It's so much easier to win when the product is the best. You can still lose because of 5000 other reasons, but the best product makes everything else so much easier.
Don't get me wrong. You need to have a good product. Your product can't be awful but it only needs to be about 80% as good as the competition before you can win in marketing and other ways.
World class customer service by itself can be a market beater, even when the product you are backing up is more expensive / lower quality for the same feature set. People like to know that when they have problems, they'll get answers quickly.
In user testing our tool was easier to use. Feature wise we had every feature they had. They were clearly copying us on features (and visa versa) though so I can't say we were "that much" better. We were a couple months ahead of them and, as I said, less buggy and easier to use.
The biggest indicator I have though is how the press handled it. The press coverage for our competition was much better. They would get a full TechChrunch article for a feature we launched months ago and they wouldn't even mention us in the article.
"It's the best but it still hasn't launched"
"It's the best but documentation is bad and nobody knows how to use it effectively"
"It's the best but has no support option"