#55- Obviously Awesome by April Dunford
Notes from the book on positioning
What is this book regarding?
How to nail Positioning
This book is for you if:
You’re the founder, CEO or an executive at a startup that needs prospects to quickly understand why your product is unique and important to shorten your sales cycles and grow revenue
You’re a marketer who wants to make it easier for your target customers to understand the strengths of your offerings so you can generate more leads
You’re a salesperson who needs to quickly get prospects to the aha moment where they understand what the product is all about and why they need it
You’re an executive at a mature business who has seen your growth flatline as your market gets crowded and new competitors nip at your heels
You sell products online and you need help connecting with customers who will love your distinctly amazing products
Notes
You’ve got a cool product, but nobody understands it. You think it’s simple, but customers don’t. They compare your products with those that are nothing like it.
At first you think this is a sales or marketing problem. If prospects don’t understand what your product is all about, it must be because they haven’t really heard you, or you’re not saying it clearly enough. But if that were true, then you would see additional marketing result in more sales, and your sales reps wouldn’t have to work so hard explaining what your product is and why anyone should care.
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. And it’s hard to blame the sales process when it takes several meetings for a customer to figure out what your product is, let alone whether or not they want to purchase it.
“How do you beat Bobby Fischer? You play him at any game but chess.” – Warren Buffet
Some folks think of positioning as messaging, and others think everything related to marketing is positioning. The first step to optimizing positioning is to really understand what it is. 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. Without that context, products are very difficult to understand, and the whole company suffers—not just the marketing and sales teams.
Often, you’re too close to your product to realize that the market doesn’t think about it the way you do.
Customers need to be able to easily understand what your product is, why it’s special and why it matters to them. When positioning is not working, it often looks like a marketing or sales problem; dig a bit below the surface and you can see that something else is going on.
Signs of weak positioning:
Your current customers love you, but new prospects can’t figure out what you’re selling
Your company has long sales cycles and low close rates, and you’re losing out to the competition
You have high customer churn
You’re under price pressure
Positioning as context
Context enables people to figure out what’s important. Positioning products is a lot like context setting in the opening of a movie.
Context can completely transform the way we think about a product. Example: Joshua Bell experiment. Read this, and this.
Even a world-class product, poorly positioned, can fail.
We rely on context to make sense of a world that is full of street performers and concert hall musicians, and full of millions of products of all shapes and sizes. Context allows us to make thousands of little decisions about what we should pay attention to and what we can simply ignore. Without context to guide us, we would be overwhelmed, maybe even paralyzed by choice.
When we lack context for a product, the easiest way to create one is by starting with something we already know. When you saw a hoverboard, you may have thought, “Hey, that kid is riding a thing that looks like a skateboard, but he’s not pushing with his foot.” Or you saw an iPad and thought, “That’s like a giant cell phone or a little monitor without a keyboard.”
For people who build and sell things, the frame of reference that a potential customer chooses can make or break the business. Coke is much more than just fizzy water in the same way that a concert violinist is more than just a street performer with a fiddle.
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.
Traps that product creators fall into:
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
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.
We generally fail to consider other—potentially better—ways to position our products because we simply aren’t positioning them deliberately.
How you position your offerings is the underpinning of your entire business strategy and can mean the difference between success and failure.
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
Five (Plus One) Components of Effective Positioning:
Competitive alternatives: What customers would do if your solution didn’t exist
Unique attributes: Your secret sauce vs what alternatives lack
Value (and proof): Why should customers care about your secret sauce (aka your value)
Target market characteristics: Your target market is customers who buy quickly, don’t ask for discounts, and tell their friends about your offering
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.” – Jeroen de Flander
10-Step Positioning Process
#1- Understand the Customers Who Love Your Product
Your best-fit customers hold the key to understanding what your product is
You can increase your growth by concentrating on your best-fit customers
The first step in the positioning exercise is to make a short list of your best customers
What if I don’t have any super-happy customers yet?
This positioning process assumes you have enough happy customers to see a pattern in who loves your product and why. Until you can see that, you will want to hold off on tightening up your positioning.
But I want to start with my product, not my customers! Your first instinct might be to consider your product and its special features and position around them. Understandable! That’s the part you understand—and possibly enjoy—the most. But that’s a trap. If we start by laying out our unique features, we are unconsciously comparing ourselves to a set of competitors. The trouble is, we frequently see our competitors much differently than customers see them.
Shouldn’t we position our product for customers the same way we position it for investors?
Absolutely not! Investors are investing in what your company will be in the future; customers are buying a solution to a problem they have right now.
Am I positioning my product, my company or both?
Startups generally start with just a single product. If that product is successful, you may add another at some point in the future
In the early days of a company with a single product, positioning the product and the company as the same thing is the easiest path to establishing a brand in the minds of customers, because there are simply fewer things to remember. It makes sense for single-product companies to have the same name, brand and positioning for the company and the product, simply so customers don’t have to figure out two things versus a single thing.
Companies that have multiple products in the market need to think about product positioning and company positioning as separate but highly linked things
In case of multi-product companies, if most customers first encounter your company through the purchase of a particular product, I would position that single product first.
#2- Form a positioning team
A positioning process works best when it’s a team effort, ideally from across different functions within the company. Each team, from sales to marketing to customer success, can bring a unique point of view relative to how customers perceive and experience the product.
The person responsible for generating business of a particular product should be seen as the driver of positioning effort. In startups, it is usually the founder or CEO. In larger companies, the head is usually the division or business unit leader and occasionally the head of marketing or head of product.
A positioning exercise that is not a team effort driven by the business leader will fail.
Positioning impacts every group in the organization. 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
You want engagement from every group because you need buy-in from every group. But bring in an experienced facilitator to guide the positioning discussion. Having someone from outside the company facilitate the discussion will make the exercise much more productive and balanced.
#3- Align Your Positioning Vocabulary and Let Go of Your Positioning Baggage
In order to consider possible new ways to think about a product, we have to consciously set aside our old ways of thinking about it. To do that, we need a common positioning vocabulary.
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
Accept the reality that most products can be many things to many types of buyers.
Market confusion starts with our disconnect between understanding the product as product creators, and understanding the product as customers first perceive it.
#4- List Your True Competitive Alternatives
Customers don’t always see competitors the same way we do, and their opinion is the only one that matters for positioning.
It’s natural for product creators to start by looking at the product and its features to determine the best market, and then build a context around that. As product people, it’s often the place where we
feel most comfortable. After all, who knows more about our solution than us? But you need to look at those features from a customer’s point of view.
The features of our product and the value they provide are only unique, interesting and valuable when a customer perceives them in relation to alternatives.
Understanding the customer’s problem wasn’t enough—to really understand how they perceived our strengths and weaknesses, we needed to understand the alternatives to which they compared us. Customers always group solutions in categories, but talking to them about problems doesn’t necessarily reveal those categories.
Ask customers where will they go to if your product ceases to exist tomorrow. Understand what a customer might replace you with in order to understand how they categorize your solution.
Focus on your best customers and what they would identify as alternative solutions.
#5- Isolate Your Unique Attributes or Features
Strong positioning is centered on what a product does best. Once you have a list of competitive alternatives, the next step is to isolate what makes you different and better than those alternatives.
Your opinion of your own strengths is irrelevant without proof.
“We don’t know who discovered water, but we’re certain it wasn’t a fish.” – John Culkin
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
Retention attributes are features that aren’t as important when a customer is making an initial purchase decision, but are very important when it comes time to renew
#6- Map the Attributes to Value “Themes”
Attributes or features are a starting point, but what customers care about is what those features can do for them.
Features enable benefits, which can be translated into value in unique customer terms.
#7- Determine Who Cares a Lot
Once you have a good understanding of the value that your product delivers versus other alternatives, you can look at which customers really care a lot about that value.
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.
Marketers call this step a “segmentation” exercise. If there’s a marketing concept more widely misunderstood than positioning, it’s segmentation.
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
Best-fit customers are easiest to sell to and retain.
Think about your best customers. Everything about doing business with them is different. They understood your product immediately and couldn’t wait to get their hands on it. 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 looove it. Marketing and selling to these folks doesn’t take much effort once you’ve found them—they are “buying” as much as you are “selling.”
If you have limited marketing and sales resources, it makes sense to spend them on prospects that are most like your best-fit customers, provided there are enough of them to meet your sales objectives.
Target as narrowly as you can to meet your near-term sales objectives. You can broaden the targets later.
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. Similarly, your target customers will also evolve over time. Great positioning resonates with your best-fit customers right now, and will evolve with them over time.
#8- Find a Market Frame of Reference That Puts Your Strengths at the Center and Determine How to Position in It
You now have a good handle on your ideal prospects, your product’s unique attributes and the value those attributes can deliver. The next step is to pick a market frame of reference that makes your value obvious to the segments who care the most about that value.
How to choose market frame of reference?
Use abundant reasoning
Examine adjacent and growing markets
Ask your customers, sometimes
There are different approaches for isolating, targeting and winning a market—and certain styles work better for some than others:
Head to Head: Positioning to win an existing market. You are trying to be market leader in an existing category. Play it when you are a leader. It is seldom easy to beat Coca Cola in fizzy drinks. Here, you wont have to convince the customers the a market exists. If you are bootstrapping, this is a very expensive strategy. There will be multiple competitors and it will be a fierce battle
Big Fish, Small Pond: Positioning to win a subsegment of an existing market. Own a niche. Just because a category leader exists, doesn’t mean you cant operate in the industry. Carve out a niche where rules are a bit different, and try to own it. It may be a smaller play but you will have the advantage of an established market without stiff competition. Best category for word of mouth. Start narrow, go wide later. You will better address customer problems than the market leader if you start narrow
Create a New Game: Positioning to win a market you create. You create a new market and own it, before attempting to create demand and sell solution. Easier said than done. Use when all other options are exhausted. Requires enabling technology, ecosystem support. Can you think about UPI but in 2000s without smartphones and internet? You have to be distinctly different and better than others
#9- Layer On a Trend (but Be Careful)
Once you have determined your market context, you can start to think about how you can layer a trend on top of your positioning to help potential customers understand why your offering is important to them right now. This step is optional but potentially really powerful—if you go about it carefully.
#10- Capture Your Positioning so It Can Be Shared
Positioning on its own isn’t useful to a company. Once you have worked through your positioning, you need to share it across the organization. Positioning needs to have company buy-in so it can be used to inform branding, marketing campaigns, sales strategy, product decisions and customer-success strategy.
What happens next? Translate Your Positioning into a Sales Story
Positioning is embodied in the way your salespeople frame the product, particularly on a first sales call. Work on defining a story of how a salesperson would pitch the product.
The story then moves to describing how customers are attempting to solve the problem today and where the current solutions fall short.
The next stage of the story is “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.
The sales story goes on to introduce the product or company and position it in the relevant market category.
Next, the story naturally flows into talking about each of the value themes with a bit more detail into how the solution enables that value.
A completed sales deck also adds some information, such as handling common objections, a case study or list of current customers.
The story wraps up with a discussion of whatever you would like the prospect to do next.
You need to be tracking your positioning over time:
A sudden change in the competitive landscape could signal a need to adjust your positioning
Other outside forces can also change your market
New technology can suddenly change what is possible in a market. Once customers understand it, purchase criteria can shift very quickly.
The attitudes and preferences of customers can shift over time.
Conclusion
Any product can be positioned in multiple markets
Great positioning rarely comes by default
Understanding what your best customers see as true alternatives to your solution will lead you to your differentiators
Position yourself in a market that makes your strengths obvious to the folks you want to sell to
Use trends to make your product more interesting to customers right now, but be very cautious
This is a fantastic read, and I highly recommend it to all founders, salespersons, managers, and creators. A pdf version of these notes can be accessed here.
Read other notes I made
#7- Actionable Book Learnings - Company of One
#46- Rethinking Competitive Advantage
#47- 100 Key Learnings from Amazon's Letters to Shareholders