[Spoiler alert] It’s not just that other company selling the same thing as you.
It may also be a spreadsheet. Or a manual process. Or just good old fashioned inertia.
And if you don’t get clear on who AND what your prospects are choosing over your solution, you risk a big gap in your messaging.
So I challenge you to go wider.
Read the full video transcript here:
Whenever I start working with a company on their messaging and positioning, one of the first things I ask them is to tell me who their competitors are. Most of the time they’ll come back to me with a list of about five or six companies — other software companies or startups — who are directly in their space selling exactly what they sell or something closely related. These are the people that they consider their biggest competitors.
Often they’re so focused on how they’re different or better than these competitors that their messaging gets very narrow. It’s all about why choose our solution over theirs, why choose us over them, how we’re different, how we’re better, etc. That conversation quickly goes into the real nitty gritty of features, like “we have a better integration” or “we have a better pricing structure for your needs.” It can get very narrow.
What I find is that competition is wider than that. It actually demands a wider definition. So I believe competition isn’t just the other people who sell exactly what you sell. Competition is anything that a prospect might choose over your solution and it doesn’t necessarily have to be another piece of software.
For example, that could be an Excel spreadsheet. It’s so common that prospects are just slapping together their own solution using spreadsheets. So that could be your biggest competitor even though you’re not selling a spreadsheet.
Another competitor could be manual process. “We don’t need computer automation to do this, we just do it by hand, it’s fine.”
The third that I see a lot is inertia. Not doing anything, loving the status quo. “I’m weary of changing to new software, “I don’t like change, we’re just gonna stick with how we’ve always done things.”
These three things are actually massive competitors especially for startups bringing something new to market.
It’s really important that you know how big of a competitor these other options are. So for example I was working with this really cool SaaS company who was bringing this new pricing software to the hospitality industry.
They offer really cool automation for managers that would save so much time and energy. And they assumed at the outset of our engagement that their biggest competitors were the other pricing software providers.
But when I started talking to their ideal customers and prospects what I learned was that the other pricing software was not at all a huge competitor in the minds of their prospects. No, the biggest competitor was that they didn’t really like the idea of automation, even though it took a ton of time, they liked putting things in manually and being in control, because it made them feel like they were in control. It made them feel like they could trust it. They just liked doing things by hand. And so this sticking to the status quo of doing things manually was the biggest competitor that this new SaaS company had to take on.
So that really guided the messaging. Instead of just talking about all this awesome automation and time savings, which really wouldn’t have resonated, we instead talked about why your current way of doing things, your manual processes, are really holding you back, here’s the cost of that and here’s what’s possible with a new approach that, oh by the way, uses automation. And that’s how we approached the messaging to really help prospects get interested in this software.
And we wouldn’t have figured that out if we hadn’t talked to customers.
So I’d love you to think broader about your competition. Don’t just stop at the hot new startup in your space that you know is launching the same thing that you have.
Go beyond and talk to some customers and figure out what they are using right now instead of your solution.
Because that might actually be your biggest competitor and you’ll want to take that on in your messaging.