicely \u2013 but not in the form of the dreaded traditional corporate overview.<\/span><\/p>\n

            Once a customer has seen that your offering can provide a solution to their problem, they begin to be interested in learning more about your organization.\u00a0 After all, they are not just buying your code, but they are also buying a relationship with a vendor.<\/span><\/p>\n

            Think about how customers perceive your strengths, as an organization.\u00a0 For example, what is your reputation regarding support?\u00a0 Implementation?\u00a0 On-time and as-promised releases (Oh, please\u2026!).\u00a0 Technology leadership?\u00a0 Some of these strengths represent opportunities to differentiate, beyond your software.<\/span><\/p>\n

            For example, let\u2019s say you have a particularly strong and active users\u2019 community \u2013 and your competition does not.\u00a0 Here\u2019s an opportunity to use a Biased Question to differentiate:<\/span><\/p>\n

            You say, \u201cSome of the other customers we\u2019ve worked with that had situations very similar to what you\u2019ve outlined so far, found that one of the most important aspects of the relationship with the vendor had nothing to do with the software itself.\u00a0 They found that interactions with the users\u2019 community enabled them to easily solve problems they had previously struggled with, deploy more broadly than expected, and implement new, unanticipated applications that were shared within the community.\u00a0 They were able to realize hundreds of thousands of dollars in additional gains and savings as a result.\u00a0 Is access to this sort of community something you might\u00a0also<\/em>\u00a0find useful in your implementation?\u201d<\/span><\/p>\n

            Your customer responds strongly in the affirmative.<\/span><\/p>\n

            You add, \u201cWell, I\u2019d be happy to connect you with some of the principals of the local users\u2019 group so that you can get introduced right away\u2026\u201d<\/span><\/p>\n

            The result?\u00a0 Positive differentiation based on organizational strengths.\u00a0 [The process of identifying these strengths is known as \u201cWhole Product Analysis\u201d, the term coined by Regis McKenna and popularized by Geoffrey Moore in “Crossing the Chasm<\/em>\u201d \u2013 really good stuff!]<\/span><\/p>\n

            What About Price?<\/span><\/h4>\n

            Really?\u00a0 If you have to differentiate on price you\u2019ve failed to establish sufficient value \u2013 both with respect to the customer\u2019s problem and especially the value of your solution.\u00a0 (Time to return to doing Discovery\u2026!)<\/span><\/p>\n

            Truly Terrific Competitive Differentiation \u2013 What, When, and How<\/span><\/h4>\n

            What:\u00a0 Look for opportunities to differentiate positively \u2013 capabilities or strengths that are perceived as\u00a0beneficial<\/em>\u00a0by the customer \u2013 and be aware of how easy it is to differentiate\u00a0negatively<\/em>\u00a0in the eyes of the customer.<\/span><\/p>\n

            When:\u00a0 All the time(!); and especially during Discovery, during demo delivery, and during discussion of implementation and beyond.<\/span><\/p>\n

            How:\u00a0 Through the use of Biased Questions \u2013 and sources for topics can come from either the capabilities in your software or the strengths of your organization.<\/span><\/p>\n

            [Of course, many Great Demo! practitioners comment that simply following the Great Demo! methodology is a terrific way to differentiate, positively!]<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

            Competitive Differentiation: vendors want to differentiate, vendors try to differentiate, but most vendors fail to meaningfully and successfully differentiate, in the opinion of their customers. When done poorly, differentiation can be stunningly awful; when done well it can be truly terrific! <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[19,14,11,8,9,17,12,10,13],"tags":[6,7],"class_list":["post-29073","post","type-post","status-publish","format-standard","hentry","category-aweful_demos","category-advanced_topics","category-beyond_demos","category-great-demo-blog","category-growth_development","category-justifying_training","category-marketing_topics","category-methodology_basics","category-mostly_for_managers","tag-articles","tag-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/posts\/29073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/comments?post=29073"}],"version-history":[{"count":1,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/posts\/29073\/revisions"}],"predecessor-version":[{"id":47485,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/posts\/29073\/revisions\/47485"}],"wp:attachment":[{"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/media?parent=29073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/categories?post=29073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/greatdemo.com\/wp-json\/wp\/v2\/tags?post=29073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}