Relevant Differentiation vs. Best Available

A number of years ago, I worked for an enterprise software vendor that offered an outstanding product – a product that we were convinced was the best available in its’ sector. Enterprise software evaluations frequently involve consultants, RFP’s, multiple rounds of meetings, site visits and detailed demonstrations. This evaluation was no different, however its’ final resolution was a marketing lesson that I have not forgotten.

Our firm progressed from the initial 8 firms that were contacted to one of two finalists. We were substantially more expensive than the other finalist but offered a variety of very clever capabilities that we felt justified our pricing differential. However, the prospect had created a “knock-out” list of 10 things that they felt were particularly vexing functional challenges that any enterprise software solution would likely struggle to address. Interestingly, both finalists addressed all 10 of them! So while we did some things that the other folks didn’t, from the perspective of the prospect, we were differentiating ourselves along a set of capabilities that were so esoteric that they couldn’t find their way to including those capabilities on a “knock-out” list. If you’re differentiating yourself beyond the “knock-out” list capabilities (think functionality that only a dog can hear), presume that most of your prospects will stay prospects. Companies pay a premium for certain things, but abstract capabilities that aren’t relevant to them aren’t one of them.

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