How to Turn a Competitor's Strength into a Weakness

We all operate in competitive markets, and often, it feels like our competitors’ strengths are impossible to overcome. But in my experience, we must remember that value varies enormously between customer segments and buyers. What looks like a strength for one market segment can be a weakness for another. Much like some martial artists are trained to use their competitors’ energy, strength, and momentum against them, we can also employ a little positioning jujutsu to win against seemingly stronger competitors.

One Segment’s Dream can be Another Segment’s Nightmare.

Back in my days as an in-house VP of Marketing, I went through several acquisitions (six, but hey, who’s counting), and it was interesting to look at the way we would position something as a strength for a mid-market customer (ease of use, rapid onboarding), only to discover post-acquisition that enterprise customers saw that same capability as a weakness (could not support the full range of required use cases, didn’t integrate with other critical business systems). This played out across different buyer personas as well - in one case, we sold to business buyers who loved our ability to give end-users the power to tap into data anywhere in the enterprise to make more informed decisions. Post-acquisition, the main deal champion was an IT leader worried about the data security and governance implications of all that end-user data freedom. One buyer’s dream can be another buyer’s nightmare.

Styles of Marketing JuJitsu

Here are a few styles of “positioning jujitsu” I have seen used successfully more than a few times. We will dive into each of these below.

Market Leader vs a Newer Challenger

Every market has leaders and challengers. Leaders have serious advantages (and should claim them), but newer entrants can and often do successfully compete.

Market Leader Advantages

1. The Low-Risk Choice - The accepted market leader in a space has a massive competitive advantage because they are the low-risk choice. Nobody is getting fired for picking the top vendor in the market, and this is a true position of strength. If you are the market leader, you would be wise to loudly call out that fact and rigorously defend against competitors who might be willing to lie and say they are bigger when they are not. Failing to remind the market of your leadership could leave you open to a fast-growing competitor who claims leadership and positions you as yesterday’s news.

2. Meets the Needs of a Broader Set of Users and Use Cases - mature products can generally deliver value for a wider range of use cases and buyers than a newer product. Market leaders should always lean into the value they can deliver that smaller challengers cannot. Beware, however, that fast-moving challengers are always catching up. Any market leader that slows down on innovation risks being unseated by an aggressive number two.

Market Leader Disadvantages

I’ve had many situations in which we successfully sold against more established companies by pointing out the obvious downsides of market leadership. Tactics to position against the market leader usually focus on the two things a market leader is generally weak at - meeting the needs of specialized segments and quickly responding to market changes.

1. “General purpose” and not specialized enough to meet the needs of certain segments – market leaders, by definition, need to appeal to a wide swath of the market to continue to grow. There will invariably be segments with special needs that the leader does not serve well. A specialized vendor can establish themselves in that beachhead market before expanding into a broader segment. In the early days, Salesforce positioned itself in the SMB market, where Siebel didn’t compete (and showed zero interest). Hubspot similarly crept into the marketing automation space bottom-up against competitors like Eloqua and Marketo, which didn’t serve that market well. Today, they are giving Salesforce a taste of their own medicine by focusing on the lower end of the CRM market - a market that Salesforce no longer serves well. There are also many examples of vertically-focused companies successfully competing with larger competitors. Vlocity grew to over $100M in revenue, successfully selling a vertically specialized product (built on Salesforce) against Salesforce until it was acquired.

2. “Legacy” or slow to adopt new technology – Leaders can often be cautious when adopting new technology or cannot adopt it quickly due to their reliance on an older underlying technology stack. A big technology shift can open up an opportunity for a challenger in the market to position the leader as a “legacy” solution that can’t deliver the value that comes with the new tech. In the early days of cloud computing, Oracle’s Larry Ellison dismissed it as a fad for years, leaving an opening for companies like Amazon, Microsoft, Snowflake, and Databricks to chip away at their share in both enterprise applications and data solutions.
   Of course, not all market leaders are slow to adopt new technology. You might argue that Salesforce isn’t the best CRM option for a small business, but any sane observer watching them adopt AI into their offerings could not credibly call them “legacy.” They are a good example of a market leader that is vigorously attempting to defend themselves against the “legacy” trap.

A Broad Platform or Suite vs. A Best of Breed Tool

For as long as I’ve worked in technology, there has been a fight between broad “Platforms” and best-of-breed tools. Platforms have obvious benefits for a certain type of customer, but tools often win with others.

Platform or Suite Advantages

1. Dealing with one Vendor is Easier - Dealing with multiple vendors is hard. When there are problems, customers hate when vendors point fingers at each other and prefer “one throat to choke” (or “one had to shake”).

2. Fewer Integration Hassles - A platform from a single vendor is often easier to deploy and adopt than a series of tools from different vendors. In general, customers should spend less time making the piece parts work together if they all come from one vendor.

3. The Value Derived from Shared Data and Context—This should be a platform's true value. If everything on the platform shares information, there should be real value for the business. The value will vary depending on what the platform does, but in general, a platform can enable things that separate tools cannot because there is no shared metadata. 

   If you rely on “one vendor is easier” or “less integration,” I would encourage you to consider the real value of integrating the platform's parts. This is the ultimate way platforms win.

Best of Breed Tool Advantages

1. Some parts of the platform kinda suck – every broad platform offering has its under-resourced, step-child piece parts. Best-of-breed solutions can focus on what the customer is giving up by choosing a broader platform option. Companies can often neutralize the platform’s value (by having partnerships or integration with other solutions), particularly for customer segments where your tool represents the most important part of the platform.

2. Vendor lock-in - Customers know they can’t predict the future. Adopting an independent set of tools allows them the flexibility to swap something out in the future. Platform lock-in is a risk that many buyers (not to mention procurement folks) worry about.

3. Deployment and Adoption May Take Longer—A platform’s broader functionality often means deployment and adoption are more complex, time-consuming, and expensive. Platforms will claim that there is less integration work with them than with a set of standalone tools, but if a customer mainly wants one piece, deploying it standalone is faster and easier for the team to learn. This isn’t always true, but where it is, standalone tools can win on this point. 

4. Overall project risk is higher – We know that perceived risk is deadly for deals. A point solution often represents a smaller, faster, easier, cheaper, and lower-risk project. Calling attention to that can tip the scales in favor of a point solution over a platform.

Low Cost (or Free) vs. Higher Price

I regularly hear vendors complain that it’s impossible to sell in a market where a competitor is selling for a very low price or giving it away for free. In my opinion, “free” isn’t the market-killer that most people think it is

Free (or very low cost) Advantages

1. Easy on the budget - Like, duh.

2. Users can Adopt Without Management Approval - this is a big deal, and for many companies, using a product-led approach to avoid procurement and management approvals can be a seriously big win. Once you are in, you can work on either selling end-users an upgrade or sending a sales team in to sell a larger enterprise deal where you can use the existing users as proof that at least part of the solution already works in the company’s situation.

Disadvantages of Free (and the advantage of charging more)

1. Support sucks for free products - Free products often don’t have the support that a larger business would want. When users get into trouble, they are on their own. When the company is rolling the product out across departments, they may need help. The more critical the product is, the more this matters.

2. Manager Value (vs User Value) - Lower cost or free products are often designed with end-users in mind. However, they often lack the functionality that a manager or executive wants. Can we analyze what is happening across users? Can we control who is allowed to do what across the company? When the buyer is a manager, they often don’t have the same definition of value as an end-user and managers will pay money to get it.

3. Lacks the Value that Higher Priced Products Deliver - This is obvious but bears repeating - customers don’t always choose the lowest priced product. The way to beat a lower-priced product is to be excellent at selling the value you can deliver that the cheapies cannot.

I’m sure folks reading this have a dozen other tricks they have seen to position a competitor’s strength as a weakness. I’d love to hear about those in the comments!

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It’s been a while since I dropped a newsletter. On a personal note - last month, I lost my sister to cancer. November was a hurricane of chaos and sadness that flattened my family. I focused on my family for a month, re-scheduled client work, canceled speaking engagements and shifted dates on several calls, podcasts, and training sessions. This kind of life circumstance shows you the caliber of people you surround yourself with. Everyone (ok, there were a couple of notable exceptions) was gracious, understanding, and kind. The folks who helped me out and cut me some slack are too long to list, but I’m happy to report that I do not hang out with a bunch of jerks personally or professionally.

I’ve been taking a podcast break, but we will return in January with new episodes. In case you missed it, I love this one I did with Georgiana Laudi on Customer Research.

I’m coming to SaaSiest London on February 4th. Join me!

Thanks so much, as always, for following along - I appreciate you folks!

April