Q: How do prospectus choose one seemingly similar vendor over another?
There’s a basic set of criteria most buyers look for. And breaking them down also shows us where the openings are for new entrants:
- Most trusted brand. In the end, 80%+ of buyers are going to pick the most trusted or one of the most trusted brands in the space. This is not irrational. Most of us don’t have the time or often the skills to truly decide which vendor is best. Brands are proxies for quality and trust. Imperfect proxies for sure. But proxies.
- The one specific vendor with that key 10x feature. This is how some startups break into a space. Sometimes, a new entrant may be feature-poor and relatively new — but it has a new take on a space and has a new critical “10x” feature for you that no leading vendor has. A customer will often pick a new vendor if it has a critical integration, a critical workflow, a critical dashboard, etc. that the established leaders don’t. More on the 10x feature here.
- Far better performance etc. A version really of the “10x feature”, but sometimes a specific vendor will have far better performance for a certain use case. Algolia search, for example, is 10x or more faster for certain types of search — but not all. Datadog also won here in part by making it far easier to monitor and manage all the critical parts of your application stack.
- The one that is far easier to deploy. We don’t all have time to deploy Salesforce. Pipedrive could be deployed in minutes. That led to a $1.5B exit.
- Cheaper (sometimes). It’s hard to build something big just because it’s cheaper. SaaS isn’t a commodity, not really. Every vendor is different. But once a market leader starts to go upmarket and get more expensive, that does leave a lot of room at the bottom. Often for several unicorns. More on that here.
- The most enterprise vendor. Sometimes, the market leaders aren’t enterprise-focused. This can create a niche for a more secure, more trusted, more workflow-ed vendor in the space. A related post here.
- A vendor tailored just for your vertical. Vertical SaaS is booming. Why? Having a CRM, an ERP, a marketing automation solution tailored to your industry can be super helpful. Veeva is a great example, with 1,000+ customers for CRM and vault products for healthcare.
Which are you?
An important note: I didn’t add the stealth Criteria #8: who has the best sales team. This really does make a difference, sometimes a huge difference. But it always makes a difference. It’s just, they ultimately build on top of whichever of the above 7 criteria they can win with. You have to give even the best sales teams the raw ingredients of success.
And a related post here: