AMA: Splunk Sr. Director, Head of AIOps and IT Ops Products, Kara Gillis on Product Differentiation

I love this question. The answer is: it depends on the exec team and how they are motivated, whether they are answering to private investors or public shareholders, etc. But - to put it simply - find someone on your exec staff who both 1) trusts you/your vision and sell them the vision and 2) is trusted by the rest of the executive team and can sell your vision or has the budget authority to invest. What do you need to sell it? A business case. I think of a business case as satisfying the inputs to the following equation: "why should we do this" + "what do we need to do" + "how much it going to cost us" = "eventual benefit to us" Many templates exist for things like this, like North Star exercises, Market/Products Requirements Documents, and Amazon's PRFAQ. Your organization probably has a template they prefer, or you can introduce an existing template to your organization if it doesn't. Just make sure it has: 1. The "why", which can come from a couple places: Untapped opportunity in an adjacent market your product could address, Customer feedback requesting this investment (this is the most compelling way to back up your assertions) bolstered by competitive pressures (this makes exec teams sweat) 2. Requirements and costs. Understanding the upfront engineering investment, ongoing COGS, and time horizon to reach projected ROI 3. Some kind of financial projection. How accurate are these? Depends on how much data you can get to influence your assumptions.

While I don't use an existing framework specifically for product differentiation, I do use a variety of inputs to determine what lever to pull or what decision to make. These inputs can be found in the answer to the question, "What are the most important inputs to take into consideration when thinking through product differentiation?" Other frameworks I do use: 1. Geoffrey Moore's Positioning Statement Template in his book, Crossing the Chasm: "For (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (statement of key benefit – that is, compelling reason to buy)." 2. Gokul's SPADE Decision Making Matrix (thank you to a former Square employee for introducing this to me at a recent networking event): https://coda.io/@gokulrajaram/gokuls-spade-toolkit

This can be a very frustrating situation to be as a product manager. This situation tells me you work in a market that hasn't matured to the point of clear nuance. The culprit could be either a product problem OR a marketing problem. The reason this can be frustrating is your product is being held to a set of standards it shouldn't be, and therefore customers get disappointed - its own form of death spiral if something doesn't change. It sounds like one or more things could be happening here: 1. Customers haven't started to view the market in subsegments yet - they still view their problems in one way, while you are framing their problems in a different way. If other folks don't understand the difference - and your product *truly* (this part is important) both does and delivers something completely different, I recommend doubling down on the differentiation through specificity. Call out what makes your target customers underserved (their titles, their industry, their organization size, how cloud native their apps and infrastructure are, etc.) and how your solution is tailored specifically for them. I think it even helps to differentiate your product within the broader market category. I'm going to use a sports analogy because nearly all business metaphors are conveyed this way, so why change now? For example, let's say you sell baseball bats. You make smaller, lighter bats for Little Leagues, but Pro Athletes are evaluating your bats for use in the MLB. Pretty big problem, right? Instead, I suggest calling your product not as "Baseball Bats" but as "Little League Baseball Bats for Kids." See the difference? Now, the SF Giants won't try to order any because they understand your product is not targeted to them. 2. Misalignment of how you view yourselves (positioning) vs how customers view your product (messaging). When you say "our product does something completely different than another product in the market" - is the value delivered also completely different? Or are they two approaches to achieve the same outcome? This is more dangerous because **the call is coming from inside the building** ...in this case, the differentiation is in the OUTCOMES and VALUE derived by the customer within the same market. Why is your approach better? Go back to those customer stories and push the heck out of them.

This is a tale as old as time. There are many ways to approach this. I have seen vendors heavily bid on the AdWords of their competitor names and promote alternative solutions (trials or marketing content). I have seen vendors who are challengers in mature markets create "Us vs. Them" web pages or blogs that outline the differences (according to the vendor publishing the info) what the major differences are. And, I have seen third-party research or analyst evaluations heavily promoted that rank vendors according to specific criteria (contracted by the vendor or annually conducted created by a research firm). However - the most powerful thing I see is customers doing the work for you. In general, I'm not a fan of tearing down competitors publicly. Think about a time you heard a friend talking about someone behind their back - it makes you feel uneasy, maybe even distrustful of your friend, right? Now think of the inverse. What if you heard you friend tell you a positive anecdote about a service or new app they used for a problem you have. How likely are you to try that service/app? I believe positive associations are more powerful than negative associations for long term engagement and trust. Customer stories are your biggest ally here. Maybe you can include in the customer story that Customer A replaced an *unnamed* competitor with your solution, and UNLIKE *unnamed* competitor, they derived the following three benefits and business outcomes with your product. And now you can arm your sales team and/or partners with this story to have a specific "you vs. your competitor" conversation with one customer at a time, proven out by a trial or proof of concept. Put your customers on your website, have them speak to other customers (video testimonials, backchannel phone calls, on stage at your conference, etc.). Customers are your biggest offense against competitor messaging. 

There are several inputs I think about when considering product differentiation: 1. Specific target customer - There are many types of customers in a market. Who are you serving? Try to narrow your focus as far as you can to understand the specific problems faced by this customer to be as tailored to their needs as possible. Has a particular customer type been ignored or underserved in the market? If so, why? What value are they seeking but not able to find with existing products? 2. Specific value delivered - The inherent "why" customers use your product. Regardless of how many features/"bells and whistles" you think customers want on your roadmap, there are generally much fewer reasons why they use your product. What is the CORE reason? That is your moat. Stengthen and defend this core value proposition to the best of your ability before adding more stuff. This value is the point of view you solve your customer's biggest problem - don't lose sight of it, or you'll start solving problems that don't matter. 3. Market maturity - Is this a new market? Is this a mature market? Hugely different considerations. In mature markets, the incumbents have defined what good looks like, or what customers expect. Incumbents will lage behind new entrants in not adapting quickly enough to new customer expectations, and new entrants may not accommodate the existing requirements fully enough. This is a hugely delicate balance to strike. This goes back to #1 - who in the market are you serving? Then, adjust accordingly. 4. Competitive benchmarking - You have to know why your customers choose other vendors. You have to understand why sales loses deals to these competitors. What value do they derive from these vendors. This is more of a general understanding of where you fall in the market to understand if there is a difference between your positioning and market perception. 5. Ease of use - Making something easier to use is itself a product differentiation strategy. I like to think of the two axes here to be - 1) how powerful is the product and 2) how easy is it to use? - and then determine where my product falls within and these two axes. Upper right quadrant - easiest to use and most powerful. Highly differentiating, but pretty rare. Go back to that target customer - how technical are they? What do they care more about? What do other solutions make hard for their customers that I can reduce as a pain point? Apply. 6. Pricing and packaging - This could be an entire AMA itself. Think of pricing as another way to leverage strategy. Charge for the value delivered in the product. What do I mean by that? Charge more when customers get more value out of the product, so you align product incentives with your customers. The trick here is to pick the metric that best represents value in your market, for your customers. Options? # of users, # of things in product consumed, # of things I can apply the product to, etc.

I'll keep this one rather brief. I find that some product managers do not always listen to their customers and their problems as the guiding light for improving and differentiating their products. Instead, they fall in love with a shiny new piece of technology that may not be solving a critical problem.

Product differentiation != new features. New features can enhance differentiation, but these are not the same thing. For example, product differentiation can be predominantly delivered in the go-to-market if a product's "see-try-buy" motion is just inherently better than everything else available. The differentiation there is in the trial experience and ease of transaction - not necessarily in the latest feature.

While it is important to care about your competitors to understand your own market position, DO NOT MAKE THEM THE FOCUS. What should be your focus? Your customers. Their problems. Their needs, their asks, their feedback. Think of your roadmap like a budget of your resources, the way you would a household budget. Break down the budget by importance. For a product that has been out in the market a bit, I break down my ideal roadmap budget into the following percentages: 50% feature enhancements 20% net new features 15% compliance/security improvements 15% tech debt improvements/automation I think this same budget can be applied to brand new products as well. It's important to nail down the features that matter MOST to a customer before adding more. For a brand new product coming out of stealth mode, however, I may want to tweak this a bit: 80% net new MVP features 20% security/compliance/automation Did you notice that nowhere on this budget did I write "competitor influence"? Competitors help me understand the misalignment between how I think I'm doing vs. how I'm actually doing, or how I perceive myself vs. how customers perceive me. It's a reality check, but not a direct influence on my roadmap. I ALWAYS go back to customers to help course correct if I identify a misalignment in those perceptions.

I used to be a product marketer. My ideal working relationship is to view product marketing as my key partner in product development, launch, and iteration. We are both stewards of the product success. I try to involve product marketing into the very beginning stages of product development - they help me amplify the voice of the customer, help me find reference customers by launch, fine tune messaging, speak to industry analysts educating them on the new product, enable sales and customers on the product benefits and messaging. PMMs also conduct competitor messaging/positioning analysis, deal win/loss analysis, and in my experience, how the product is represented in all facets (website, content marketing, customer facing slides, analyst research).