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

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)

Developing The Whole Product: Crossing the Chasm Strategy Part 5

The following is the fifth in a series of posts about high tech marketing strategy based on Crossing the Chasm.

 

One of the most important functions of marketing isn’t viral and it isn’t advertising and no, it’s not creative slogals. Rather it’s in the fundamental 4Ps taught in every Marketing 101 class: Product.

In order to win the marketplace, you must wire the marketplace. According to Moore, “For a given target customer and a given application, create a marketplace in which your product is the only reasonable buying proposition. That starts… with targeting markets that have a compelling reason to buy your product. The next step is ensuring that you have a monopoly over fulfilling the reason to buy.”

Moore brings Theodore Levitt’s model of product defined in The Marketing Imagination. 

  1. Generic Product – what’s shipped in the box
  2. Expected Product – what the consumer expects – the minimum configuration of products and services necessary to have any chance of achieving the buying objective
  3. Augmented Product – The fleshed out product achieving maximum chance of achieving the buying objectives – all the products and services that are related
  4. Potential product – The product’s room for growth

 

Pragmatists buy the whole product.

According to Moore, “Whole product planning is the centerpiece for developing a market domination strategy.” He continues, “Winning the whole product battle means winning the war.”

In the following model, there are only two categories: (1) what’s shipped (the generic product) and (2) what else the customers need in order to achieve their compelling reason to buy. Moore calls this the “marketing promise” made to win the sale. Failure to meet this promise in a B2B marketplace has serious consequence, this isn’t fluff or mumbo jumbo but a promise that must be delivered on.

This can, of course, be delivered with partners and additional vendors over a period of time. You don’t need to provide everything yourself but you do need to create the whole package.

 

 

whole product model

Hi Tech Business Strategy: The Technology Adoption Life Cycle (Crossing the Chasm Part 1)

The following is the first of several posts about high tech business and marketing strategy, based on the bible of high tech marketing, Crossing the Chasm.

As my colleague Josh Cline likes to say, we frequently put the cart before the horse, developing a plan before engaging in a strategy.

We can’t implement a promotional plan before we understand the decision making cycle and just how technology is adopted. Selling to the uber-geek early adopter requires a different strategy than selling to your mother and selling to a small, disruptive startup is also going to require a different strategy than selling to a global behemoth.

We know that, right? But do we know how to map a promotional and strategic plan throughout the entire technology adoption lifecycle. In order to develop a plan, first we should understand how technology is adopted.

The technology adoption lifecycle is a model from the 1950s and 1960s (first used to understand how farmers purchased corn!) that intended to describe how new ideas and new technologies spread in different cultures. According to Wikipedia:

The technology adoption lifecycle model describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or “bell curve.” The model indicates that the first group of people to use a new product is called “innovators,” followed by “early adopters.” Next come the early and late majority, and the last group to eventually adopt a product are called “laggards.”

Technology Adoption Life Cycle

According to this model, the process  of technology adoption takes place at a steady pace, with the first group (making up about 2.5% of the population) being the innnovators, the next group (another 13.5%) are the early adoptors, and than a larger growth happens next – the 34% that are the early majority, immediately followed by another equal group, the late majority, followed by the laggards, the remaining 16%. While each group is not equal in size, according to this model, progression naturally flows from one group to the next. Thus, when developing business strategy, one simply pinpoints their location on the map and develops and adapts naturally as your company develops along the cycle.

So – why do so many startups fail and don’t gain majority support?

According to Geoffrey Moore, it’s because this model – first developed for agriculture – is flawed. According to Moore, companies get stuck in the chasm – the gap between innovators and early adoptors and the rest of us.

The model is wrong and so the strategy based on winning is also flawed.

Technology adoption doesn’t take place at a continuous place.

Rather, it gets stuck in the chasm before experiencing tornado-like rapid growth.

This is Moore’s revised model:

tech

According to Moore, there is a gap – a chasm – between the Early Market and the Mainstream Adoption. It’s not continuous and it’s possible to get stuck in this chasm.

In order to avoid getting stuck, Moore outlines a series of prescriptions and strategic requirements, including positioning, price, product, and place, in order to cross the chasm between the early market and market to the main street.

Yup, you must start with business strategy.

The next several posts will outline strategies that high tech companies, especially startups, can put in place in order to win their market and sell disruptive products to the mainstream.

The Marketing Creativity Conundrum

Frequently, when planning marketing campaigns or discussing how to market a brand or product, there’s a demand for creative ideas. The first stage of many people’s planning is looking for creative ways to “promote” their campaign.

how_to_store_a_cakeBut, frequently, what they are missing isn’t creativity but rather a working strategy:

  • What’s the strategy?
  • Who is the audience? Usually there are multiple audience stakeholders
  • What’s the core messaging (values/benefits for each target market)
  • Are you positioned in the right market?
  • Are you going after the people most likely to buy?
  • Tactically – are you running a B2C campaign for a B2B campaign?
  • Have you discussed the ROI: What’s in it for them?
  • Are you using the right channels? If you’re working with a PR company, are they pitching media with the right messages or just posting press releases on free press release sites?

There’s a role for creativity, but that’s the icing. Creativity – or lack of it  – won’t make or break your product/service. However, if you have the wrong strategy, than you won’t succeed. You can have a cake without icing, but you can’t have a cake without flour. Strategy is the flour, while creativity is the icing. Icing’s nice, but are you trying to get the icing without doing the hard work?

Creativity comes after a proper strategy.

7 Social Media Marketing Lessons from Mad Men

Mad Men may depict the ad world of the 1960s, but the lessons of this successful AMC show depicting the Madison Avenue world of 50 years ago still has a lot of relevance in today’s digital environment of 2010 and beyond.

While Don Draper barely respected the world of the television commercial and certainly couldn’t have imagined Wikipedia or Facebook, there is still a lot we can learn — including the mistakes — from the Sterling Cooper team.

Apologies but I can’t embed most clips that are on YouTube, so check out the links.

7. The Medium is the Message – While a bit anachronistic in the preceding clip, the phrase the medium is the message is even more true over social media.

The phrase was introduced in Marshall McLuhan’s most widely known book, Understanding Media: The Extensions of Man, published in 1964. McLuhan proposes that a medium itself, not the content it carries, should be the focus of study. For example, McLuhan claimed in Understanding Media that all media have characteristics that engage the viewer in different ways; for instance, a passage in a book could be reread at will, but a movie had to be screened again in its entirety to study any individual part of it. So the medium through which a person encounters a particular piece of content would have an effect on the individual’s understanding of it.

This is true today as well. Different social networks should be utilized differently. Content appropriate for Twitter may not be appropriate for Facebook. Different people use and create material differently, as well – what Forrester calls the Social Technographics Profile. McLuhan’s research is just as relevant today.

6. Strategy is the strength. The core of marketing is still key — branding and positioning rule. Strategy matters. Social media requires more than just an ability to update a Facebook status or send a tweet. It requires an understanding of branding and strategy. The message still matters. Knowing your target audience is key — as clearly Don Draper gets it when he convinces a client that the ad agency gets it and Sterling Cooper’s strategy will lead to success – instead of the company’s initial ideas-  in the clip here.

5. Write Well – Copy and creativity matter. The Sterling Cooper team turned the drab idea of the Kodak Slideshow – which defined a generation – into the iconic Kodak Carousel. The product was the same: a common slide projector. But would people have bought the Kodak Wheel? Probably not. The same product, but different branding and a different story: a product that defined a generation.

There will be a difference in the number of fans and attractors depending on what your brand’s name is, depending on what your website’s URL is, what your Facebook page is named or your twitter handle. What content you send out matters. Good writing matters and, yes, content is still king — just the definion of good content takes many more factors into account. It’s not about the product, it’s about the experience.

Don Draper turned a slide projector into an iconic moment in this clip.

4. Efficiency Matters because an Upstart is Around the Corner — While the Sterling Cooper is drinking all day, taking expensive vacations, and going to the upper-crust parties, someone is just around the corner, being more efficient, and out to get your business. Today that kind of waste doesn’t cut it. And while you were out drinking, someone else is coding today and developing the next startup. Do you want to remain relevant? Then stay on your toes.

3. It’s about feeling, not feature – Social is the first word in “social media.” The job title of the person in charge of implementing your brand’s presence on social networks is frequently referred to as “community management.” People need to feel a part of a community. They need to feel good about your brand. Your customers don’t care about your latest engineering feat or that your classes use video and audio. These are important things that may be needed in order to the end result but it won’t sell. Instead, people care about how it makes them feel. Peggy is right: “What we are selling is confidence, a better you.” It’s about feeling, not feature.

2. Change is Inevitable – It’s not by accident that Mad Men begins in the 1960s. The sexual revolution. The move from print to radio to television. The iconic role that television played during that generation in people’s experiences – from the Cuban Missile Crisis to the Vietnam War and the rise of feminism was a dramatic change. Bert Cooper started Sterling Cooper but he needed the younger Don Draper and Roger Sterling, Jr. (son of the co-founder, along with Bert, of Sterling Cooper) to continue it. Draper and Sterling then needed the younger team of Peggy and Pete and Harry to remain relevant and implement for the future. Draper and Sterling’s business acumen was much higher but they needed their younger and more inexperienced team to keep them relevant. Embrace change because it is today.

Embrace change and your younger team. If you want it to work, treat your younger team with respect, as Peggy explains in this clip.

1. Embrace New Technology – Today’s social media is yesterday’s TV. Yesterday’s TV is last week’s radio and newspaper.

Today’s new technology is tomorrow’s old technology. When Harry Crane decides that television is important, the team laughs at him. In the end, they make him the TV department — because they didn’t value TV. In the end, Harry is one of the most important members of the team. Do you have an intern or recent grad in charge of social media? What does that say about your priorities? Are you putting Harry Crane in charge of your most important department? In a few years, they’ll be the entire organization and the only one left.

Don Draper has descended  – but still plays a role and is still the figurehead. But Harry Crane is the one that does the work and gets the job done.