'My dad can beat up your dad' >BY Liza Henderson

When it comes to marketing "hi-tech" products and services, coming up with a sustainable differentiation strategy can be tough, regardless of whether the technology is established and relatively mature or just emerging and in a constant state of flux. This certainly places a high level of pressure on product marketing managers to be innovative.

The challenge is to develop a sustainable lead strategy and value proposition that can be smoothly evolved throughout the product's life cycle. This is easier said than done.

Here are the top five guidelines to keep in mind when formulating a unique primary value proposition for a product or product family.

1. If the primary underpinnings for your differentiation are that your technology is better than your competitors', be careful. Your competitor isn't going to walk in the door and say that his technology is second best, but please buy it anyway.

Minimize dependence on technology features and capabilities because chances are, someone already has or will soon have something similar. Technology features are fairly easy to mimic, especially when standards are being developed or are already complete. The result is "technology leapfrogging," a common phenomenon in the telecom industry

2. Avoid nebulous adverbs or adjectives like best, fastest, cheapest, least, most and others.These are very subjective terms that are generally exposed to arguments and controversy. It's almost like saying, "My dad can beat up your dad." One can expect a retort similar to "Oh yeah? Prove it."

It's a very natural tendency to focus on your competitors' weaknesses to show that your product is better or the best overall. The problem is that your competitors are most likely making the same claims. This strategy can confuse the market, increase sales cycle times, or even delay product acceptance.

What does this leave? Just about everything else. The primary value proposition can be based on support services, understanding the client's business environment and needs, the definition of your product or service, customization or integration, rapid installation, painting your box in psychedelic colors, offering free concert tickets or puppies with each service order, and so forth.

3. Be aware of the impact of numbers! Although numbers are something tangible that end users can relate to, vendors and service providers may use different approaches to calculating these numbers. Chances are, your competitor can make the numbers work for him as easily as you make them work for you.

But this doesn't make numbers something to avoid; they just need to be managed. Focus attention on the overall cost of ownership instead of the cost of any individual element at any given point in time. Relate numbers to the overall business impact, not just the impact on any one component of the network budget. And when possible, quote numbers generated by objective third parties or as derived from actual case studies.

4. Map the product's strategy with the company's strategy for the data portfolio as a whole and with the company's overall business strategy and objectives. You will probably be amazed to find inconsistencies in cross-product strategy and positioning, which can negatively affect not only the new product but other products in the family. Discontinuities in your product migration plans and market share management are just two of the side effects of clashing strategies and tactics.

Here's a simple but telling example. Nearly all the interexchange carriers have publicly stated that the cross-product positioning strategy for frame relay and ATM is either to price the two services the same for similar configurations or to price ATM at a premium because it is a premium service. However, recent analysis has shown that in nearly all cases, ATM pricing is less than frame relay pricing at T-1 levels for similar configurations. The strategy and the tactics don't match.

5. Stress test the strategy against alternative market scenarios one, three and five years out. Determine the market scenarios in which the strategy succeeds and fails, and develop a list of early warning signs that could signal market changes that could lead to a "failure" situation. Contingency plans are a critical element in any strategy.

A good differentiation strategy needs staying power, even when unexpected events alter the market in ways that you have not foreseen. Once your strategy is created, stress-test it against different future environments that may be substantially different from your assumptions about future trends and buying patterns. Stress-testing the strategy before implementation could save substantial back-peddling and damage control if the market zigs when you thought it would zag.

Lisa Henderson is a Broadband Consultant with TeleChoice, Verona, N.J. Her e-mail address is lhenderson@telechoice.com.