Positioning in Marketing and Sales

Key Concepts

What is Positioning?

• Positioning defines how a product is the best in delivering specific value to a well-defined set of customers.
• Common misconceptions include thinking positioning is the same as messaging, a tagline, or brand positioning.
• Positioning is the foundation for all marketing and sales activities.
• It’s about setting context so customers understand and care about the product.

Importance of Context

• Example: Double chocolate caramel muffin is perceived differently from cake due to context.
• Positioning changes assumptions about competitors, value, and customer expectations.

Common Mistakes in Positioning

Lack of Deliberate Positioning

• Companies often fail to think about positioning, assuming the product can only be positioned in one way.
• Example: A CEO designing a better email based on personal dissatisfaction without considering evolving market needs can lead to misalignment.
• Failure to deliberately position initially leads to confusion when repositioning becomes necessary.

Competing in Too Large of a Market

• Positioning in a very large market can be ineffective; it's better to dominate a smaller, underserved niche and expand from there.
• Example: A CRM company targeting investment banks first, then retail banks, and then financial services.

B2B vs. B2C Positioning

Differences

• In B2B, multiple stakeholders are often involved, and decisions are driven by rational value propositions (e.g., save or make money) and fear of making a poor choice.
• In B2C, decisions can be driven by personal preferences and emotional factors.

Fear as a Key Emotion in B2B

• Fear of making a poor choice, looking bad, or getting fired influences decisions.
• Incumbents benefit from being the safe choice (e.g., Salesforce).
• New entrants need to counteract this fear with a strong, clear positioning.

Effective Positioning Strategies

Finding Underserved Markets

• Successful tech companies often target an underserved sub-segment and dominate it before expanding.
• Example: Salesforce initially serving small businesses with no IT departments using a SaaS model.

Creating a Category

• Only 10% of companies create a new market category. Most find an underserved segment in an existing one.
• Creating a category involves defining new terms and educating customers about this new problem and solution.
• Example: Postman with the concept of the 'API-first world.'

Components of Positioning

Key Components

• Competitive Alternatives: What would customers use if your product didn't exist?
• Differentiated Capabilities: Features your product has that others don’t.
• Value Propositions: Why those features matter to customers.
• Target Market: Who cares a lot about the differentiated features?
• Message: Communicates the above elements clearly.

Mistakes

• Ignoring or misunderstanding competitors and not clearly communicating the unique value proposition.
• Assuming customers understand the value of features without explanation, especially with new or innovative products.

Evaluating Positioning

Signs of Weak Positioning

• Customers are confused about what the product is or compare it incorrectly to others (e.g., CRM vs. chat system confusion).
• Customers don’t see the value or understand why they would pay for the product.

Cross-Functional Team Required

• Positioning decisions should be made by a cross-functional team including marketing, sales, product, and executive leadership to ensure alignment.

Storytelling and Positioning

Effective Sales Storytelling

• Different from hero’s journey storytelling; must include competitors and alternative approaches to educating the customer.
• Helps the customer understand the whole market and why your product is the best choice.

Example: Postman

• Uses storytelling to explain the importance of an API platform and coined the term “API-first world.”

Academic vs. Real-World B2B Marketing

• Academic focus often on consumer goods, not addressing the complexity of B2B marketing.
• Real-world B2B decisions are driven by multiple stakeholders and the unique pressures they face.

Recommendations for Startups

• Engage in customer discovery to validate market needs and assumptions.
• Avoid building products without understanding if there is a significant and addressable market need.

Final Reflections on Success

• Success in positioning is achieving clarity where customers quickly grasp the value, fit, and differentiation of the product.
• Satisfaction comes from solving complex positioning challenges and seeing immediate positive feedback in sales activities.