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Can marketing provide a competitive advantage?

Part of every CMO’s charter should be to think about marketing can provide a competitive advantage to the organization. I’m not just talking about getting tons of leads and lots of press coverage, but on a more strategic level. Most people don’t think about marketing when they think about competitive advantage. Sustainable differentiation typically is associated with areas such as creating unique product features, tapping large distribution channels, or launching innovative business models. But marketing can be a corporate differentiator as well especially if the organization can establish a high level of brand awareness or a highly efficient demand generation model. Ideally, you want marketing to build a competitive moat around the business that is impenetrable by competitors seeking to attack your leadership position.

abtract illustration of castle representing competitive moat

What is a marketing moat?

Assuming you paid attention in your European history course you probably recall that in medieval times, moats were dug around castles as a defense mechanism. Enemy attackers would struggle to cross the moat because it was too deep to walk across. Swimming across the moat wasn’t a practical option either, because its hard to freestyle with 50 lbs of weapons strapped to your armor suit. Even if the enemy could cross the moat, it would be challenging to do so without attracting the attention of castle guards overlooking from on-high.

A marketing moat serves a similar purpose to those from the middle ages. It prevents competitors from penetrating the leadership position you have established in your category. Moats are particularly strategic as you face more new entrants that want to disrupt your market and displace the incumbents with a better, faster, cheaper product. Ideally, your marketing moat should be sufficient to fortify your position so that even the most well-financed, venture-backed startups will have to invest massive amounts of time, energy, and resources to match your position. You know you have built a moat successfully when competitors start to avoid or abandon specific marketing tactics because they know they cannot beat you.

The best moats are not built to resist the most likely competitive threats. If a startup with a lot of venture capital can spend a few million dollars to catch up then you haven’t really built a moat. throw hundreds of resources to catch up that’s not a very deep moat either. Global workforce can easily scale up thousands of employees in lower cost geographies to reach parity. The deepest and most effective moats have a time dimension. Barriers that cannot be overcome with money and headcount, but require developing a reputation, or external dependencies on customers.

Which companies have built a marketing moat?

You don’t have to look very far to find examples of marketing moats. Below are a few examples:

  • built a marketing moat by cultivating a large community of users that meet together regularly at in person events. Dreamforce is the “must attend” show for sales and rev ops leaders. There have been many new entrants to the CRM sector which have built innovative products and captured market share. However, none have attempted to challenge Dreamforce with a large-scale end-user event and none probably will.
  • Hubspot built a marketing moat using content that its end user community loved. The founders authored a book on Inbound Marketing that became required reading for any CMO. The team generated dozens of helpful ebooks, blog posts, tools, and templates targeted towards beginner-level marketers entering the space. New entrants to the Martech space don’t dare to go head-on with Hubspot on content. They pursue alternate strategies.
  • ADP built a marketing moat with its monthly National Employment Report based upon analysis of data from its community of payroll clients. The report generates tons of publicity and news coverage for ADP. Stock traders and economists follow the ADP numbers more closely than many of the data sets coming from government agencies. Although there are many new disruptors in the payroll sector, none will likely challenge ADP’s leadership in original economic data research.
  • Greenlight Guru – You don’t have be a large company to build a moat. Check out Greenlight Guru, a vertical SaaS leader that helps medical device companies bring new products to market and comply with government quality regulations. Similar to Hubspot, they have built a content moat that includes hundreds of ebooks, guides, checklists, templates, and blog posts on every aspect of the MedTech product lifecycle. While there are dozens of competitors in the life sciences quality management space, none have a content catalog even half the size of Greenlight’s.
Steve Keifer

Steve Keifer has led marketing and product management teams at seven different SaaS and cloud providers ranging from venture-backed, early-stage startups to multi-billion, publicly traded companies - including several that experienced hypergrowth, filed IPOs, and reached unicorn status. In Bantrr, Steve shares many of the best practices and lessons learned from building and scaling marketing organizations. Topics include new category creation, brand development, and demand generation.