It is easy to assume that the company with the best product will be the market leader. Such a thought is intuitive, and business leaders often default to this thinking as they try to carve out a competitive advantage. The problem is that there is so much more to winning business than building a great product.
This “best product” thinking is not a mistake only novices make. There are numerous examples of mature businesses run by savvy executives that expend significant resources developing great products that few people actually want to buy. My favorite example of this is when Steve Jobs left Apple to start the NeXT computer company. Jobs, by many standards, was one of the greatest product creators of our time, yet with NeXT he built a powerful computer that failed to resonate with his target market. A superior product can miss the mark due to poor product/market fit.
At Clozd, we frequently see this “best product” fallacy in our win-loss interviews with buyers from a variety of industries. Buyers will explicitly state that the product they considered purchasing was the best one out there, but they chose not to move forward with a purchase. While there are various reasons why buyers choose competing products that may be inferior in quality, many reasons boil down to issues with product/market fit. As product/market fit can mean different things depending on the context, here are three ways we commonly see companies fail to achieve product/market fit despite having a very high-quality product.
Having a strong sense of the market’s core use cases for a product is of paramount importance. Otherwise, companies end up building products designed to achieve something other than what buyers need. In our win-loss analysis, we frequently hear buyers say that a product is great, but it has a variety of features they don’t think they will use and/or is missing the functionality they fundamentally need. Products that resolve the most critical buyer pain points will win in the marketplace, even if competing products have more features.
We also see situations where products are designed with the end-user in mind and do a good job addressing some key use cases but miss the most common use cases of the largest segments of the market. Assess who the biggest players are in your target market and design your product to meet their needs, not the needs of a smaller subset of your total addressable market.
Buyers have an innate sense of ROI. They might not use that exact term, but essentially, buyers have a “gut feel” for how much a product is worth relative to how much they are being asked to pay for it. Some buyers will share that a product is the best in the market, but they are willing to go with the second-best option because it has most, but not all, of what they need at a much lower price. We have also heard this reasoning quantified, where buyers will relate that the product is 10% better than the competition but 100% more expensive, and that tradeoff doesn’t motivate them to choose the best product.
If a product is difficult to buy, it won’t be the leader. It seems obvious that companies should make their product easy to buy, but in practice, many companies do not provide a straightforward customer journey. Ease or difficulty of doing business comes in a variety of forms. It ranges from something as simple as a buyer having a hard time finding the “checkout” button on an e-commerce site to something as complicated as an enterprise software buyer unable to navigate a POC. In both of these situations, buyers may feel that your product is the best and want to purchase, but they give up because it is just too hard to close the deal.
In our win-loss analysis at Clozd, we have found that buyers in a B2B context will raise the concern of ease of doing business at various points in the sales process. At the front end of the sales cycle, buyers may share that the salesperson didn’t seem to listen to them or was too aggressive. Towards the end of the sales cycle, a difficult contracting process or lack of clarity around pricing terms can cause significant roadblocks for buyers. Overall, if buyers feel that you are difficult to work with, there will be potential revenue left on the table, even if you have the best product in the industry.
Having a great product isn’t a bad thing — it's fantastic and indisputably one of the best ways to lead the market. But great products alone don’t make for a winning company. How well a product aligns with the buyer’s core use cases, price point, and ideal buying experience will time and time again trump pure product capabilities.
For additional best practices and strategies, read our Definitive Guide to Win-Loss Analysis:
Activate the value of a win-loss interview program today. Learn more about how to start your win-loss interview program here.