Position Against Your True Competition to Win the Customer
Position Against Your True Competition to Win the Customer
And deliver a Mafia Offer your customers cannot refuse.
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Most entrepreneurs never bring up their true competition during a product pitch because either they
don’t think they have any,
don’t know who they are, or
don’t want to tip their customers toward the competition.
This is a costly mistake.
Here’s why.
1. Every successful product had true competition
If you haven’t been able to identify your true competition, chances are you aren’t looking broadly enough and limiting yourself to a narrow category.
Your true competition transcends product category.
Examples:
drill bits vs. command strips
compact disc players vs. iPods vs. streaming services
vaccines vs. social distancing
If you find an exception to this rule, leave a comment below:
2. Your true competition is often not who you think it is
Too many startups look to position themselves against other “shiny” competitors in their space also trying to win the customer.
This is typically NOT your true competition.
They haven’t won the customer and maybe never will. Unless your customers use, evaluate, or mention them, they don’t exist in the competitor matrix.
Your true competition is what your target customer is currently hiring to get the job done.
3. Your customers know your true competition
If your target customer isn’t looking for a new solution, they will compare you against their existing alternative.
If they are actively looking for a new solution, they will compare you against new alternatives.
In other words, your customers are sophisticated and will compare-shop anyway. Would you prefer that they compare you to the competition without you in the room when you have no say in the comparison?
Your competition is the elephant in the room, and it’s your job to expose it and diffuse it.
Innovation is about causing a switch from an old way to a new way, and the best way to cause a switch is to break the old way.
This is precisely why a good product pitch shouldn’t ignore the competition but rather do three things:
Name the old way.
Break the old way.
Cause a switch to your new way.
Doing these three things well is how you turn an offer into a mafia offer.
Mafia Offer: An offer your customers cannot refuse.
Let’s see an example of a Mafia Offer in action.
The iPad Mafia Offer
Background
I still remember Steve Jobs’ unveiling of the original iPhone in 2007. As he opened the keynote, he announced that Apple was entering the smartphone market with a revolutionary new device combining three devices: a music player, a PDA, and a phone.
Then he quickly pointed out the problems with existing smartphones: 40% of the phone is taken up by a plastic keyboard (not smart), and they aren’t easy to use. Before showing the iPhone, he teases the iPhone’s UVP with great effect: What if you could have a phone that was all screen? And instead of using a stylus to control the phone, what if you could use your fingers?
That was immediately different and attention-grabbing.
As he walked through the demo, I thought he was performing a magic trick as I had never seen any user interface like it before. I was sold and even stood in line to purchase the original iPhone when it officially went on sale.
Three years later, there were rumors that Apple would unveil a new tablet device— the iPad. This time, however, I was on the fence. I had been an early adopter of several tablets before the iPad and had been underwhelmed by all of them.
Despite my skepticism, I tuned in to watch the unveiling and again bought the product. Fast forward to today, my household has more iPads than people. You could argue that the iPad was even more successful than the iPhone by that logic.
How did that happen?
Do you remember how Steve Jobs pitched the iPad? Even if you didn’t watch the keynote live, can you guess?
What he didn’t do
Steve Jobs could have come on stage and said: “We are Apple, and we build great products that are simple to use. We have built the best tablet in the world, so buy one.”
This would have been a category-centric pitch.
The problem, of course, is that no one, other than a small sliver of innovators and early evangelists, was using tablets at the time. How do you pitch a new category-defining product when the category doesn’t yet exist?
What he did instead
Name the old way
Opening the iPad keynote, he didn’t talk about tablets but set the stage to introduce a new product (iPad) that would compete with laptops and smartphones.
Break the old way
He then singled out a single existing alternative as the iPad’s true competition: the Netbook. In less than 30 seconds, he breaks the old way for his audience:
“They’re just cheap laptops and not really better at anything—they’re slow, with low-quality displays, and run on clunky PC software.”
This set the stage for introducing the iPad.Cause a switch to your new way.
With the stage set, he then demonstrates how the iPad is better than the Netbook and cheaper. Doing both these things is what sets his pitch apart from others and makes it a mafia offer.
So next time you pitch your product, don’t leave it up to your customers to determine your true competition.
Do your homework,
Anchor against your true competition, and
Watch your customers nod through your entire pitch.
Bonus Section for Newsletter Subscribers: How to Pitch Like Steve Jobs
Steve Jobs was a great storyteller; you might wonder how you’ll ever get to deliver your pitch as naturally as he did. It comes down to preparation and practice.
A good story pitch template is the first key to assembling a good pitch. In this section, I’ll dissect Steve Jobs's iPad pitch step-by-step into a Mafia Offer Story Pitch template you can use to pitch your product.