For more than a decade, I've been offering content marketing services to companies in the software development industry. One thing I’ve noticed time and time again is companies with well-defined positioning and differentiation achieve greater success in content marketing than those that blend in without any real distinction.
Last month, I conducted a workshop for a Ukrainian community on differentiation strategies for software development companies. The response was so positive that I decided to turn that workshop into a story that illustrates the thought process that a software development company can use to develop its positioning and differentiation strategy.
I came up with E-Soft – a typical e-commerce development firm that offers the same services as so many others in the industry and targets the same market. If it doesn’t rethink its positioning and find a way to differentiate its offerings, it will be forced to increase its marketing spend and cut costs – something no company wants to do.
In this story, you'll see how E-Soft makes the bold decision to narrow its focus and target a specific customer segment. If you want to shake things up and make your company stand out, I hope this story inspires you.
A notification pinged in the Slack Content channel, attracting everyone's attention. "We need to discuss our USP in the next meeting," Vlad's message read.
Ann, the marketer, rolled her eyes. "USP? Really?" she muttered to herself, her fingers tapping out a sarcastic response. "Okay… We don't have one."
She leaned back in her chair, her mind racing. "What is it now? Did he just learn a new marketing buzzword?" she thought. Ann had pushed for positioning before, but Vlad never took it seriously. Now, out of nowhere, he wanted to talk Unique Selling Propositions. "Great," she thought, "He's picked up a new marketing term."
"Our selling propositions are quite strong," she typed, softening her tone. "We build e-commerce stores using existing platforms to help our clients save costs. Problem is, everyone does that. So, no USP."
"We need one. Clients are asking," Vlad shot back.
"I'll think about it and share my thoughts at our next meeting," Ann promised.
At the meeting, Ann took the floor.
"We need to rethink our positioning," Ann said.
"What’s your approach?" Vlad asked.
"We need to find a unique way to stand out," Ann explained.
"Do you need anything from me?" Vlad asked.
"Obviously," Ann thought to herself, fighting the urge to roll her eyes. "I need everything from you."
"I need you to evaluate possible strategies and choose a course for the company," she said instead, keeping her tone professional.
"What do you mean?" Vlad asked.
"Let me think this over and present these strategies next week," Ann said.
"Go ahead," Vlad said.
As the meeting wrapped up, Ann couldn't help but feel a spark of excitement.
"One strategy we can use to differentiate E-Soft from competitors is doing the opposite of what everyone else is doing," Ann said at the first meeting she titled "E-Soft Strategy Makeover" in Google Calendar.
"All right, explain," Vlad said, leaning forward.
Ann clicked on the next slide in her presentation, which featured spot-on examples, "In custom software development, most companies build from scratch. But there are low-code platforms—ServiceNow, UiPath, Airtable—that have a network of implementation partners, creating new market opportunities for software developers. Why not use these platforms to go against the grain? Some do. For example, InAir positioned itself as the top consultant in the Airtable Ecosystem by helping enterprise teams turn Excel sheets into connected apps.
This is not the only way to do the opposite.
Software developers can also set themselves apart by building their own solutions, rather than offering services on existing platforms. Infosys, for example, provides both custom software development and ready-built solutions for various industries," Ann explained.
"Doing the opposite can apply not only to what you sell but also to your pricing model. For example, unlike most UI/UX design companies that charge per hour, Designjoy operates on a subscription.
"But we're an e-commerce development company," Vlad pointed out.
"True. So, we can do three things: One, build ready-made solutions like support for multiple languages and currencies. Two, certify with Salesforce Commerce Cloud and/or Shopify Plus, positioning ourselves as a premier development partner for top SaaS e-commerce platforms. Three, operate on a fixed monthly rate." Ann suggested.
"The first and the third ideas aren't feasible," Vlad replied. "Those are 2 different business models. In the first case, we would push ourselves into competing directly with developers who are already creating similar apps and plugins for e-commerce, and that's a tough and lengthy path. And the third idea, well, it would require a completely different service model to justify a fixed monthly subscription that's the same for every client. I want us to stay true to our roots as a service-based company, offering bespoke development services tailored to e-commerce owners."
"Can you bring up the slide with the second idea again?" Vlad asked, his expression thoughtful.
After a brief pause, "The second idea isn't bad," he acknowledged. "But it would take months for our developers to get up to speed on Salesforce Commerce Cloud or Shopify Plus. Also, we don't have enough projects on these platforms to claim expertise. It could be a good long-term investment, but for now, let's explore something more immediate," Vlad responded.
"Got it. I'll present the next strategy at our next meeting," Ann said, ready for the challenge.
“Let’s think like IKEA!” Ann exclaimed at the second meeting devoted to E-Soft marketing strategy.
"IKEA flipped the script by questioning traditional methods," Ann said.
"Think about it: many software development companies mirror each other because they don't challenge the status quo. Take costs, for example. Instead of using what's already out there, they reinvent the wheel just to charge more. They think raising rates is the only way to grow, rather than finding ways to cut costs and give more value. And when it comes to delivering projects, they add more resources and services instead of automating tasks wherever they can.
It's like they’re too afraid to make things simpler and more cost-effective."
Vlad raised an eyebrow. “So what’s your point?”
Ann smiled. “Image if a software development company adopted IKEA’s strategy. How would that change things?
IKEA: Modular furniture
Software development company: Reusable code modules that fit different projects.
IKEA: Easy-to-follow assembly instructions
Software development company: Clear documentation and client self-service tools.
IKEA: Affordable prices
Software development company: Cost-effective, AI-assisted development.
For example, look at Superside's new offer for an AI-powered creative team. Instead of offering clients a full-fledged design team, they say AI can handle design tasks, which can save up to 60% per project,” she pointed to the link on the screen.
“That’s impressive. So, if we could leverage AI similarly, we could make our services more affordable and efficient,” said Lisa, E-Soft's Sales Lead.
“Right,” Ann agreed. “But let’s also think about how we can differentiate in other ways. Many companies in our field focus on long-term, complex projects, but we could challenge that norm. We could offer a marketplace model similar to Task4Store where clients can get small tasks done quickly.”
"Implementing that would require a significant shift in our operations. I’m not sure we need that,” Vlad said.
Ann added, “And what about SEO? It’s often overlooked by developers, but if we incorporated it into our e-commerce development services, we’d offer something that many others don’t.”
“SEO is definitely something we can tackle. It’s a clear value add and fits well with our existing services,” Vlad agreed.
Ann smiled, relieved. “Great! I'm happy we have something to move forward with."
"I'll take care of integrating SEO into our operations but you need to make it a standout feature,” Vlad said.
"Agreed," Ann nodded. "But I'm not done here. Next time, we'll talk about one more strategy: Missing use case."
"Looking forward!" Vald said, more enthusiastic than usual.
"Let's face it, software development is a commodity service," Ann said bluntly.
Vlad sighed. "It’s hard to argue with that."
Ann continued, "The problem is software development companies are the same. They are serving the same needs for the same companies in the same ways. So, they all end up competing by trying to be 'better."
"When we claim to have more skilled developers or offer a better service, we're saying the same thing as everyone else. And who can measure that? It’s a pointless race trying to outdo each other with the same offerings.
"We need a different approach," Ann said firmly. "Instead of competing within the same rules, we should create our own game with our own rules."
Vlad said skeptically. "That sounds bold, but we’ve talked about this before. Changing our business model isn’t an option."
"I’m not suggesting a complete overhaul," Ann clarified. "I’m proposing we still offer our services but narrow our focus."
"Kajabi, Substack, Circle, and Membership.io all provide similar features like courses, communities, newsletters, and memberships. Yet each is known for a specific area: Kajabi is the go-to for courses, Substack for newsletters, Circle for communities, and Searchie for memberships. They’ve carved out their niches."
Ann continued, "Similarly, in software development. Alcor focuses on building development centers abroad, promising from 0 to 100 engineers in one year. qBotica positions itself as Automation as a Service (AaaS) provider that targets enterprise customers looking to lower operating costs. They focus on specific use cases."
"So what’s our use case?" Vlad asked.
Ann’s eyes lit up. "Rather than trying to serve every e-commerce development need—building new stores, fixing existing ones, or 'lending' developers—we should focus on one thing."
Vlad raised an eyebrow. "And that one thing is…?"
"Replatforming," Ann said.
"Is it just me, or does the tagline 'Crafting e-commerce' seem off?" Ann asked at the final "E-Soft Strategy Makeover" meeting, where the team was set to decide on their new strategy.
"What’s wrong with it?" Sarah, the Content Lead, asked.
"It’s too broad!" Ann replied. "We can't target all types of companies and personas."
"Wait a minute," Lisa, the Sales Lead, interjected. "Narrowing our focus might scare away other potential clients."
"I don't think so," Ann said firmly. "We can’t make our offerings appeal to everyone. We need to be more specific about our audience."
"At our last meeting, I suggested we niche down to find a distinct message," Ann continued. "I believe replatforming is the way to go. It’s a complex project that aligns with our target customers."
"Go on," Vlad prompted.
"We want to target large enterprise-level companies," Ann said. "They have longer-term value, bigger budgets, and complex projects that are both challenging and interesting."
"Exactly," Vlad agreed.
"Perfect. So, we’re all on board with targeting this segment?" Ann asked, seeking confirmation.
"Yes," Vlad confirmed.
"In that case," Ann said, "focusing on replatforming makes the most sense. Replatforming is a complex project. Companies that undertake it have outgrown their current platforms and are ready to invest heavily in a new one. They need a reliable team to ensure their investment pays off."
"Got it," Vlad said with determination. "If we can position ourselves as the go-to experts for replatforming, we’ll stand out in the market."
Ann smiled, satisfied. "Great. Let’s make it happen."
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