Product differentiators are unique features, attributes, or benefits that set a product apart from its competitors in the market. They’re the characteristics that make a product stand out and provide a competitive advantage.

Product differentiators can be helpful for several reasons:

  • Market positioning: Differentiators help position a product in the market and create a distinct identity by communicating the unique value proposition.
  • Market expansion: By offering something distinct, a product can appeal to a broader audience and penetrate untapped markets, driving business growth.
  • Price premium: Customers who perceive unique value in a product are often willing to pay more for it.

Tools to identify your product’s differentiators

Identifying your product's differentiators is crucial for developing a strong value proposition and standing out in a competitive market. Here are some effective ways to identify your product's differentiators:

1. Voice of customer: Engage with your existing customers and target audience through interviews, surveys, reviews, testimonials, and other feedback mechanisms to ask about what they value most in a product, their pain points, and what sets your product apart from others they have used.

2. Competitive analysis: Evaluate your competitors' products to identify their strengths and weaknesses. Look for areas where your product outperforms or offers distinctive features that can provide a competitive advantage. Understanding the competitive landscape helps uncover potential differentiators.

3. MUD framework: The MUD framework is a strategic model that evaluates differentiators based on the impact, distinctiveness, and sustainability of a product. [more on this below]

4. Internal brainstorming and collaboration: Engage your all relevant internal stakeholders in brainstorming sessions to analyze your product's Strengths, Weaknesses, Opportunities, and threats to identify traits that set your product apart.

My team applies a combination of these approaches in a step-by-step method to identify our product's differentiators. These methods have helped us understand customer needs, evaluate our strengths, and craft a compelling value proposition that sets us apart in the market.

What is the MUD framework?

The MUD framework is a strategic model that helps organizations evaluate and identify their product differentiators to gain a competitive edge in the market. Here's a breakdown of each component:

  • Meaningfulness: Meaningfulness refers to how impactful and valuable a product's benefit or feature is in meeting customer needs or solving their problems.
  • Uniqueness: Uniqueness focuses on the distinctiveness of a product's differentiating factor compared to competitors. It involves assessing whether the product feature or attribute sets it apart from similar offerings in the market. The greater the uniqueness, the stronger the differentiation and competitive advantage.
  • Defensibility: Defensibility refers to the sustainability and protection of a product's differentiator over time. It involves assessing the barriers or challenges that competitors may face in replicating or neutralizing the differentiation. Factors such as patents, intellectual property, exclusive partnerships, or technological complexity can contribute to the defensibility of the differentiator.

By evaluating each element of MUD – Meaningfulness, Uniqueness, and Defensibility – organizations can gain insights into their product's competitive differentiation. This framework helps guide strategic decision-making, such as focusing on enhancing or leveraging existing differentiators, identifying new areas for differentiation, or exploring ways to strengthen the defensibility of the product's unique attributes.

How CometChat used the MUD framework to identify product differentiators in the first 60 days of PMM

CometChat’s newly formed PMM team, led by Ryan Graff, utilized the MUD framework to identify differentiators for our product internally. Here's how we approached it:

Step 1: Download & customize the MUD framework template: 

We created this sheet and tailored it to fit our specific needs. The goal was to keep it simple and repeatable, so we kept it limited to exactly what we needed. 

Download here. Here’s how to customize this template:

  1. Create an organized list of categories of different buying factors such as product benefits, capabilities, and features of your offering. See the template for reference.
  2. Keep the rest of the columns blank for now.

We had about 20 categories listed for our offering. This provides a structured framework to move to the next part.

Step 2: Brainstorming sessions with functional leaders: 

We planned two long brainstorming sessions with ONE leader from each function – product, engineering, marketing, sales, support, customer success, and leadership. Presenting this template to everyone, we picked a category from column A and started an open discussion on what each leader thought could make a potential differentiator for our offering. Listed each of these under “Itemized buying factor” along with a detailed description in the next column. We managed to create a list of more than 40 potential differentiators.

The next step was to collaboratively discuss how each of these listed items passed on the MUD test. Ask these three questions and let the group decide:

  1. Is this line item meaningful – what value does it create for the customer?
  2. Is this line item unique to our company/product – does no other competitor offer it?
  3. Is this line item defensible – will it sustain for a long enough period of time or is it temporary?

Make sure to discuss real examples and proof points for every answer. Otherwise, it’s just hearsay.

Next, from each dropdown under “Meaningful”, “Unique”, and “Defensible”, we picked Yes or No based on the discussion. Enter any comments in the adjacent column. Eliminate rows with a “No” in any of the 3 columns.

Only items with Yes under all three, i.e. Only items that are meaningful, unique, and defensible remain for the next step. We had about 15 items on this list.

Step 3: Validating through customer interactions: 

So far we’ve identified what we think our differentiators are. But it’s also important to validate the identified differentiators from a buyer’s perspective. So we engaged in conversations with existing customers through interviews and gathered feedback to understand their perception of our product's strengths and what truly set us apart. 

A customer-centric approach helped ensure that our differentiators resonated with the target audience. 

This step helped us eliminate five to seven items from our list because customers either didn’t care enough about those or simply had a different perspective. Moreover, we were able to rank these differentiators based on how impactful customers found them to be.

PMA insider membership plan

Step 4: Editing and polishing: 

We reviewed the list generated during the brainstorming sessions and refined the differentiators, ensuring they were clear, concise, and aligned with our overall product strategy and target market. This step involved rephrasing and fine-tuning the language to effectively communicate the unique aspects of our product. 

Surprisingly, we were able to club a few of the validated differentiators under similar umbrellas.

Step 5: Repeat once or twice a year:

Depending on your product’s development velocity, I’d recommend repeating this exercise at least once every year. That helps you stay up to date with changes in your own product as well as competitor products. Furthermore, these workshops can be a great way to collaborate with all other functions in your company and keep them engaged with your differentiators. People are more likely to acknowledge and use them if they feel part of the process from the start.  

We leveraged the MUD framework to identify and refine our product differentiators internally and then validated them externally from a buyer’s perspective. This process allowed us to tap into the expertise of cross-functional leaders, validate our assumptions through customer interactions, and ultimately create a compelling value proposition that distinguishes our product in the market.

Leveraging product differentiators

We used the identified product differentiators in several ways to gain a competitive advantage and drive business growth. Here are some ways you can use product differentiators:

  • Marketing: Use your product differentiators to create compelling marketing messages that resonate with your target audience. Highlight the unique value propositions of your product and how they solve your customers' pain points.
  • Sales: Communicate your differentiators during every aspect of the sales process. Highlight the unique features and benefits of your product and how they can help your customers achieve their goals.
  • Product development: Use your product differentiators to guide product development efforts. Focus on developing features and functionality that align with your unique value propositions and strengthen your differentiators.
  • Pricing: Use your product differentiators to justify premium pricing. If your product offers unique value propositions that competitors don't, you can charge a premium price for it.
  • Customer Retention: If your product offers unique value propositions, your customers will be hooked and stay loyal.

Product differentiators + the MUD framework: Let's recap

Identifying and leveraging your product's differentiators is a continuous process that requires commitment and cross-functional collaboration. As your product and market evolve, it's crucial to re-evaluate your differentiators to ensure they remain meaningful, unique, and defensible. 

The MUD framework offers a structured approach to periodically analyze your differentiation strategy. Supplement this with continuous customer engagement to validate assumptions and refine messaging.

When done right, clearly articulated and marketed differentiators can transform how your customers perceive your product's value. They provide the foundation for all go-to-market initiatives and help carve out a distinct, competitive position in the marketplace.