Comparing Yourself Publicly to the Market Leader

I'm better than youMarket leaders almost never compare themselves to competitors publicly because it gives their competitors legitimacy and potentially shows nervousness about them.  But what if you’re #2, #3 or worse in your market in terms of market share or some other important attribute?  Is it OK to compare yourself publicly to the market leader?  If so, how direct or inflammatory should you be?  Let’s explore further.

First, let’s differentiate between being a close #2 in the market versus a nobody-knows-us #5.  The closer you are to the market leading position the more you want to act like the market leader, which means less direct comparison, less disparagement and more highlighting your value proposition.  The further you are from the market leading position, the more lift you can possibly get by directly comparing/contrasting yourself to the leader.

Often, a startup or early stage company has far less breadth of functionality than the market leader but is far less expensive or with superior ease of use (for example).  An awareness campaign headline might look something like, “Shockwave has all the key functions of Acme but at half the price.  Download a free trial to see for yourself.” or “Why waste time and resources training your employees how to use Acme?  Shockwave is so easy to use, your employees won’t even need a cheat sheet.”

A startup I advise recently asked me how aggressive and directly comparative they should be to the market leader.  The startup had compiled a list of 101 ways they are superior to the market leader and the items in the list were apparently factual (let’s assume that’s true).  The question was how to market and promote the list to gain awareness.  The final decision is less important than the continuum of options I described to this startup.  Here’s a graphical representation using Acme as the market leader and Shockwave as the startup.

Comparing to the Market Leader

Even for startups that have just launched the first version of their product and aren’t known by anyone, I can’t think of a scenario that would justify the most direct and disparaging approach shown above (far left).  Maybe this comes from my time spent at market leaders like IBM, Compaq and NetQoS, where we never disparaged the competition.  It was also engrained into the company culture (see related blog article titled “Founding Principles – Do You Have Them?“).  To me, disparagement comes across as desperate and gives a strong hint of an overly-aggressive and unappreciative company culture.  Contrast this with the approach on the far right that doesn’t even mention Acme but rather messages exclusively on Shockwave’s value to the customer.

The two approaches in the middle of the graphic are similar but with an important distinction, in my mind.  Both include the Acme name to help cast the Shockwave name in the same light (in other words, help prospects perceive both companies as peers).  But the one on the left (“… Shockwave is better than…”) is more direct in its claim of superiority before even revealing the actual list of 101 ways that supposedly substantiate the claim.  In other words, you’re giving the prospect the answer up front.  The one on the right (“… Acme customers should consider…”) avoids a direct attack in exchange for asking customers to just give your company and product a look.  In essence, you’re purposely leaving the power to discover and evaluate in the hands of the prospect.

Conventionally-speaking, the more unique you are or the closer you get to the market leader in whatever dimensions are important, the more you move towards the examples described on the right side of the graphic.  Of course, every industry and every situation is different.  The main thing is to think about what you’re trying to accomplish, where you sit in the market and what sort of reaction you’re hoping to get from prospects with your claims.

One final thought.  Regardless of any of your public marketing campaigns that take the “high road” (on the right half of the graphic), your sales team will often find themselves needing to be more direct in their comparisons to the market leader or some other competitor.  So while your public messages may lean towards the “pure value” end of the continuum, your sales tools and collateral intended for the sales team to use with prospects during the late stages of the consideration cycle might be more direct.  That doesn’t mean disparaging, just more direct.

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Wait, there’s much more!!!

The information in this article is just a very small piece of what I cover in my Founders Academy Video Library, which includes more than 35 topic-specific modules and 6 themed compilations.

I’m talking about more than 13 hours of educational and advisory content to help you grow a great company.  Click Here to Learn More

“The way you convey the material is great and the examples you give makes things clear.” (startup founder)

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen nearly 1,000 startup pitches, advised more than 200 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, serving twice as President and three times as CMO, Gordon has both an IPO and a $200M acquisition exit under his belt. Now his emphasis is purely focused on helping startups and early stage tech companies. Through his Shockwave Innovations advisory practice and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon is an active angel investor, VC and startup advisor.

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