April Dunford - Obviously Awesome notes


“ Components of Effective Positioning:

  
1. Competitive alternatives. What customers would do if your solution didn’t exist.
2. Unique attributes. The features and capabilities that you have and the alternatives lack.
3. Value (and proof). The benefit that those features enable for customers.
4. Target market characteristics. The characteristics of a group of buyers that lead them to really care a lot about the value you deliver.
5. Market category. The market you describe yourself as being part of, to help customers understand your value.
6. (Bonus) Relevant trends. Trends that your target customers understand and/or are interested in that can help make your product more relevant right now.”


“You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time.” — JEROEN DE FLANDER”


“Market categories help customers use what they know to figure out what they don’t.

A well-chosen market category will help make your unique value more obvious to your target customers.”

“STEP 1. Understand the Customers Who Love Your Product”

“Your best-fit customers hold the key to understanding what your product is.”

“There is only one thing stronger than all the armies of the world: and that is an idea whose time has come.” — Victor Hugo
 
“Strong positioning is centered on what a product does best. Once you have a list of competitive alternatives, the next step is to isolate what makes you different and better than those alternatives.”

“In this step, list all of the capabilities you have that the alternatives do not.

 List every attribute you can think of, even if it seems like it could be a negative to certain customers and even if you’re uncertain what its value might be. For tech companies, patented features are an obvious place to start. Sometimes it is helpful to think about the feedback you get from customers when you ask them why they chose your offering. You might be the only consulting business with a certain combination of skills and experience. You might be the only company with a certain technology or a certain set of partnerships. You might be the only hat maker that sources materials from Canada or the only makeup that is made from herbs grown in your own organic garden.

It’s OK to list things here that some folks on the team might think of as negative. A software company in one of my workshops talked about how they were the only company on the market that required a professional services team to come onsite to install the software. The head of sales felt that was a negative, because it took longer for a company to get up and running with the software. The head of customer service saw it as a uniquely positive attribute, because certain customers wanted that type of customization and high-touch service.

Your opinion of your own strengths is irrelevant without proof.

 Some groups at this stage will list features that are either difficult to prove or really more of a benefit than a feature. “We provide outstanding customer service” is probably the most common of these, followed by “very easy to use.” Focus on the characteristics of your product or company that drives a potential benefit—ideally those features are based on objective facts and are provable. For example, I have yet to meet a company that believes they provide terrible customer service. If you truly believe that your company is better at customer service, how would you go about proving that? Do you have more support people than your competitors and can you prove it? Do your support people have certifications that others don’t? Ease of use is another “feature” that I believe is really a value. What is it about your product that makes it easier to use and how do you prove it? Do your competitors’ products require training and your product doesn’t? Can you quantify how long it takes to become proficient with your product versus alternative products?”

“We don’t know who discovered water, but we’re certain it wasn’t a fish.” — John Culkin”

“Third-party validation that your product’s feature is better than the alternative counts as proof. If an independent reviewer or analyst stated that your product is easier to use, that’s a fact. If a customer says in an approved quote that your customer service is much better than another company’s, that’s proof.

 Be broad and creative with the attributes you list. They could be a proprietary process, expertise in a special area, distribution channels, partnerships or special skills. Tech companies usually think of features first, but it is helpful to dig deeper into the full range of what makes the offering and the company unique. For service companies, the skills of the team are the obvious choice, but experience with a particular kind of project or company can also be a powerful attribute.

“Concentrate on “consideration” rather than “retention” attributes.

 Consideration attributes are things that customers care about when they are evaluating whether or not to make a purchase. Every product has features that you can connect directly to a goal the customer would like to accomplish right now. Retention attributes are features that aren’t as important when a customer is making an initial purchase decision, but are very important when it comes time to renew. These include how easy it is to do business with a company and the quality of customer support.

I’m not saying that positioning doesn’t matter for retention—it absolutely does. Poorly positioned products are often bought by customers who misunderstand the real value of a product; those customers often quickly abandon the product when they realize it doesn’t do what they thought it did. However, customers who don’t see enough value to consider buying the product will never stick around long enough to experience retention attributes such as your excellent customer service.

List as many attributes as you like at this stage. You’ll group them as you move to the next stage in the process. Focus on capturing the broader set without trying to decide what’s really important and what isn’t.”

“STEP 6. Map the Attributes to Value “Themes”

  Attributes or features are a starting point, but what customers care about is what those features can do for them.

  Attributes like “15-megapixel camera” or “all-metal construction” enable benefits for customers such as “sharper images” or “a stronger frame.” Articulating value takes the benefits one step further: putting benefits into the context of a goal the customer is trying to achieve.

  Value could be “photos that are sharp even when printed or zoomed in,” “a frame that saves you money on replacements,” “every level of the organization knows the status of key metrics” or “help is immediately available across every time zone.”

Features enable benefits, which can be translated into value in unique customer terms.

  In this step, you’ll capture the value that each of your unique attributes enables for customers. Each feature can have multiple value points, and a combination of features can provide value as well. In Step 7, we’ll determine which customers find these valuable and how many of those customers there might be.

“Moving from “features” to “benefits” and then to “value” often confuses people, particularly folks who come from a technical background. An engineer by training, I often viewed features and the benefits derived from those features as interchangeable early in my career. For many consumer technical products, features are presented as valuable in their own right—but only because we do the translation to value automatically in our heads. For example, phone makers have often represented the quality of their cameras by talking about the number of megapixels. Consumers have been trained to translate megapixels to photo quality and therefore believe that cameras with more megapixels take better photos. Digging a bit deeper, the value of “better photos” for most consumers means sharper, more detailed images when printed or zoomed in.

For most of our products, however, we don’t have the luxury of letting customers figure out the value of our features on their own. If I tell someone I have a “patented fuzzy logic algorithm” for my product, I would expect their response to be, So what? I explained the feature without being explicit about why it matters. In this example, the benefit might be “faster response times.” Taking the question further, What does that mean for customers? What can they do with a faster response time that they couldn’t with a slower response? The answer might be that they can use the system to respond to their own customers while a customer is on the phone, rather than having to call them back, thereby decreasing support response times and increasing their customers’ satisfaction.

Clustering the Value into “Themes”

  In your list, you should see a handful of themes start to emerge and the value those features deliver to customers. Now we need to organize the list.

  To group points of value, you need to take the perspective of a customer. What points would naturally be related in the minds of your customers and prospects? For example, if you have attributes like “works on any mobile device” or “works without an internet connection,” those might both provide value to customers who would like to use the solution with field workers in remote locations or locations with intermittent Wi-Fi or cell access. You could clump those attributes in a group called “supports remote environments.

Group attributes that provide similar value so you can get down to a more reasonable number. The goal of this step is to see the patterns and shorten the list to one to four value clusters. It’s not uncommon for this exercise to produce just a single value point.”

“The stone age didn’t end because they ran out of stones.” — Unknown

“Remember: this positioning exercise is not about highlighting every little feature and attribute that our customers love.

  In positioning a product, we’re taking the most critical things that make us special and worth considering, and bringing the resulting unique value to the front and center.”


“STEP 7. Determine Who Cares a Lot

  Once you have a good understanding of the value that your product delivers versus other alternatives, you can look at which customers really care a lot about that value.

It’s important to remember that although you have unique attributes that deliver value to customers, not all customers care about that value in exactly the same way. You might have a solution for invoicing that supports integration with an accounting package like QuickBooks. This feature provides the value of saving time and reducing errors from manually entering data. For customers who don’t use QuickBooks, the value is irrelevant. Among those who do, customers who send a large number of invoices will feel the pain of data entry more than customers who send only one or two invoices a day. The customers who send a lot of invoices will care a lot about the value of reducing time and errors.

Marketers call this step a “segmentation” exercise. In my experience, if there’s a marketing concept more widely misunderstood than positioning, it’s segmentation.

  Most marketing courses talk about segmentation in a way that only makes sense to large companies who sell to consumers. Segmentation examples are usually based on consumer demographics—for example, “this product is aimed at single men between the ages of 18 and 30.” Demographic thinking often bleeds into the way people typically think of segmenting a market of businesses—for example, “small businesses” or “businesses with 100 to 2,000 employees.” A useful segmentation, however, needs to go well beyond demographics or firmographics.

An actionable segmentation captures a list of a person’s or company’s easily identifiable characteristics that make them really care about what you do.

  For consumers, a segmentation could include combinations of things such as other brands they own or like, stores they buy from, the job they hold or their music or entertainment preferences. For businesses, it could be the way they sell, other products they have invested in or the skills they have or don’t have inside their company.

  In this step, you’ll determine what makes some prospects much more excited about your offerings than others—think of these as your “best-fit prospects.”

Best-fit customers are easiest to sell to and retain.

  Focusing on a best-fit prospect segment doesn’t always make sense to people who don’t have a marketing background. If I wanted to increase my chances of landing a customer, wouldn’t I want to target as broad a market as possible? The reality is the exact opposite. The broader your focus, the more difficult it is to connect with prospects and convince them that your solution is the best one for them above all others.

  Think about the difference between your best-fit customers and your other customers. Your other customers think your product is OK for the price, but they will jump ship if a different company offers a cheaper or better version. These customers are harder to close business with—they take their time making a purchase decision and frequently ask for a discount. In short, they like your product but they just don’t love it. You can target your marketing and sales programs at them, but selling to them and keeping them happy isn’t going to be easy.

Now think about your best customers. Everything about doing business with them is different. They understood your product immediately and couldn’t wait to get their hands on it. They bought quickly and instead of asking for a cheaper price, they might have told you your product should be priced higher. They tell their friends about your product, and not only do they not churn, they will fight anyone who tries to take it away from them. They don’t just like your product, they loooooove it. Marketing and selling to these folks doesn’t take much effort once you’ve found them—they are “buying” as much as you are “selling.”

“Target as narrowly as you can to meet your near-term sales objectives. You can broaden the targets later.

  I encourage teams not to get their positioning too far ahead of their business objectives. Think about your sales targets for this year and how many sales you need to make to achieve them. Could you hit your targets by focusing on only your best-fit customers? If the answer is no, you need to broaden your definition of “best-fit.” If the answer is yes, keeping your positioning focused on that segment is the most efficient use of your sales resources and the fastest and easiest path to hitting your sales targets.

Keep in mind that your product positioning will constantly be evolving. There is no need to make sure that your positioning will fit perfectly with where you or your product will be in ten years or five years or even two years from now. Similarly, your target customers will also evolve over time. Great positioning resonates with your best-fit customers right now, and will evolve with them over time.

  Many companies take a logical approach to this step, based on what they already know about who values what. For example, companies in highly regulated markets have to care more about information security; managers with very large teams struggle more with team communication and collaboration; smaller companies without in-house IT support need solutions that are easy to set up and run, etcetera.

I’ve found that this step tends to be either the easiest or the most difficult to work through. You are mapping the value that your product’s features deliver to a group of customers who have the highest affinity for your product. You need to focus on the value points that you listed in the previous step and repeat the question, Who cares and why?

  For example, your unique feature might be that your online appointment scheduling software supports scheduling across multiple locations and multiple service organizations. The value is that customers can book an appointment at a location that is convenient for them and with a representative that can serve them best. What kind of business cares a lot about that? You might say businesses with a lot of locations and many kinds of offerings. But not all businesses care about appointments. Drugstores have a lot of locations and many offerings, but they don’t care that much about appointments. What sort of businesses do? You might list businesses that offer financial services and tax preparation services.

A segment can be defined by narrowing the set of buyers you are targeting. For example, you might focus the category of “accounting software” to “accounting software for freelancers or lawyers.” You might narrow down “sporting goods” to “sporting goods for babies” or “for dogs” or “for octogenarians.” In general, the segment needs to meet at least two criteria to be worthy of focus: (1) it needs to be big enough that it’s possible to meet the goals of your business, and (2) it needs to have important, specific, unmet needs that are common to the segment. If you’re a tennis racquet maker and decide to market a racquet for seniors, you need to figure out first if there are enough tennis-playing seniors who might need a racquet, and second if you could fulfil an unmet need that seniors have in their racquets.”

“STEP 8. Find a Market Frame of Reference That Puts Your Strengths at the Center and Determine How to Position in It”

“You now have a good handle on your ideal prospects, your product’s unique attributes and the value those attributes can deliver. The next step is to pick a market frame of reference that makes your value obvious to the segments who care the most about that value.

Picking a market that does this is harder than you might think. Chances are, when you first conceived the offering, you had a market in mind. You were building an email system for lawyers, a bicycle that could give you directions, a robot that could move things around a manufacturing plant. Baked in was the idea of the market—“database,” “bicycle” and “robot” are all markets that exist and mean something to customers. However, since your offering evolved and the market itself evolved over time, the original market category may no longer be the best way to frame your unique strengths. Also, the customers most likely to buy your product might have a very different point of view on markets than you do.

In the context of this exercise, a “market” needs to be something that already exists in the minds of customers (except in the very rare case where you make a conscious decision to create a new market—which we’ll discuss later in this step). We position our offering in a market to trigger a set of assumptions—about competitors, features and pricing—that work to our advantage. By choosing to position within a specific market, you’re giving your prospects clues about what products they should compare you with, your key features, your price and your benefits. Those comparisons help customers quickly figure out what your product is all about and whether or not they should consider purchasing it.”

“Use abductive reasoning. The adage “if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck” also applies to new products. With abductive reasoning, you choose a market category by isolating your key features and their value, and asking yourself, What types of products typically have those features? What category of products typically deliver that value?

Examine adjacent (growing) markets. Another place to look for options is in the markets adjacent to the one in which you have been positioning yourself. Frequently, there are overlaps or blurry lines between markets. As a product shifts over time, its features and value could look more at home in a neighboring market. Especially in the tech space, it’s not unusual for lines between markets to shift or be redrawn as companies emerge, release new technology or come up with new ideas. Looking at adjacent markets is a good way to find markets that might make your value more obvious to prospects.

    Pay particular attention to adjacent markets that are growing quickly. Positioning yourself in a growing market has obvious benefits: a rising tide of customer interest, media focus and buzz, and the appearance of being new and cool—who doesn’t want that? But be careful—simply wanting to belong in a market doesn’t make it the right one for you. Only choose a market if it makes your strengths obvious.

Ask your customers (but be cautious). I’ve had folks ask me, “Can’t you just ask your customers what market you’re in?” My answer: “Sometimes.” If you have already positioned yourself in a given market, your customers will have at least attempted to place you there, even if that attempt confused them. They will naturally try to put you in markets that are close to that market. That was the case with our database—a customer described us as an analytics tool because he had been looking at analytics tools and was familiar with them. This market was closely associated with the database market and therefore it wasn’t much of a leap for him to think of us that way.

I would caution you to be extremely careful in seeking feedback from customers and prospects about what market they see you in. Prospects may see things differently than those who have already tried to make sense of your product one way and failed. Also, customers will only try to position you in markets that are frequently linked to their industry or job function. Customers aren’t positioning experts, nor are they experts in how a market category works. Frequently they will attempt to position you in the most obvious market possible, and this market is often not the best one for highlighting your strengths.”

“There are different approaches for isolating, targeting and winning a market—and certain styles work better for some than others.

  Picking a market is like giving customers an answer to the question, What are you? Frequently, however, we need to think a little bit deeper about how we intend to win in the market we have chosen. At a high level we can either choose to enter an existing market or create a new market. If we choose to enter an existing market, we can either compete to win the entire market or position our product to win a slice of it. The “style” of positioning you choose will depend on a set of factors including the competitive landscape and your business goals. Here’s my advice on how and when to use each of them:

Head to Head: Positioning to win an existing market You are aiming to be the leader in a market category that already exists in the minds of customers. If there is an established leader, your goal is to beat them at their own game by convincing customers that you are the best at delivering the solution.

Big Fish, Small Pond: Positioning to win a subsegment of an existing market You are aiming to dominate a piece of an existing market category. Your goal is not to take on the overall market leaders directly, but to win in a well-defined segment of the market. You do this by targeting buyers in a subsegment of the broader market who have different requirements that are not being met by the current overall market leader.

Create a New Game: Positioning to win a market you create You are aiming to create a new market category. Your goals are first to prove to customers that a new market category deserves to exist, then to define the parameters of that market in the minds of customers, and lastly, to position yourself as the leader within it.”

“Word-of-mouth marketing happens most naturally in tight market subsegments.

  A caution here is that the subsegment must represent a large enough opportunity that you can meet your business goals, at least in the short term. Companies tend to shy away from this style because they are worried that moving from targeting the entire market to just a small piece of it will mean less opportunity. In reality the opposite is frequently true: you are simply unselecting the part of the market that was never going to buy your product anyway in order to focus only on customers where you have a distinct advantage. The best way to determine if your chosen subsegment is big enough is to determine how many sales you need to make in the next year to meet your revenue goals. If you need to close thirty deals to make your number this year and your target segment has only one hundred businesses in it, you are going to have to look elsewhere. If, on the other hand, you need to close thirty deals and there are thousands of businesses in your subsegment, it’s likely big enough for now.

Just because your initial target market is narrow doesn’t mean you will stay narrowly focused forever.

  Think back to the lessons in Step 7, about defining a subsegment of best-fit customers for now, and expand that group as the segment and the market evolve. You might start out targeting a very narrow segment but once you have enough customers there, you can start going after adjacent markets where the success you have built so far is relevant. For example, you could start out focusing on credit unions, then expand to retail banks more broadly and then on to other industries like insurance. Once you are larger, you may be ready to take on the market leader head to head, or try to create a new market (more on this in the third style of positioning, Create a New Game).”

“The work of Big Fish, Small Pond

This positioning style is often useful for smaller startups that are looking for a way to establish themselves in a market with a strong market leader that they can’t take on directly. The work of this style is first to educate the targeted subsegment about how a general-purpose solution is not meeting their needs. You need proof points that show there is a clear gap in value between the general-purpose solution offered by the market leader and your more-purpose-built solution. You need to help the subsegment understand what’s in it for them if they do have those needs met. There should ideally be a way to quantify the value to them if they choose your solution over the market leader’s more generic solution.

You also have to show that you meet or exceed the existing category criteria (at least the ones that matter most to your subsegment). Remember that you aren’t redefining the category, you are merely trying to capture a piece of it, so while you are leading with your defining features and value for your subsegment, you still have to prove that you meet the underlying basic needs common to the overall market category.

If you choose to use the Big Fish, Small Pond style...

  Understand that the subsegment must have truly distinct needs not being met by the leader in the broader market. If you are trying to dominate a subsegment, be careful that the market leader doesn’t turn their attention to the subsegment and try to offer a “good enough” solution with some features that at least partially meet the buyers’ needs. Large category leaders will often acquire small companies to block a fast-growing competitor from gaining on them in a particular subsegment. Ideally your competitive advantage is something that is difficult for the market leader to copy, either because you own the intellectual property, or (more commonly) because trying to match your functionality might cause them damage in the broader market where they are winning. It would be difficult for Coke to make a product aimed at dogs without suffering some damage to the perception of the brand among humans.

Positioning Story: A niche CRM startup outpowers a global market leader

    I worked at a startup called Janna Systems in the CRM market. In its early days, the company had attempted to sell a contact manager directly to consumers, but improvements to free contact managers from Microsoft, Apple and others quickly destroyed this market. The company moved to selling a CRM solution to businesses and eventually settled on large enterprises as their target market—a very big market.

A couple years after entering the CRM market, Janna Systems was struggling to grow. The enterprise CRM market at that time was completely dominated by one large company, Siebel Systems, which had over $2 billion annual revenue and hundreds of large enterprise customers. (Salesforce, which leads this market today, was a small company back then and focused only on small businesses, not large enterprises—choosing to stick to a submarket rather than have a head-to-head battle against Siebel in the broader category.) Given Siebel’s complete dominance in the market, every time we pitched our solution to a company, the first question we had to answer was, How are you better than Siebel? It was a question we struggled to answer.

For the vast majority of our prospects, our differentiators couldn’t make up for what Siebel had and we didn’t have: a proven solution used by a long list of Fortune 1000 clients; a product with thousands of features that appealed to customers in a wide range of industries; and a famously successful CEO who wrote books, keynoted conferences and appeared regularly on television. In contrast, our product was largely unproven, our feature list was much shorter and our scrappy little team in Toronto was utterly unknown. We charged less than Siebel did, of course, but most large companies cared more about having a product that met their needs than getting a bargain. Once a senior technical manager at a large telco, after listening to our pitch, summed up our positioning as a “cheaper, crappier Siebel.” Ouch.

We did, however, have one feature that Siebel didn’t. Our CRM let us model relationships between people in a way that Siebel (or any other CRM on the market) couldn’t. We always highlighted this feature and included a demonstration in our product demos. The problem was that, in general, customers didn’t seem to care about it.

We had a differentiator, but we struggled to map that differentiator to real value for a defined set of prospects.

    That changed when we managed to get a sales meeting with the head of investment banking at a very large New York investment bank. Unlike many of our other prospects, he got really excited when we showed him our special feature. We quickly closed a deal with the bank. In working with them, we began to understand that our little feature solved a serious problem for investment bankers charged with driving business. By using our solution, they were able to unlock significant revenue. We wondered if other investment banks operated the same way. It turned out they did, and the more we spoke to investment banks, the more we understood our product was valuable to them in a way it wasn’t for businesses that weren’t as deeply driven by relationships.

We began to have a conversation internally about repositioning ourselves away from “enterprise CRM” to positioning ourselves as “CRM for investment banks.” At first this shift in positioning seemed risky. Some people on the team felt that moving from focusing on a very large market to a very small one would stifle our growth. Our investors worried that the target market was simply too small for us and we would never grow to be the large company they needed us to be.

At the same time, there was good reason to reposition ourselves. Investment banks continued to call Siebel before they called us, because we still appeared to be delivering more or less the same thing for the same very broad market. Our investment banking clients didn’t want their competitors knowing they used our solution, so as not to give them the upper hand, and they refused to let us reference them by name in our marketing materials. Labeling ourselves as CRM for investment banking gave us a way to put all the attention on our key differentiating feature and signal that we were, in fact, completely different from Siebel. Besides, it wasn’t like we were flooded with prospects anyway. We reasoned that even if we positioned ourselves for banks in the short term, we could always expand it to include similar industries (insurance, retail banking) once we had done as much business as we could do with the banks. We decided to give CRM for investment banks a try.

The result was transformational.

    Our sales and marketing teams, focused only on investment banks and began to deeply understand the nuances of the that segment’s needs. We used banking terms in our pitches, and our demo data looked like banking data. We were still compared with Siebel, but we began to quickly eliminate them as a competitor as we demonstrated that even though they were the best CRM for enterprises, they weren’t the best CRM for investment banks.

    We raised our prices and began to rapidly close very large deals with investment banks, first in the US and then globally in the UK, Switzerland and Australia, growing our revenue from $2 million to over $70 million in eighteen months.

As we started to expand beyond banking, Siebel began to see us as a legitimate competitive threat and we were acquired for a staggering $1.7 billion, making us the largest acquisition of a Canadian software company at the time.

    Not bad for a “cheaper, crappier Siebel” and proof that focusing on a niche doesn’t mean you can’t grow.

3. Create a New Game: Positioning to win a market you create

  Sometimes new technology or circumstances pave the way for a completely new market. Other times a market can be created by combining one or more existing markets to form one with different buying criteria. Developing a new market comes with its own distinct set of opportunities and challenges.

When to use the Create a New Game style

  Because this style of positioning is so difficult, it should only be used when you have evaluated every possible existing market category and concluded that you cannot position your offering there, because doing so would fail to put the focus on your true differentiators and value. This style can also work if your company is large and powerful enough to capture the attention of customers, media and analysts to make a case for why the new market category deserves to exist.

You aren’t simply capturing demand that already exists; you have to spark some demand first.

  This style is usually only possible when there has been a massive change with a big potential impact on what is possible or what is important in a market. These changes can include new technologies, economic changes, political forces or a combination of these. We saw new markets emerge as cellular networks increased their speeds and coverage, making it possible to do things on a smartphone we couldn’t before. Government regulations in privacy and security, particularly in banking and insurance, have driven a wave of data security and customer-­tracking software innovation over the past two decades. Our shifting attitudes about privacy and community facilitated the rise of open social networks like Facebook and Twitter, and the backlash against the unintended consequences of heavy use of those platforms has, in turn, begun to transform our attitudes and preferences around privacy and security.

Often a category emerges when an enabling technology, a shift in customer preferences and a supporting ecosystem manage to come together at once.

  If your product cannot be well positioned in any existing category, this might be a good option for you. If your solution requires both a new way of thinking about the boundaries of an existing category and a new way of thinking about purchase criteria, then it probably makes more sense to create an entirely new category rather than attempt to stretch existing categories along more than one dimension.

The work of Create a New Game

  Creating a new category is the most difficult style of positioning, even when the pre-existing conditions are aligned to support it, mainly because it involves the greatest amount of “teaching” the customer. In the other positioning styles, you’re leveraging what folks already know about a category and building on that to create a position in the mind of customers. In this style, you are starting with a blank canvas.

  Customers need to first understand why the category deserves to exist. Why is the problem unique? Why do existing solutions in other categories fall short of solving that problem? While you are convincing the market that this category should exist, you are also teaching folks how to best evaluate solutions in that category. And while you are busy with all of that, you need to teach people why you are unquestionably the best vendor to deliver solutions in this category.

To credibly create a new category, you need a product that is demonstrably, inarguably new and different from what exists in other market categories.

  Wishful thinking won’t convince prospects that you don’t belong in any other existing category—this needs to be obviously true in the minds of customers. Also, be aware that the leaders of existing categories may claim that your new product is merely a feature or subset of their existing solutions. To successfully create a new category, you need to have strong arguments against any competitor that tries to convince customers that what you are selling is “merely a feature” instead of a product in its own right.

Timing is also important in creating a new category. To help customers make sense of why this category hasn’t emerged sooner, there should be a very strong answer to the questions, Why now? What factors have finally made this category possible and/or necessary? These might be new technology capabilities, a shift in buyer behavior, a change in the business environment such as new government regulations or a shift in the economy.

Category creation is about selling the market on the problem first, rather than on your solution.

  If the category doesn’t already exist, it means customers aren’t currently aware that they have a problem. They don’t understand the cost of not solving that problem, nor do they understand the potential value they can unlock by solving that problem. Customers need to be aware of those things before you can successfully convince them to purchase any solution (including yours).

This style is very, very difficult to execute, but if you manage to pull it off, the rewards are massive.

  Unlike the other positioning styles, Create a New Game allows you to create a market that is perfectly tailored to your strengths and weaknesses. It allows you to set the boundaries of the market exactly where you want them and to define purchase criteria so they map exactly to the things you do best. Anyone who successfully defines a market can become its leader because the market was specifically designed that way. Once the market is created, it takes serious work to change it in the minds of customers. Companies that successfully create a category in the customers’ minds are well set up to lead it, not only in the short term but also in the future.

This style is the most difficult because it involves dramatically shifting the way customers think, and shifting customer thinking takes a very strong, consistent, long-term effort. That means you need a certain amount of money and time to convince the market to make this shift. Because of the investment and time required, this style is generally best used by more established companies with massive resources to put toward educating the market and establishing a leadership position. For smaller companies, this style generally requires the participation of deep-pocketed, patient investors.

If you choose to use the Create a New Game style...

  Follow a long-term plan. At every step, you need to defend yourself as the category leader, or risk having a competitor with more resources and name-brand recognition reap the rewards of your hard work in creating the category. The most common way startups fail at this style is by working to build the market and then losing out on establishing themselves as its leader. At the exact moment when prospects start to show signs of understanding the category, a larger competitor or a well-funded fast follower swoops in to take advantage of their category-creation work and steal leadership from them.”

“STEP 9. Layer On a Trend (but Be Careful)

  Once you have determined your market context, you can start to think about how you can layer a trend on top of your positioning to help potential customers understand why your offering is important to them right now. This step is optional but potentially really powerful—if you go about it carefully.

Think of your product’s strengths, your market context and a trend that is relevant to your customer base as three overlapping circles. You are aiming for the center, where all three intersect.

  At one point, I worked at a startup that sold a product for retail sales associates that gave them access to information across both e-commerce and in-store systems. The product was positioned in the market as a solution that helped retail sales associates serve customers better. When we talked to retailers, one trend that everyone was interested in was “mobility”—every retailer believed they would need tablets for sales associates in every store in the near future, but they weren’t exactly sure how they were going to support that. We used this mobility trend as a jumping-off point to talk about our solution for sales associates, because access to information across multiple platforms and devices—including tablets—was an obvious way that retailers could use mobility to empower their sales associates.

A product that is well positioned in a market can still be very successful without relating it to a trend. Ideally, if a current trend helps reinforce your positioning and the value that your offerings deliver, you can use it to your advantage. Aligning with a trend can help make your offering look current and relevant, particularly for customers interested in that trend. I’ve worked on many products that were considered useful and valuable and sold quite well, even though they were fundamentally “boring.” The use of a relevant trend is not a prerequisite for success, but trends can sometimes give “boring” products an extra gloss of interest. Caution: if the trend doesn’t reinforce your positioning, it can also muddy your positioning waters.

It’s always better to be a little boring than completely baffling.

Positioning Story: Redgate Software makes a boring but profitable market cool—and even more profitable

    Redgate Software is based in Cambridge, UK. They’ve been in business since 1999 and are the leader in the database tools market—providing services including data monitoring, synchronization, data privacy and automation. They have over 800,000 users, which means your company is likely a Redgate customer.

    Redgate has dozens of products in the market and they wanted to do a better job of telling a story of how customers could see more value by using the products together. Although business was great, customers didn’t always see Redgate’s products as an urgent or strategic (or dare we say it, cool) purchase.

For Redgate, a shift in market category didn’t really make sense—their category was well established and they were a leader in it. But that doesn’t mean they couldn’t spice it up a little by aligning what they do with industry trends.

    Redgate noticed that DevOps concepts (software development, or Dev, plus IT operations, or Ops) were gaining in popularity with the development teams they worked with, but it seemed that nobody was talking about the important role of databases in a DevOps transformation—particularly at a time when new data privacy regulations had customers concerned about data security and compliance. So they wove “database DevOps” into their positioning by creating content that described the importance of data in a DevOps transformation and by training their sales team on how to consult with more senior-level folks in a development team that were looking for ways to be smarter about implementing DevOps processes.

The result was a dramatic increase in customers buying multiple Redgate products at a time and a whopping 100% increase in inbound leads (companies contacting Redgate wanting to buy their products)—a clear indicator that Redgate’s products had become a higher-priority purchase.

“If you change the way you look at things, the things you look at change.” - WAYNE DYER
  

  Describing a trend without declaring a market can make your product cool but baffling.

There are lots of ways that throwing trends into the mix can be potentially harmful. Companies can get too focused on the trend to the exclusion of the market, which ultimately leads to confused customers. It’s like describing why you are interesting without first telling people who you are. One example was a company that described its app to me as, “the sharing economy for pets.” I thought about my own dog and couldn’t imagine sharing him with anyone. When I told them I really didn’t understand what that was, they switched to describing themselves as “Uber for cats.” For a moment I thought about the possibility that these Silicon Valley engineers had succeeded in teaching cats how to drive. “Would they hit the brakes if a dog ran across the street?” I wondered. As enticing as Uber for cats was to me, it seemed unlikely that this was really what the product was all about either. After a bit of probing, they explained that their solution was a marketplace for pet services, like pet sitters and groomers, where customers could find, purchase and rate pet service providers. Once I understood what market they were in, it was much easier to understand what they did. In this case, “sharing economy” is not a market, it’s a trend. Uber is also not a market, it’s a company (and one that not everyone has consistent assumptions about).

Trends can only be used when they have a clear link to your product. Start by making the connection between your product and the market obvious.

  Another way that using trends can get you in trouble is if you focus on the trends and the market, but don’t show the link to your actual solution. One example of this is companies that get a little carried away with blogging and other forms of content creation—they are so busy writing content to attract readers that they forget there is an actual solution their company sells. While the trend might be fun to read about, it doesn’t help to sell any product.

When the company Long Island Iced Tea made the radical decision to change its name to Long Blockchain (really), it made headlines for days while investors and analysts tried to draw a link between their iced tea and this hot, new technology trend. The stock briefly soared as the company made little effort to explain how exactly it would exploit blockchain for its business, but that didn’t deter blockchain enthusiasts from speculating about all of the potential ways that an injection of blockchain magic might transform even a boring business that sold iced tea. Over the course of a couple weeks, however, it become clear that Long Blockchain didn’t have a blockchain strategy to go with the name change—no new partnerships, no explanation of how blockchain would be used and no clear relationship between their existing business and any potential new business related to blockchain. Once investors realized this disconnect, the stock plummeted and within months the company was delisted from the Nasdaq stock exchange, proving that trying to capitalize on hype without linking it to your product is a dangerous game.

If you find that you don’t have a way to pull trends into your positioning, there’s no need to panic. Many companies operate perfectly fine in markets that don’t have much sizzle and pizzazz. There’s something to be said for tried and true, even traditional. If there’s a way to pull in trends, you should do it, but if there isn’t, it’s possible to have a very successful business without being trendy in the slightest.

STEP 10. Capture Your Positioning so It Can Be Shared

  Positioning on its own isn’t useful to a company. Once you have worked through your positioning, you need to share it across the organization. Positioning needs to have company buy-in so it can be used to inform branding, marketing campaigns, sales strategy, product decisions and customer-success strategy.

One of my biggest complaints about the positioning state-ment was that the statement itself was too brief to communicate the subtleties of a product’s position, and at the same time was too contrived and awkward to be memorized or repeated. I recommend capturing your positioning in a document with enough detail that it can be used by marketing, sales and product creation. This document should break down each individual component of the position, give enough detail for each to be understood and show how they interact with one another. I’m a fan of having a shorter, concise version of the positioning that can be captured on a single page and easily shared across the company. I also try to capture the positioning at a higher level in a positioning canvas.”

Here’s the positioning canvas I use. It includes the product name and a one-line description as well as the market category (and subcategory if needed). It then lets you line up competitive alternatives, attributes, value and customer segments in a way that shows the relationship between them.

  Table 2. Positioning canvas
        
          Product name and one-line description
        
          Market category (and subcategory)

          The macro market and submarket (if applicable) that you compete in
        
          Competitive alternatives

          What would customers use if your product did not exist?
        
          Unique attributes

          What features/capabilities does your product have that the alternatives do not?
       
          Value

          What value do those attributes enable for customers?
       
          Who cares a lot

          What are the characteristics of a customer that makes them care a lot about the value you deliver?


AFTER POSITIONING: WHAT HAPPENS NEXT?

  When I run positioning workshops with startups, as soon as we have completed the 10-step process, I usually get the question, “OK, April, now what?”

A positioning exercise on its own is valuable, in particular when it gets the entire team to agree on what the differentiated value is for the offering and what customer segments the sales and marketing teams should be targeting. The next stage is to make the positioning real across the company. How do you implement a position? The most obvious immediate next thing after a change in positioning is to create new messaging that reflects the positioning. Interestingly, however, having worked with dozens of companies on their positioning, I’ve found that before we tackle messaging, it is more effective to craft what I call a “sales story.”

Translating Your Positioning into a Sales Story

  Most of the companies I work with sell to businesses, and even more specifically, they have a complex sales cycle that involves a salesperson talking to a prospect at least once before they can close a sale. For these types of businesses, it’s very important that the positioning is embodied in the way your salespeople frame the product, particularly on a first sales call. As a group, once you have completed a positioning exercise, you can work through defining a story of how a salesperson would pitch the product. This doesn’t mean you will be creating the exact copy that will go in the presentation, nor will you be working on making that presentation look good. You can think of this as more of an exercise where you define the components of a sales story that will later be worked into an actual presentation for the sales team to use.

When selling to businesses, a sales story generally follows a common arc. It starts with a definition of the problem that your solution was designed to solve. As a team you can succinctly define the problem your solution solves. In a final sales presentation, the definition of the problem helps to put a boundary around the discussion and frame it in a way that makes what you are talking about obvious to customers as well. An example would be, “Insurance companies today are trying to make their claims process less difficult for demanding digital-savvy customers,” or “Cash flow is critical to small businesses where an unexpected expense can kill a company.”

The story then moves to describing how customers are attempting to solve the problem today and where the current solutions fall short. Using the previous examples this might be, “Insurers have added mobile claims functionality, but it still requires customers to do many steps of the process manually,” or “Some small businesses can get financing from their bank, but many do not qualify, and getting a bank loan takes time.”

  The next stage of the story is what I call “the perfect world.” It’s where you describe what the features of a perfect solution would be, knowing what you know about the problem and the limitations of current solutions. In our examples it would be something like, “In a perfect world, customers could complete the entire claims process seamlessly with their mobile device,” or “In a perfect world, small businesses could get the money they need quickly based on business they have already closed.”

The sales story goes on to introduce the product or company and position it in the relevant market category. For example, “Mobileclaimsorama is a mobile claims management solution for insurers,” or “Financialhoohah offers invoice financing to growing small businesses.”

  Next, the story naturally flows into talking about each of the value themes with a bit more detail into how the solution enables that value. A completed sales deck also adds some information, such as handling common objections, a case study or list of current customers. The story wraps up with a discussion of whatever you would like the prospect to do next.

  The point of working through the sales story is that everyone in the discussion can agree on how the positioning translates into a “pitch.” To do that, the team needs to agree on how to define the problem, current solutions, the gap and the key purchase criteria that a customer should have when looking for a solution in your market.

Messaging

  While the sales story can be mapped out with a team, messaging is not something you want to do in real time with a group. Once the story arc is complete, the marketing team will translate that into messaging that can be used in marketing and sales materials, for campaigns and on the website.

  There are already stores full of books that can teach you how to do a better job of messaging, so I will give you just one tip that I think is important: write a messaging document. Every campaign you create or new piece of material you build is going to have a slightly different purpose and slightly different messaging. If there isn’t one master messaging document that is used as the starting point, your messaging (and often your positioning) will start to creep as messages are built on modified messages in a chain. A messaging document helps you keep a record of the accepted baseline messaging, gives everyone a common starting point for building specific copy for a specific purpose and keeps the language (and the positioning) from evolving too far away from the agreed-upon starting point.”