How to stay relevant in your category

The signs on the wall you should pay attention to

A couple of weeks ago I wrote a blog about ‘The Remarkable Effect,‘ an overview of the ten traits of remarkable software companies. Remarkable companies have something magical. When your software company is ‘worth making a remark about’ something special is happening. They have gained an edge that’s attractive to their ideal customers. Often this becomes their tipping point and removes their limitations to growth.

As such every business software company would want to strive for this. Fact is many might aim for it, only a few truly become remarkable in the eyes of their ideal customers. Moreover, that makes their life a lot harder than it should be.

Stay RelevantFix the symptoms

So, what makes it so hard for business software companies to become ‘worth making a remark about.’ It’s a question I try to answer in the process of writing my first book. I, therefore, explore the typical challenges (and underlying causes) business software companies face in their day-to-day fight to stand out in their market place.

Be aware: It’s a combination of factors; It’s very often not one thing; It’s a string of things. It’s not about ‘we’re not creative’ or ‘we simply haven’t got the ideas.’ It’s not about creating this one campaign to turn the ship – It’s often much more fundamental.

To turn the challenge into an advantage, the first thing to do is to recognize the symptoms, i.e. the underlying shifts that are happening with or without you knowing it. That’s what this week’s blog is about. 

The signs on the wall

Let’s start with the typical signs and signals that should ring alarm bells for you:

  1. You’re challenged to build engagement with prospects
  2. You’re less invited to the long list – let alone the shortlist
  3. When you are invited, you’re not winning enough
  4. You’re fighting a race to the bottom – the discount challenge
  5. Customers poorly adopt your new products
  6. The balance of new business / existing business is shifting to the latter
  7. Meeting new expectations in your market is a growing challenge

All these little signs are signals that come from one or more substantial shifts. Sometimes they are blurred, almost hidden or even contradicting. Remarkable companies anticipate those shifts and act on them,  because they are masters at staying curious. They realize that What got them here, won’t get them there (to quote a famous book from Marshall Goldsmith).

The three levers that inform the shifts: Mindset, Urgency, Expectation

What's brokenIn every project I execute with my customers three levers become the center of focus of everything we do – whether it’s crafting their value proposition, their product strategy or a pitch for a strategic prospect. Irrespective of the problem to solve, it’s your ability to match the Mindset, Urgency, and Expectation of your ideal customer that determines whether your approach is successful or not.

Here’s why: Let’s take a common problem that many organizations are struggling with: “The inability to spot operational risk fast enough.”

Seems like a problem many vendors could offer a solution for, correct? However, who wins is virtually always determined by the three levers i.e., how well a vendor can tune its actions to create a perfect blend. It’s where the trinity of Product Strategy, Marketing and Sales become a force.

Lever 1: Mindset – the segmentation challenge

Mindset is possibly the biggest influencing factor – it’s about what your ideal prospect is aiming for. Let me explain this by referring back to Geoffrey Moore’s book “Crossing the Chasm.” Here a famous categorization of the market is communicated in that you have ‘innovators,’ ‘early adopters,’ ‘early majority,’ ‘late majority,’ and ‘laggards.’

Each organization might struggle with the common problem mentioned above, but the way they react and prioritize to it is heavily influenced by the mindset they have. An innovator will judge your solution radically different than an organization that you’d categorize in the early majority group. Innovators are always on the lookout for something new; they are happy to take risks, it’s part of who they are /whom they want to be. Early Majority, however, is the opposite. They buy the cheapest, the safest, the lowest risk. They don’t want to be first. They don’t even want to be second. What they invest in doesn’t need to stand out, it just needs to do as promised. Not more, not less. A segmentation challenge more than anything else.

Many business software vendors think they are addressing innovators with their latest SaaS, big data, or mobile solution, but in essence, they are automating a problem that’s been well solved for over a decade.

So, going back to the signals – always be on the outlook for shifts in mindset amongst your ideal customers. What drives them, what problems hold them back, etcetera. It could be that you used to perfectly address the needs of innovators, where today the market is shifting, and this same product is starting to appeal more to the early majority. It requires a radical change in approach to be successful.

Lever 2: Urgency – the positioning challenge

Let’s discuss the second lever: Urgency. Urgency drives sales. If you can create tension between your prospects problem, your solution, and the fact that doing nothing is not an option, you’ve almost won. Positioning at its best. That also provides the challenge. As you can imagine, an innovator has a different vision of the world, different objectives to achieve it, and as such has a different concept of urgency. For them having your solution might give them an edge over their competition because now they can break the norm in their industry. That drives urgency behind the sale. The early majority, however, couldn’t be bothered less. Their sense of urgency is not angled around creating competitive advantage; it’s about avoiding waste and saving cost, being more efficient. It requires a different approach from you to stand out in their eyes.

Back to the signals: Chances are you offer a solution that, three years ago, was in high demand because there was a clear connection between problem and urgency for innovators. Today that urgency can have evaporated entirely leaving you with an excellent solution, but no customer that wants to buy it from you. The urgency has shifted, and your positioning is falling flat on its face.

Lever 3: Expectation – the product challenge

Now the last lever: Expectation. Expectations always evolve. It’s very much influenced by what we believe is the norm of what ‘good’ looks like. Again, innovators have different norms than the early majority – so one size fits all won’t work. You have to be very articulate in who’s your ideal customer. Only then you can tune your solution to exceed the expectations of your ideal customer and gain an advantage over your competitors. Being articulate about what defines your ideal customer allows you to evolve with them as their expectations change – not only in your marketing or your approach to sales but more importantly in the choices you (need to) make regarding product strategy.

Many business software vendors define their business they are in in the same category as they’d set it when they founded their company. ‘We automate finance.’ ‘We optimize HR.’ ‘We streamline your manufacturing process.’ That’s all good, but it is not what your customer is looking for. For them it’s not about the ‘what’, but about the ‘why’ and ‘how’. They are buying the outcome of what you do, and that’s a moving target.  So if you don’t evolve how you address the outcome chances are that customers that bought your solution five years ago, would not repurchase it if they’d be asked tomorrow.  As they grow, so do their expectations and their perspective of what excellent looks like.

The lesson to be learned

As you can imagine, the third lever ‘Expectation’ isn’t one you fix as easy as the two previous levers Mindset and Urgency. As such, to stay relevant in your category requires you to constantly evolve across all three levers. A big recommendation here is to not to do so by responding to the market, but by responding to your ideal customer. No one can ever find the resources nor budget to respond to the market effectively. However, by being very articulate what defines and drives your ideal customers puts all the change into context. It enables you to spot the signals early on by understanding shifts in mindset, urgency, and expectation. It allows you to optimally align the trinity of product strategy, marketing, and sales to leverage your impact. It will make decision making easier, will let you to be resourceful, assign enough resources behind the things that matter most for your ideal customers (and give you an edge), so you are always one step ahead. That will be noticed and rewarded.


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About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.