What's the difference between positioning and branding?

Positioning is an input that sets the foundation for your product's market perception. Branding, on the other hand, deals with the visual and emotional elements that come after positioning is established. While related, they are distinct functions.

How can a company effectively position a new product?

A common strategy is to identify an underserved segment of the market, dominate that niche, and then expand outwards. This allows a company to establish itself as the best in a specific area before tackling larger competitors.

Why is it difficult to sell B2B software?

The primary challenge is customer indecision. B2B purchases have high stakes, involving multiple stakeholders and the risk of making a bad choice that could lead to job loss. This fear often results in deals ending in 'no decision' rather than choosing a vendor.

What is the biggest mistake companies make with positioning?

The biggest mistake is not thinking about positioning deliberately or treating it as a minor marketing task. Many companies assume their positioning is obvious or just use new words on a homepage without truly understanding their competitive landscape or customer value.

How does positioning differ between B2B and B2C?

In B2C, value can be emotional or aspirational (e.g., looking rich). In B2B, value is typically tied to business outcomes – making money or saving money. B2B decisions involve more stakeholders and are heavily influenced by the fear of making a mistake.

What are the key components of effective product positioning?

Effective positioning requires understanding competitive alternatives, identifying your differentiated capabilities and the value they deliver, and knowing which target customers care most about that value. This forms the basis for your messaging.

How can a startup that can't compete on features position itself?

Find a specific, underserved niche where your unique features offer significant value. Position yourself as the best solution for that particular segment, allowing you to avoid direct competition with larger players and build a foundation for future expansion.

What role does storytelling play in B2B positioning?

Storytelling in B2B should go beyond the 'hero's journey' and focus on explaining why customers should choose you over competitors. It involves painting a picture of the market, discussing alternative approaches, and helping buyers confidently make a decision.

Can a product be repositioned? When might it fail?

Yes, products can be repositioned, but it can fail if the underlying assumption about customer needs isn't validated. For example, repositioning a fast database as a data warehouse for analytics failed because the target customers didn't need that speed for analytics, only for customer service, creating a tiny market.

How do you evaluate if your positioning is working for a B2B product?

The best indicator is how quickly new prospects understand your value proposition. If they get confused, compare you to the wrong competitors, or don't understand the value proposition (asking 'why pay for this?'), your positioning is likely weak.

Who should be responsible for positioning within a company?

Positioning is not just a marketing function; it requires a cross-functional team involving product, sales, and customer success. While marketing can steward the messaging, the decision-making and agreement should come from a group effort.

The Marketing Expert: Sell Anything with this Trick | April Dunford

The Knowledge Project

People & Blogs6 min read73 min video

Feb 27, 2024|865,458 views|19,368|397

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TL;DR

Positioning defines your product's value and context for customers, crucial for success.

Key Insights

Positioning is not just messaging or a tagline; it's the foundational context that defines how your product is the best at delivering specific value to a defined customer segment.

Effective positioning involves understanding competitive alternatives, identifying differentiated capabilities, articulating their value, and targeting the right customers who care about that value.

In B2B, positioning must address the high stakes of purchase decisions, primarily driven by fear of making a bad choice, leading to 'no decision' as a major competitor.

Successful companies often start by dominating a niche market too small for leaders to notice and then expand, rather than competing head-on in a broad, established market.

When creating a new market category, defining the vocabulary and conceptual framework is key to educating customers about a problem they may not even realize they have.

Positioning is a cross-functional effort involving sales, marketing, product, and customer success, not solely a marketing function, requiring buy-in from all stakeholders.

DEFINING PRODUCT POSITIONING

Positioning is the fundamental context for a product, defining its unique value proposition for a specific customer set. It's not merely messaging or a tagline, but rather the foundation upon which marketing and sales efforts are built. April Dunford emphasizes that positioning dictates how a product is perceived, influencing customer assumptions about its capabilities, competitors, and value. It sets the stage for how customers will compare and understand a product by framing its market category.

THE POWER OF CONTEXT AND COMPETITIVE ALTERNATIVES

Positioning works by establishing a context that triggers specific customer assumptions. If a product is positioned as a 'CRM,' customers immediately assume it competes with giants like Salesforce, influencing their expectations about features, pricing, and target audience. Conversely, a well-crafted position can highlight a unique value proposition, saving marketing and sales significant effort. The key is to occupy a space where the product is demonstrably the best, even if that space is initially small.

STRATEGIC MARKET PENETRATION: DOMINATE AND EXPAND

A common and effective strategy, particularly in tech, is to identify an underserved niche within a larger market, dominate that segment, and then expand outwards. This approach allows companies to build momentum and establish themselves as leaders in a specific area without immediately confronting established giants. Examples like Salesforce starting with small businesses, utilizing a SaaS model ('no software'), and gradually moving upmarket illustrate this 'land and expand' methodology.

B2B VS. B2C POSITIONING: ADDRESSING HIGH STAKES PURCHASES

Business-to-business (B2B) positioning differs significantly from business-to-consumer (B2C) due to the higher stakes involved. B2B purchases often involve multiple stakeholders, and the decision-maker fears personal repercussions for making a poor choice. This fear drives many B2B decisions, making 'no decision' a primary competitor. Unlike emotional B2C purchases, B2B value is primarily framed around saving money or making money, requiring a business case and justification.

OVERCOMING CUSTOMER INDECISION AND THE 'NO DECISION' COMPETITOR

A significant challenge in B2B is customer indecision, leading to 'no decision' outcomes in 40-60% of processes. This isn't a preference for the status quo, but rather an inability to confidently make a choice for fear of negative consequences. Effective B2B positioning and sales approaches must help buyers navigate these choices, clearly illustrating trade-offs and providing the confidence to commit, rather than defaulting to inaction. Understanding this research is crucial for success.

THE ROLE OF BRAND POSITIONING AND CATEGORY CREATION

While distinct from branding, positioning plays a vital role in shaping customer perception. In emerging markets, companies may need to engage in category creation, defining new vocabulary and frameworks to educate customers about previously unrecognized problems. This requires a strong point of view from leadership. However, attempting to create a new category when a product clearly fits into an existing one can lead to customer confusion and failed positioning efforts.

IDENTIFYING AND VALIDATING PAIN POINTS FOR POSITIONING

For startups with limited resources, identifying and validating customer pain points is critical. This involves customer discovery rather than just building a product based on assumptions. Even with customer discovery, challenges remain as customer needs can evolve. Startups must be agile, ready to pivot and refine their positioning as they gain market insights and encounter unexpected assumptions or customer behaviors.

CRAFTING EFFECTIVE POSITIONING MESSAGING

Positioning requires clearly communicating value differentiators. This involves understanding competitive alternatives, specific capabilities that offer unique value, and why that value matters to a target audience. On a product page, this translates to conveying who the product is for, why it's different, and why it's better, all within seconds. Focusing on benefits rather than just features is paramount, as customers may not intuitively connect technical features to tangible value.

THE CROSS-FUNCTIONAL NATURE OF POSITIONING

Positioning is not solely a marketing task; it requires a cross-functional effort involving sales, product, customer success, and support, often championed by the CEO. While marketing may steward the messaging, strategic positioning decisions demand input and alignment from all departments. This collaborative approach ensures that the positioning is realistic, believed by sales, and truly reflects the product's capabilities and market reality.

THE MISCONCEPTION OF CONSUMER MARKETING IN B2B

A common error is applying consumer marketing tactics directly to B2B. While emotions play a role, the primary B2B emotion is often fear of failure, not the desire to look cool. B2B purchases are considered, high-stakes decisions that cannot be equated to buying casual consumer goods. Academic marketing research often overemphasizes consumer models, neglecting the complexities of B2B buying committees and the critical need to overcome indecision and fear.

ASSESSING POSITIONING EFFECTIVENESS

Evaluating positioning isn't about a 'grandmother test'; it's about how well the message resonates with the target specialized audience. Signs of weak positioning include customer confusion about what the product is or who it competes with, or the customer believing it's the same as a competitor when it's not. Another key indicator is when customers understand the product but fail to grasp its value and question why they should pay for it.

THE IMPORTANCE OF POSITIONING AS A LEADERSHIP STRATEGY

For CEOs and founders, developing a clear point of view on the market and articulating it is crucial. This involves understanding the market differently than others and guiding customers to see the problem and solution through that unique lens. By coining terms and defining category boundaries, especially for emerging technologies, companies can establish leadership and capture mindshare, making their solutions the obvious choice.

THE STRATEGIC ROLE OF INFLUENCERS AND ANALYSTS

Understanding and influencing key third-party entities like industry analysts (e.g., Gartner) or service providers is vital, particularly in B2B enterprise markets. These influencers shape customer perceptions and purchasing decisions. Vendors must educate these entities about their offerings and value to ensure they are correctly positioned in the advice they provide to potential customers, thereby gaining a competitive advantage.

FAILURES IN POSITIONING: AVOIDABLE MISTAKES

Key positioning mistakes include not thinking about it at all, treating it as a superficial marketing exercise, or attempting category creation without a genuinely new market. Companies often fail by assuming their product's value is self-evident or by trying to position themselves as 'good at everything' instead of focusing on a specific niche where they can excel and then expand.

Mentioned in This Episode

●Products

●Companies

●Organizations

●Books

●Concepts

●People Referenced

Positioning Best Practices

Practical takeaways from this episode

Do This

Define your product's unique value and who cares about it most.

Position your product in a context that sets clear customer expectations and highlights advantages.

Find an underserved market segment and dominate it before expanding.

Understand the core value drivers in B2B: making money or saving money.

Focus on addressing the buyer's fear of making a poor decision.

Develop a clear point of view on the market and communicate it.

Collaborate with a cross-functional team (sales, marketing, product, etc.) to define positioning.

Educate influencers and analysts that your buyers trust.

For emerging markets, define the vocabulary and category boundaries.

Avoid This

Don't assume positioning is just messaging or a tagline; it's the foundation.

Don't position a specialized B2B product so broadly that it loses relevance for your target audience (e.g., the 'grandmother test' isn't always applicable).

Don't neglect deliberate positioning; let it evolve organically.

Don't position your product in a way that sets incorrect customer assumptions.

Don't compete head-to-head with market leaders in their dominated space without a clear advantage.

Don't rely solely on consumer marketing principles for complex B2B purchases.

Don't treat positioning as a purely marketing-led exercise; involve other departments.

Don't attempt category creation if your product clearly fits within an existing market.

Don't focus solely on features; emphasize the value and benefits they deliver.

Common Questions

Positioning defines how your product is the best in the world at delivering specific value that a defined set of customers cares about. It's the foundation for marketing and sales, setting the context for customers to understand what your product is, why they should care, and how it compares to alternatives.

Topics

B2B Marketing Product Marketing Market Segmentation Customer Perception Category Creation Brand Positioning

Mentioned in this video

bookThe Jolt Effect

A book by Matt Dixon that presents research on B2B sales calls, analyzing data to understand why deals end in 'no decision.'

companyPostman

Highlighted as a company that excels at positioning a technical product (API platform) by creating a new concept ('API first world') and using storytelling, like a graphic novel, to explain its value.

personMatt Dixon

Author of 'The Jolt Effect,' a book based on research analyzing millions of B2B sales calls to understand decision-making and 'no decision' outcomes.

personMartin Sheen

The lead actor in Apocalypse Now, whose character's state and setting are used in the example of an effective opening scene for positioning.

personAl Ries

Co-author of the foundational book 'Positioning: The Battle for Your Mind', credited with introducing the concept of positioning.

companySiebel

Initially referred to as 'Seil', this is clarified to likely be Siebel, a major Enterprise CRM competitor during Jan Systems' time, and a company whose market was initially ignored by Salesforce.

mediaApocalypse Now

Cited as an example of a movie with an effective opening scene that sets the context for the audience, much like good product positioning.

conceptCRM

Customer Relationship Management, used as a core example category to illustrate how positioning within a market category sets customer expectations and defines competitors, pricing, and features.

bookPositioning: The Battle for Your Mind

Cited as the foundational book on positioning by Al Ries and Jack Trout, published in 1982, which highlighted the increasing importance of positioning in a crowded market.

personJack Trout