Are you making it harder for customers to choose you?

In today's tough economic environment, companies might be unknowingly complicating their customers' buying process. The root cause? Inside-out thinking.

By focusing too much on their perspective, companies often miss the mark on their customers' actual needs, leading to a disconnect that makes it harder for customers to make a choice.

Today, we’ll explore:

• What is inside-out thinking and how does it affect the buying process?

• How can companies shift their perspective to align better with customer needs?

• Why is it important to differentiate based on genuine customer value rather than trendy features?

• How can ungating customer information improve team alignment and product development?

• What are practical steps to avoid the pitfalls of inside-out thinking in your Go-To-Market strategy? ​

Selling in this current economic environment can feel like crawling through a never-ending obstacle course. But what if companies are making it harder on themselves?

Imagine the best-case scenario: a customer actively seeking a solution to a pressing problem. She's met with endless, largely similar options and has to work hard just to choose between them.

How did we end up with such a disconnect in the buying process?

One key reason is the impact of inside-out thinking.

This mindset causes companies to focus so much on their own perspective that they end up speaking into a void, disconnected from their customers' needs.

Every GTM team is inevitably affected by inside-out thinking to some degree. After all, they spend all their working hours focused on their product's success.

Along the way, a bias forms about the product's importance, distorting their understanding of the customer.

Not everyone is reading the same industry articles.

Not everyone sees 3X value from the new feature your competitor released. No customer is thinking about your product as much as the team.

Here are some examples of how the company and the customer can be looking in opposite directions. 

Inside-out thinking creates a false confidence in knowing the customer, and this significantly impacts the work streams that get prioritized. If companies are caught in the trap of this mindset, the differentiator is usually a clear give away. 

Often, you'll see phrases like "AI-powered" or "Easier to use," which are not meaningful enough to stand out.

Let’s explore how inside-out thinking frequently shapes these types of differentiators.

1. Group Bias

When I was an in-house PMM, the PM team was convinced we were developing a groundbreaking feature.

The rest of the GTM team got swept up in the excitement of being different, only to realize much later that customers found no value in the feature.

This scenario is common when developing shiny, future-forward features.

A unique feature can be a powerful differentiator, but if it doesn’t address a strong enough pain point, it is unlikely to resonate with customers. 

Often, when a few executives seem confident, everyone just goes along with the tide.

We all bought into the idea's success, likely due to Groupthink theory (Tversky/Kahneman), where groups prefer consensus over conflict or questioning any decision-making.

2. Hyper-focus on Competitors

GTM teams become very focused on a set of competitors.

If a competitor builds a new feature, it’s added to the roadmap.

If they change their messaging, most companies follow suit.

There is a pressure in keeping up with competitors, whether it adds value to customers or not. 

This obsession often makes products in the same category look and sound the same, and makes it difficult for customers to choose from alternatives.

3. Preference to innovation vs actual needs

PMMs and PMs, already spread thin, often make strategic decisions like new positioning or product lines that are most likely to gain leadership approval.

The leadership in turn is likely to approve of strategic decisions that will look great to get a new round of funding or to appeal to a board.

This is why we focus on ‘on trend’ themes or innovation for the heck of it. 

So, how do we come up with a differentiation that actually helps customers choose a product?

1. Ungate customer information (not the same as “Talk to your customers”)

Here are a few ways information flows in startups:

• It sits in the minds of a few team members and is undocumented.

• There are thousands of calls to sift through.

• Access to customers is fiercely guarded.

As a result, customer understanding is based on the thoughts of a handful of people. Ungating information is the best antidote to inside-out thinking.

Often, research done by one team, like the product team, rarely reaches the marketing team.

Making AI-generated research summaries accessible across teams would be invaluable. I also appreciate how a PM I worked with made customer stories readable across teams.

Every quarter, he condensed why each ten customers chose us into snackable stories that were widely read.

Here is an example of the format that he used.

A dream version would be to tether roadmap planning to the customer stories and differentiators we want to strengthen as a team, rather than just features. Even better if it’s rooted in market research to always keep an ear to ground.

2. Move away from “new” or “On-trend” differentiation

Challenge the mindset that differentiation needs to be “different”. That it only rings true if it’s path breaking or if it's something that your competitor does not have.

Product differentiation is also clarity on how you add value to a subset of customers better than anyone else.

Talk about how your approach is different and show how it’s done, and you will have a more meaningful differentiator.

Here are a few examples:

Focused on a type of customer vs everyone 
Pulley is focused on how founders offer equity better than their main competitor, Carta. The use cases, the time it takes to get an evaluation is all centered around serving the needs of the founder better than anyone else.

Combining two pain points 
Ramp Travel addresses both employees' pain of filing travel expense reports and the Finance team’s concern for finding the lowest price. Their main competitor has tie ups with only a few airlines.

Here are a few more ways to think about differentiation in a meaningful way.

3. Budget to Test with Prospects/New Customers 

A differentiator is often derived from customer conversations.

However, it's important to distinguish between what customers are happy with now and why they originally bought the product. 

They may appreciate the responsive support, but that might not have been a key evaluation criterion.

If you have the budget, test your differentiator with prospects or new customers.

A strong differentiator is a powerful tool to stand out from the competition and is especially helpful when customers are evaluating multiple products.

—

As your customer is browsing through your website or sales pitch, they are trying to make sense of what to compare you with and are on the fence about trusting you. If the process overwhelms them they are bound to make a choice based on price or the bigger brand.

Make the choice easy, everything else follows.

Let’s have a discussion

Join Sam Dega on the Spiky Growth podcast where we’ll discuss this topic in more detail.