Our VP of Sales asked the uncomfortable question in the exec meeting: "Why should a customer choose us over Competitor X? What makes us actually different?"
I pulled up our competitive positioning deck. I listed our differentiators:
- "More intuitive user experience"
- "Better customer support"
- "Faster implementation"
- "More affordable pricing"
The VP of Sales shook his head. "That's what every competitor claims. Prospects hear the same thing from everyone. Where's the real differentiation?"
He was right.
We competed in a commoditized market. Five major competitors offered nearly identical products. Similar features. Similar pricing (within 10%). Similar target customers. Similar go-to-market motions.
Our product wasn't dramatically different. Our technology wasn't revolutionary. Our approach wasn't fundamentally novel.
We were competing in a commodity market where perceived differences were minimal and actual differences were even smaller.
The classic differentiation advice—"build something 10X better" or "create a category"—didn't apply. We couldn't rebuild the product from scratch. We couldn't afford category creation.
We needed differentiation strategy for a commodity market where products are inherently similar.
Over the next year, I developed an approach that created meaningful differentiation without changing the core product. Our competitive win rate improved from 39% to 64%. Average deal size increased 28%. Sales cycle shortened by 19 days.
Not because we built revolutionary features. Because we differentiated on dimensions competitors ignored.
Here's how to create differentiation in a commodity market.
Why Traditional Differentiation Strategies Fail in Commodity Markets
Most differentiation advice assumes you can build something meaningfully different. In commodity markets, you can't.
Why traditional differentiation doesn't work:
Strategy 1: "Build better features"
In commodity markets, feature parity happens within 6-12 months. You build Feature X, competitors copy it. They build Feature Y, you copy it. Everyone converges toward the same feature set.
You can't sustain feature-based differentiation.
Strategy 2: "Create a new category"
Category creation requires massive marketing spend and genuinely novel problem/solution. In commodity markets, the problem is well-defined and solutions are similar.
You can't create a category when you're solving the same problem as five competitors.
Strategy 3: "Build 10X better product"
In established markets with mature products, 10X improvement is nearly impossible. Going from 1→10 is easy. Going from good→10X better requires fundamental breakthroughs.
Most commodity markets don't have 10X improvement opportunities.
Strategy 4: "Compete on price"
Commodities compete on price until nobody's profitable. You can win deals by being 20% cheaper, but you'll destroy margins and build an unsustainable business.
Price competition is a race to the bottom.
The Differentiation Framework That Actually Works in Commodity Markets
Since we couldn't differentiate on product, we differentiated on everything surrounding the product.
Insight: In commodity markets, the product is table stakes. Differentiation happens in delivery, experience, and context.
Our framework: The 4 Non-Product Differentiation Dimensions
Dimension 1: Speed (time to value)
Everyone has similar features. Not everyone delivers value at the same speed.
We couldn't build better features, but we could get customers to their first success faster.
What we did:
Competitors required 3-4 weeks of implementation before customers could launch their first campaign. We streamlined onboarding to get customers their first launch in under a week.
Not by building different features. By:
- Pre-built templates for common use cases
- Opinionated workflows that required less configuration
- Guided onboarding that reduced setup decisions
- Faster customer success response times
Result: "Speed to first launch" became our primary differentiator.
Why this works: Customers care more about getting results fast than having every possible feature. In blind tests, products with fewer features but faster time-to-value win.
Dimension 2: Specialization (vertical/use case focus)
Everyone targets "all companies that need project management." Nobody owns a specific vertical.
We couldn't build a completely different product, but we could specialize our positioning and go-to-market for a specific segment.
What we did:
We positioned as "Purpose-built for B2B SaaS product marketing teams" instead of "Project management for everyone."
Not by locking out other users. By:
- All marketing mentions B2B SaaS GTM teams
- Templates specific to product launches (not generic projects)
- Case studies exclusively from B2B SaaS companies
- Content topics relevant to PMMs (not general project managers)
Result: We became the default choice for PMMs at B2B SaaS companies.
Why this works: Even though our product could work for anyone, specialization creates perception of expertise and purpose-built fit.
Dimension 3: Experience (how it feels to be a customer)
Products are similar. Customer experience isn't.
We couldn't change what the product does, but we could change how it feels to use it and be a customer.
What we did:
While competitors optimized for feature count, we optimized for customer experience:
- Support response time: <2 hours vs. competitor average 24-48 hours
- Onboarding calls: Within 24 hours of signup vs. "schedule a call next week"
- Product updates: Weekly releases vs. competitor quarterly releases
- Customer feedback: Direct Slack channel with product team vs. ticketing system
Result: Customers chose us because working with us felt better, even though the product was similar.
Why this works: In commodity markets, experience is the differentiator because products converge but experiences don't.
Dimension 4: Outcomes (results, not features)
Everyone talks about features. Nobody talks about outcomes.
We shifted positioning from "what the product does" to "what results customers achieve."
What we did:
Competitor positioning: "Powerful project management with advanced workflows, Gantt charts, resource allocation, and 50+ integrations"
Our positioning: "B2B SaaS teams launch products 40% faster using our platform. Average time from idea to launch: 28 days vs. industry average 45 days."
Same product underneath. Completely different positioning framework.
Why this works: Buyers care about outcomes, not features. But most competitors default to feature-based positioning because it's easier.
How We Executed Non-Product Differentiation
Differentiation strategy only matters if you can execute it. Here's how we operationalized each dimension:
Executing on Speed Differentiation:
Product changes:
- Built 12 launch templates for common GTM scenarios
- Created guided onboarding flow that reduced decisions from 47 to 8
- Added "launch in 60 minutes" quick-start path
Customer success changes:
- Onboarding call within 24 hours of signup (not 1-2 weeks)
- First launch planning session in onboarding call
- Success metrics tied to time-to-first-launch (not feature adoption)
Sales changes:
- Demos now include "Let's plan your next launch together right now"
- Trials measured by "Did customer execute first launch?" not "Did they explore features?"
- Competitive positioning: "Get your first launch done this week, not next month"
Measurement:
- Average time to first successful launch: 6.2 days
- Competitor average (from customer interviews): 18-24 days
- Win rate when "speed" was mentioned in sales calls: 71% vs. overall 64%
Executing on Specialization Differentiation:
Marketing changes:
- All website copy mentions "B2B SaaS product marketing teams"
- Case studies exclusively from B2B SaaS companies
- Content topics: product launches, GTM strategy, competitive intelligence
- SEO focus: "product marketing platform for B2B SaaS" not "project management software"
Sales changes:
- Reps specialized by vertical (only sell to B2B SaaS PMMs)
- Reference customers matched by company size and market
- Discovery questions specific to product marketing challenges
- Demos showed launch planning, not generic project management
Product changes:
- Templates for product launches, not generic projects
- Terminology: "launches" not "projects," "GTM team" not "team members"
- Integrations prioritized for GTM stack (Salesforce, HubSpot, Slack) over generic tools
Measurement:
- % of customers in target vertical (B2B SaaS): 73%
- Brand recognition in target segment: Top 3 "product marketing platforms for B2B SaaS"
- Win rate in segment: 64% vs. 39% outside segment
The Competitive Positioning Playbook for Commodity Markets
When products are similar, positioning determines winners. Here's how we positioned in competitive deals:
Positioning Tactic 1: Acknowledge similarity, differentiate on delivery
Bad positioning (pretending products are different): "Our features are better and more powerful than competitors"
Good positioning (honest about similarity, differentiate on delivery): "Most product marketing platforms have similar core features—task management, timelines, collaboration. The difference is how fast you can actually start using them. Competitors require 3-4 weeks of setup. We get your team productive in days."
Positioning Tactic 2: Reframe buying criteria away from features
Don't let prospects evaluate you on feature checklists in commodity markets. Reframe toward delivery criteria.
Prospect: "Do you have Gantt charts like Competitor X?"
Bad answer: "Yes, we have Gantt charts"
Good answer: "We have timeline views, though we've found most product marketing teams care less about Gantt chart specifics and more about how quickly they can plan their next launch. Can I show you how Company Y planned a product launch in 2 hours using our templates?"
Positioning Tactic 3: Specialize messaging even if product is general
Our product could work for any project management. Our messaging was hyper-specific:
"Built for B2B SaaS product marketers managing launches"
"Purpose-designed for GTM teams coordinating cross-functional launches"
"The only platform that understands product marketing workflows"
Prospects in our target segment felt like we built the product specifically for them (even though the underlying product was general-purpose).
Positioning Tactic 4: Lead with outcomes, not features
Feature positioning (what competitors do): "Advanced workflow automation with conditional logic, custom fields, and API access"
Outcome positioning (what we do): "Launch products 40% faster. Our customers go from launch planning to market in 28 days average vs. 45 days with traditional project management tools."
How to Measure Differentiation Effectiveness
In commodity markets, differentiation is perception, not just reality. I measured both:
Metric 1: Differentiation perception
Survey question to prospects who evaluated us and competitors: "What made [our company] different from alternatives you considered?"
Before non-product differentiation strategy:
- "Better features": 12%
- "Lower price": 31%
- "Not sure/nothing specific": 47%
After:
- "Faster time to value": 58%
- "Built specifically for PMMs": 41%
- "Better experience": 34%
- "Not sure": 8%
Prospects clearly articulated our differentiation.
Metric 2: Win rate in target segment
Overall market win rate: 48% (commodity market, hard to win everywhere) Target segment (B2B SaaS PMMs) win rate: 64%
Specialization created 16-point win rate advantage.
Metric 3: Average deal size
Before outcome-based positioning: $18K average deal After: $23K average deal (+28%)
Outcome positioning justified higher pricing.
Metric 4: Sales cycle length
Before speed differentiation: 67 days average After: 48 days average (-19 days)
When differentiation was clear, prospects decided faster.
Metric 5: Competitive displacement rate
How often do customers switch from competitors to us?
Before: 12% of new customers were switchers After: 31% of new customers were switchers
Better differentiation made switching more compelling.
For teams executing differentiation strategies across commodity markets or segments, platforms like Segment8 help maintain consistent positioning and track differentiation effectiveness across different competitive scenarios.
Common Mistakes That Destroy Differentiation in Commodity Markets
Mistake 1: Claiming differentiation that isn't real
Saying "We're more intuitive" when you're not actually more intuitive destroys credibility.
Fix: Only claim differentiation you can prove with customer quotes, data, or live demo.
Mistake 2: Differentiating on features in feature-parity markets
If competitors can copy features in 3 months, feature differentiation is temporary.
Fix: Differentiate on delivery, experience, specialization, outcomes—things that are harder to copy.
Mistake 3: Trying to be different for everyone
You can't differentiate broadly in commodity markets. You need focused differentiation for specific segments.
Fix: Own one segment completely rather than competing everywhere with generic differentiation.
Mistake 4: Not reinforcing differentiation consistently
Differentiation only works if every touchpoint reinforces it.
Fix: Sales, marketing, product, customer success must all deliver the same differentiation message.
Mistake 5: Giving up and competing only on price
Price competition in commodity markets is unsustainable.
Fix: Even 10% price premium is achievable with strong differentiation on experience and outcomes.
When Non-Product Differentiation Works (and When It Doesn't)
This strategy works well in specific scenarios:
When it works:
Scenario 1: Mature markets with feature parity
If all major competitors have similar core features, product differentiation is exhausted. Experience and delivery differentiation become primary.
Scenario 2: You can execute demonstrably better delivery
If you can actually deliver value faster, provide better support, or create better experience, this strategy works.
Scenario 3: Clear segment has underserved needs
If a specific segment (industry, company size, use case) is underserved by generic competitors, specialization works.
When it doesn't work:
Scenario 1: Your product is actually worse
You can't differentiate on experience if your product doesn't work well. Table stakes matter.
Scenario 2: You can't execute on promised differentiation
If you claim "faster support" but actually have slow support, it backfires.
Scenario 3: Competitors copy your differentiation
If competitors can easily copy your speed/experience advantages, differentiation erodes.
The Long-Term Play: Non-Product Differentiation Buys Time for Product Differentiation
Here's the strategic insight:
Non-product differentiation is faster to execute than product differentiation. You can change customer experience in weeks. Building genuinely different product takes years.
Our timeline:
Year 1: Differentiate on speed, experience, specialization (non-product) Result: Win rate improved, bought us revenue growth and runway
Year 2: Use revenue from non-product differentiation to fund product differentiation Result: Built launch coordination features that competitors didn't have
Year 3: Now we have both product differentiation AND experience differentiation Result: Sustainable competitive advantage
Non-product differentiation isn't permanent. But it creates space to build real product differentiation while you grow.
The Uncomfortable Truth About Commodity Markets
In truly commodity markets, products converge toward similarity over time. Fighting this convergence through features alone is losing battle.
The companies that win in commodity markets differentiate on execution:
- How fast customers get value
- How good the experience feels
- How well you serve specific segments
- What outcomes customers achieve
These are harder to copy than features because they require operational excellence, not just product development.
Last quarter, we won a competitive deal where the prospect told us: "Honestly, your product and Competitor X's product are pretty similar. We chose you because your team got us productive in 4 days. With them, we'd still be in implementation."
That's commodity market differentiation. Not better product. Better delivery.
You don't need revolutionary products to win in commodity markets. You need exceptional execution on dimensions competitors ignore.
Most companies try to differentiate through features in commodity markets. The smart ones differentiate through delivery, experience, and outcomes.