Discover Your Superpower in a Sea of Sameness: How SaaS Companies Can Differentiate

“Software companies taste like chicken. They’re selling different products, but 80% of what they do is pretty much the same.”
* Robert Smith, Vista Equity Partners.

This quote from Robert Smith, a prominent investor in the software industry, highlights the harsh reality for SaaS companies. While they may offer seemingly unique products, the truth is that a significant portion of what they do is similar to competitors. How can a SaaS company distinguish itself and stand out from the crowd in a market saturated with countless options?

One approach often taken by companies is to invest heavily in advertising and establish a strong presence on social media platforms. While this can be effective, it requires substantial time, effort, and financial resources, making it an unattainable strategy for many companies, especially startups or those with limited budgets.

An alternative path to differentiation lies in brand positioning. Brand positioning involves identifying and emphasizing what sets a company apart from its competitors and what makes it better, unique, or different. It empowers companies to discover a particular slant, angle, capability, or superpower they can rally around.

Effective positioning does not necessarily involve a dramatic revelation. It often revolves around a specific feature that customers love or an aspect that competitors either cannot or will not offer. The goal is to find a niche within the market where the company can excel and provide value that competitors struggle to match.

Discovering how to stand out in a highly competitive landscape involves focusing on three key pillars: customers, competition, and offering.

Firstly, understanding the customers is crucial.

This goes beyond knowing their basic demographics. It involves delving into their challenges, frustrations, goals, and aspirations. Using frameworks such as the jobs-to-be-done approach can help gain insights into customers’ day-to-day lives, their research process, and the factors that influence their purchasing decisions.

Talking to different types of customers and gathering a variety of perspectives is essential for a comprehensive understanding.

Secondly, analyzing the competition is crucial.

Companies must identify the strengths and weaknesses of their competitors and gain insights into how they differentiate themselves. Studying the competitive landscape makes it easier to identify the crowded areas where competition is fierce and determine which untapped or less crowded areas to focus on.

Finally, a critical aspect of positioning is a thorough exploration of the offering.

Companies need to identify their strengths and weaknesses and understand what customers love and dislike about their product. This requires embracing brutal honesty and setting aside personal biases. Sometimes, it may be necessary to seek third-party perspectives to gain objective insights.

As Robert Smith rightly points out, most software companies offer similar offerings when it comes to benefits, features, and pricing.

Without a well-defined and effective positioning strategy, companies risk blending into the crowd, making it challenging for customers to consider them as an option, let alone the obvious choice.

To assess the effectiveness of their positioning, companies can conduct quick tests.

One approach is to ask employees how they perceive the company’s product or brand to be different. The answers should be immediate and straightforward, without hesitation.

As well, seeking the viewpoints of customers, particularly new ones who offer a fresh perspective, can provide valuable insights into how the company is perceived in the market.

If the answers to these positioning tests do not flow easily or sound generic, the company will likely have a positioning problem. Addressing this issue requires a reevaluation of the brand’s unique value proposition and a realignment of the company’s messaging and positioning strategy.

Bottom line: while many software companies may offer similar products and services, it is crucial for SaaS companies to establish a strong brand positioning strategy to differentiate themselves effectively. By understanding their customers, analyzing the competition, and taking an honest look at their offering, companies can rally around what makes them capture the spotlight.

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Originally published at https://www.marketingspark.co.