Creating messaging that resonates with your customer’s needs. In new markets, most customers will be coming from old solutions. These customers may not understand your new offering. This means you may need to message a lot of basics. In more mature markets, reduce this messaging and focus on differentiation to gain a competitive advantage.

Minimum offering size

Even the most basic product must solve a problem for a customer. Too little functional depth and they will reject you regardless of price. Imagine buying a fridge that doesn’t cool down properly. Here, we see two features with sufficient functional richness.

Customer’s expectations are also based on the competition. If all competitors offer certain features, these will become expected. Imagine a new car without adjustable seats.

Select a strategy

We can see a choice of strategies in Porter's Generic Strategies Framework. These provide an overall direction. You may still choose a hybrid strategy, but this shows your priority. For example, you focus mainly on cost leadership but have a few differentiators.

Cost leadership strategy (low price)
- You are releasing a standardised product.
- You can make use of economies of scale.
- Your customers are price-sensitive.
Differentiator strategy - Your customers are willing to pay a premium for differentiators.
Focus strategy (narrow customer group)
- Select this where you can identify niche customer needs and better serve them.
- Pivot later on to a broad market when successful.

Differentiation strategy - functionality

Functional differentiators can be

Additional functional depth within a feature (FT2)
Additional feature(s) (FT3)

Traditional competitor analysis focuses on evaluating feature differentiators. The anti-pattern is that customers may not care about these features.

Instead of seeking feature parity, start with the question:

How big a problem does this feature solve?

For even more chance of success, consider:

Is this why your potential customers reject you and go with a competitor?

Differentiation strategy options

Differentiators can be used to:

Increase sales at the same competitor price point.
Justify a higher price.

There are many ways you can differentiate:

Functionality
Service quality
Customisation
Usability
Stability
Performance
Security
Price

Market saturation and differentiation

Commoditisation is when a market and its associated products are so mature there are few real differentiators:

Customers will select based on price and trusted brands.
Consider differentiating on better service and design quality (UX/UI).

Functional depth at this stage is a significant barrier to entry for new companies.

Benefits messaging summary

Create messaging that resonates with your customer’s needs:

Major problems you solve.
Differentiators they care about.

Focus on explaining your core product where most customers are confused about the type of solution you offer. Imagine the basic messaging required for the first petrol car. This would have been very new to people. Shift more towards differentiator messaging when the market is mature.