“The most common sign that you have weak positioning is when your existing customers are really happy using your stuff but you don’t see that same level of enthusiasm in the early parts of a customer sales journey”.
Poor positioning can be fatal for your organization. The way you position yourself in the market triggers a set of assumptions in your prospect’s minds and poor positioning can lead to negative assumptions. You can be equated with a competitor or your product is undervalued and its value proposition is unclear. We unravel positioning with April Dunford a consultant, author, and thought leader in the field.
April Dunford is the author of ‘Obviously Awesome: How to Nail Product Positioning So Customers Get It, Buy It, Love It’. April has worked with several startups running marketing, product, and sales teams. She has led teams at seven successful B2B technology startups. Most of those startups were acquired by companies like IBM, Siebel Systems, SAP, and Sybase. Through her journey, she has positioned, repositioned, and launched 16 products. The book, Obviously Awesome, captures her ideas about positioning and a methodology for identifying positioning that any startup can follow.
April talks about how to identify if a company has weak positioning, the methodology that can be used to identify right positioning, the power of context setting, and how to layer current trends around positioning to supercharge marketing RoI.
Q. In your book, in the early parts, you say that positioning has a positioning problem. Talk to us about that.
April Dunford: In marketing, we like to define things, and then we like to mess around with the definitions. Positioning, in particular, is interesting. It’s not a new concept. It’s an old concept. It’s been around since the 80s. But it’s misunderstood even by career marketers. If I was to take a dozen vice presidents of marketing, put them together in a room and say, okay, define positioning, we will probably get a dozen different definitions.
I’m not sure where this confusion comes from. Typically, when I talk to people about positioning, they’ll confuse it with things that that we do with positioning once we have it. They’ll say, positioning is the same as messaging and that’s like building a tagline. My personal pet peeve is when folks talk about brand positioning. This really bugs me because there’s positioning and there’s branding. But those are two completely separate things. In fact, most of the things that we mistakenly think are positioning are actually things we do after we have the right positioning.
If you were to say to me, April, we need to make messaging I’d say, who’s your target customer? What’s your value proposition? Who do you compete with? How are you different? One way to think about it is positioning helps us find these fundamental inputs for the rest of the things we do in marketing and sales. If we think about everything we do in marketing and sales as the house. Positioning is the foundation upon which the house is built.
Q. How can a startup identify a problem with its positioning?
April: There are some signs the most common one is when your existing customers are really happy using your stuff but you don’t see that same level of enthusiasm in the early parts of a customer sales journey.
You’ve got this product and your existing customers love it. But on a first sales meeting halfway through the pitch, the customer will ask- What is it again? Or they’ll say I get it, I just don’t get why anybody would pay for that. They don’t understand the value of your product.
That’s typically a good sign that what you’ve got is a positioning problem. There’s a gap between what an existing customer knows and understands about your product, and what’s coming across in the way you pitch it in your marketing and sales material. Somehow you need to close that gap. Usually, that’s how we know we’ve got weak positioning.
Q. What is the role of context-setting?
April: Context is important in startups because it’s how customers understand something that they’ve never encountered before. If they’re looking at your product for the first time, they’re just trying to figure out what is this thing? Why is it for me? Should I pay attention to this or not? Then they’ll look for clues in the context you set to try and answer these questions.
Assumptions are triggered in the minds of customers when you first pitch your product. If you do a good job of this what you’ll trigger is a bunch of assumptions about your product that are true. But it also works the other way around. If I say I’m something and it triggers a set of assumptions about my product that are not true, then I’m going to have to spend a significant effort undoing the damage that this positioning has already done.
Q. In your book, you say there are some aspects that you can look at as you come up with your positioning for a startup. Can you walk us through this?
April: It begins with figuring out the component pieces of your positioning. The component pieces are more or less these five things. It’s competitive alternatives, so who do you compete against? Unique capabilities or features, what can you do the competitors can’t do? Differentiated value for customers- how can you help customers in their business in a way that’s different than your competitors? Which customer segments do you target? And then the last one is the market category? Am I email or am I team collaboration? Am I a database? These are the five components.
When you look at it, the first thing you understand is that the pieces aren’t actually independent. They are all related to each other. If they’re all related to each other then which component do you start at?
For a long time, I thought that there wasn’t a good starting place. You pick a spot and you work your way around the circle. It was later that I had an epiphany and I realized that you have to start with competitive alternatives and work your way from there. If you don’t, what you end up with is positioning that sounds good inside the office. But when you take it out, it doesn’t win in the market, because it’s not differentiated.
So you have to do it in this order. The first step is if you didn’t exist, what would a customer be doing? That’s the competitive alternative. It might not be direct competitors it’s competitive alternatives, not just competitors. That’s the first step.
Then the next step is figuring out what capabilities you have that the alternative doesn’t have? This largely involves product features but you have to really think through if the customers care about the feature.
Once you have that you have to think about the characteristics of a target prospect. That’s how you figure out what your best-fit customers are. And once you have that, then you can get to the market category and you can say, you’re team collaboration or email. Depending on the best context that helps people understand your value.
Q. You also talk about creating a positioning team. What does this team do and who are the kind of people that founders should have in this team?
April: This is an important point to understand. We often think about positioning as a marketing function. But in my opinion, positioning is a decision made by the senior executive team. Because it impacts everybody, not just copy on the homepage, it impacts sales, in the way they pitch. It also impacts the product and the roadmap moving forward.
If we’re going to work on positioning, ideally we need representation from across the organization at the table. And importantly, at the end of that, we’ve got agreement and alignment across the team so that everybody agrees, here’s what we compete with, here’s how we’re different, this is our value, here’s who we’re going after and this is the market we’re going to win. It needs to be done as a team. And ideally, it’s a cross-functional team with the representation of all the major groups across the company.
Q. April, thank you for joining us today. How can companies get started right away with nailing their positioning?
April: The first thing they want to do is to take their positioning and translate it into what I call a sales narrative or a sales pitch. That’s the best way to test positioning. Take your positioning, build the sales pitch, and then test it on live prospects and see if it works. Usually what happens is you end up tuning it a little bit and then once you have a sales pitch that works, then you use that to build messaging.
You also need to remember that positioning is not carved in stone. It’s a living breathing thing. Your product is changing, your market is changing, you’re going to need to check in regularly on your positioning, to make sure that something hasn’t changed in the market, which requires you to shift the positioning.