Obviously Awesome by April Dunford

 Introduction

 - Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about.

 - If we fail at positioning, we fail at marketing and sales. If we fail at marketing and sales, the entire business fails.

 - Like speaking Japanese slowly and loudly to a person who speaks only English, putting a bigger marketing budget behind confusing and unclear positioning doesn’t work.

 - I like to describe positioning as “context setting” for products. When we encounter something new, we will attempt to make sense of it by gathering together all of the little clues we can quickly find to determine how we should think about this new thing.

 - Often, you’re too close to your product to realize that the market doesn’t think about it the way you do.

 - Positioning is a secret superpower that, when harnessed correctly, can change the way the world thinks about a problem, a technology or even an entire market.

 - Ries and Trout argued that markets had become crowded with copycat products, and buyers were overwhelmed with the volume of marketing aimed at them. In order to break through the noise, companies would need to take into account their own strengths and weaknesses, then contrast them with their competitors to create a unique leadership position in the minds of customers.

 - Clear positioning was important in 1981; we are doomed without it today.

 - Customers need to be able to easily understand what your product is, why it’s special and why it matters to them.

 - Your current customers love you, but new prospects can’t figure out what you’re selling.

 - If you see a disconnect between how your happy customers think about your product and how prospects see it, you likely have a positioning problem.

 - Your company has long sales cycles and low close rates, and you’re losing out to the competition.

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 Positioning as Context

   - Positioning products is a lot like context setting in the opening of a movie.

   - The opening scene positions the movie so you can stop wondering about the big questions of where, what, why and who and move onto focusing on the story itself within that context.

   - When customers encounter a product they have never seen before, they will look for contextual clues to help them figure out what it is, who it’s for and why they should care. Taken together, the messaging, pricing, features, branding, partners and customers create context and set the scene for the product.

   - Joshua Bell regularly sells out concert halls where tickets cost $ 300 or more. For this test of context, he would play the violin outside a busy subway station in Washington, DC, during the morning commute. Would people recognize Bell’s extraordinary talent, or would they simply walk past him as they would any other street performer? And more importantly for the experiment, would he make more money than a typical street performer? Bell performed for forty-five minutes. In that time, 1,070 people passed by, and of those, 27 gave him money, and only 7 paused to listen. His total earnings for the concert: $ 32.17. You might argue that the commuters of Washington, DC, may simply be late getting to work and don’t carry change. Just because he didn’t draw a crowd and he didn’t make much money doesn’t mean the rushing commuters weren’t suddenly inspired to ponder the meaning of their lives. But the Washington Post went further and interviewed people who had experienced the music. It turned out that plenty of them weren’t in much of a rush at all—like the man getting a shoe shine in the corner of the plaza or the people lined up to buy lottery tickets at the kiosk twenty feet from Bell. It turns out they weren’t any more likely to notice the music.

   - Even a world-class product, poorly positioned, can fail.

   - In the context of a concert hall, Bell is perceived as producing something that is very valuable. He’s dressed to perform. He’s surrounded by an orchestra on a beautiful stage. The program tells people what awards he has won. Whereas, when he’s playing outside a subway station, everything around him has changed. He’s dressed like a street performer and standing beside a garbage can, playing for tips. His product—the music—hasn’t changed, but in this context, few people recognize its value.

   - Without context to guide us, we would be overwhelmed, maybe even paralyzed by choice.

   - Understanding something new is challenging because we don’t yet have a frame of reference. When we lack context for a product, the easiest way to create one is by starting with something we already know.

   - Most products are exceptional only when we understand them within their best frame of reference.

   - While we understand that context is important, we generally fail to deliberately choose a context because we believe that the context for our product is obvious.

   - Trap 1: You are stuck on the idea of what you intended to build, and you don’t realize that your product has become something else.

   - Now, suppose that in your process of experimentation, you end up creating a cake that is actually quite small. It’s so small you could sell it as a self-contained, single-serving cake, so you put a little wrapper around it. You realize that you’ve actually made supreme chocolate muffins instead of better chocolate cake.

   - However, choosing to make muffins or cake results in two fundamentally different business models, with different ways of making revenue.

   - We still see the product as the thing we set out to build. What else could it possibly be? Customers, though, are often left confused by products that don’t seem to match up with the way companies are positioning them.

   - Trap 2: You carefully designed your product for a market, but that market has changed.

   - Sometimes a product that was well positioned in a market suddenly becomes poorly positioned, not because the product itself has changed, but because markets around the product have shifted.

   - “Cake on a stick” doesn’t sound like better cake or innovative cake—it just sounds wrong. It sounds like cake doing things it wasn’t meant to do. You’ve created Frankencake. Who would want to eat that?

   - We generally fail to consider other—potentially better—ways to position our products because we simply aren’t positioning them deliberately.

   - Great positioning takes into account all of the following: The customer’s point of view on the problem you solve and the alternative ways of solving that problem. The ways you are uniquely different from those alternatives and why that’s meaningful for customers. The characteristics of a potential customer that really values what you can uniquely deliver. The best market context for your product that makes your unique value obvious to those customers who are best suited to your product.

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The Five (plus One) Components of Effective Positioning

   - (Aside: this is where I also first encountered the expression“malicious compliance,” meaning you have completed something that was requested of you, simply to illustrate the stupidity of the request.)

   - The worst part of a positioning statement exercise is that it assumes you know the answers.

   - I’ve talked to dozens of companies that have gone through the exercise of documenting their positioning statement, and not one did anything useful with it once it was completed. Did marketing refer to it when they created messaging? No. Did the product team use it to inform what features they should build? Nope. Did sales use it to figure out what types of customers they should sell to? Never. What do you call an exercise that produces something that never gets used? A big waste of time, that’s what you call it.

   - These are the Five(Plus One) Components of Effective Positioning: Competitive alternatives. What customers would do if your solution didn’t exist. Unique attributes. The features and capabilities that you have and the alternatives lack. Value(and proof). The benefit that those features enable for customers. Target market characteristics. The characteristics of a group of buyers that lead them to really care a lot about the value you deliver. Market category. The market you describe yourself as being part of, to help customers understand your value.(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.”

   - Alternatives to your product can be“hire an intern to do it,”“use a spreadsheet” or even“suffer along with the problem and do nothing.”

   - The competitive alternative is what your target customers would“use” or“do” if your product didn’t exist.

   - Your unique attributes are your secret sauce, the things you can do that the alternatives can’t.

   - For technology companies, these are often technical features, but unique attributes could also be things like your delivery model(such as installed on-premise vs. software as a service), your business model(think Rent the Runway upending retail by leasing instead of selling special-occasion wear) or your specific expertise(perhaps you have a dozen international banks as clients and therefore understand their business better than others in the market).

   - Value is the benefit you can deliver to customers because of your unique attributes.

   - If unique attributes are your secret sauce, then value is the reason why someone might care about your secret sauce.

   - Your opinion of your value does not count as proof; the opinion of customers, reviewers and experts does. Data or third-party opinions are difficult to refute. Your value needs to be provable in an objective and demonstrable way.

   - Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offerings.

   - Then we asked ourselves who cares a lot about getting answers quickly from a large amount of data. One group was banks that had a very time-sensitive need to analyze data to quickly identify a potential security threat. This specificity of positioning allowed us to be really targeted in our sales and marketing—instead of focusing our marketing on any company with a lot of data, we could specifically target banks.

   - Think of the market category as a frame of reference for your target customers, which helps them understand your unique value.

   - Declaring that your product exists in a market category triggers a set of powerful assumptions.

   - Market categories are one way that customers organize products in their minds.

   - If you choose your category wisely, all the assumptions are working for you. You don’t have to tell customers who your competitors are. It’s assumed! You don’t have to list every feature, because it’s assumed that all products in the category have basic category functions.

   - The product was positioned as“email” but didn’t have features we assume any email solution would have. Also, the key unique feature of the product was not expected or even particularly valued in their market(“ email”). Repositioning the product as“team collaboration software” made it easier for customers to intuitively understand what was valuable about it, and avoided customers looking for functionality it didn’t have.

   - Trends help buyers understand why this product is important to them right now. Trends can help business buyers understand how a product aligns with overall company priorities, making it a more strategic and urgent purchase.

   - Trends can help customers understand why a product is important right now.

   - In technology, we can think of market categories as groups of solutions that are similar and compete with each other. Accounting software, group chat, security systems, networking solutions—these are all market categories. Trends in technology can be applied to multiple market categories. Blockchain technology, artificial intelligence(AI) and augmented reality are examples of trends that are relevant to multiple different markets.

   - “When we started to describe ourselves as“direct-to-consumer sampling,” brands made Sampler a priority and deals closed faster.

   - Attributes of your product are only“unique” when compared with competitive alternatives.

   - I’ve seen teams start with defining key features, without looking at competitive alternatives, and the resulting positioning doesn’t connect with how customers really evaluate a solution.

   - I’ve determined that it’s critical to start with understanding what the customer sees as a competitive alternative, and then working through the rest of the components—attributes, value, characteristics, market category, relevant trends—from there.

Step 1. Understand the Customers Who Love Your Product

   - What was it about our offering that made them so happy with it, and what was it about those customers that made them such a good fit for us? Answering these questions helped us figure out what our value was, who it was resonating for and why—in other words, it helped us get a start on understanding what our positioning should be.

   - 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

   - The first step in the positioning exercise is to make a short list of your best customers.

   - Do bigger businesses love your product more than smaller ones? Are businesses in a certain industry more drawn to your product than those in other industries? Are your happiest customers more likely to have certain characteristics?

   - Until we have more experience with real customers, it’s better to keep our minds open and our positioning loose, and see what happens.

   - Investors are investing in what your company will be in the future; customers are buying a solution to a problem they have right now.

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Step 2. Form a Positioning Team

   - Positioning is a business strategy exercise—the person who owns the business strategy needs to fully support the positioning, or it’s unlikely to be adopted. In startups, the head is the CEO and/ or the founders. In larger companies, the head is usually the division or business unit leader and occasionally the head of marketing or head of product.

   - But marketing can’t“own” positioning, in the same way marketing can’t“own” the overall business strategy. It’s simply too broad and too important to live in one silo of the overall company.

   - Consider these outputs that all flow from positioning: Marketing: messaging, audience targeting and campaign development Sales and business development: target customer segmentation and account strategy Customer success: onboarding and account expansion strategy Product and development: roadmaps and prioritization

Step 3. Align Your Positioning Vocabulary and Let Go of Your Positioning Baggage

   - At a minimum, the team needs to be on the same page regarding: What positioning means and why it is important Which components make up a position and how we define each of those How market maturity and competitive landscape impact the style of positioning you choose for a product

   - The goal of the 10-Step Positioning Process is to find the best position for a product, one that puts the product in the context of a market where it can easily win because the product has obvious benefits over alternatives.

   - The reality is that most products can be many things to many types of buyers.

   - Customers don’t have the same baggage—they know nothing about the history of the product when they first encounter it.

   - founders and long-time employees might view the product from the full perspective of its history, while newer employees do not.

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Step 4. List Your True Competitive Alternatives

   - Understand what a customer might replace you with in order to understand how they categorize your solution.

   - For many new products, the answer is“use a pen and paper” or“hire an intern to do it.” Some of the startups I work with have ideas so innovative that customers don’t even understand that they have a problem—if the product didn’t exist, they would simply“do nothing.”

   - Focus on your best customers and what they would identify as alternative solutions.

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Step 5. Isolate Your Unique Attributes or Features

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

   - 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.

   - 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.

   - 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.

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Step 6. Map the Attributes to Value “Themes”

   - 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.”

   - Feature: Something your product does or has Benefit: What the feature enables for customers Value: How this feature maps to a goal the customer is trying to achieve 15-megapixel camera Sharp photo images Images can be zoomed in or printed in large format and still look sharp. All-metal construction A stronger frame that resists damage The frame lasts five times longer, allowing savings of $ 50,000 per year on frame replacements. One-click reports Fast, easy report generation Every part of the organization can make better decisions based on accurate, up-to-date metrics. 24-hour support Support that is always available Global operations have access to help across every time zone.

   - 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.”

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Step 7. Determine Who Cares a Lot

   - 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.

   - 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 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.

   - 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.

   - 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.

   - 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.

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

   - 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.

   - 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.

   - 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.

   - 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.

   - 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.

   - Create a New Game: Positioning to win a market you create

   - In marketing, the process of splitting up an existing market is called subsegmenting. A market can be subsegmented by industry(manufacturing vs. retail), by geographic region(North America vs. South America), company size and a myriad of other criteria.

   - The goal of the Big Fish, Small Pond style of positioning is to carve off a piece of the market where the rules are a little bit different—just enough to give your product an edge over the category leader.

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

   - 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.

   - Large category leaders will often acquire small companies to block a fast-growing competitor from gaining on them in a particular subsegment.

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

   - 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.

   - 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.

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

   - 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.

   - 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.

   - 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.

   - “The most successful efforts in category creation do not result from company executives creating an acronym at an offsite. Rather they are discovered from deeply understanding a narrow set of customers. These customers are often ‘freaks,’ extreme in their attitudes and behavior, forged by tectonic technological and societal shifts. The category then emerges when and if the freakish attitudes and behavior become mainstream. Category creation is hard, slow work, but if you are successful the rewards are huge.”

Step 9. Layer On a Trend (but Be Careful)

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

   - 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.

   - 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.

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Step 10. Capture Your Positioning so It Can Be Shared

   - 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

After Positioning: What Happens Next?

   - 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.”

   - 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.

   - Similarly, pricing reflects positioning and might need to be adjusted. There are price expectations in each market category, so getting your pricing in line with those will help reinforce that your product belongs there. For example, we raised the pricing for our“CRM for investment banks” because our investment banking customers didn’t expect us to be the same price as a general-purpose CRM.

   - I recommend checking in on your positioning every six months or when there has been a major event that could impact the competitive landscape or the way customers perceive and evaluate solutions.

   - Large competitors have the ability to reach a very large number of prospects in a short amount of time, through marketing spend, sales channels and partnerships. Credible competitors can quickly change prospects’ perceptions about what is possible for offerings in the space, which features matter most, what the expected pricing should be and more.

   - Some competitors have the ability to purchase an up-and-coming company in the space and give it the additional support capacity, partnerships and sales reach it previously lacked, making a once-small player suddenly very credible as a contender to lead a market.

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