If you're a baker, making bread, you're a baker. If you make the best bread in the world, you're not an artist, but if you bake the bread in the gallery, you're an artist. So the context makes the difference. - Marina Abramovic
Most products are exceptional only when we understand them within their best frame of reference. - pg 24
2 traps:
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. You probably weren't aware of it, but the minute you decided what your product was, you made a set of critical business decisions. These include:
- Target buyers and where you sell.
- Competitive alternatives
- Pricing and margin.
- Key product features and roadmap.
Trap 2: You carefully designed your products for a market, but that market has changed.
We can break down positioning into five components (plus an optional bonus component) that come together to define what we do, why we are special, which customers we can best serve and the market we intend to win. 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.
Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offering.
Declaring that your product exists in a market category triggers a set of powerful assumptions.
Your market category can work for you or against you. 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.
Market categories help customers use what they know to figure out what they don't.
Trends can help customers understand why a product is important right now. Every year, Pantone, inventors of the Pantone Color Matching System, selects a "color of the year." In 2019, it's "living coral" (or pink, for us regular folks). Companies then create pink clothing, lipstick and furniture to be on trend. If you create a pink couch, you are still in the couch business (your market category) but you used a trend (pink) to make it clear that your couch is cool in 2019.
Using a trend in positioning is optional but often desirable. Position your product in a market category that puts your offering's strengths in their best context, and then look for relevant trends in your industry that can help customers understand why they should consider this product right now.
The first step in the positioning exercise is to make a list of your best customers. They understood your product quickly and bought from quickly. They became raving fans, referred you to other companies and acted as a reference for you. They represent the perfect type of customer you want to buy from you (at least in the short term). Make a list of them. You will use this list as a reference point for the rest of the exercise.
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. Time for a test. In the early days of a company, when you are still learning about what customers love and hate about your offering, you need to get your product in front of a fairly wide set of potential customers. Test your offering on this diverse audience so you can see patterns emerge.
Think of your product as a fishing net. You have a theory that your net is good for catching grouper, but you haven't hashed with it yet so you aren't certain what you might catch. At first, you'll want to go where there are lots of different fish and see what you pull up. If you notice over time you're pulling in a lot of tuna, not grouper, you can move to the tuna spot and do the same amount of work to get a lot more fish. If you had positioned your tuna net as a grouper net in the beginning, you might never have figured out your best positioning. Positioning your net broadly as a "fish net" when you have little market experience is the best way to keep your options open until you have enough customer experience to start seeing patterns. 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. I've found this to be particularly true in technology startups that are keeping an eye on other startups in their space that are competing with them.