Our product is better than X. Our USP is Y. Our competitors do Z. Let’s set the stage: Better is not decisive. USP does not exist. And what the competitors do is secondary. You are still with me?
I’ll show you why different is better than better and what influence it has on the individual perception of users and buyers.
1. Marketing is a battle of perceptions, not a battle of products
The phrase comes from the 1980s, from Al Ries’ book “The 22 Laws of Marketing.” And the message is just as true today. If person A thinks something is “better”, then it is because it is better for them personally, for their needs and based on their experience. For person B the same product can be worse in comparison.
Therefore products are not better than others, they are different. We all live in our own reality and perceive it differently. This happens because of our background, upbringing, education, experiences and the resulting expectations. This single reality, which we describe as the right one for us, does not exist in a general context.
What matters is that our product is “better” in our users perception, and that means being different.
2. Forget the USP
Anyone who studies marketing learns the USP – the Unique Selling Proposition. I have been searching for the USP since my studies and still haven’t found it. The reason is that the USP is a myth.
When I ask about the USP of companies, I often hear about Coca Cola and their strictly guarded recipe. Who buys Coke because of the recipe? Nobody. Coca Cola has a unique brand and is great at storytelling.
Apple? Who can really explain why you spend $500 on headphones? Again, it’s experience and brand-actually almost movement instead of brand.
Instead of looking for the USP, it is smarter to determine your own differentiators and have a clear positioning.
3. Work on differentiators, not on features
Where does our product or service differ from others? This question is especially important for startups that want to compete with existing competitors in existing markets or with the big players in new markets.
Roadmaps are usually built based on what is technologically appealing or what feedback comes from customers. It is important that differentiators come into the product that make our product more valuable than other products for a certain target group. The product strategy needs a clear distinction in the market.
4. Alternatives beat competitors
We always look at our competitors. What do they offer, what channels are they on? But does that mean our competitors are doing everything right? Of course not.
What’s important, especially with new technologies where user adoption is often lacking, is our differentiation from existing solutions.
Companies and users may not yet have discovered that there is a solution to their problem. Therefore, it is much more important to show what is different with our solution than with the existing solution.
Out of 10 pitch decks, there may be one that shows how the product differs from alternative product categories. Mostly you only find competition tables.
5. Work on defensibility
Strong differentiation and clear positioning help build defensibility. It forms the foundation for category creation and brand building.
Well-known companies have an advantage especially in the B2B environment due to their name recognition and existing trust. When in doubt, customers choose a well-known brand to reduce risks.
In new markets like the Metaverse-and especially inCrypto and Blockchain-this phase is taking place. Companies like OpenSea have positioned themselves with a clear profile and are now growing as category leaders.
In addition, there are network effects that support defensibility. The more users on the supply side, the more value for the demand side and vice versa.
6. Positioning is not a one-off job
Differentiation does not take place in one’s own rooms. The characteristics flow into the positioning and thus into the story.
Positioning is often done as a quick task. Write a positioning statement and you’re done. Most of them talk about technology and how great – i.e. innovative, smart, leading – the company is. All nonsense.
Just as important as finding and defining the differentiators, working them into the product and having alternative solutions in mind, is to build an understandable positioning. And this is a continuous process, like product development.
Dirk Schart is CMO of the No. 1 Enterprise AR startup RE’FLEKT. He is a brand and growth leader and focuses on bringing B2B software and SaaS products to market —from zero to hero. Dirk is the former Director of SaaS Products at HyperloopTT, and helped scale SkyWork from 30 to 200+ in less than 18 months. He mentors startups at the German Accelerator in Silicon Valley and is the author of “Augmented and Mixed Reality for Marketing”.