Gartner Blog Network


Differentiation and Neutralization – The Constant Struggle

by Hank Barnes  |  November 15, 2016  |  4 Comments

Last week, Geoffrey Moore published a post on LinkedIn called Innovation Silicon Valley Style is the Exception, Not the Rule.  As always with Geoff, it is excellent and well worth the read.  One of the things he highlights is the difference between disruptive innovation and sustaining innovation, playing up that the path has an impact on differentiation approaches.

While our research at Gartner consistently reveals that buyers struggle to understand the differentiation between providers, I’ve come to realize that, at least for some providers (a small set), differentiation is not critical.  Geoff’s post crystallized this for me.   If you are an established provider, preferably a mega vendor, then your goal is not to differentiate (in most cases).   It is to neutralize others.  Geoff uses Microsoft as his lead example, and it is a good one, but there can be many others.

What does it mean to neutralize?   Effectively, it is to have a “good enough” product that diminishes the differentiation of others enough that buyers either don’t embrace the differences or, frankly, don’t feel they matter that much.   When that happens, the most common choice buyers make–go with a known established provider.  That is, go with the neutralizer.

differentiation2016

This is an incredibly powerful asset for established vendors.   But it requires discipline.   Talented engineers often aren’t excited about creating “neutralizing products.”   Being the most innovative is cool, so there is a tendency to try to out innovate others–both in features and words.   For neutralizers, the better choice is “we are just as good, or almost as good, but–and more importantly for you, Mr. and Ms. Customer, we are lower risk and easier for you to manage.”    Effectively, the differentiation is not the product, it is the company and the established relationships (and risk reduction).

That storyline is not as appealing initially.  Analysts, Bloggers, and the press may bemoan that lack of “newness.”   Others talk about it being a risky “catchup” effort.   But momentum is an interesting thing.  When you have the force of a large customer base and channel, once it gets moving, the impact is significant.  The fast follower strategy is often a winning strategy.  The key to success is choosing the right places and timing to follow.

This presents a challenge for the disruptive innovators.   In order to establish a foothold, they have to create compelling differentiation.   Then, if they are successful and in a big enough market for the established vendors to care, they’ll be attacked by neutralizers.   Once that occurs, feature differentiation or “better product” differentiation won’t work.   Instead, it will be time to shift to other attributes — customer experience, focus, etc.–to stand out.   And, once you grow and are established, you may need to move to neutralization approaches.

Netting it out.  Differentiation matters, but neutralization strategies may be the biggest threat that you will face (or biggest opportunity, depending on your place in the market).

 

Additional Resources

View Free, Relevant Gartner Research

Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.

Read Free Gartner Research

Category: go-to-market  

Tags: differentiation  disruptive-innovation  innovation  neutralization  sustaining-innovation  

Hank Barnes
VP Distinguished Analyst
6+ years at Gartner
30+ years IT Industry

Hank Barnes explores the dynamics, challenges, and frustrations enterprises face when buying technology products and services. Using that customer-centric lens, he advises those responsible for marketing technology products and services, general managers responsible for product portfolios, and startup CEOs on next practices to drive success for their customers and their business. Read Full Bio


Thoughts on Differentiation and Neutralization – The Constant Struggle


  1. Christine Sten says:

    Spot on, Hank! Today’s buyer rarely buys product. They are seeking and purchase technology to achieve outcomes. This is great insight to smaller and emerging tech vendors to differentiate on higher value business drivers/outcomes, and avoid the risk of by mega vendors’ “good enough” satisfying buyers’ risk aversion. But messaging differentiation alone will not be sufficient. Smaller vendors must be able to demonstrate ample evidence of their solution’s ability to deliver those results.

  2. ken rutsky says:

    Hank. This post is kinda problematic for me. My experience says most large vendors are asleep, not busy neutralizing. Let me explain with an example. When I was managing the Firewall business at McAfee, we were obsessed with competing with Cisco and Checkpoint. At least in marketing. Sales was “screaming” about Palo Alto Networks. We didn’t hear them. Sales is the canary in the coal mine, but all too often the “factory” doesn’t hear it’s song. Fast forward 8 yrs and McAfee is out of this business and Palo Alto is the leader. Wow. So before Neutralizing, we need to LISTEN and understand, without over-reacting. That is hard.

    Also, in today’s markets, start-up that can prove value fast, with lower investments, can so much more easily disrupt markets. What an exciting time we live it (Tongue firmly in cheek on this last line! )

    Ken

    The other shift

  3. Hank Barnes says:

    Ken,

    Thanks for the thoughtful comment. I don’t disagree..established companies can miss the mark at neutralizing (and if the differentiation comes from a viewpoint v. a feature, it can be harder to neutralize!), but it is an effective strategy when done right. Understanding market adoption is also important. I could disrupt in the early market, but fail to convert the majority. Or, that disruption could have a lasting effect.

    I would definitely say that “neutralizing” can not be ignoring (and only a select view can be effective neutralizers)

  4. Scott Myers says:

    A Chinese idiom which matches this fairly closely as well: 画蛇添足 huà shé tiān zú ‘to draw a snake and add feet’, that is, to continue embellishing on something until you end up adding superfluous detail that ends up being detrimental rather than useful. – Janus Bahs Jacquet Jul 15 ’15 at 7:36
    @petascale #petascale



Leave a Reply

Your email address will not be published. Required fields are marked *

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.