so you can't tell just using you know what I would call the grandmother test you know would your grandmother understand this well unless you're selling a grandmothers it doesn't matter if I'm selling a specialized thing to specialized buyers it just needs to resonate with them it's okay if it doesn't resonate with your grandar the most common way that tech companies successfully position is they find an underserved Subs segment of the market and then they attempt to dominate that Subs segment and then push out from there what are the most interesting mistakes you've seen people make
when it comes to positioning oh so many things the first mistake [Music] is I want to start with the basics what is positioning it's interesting I so I'm a positioning expert and when I started out as a consultant being a positioning expert the worst part about that is nobody really knows what positioning is they think they do so people will say positioning that's just like messaging isn't it I'm like actually no it's not quite that or they'll say positioning is like a tagline we're coming up with a tagline and I'm like oh gosh no there's
a lot of things that we do that aren't tagline related my personal pet peeve is when people talk about brand positioning that drives me nuts there is positioning and there's branding those two things are actually really separate so most of the things that we confuse with position positioning are actually things we do with positioning once we're done with it but positioning is an input so if you 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 so my definition of
positioning goes like this positioning defines how your product is the best in the world at delivering something some value that a well-defined set of customers cares a lot about now that's a bit of a mouthful a lot of the folks that I work with are not marketing people they're CEOs of tech companies so they don't have a background in this stuff so I think the best way to think about it is it's like context setting for products it's the context I position my product in such that customers kind of have an idea like what is
this thing what's it all about why should I care it's a starting point for a conversation with a customer can you give me an example when one of the things that really stuck out to me I was always trying to explain to tech company CEOs with a tech company example and whenever I did that the tech company CEOs would say well that's a database that you know and we're not like a database so I thought I need some examples that have nothing to do with technology they're really simple so I was trying to come up
with example and I was on my way to work and I went to Tim Horton's coffee shop in Canada so I'm standing in line and the guy in front of me is ordering breakfast it's 8:00 a.m. and he he orders this thing which is a double chocolate salted caramel muffin and I was like that is some genius marketing stuff right there so I've got a piece of cake it is double chocolate caramel cake but if I put it in the muffin format and I call it a muffin everything about that is different the whole context
around it is different it is socially acceptable to to order double chocolate caramel whatever if you say it's a muffin because I'm now comparing it differently so if I said it was cake what's cake cake competes with other things that are like dessert it competes with ice cream and tasu and other things you would order for dessert what does cake cost well if in a restaurant it's $10 $15 um where do I get it I might go to a bakery but I get it at a restaurant too when I'm talking about a muffin well muffin's
totally different a muffin's breakfast it competes with a bagel and a donut what do I charge for a muffin I charge a dollar $2 for a muffin the whole context around it is different the product however is the same like that thing that you're eating is a piece of cake whether whether it's in cake form or muffin form so I can choose to position it as a muffin it's the same product but the assumptions about that the competitors are different your value is different the assumptions that customers have about that product are different because I've
placed it in a different context what are the most common misperceptions about positioning that companies have I would say the most companies just don't think about positioning at all in the vast majority of cases the companies that I work with the positioning feels obvious It Feels Like You couldn't possibly position it as anything else so it started like this the founder woke up one morning and said you know what sucks email sucks we're going to make way better email it's going to be fantastic and it's going to fix all these things I hate about email
and then they launch it and customers say I like this part I don't like this part they change it it evolves over time maybe the whole Market evolves if we fast forward two years from now the founder and everybody inside of the company still says email we're building this email thing but maybe that product actually looks more like chat because that's kind of like email too and so we'll start having this disconnect where the customer sees it and the company is saying well this is email look at our amazing email and the customer's like I
don't know that kind of feels like chat you're calling an email I feel like maybe it's chat and now I'm confused and I don't really know what this thing is anymore when the company figures out they have a problem like oh maybe this is an email maybe we should reposition it nobody knows what to do at that point because they never deliberately positioned it or did a thing to decide it was email in the first first place it was just obvious of course it's email that was our idea that's what we're going to do product
positioning is basically shaping the environment in the consumer's Mind by which they draw comparisons and know what to expect that's a good way to describe it it's a bit like the opening scene of a movie so you walk into the movie let's say you're going to the movie theater walk into the movie theater you know a little bit about it you bought a ticket but the job of the opening scene in the movie is to set context for the movie because you have these big questions where are we what time frame is this who are
these characters what is the vibe of this whole movie you need to get these big questions answered before you can settle in and pay attention to the details of the story um so if we take I usually use Apocalypse Now is the example of a great opening scene the opening scene of Apocalypse Now starts with a shot of the beach it's palm trees it's all nice it's lovely you walk in you might think oh you know I know it's called apocalypse now but maybe it's not apocalypse right now maybe it's apocalypse 30 minutes from now
so you walk in but suddenly this thing changes like the music gets a little bit more intense we see this thing it looks like smoke dust and you're like oh it's actually smoke helicopters go goes by and boom the beach is on fire and all of a sudden we're in the middle of the Vietnam War and then the scene changes and it's Martin Sheen he's in his hotel room he's drinking smoking he's clearly in distress he walks over the window he peeks out the blinds and we get the first line of dialogue which is actually
his thoughts of the movie he looks out and he says Saigon I'm still only in Saigon every time I think I'm G to wake up back in the jungle so here we are we're 3 minutes into a a three and a half hour movie and we know a lot where are we we're in the middle of the Vietnam War specifically we're in Saigon our lead character has been there before it didn't go so well he has PTSD this movie is not going to be funny it's going to be kind of intense now I can settle
in and pay attention to the details of the story positioning works the same way if I walked up in Shark Tank or I forget what we call it here in Canada what's it called Dragon's Den so let's say we have weirdo Dragon's Den and I'm not allowed to give you my whole pitch for something I'm just going to talk about the market category so the category that the product is positioned in so I walk out and I say I've got this amazing thing it's revolutionary Next Generation thing but it's CR M customer relationship management if
you're tech people and you know what a CRM is you will make a whole bunch of assumptions about that product just because I called it a CRM so you'll say well you must compete with Salesforce they're the absolute leader in that market the gorilla in that market so I will just assume that you compete there I will make assumptions about what that product does I will assume that it track tracks deals across a pipeline I will assume who the buyer of that is I'll assume it's the head of sales vice president of sales I'll even
make an assumption about the pricing even though I said nothing about what that thing is or who the expected customers are of that thing but if you assume that Salesforce is my big competitor because they're the absolute leader in that space I'm not charging more for my CRM than Salesforce is so this is how this works what it does is I positioned that product in a market category that market category has set off a set of assumptions in the customer's mind about that product if I do this well it sets off a set of assumptions
about that product that are true and that's great now I've saved marketing and sales a whole lot of time energy effort I don't have to tell you exactly who my competitors are it's assumed I don't have to list every single feature a lot of that stuff is considered table stakes in the category but it works the same way if I do a terrible job of it so if I do a terrible job of it I position position my product in a market category such that it sets off a set of assumptions about my product that
are not true now marketing and sales has their work cut out for them on doing this damage that your positioning is already done where they're like no no no we don't do that no no no I know you think that no no no it's not that it's just other thing so if I'm trying to compete with Salesforce should I do that in a way where I have a product it's it's probably inferior because I'm a startup right uh and so we can't go toe-to-toe on every every aspect how do we position that in a way
to a consumer which in this case would be a business a business that's a buyer the most common way that tech companies successfully position is they find an underserved Subs segment of the market and then they attempt to dominate that Subs segment and then push out from there so I can give you an example I worked at a company called Jan systems and at the time this was quite a while ago so seil or Salesforce was a small company at that point and only selling to the very low end of the market but the gorilla
in that space at the time was a big big company in Silicon Valley called seil and so they were fantastic company two billion Revenue fastest company to ever get to a billion Revenue in the history of Silicon Valley amazing success story they were positioned as Enterprise CRM they were the absolute Kings of Enterprise CRM we had a product that was also Enterprise CRM so we would position ourselves as Enterprise CRM and so not surprisingly we would get a meeting with a customer and the customer would say okay so your Enterprise CRM their Enterprise CRM how
are you better and the answer that question was we simply weren't better than them they had we had you know we had 2 million Revenue they had two billion Revenue they had 400 customers we had six they had thousands of employees I was employeed 26 or something I mean we were just no comparison at all however we had a feature that they could not copy that was really interesting and we thought it would be really valuable to customers we didn't really understand the value of it for customers but we always showed it in meetings so
we'd go in we show the thing and it was this neat feature and we say hey here's the feature it's really great and customers would look at us and say hey that looks cool what do we do with that and we'd say any anything you want and then the customer would say okay well that's confusing what else you got and then we'd say well you know really cheap if you want us to be really cheap because we're desperate to close business how we got out of that mess and eventually landed on positioning that was really
good for us is we uh we sold a deal to an investment bank and it was kind of by accident we hired a sales rep that had a relationship with somebody very senior at the Investment Bank that we did a good pitch in there we showed them our magical feature and what that customer taught us is that feature was actually very very valuable to investment Banks and the way that they wanted to manage relationships inside the bank once we figured that out then it was like okay we actually have a feature that's really really valuable
for a sub segment of this big market and we knew at the time Cel couldn't copy us on that feature so we narrowed down the positioning and instead of saying we were Enterprise CRM we were CRM for investment Banks and the great thing about that is that we never got into a real head-to-head against those guys again so we would come in and say hey we're CRM for investment Banks and the customer would say oh well wait doesn't seel do that like don't you guys compete with seel and we say ah seel we love those
guys so big so smart so many people they're like the world's greatest general purpose CRM for like call centers and manufacturing plants and I don't know what but not you Wolf of Wall Street you need something special let me show you this thing and we would show them the thing and talk about the thing and so our plan was to absolutely dominate that space and then once we had dominated that we would be building the product and making the product more mature and our dominance and Investment Banking was going to allow us to get into
retail banking so we were going to expand the market from there and then if we were successful in retail banking that would allow us to get into insurance at that point we would reposition ourselves as CRM for financial services if we were successful there then we'd be big enough and successful enough to challenge the market leader and take over and be Enterprise CRM which was still the long-term goal so is this the bo shrinking your target market or your ecosystem in a way in which you're going to compete to one where you have an advantage
or an edge over somebody else and then expanding from there often in technology companies that's exactly what we're doing that seems yeah that seems like very intuitive why don't intuitive um there's a lot of reasons so the biggest one is people get very worried about what we call the addressable market so if I was trying to fund raise and went to an investor and said look I want to build a thing and it's just CRM for investment Banks the investor would say well how many investment banks are there in the world I need you to
be a billion dollar business that's not a billion dollars business I don't know how you're going to do that uh so they for a investor you need to talk about the longterm story where do we want to be in 10 years where you know how do we what is our path to getting to be a billion dollars and if I look at that example I just gave you we had that long-term Vision we were going to be a billion dollar company eventually but for most companies when you start I'm not trying to do a billion
dollars this year I'm trying to do a million I'm trying to close five deals I'm trying to close 10 deals and in order to close any business at all you have to be the best at something the customer is not going to come in and say you know there's these three options and I'll pick this one that's just okay no the customer says they want the best thing for their particular things so great positioning is all about defining where do you win like where are you the best in the world and even if that market
is very small at the beginning you need to have a pathway to get to this bigger market so I'll win here then I'll win here then I'll win here and the market will expand so the vast majority of companies that we know did exactly that like Salesforce is actually a great example when they started out the Enterprise part of CRM was absolutely dominated by a big competitor so it didn't make sense for them to enter that market there instead they entered the market at the very bottom so they were selling to small medium businesses and
they Secret Sauce so the thing they could do better than anyone else is they were one of the world's first SAS businesses so it was hosted in the cloud the value to the customer was that you could get CRM just like the big companies had even if you didn't have an IT department to babysit it so their big slogan of no software was all about that they were selling to Tiny companies that had no it Department that could never touch CRM and there was no competition there so it was very easy for them to go
in and I was working at seil at the time and when they started down at the bottom we were like we don't care about that market we're not going to chase them down there we sell great big million-dollar Enterprise deals never read The inator Dilemma I guess we had no interest in that our goal was to just was to just sit in the rare Air at the very top of the stack and just sell all of that and that was it so of course what seil did was they started at the bottom and then crawled
their way up that's fasc fting so basically to compete from a staffing point of view from a VC funding point of view you you sort of say our total Market is huge but then on a practical basis to develop a product right you have to start small in in a lend and expand sort of fashion generally if you look at most the vast majority of successful companies they've started by dominating a market that was too small for the market leader to care about mhm they dominated that market and then what they did was they proceeded
to push the boundaries of that market and creep closer and closer and closer to whoever the market leader is what's the difference between B2B positioning and b2c like businessto business positioning versus business to Consumer positioning there's a lot of things that are different kind of if we think about the core of good positioning the core of good positioning is thinking about what your differentiated value is meaning the value you can deliver for a customer that no one else can and then great positioning puts that in a context that a customer can understand it if we
think about value in B2B it's very different than value in consumer products value can be all kinds of things in consumer products I you know I might buy shoes because I just like the color green man or I'm buying consumer things because I think it makes me look rich or it's going to me a date or there's a lot of different things that are valuable in consumer in busines to business it's very different in businesses to business typically there isn't one person buying typically there's a a group of people the average B2B deal there's 5
to 11 stakeholders in the deal so if I'm buying accounting software my boss comes to me and says hey I don't like the accounting software we have right now you go buy us some that's terrify Ying my neck is on the line if I make a bad choice here I look bad in front of my boss the end users don't like it maybe the software screws up I get passed over from promotion I might actually get fired so there's stakes in a B2B purchase decision the way we think about value is also really different we
I can't go to my boss and say I just like the vibe of this software you know I have to make a business case to my boss for why we should buy it and in businesses I mean we kind of only have two things we're either helping you make money or we're helping you save money and that's about it MH so you know I might make a very irrational decision about a product and often we do make very irrational decisions even in B2B about a product but I can't say that to my boss right I
still have to go to my boss and say Here's why we picked it here's the list of reasons there needs to be some justification that's exactly it it's explainable to somebody else exactly so we think a lot about you know in in consumer consumer marketers talk a lot about emotion invoking emotion in B2B the granddaddy of emotions is fear fear making a poor choice fear looking bad in front of my boss fear getting fired like fear of making a mistake drives a lot of decisions in B to be this is why incumbents like whoever's the
leader in the market has such an advantage in B2B technology because it is the safe decision nobody is going to get fired for picking Salesforce at this point they have double the market share of their closest competitor you can go to your boss and say look I looked at all the other options but I picked Salesforce because everybody uses Salesforce they have a big ecosystem they have the best this the best that they're the biggest it's the safe choice to make if you're trying to compete against Salesforce that's really hard gravity to pull against it's
very risky to pick you if the choice is you versus Salesforce or an established market leader when you think about consumer positioning I'm really interested and I I know this isn't your sort of area of expertise but when you walk into like a Louis Vuitton or Herz how do you think about positioning such that they can charge I don't know 30 $40,000 for a34 $40,000 is the point right I'm not buying that bag because I think it's $30,000 better than a bag that costs 20 bucks although it probably is finely crafted and all that sort
of things a lot of times I think luxury goods are really about a a signal to the market it's like I'm a rich successful person um that has made enough money that I can carry a Louis vuon bag or wear a Rolex watch or whatever luxury things are it's outside of my wheelhouse but you know again when we look at consumer stuff value comes in all sorts of forms like we buy things in very rational ways in consumer products um we're we're also IR rational in B2B too but most that irrationality is around fear it's
like I just don't want to make a bad choice here and look bad in front of my boss or do something that the companies all mad at me about later the thing we have in B2B that's actually a real problem is it's so scary to purchase something in B2B that 50 to 70% of the time a deal that gets started actually ends in no decision and the no decision isn't they they voted to stay with the current product that they have it's usually no decision because everything looked the same I couldn't confidently make a decision
that I was sure I wasn't going to get in trouble for so it's easier to just go back to your boss and say you know what now's not a good time let's buy the accounting package next year you know we don't want we don't need to get into this now and the person who's been tasked with making that decision is just crossing their fingers that they don't have to be on the hook to make the decision next year when the decision comes up again like okay let's go and look again they just don't want to
be the person that has to stick their neck out to advocate for something which is totally different from how we buy a pack of gum or buy fizzy water at the corner store or buy a purse the downside there is really small and at work the Downs side's huge and the UPS's like nothing right so if you advocate for a different product that's outside of standard best practices or standard industry standard then if you're successful everybody forgets that you advocated for it but if it fails mean cases exactly in rare cases you'll see Senior Executives
at companies where their role is to change things so their role is transformation in some way Innovation transformation or a digital transformation you see a lot of companies right now that have been tasked by the CEO were there are teams that have been tasked by the CEO to figure this AI thing out and make sure we're not falling behind yeah in those cases the person driving that program if it is successful is going to get a promotion they're going to get a raise they you know it's going to look really good on them if they
can successfully do it if it's not success uccessful then they're a bum would you say the biggest mistake then that you see especially with software products is competing and positioning in too big of a market that's one of the things I think a lot of times if you look at the positioning that the company has the biggest mistake is not deliberately positioning I think a lot of companies start looking at their product in isolation almost like there are no competitors you see it a a lot in the way companies do sales pitches like they'll walk
in and they'll give this sales pitch they'll they'll talk about the product we have this great feature that great feature this great feature it's amazing you should buy us but the buyer on the other side of that conversation they're terrified of making a bad choice and they're sitting there going well that's all great but I just had three other sales calls with your competitors some of that stuff sounds the same and so we walk into these situations as vendors in enal thinking that the answer the question we're trying to answer is why pick us but
the real question we have to answer is why pick us over the other guys and I think most companies don't really wrestle with that they don't sit down put themselves in the shoes of a buyer recognize how hard it is to make a purchase decision and think like how do we position versus everybody else well it's really easy to go with the incumbent the largest and then you have to basically get people out of that default some exactly exactly that's fascinating can you tell me about a time when repositioning a product failed and what happened
yeah so I worked at a company where uh we were building a thing the original conception of this thing was that it was a database but it was a really fancy database that could do a certain kind of query really really really fast it was originally developed for bank and there were a set of queries that the bank did that were so difficult to process that they would run them on Friday and the query took all weekend to get the answer back so you're asking the DAT of this question and it took three days to
get the answer back so these folks couple Super Genius database guys came up with this database fix that problem and it could run that query in seconds so it's amazing aming technology fantastic they got patents on it nobody's seen a database like this before really really in Innovative so the original conception of this thing was that it was a database uh I joined as the head of marketing and we were having a terrible time selling the positioning was terrible like nobody wanted a new database there's an absolute Giant in that market they're called Oracle everybody's
standard on Oracle everybody gets certified on Oracle don't want to have multiple database solutions to do something so we would come in and say we've got this Nifty new database and the customers would say well that's you know we're Oracle shop like we're not married to Oracle we don't think Oracle is the best thing but we can't bring in another platform we eventually repositioned it as a data warehouse which is a specific purpose-built kind of database for doing analytics which is exactly what we're doing when we're doing this big query so we did that repositioning
and it was much much better much better better first call was better much better than we were doing before the problem was when we looked at we had an assumption that if you had these queries that took three days you would want to be able to do them in 10 seconds versus 3 days and it turned out that assumption was wrong so when we went to the other Banks and said hey you're doing this thing and it it takes three days and you could use this thing and it would take 3 seconds and they're like
it's okay nothing's nobody's really doing anything over the weekend anyway we don't need the answer right away so then we had this question well who needs the answer right away and we had never asked ourselves that question like our whole value proposition is speed doing this query fast it turned out the only customers that needed the answer right away were customers that were doing the query be for customer service so their customer calls in they're on the phone and they're like hey I need to know this thing well I don't want to wait 3 days
to get the answer they want to do it in seconds and then we looked at the universe of companies that had data of a scale where our thing was appropriate and needed this query answered to do customer service and there was literally 10 companies on the planet and that was it so the addressable Market was so small that it wasn't a viable business so we had essentially built a product that nobody wanted it was neat it was really Innovative it was really cool but there was no market for it didn't solve a problem that anybody
really had so if you're a startup you have limited resources and how do you go about identifying those pain points then to better position your product I mean the idea behind the famous book on this is uh Eric Reese Lean Startup and the the way the Lean Startup describes this is you should be out doing something called customer Discovery so before you write anything you should be out interviewing customer customers or potential customers and validating the assumptions that you have about this Market is this a thing that people would pay for how many how much
would you pay for it are there a big enough group of people that have this pain to solve it and in a perfect world that's what we would all be doing but often products just don't happen that way like often products you know like this this particular company they had built it custom they had done the deal with the bank in such a way that they owned the IP it seemed like a good idea they had a bunch of assumptions baked in there they never tested those assumptions until later but it was good enough to
go raise money they just went and raised some money and well okay now we're going we're doing a thing so I don't think a lot of startups do enough customer Discovery at the beginning to make sure that they've got a thing that people really want the second thing is that even if you do do customer Discovery it's really hard it's really difficult customers will sometimes tell you things that aren't true um or they'll say yes yes we would buy that and we would buy it for this much but by the time you've actually built the
thing and you have a prototype of the thing you get it in customers hands of like actually there's a different way to do this and we decided to do it this different way or there's you know that customers have lots of options so startups are very hard because we're we're dealing with uncertainty we're dealing with a certain amount of assumptions our assumptions may prove to be wrong and we have to be able to move and pivot and look for other things and sometimes our first crack it it isn't going to work then we're going to
have to go to the draw back to the drawing board and kind of invent something else and see if that works how do you position your product on a page a lot of B2B starts with a sales rep or somebody looking at a page for a product how do you position that product within you have probably I don't know 10 seconds to get somebody's attention yeah 10 seconds to get somebody's attention so the way I think about positioning is this way um I like to position I like to break positioning up into a set of
components so the component pieces of positioning are competitive Alternatives so if you didn't exist what would a customer do and then we need to understand what makes us different which is our differentiated capabilities like what do we got that the Alternatives don't have thing that we really need to understand is why those features matter so what is the value that those features can deliver for a business and you mean the features else you have that nobody else that no one else has so that's our differentiated value it says look we can do this for your
business and no one else can do it and then the next thing we have to understand is well who cares a lot about that because just because we have that thing if only three people on the planet care about that that's not a viable business so we need to understand that so what is it what are the characteristics of a Target company that make them really really care a lot about the thing that only we can do once we have all of that then we need to build messaging around that so if we think about
typical homepage of a product it needs to communicate what is the value that we can deliver that no one else can and is this for me me as the browser the person that's there so I need to communicate who's this for why is it different why is it better and that's really hard to do on one page you don't have a lot of copy to do that you don't have a lot of ways to do that but that's what we really have to focus on the biggest mistake I see technology companies making is they're so
certain that the that their features valuable and people will just understand what the value of those features are they're talking about the features but they're not talking about why the features matter so they're they're talking you they're not talking about the benefit exactly so if I use the example of the CRM company I was talking about earlier we had a feature we just assumed that customers would look at that feature and know what the value was but they didn't they didn't and so we all we did was talk about the feature we're like look you
can model relationships this way and they were like but why why do I actually want to do that and what's that's what's that good for we're like what's good for anything you want to do with it like you figure it out and I think in technology companies we get we're very technical people we know a lot about technology we get so close to it we just assume that the customer can make the translation from feature to Value but a lot of times they can't and in particularly with something that's really Innovative really new they've never
seen it before we're going to have to help them understand why those features are important if we think about a lot of consumer Tech we've been trained how to do this like if I tell you I've got a phone on my camera and it's 2,000 megapixels you know 2,000 megapixels is way better than 100 megapixels you've been trained we know that but the first time anybody ever talked to you about megapixels you had no idea what a megapixel even was companies had to teach you why that was important it's interesting because that's sort of gone
away at this Point like nobody's asking how many megapixels are in their phone camera at one point it was like big differentiator but that's a good that's a good um sort of segue into my next question which is how has the digital transformation over the last 25 30 years changed positioning I think the fundamentals of positioning haven't changed at all is is my opinion if you read the original book on positioning was called positioning the battle for your mind by these guys Reas and trout they came up with the concept they published a book in
1982 and if you read that book the first chapter talks about why do we have to worry about positioning why is positioning important and they talked about how it's important because previous to that in any given Market category there were only a handful of products so consumers just made a choice between the two or three choices that they had but it wasn't all that important for companies to really differentiate between those choices but in 1982 oh my gosh we have so many choices now positioning is really important because the customer has thousands of choices hundreds
of choices now if we look at the difference between 1982 to now that has just exploded like I think it's much more important now to really establish that position it's much harder now to stand out in a world where we're exposed to millions of advertising messages a day like think about digital stuff I am constantly bombarded with messages from companies I cannot avoid it it's Millions a day compared to 1982 so in order for customers to really stick out sorry in order for companies to really stand out in a market that is so crowded and
so overwhelmed with messages from Brands we're going to have to get really SU syn on what is this thing what is the value of this thing who is it for how is it different from the other things in the market and we're going to have to be so clear about that to break out from the noise and why you should trust us because if we're a small company we' got like five employees and we're competing with Salesforce but we have one particular feature that they don't have and we have our our sort of positioning in
our niche market right well now there's still a brand issue because it's like nobody's ever heard of you a lot of this stuff so we think about so if I go back to that example of that CRM company I was in the great thing about that was we managed to establish ourself in this little bubble of investment banking and once we had done two customers in invest Investment Banking we were the kings of investment banking with only two customers because we could walk in and say well you know Goldman Sachs and Marl Lynch what do
they got they got a bunch of call centers and a bunch of manufacturing like and so we could put a circle around it and kind of make like the rest of the market doesn't matter to you investment banker like you don't want the world's greatest general purpose CRM you want the world's greatest CRM for people like you that's how we win in this thing if I walk in and say we're just CRM we're CRM for everybody and we're just the greatest CRM ever nobody wants that it's like you're you're changing the frame almost taking a
a photogra like there's this great quote about you know what makes a great photograph as knowing where to stand and it's like you're basically almost picking somebody up and you're being like look at this way yeah this is the this is the Warren Buffett quote you know how do you beat Bobby Fisher you play them at any game but chess how do you go about evaluating product positioning this is an interesting question people want me to look at their website and tell me whether or not their positioning is good and in B2B that is almost
impossible almost impossible so you have this thing it it serves a market I am not the buyer for that thing so I could look at your website and say I I don't have a clue what this is all about but the thing you sell is for airplane mechanics it's fine if I don't have a clue about that it needs to resonate with airplane mechanics so you can't tell just using you know what I would call the grandmother test you know would your grandmother understand this well unless you're selling a grandmothers it doesn't matter if the
grandmother understands it so some people will say well we need to dumb this down and we need to have it so that anybody understands it I super disagree with that in B2B if I'm selling a specialized thing to specialized buyers it just needs to resonate with them it's okay if it doesn't resonate with your grandmother what it does mean is if we're trying to assess the positioning what really matters is when we are when we have a brand new prospect that comes in that doesn't really know too much about us how long does it take
us before it clicks and they're like oh I get it oh I get why you're different oh I get why that's good oh I get why in my career so I used to be an in-house vice president of marketing and so the latter part of my career I was very focused on positioning so if the CEO hired me they hired me because I could talk intelligently about how we were going to fix this positioning I would come on board and what everybody would want me to do is just run campaigns April make the revenue go
up to the right and I was always worried about running campaigns on weak positioning because it's a bit like pouring water into the Leaky bucket and so what I would do to assess the positioning whether it was good or not is I would walk over to sales and there would be people doing sales people doing first calls with customers and you hear it in a first call and it sounds like this your sales rep is doing a great job they have a pitch customers there and the sales rep has has a pitch that's maybe a
dozen slides long and they're saying okay here's what we are here's what we do we do this thing they're getting into the pitch and you'll see the customer if it's a video call you'll see the customer and they'll be making this confused face like and what'll happen is and they're not saying too much and a good rep will stop and be like are there any questions like are you with me still and the customer will go yeah yeah yeah just back it up can you just go back to the beginning back it up and go
back to the beginning like pitch it to me again and and there's this fundamental disconnect like I don't even know what bucket to put this thing in like is it a is it a database is it a business intelligence tool is it a thing like you hav't framed it figure you know and so there's something in that positioning that is just confusing the heck out of the customer that's the most common sign you see is the customer looking at it and they're like I just can't figure out what this thing is the second common sign
you'll see with weak positioning is the customer thinks they've got it figured out um but they're actually comparing you to something that you don't actually compete with so you'll get to slide three or four and the customer will say yay I get it you're just like Salesforce and you're nothing like Salesforce you don't compete in that market you're not that and then the rep is like no no no no no let me go back I'll go back to the beginning we'll do this again um so you'll hear that a lot the other thing you'll hear
and this is almost the most terrifying one is in these early conversations with a prospect the prospect will say I get it I get what you are I get who you compete with I just just don't really get why we would pay money for that can I just do that with a spreadsheet can I just do that with my accounting package could I just hire an intern to do that why would I pay money to do that so they kind of understand the product but again they don't understand the value of it why would I
give you money in exchange for that thing who's in charge of positioning at a company good question this has traditionally been seen as a marketing function um and even more specifically in tech companies we often say this is a product marketing function but I don't believe that I think that's not the right way to think about it if we really think about what we're doing in positioning is we're getting really tight on who's our competitor how are we different what is the value we can provide to them to the customer and who exactly are those
customers if we made a change in that that would be a big change in the business if I think about again my CRM example if we switch from being general purpose Enterprise CRM to CRM for investment Banks that's a that's a whole different company yeah so I don't think marketing has first of all they're not talking to customers every day the way sales is uh they don't necessarily understand the differentiation amongst competitors the way the product team would and sure as heck the CEO is going to have something to say about where we're selling and
how we win in the market so in the work that I do with companies with positioning we do it with a cross functional team so we bring together product marketing sales customer success support and we bring everybody together and everybody comes with what they understand about customers and how we win and we work through the positioning together as a group exercise now somebody needs to be the steward or the police of that positioning once we've set it to make sure that we are consistent about that and the way we're using it in marketing and the
way we're using it in sales and that's typically marketing that does that I also think it's good to have somebody be the person that puts their hand up and says you know what things are changing in the market we we maybe need to come back together and check in on that positioning but I don't think that marketing should be able to change positioning or look at positioning or do it on their own they could try but it won't stick because sales won't believe in it CEO won't believe in it what we actually need is a
cross functional team to get together and look at it make some decisions get everybody in agreement and alignment on it and then we can all go execute on it and in our respective departments and then marketing can be the steward of here's the positioning here's how we Define it this is the messaging that comes out of that positioning and then marketing be the person to put their hand up and say you know what this big acquisition just happened in our market and we might need to step back and look relook at the positioning it's interesting
that you you say that when you're talking about a salesperson and the first call I was thinking oh like if things don't go as planned the salesperson points to marketing marketing points to the sales person everybody points to product and and but you even expanded this so you have a cross functional team of sales marketing product customer success support and then you have the CEO involvement at some point in there too exactly and when things are going well everybody is a winner and everybody's responsible for success but the minute you have a problem everybody starts
pointing the finger at everybody else how do you determine when that's a positioning problem versus a larger problem it's interesting because you know I do this as work as a consultant and sometimes companies will call me and they think they have a positioning problem and then I have a conversation with them and I'm like I don't actually think that's a positioning problem because there's lots of reasons businesses aren't successful F and positioning is just one of them so typically so sometimes companies will come to me and they'll say you know what every company we talk
to loves us if we can get them in a meeting we close all that business that tells me the positioning is good you're just not getting enough meetings you're just doing a terrible job at lean generation you should go fix that you just need to get more at bats uh sometimes what you have is a sales execution problem like there's something in the way you're executing in sales it isn't working so my test is often like so first of all do you have good happy customers that stick with you and love you and are referenceable
and whatever most of the companies that come to me and say yes yes we have that okay do you have confusion when at the beginning of your sales process where they come in and they just don't get it that gap between what a customer knows and what a prospect knows we can close that Gap with good positioning what role does storytelling play in all of this storytelling is one of these things marketers think a lot about storytelling and obsess a lot about storytelling particularly on the consumer side businessto business marketers like to think about storytelling
I don't think a lot of B2B companies are doing an amazing job at storytelling what's really funny about that if you go over to sales sales doesn't care about storytelling they never talk about storytelling and yet they're the ones that that actually are face to face with a customer and if anyone should be telling a story maybe it's your sales team most of the storytelling stuff that you see or at least what I learned as a marketer going through if you go to marketing school and learn storytelling a lot of what you'll see is this
hero's journey structure for storytelling which um is very common in entertainment it's the way most movies are written a lot of stories are written with this hero's journey so in B2B storytelling we think about the hero as the C customer so the customer has a problem they embark on this Quest they meet a guide that's us we're the guide and we give them a plan and we help them be successful and avoid defeat as we have this hero's journey the problem with that storytelling Arc is there's kind of no competitor in there and if we
think about what a buyer is actually trying to figure out is why pick you over the other guys a hero's journey doesn't really give us an arc to do that in the work that I do with c customers we start with positioning so we get really clear on what's the value we can deliver that no one else can who are the customers that really care about that and then we want to build a story around that the story that we're trying to tell needs to answer this question why pick us over the other guys so
in that storytelling framework we need to we need to have a spot in that framework to paint a picture of the whole market and then show where we fit and where everybody fits so we shouldn't actually be just talking about us we should be talking about the alternative approaches to the problem which means we're going to talk about competitors or at least the approach that the competitors take in the work I do we take the position we translate it into a sales pitch that sales pitch has a storytelling structure that starts with a conversation around
the market so we'll talk about look we look at this Market in a different way than our competitors and because we look at it in a different way we've built the product in a different way and you're you're a customer you have you have lots of choices there's other products that you could buy there's other approaches you could take to this problem let's talk about that we think about this all day we have opinions about it we want to hear what you have to say about it too so this is the way we look at
it you could do it this way this way or this way and here's the pluses and minuses of these different ways of solving this problem and this is a conversation with the customer more than me telling the customer stuff but at the same time I'm teaching the customer about what we think is important in a purchase decision which most customers don't know early in their purchase process they're trying to buy accounting software half the people doing a purchase in B2B have never purchased a product like yours before so they're doing this for the first time
they're overwhelmed with information on the internet every vendor says we're the best no we're the best no we're the best what we need to do in good sales storytelling and B2B is help customers understand how to confidently make a decision in order to do that I have to paint a picture of the whole market so they feel good that they understand ah if I choose this I'm choosing to go big on this and low on this if I choose this here are the trade-offs for this if I choose this here the tradeoffs for this or
you could choose us and here's the tradeoffs for us are we a good fit for you or not that's what we should be doing in a good sales storytelling in my opinion and who does that really well in your opinion I have a bunch of clients that I've worked with but one that I think is doing an amazing job of this for a really technical complicated product is a company I worked in with in San Francisco called Postman Postman does essentially a platform for um developing apis This Is A New Concept nobody had this idea
of a platform for apis before postmen came up with it they do an amazing job I think of talking about why apis are important so important that you actually don't want a set of disjointed tools across your organization to work on them why that's important they've coined a concept called an API first world and then they've done an amazing job of Storytelling around that so if you go on their website on their homepage and you scroll down about halfway they have a graphic novel called the API first world and it's a graphic novel Divi designed
for technical people to understand this story of what's an API why is it important why do we really want to have highquality apis why is that important for your business and why do we need a platform to enable that so I think they do an incredible job of that and they do it in a thousand different ways like if you see the CEO do a conference talk he's actually not talking about the product as much as he is talking about the market and this concept and why we need to think about apis differently but if
you are aligned with his point of view on the market you're going to buy his product but they've really done a good job I think of developing a point of view on the market helping customers understand the context around their product and the things that you need to understand in order to understand why their product is valuable and why you might pick it how important is that from a CEO perspective at conferences and talks and media to basically put yourself out there and say I see the world this way which is slightly different than most
people see it I think it's super important I think this concept of having a point of view on the market is really really important most Founders that I've worked with if you talk about how the original idea for the product came up they'll say you know I was really frustrated I looked at all the databases and I decided all the databases were doing it wrong and if you were smart and you knew what I knew I had a better way to do it yeah you would build a database like this part of what we need
to communicate to customers is we kind of need to take them on that journey and say look we have a different perspective on this like we look at this problem different we it's not the problem it's we see a problem inside the problem we have a perspective on the problem that if you understood it the way we understood it you would pick our stuff right so that point of view I think is really super important and if you can nail that it is the key to selling lots of stuff and how important is it to
you mentioned coin the term like how important is it to define the vocabulary by which the customers use ultimately to make a choice or to own a term so that if it becomes top of mind to them nobody else has that term it's really important if you are doing something that is truly Innovative like an emerging thing so earlier we talked about Market categories and most of the time if you look at by the way most successful companies do this they're going into an existing Market category and they're serving an underserved corner of that and
they're expanding from that about 10% of the time that's not true 10% of the time we have something that is emerging it's a market that is emerging there is no leader in that market right now because that market doesn't even exist right now this is something brand new you could never even do this before because technology wouldn't wasn't there to do it and so it's emerging when it's emerging there's no good vocabulary to talk about it because we've never talked about it before and often in those cases what we're doing is we're defining or attempting
to Define what the boundaries of that Emerging Market category are what's important and what isn't important in that Emerging Market category and in those cases we often very much do want to put some names on things we may want to specifically name the market category in a way that advantages us we may want to name key Concepts in inside that in a way that helps customers understand why this is an important key thing that you need to understand in that and so if you see companies that have truly done category creation often they've done a
very good job of helping customers understand key things that they needed to understand in order to understand ah this is a totally different problem I didn't even know I had this problem you know because if the customer knew there was a problem and they have that problem there would be a categories of solutions to solve it already in Emerging Markets we're often addressing a problem that customer doesn't even Define it as a problem they don't even know this is a problem it's just this is just the way the word world works there's no way to
solve this problem if we can help them become problem aware then you know that's a step closer to that well you know now that you know that you have a problem we're the thing to thing we're the thing to solve that how do you think about independent bodies that play a role and I'm thinking like in cyber security there's the gardener quadrant and if you're not on there like people won't even consider your product but that sort of limits your ability to absolutely how do you think about that I spend a lot of time working
with Gardner in my past roles as a VP marketing not every Market segment has an analyst or an expert body or somebody whose opinion matters a lot but but in some segments we do so I spent a lot of time in the database Market no large Enterprise buys a database without talking to Gardner group first so in that case we spent a lot of time helping Gardner group understand what our stuff was about why it was important why they should include us in the quadrant because we literally needed them to position us properly to clients
that called them and asked for advice I've had other markets that I've been in where the buyers simply don't call Gardener group because they don't care what Gardener group has to say about that because Gardener group doesn't cover that space and Gardener groups does a really good job in Enterprise it outside of Enterprise it they're a bit less influential I think it's important if we're a vendor to understand where do our customers look for advice and where do we need to educate those people or those entities because they're giving advice to our customers sometimes that's
industry analysts like Gartner sometimes it's service providers or system integrators like like deoe and they'll go to deoy and say what do you think about this you know we're being doing a big digital transformation you're our trusted adviser on digital transformation what do you think about these products in which case maybe I need a partnership with deoy because they're not going to recommend my stuff if they don't get some kind of money off of that yeah so it's important to understand who influences your buyer as we go down Market it's interesting there there'll be people
like like you like podcasters that people listen to um people that are experts in things people ask me my advice about marketing technology all the time so in a small way I'm an influencer there um in the work that I do companies will often ask me well you know we now need to do all these things in sales who do you know that's really good in sales is there particular technology you should recommend in sales the important part as vendors I think is we need to understand who has influence on our buyers and do we
need to invest some energy and attention in making sure that those influencers understand our stuff and are positioning us well what are the most interesting mistakes you've seen people make when it comes to positioning oh so many things the first mistake is not thinking about it at all and just assuming that there's only one position we could possibly take most products we could position them in a dozen different markets and if we really step back and forgot about the history and where we came from and looked at it with our fresh eyes we might see
something really different so we need to think about this in the way customer thinks about it so not thinking about positioning at all is the first mistake the second mistake is as we talked about before treating it as a little marketing exercise we're just going to put some new words on the homepage and that's it we're done but sales has no idea how to pitch it product doesn't really understand it it doesn't actually represent the truth of our product at all is just nice pretty words this is not repositioning this isn't going to move the
dial on anything um and then lately what I've seen is um companies that love the idea of category creation are are attempting to create a category when they obviously fit in an existing Market category and it's kind of wishful thinking that this is a new category so they say no no no we don't have any competition this is a brand new thing nobody works like this and the result is the customer is like but wait aren't you just a CRM why are you using all these other words I'm just confused so I've seen a lot
of companies have come to me that have attempted to do category creation or pretend that they're doing this new category of things and then it's been a disaster customers are just very confused they don't understand why this is different from the existing things they're doing they can't figure out what bucket to put it in because they're trying to create a new bucket and it's been a disaster and then they come to me and they're like H now we got to fix this and how do we do it when there's an obvious spot where they could
easily position in a very big sub segment of an existing Market category and that would be way easier to sell way easier to tell the story way easier to do deals so I see a lot of that right now what's the difference or maybe what does schools get wrong about B2B marketing that when you in the academic environment that sounds good but in the real world it falls flat oh my gosh so much stuff most of the research that's been done in marketing like when I went to marketing school it was so disappointing all of
the research is done on consumer package Goods all of it and often what you'll get is a professor inside a marketing department at a University taking these things that we've learned about consumer packaged goods and then stretching it out and saying well obviously this works B to be exactly the same way and it's like well wait a second so we'll see things like I can't I must have this conversation about once a week where people will talk about uh what's that water liquid death you know this one I don't drink that the marketers are marketers
are obsessed with this thing called liquid death and all it is is fizzy in a can made to look cool and they sell it at bars so you don't want to so you don't want to consume alcohol you're not into booze you go to the bar you still want to look cool you can order this liquid death it's got skulls on it and stuff they do all this really creative advertising and all this stuff and the B2B marketers look at that and say why can't we do that right like why can't this just be marketing
why do we have to worry about product at all and often you'll get these marketers say look can we really differentiate on product because people can just copy our product they eventually everyone will just keep catch up to us and all the products will be exactly the same and if you're in Tech that is nonsense that is nonsense that that would be like saying you don't think any of the Innovation that Apple's done matters they could have just it's just marketing do you really think that so there is kind of this belief that we can
take these things from consumer and apply it to a very considered purchase in a B2B situation where there are Stakes involved where the person making the decision might get fired right and say oh yeah that's just like buying fizzy water oh at the end of the day these people are all people and they're driven by emotions we have to connect with their emotions I agree with that but the emotion is fear it's not looking cool it's not hey I like the one with the skulls I can't go to my boss and say I bought the
datab with this with the skulls man come on I just can't get away with that and so I've heard a lot of things in marketing classes where I've leaned back and said okay man if we're selling toothpaste fine but if I'm selling a million dollars worth of middleware not fine these rules do not apply so I think in schools we don't teach enough about B2B we don't teach enough about the difference between a highly considered purchase versus an unconsidered purchase I don't think we talk enough about buying committees I don't think we look enough at
the research around how difficult it is to get over indecision in a B2B purchase process and what that means for our positioning for the way that we do sales pitches for a lot of the stuff we do so I don't see that covered enough in schools at all every great B2B marketer I know has learned this on the ground handson doing it in companies where all starting from scratch what do you know about B2B decision making that you would say most people get wrong the the biggest one is this idea of customer indecision that people
do not understand how difficult it is to make a purchase if you understood the research on that it's amazing anything gets bought at all there's a great book out there it's by this guy Matt Dixon it's called the jolt effect and the research in that is incredible so when we went into lockdown and co uh he took this opportunity to study sales calls because all of a sudden all the sales calls were happening virtually so everybody was doing them on zoom and so they took some Ai and they analyzed two and a half million sales
calls and they did it in partnership with with these companies so that they could look at what happened on the sales call and then what ultimately happened did we get the deal did we not get the deal what works and what doesn't work and that research is terrifying when you look at it like that's where this number comes from 40 to 60% of B2B purchase processes end in no decision this is the most fearsome competitor we have in B2B by far is no decision and this no decision is not because we've made a decision to
stay with the thing we have because we think it's better is because we look at our choices we can't figure out how to do that in a way that we're sure isn't going to get us into trouble so we just don't do anything if we really understood that I think we would operate very differently in B2B you can see the difference in people that get that and people that don't that's fascinating I think it's really interesting to sort of think of sales Cycles I like the fear concept my friend who who runs a cyber secur
company I was like oh put me in charge of sales he's like what would you do I was like I would show up with a binder of newspaper clippings companies that got hacked and be like my job is that you don't appear in this book and that would be my entire s like they don't care about the technical feature they're not buying features right they're buying the benefit and when you're selling something negative which you know doesn't contribute to revenue directly right you're basically selling the prevention of something negative from happening right how do you
do that I was like why wouldn't that be effective I don't know right this has been a fascinating conversation we always end with sort of the same question which is what is success for you in life oh so I feel like I so I spent my whole career being a vice president of marketing I did that for 25 30 years and the thing about being a vice president of marketing it's a really hard job you have to know a lot about a lot of things marketers talk about being t-shaped you have to know you have
to be this deep on so many things and then usually you have one thing that you're really deep on for most of my career I was a t-shaped marketer and the thing I was really deep on was positioning now I'm a consultant and I just get to do that thing that I love and so that has been such satisfying work it's been so satisfying to work with companies wrestle this thing that is really thorny really hard and when it clicks it feels like magic it feels like magic like good positioning when you look at it
afterwards people will say of course that's what they are of of course that's what they do and you're like actually that was really hard for us to get there and if you had to asked us two years ago we had no idea what that is and now it's this and it seems obvious but it wasn't obvious that is very satisfying work to do so I just feel that is success for me when we get to the end of these these projects and everybody in the room is like this is so much easier to sell this
is so much easier for customers to understand I had a client come to me two weeks ago and they're doing the the first roll out of these new sales pitches that they're doing and so the first pitch that they did and they were very scared to do it because a brand new pitch and it was really high-profile client really big deal they went in and it's a competitive deal so they know that the prospect has talked to their two competitors and then they're coming to talk to them and the CEO sent me an email and
said after we did the pitch the prospect CEO pulled him aside and said I have never seen a sales pitch as good to that in my entire life and like we've seen a lot of sales pitches like that was really great that's awesome and so that is the most satisfying thing and so he's happy I'm happy everyone's happy you also hit on something in that answer that I think goes underappreciated in life which is avoiding uh your weaknesses so doing the thing that you're really good at and structuring your life in a way uh where
you're not you're doing a lot of the things that you either don't want to be doing or that you're not as good at it's so amazing I wish I had have been doing it sooner in my career although I don't know if I'd be good at this if I didn't have 25 30 years of being a Hands-On vice president of marketing but this does feel like the reward phase of my career that I just get to work in my little zone of Excellence doing this thing that has really big impact on companies I love it
they love it I'm happy they're happy everybody's happy it's if if this is all I do for the rest of my life perfect
