Friday, January 8, 2010

Carving Out a Reputation

The Crucial Role of Branding and Positioning for Tech Companies

Carving Out a ReputationStarting a B2B technology company is a tough business. Many companies try, but few succeed over the long haul. But not all of the companies that fail do so because of bad technology. Some that fail even have superior technology... but they didn't have a good handle on the marketing process. The B2B technology market is a demanding one, with buyers who are knowledgable, pressed for time, and, ultimately fickle. They have no interest in wading through products that are poorly positioned, with lousy collaterals, or confusing pricing models. Which is why a good working knowledge of Product Marketing is so vitally important!

There are typically two things that stand between a technology product and its intended market: The product itself; and a successful marketing plan. Products that don't adequately address market needs, or that perform poorly, already have two strikes against them. But even a killer product, without a sound, viable marketing plan, can quickly go down in flames. Now, if you've got a product that just isn't up to snuff, that's really a Product Management issue, beyond the scope of this article (we'll cover it in the next issue). But, having successfully marketed tech products that were, shall we say, not quite ready for prime time, I'd like to talk about positioning strategies that have proven effective.

First, I'd like to talk about the distinction between Product Management and Product Marketing... In an ideal world, these disciplines work closely together but are distinctively separate, because their roles are somewhat different. At the most basic level, Product Managers "listen to" the market — learning what the market needs and building a product that meets those needs; while Product Marketers "talk to" the market — telling them what your product is and how it can help them. Not a huge distinction, but an important one. Unfortunately, in this day and age, more and more companies are combining these roles into one, especially in startups and early-stage companies. Of course, in these types of situations, you'd better have a pretty good handle on the fundamentals of both disciplines; However, for this series, I'm focusing primarily on the high-level fundamentals of Product Marketing.

Product Marketing Basics

There are four basic components that are essential to product marketing:

  • Positioning — Providing a clear description to the marketplace of your product's purpose and functionality, as a stand-alone entity, as well as in relation to competing products
  • Launch — Announcing and releasing the product to the marketplace
  • Distribution — Delivering the product to buyers
  • Sustaining — Maintaining sales and market share through marketing and promotional activities Positioning, Naming, and Pricing

This month, we'll focus primarily on Positioning. Positioning is something that happens in the minds of the target market. It's the perception the market has of a particular company, product or service in relation to their perceptions of competitors in the same category. For example, you know the difference between, say, Microsoft and Apple, because of the considerabl work that each company has done on its positioning. Other examples in the automotive industry might be Volvo (safety); Porsche (engineering); and Subaru (inexpensive dependability). In the emerging technology space, though, it's scary how many tech products have gone to market without a clear understanding of the product's position in the marketplace. Until you've properly defined your product, your target market, and the all-important "why" someone would want to buy it, you can't even begin to market it. Positioning is the foundation for virtually all of your marketing activities. And it has to be clear and logical, to both your marketplace, and, equally importantly, to your company. More on that later.

There are many ways to position your product, but here's a good example of a product positioning statement "format," of the type that was used by Geoffrey Moore, author of Crossing the Chasm, from his days at the legendary Silicon Valley tech marketing consultancy Regis McKenna. Moore wrote that "Positioning is the single largest influence on the buying decision." An example of the type of format he used looks like this:

Product Position Statement

For (list the targeted end-user)

Who wants or needs (list a compelling reason for them to purchase),

The (your product or service) is a (list the product category)

That provides (list your key benefits),

Unlike the (name of competing product) offered by (list your main competitor),

Which does not (list the key points of differentiation)

So, the logical extension might look something like this:

For Retailers who need real-time point-of-sale transaction security monitoring, eVanta'sTransView is an enterprise Point of Sale transaction monitoring solution that provides live monitoring and real-time flagging of suspicious transactions, unlike currently available solution that only do so in batch processes.

Here's a slightly different approach — Imagine that you're promoting a service such as tax preparation that targets the self-employed. You might work through a thought process something like this

This service would be valuable because:
The provider specializes in tax preparation for the self-employed.

Customers would benefit because:

  • Expertise in this area would provide the maximum potential for tax savings.
  • Lower fee structure enabled because of a narrower band of expertise.
  • Quicker response (and quicker refunds) because expertise enables returns to be completed in a more timely manner.

This service would be useful for:

  • Business consultants
  • Freelance writers
  • Photographers
  • Artists
  • Musicians

The resulting short and long positioning statements might read:


Bob Eckert, CPA, is a tax preparation service that helps self-employed individuals such as business consultants, freelance writers, musicians and artists file their tax forms quickly and correctly, enabling them to reduce their tax liability.


Bob Eckert, CPA, meets the needs of self-employed people such as business consultants, freelance writers, musicians and artists. Customers will benefit from using Bob Eckert, CPA, because Mr. Eckert is an expert in this area and is knowledgable about self-employment tax law, enabling the maximum about of tax savings. Clients also benefit from a lower fee structure and quicker response, because Mr. Eckert's expertise enables him to complete these types of returns more quickly than a "generalist" Tax Firm.

The Essentials

As you see, there are a number of different approaches that you can take. But generally, the product positioning process involves:

  • Defining the market in which the product or brand will compete (who are the relevant buyers)
  • Identifying the attributes that define the product space
  • Collecting information from a sample of customers about their perceptions of each currently-available competitive product and their relevant attributes

Specifically, you need to answer a couple of questions:

  • Who is your target market?
  • What challenges do they face that your product can help them solve?
  • What are the major features and benefits of your product, and how to they align with the expectations of your target audience?
  • What other products are available, against which your product must compete?
  • How does your product stand up against these competing products?
  • What class of product are you selling (low-end, mid-level, high-end)?

Answer these questions truthfully and objectively, and you're well on your way to successfully bringing your product to market. You'll be able to:

  • Clearly define your target audience
  • Clearly define your product and product category
  • Build a product that meets the needs of your target audience (althought this encroaches into Product Management territory)
  • Determine what kind of distribution system (internal or external) you will require
  • Price your product competitively (and realistically)

The Competitive Matrix

A Competitive Market Matrix

Another tool that is often used in developing positioning is a matrix (example at right), on which you would plot-out the currently-available competing products within the marketplace, along with relevant attributes, from low-to high (i.e. price, features, innovation, etc.)

A competitive matrix helps you determine your company's competitive advantage (or disadvantage, for that matter). It provides an easy-to-read portrait of your competitive landscape and your position in the marketplace. This can aid in visualizing where you are versus your competitors, and can help you to better understand your strengths and weaknesses. As you can imagine, it is critical that you are coldlyobjective about where you actually fit in the marketplace. Attempting to fudge on this area will only mean that the decisions you make based on this delusion will be flawed... as will your results. An objective view of your "real" position within the marketplace can help you determine which steps you need to take in order to a) be competitive, and b) understand what you would need to do to, in order to be where you'd want to be on the matrix.

The Value of Your Brand

Branding and positioning are key to the success of your product, so it's crucial that your efforts convey a clear and credible promise of value for your intended audience. It's important to understand what a brand is. It's NOT a product, yet that seems to be a difficult concept for some marketers to understand. Sure, you can buy a company. And you can buy its brands. But you can NOT sell these brands to the customer. All you can ever sell are products and services. That's because the brand is just a symbol, an intangible entity that is the result of your company's hard work: PR, media and analyst relations; advertising; collaterals; testimonials; and — of course — a good product. The real goal of investing in your brand is to be able to charge a premium for your product, or to increase your market share. Or preferably both.

Communicating Your Value

In order to gain acceptance for your product or service, you'll need to create compelling value propositions that address not only the user benefits of your product, but also the benefits to decision-makers and key influencers, who may not be the same as the end-user. In B2B plays, your decision-makers and influencers are — more often than not — completely different from one another, and may even be in conflict with each other. For example, say you've developed an application that helps monitor financial transactions at a brokerage, identifying and flagging unusual transactions that might be inappropriate or even fraudulent. Your end-user might be a mid-level operations employee, but they aren't the actual decision maker. While they might recommend products or services, the final decision ultimately rests with a business manager or P&L owner. Similarly, technology products will usually need to be vetted by a technology gatekeeper, say, the CTO or the CIO. Of course, their interest might be in maintaining tight control over technology spending (hoarding it all for internal projects), and they might also be wary of technology (or technology purchases) that did not originate with them. And if there are consultants involved, that can add yet another layer of gatekeeper who must also be "managed."

In this type of scenario, you'll need to look at each participant in the decision-making process, identify their respective hot-buttons, and develop specific value propositions for each of them. Each participant in the decision process must be made to feel that your product or service provides them with real, distinct value, value that they can't get elsewhere. If you already have customers, you need to ask them "What value do users get from this product or service?" You need to determine how they are better-off, as a result of using your product or service. And, what characteristics differentiate your product or service from others that are already available in the marketplace? If you don't yet have customers, you need to be talking to your prospects, and determining what they feel are the most important aspects of your offering (hopefully, you will have already done this before you began your product development efforts). Starting with the answers to these questions, you can begin to create the first draft of your positioning statement. After you've done so, test it out on people who don't really know what it is that you do or sell, and listen for their responses. Once you've piqued their interest sufficiently so that they want to know "more," you'll know you're on the right track!

Employee Alignment

One last point that is too often neglected: It is critical that your employees — at all levels — are brought into the branding and positioning process at the earliest stage. They already have a perception — for better or for worse — of your company and its products. They also may be on the "front lines," interfacing directly with your prospects and clients, and may have valuable insight on how you are already perceived within the marketplace. In order for your brand positioning to be effective, it has to reach every area of your company, and be a part of every customer interaction. In order to have a strong brand, even your receptionist must know the central values, and these values should guide their day-to-day behavior. With proper employee alignment, each and every person in your company will deliver a consistent brand experience to each and every prospect or customer with whom they come in contact. And as a result, your prospects and customers — and the marketplace — will begin to regularly associate your products and your company with the values you've established!

Well Worth the Effort

Virtually every strategic marketing activity — from naming, to collateral development, to packaging, to PR, Media, and Analyst Relations — depends on having a clear and concise brand position. A well-conceived — andconsistent — brand and positioning strategy creates a strong brand equity, which is the added value brought to your company's products or services that enables you to charge more than what can be charged by similar, unbranded (or poorly-branded) products. An obvious example of this would be Coke versus a generic or store-brand cola. Because Coca-Cola has built such a powerful brand equity, it can charge more for its product — which is why customers willingly search-out Coke, and will pay a premium price. Position your company and its products correctly, and you will quickly build awareness and enhance profitability!

Hopefully, this article has provided you with some useful information that can help you in properly positioning your product or service.

Comments or questions? Drop me a line at

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