Brief Summary
This podcast episode features a discussion on product positioning with a positioning expert. The expert defines positioning as how a product delivers value to a well-defined set of customers, emphasizing its role as the foundation for marketing and sales efforts. The conversation covers various aspects of positioning, including its importance, differences between B2B and B2C strategies, common mistakes, and the impact of technology. The expert stresses the significance of understanding customer pain points, crafting compelling narratives, and aligning positioning across the entire company.
- Positioning defines how a product delivers value to a specific customer segment.
- B2B positioning focuses on financial benefits and risk reduction, while B2C is more about emotional appeal.
- Storytelling in sales should focus on comparing options and helping customers make informed decisions.
- Cross-functional alignment is crucial for effective positioning.
Intro
This section introduces the topic of the podcast: product positioning. The guest is a positioning expert, and the discussion will cover various aspects of positioning, including its definition, importance, and practical application.
Positioning, explained
The expert defines positioning as how a product is the best in the world at delivering a specific value that a well-defined set of customers cares about. It's about setting the context for a product so customers understand what it is, why they should care, and serves as a starting point for a conversation. The expert uses the example of a double chocolate salted caramel muffin to illustrate how positioning can change the perception of a product, even if the product itself remains the same. By positioning the cake as a muffin, it changes the context, competitors, value, and customer assumptions.
Why is positioning important?
Many companies don't think about positioning at all, assuming it's obvious. Founders often start with a general idea, like improving email, and the product evolves organically. However, this can lead to a disconnect between the company's perception and the customer's view. Deliberate positioning is crucial for shaping the environment in the consumer's mind and setting expectations. Positioning is like the opening scene of a movie, setting the context and answering key questions for the audience.
B2B vs. B2C positioning
The core of good positioning is understanding differentiated value and putting it in a context customers understand. In B2B, value is different from consumer products. B2B purchases involve multiple stakeholders (5-11 on average), and the buyer's neck is on the line. Value is typically about making or saving money, and decisions must be justifiable to others. Fear of making a poor choice drives many B2B decisions, giving incumbents an advantage.
When re-positioning a product failed
The expert shares an experience where a company built a database designed for fast queries, initially positioning it as a database. However, customers didn't want a new database. They repositioned it as a data warehouse, which was better, but they assumed customers needed fast query results. It turned out only companies doing customer service needed immediate answers, and the market was too small. They built a product nobody wanted because it didn't solve a real problem.
How to identify customer's pain points
The Lean Startup methodology suggests customer discovery before product development to validate assumptions about the market. However, many products evolve differently, with assumptions tested later. Startups often don't do enough customer discovery to ensure they have a desirable product. Even with customer discovery, it's challenging because customers may not be truthful or change their minds. Startups face uncertainty and must be able to pivot when assumptions are wrong.
How to position a product on a sales page
A product page needs to quickly communicate the unique value proposition and relevance to the visitor. Positioning involves understanding competitive alternatives, differentiated capabilities, the value of those features, and the target audience. The page should convey what value the product delivers that no one else can and whether it's for the visitor. The biggest mistake is focusing on features without explaining their value.
How technology has changed positioning
The fundamentals of positioning haven't changed. The original book on positioning emphasized its importance due to the increasing number of choices. Now, with digital transformation, there are even more choices and advertising messages. It's more critical to establish a clear position to break through the noise. Small companies need to clearly communicate their unique features and niche to compete with larger players.
How to evaluate product positioning
Evaluating positioning involves assessing how quickly new prospects understand the product's value and differentiation. It's not about whether a layperson understands it, but whether the target audience resonates with it. A key sign of weak positioning is when customers look confused during a sales pitch or compare the product to something it doesn't compete with. Another sign is when customers understand the product but don't see why they should pay for it.
Who's in charge of positioning at a company?
Positioning should not be solely a marketing function. It requires a cross-functional team including product, marketing, sales, customer success, and support. Each team brings unique insights about customers and how to win. Marketing can steward the positioning and ensure consistency, but the initial decisions should be made collaboratively.
On storytelling
Storytelling is important, but B2B companies often don't do it well. Sales teams, who are face-to-face with customers, often don't focus on storytelling. The traditional hero's journey framework doesn't address competition. Storytelling should focus on why to pick the product over competitors. The sales pitch should start with a conversation about the market, different approaches, and the trade-offs of each. The goal is to help customers confidently make a decision.
Should a company have a point of view on the market?
Having a point of view on the market is crucial. Founders often have a unique perspective that led to the product's creation. Communicating this perspective and taking customers on that journey is essential. If customers understand the problem the way the company does, they are more likely to choose their product.
Dealing with gatekeepers in B2B marketing
It's important to understand where customers look for advice and educate those influencers. This could be industry analysts, service providers, or system integrators. Building partnerships with these influencers may be necessary to ensure they recommend the product.
Mistakes people make with positioning
The first mistake is not thinking about positioning at all and assuming there's only one possible position. The second mistake is treating it as a minor marketing exercise. The third mistake is attempting category creation when the product obviously fits into an existing market category.
What schools get wrong about marketing
Most marketing research is done on consumer packaged goods, and applying those principles to B2B is a mistake. B2B purchases are highly considered, with stakes involved, unlike buying fizzy water. Schools don't teach enough about B2B, buying committees, or overcoming indecision in the purchase process.
Secrets of B2B decision-making
The biggest misconception is not understanding customer indecision. Research shows that a significant percentage of B2B purchase processes end in no decision. This is not because they chose to stay with their current solution, but because they couldn't confidently make a decision without getting into trouble.
On success
Success is doing what you love and having a big impact on companies. It's satisfying to help companies wrestle with positioning and see it click. Good positioning makes it easier to sell and for customers to understand. It's also about avoiding weaknesses and focusing on strengths.
