Hello marketing leaders, strategists, and innovators! 👋 Thank you for dropping by to learn practical AI applications and gain strategic insights to help you grow your business, elevate your and your team’s strategic value as marketers, use business as a force for good, and help advance your career.

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As we head into strategy and planning season, there’s one critical question we need to ask: how solid is your product-market fit (PMF) in today’s AI-driven world? Findings from CMO Huddles‘ “Underground Recession: The Hidden Strain on B2B CMOs,” uncover hard truths like budget cuts and longer deal cycles.

Product-Market Fit and Defensibility Matter Now

Most B2B companies face two core challenges: ensuring PMF and building customer trust. Here’s why it’s urgent now:

• Profitability Shift – The transition from “growth at all costs” to sustainable profitability requires a fresh look at PMF and choosing a select few top market segments (https://lnkd.in/gm_iJsbd). Many are still struggling with this shift after two years.

• AI’s Role – AI brings both opportunities and challenges, particularly around data privacy, which requires buy-in from across the company.

• Evolving Buyer Behaviors – Customer needs and behaviors are shifting from how they search online (https://lnkd.in/gY-EUmpD) to preference towards known entities and peer recommendations.

• Upmarket Expansion – Companies looking to move into enterprise markets face significant risks if their PMF isn’t rock solid.

• Product-Led Growth (PLG) – PLG changes how products are built and marketed, and without a strong PMF, companies will have difficulty adapting to this model.

Remember, as marketers: just as we can’t out-exercise a bad diet, we can’t out-campaign a bad product-market fit. No company is immune to these challenges – even tech giants are reassessing their PMF.

Take Google, for example. It’s tackling the innovator’s dilemma head-on by fully integrating AI into search. It’s not about to let OpenAI, Microsoft, Perplexity, or others redefine the space. This shows why C-suite leaders must rally behind marketing to address PMF and trust-building directly.

To help navigate this process, I’m sharing with you the Competitive Defensibility Analyzer, an AI-powered tool that helps assess and strengthen your product’s market position.

The AI-Powered PMF Approach

AI is a powerful amplifier of everything, the good and the bad. It can optimize and scale your strategies, but if your product misses the mark, you’re essentially optimizing the path to failure.

• Bad product fit + smart AI = a faster path to failure.

• Good product fit + smart AI = rocket fuel for growth.

That said, especially in the era of AI, it’s not enough to have AI as your only differentiator—particularly if you’re building on top of foundational models like OpenAI’s, Google’s, Meta’s, or Anthropic’s. As AI continues to advance, how quickly could those advances outpace your differentiation?

People refer to these as “AI wrappers” that may not be sustainable long term. Instead, things like deep knowledge of a segment to deliver personalized experiences, unique industry data and insights, a robust partner ecosystem, and a strong brand are generally more defensible.

Nailing down your Product-Market Fit (PMF) is absolutely critical, regardless of your company’s stage, whether you’re a startup, scaling up, or a well-established business. It requires full alignment with your executive team and a keen awareness of how AI, evolving buyer expectations, and shifting economic factors are changing your market.

The Competitive Defensibility Analyzer GPT: Your Powerful AI Assistant

For years, I’ve relied on a powerful framework developed by strategic thinkers, Russ McGuire and Christine / Chris Heckart, to assess product-market fit and competitive defensibility.

“Building defensibility isn’t just a strategic option; it’s a necessity. Focus on creating value that can’t be easily replicated by competitors. Use this framework to identify where your product excels and where you need to reinforce your position before gaps turn into vulnerabilities. And always remember to be different, not just better.”

This framework has helped me identify whether a company has the potential to lead its category or if it’s simply building a better version of an existing product. It’s stood the test of time, from the rise of the internet to AI.

To make this accessible to more teams, I built the Competitive Defensibility Analyzer GPT. This AI tool, based on that same framework, helps you assess your product’s market position in a clear and structured way.

What’s exciting about this GPT is that it democratizes strategic thinking. You and your team can now use the same approach I’ve relied on to evaluate your market position and pinpoint where you need to improve.

The custom GPT is available on the GPT Store for free and you can find it when you type Competitive Defensibility Analyzer in the search field. Here’s the direct link to the GPT. Reminder that you’ll need a paid version of ChatGPT, Plus, Team, or Enterprise, to build, access, and use GPTs.

How to Use the Competitive Defensibility Analyzer

Here’s a step-by-step breakdown (as illustrated in the screenshots) of how the Competitive Defensibility Analyzer works, allowing you to assess where your product stands in the market:

Step 1 – Define Your Market Category

Start by selecting your product’s market category. This will shape the entire analysis, whether it’s a broad sector like “Employee Experience Solutions” or a more niche category. (Image 1)

Step 2: Assess Your Value Proposition

Next, evaluate how much value your product provides compared to competitors. Choose from:

• Same as others

• Incremental improvement (used in our example)

• Order of magnitude or more

This will help you understand where you stand in the competitive landscape. (Image 1)

Step 3: Identify Your Core Differentiators

Then, pick up to three top differentiators that set your product apart. In our example, we selected: (Image 1)

• Innovative technology

• Partner ecosystem

• End-to-end workflows

These differentiators are essential for assessing how defensible your market position is. As Bill Hobbib notes:

“This tool forces you to take a hard look at your product’s strengths and weaknesses. Use the insights to make immediate adjustments, close strategic gaps, and refine your market approach so your product can lead, not follow.”

Bill shared his thoughts about this tool on LinkedIn when I previewed it to a group of CMOs a few months ago.

Step 4: Assign Weights to Your Differentiators

Now, assign a weight to each differentiator based on its impact on your strategy. In the example, we used:

• 30% for end-to-end workflows

• 40% for the partner ecosystem

• 30% for technology

These weights will be key in calculating your overall defensibility score. (Image 2)

Step 5: Evaluate Defensibility

Next, rate how difficult it would be for competitors to replicate each differentiator. Options include:

• Easy

• Moderate

• Hard

In our example, workflows and technology were rated as “Easy” to replicate, while the partner ecosystem was “Moderate.” (Image 2)

Step 6: Calculate Your Defensibility Score

The GPT will then calculate your defensibility score based on your inputs. This score provides a clear view of how defensible your product is in the market.

In our example, we scored 1.4, placing the product in the Next Release category, indicating incremental improvements with moderate defensibility. (Image 2)

Step 7: Map Your Market Position

Finally, the Analyzer maps your defensibility score against your value score to show where your product stands today. This visual snapshot highlights where you’re positioned and what strategic moves you need to make to improve. (Image 3)

In our example, landing in the Next Release category means our product has incremental improvements in value with moderate defensibility. While it indicates potential for market impact, it also highlights the areas where further differentiation could increase our market standing.

This process gives you more than just a snapshot, it helps you pinpoint the strategic moves necessary to ensure your product not only competes but leads. Carilu Dietrich highlights the power of AI in navigating today’s fast-moving markets:

“AI can fundamentally change the way marketers work – far beyond content and image creation. This approach for analyzing and improving product and company strategy can give you a huge advantage in making faster, more informed decisions. Liza’s actionable frameworks help marketers analyze complex markets, prioritize strategy efforts, and take action. I’m so impressed by what she’s building.”

A Note on GPT Drift:

Like all AI models, GPTs can experience “GPT Drift”—where responses deviate over time due to learned patterns. This can affect multi-step processes like the Competitive Defensibility Analyzer.

However, the new ChatGPT-o1 Mini and o1 Preview models offer improved reasoning and calculation capabilities, which should reduce drift and increase accuracy. Until these models are available for custom GPTs, consider the Analyzer’s output as a starting point and manually verify key steps for precision.

PMF Checklist for Your Next Strategy Session

Ask these key questions to assess your product-market fit before your next strategy meeting:

• Are we losing customers despite high conversion rates?

• Is it hard to grow beyond early adopters?

• Does our product fail to meet market needs or preferences?

• Are we seeing high churn or low customer lifetime value?

• Are competitors gaining ground with similar messaging?

If you answered “yes” to any of these, it’s time to revisit your PMF. AI tools like the Competitive Defensibility Analyzer can simplify this process and provide clear insights into where your product stands and what needs to change.

Product-market fit isn’t a one-time goal, it’s an ongoing process. As markets shift, so should your understanding of how well your product fits. AI tools like the Competitive Defensibility Analyzer make continuous PMF assessment easier and more impactful.

I’d love to hear how you’re using AI in your strategy and what challenges you’re facing. Let’s connect to explore how we can leverage AI to drive your initiatives and ensure your product leads the market, not just competes.

The Practical AI in Marketing newsletter is designed to share practical learnings and insights in using AI responsibly for strategic, product, digital, brand, demand, and growth marketing. Subscribe today and lets learn together on this AI journey!

Also check out this team transformation case study and step-by playbook of how we helped transform a lean GTM team into a human-AI powerhouse with human and AI teammates.

Or, if audio-visual content is your style, here are virtual and in-person speaking events where I’ve covered a variety of AI topics. I’ve also keynoted at many organization and corporate-wide events. Whether through the newsletter, multimedia content, or in-person events, I hope to connect with you soon.