How To Nail Product Positioning So Customers Get It, Buy It, Love It with April Dunford, Ambient Strategy

By declaring that my product sits in a market category. If I say I'm in a category and it triggers a bunch of assumptions about my product that are true, fantastic. I just save myself a lot of energy. I don't have to tell you my competitor is. It's assumed I don't have to list every single feature. Half of those are like table stakes. We just assume we've got them now. Unfortunately, it works the same way if we do a lousy job of it. So if I do a bad job of putting my product in a market category and it triggers a bunch of assumptions about my product that are not true, then my marketing and sales team is going to have to make a significant effort undoing the damage that my positioning has just done.

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Teach you guys something about what is possibly the most powerful tool at your discovery disposal As a product person and in my experience, which by the way, spans across seven startups, six acquisitions, five big multinationals, 16 product launches, in my opinion, mastering this one concept can mean the difference between success and failure of a product. Sometimes your company and sometimes your career. This is a talk about one of the most misunderstood concepts in product marketing, which is positioning. It's so misunderstood that whenever I talk about it, the first thing I have to do is I have to start by talking about what positioning is not. So it's not a tagline. Positioning is not the same thing as messaging. It's not your vision statement. Some people will tell me, well, isn't positioning just everything we do in marketing all balled up together? No, it's not. So all of those things flow from positioning, but we actually have to figure out positioning first in order to figure out our messaging, in order to figure out our branding, in order to figure out our tagline or any of these other things. You can think about it this way. If everything we do in marketing and sales is the house, positioning is the foundation upon which the house is built. I like to define it this way. So positioning defines how your product is the best in the world at providing thing that a well defined set of customers cares a lot about. Put another way, it answers a set of really basic fundamental questions. What is this thing and why do we care? I like to think of it as context setting for products. Context is really important, particularly if we're talking about something new that we've never encountered before, because we look to context to try and figure out things that we've never seen before. So I like using this as an example. So this is an example of a product that I encountered once, completely out of context in Amazon. And when I first saw this thing, I decided that what it was a shoe. So I thought this was Crocs and they're doubling down on their position as ugly shoe people of the world. And they like cut out the toe and they put this thing at the back. And I was like, man, look at that thing. It's hideous. It's so crocky. And then I saw it in context and I realized, oh, it's not what it is at all. And in context it was obvious that thing was and what it was good for. What is a dog muzzle? What it's good for is embarrassing your dog in public. Just a little hint of context can sometimes completely change your perception of a product. So I'll give you this example now. I just showed you that thing with the dog. So then I show you this, and you might think, oh, got it. It's dog stuff. This is like one of those cone things where the dog can't bite itself or whatever. It. It turns out it's a cone for humans. Crazy. It's like for spilled noodles or something. I actually have no idea what this thing is. But the marketers that made this ad, they give you the clue what it's good for. Here is that guy in the corner. See that guy? This thing is for making people fall in love with you. That's what it's for. Yeah. Okay. Probably not. So a shift in positioning can completely transform the way we see a product. Now, the second thing I get challenged with when I'm talking about positioning is people will say, hey, that positioning stuff, that was invented in, like, the 80s. Do we still need that? Aren't we past positioning? And I'm like, yeah, because the markets we operate in are intensely crowded. Now, I speak at a lot of marketing conferences. You get marketers on stage, and half of them will start their talks like this. We operate in crowded markets. Markets are crowded. Like, we say this so much, it's like a cliche in marketing, but I don't think we feel in our gut just how bad it really is. So I use this example, like, freak people out about market. This guy, Scott Brinkler, puts this thing together every year. It's called the marketing technology landscape. So if you think about all the software to solve all the problems in the world, this is one guy's attempt at modeling just one tiny corner of that universe, just the solutions to marketing problems. And look at that thing. There's 350 companies on there. In fact, the first time I came across this was 2012. This is the chart from 2012. And I was working with a company that did marketing technology. And we were so stressed out by this, we're like, oh, my God, 50 companies. Like, how do we ever stand out in this? How do marketers ever choose something to buy in here? How do they make a short list? And we decided this was so bad that, in fact, what would happen is the market would consolidate and all these people would buy each other. And if we fast forwarded five years, we'd only have five or six companies left on here, because this is a nightmare. This can't continue like this. So let's fast forward five years and see what happened. Oh, my God, we were so wrong. So now there's 7,000 companies on there. You know what's really terrifying is 6,650 of those are brand new in the last five years. So if it was super important for us to distinguish why our products are different and better than anything else out there, which is what positioning does, then it is critical to do it today when our markets are disastrously crowded. Now, if you think about how to do this, if you dig into the research which I have done, the research is super interesting. The research shows that when we encounter something new, we use what we know to figure out what we don't know. So customers use what they know to make sense of what they don't. And one of the big touch points they have for this is market categories. So about that for a minute. If I go back to Scott's terrifying chart, you can see that he's attempted to categorize these solutions first by color. So the red stuff and advertising. The yellow is like social and relationships. So let's say I'm a marketer and I decide what I'm trying to do is Live Chat a website. I can look at this chart and I'll say live chat. That sounds a little bit like social and relationships. I'll narrow it down to there. And. Oh, yeah, sure enough, there's a bot in there called bots and Live Chat. Great. Now, I'm not talking about 7,000 competitors anymore. I'm talking about a few dozen. It's still pretty crappy. It's better than 7,000. But that's not all a market category does. So positioning your product in a certain market category actually sets off a really, really powerful set of assumptions in the minds of customers about what your product is all about. So it works a little bit like this. Let's do an experiment. So let's say this is one of those stupid pitch contest things. I hate those. You ever do one of those pitch contest things they do, like Dragon's Den. Okay, so let's say I got up here and I'm going to pitch you my product, but all I'm allowed to tell you about it is the market category. That's it. So I come up and I'm like, hello, I'm April. My product, it's a CRM. Customer Relationship Management. It's a CRM. That's it. Who's my competitor? Salesforce. Name me a couple of features. Tracking accounts, tracking deals, keeping track of a pipeline, CRM stuff. I just assume that it does all that. Who am I selling to? Vice president of sales. That's who you sell a CRM to. What's my price? Less than Salesforce. Because they're the leader in this Market, I'm never going to get away with charging more than them. So I didn't tell you my exact price, but I set a ceiling. So think about it this way. By declaring that my product sits in a market category, if I say I'm in a category and it triggers a bunch of assumptions about my product that are true, fantastic. I just save myself a lot of energy. I don't have to tell you who my competitor is. It's assumed. I don't have to list every single feature. Half of those are like table stakes. We just assume we've got them. Now, unfortunately, it works the same way if we do a lousy job of it. So if I do a bad job of putting my product in a market category and it triggers a bunch of assumptions about my product that are not true, then my marketing and sales team is going to have to make a significant effort undoing the damage that my positioning has just done. I'll give you an example. I get a call from these guys. So they got introduced to me. They're at the Valley, and I know the investor, and the investor says, look, these guys have an amazing product and their customers love them. And once a customer gets using it, they love it. But when they're trying to pitch it to them in sales calls, nobody can figure out what the heck it is. I think they have a positioning problem. You could help them out. Great. So we get on the phone and I said, so, what's your story? And they said, we're lawyers, ex lawyers. And we came up with this idea. We're going to build email for lawyers. And I'm like, who knew the lawyers needed their own weird email? But okay, email for lawyers. What do I know? I'm not a lawyer. So they jump into the demo and they're showing me this demo, and I'm like, that's fascinating. They got an inbox. I do messages and stuff. And I'm like, that's cool. How does the calendar work on this thing? And they're like, oh, we don't have a calendar. Yeah. You know what you call email without a calendar? Crappy email. That's what you call it. You don't buy that email. And I said, wait, so you guys compete with Gmail and Outlook, but you can't replace them? And oh, God, no, we don't have a calendar. So I'm like, wait a second. So people love you, though. So why do your customers love you so much? And they say, oh, we've got this feature. It's super secure, context aware, file Sharing. So what it does is it looks at the history of communication between the lawyer and the clients. It decides who should have access to a document, and then it automatically in a super secure way. That's cool. Actually, that's pretty neat. It also is. An email has nothing to do with email. If I wanted to solve that problem, would I pick email to do that? No, I would not. So what these guys have is a really neat product masquerading as shitty email. So let's take the same product and let's put it in another market category and see if we think differently about it. What if I called it team collaboration for lawyers? Now who's my competitor? Slack. That's bad too. But it's Slack for lawyers. Team collaboration for lawyers, that's different. Slack doesn't do anything in particular for lawyers. And. And what do these guys have? Well, they got this super secure, context aware, file sharing thing. Now their secret sauce feature sits right smack in the middle of the category. Of course they do that. Does it need to have a calendar anymore? No, it's fine. It doesn't need a calendar. Who's it for? Lawyers. I already told you that. Right in the definition of the category. The best way is we had this great conversation about pricing and I said, look, you guys have this big opportunity here. It's team collaboration for lawyers. And that's great for lots of reasons. One email, everybody expects that to be free. But team collaboration, people pay big bucks for that. So now your team collaboration for lawyers, this is what you should do. You should call the lawyers and when they ask you how does the pricing work, you just respond and say, we're charging by the minute, just let that dangle. And I want to be there when you tell them. And then they didn't do that, but I think they left some money on the table of that one anyways. So this is also a neat example of the biggest problem we have around positioning is we almost never deliberately position our products. So 16 products, I've worked on every single one, I've repositioned them at some point, and every single one started out with this kind of default positioning. And it was the positioning that the inventors had in their mind when they first came up with the idea for the product. Oh, we're going to build email for lawyers, because that's what we are. And you could spend your whole life trying to market and sell email for lawyers and it's going to be a failure. Not because you're lousy at marketing, not because you're bad product Management people, it's because your positioning stinks. So if we really want to do this properly, we have to get past the default position, open our minds to the idea that maybe what we built belongs in a whole other market category, and then go do that. Here's an example. So there's this cool company, they're in Kitchener Waterloo in Ontario, and originally called clearpath Robotics, founded by two guys with mechatronics engineering degrees from the University of Waterloo. So they start this company and what they build are robots. Eventually they get this idea for this robot on the right hand side. And what it does is it drives around a manufacturing plant, it delivers things from one place to the other. Now, if you're like me and you don't know a lot about robotics, that might not sound like a complicated problem to solve, but it turns out that is an intensely complicated problem to solve. It requires mapping and sensors and a team full of people with advanced degrees in artificial intelligence. So they go out, they go to sell this thing to manufacturing plants. They get in front of the guy who buys robots at a manufacturing plant, and they're like, hello, we are Clearpath Robotics. We are here to sell you our fancy new robot. And the reaction from the manufacturing plant guys are like, ugh, robots. We got robots, man. We've been using robots for decades. We got robot vendors. We know what robots cost. Yeah, your thing. Maybe my vendor already sells one of those things, I don't know. And they're like, no, you don't understand. These are not the robots you're talking about. They're special robots like no other robot you've ever seen before, in fact. So eventually they say to themselves, maybe this robot positioning is not doing us any favors. So they took a step back, said, what are we? Fundamentally, what are we? Let's start with what we're really good at. Well, what makes us special is we drive around chock full of artificial intelligence, mapping and sensors. Okay, what's driving around full of artificial intelligence and mapping and sensors? And they realize maybe what we've invented is a self driving car or an autonomous vehicle for industrial uses, if you want to get super specific. So they repositioned the thing. What I love about these guys is they went whole hog on this thing. So they renamed the division Auto Motors. You can see it on the front of the thing. And then it changed the industrial design of it. So you can see it's got white lights, headlights on the front and brake lights on the back. Those do nothing. They're just there to make it look Like a car. And so they go in and they say, hey, we're auto motors. And what we do is autonomous vehicles for industrial uses. Of course it drives around. Of course it's full of mapping and sensors. That's what you expect that thing to do. Interestingly, when they were trying to raise money, they had this great story about how they went to the Valley and they're pitching VCs. And with the original positioning, they came in and they're like, so we have this little robot and it drives around. And the first VC they pitched, said what? Roomba? And they're like serious mechanical engineers. They're like, we're not making vacuum cleaners here, buddy. And so anyways, they did the repositioning and then get to go back and go, we're autonomous vehicle for industrial uses. Ever heard of this guy, Elon Musk? This is Elon Musk stuff. And anyways, they raised $30 million on that new positioning. If positioning is important. A question that vexed me in my career. My background is I have a degree in system design. Engineering. I got a job at a startup. I just happened to be in the marketing department, product marketing. But that startup got acquired by a big company in the Valley. My boss left. I just happened to be in the right place at the time. Next thing, I'm head of marketing for this big global thing. I'm two years out of school, engineering school. I can't even spell marketing. I have no idea what I'm doing. But by that point, I had repositioned two products, and I had this idea that positioning was really important, but I was winging it. I didn't actually know how to do it. So I ran around and I asked all my smart marketing friends, how do we actually do positioning? And the answer I got was, we just figure it out. And nobody had an answer. So I went and read a whole bunch of books, and I learned a lot of things. But this positioning thing was like a big blank. I went and took a class, and we learned this. And this is without a doubt the dumbest thing I've ever learned in class, like, anywhere, ever. Have you ever done one of these? A positioning statement. This is so dumb. So I went to school, and the professor puts his thing up and he's like, how do we do positioning? This is what we do. We do this Mad Libs, fill in the blanks thing. And so we say, my product is a blank. And you put in the market category for blank is a blank. And you fill in the differentiators or whatever, and Then that's it, you're done. And I'm like, that doesn't make any sense. I'm at the back of the class and at this point I'd already repositioned to it. How would that tell me whether I'm a robot or a self driving car? How would that exercise tell me if I'm email or team collaboration? It doesn't. So I'm at the back, I put my hand up and professor, yes. And I'm like, okay, so dude, how do I know what market category to write in the blank? There must be a methodology for that. And the guy looks at me and he says, april, you'll just know. Like if an engineer. I didn't just know anything. I didn't just know mechanics of formable solids. I had to learn that. I got a feeling I have to learn this too. So I got this idea that the first thing you should do is you should take positioning. You should break it down in little pieces. And the pieces are essentially the blanks in a positioning statement. And they go like this. One is your market category. Two is I need to know what my competitive alternatives are. Who am I really competing against? 3, I need to understand what my unique capabilities are. These are the features that I have that no other product in my category has. Four, what is the value for customers that feature enables? And then the last thing is, who are the customer segments? So who am I targeting? Who cares a lot about that value? Easy. So I figure I'll just break it into pieces. I'll figure out the best answer for all those things, then I've got it. Great positioning. Here's where it gets sneaky and tricky. And this is why this is hard. All of those things actually have a relationship to each other. So think about it. My target customer segments are the people that care the most about the differentiated value I can deliver. My differentiated value is completely dependent on my differentiated capabilities. Those capabilities are only differentiated if I compare them to competitor. So where do I start? So I monkey with this time. And then I got hired as an EIR at a local startup incubator and there are 800 member companies in the incubator. And I used them as guinea pigs, actually, they volunteered willingly. And we tried doing it with different starting points and it turns out you actually have to do it like this. And there's a couple of gotchas. So you have to start with competitive comparables. But everybody messes up their competitive comparables. That's the trick. So the competitive comparables are one, it's probably not your competitors. So most startups that I work with, if I say, who's your competitor? They'll list me some giant list of companies in the Valley that are in their market space. But then if I go to their best customers, their happiest customers, and say, if this product didn't exist, what would you folks use? Usually in B2B, the answer is usually something like, I just use Excel or I just hire an intern to do it. So if you get the competitive comparables wrong, then your features that you're trying to highlight are all wrong. So I talk to these startups and they'll say, our big differentiator is ease of use. Look at all these other companies out there. It takes them 19 clicks to get to where they need to go and we can do it in two. So ease of use is our big thing. But then I go to the customer and the customer says, yeah, if we didn't use that thing, we just hired the intern. You're never going to be easier to use than the intern ever, but super easy to use interns. Hey Joey, get me a coffee. While you're at it, put all that data in that spreadsheet. Come back when you're done. Like you're highlighting the wrong thing. So the first thing is you need to understand what your true competitive comparables are. Then I say, okay, compared to that, what are my unique attributes? And you end up with a giant long list of things. Then you map those to value and you tend to get a set of value themes. Then you look at that and you say, okay, who cares a lot about that value? What are the characteristics of a company that makes them really care about that value? These are your low hanging fruit prospects, the easiest ones for you to close. And then the last thing is market category. I'm trying to communicate that value to these people. What is the best context to wrap around that makes that value obvious to those folks? It's tricky. So I took a whole bunch of notes for you and I wrote it down in a book. And it's this book here. And for the price of a beer, you can get access to my entire life's work. What a world we live in and finish with one story. It's an older story, but it's such a good illustration of all of this that I like to tell it. Anyway, this was early in my career. I got hired to run marketing at a startup in enterprise CRM space. So this was years ago when Salesforce was still pretty small, only selling in the mid market in the Enterprise space. There was a big company called Siebel, which was the gorilla in the market at the time. And so not surprisingly, every time we got a meeting with a customer, we'd walk in and we'd say, hey, we're Enterprise CRM. And the customer would say, so how are you better than Siebel? And the answer was we kind of weren't. So they had 8,000 employees, we had 35. They had 400 customers, we had four. They did 2 billion revenue, we did one and a half million revenue. And we had two things that differentiated us. The first one was we had a feature. We always showed it in the demo and it was pretty cool. And they couldn't do it and we could, which is why we really highlighted it. The problem was, is nobody seemed to care. So we showed it and it was like the ability to model a many to many relationship amongst people instead of companies. No CRM on the market today even does that. And we'd show it to people and they'd just get confused and say, what else you got? Second differentiator was our unfettered and enthusiastic ability to discount until they said yes because we were so cheap. And so I remember we were pitching to head of tech at a telecom once and we pitched the whole thing and then we got to the end and we had the pricing discussion and the guy says, oh, I get what you are. You're the cheap crappy Siebel. How's that for positioning? So needless to say, business was not so good. Things weren't going so good. And how we got out of this was literally luck. So we had a hard time keeping sales reps because they couldn't sell anything. And so we were interviewing for sales rep and my CEO had this really obnoxious interview tactic. So anyways, this guy comes in to interview for a job, he sits down and my CEO does this obnoxious thing where he goes, give me one good reason why we should hire you. And the guy we're interviewing is from New York. And so he just gives it right back to me. He's like, I'll give you a good reason to hire me. My buddy's the head of investment banking at Goldman Sachs and I'm going to get you a meeting there. We're like, sounds good, when can you start? So we hired the guy, we get the meeting, and then I go along as a ride along because one mainly I just want to see what the head of investment bank at Goldman Sachs his office looks like. But I go to the meeting and he does the demo, and the demo is cool, like we always do. And he gets to this part where he shows our special feature. And he shows the thing. And the head of investment banking says, whoa, whoa, whoa, back up. Show me that thing again. He shows it to him again. Then he says, wait, so does that mean if this person and that person sit on a board together, you can model that? We're like, yeah. And we're like, if this person and this person belong to the same club together, you can model that? We're like, yeah. And he's hang on, I need the vice presidents. So he runs down the hall and he comes back with three vice presidents that report to him and he says, show them the thing. Show them the thing. We're like, okay. So we show them the thing and they ask the same question. They're like, wait, so can you model this with this? And we're like, yes, we can. Can you model this with this? Yes, we can. And they all got super excited. And the next thing, there's like the four of them. They're in the office and they're jumping up and down. They're super like. Have you ever been in a room full of super excited investment bankers? Terrifying. Anyway, so, no, long story short, we closed the deal, we're all excited, and then we get this idea. Maybe investment bankers really dig our stuff. So we go down Wall street and we pitch it. And every time we pitch it, it's the same thing. We walk in, we show them the thing, everybody jumps up and down, we close the business. It's amazing. Most importantly, though, we went back to the office and it triggered a discussion. What are we really? Enterprise CRM. Because we can't win any deals there. Maybe what we are, CRM for investment bankers. And I'll tell you, that seems like a small change. But everybody hated it. Who hated it the most? Our investors and the board, because that sounded too small. They're like, look, we didn't write you a check to be CRM in some niche little thing. We wrote you a check to go out there and kick Siebel's ass. And now you're saying you're going to retreat to some little corner. We're like, look, okay, this is how it's going to work. First, we're going to beat them in investment banking. And look, it's not like we're giving anything up. Nobody else wants to buy this thing anyway. And then we're going to expand out to other parts of the investment bank. Then we're going to get Insurance, then world domination, and we'll kick those Siebel guys butts. And they said, yeah, okay. And it was completely transformative to our business. No longer were we ever compared directly to Siebel. It was cool. We walk into meetings, we say, hey, we're CRM for investment bankers. They're like, hang on, doesn't Siebel do that? We're like, siebel. We love those guys. They're fantastic. So big, they make so much money. They're so great. If you're a call center in India or a manufacturing plant or retailer, not you, Wolf of Wall street, you need something special. Show them the thing up and down. Close the business. We went from 2 million to 80 million in a little under 18 months. Yeah. And then the end of the story is Siebel got so sick of us kicking their tail up and down Wall street, they came and acquired us for $1.6 billion. They thought we weren't going to make any money with that repositioning. And here's the takeaways. You need to position deliberately. You need to center on your differentiated strengths.

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