Many founders and marketers believe that their products are better. Every week I hear stuff like “we have the better product”. No, you don’t. There are no netter products. If you believe you have the better product, well, you are already in the perception trap.
The perception trap can snap in all software categories–from self-serve products to complex enterprise solutions. Product-led growth companies are in most danger since they use the product as the primary acquisition channel.
If your company falls into the perception trap, it affects the brand and its credibility as well as the positioning in the market. The consequences are disappointed users, high churn, and lost revenue. In simple words, the growth loop dies before it has started to pick up speed.
Yes, I created this little sticker and whenever someone is telling me the better product story, I am sending the sticker. Marc Benioff inspired me with his “No Software” sticker when he founded Salesforce.
Let’s have a look at what I mean by “Perception Trap” and how you avoid falling into it.
Why do we believe in better products?
The list of products and categories we compare is long. Just think about your favorite products and which ones you declare as “better”. Let’s do a little test. Look at the examples below and note whether the statement is right or wrong.
🍔 McDonalds is better than Burger King
🧃Coca Cola is better than Pepsi
🚘 Tesla is better than Audi
📱Apple’s iPhone is better than Google’s Pixel
Now, coming to the software world:
📀 HubSpot is better than Salesforce
📄 Google Docs is better than MS Word
We can go on like this for the next few hours. Did you ever ask yourself why one is better than the other? The answer is quite simple. We generalize our own preferences and present this as “better”. The reason for this lies in the way we perceive everything that is around us.
What is the Perception Trap?
Let’s take a short trip back to the 1970s to understand what perception is all about and what it means for strategy, positioning and the go-to-market approach.
In his book “How real is reality” the Austrian scientist Paul Watzlawick described how our reality is created. Watzlawick mentions that reality is a result of communication and that we all live in our own reality.
We do not all live in the same reality (no, I do not mean simulations or matrix). We form our reality over time based on our experiences, education, social background, and many other factors that are communicated to us throughout our lives.
As marketers, we need to understand that there is no objective reality in which our product is better than anyone else’s for everyone. That is an illusion. Our individual perception is the reality. And everyone perceives reality differently – including our products.
So we’ve known for almost 50 years that there are no better products, and yet we keep falling into the perception trap. Crazy, isn’t it? 🙈
The impact on Brand and Growth
Before I show you how to avoid or escape the perception trap I want to remind you what the wrong approach with “Better Products” causes.
If you promise something you can’t deliver, you lose credibility and trust, which can quickly lead to failure, especially for startups.
The positioning as a better product is not precise or even misleading and leads to a gap between promise and delivery.
Customers share their experiences with products, with positive experiences but even more with negative ones. This leads to negative word-of-mouth and can kill an acquisition channel.
If word-of-mouth is an essential growth loop for the product, growth is deprived of its foundation.
The result is an unnecessary effort in lead qualification, frustration in the sales team and thus higher acquisition costs.
On the retention side, high churn and low user adoption spread, expansion and healthy net retention rates are wishful thinking.
One of the most common problems with companies that have fallen for the “better products” craze is inadequate segmentation and overly generic positioning and messaging.
How you can avoid falling into the Perception Trap
The solution is actually quite simple. Here are 5 questions to avoid the perception trap:
- What do we / our products do differently than existing solutions (that we want to replace)?
- What do we / our products do differently than comparable solutions on the market?
- Which customers find our product better to solve their individual problem?
- Why do the customers feel it is better for them?
- How can we communicate these differentiators to target our ideal customer profile?
Change your mindset from believing in the better product to positioning the product with differentiators. Better exists only in the individual reality of a single person related to a specific problem. Whoever manages to define a specific segment and to clearly address the message has a competitive advantage.
Turn your differentiators into your advantage
By the way, I often see product teams and engineering falling for the “better products” belief. Probably because they always perceive their own “baby” differently. Mostly more positive than in the reality of those who are supposed to buy it.
Marketing and Sales believe they can do this with a good story but quickly realize they are selling to the wrong customers or Customer Success and Support are bombarded by frustrated customers.
In summary, there are five areas that must be properly defined and, most importantly, must work together. This applies above all to the teams.
- Market segmentation / Ideal Customer Profile
- Product vision and roadmap
- Go-to-market approach
Alright, I’m going to get an In & Out Burger, the best burgers around 😂😂😂
Dirk Schart is Director Growth & Marketing of PTC’s Vuforia suite and former 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 for Marketing”.