If you’re a founder, an investor has undoubtedly asked you some flavor of the question, “So, what makes you different?” The reasoning behind this makes sense – meaningful differentiators position a product to stand out from the crowd, which is essential from a sales and marketing perspective.
However, it’s crucial not to oversimplify the concept of the competitive differentiator, as being different from the competition is rarely enough of a selling point on its own. The real question investors should be asking – and the question founders should be asking themselves – is, “How does your differentiator translate to incremental client value?” In the absence of clear and quantifiable client value, a highly differentiated and appealing solution is no better – and maybe even worse – than a non-differentiated and commoditized product.
Let’s say you’re clear on your competitive difference and can link it directly to incremental value for clients. What’s next? Time to think through replicability. The best differentiators are those that can’t be easily replicated, allowing you the time and opportunity to establish a foothold in the marketplace before competitors or established incumbents launch similar products. In a best-case scenario, your differentiator will be rooted in a secret sauce consisting of factors like intellectual property, proprietary insights from rare data sets, or sheer technical excellence. When this isn’t possible, effective differentiators can be rooted in unique methodology, highly efficient processes, and top-tier talent.
It’s important to remember that copycats are usually inevitable, as almost everything can be emulated with enough time and investment. The key is making it challenging for competitors to imitate your product, allowing you enough time to complete sales cycles and establish a strong foothold in the market. To do so, it’s crucial to develop simple and easily digestible product positioning. While it can be tempting to highlight the complexity of your technology, customers are usually most concerned with whether your product will increase their efficiency, win budget and internal buy-in, and be implemented with minimal friction. Your sales materials should lead with solutions to client pain points, using simple analogies and examples to convey the essence of your product without losing the sophistication if that is your differentiator. Overly complicated messaging often signals a lack of credibility and can cause customers to lose conviction in your offering.
The reality is that although differentiated technology can give you time to establish a foothold in your target market, it can also be challenging to sell – a lesson we learned firsthand during the decade we spent building and scaling Jvion. Clients find comfort in familiarity, and technological innovation can push them out of their comfort zone. In practical terms, this often means they’ll need to revisit their budget to get approval for a new product category, rather than simply buying a product in a category for which budget is already allocated. This can be a huge lift for customers, but your team can help. Our advice? Use marketing material to communicate your willingness to support clients in writing budget statements. This will help build goodwill and accelerate your sales.
- Shantanu Nigam, Managing Partner
Are you innovating in healthcare technology? Get in touch with us here.