THE STARTUP CHAT

Steli Efti:

Hey everybody, this is Steli Efti.

Hiten Shah:

And this is Hiten Shah.

Steli Efti:

And in today’s episode of The Startup Chat, we’re going to talk about how to  do marketing against your competition. Or how to do, whatever, I don’t know how to  even call it. I don’t know if there’s a real name for it. Competitive marketing?  It basically-

Hiten Shah:

Yeah-

Steli Efti:

Oh, go ahead. Maybe there is a name, and you know it.

Hiten Shah:

Yeah, I’d probably collect competitive marketing, more than anything else.

Steli Efti:

So the idea of doing marketing that relates directly with your competition. So two examples  would be, creating SEO pages where you show your tool, or your company, versus your  other. So if somebody types in your company name, versus this other company name that  you’re competing with, your SEO page would show up, and you would have some kind  of comparative metrics, or a spreadsheet that shows that your tool is better than theirs,  or whatever it is. Or, if there’s a big PR thing that’s going that breaks  some news, you do counter PR, that type of stuff. I don’t even know how  many more tactics there are, but yeah, competitive marketing. What is it? What tactics are  there? What’s good? What’s bad? What has changed? I’d love to explore all of this  with you.

Hiten Shah:

Yeah. I like your definition of just, basically it’s something where you’re doing marketing, and  it’s very related and relevant to your competition. Meaning, there’s so many ways to think  about this. I love your idea of those landing pages that are SEO optimized. The  reason that, that exist though and the reason that this tactic even make sense to  talk about, in my opinion, would be because today, and even in the past, but  more so today the customer matters more than ever. Your product is likely not that  unique on the surface. So you have to do whatever you can to be able  to explain to the market, the customer, how it’s different and better for them. Better meaning better than any alternatives. So one way that I think about competition a lot,  is competition is any alternative to your product. It doesn’t have to be just a  direct competitor. So if you’re a SAS tool that does analytics, it doesn’t have to  be another analytics tool, it can be a spreadsheet. It can be a database product.  It can be a business intelligence product, that’s competing for the attention of your customer,  and their patronage as a customer of yours. So to me, any alternative is considered  a competitor in my mind. Any alternative to what you do for customers today. That  can broaden how we think about marketing-

Steli Efti:

I love that-

Hiten Shah:

You’re marketing against alternatives, to help the customer understand how you’re different.

Steli Efti:

I love that, and the first example that popped up in my mind, and take  you for broadening the scope of this, is the spreadsheet example. Right?

Hiten Shah:

Yeah.

Steli Efti:

Spreadsheets are basically a competitions almost every SAS tool out there, and there aren’t many  companies, successful product companies that either have these landing, SEO pages that are, “Better alternative  to bookkeeping than a spreadsheet.” So they’ll compare their tool with a spreadsheet. Or even,  mostly they’ll come up with spreadsheet templates that people in business today will want, that  use spreadsheets do a certain thing. That would then try to market to switch them  from the spreadsheets to their software tool. So we’ll give you a free spreadsheet template  for accounting or whatever, for restaurants, and in the restaurant will find this spreadsheet, downloaded  to do their accounting, but now that company has their email, and they’re start marketing  to them, “Hey, if you’re using a spreadsheet to do your accounting, we have built  accounting software that specifically for restaurant owners. It’s better than a spreadsheet because XYZ.” I’ve  seen the spreadsheet type of a thing a lot, because Whiteboards and spreadsheets are still  very high up in the list, as Competitors almost every software tool that exist.

Hiten Shah:

Yeah, so we’re all competing against the spreadsheet. If you even talk to … It’s  just bring up an example of the business you’re in. If you look at CRM,  it’s so easy to build the CRM’s, at least some sort of, “These are my customers. Or these are my users. Or these are people I want to talk to,  and here’s more characteristics about them.” If you think about that, it’s still being done  in spreadsheets for so many use cases. All CRM is, is taking that spreadsheet, that  concept, and turning it into software that’s supposedly easier to use. I’m sure yours is,  but other ones aren’t. Not to mention any really large SAS company names, and you  wouldn’t exist if they were doing a good job. Right?

Steli Efti:

Right.

Hiten Shah:

So I would say I love that you mentioned that, because if you just think  about that, and you actually talk to your customers, you will learn what kind of  alternatives there are to you. So to me, that points to, I think a big strategy. I think We can just bounce back and forth on this, but for me,  one big strategy of knowing when you should do competitive marketing, is if you’re talking  to your customers, and you just asked them, “What did you do before you started  using us? What would you use as an alternative to us?” And questions along those  lines, you will understand who or what they are doing, instead of you. Who they’re  using, or what they’re using, what they’re doing, instead of you. Or would use instead  of you. That will help you really define when you should do competitive marketing, and  how you should think about. So they say, “We’re using spreadsheets.” Then your alternatives, and  some of the ways, if most of your customers say that, “We were using spreadsheets  before you. We would use spreadsheets if you didn’t exist, and here’s why you’re better  than spreadsheets.” If you hear that kind of thing, then you know that you can  do competitive marketing against a spreadsheet. Now, the common scenario today, because there is so  much [F’n 00:06:08] SAS out there, is that there is a likely SAS competitor that  they are going to mention. So ideally, not ideally, but usually, this is not ideal,  but usually something larger than you, some company larger than you, or even some alternative  they know of, you’re looking for the popular alternatives. Then you’re looking to create these  landing pages, or mention these folks, these companies in your marketing if necessary. It’s not  unheard of now, to mention competitors in your marketing, especially if you know your customers  love you for specific reasons that go sort of against, or is differentiated from what  your competitor does.

Steli Efti:

I love that, so let’s take a for a second. Let’s take the example of  you hear What customers were doing before they find you, and the reasons why they  thought your solution was much better, and much more valuable than the alternative they were  using before. Let’s say it’s a specific competitor, another SAS tool or another product, and  you go, “Okay, we’ve identified our competition where the customer is leaving them to come  to us, and there’s good reasons for that.” What are all your options to do  now? Competitive marketing against that very specific, targeted competitor?

Hiten Shah:

Yeah, I think it’s really understanding, very specifically if you can, when somebody signs up  for your product, and not enough people do this, is to actually start asking them,  whether it’s on the sign-up forms, or even in your sales process, “What are you  using today?” So I know this sounds like, “Oh, this is not marketing,” but really,  if you can figure that out early on in your sales process, or even if  it’s a self service product, you’ll at least have a framework of knowing what they’re  used to. So I think to me, a lot of the alternatives is more about  what are they used to, and how does that impact how you speak to them.  How you talk to them, the copy you use, the features you suggest to them,  and what you say about yourself. Right now the way it works, if you look  around the web, is that you can type in, for example, Intercom versus Zendesk in  Google. You will see an Intercom ad. You might even see a Zendesk ad. You  will also see, Intercom’s landing page on that first page. Well guess what, when you click on that page, they already know you’re comparing Zendesk and Intercom. So then they  start really customizing their chat, and pointing you to the right places as a result  of where you came from. The same goes for Drift, as an example. They have  some pages, because they’re an Intercom competitor. If you type in Intercom versus Drift, you’ll  start seeing a Drift page, and it’s all about the difference between Intercom and Drift.  If you type in HubSpot versus Marketo, you’ll start seeing this page. Actually, the HubSpot  versus Marketo one, the HubSpot page for it is some of my favorite ones, because  what they do, is they have higher ratings in some of the SAS review sites,  so they start inserting those rating into that landing page. They say, “Look, we’re better than Marketo. Look at their ratings. Look at ours. Look what customers are saying. Don’t  believe us, here’s what customers say.” So to me, when you can always get quotes  and testimonials from customers about how much they love you better than what they were  using before, that’s some of the best marketing, especially if it’s off of a third-party  site. Or even your own quotes, and you can name the customer, their name, their  title, and who they are. That’s the most powerful thing, because essential people want to  know that there’s people out there like them, including people that are used to use  alternatives, that are now using you.

Steli Efti:

I love that. So you want to know what tools, and what alternatives people used  before they come to you. You want to understand what they were doing, and why  they were switching, what the value proposition, the differentiation is from a customer point of  view. Then you want to put together a page that compares the two solutions, and  ideally uses third-party validation, testimonials, people stories, but also especially if there’s rankings, awards, whatever  else of credibility you can generate. Articles that compare the two solutions, and favor you,  obviously, you do that. I have the Marketo versus HubSpot site open, so I love  that. You can get people there through SEO, in trying to create these pages that  will organically rank, and slash, you can do paid ads. So when people type in,  even just the competitor name, or that alternative name, or the actual keyword of your  solution versus the alternative solution, you can force yourself up. I just saw this. The  HubSpot article actually is organically ranking number one, but Marketo is actually … Marketo’s ad  is the number one spot. I think they even have the first and the second  or something. So they are spending a ton of money to kind of counteract the  fact that HubSpot has a very high, organic ranking article on this. So you can  do paid ads for it, and send them to the pages. You can do organic  SEO, if you can, to send them to those pages. What other things can companies  do? Obviously, one potential today is to use social media. Look for people, if you  go to Facebook, people that are fans of that alternative. If there’s pages and groups  that are associated with it, and try to advertise to those people. On twitter, you  might look for mentions off that company name, and then interact individually with people that  are talking about that alternative, and pitch yours. So try to be helpful. What have you seen work well within social media, being competitive? Versus maybe not so well, because  you can always … And this is maybe a more general question, but you do  direct competitive marketing, this opportunity, but there’s also risk. The risk seems to me to  be that if you don’t do it right, you might piss people off. I’m not speaking about your competitor. I speak about your potential customers. If you’re too aggressive, if  somebody is let’s say, just tweeting, “I love whatever, Marketo,” and HubSpot’s Twitter account just  responds, “Yeah, but we’re much better. Just sign up for us.” That’s actually gonna be  much worse than just a general marketing tweet. That might piss off some people. So  I think two questions. One is social media use in competitive marketing, but then also  just risks on what not to do, when you do direct competitive marketing.

Hiten Shah:

Don’t be an asshole. Don’t use language where you’re talking shit. I see that happen  and it’s like, “Hey, don’t talk shit.” Now, the bigger, interesting question is what if  your competitor is talking shit.

Steli Efti:

Yep.

Hiten Shah:

Right? Then I think if you’re not a shit talker … Obviously, some cultures are,  some people are, go ahead and talk shit back. That’s great. But I think the  better way is taking the high ground, and even communicating that. They will tell you  lies, we won’t. That some of the most effective ways to counteract that, just as  a quick thought. Yeah, to me, I think a lot of it has to do  with what … This is what really got me, and convinced me about competition, because  I used to just hate it, and not want to talk about it, or think  about it. It would give me a lot of stress, in terms of their marketing,  or their this or that. What really got me though, is this simple thing, which  is you have to look at your market. What market are you in? Are there  competitors, and what is the norm in that market? Right now, in the help desk,  customer support category, there are versus pages all over the place. Us versus them, and  a lot of them are us versus Zendesk, to be honest, because they’re a public  company. They’ve proven the market out for this. I remember being in their office back  in the day, and talking to them about SEO and stuff like that. That was  many years ago, when they first moved to the US, because they started out in another country. Wow, that company to me has really proven that there is a market  here. So now everybody is coming in and saying, “Us versus them.” I almost think  I see more customer support, help desk versus pages, then I do CRM ones, for  some reason, because it’s just us versus Salesforce in most cases. Right? That people put  up, and that’s not very powerful. That’s not very effective, because Salesforce does everything. So  I think I really look at the market and say, “What are competitors doing? What  is it?” Then decide, “Hey, if there aren’t a lot of versus page, but your  customer is using something else, you can be one of the first to put those  pages up.” That’s actually an advantage to you. If though, your market isn’t full of  competitors, it’s more full of alternatives like spreadsheets and manual work, then put up pages  that speak to them, that say, “Today you’re doing it like this. Guess what? You  don’t have to do it like this anymore?” Honestly, those were the first pages Intercom  put up. Even today, their homepage still says, “Stop using all these tools, you can  just use one, ours.” Right? So I think there’s a lot of strategies like that,  that I would suggest. But all of it has to do with the market. So  to me now, when we enter a market, or when we’re thinking about our own  business and product, we start putting up these pages, one, if they already exist in  the market, because we have no choice. We need to have those pages. Two, because  it’s likely our brand is mentioned on a competitor’s site. Right? That’s not cool, if we’re not mentioning them too, because then we’re losing out on that business, those people  that are reaching and comparing, which is ending up being a big, core demographic of  customers today. Right? Then too, we do it in a market, if the market is  newer, and we want to be the first to do it, because there’s enough competitors  out there. Three, if there are no competitors out there, but there are alternatives, we  wood frame our whole business around the alternative, and how we’re better.

Steli Efti:

I love that. I’ll give one example on the social media thing. So we’re not  super big on using social media. We’re definitely not big on doing competitive marketing on  social media, but there were two examples of where we did it. One successful, one  not so successful. The successful one was when one of our direct competitors, kind of  a newer startup in the early days of our existence, was purchased by a bigger  competitor, and they decided to stop servicing clients outside of North America. There were a  lot of these North American companies that were using that competitor, that were complaining on  social media. We were just pinging them and going, “Hey, it sucks. Sorry to hear  that you have trouble. We have a lot of customers that are switching from them  to us, and we wanted to let you know. If you need any help with  transitioning, let us know if we can do anything.” We were winning a bunch of  business that way, because again, we weren’t assholes. We were like, “Hey, I get that  this sucks. You have a tool. It’s working, and now you can’t use it anymore.  You need to look for an alternative. We think we’re a good alternative, and we’re  here for you. We’re happy to help if we can.” We got a lot of  business that way. That was kind of successful, a successful campaign. The not so successful  campaign was a similar, but different case where a competitor, although it was not as  direct, and maybe that was the issue, not a lot of our customers were coming  from them, but they were still kind of in our space, they switched management. It  was not clear if the company would still exist, or how much. There was some  press, and some about the future of that business. We just put together, I think  a landing page, that was talking about people switching to us. We promoted a little  bit, but there was not a lot of social media discussions around that, funny enough.  So we never got a lot of traction, a lot of traffic on that thing.  It never really converted much. So those are kind of two examples of when we  used social media to do competitive marketing. But this is two examples in four five  years, so we don’t do it a lot, but once we saw these two opportunities,  we jumped in there. Let me ask you about the comparison tools, because that’s a  big thing in SAS now, where competitive marketing is playing an interesting role. There’s all  these sites that allow customers, that rank really highly, and allow customers to compare tools  in certain categories, especially in SAS. Right? What’s the big one? I missing the names  right now, but there’s two or three really big ones, where it’s –

Hiten Shah:

Oh, Capterra, or G2Crowd? All those?

Steli Efti:

Yes, all those. Right?

Hiten Shah:

Yeah.

Steli Efti:

They do rank really highly in a lot of keyword searches, like CRM comparisons, CRM  best, whatever. Then they have these … We have all the customer reviews, and we  have these landing pages where we, as a third-party provider, show you which tool is  better for what kind of use case. What they incentivize you to is to send  a lot of your customers their way, to write reviews on their site, but once  you do that for a while, you realize, “Huh, shit. Why are we still not  ranking, or being mentioned aggressively enough in a lot of these reports that rank really highly?” The reason for that is, they want you to pay money. They want you  to basically advertise, so all the reviews you’ve gotten are actually seen by people that  search, and you show up in their reports. Now, you can decide if you want  to play that game or not, but if you’re not, a lot … I know  for the CRM space for sure, a lot of our competitors are in those reports,  are ranking really highly, although they have less five star reviews than we have even  from people, because they pay a lot of advertising dollars to rank high. Have you  seen a lot of SAS tools use that? I’ve gotten mixed reviews. Some founders have  told me that it was a total waste of money and time. Some investors actually  told me, that they don’t do anything in SAS space, if they don’t spend a  lot of money in there, because there’s a lot of leads, and a lot of  opportunities coming that way. Do you have any opinion on these kind of sites? Is  it worth it or not? Or how to play the game on these comparison websites, review websites basically?

Hiten Shah:

Yeah, get your best customers to put reviews in. You know your best customers are,  and it’s not cheating. If a customer loves you, they’ll write a review for you.  You don’t have to do anything, except ask them. Right? Start incorporating that into your  process. “Hey, we know you’re getting a lot of value from our product. You mentioned that to us. We’d love if you could review us on G2Crowd. Please be honest.”  And just be ready to deal with whatever that honesty is.

Steli Efti:

Fair enough, and I know in our case what we do is, I think once  a customer has been around for two months, and has given us a certain NPS  score, we’ll ask for referrals, and for ask for a review on one of the  sites. We get a good number of it. The funny thing is, a lot of  times, you don’t … For instance, we were doing this, I don’t even know if  we still do, but we have a fair amount of good reviews. Good meaning high  quality, authentic reviews on Quora for . I know that for a while we were  looking at the traffic, and we were like, “Huh, this doesn’t really do anything traffic  wise. This doesn’t really bring lots of people.” But then when we were talking to  our trial users, and we were asking them, “How did you hear about us?” One  part of their search was seeing a positive review of us somewhere. It was not  the thing that brought them to us, but it was a part of their search  that convinced them later on to come and sign up. So it’s an interesting observation  that these review sites, they might not even directly bring you, or these reviews might  not directly bring you traffic, so you can super easily attribute it to them bring  you a trial, but people still see these reviews. It influences them trusting you, and  wanting to come and check out your software later. All right, I think we covered  a bunch in terms of the competitive marketing space, how to think about it, what  tactics to use. It’s an interesting space, and I feel very similar to you Hiten,  just to share this with the listeners. Four years ago, I didn’t want to do  anything that was competitive marketing. I didn’t want to think about the competition. I just  wanted to think about my customer, do the marketing I want, build the product I  want. Today, that still the majority of what I do, but we’ve talked about this  before, and you’ve helped me see the light on this, on seeing my competitors as  another way to understand my customers better. Also, seeing some trends in the market, and  what our customers do, in terms of how we make decisions, where it’s just dumb  to ignore those out of stubbornness. We’re like, “Okay, if a lot of our customers  are comparing, if a lot of these alternatives we see a lot of success with,  we should exploit these. We should play in certain areas, because it’s what’s going to  help us acquire more of the right type of customers.” All right, I think that’s  it from us for this episode.

Hiten Shah:

Later.

Steli Efti:

Bye-bye.