Positioning: Defining The Battle (Crossing the Chasm Strategy Part 6)

November 21st, 2011 No Comments

The following is sixth in a series of posts about high tech marketing strategy based on Geoffrey Moore’s Crossing the Chasm.

In order to win the battle for customers and revenue, you must define the battle.

One essential component to building a market is positioning.

Positioning is the image or identity in the minds of their target market for its product, brand, or organization.

Despite common misconception (and Wikipedia’s own entry), positioning is not a process but rather the market position itself.

To succeed “we need to understand who or what the competition is, what their current relationship to our target customer consists of, and how we can best position ourselves to force them out of our target market segment.”

Create the competition

Define the competition in such a way that you are the leader.

It must be a competition big enough that there’s a market, but also targeted enough to win.

Geoffrey Moore might be the greatest marketing consultant with a PhD in Renaissance English but so what? That’s a small, irrelevant niche.

He could claim he’s the greatest marketing consultant of all time but – as much as Crossing the Chasm is great – that’s simply false and even worse not credible.

Our positioning should change depending on the stage of the technology adoption life cycle that we are targeting, according to the Competitive Positioning Compass.

Chasm3 vrs2

The early market is dominated by specialists interested in technology and product, rather than company or market issues.

The mainstream market is “dominated by generalists who are more interested in market leadership and company stability than the bits and bytes or speeds and feeds of particular products.”

Markets begin in a state of skepticism and evolve to a state of support. In the early market, the technology enthusiasts are the skeptical gatekeepers. In the mainstream, it’s the pragmatists. However, once they give their blessings, they buy in. Hence, you need to create a value proposition for each group that’s compelling.

In order to win the pragmatist than we must focus on market-centered concerns. Shift our marketing focus from product-centric values to market-centric ones. See the chart below:

Product-Centric Market-Centric
Fastest product Largest installed base
Easiest to use Most third party supporters
Elegant architecture De facto standard
Product price Cost of ownership
Unique functionality Quality of support

 

According to Moore, “it is the market-centric value system – supplemented (but not superceded) by the product-centric one – that must be the basis for the value profile of the target customers when crossing the chasm.

Next comes positioning.

There are four important principles to remember about positioning:

  1. Positioning is a noun, not a verb – it’s attribute, not a marketing process.
  2. Positioning is the single largest influence on the buying decision – it serves as buyers’ shorthand
  3. Positioning exists in people’s heads, not in your words – You must frame a position that actually exists in other people’s heads “and not in words that come straight from hot advertising copy.” Forget creative or buzz or fluff. If it’s inauthentic, it’s not correctly positioned.
  4. People are highly conservative about entertaining changes in positioning – the most effective positioning strategies demand the least amount of change.

How do we come up with a position? There are four important steps:

  1. Name it and frame it – reference what they seek and under what category it resides. Jargon is gobbledygook and has no place. Listen to Strunk and White, be clear and concise.This is the minimum needed to get a technology enthusiast to buy.
  2. Who for and what for – Customers will not buy something until they know who is going to use it and the purpose it serves. This is the minimum needed to get a visionary to buy.
  3. Competition and differentiation – Customers can’t know what to expect or what to pay until they can place it in a comparative context. This is the minimum needed to get a pragmatist to buy.
  4. Financials and futures – Customers can’t be completely secure in buying unless they know it comes from a vendor with straying power. This is the minimum needed to get a conservative to buy.

So, now what? I still don’t have an elevator statement, or a positioning statement.

What is a positioning statement? What is it made up of?

  1. The claim
  2. The evidence
  3. Communications
  4. Feedback and adjustment

A good position must pass the elevator test. It must be credible. Can you explain your product in the amount of time it takes to ride up in an elevator. If not, you will fail. You won’t get funded. Here’s why:

  1. Your claim can’t be transmitted by word-of-mouth.
  2. Your marketing communications will be all over the map.
  3. Your R&D will be all over the map. You will have no winning proposition, but many losing ones.
  4. You won’t be able to recruit partners and allies.
  5. You won’t get financing from anybody with experience  — if you can’t pass the elevator test, investors know that you lack a clear and investable marketing strategy.

Define your position based on the target segment you intend to dominate and the value proposition that you intend to dominate it with.

Positioning is dynamic. It’s not a one time event, but something that – like agile – should have continuous iterations.

Here’s a proven formula to win. Try it out:

  • For (target customers – beachhead segment only)
  • Who are dissatisfied with (the current market alternative)
  • Our product is a (new product category)
  • That provides (key problem solving capability)
  • Unlike (the product alternative – competitors and substitute goods)
  • We have assembled (key whole product features)

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