The company tells me that they've developed a wonderful solution with a boatload of impressive features.
But they're selling into a market that's already crowded with other vendors.
Just what the world needs - another HR or CRM or email marketing or whatever solution.
Finding an unmet need, a hole waiting to be filled
But on second thought, I think maybe there's a way for this to work after all. Maybe we can make the case that the world does, in fact, need another solution.
The challenge is to figure out a way to present this new solution as something different and better than the other choices that are already out there. We need to determine if there's an important unmet need in the market that this new solution can fill.
Sometimes being late is an advantage
By the way, sometimes there’s an advantage to being a late-comer to the market.
The early entrants have already done much of the missionary work, educating the market and customers are already familiar with the category.
Having had more experience with other solutions, the customers may better understand their needs and preferences. It’s easier to determine what’s really important to them.
A late-comer can also learn from the experience of the established vendors and avoid their mistakes.
Tough to differentiate on features or price
Sometimes, companies’ first inclination is to try to differentiate themselves on features. “Our solution has this function and the others don’t.”
Unfortunately that’s hard to pull off. For one, getting prospects to carefully evaluate all their choices feature-by-feature can be tough.
Besides, since SaaS companies can develop and deliver new functions fairly quickly, it’s hard to sustain this advantage for very long.
Others will consider positioning themselves as the “lowest price” solution. There are ways to make this approach work, but it can present challenges, especially when competing against larger, more established vendors that have deeper pockets and can match the low prices.
Lots of options to look different and better
But there’s no reason for SaaS companies to limit their differentiation options to just features or pricing.
They could, for example, decide to position themselves as the vendor providing the best support or expert guidance.
Or they could highlight the fact that they specialize in a specific industry or market, and they better understand the needs of those particular users.
Or they might consider making a virtue of their smaller size and claim that they are more attentive to each user.
Or… whatever other benefit that might be valuable to the prospective customer. (Contact me if you need help figuring that out.)
If you’re competing in a crowded market, trying to stand out from the rest isn’t easy… but it’s usually not impossible.
