Positioning and the Positioning Statement

Positioning and the Positioning Statement

This page contains a summary of a series of blog entries I made during January and February 2009.  It describes the format of the positioning statement that we use in the REPAMA competitive intelligence methodology. I refer to the concept of positioning and the positioning statement frequently so I wanted to pull them all together in once place.  So here you are.

Danny Goodall

Links to Original Posts

The Positioning Statement
FOR… positioning element
WHO…positioning element
OUR…positioning element
IS A…positioning element
THAT PROVIDES…positioning element
UNLIKE…positioning element
OUR PRODUCT…positioning element

Positioning Cross HairsPart 1 – Positioning

Happy 2009! I’ve been in debate with a number of correspondents about the layout and format of the positioning statement that we use in the Lustratus REPAMA-based research.  So I’m going to dedicate the next few blog entries to the positioning statement.  I hope to answer the following questions.

  • What is the positioning statement?
  • Why use a positioning statement?
  • What is the value of a positioning statement?
  • What is the format of a positioning statement?

The first thing to say is that over the years, having worked with some of the best product marketing people in the industry, I’ve seen many different approaches to positioning and equally many different formats for positioning statements. Each of them, to a greater or lesser extent has been valuable.  Most positioning statements that I’ve seen and used have had a very similar structure.  Although I have seen some that have been very different, in fact more like a what I would refer to as a value statement or a value proposition.  Perhaps I will revisit them in a future blog but here I’m going to focus on the classic positioning statement.  So as I’ve mentioned there is no single way to construct a positioning statement but Lustratus has settled on a specific format that captures and conveys the seven key product marketing elements and it is this format that I will concentrate on here.

What purpose does the positioning statement serve?

It’s probably best to start with a definition for positioning first.  And if positioning statements are contentious then the the broader subject of positioning is even more so.  Whilst there are many views on this, for me, positioning is about creating a unique, compelling and defensible space in the minds of your prospects where your product/service and only your product/service sits.  Your ideal prospect must feel that you created the product/service for them alone to answer their specific problems and very importantly they must understand exactly how you are different/better that the alternative/competition.  Most product marketing professionals understand this well but as mentioned above, the development of positioning strategies and the statements that captures those strategies can take many different forms.

In my experience most positioning statements are designed to be internal tools for the development and then internal communication of a unique and compelling market proposition.  The positioning statement seldom gets used externally (with customers or prospects) in its raw format.  External marketing communications strategies are typically developed using the internal positioning statement as a guide.

The positioning statement conveys the following seven product marketing elements:

  1. The Ideal customer
  2. The main pain that the ideal customer has or the negative situation they find themselves in
  3. The name of the product
  4. The name of the product category – the generic way to refer to the class of product (I often see this omitted)
  5. The main benefit that the product provides and the key reason that the prospect should buy the product
  6. The primary competition or alternative
  7. The unique selling proposition (USP)

The format of a positioning statement

A positioning statement is natural language-based and should read fluidly and easily as a single sentence and yet should contain all seven of the marketing elements above.  This sounds like a complex task and to aid us in that development we use a specific structure for the statement.  This is shown below.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

So the “for”, “who”, “our”, “is a”, “that provides”, “unlike” and “our product” elements give our positioning statement the structure it needs.

An example positioning statement

An example positioning statement is shown below. It is taken from the upcoming Lustratus REPAMA Segment Analysis Study into theEnterprise Service Bus (ESB) market segment. In the study we reverse-engineer the seven marketing strategy elements of positioning statement (as well as many others) used by a number of the vendors in the ESB space – in this case the products examined were Microsoft ESB Guidance, Oracle Service Bus, Progress Sonic ESB and TIBCO ActiveMatrix Service Bus.  In the example below we’ve attempted to capture Microsoft’s position and proposition in the ESB market.

FOR Microsoft BizTalk Developers WHO are building solutions that leverage the SOA pattern OUR Microsoft ESB Guidance IS A loosely-coupled messaging environment THAT PROVIDES an infrastructure for enabling a service-oriented architecture UNLIKE traditional ESBs OUR PRODUCT provides a superset of ESB functionality, extending the ESB pattern to include modelling and execution of business rules, workflow, and adapter integration

It’s notoriously difficult to be precise when reverse-engineering a vendor’s positioning statement and sections like the “that provides” and “our product” are especially difficult to define precisely.  But hopefully it shows how an organisation like Microsoft might set about defining its approach to a particular market segment.

In the next several blogs I’ll expand on the positioning statement and cover each of the seven elements in a bit more detail.  <More information can be found in the Lustratus REPAMA Guide here>

man holding money 3

Part 2 – The Ideal Customer

As mentioned in the previous blog entry on the positioning statement, I’m going to continue to flesh out the details of the seven other positioning elements.

This time its the ideal target customer, so let’s first revisit the format of the positioning statement just to give us a context.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

The ideal customer allows the organisation creating the positioning statement to express the characteristics of their ideal target customer for the product or service they sell.  This can obviously be done in many different ways and I’ll list some of the more common ones below.  In the previous blog entry I gave an example of the REPAMA reverse-engineered positioning statement forMicrosoft ESB Guidance.  We saw that Microsoft’s ideal target customer was defined as:

FOR Microsoft BizTalk Developers

Between you and I, this is not the most definitive classification of ideal customer I’ve ever seen, but when reverse-engineering a vendor’s implied positioning from their outbound marketing communications, it’s often as close as we can get. I suspect that Microsoft’s internal classification will expand on this to include other characteristics that make their ideal target client more relevant to them.  That said, in the context of the ESB REPAMA Segment Analysis Study that we conducted, we’re pretty confident that this ideal target client is correct for Microsoft.

Other customer characteristics that can be used to segment the market to effectively define the ideal target customer include:

  • Industry/Vertical – Can you define the industry or vertical market that the ideal client belongs to?
  • Geography – Where are they based?
  • Size – What size of organisation? – by revenue or employees
  • Reach – The reach of your organisation – local, regional, national, multi-national?
  • Budget – Is the client able to be classified in terms of how much money they have to spend?
  • Pricing – Are they sensitive to price?
  • Job title – What is their position/job title?
  • User – Who will use the product?
  • Decision maker – Who makes the decision on this type of product?
  • Image – What image does this client have? – Leading edge, conservative, well know, leader in their own market.
  • Benefit – What will the product do to improve the client’s life?
  • Reason to buy – What compelling reason does the client have to buy the product?
  • Use – What other complimentary or competitive products are they using?
  • Concerns – What are the main concerns of your target client?
  • Business type – What is their type of business?
  • Business model – What is their business model?
  • Competition – Who is their competition?
  • Clients – Who are their clients?
  • Problems – What are their problems?

So examples for a company that sells products used by telecommunications organisations might include:

For…

  • Mobile telecommunications organisations
  • Mobile telecommunications organisations concerned with adhering to new governmental regulations
  • Mobile telecommunications companies that sell through channels
  • Mobile telecommunications organisations that have a prestige image
  • Mobile telecommunications organisations that operate at the budget end of the market
  • Mobile telecommunications organisations that compete with RingRingTelco Corp.
  • etc.

What we’re attempting to do here is to segment the total available market so that we end up with a segment that is a) big enough to sustain us but b) small enough for us to dominate.  Obviously credibility and ability to reach these organisations comes into the decision.  So if I were a product marketing VP for a 10 man start-up software organisation, whist I might be attracted to an ideal target client of “the largest global banks struggling to implement a worldwide roll-out of XYZ application”, I might lack the credibility or the reach to be able to deliver on this.

So as we can see the ideal target client goes right to the heart of the business planning for the product unit or corporation and is incredibly important to define accurately.

So that’s ideal customer, I’ll tackle the “pain” section in a future blog.  <More information can be found in the Lustratus REPAMA Guide here>

Pain imagePart 3 – Pain, problem, need or desire

Continuing  the series of blogs looking at the elements of the positioning statement I’m going to look at the customer pain or problem section.

In this entry I will look at the pain, problem, need or desire that we believe that target customer is looking to resolve.  So just so we have a the context for the discussion, here is the positioning statement format that Lustratus uses.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

In the last blog entry we had started to create the unique position in a prospect’s mind where our products and services uniquely sit.  We did this by first identifying the ideal client.  Now we’re going to expand on the ideal client segmentation by adding a specific pain, need or desire that the ideal customer can relate to or a situation that they find themselves in.  The “who” element describes the situation, nearly always negative, that the ideal customer finds themselves in and the implication is that we can positively alter the ideal customer’s situation.

The following questions often help to narrowing down the “who” element of the positioning statement:

  • What is the ideal customer looking to do or achieve that they cannot do without help?
  • What must the ideal customer do that they are struggling to do?
  • What is the desired state that the ideal customer is looking to achieve?
  • What is the problem that the ideal customer is wrestling with?
  • What situation (needn’t be negative) does the ideal customer find themselves in?
  • etc.

Some examples

In a previous blog entry on the positioning statement we looked at an example REPAMA reverse-engineered positioning statement forMicrosoft ESB Guidance.  Here, we saw that Microsoft’s “who” section was was defined as:

WHO are building solutions that leverage the SOA pattern

For those readers who are not experts in SOA (service-oriented architecture) or the infrastructure software market in general, “SOA” here is an esoteric software architecture model that many organisations believe provides great benefits.  Microsoft, amongst other vendors, claims that its products help its users to implement SOA more effectively.

Microsoft is effectively saying that it believes that the situation its target customer (Microsoft BizTalk Developers) finds themselves in is that of “building solutions that leverage the SOA pattern”.  Interestingly, in our attempt to reverse-engineer Microsoft’s positioning statement, we see that Microsoft has not aimed at an overtly negative pain for the ideal customer.  Rather it has chosen to simply focus on a situation the ideal customer finds themselves in.  Other vendors from the ESB REPAMA SAS report show a different approach to the pain.  Oracle with its Oracle Service Bus product chooses to identify the following area of pain in our reverse-engineered positioning statement:

WHO need to enforce quality of service, security and performance policies across an enterprise-wide network of multiple SOA domains

Progress with its Progress Sonic ESB product identifies this need

WHO need to connect many different IT resources using many different technologies in many physically different locations

So whilst Microsoft has chosen to simply state a situation, other vendors have chosen to highlight specific needs or deficiencies. Remember the positioning statement in its entirety should be used to make the ideal customer feel that you have designed and built the product (or service) specifically for them in response to their specific problems.  Other, more generic examples might include:

  • WHO are struggling to implement the latest governmental regulation
  • WHO need to remove costs from their IT operations
  • WHO fail to bring new products to market ahead of their competition
  • WHO are unable to ascertain their risk exposure in a timely manner
  • WHO cannot currently meet their corporate governance requirements
  • etc.

So that’s the main pain, need or desire section, I’ll tackle the “OUR [product name] section in a later blog entry.  <More information can be found in the Lustratus REPAMA Guide here>

name image 2Part 4 – The Our Product Element

In this series of blogs we’re looking at the elements of the positioning statement format that Lustratus uses in our REPAMA research methodology.

In this entry I’m going to tackle one of the easier elements, where little specific planning or strategy is needed.  Here we’re looking at the “Our [product name]” section of the positioning statement.  So as usual let’s look at the context of this element in the wider positioning statement.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

Having said that little planning or strategy is required here, what I should have said is that from the perspective of the product marketing task of creating the positioning statement, the product name is usually already in place.  But not always.  Obviously an incredible amount of effort, research and focus group feedback can go into selecting the product name. And whilst the name doesn’t usually change based on the ideal customer or the pain that they have, it might be that specific products are “created” so as to appear focused on a specific audience and/or problem.

I’ve had experience of companies (mea culpa!) where the engineering effort required to bring such a product to market stretches only as far as to add an adjective or a noun to a product name in order to make it appear more targeted at a specific problem or prospect.

Whilst the science of product naming is outside the scope of what I want to cover here, if you’re interested there is an good discussion on that subject, as well as many others in the seminal book by Ries and Trout “Positioning: The battle for your mind“.  It’s a good read even if its roots are in advertising and it appears a little dated now.  Perhaps I’ll revisit it later with a book review.

So other than that, that is the product name section – really just a place holder for, as you might expect, the name of the product (or service).

<More information can be found in the Lustratus REPAMA Guide here>

buckets 4Part 5 – Product Category

Continuing this series of blogs where we are looking at the positioning statement format that Lustratus uses in our REPAMA research methodology.  In this blog entry we’re going to look at one of the elements that usually, but not necessarily, picks itself.  This entry is looking at the “IS A [product category]” element here.

So as usual let’s look at the context of this element in the wider positioning statement.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

The product category is a bucket into which other similar offerings are placed whose definition is generally understood in the wider market.  Product categories can be defined by convention, market analysts or by vendors themselves.  It is typically used as a mechanism for a vendor to communicate quickly and generically, what type of product they take to market.

  • OUR XYZ product IS A Database
  • OUR XYZ product IS A Relational Database
  • OUR XYZ product IS A Spreadsheet
  • etc.

From a marketing communications and lead generation perspective, selecting the correct product category is critically important.  When prospects are actively looking to make a purchase, they may believe that they know what type or category of product will best solve their problem.  Ensuring that you use language that matches with your prospect’s expectation is key.  The product category should also ideally clearly communicate, in terms that the target customer would understand, what the product is and, ideally, does.  Many highly technical vendors will use incredibly complex terminology to describe their product category.  As long as the target audience within the ideal customer understands this terminology then there isn’t a problem.  But if the target audience, as often happens, evolves over time to include individuals that do not understand such terminology then problems can arise.

The temptation to re-segment an existing product category (as with Database and Relational Database above) or to even introduce a new product category is great amongst vendors looking to differentiate themselves versus the competition.  This is especially true in early market situations where some form of significant innovation might have taken place.  The logic here is simple – “I need to make my prospects understand why we’re different so I will create a new product category that better describes what it is that we do.”  It sounds like a good plan however the task of successfully re-segmenting or even creating a new category is often underestimated.  With millions of dollars in marketing spend at my disposal throughout my career, I have only once been part of the sustainable introduction of a new product category and only once have I successfully re-segmented an existing category.  The lesson I learned was that It’s often better to work from within the category and differentiate there.

Another key thing to remember when defining the product category, other than to question very hard whether you actually need to change an existing product category, is to keep an external perspective.  Most vendors look in detail at the capabilities of their product and discuss this internally with the people they work with on a day-to-day basis.  Instead of looking in the mirror, in my experience it’s best to look at the problem from the outside in.  By putting yourself in the shoes of your prospects and asking how they will go about attempting to solve their problems you’ll gain greater insight.  What category of product would a prospect turn to, to solve their particular problem?  In many cases it’s moot anyway as, if you’re a market follower rather than a leader, you typically have to go with the category of the market leader anyway. And this is where competitive intelligence plays a key role.

Examples

In the example REPAMA reverse-engineered positioning statement I’m using as part of this series of blogs, we’re looking at how Microsoft takes its ESB Guidance product to market – as well as other vendors such as Progress, Oracle and TIBCO.  (For no other reasons than I have just finished the primary research on the REPAMA SAS into the ESB market so its fresh in my mind.)

Microsoft describes its product category as follows:

IS A loosely-coupled messaging environment

(This paragraph for those interested in the SOA and ESB market only…) In the context of the Lustratus REPAMA Segment Analysis Study on the ESB market, this is significant as the other three vendors in the report all define their product as an Enterprise Service Bus.  And whilst Microsoft generically uses the ESB term in its product name (ESB Guidance), it decides to refer to the category of product without it.

So that’s it for the “IS A [product category]” element of the positioning statement, other than to say that from my experience in infrastructure software marketing, this element is the one most likely to be omitted or combined with the OUR PRODUCT [product name] element.  I think that’s a mistake, but as Lustratus competitive intelligence is based on comparing the relative positioning strategies of different vendors, I guess you’d expect me to say that.

In the next blog in this series I’ll be looking at the “THAT PROVIDES [this main benefit and reason to buy]” element.  <More information can be found in the Lustratus REPAMA Guide here>

Present boxPart 6 – The Main Benefit or Reason to buy

In this series of blogs I’m exploring the format of the positioning statement that Lustratus uses in our REPAMAresearch methodology.

Today I’m looking at one of, if not the most important elements.  This is an element that in my experience vendors often find the most difficult to define about their own offering.  This is the “THAT PROVIDES [main benefit]” element.  First some let’s look at how this element fits into the context of the complete positioning statement.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

In my experience, this positioning element is often watered down so that it lacks any real convincing power.  The purpose of the THAT PROVIDES element is to describe the main benefit that your product or service provides your customer.  It details the value that your target customer can potentially derive and should be compelling enough to provide a reason for them to buy from you.  Instead of this, I often see this element used as a place to add another ho-hum feature or an also-ran benefit.  The question that should be asked is

“What benefit or value will compel the target customer to want to go through the process of buying from you?”

Who and That Provides pairingWhilst this is not a hard and fast rule, the THAT PROVIDES element is often paired with the WHO [has this specific pain or problem] element of the positioning statement.  So that the WHO section  sets up the main pain experienced by the target customer and the THAT PROVIDES section often outlines the solution or antidote to the pain.

It’s worth stressing one more time that the positioning process should produce a description of your overall approach to the market so that a target customer feels that you, and you alone a) understand their problem b) have the most compelling solution.  Ideally, they should be left feeling that you went into business simply to solve their specific problem.

Examples

  • THAT PROVIDES a reduction of up to 20% in data centre costs
  • THAT PROVIDES a 15% reduction in the time to bring new products to market
  • THAT PROVIDES complete alignment between corporate objectives and IT infrastructure
  • THAT PROVIDES complete, accurate and timely visibility into corporate risk
  • etc.

The impact of this positioning element is improved dramatically If the benefit can quantified or at least expressed in detail.

There is often a temptation when creating this element to fill it full of technical features or justification.  This is especially true of early market technology companies.  Whilst it is a generally held rule that it is better to concentrate on what the product leaves behind (i.e. the benefit), it is OK to focus on the technical value of the product IF the target customer or at least the target audience within the target customer, is highly technically-focused.

(This section for those interested in the SOA and ESB market only…)  I’m using an extract from one of Lustratus’ REPAMA reports to illustrate “real-world” positioning statements.  Here I’ve reverse-engineered the positioning statement for Microsoft’s ESB
Guidance product.  According to their outbound marketing, Microsoft sees the following as the main benefit they provide their target customer (BizTalk developers):

THAT PROVIDES an infrastructure for enabling service oriented architectures

This example falls into the “vanilla” category and certainly doesn’t really cut it as a compelling reason to buy.  That said, for the target audience (technical) within the target customer (BizTalk Developers), it represents a clear and (albeit overtly technically) compelling proposition.

OK so that was the THAT PROVIDES section. In the next blog entry in this series I’ll be looking at the “UNLIKE [the primary alternative or competitor]” element.  <More information can be found in the Lustratus REPAMA Guide here>

Spot the differencePart 7 – The Primary Competitor or Alternative

I’ve been looking at the positioning statement In this series of blogs.  This entry will focus on the UNLIKE [the primary alternative or competitor] element.

So just to recap here we’re constructing a natural language statement that captures a number of key strategic marketing positioning elements.  This particular element in the positioning statement above is where the ideal customer’s alternative to our product is defined.

First let’s see this element in the context of the complete positioning statement.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE[the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

Whilst this sounds straightforward – “It’s just the number one competitor, right?”, it actually requires a fair bit of thought, analysis, and planning.  This element effectively recognises that the ideal client has a choice as to how they will go about solving their problem.  The primary alternative from the ideal client’s perspective is captured in this element.

Unlike and Our Product pairingIn my experience this element is nearly always paired with the OUR PRODUCT element that follows it in the positioning statement.  The combination allows the UNLIKE element to define the primary alternative or competitor and the following OUR PRODUCT element outlines the Unique Selling Proposition benefits that differentiates “our product” versus the primary alternative.

For example:

UNLIKE alternative approaches to managing risk OUR PRODUCT not only manages risk but also reduces your corporate governance budget by up to 15%.

This example assumes that the ideal client believes that they have a number of “alternative approaches to managing risk” we then go on to differentiate ourselves versus these alternative approaches.

I have seen and used many different approaches for this element and it is critical to understand who or what we need to be “better than”, or at least “different from” to convince the prospect to put their business with us.  The key question to ask here is:

What does my ideal client perceive as their primary alternative (to my product) to solve their pain, need or desire?

This is key question.  Many mistakes that I see in competitive marketing start by getting the perspective wrong here.  It is critical to think from the prospect’s perspective and not from one’s own organisation’s perspective.  Many marketing organisations typically think:

  • “who do we compete with here?”
  • “who has the largest market share?”
  • “who has a product that is most similar to ours?”
  • “who do the analysts think we compete with?”

Each of these approaches is internally-focussed and whilst answering them will certainly help with competitive marketing, the answer might not be that important to the ideal client.

Approaches that I’ve used or seen for this element include:

  • A key competitor
  • A key competitive product
  • A number of key competitors (it’s better to have a single defined alternative)
  • A key category of competitor
  • Other vendors’ approach in the same market category
  • An alternative approach to solving the problem
  • Inaction – i.e. doing nothing

Examples

  • UNLIKE ACME Corp…. (key competitor)
  • UNLIKE ACMEProTurbo… (key competitive product)
  • UNLIKE ACME Corp and XYZ Inc…. (multiple key competitors)
  • UNLIKE relational database vendors…. (a key category of competitor)
  • UNLIKE other cloud computing vendors…. (other vendors’ approach in the same market category)
  • UNLIKE using spreadsheets to manage data…. (an alternative approach)
  • UNLIKE outsourcing your data management needs…. (an alternative approach)
  • UNLIKE managing information manually as you’ve always done…. (inaction – doing nothing)

Real world example

(This section for those interested in the SOA and ESB market only…)  In this series I’ve used an example positioning statement from Microsoft’s go to market strategy for their ESB product.  Here I’ve used our REPAMA methodology to reverse-engineer the positioning statement for Microsoft’s ESB Guidance product from their outbound marketing communications, Microsoft apparently perceives the primary alternative to be:

UNLIKE traditional ESBs…

So Microsoft is using the “other vendors’ approach in the same market category” strategy listed above.  This suggests that Microsoft believes that their prospect’s primary alternative lies with other ESBs and also that there is something about Microsoft’s approach to the ESB category that sets it apart from “traditional” ESBs.

So being clear about the primary alternative or competitor is important as is thinking from the prospect’s perspective and not from the organisation’s.  That is the UNLIKE element covered and in the final blog entry in this series I’ll be looking at the “OUR PRODUCT [has this unique selling proposition] element.  <More information can be found in the Lustratus REPAMA Guide here>

Danny Goodall.

BTW
It should be borne in mind that Lustratus’ focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we’re dealing with a technical audience for infrastructure software.  So please bear that in mind for your own industry.

Whilst I couldn’t find any reference to restrictions on the use of the Spot The Difference caption used in this blog entry, I wanted to ensure I provided a link back to its original location.

USP red apple amongst greenPart 8 – The Unique Selling Proposition

Throughout this series of blogs I’ve been examining the format of the positioning statement that we use in our REPAMA consultancy and analysis services.

In this final entry in the series I’m going to close out by looking at the pay-off, the crescendo, the exclamation mark at the end of the positioning statement – the USP or unique selling proposition.

But first, and for one last time, let’s take a look at this element in the context of the complete positioning statement.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE[the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

USP is one of those over-used terms that has found friends at all levels of responsibility throughout sales and marketing organisations. I’ve heard everyone from line of business managers, to sales people to CEOs use this term.  Everyone feels they have a handle on it and over time the term has come to generically mean “differentiator”.  Whilst I’m in favour of strategic marketing concepts finding friends throughout an organisation, there is a considerable amount of subtlety and craft missing from the “common” understanding of the USP.  So let’s start with some definitions and perhaps a little bit of history.

Rosser ReevesRosser Reeves – what a great name.  He sounds like he should have been some shady 1940s London underworld gangster.  But he wasn’t.  Instead he was an advertising man, one of the first in fact and it was he who brought us the concept of the unique selling proposition.  For him, its use and definition were rooted in (print) advertising and as such the formal definition assumes that the USP is being used in some form of promotional campaign.  There was also an implied assumption that we were dealing with business-to-consumer advertising too.  Since then we’ve broadened the definition to think of it as any general proposition made via any medium (adverts, web site, emails, phone calls, face-to-face conversations, etc.) whether that be business-to-business or business-to-consumer based.  Whilst the use of the USP may have changed, the disciplines and thought processes used in its creation are still valid today.

The definition below is taken from the book Differentiate or Die (survival in our era of killer competition) by Jack Trout and Steve Rivkin.  In this book the authors refer to Rosser Reeves’ 1961 work Reality in Advertising from which they quote Reeves’ three-part USP definition:

  1. Each advertisement must make a proposition to the consumer.  Not just words, not just product puffery, not just show-window advertising.  Each advertisement must say to each reader “Buy this product, and you will get this specific benefit.”
  2. The proposition must be one that the competition either cannot, or does not, offer.  It must be unique – either a uniqueness of the brand or a claim not otherwise made in that particular field of advertising.
  3. The proposition must be so strong that it can move the mass millions (i.e. to pull over new customers to your product).

As I mentioned above, whilst many of these disciplines are still valid, there is now so much competition in just about every market category, segment and sub-segment that being “unique” is increasingly more difficult.  So it’s no surprise that many of the USPs I see when reverse-engineering vendor’s positioning statements are often just SPs – with little or nothing unique about them.

Unlike and Our Product pairingWhen looking at the USP in the context of the positioning statement its important to remember that the “OUR PRODUCT” positioning element is typically paired with the “UNLIKE” section.  The UNLIKE element sets up the main alternative and the OUR PRODUCT element describes the USP that the alternative doesn’t have.

As shown below:

UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition]

The biggest challenge in defining this element of the positioning statement is in defining that unique space (number 2 on Rosser Reeves’ list above).  With product categories, segments and sub-segments so granular across many markets and with ultra competitive competitors competing within each of those segments, finding a position that only you can own is not the work of a moment.  In addition its important to remember that we’re not just trying to find a unique space, but a unique space that has compelling value to the consumer/customer as outlined in Reeves’ point 1 above.

In reality what tends to happen (in my experience of the infrastructure software space) is that the first entrant to the market (first mover) aims for something unique which is then “flatteringly” copied by later entrants to the market.  To later entrants this makes sense as they want to have some of the pie of the first movers and are happy to trade uniqueness for being perceived as similar to the market leaders.  Understandably it makes sense to “look” like the first mover.  This tends to lead to what I call “standards-based marketing” and simply creates a homogeneity of messages and propositions amongst the market protagonists.  This leads to little real differentiation and leaves prospects studying highly technical features to really understand the differences between products.

Examples

  • OUR PRODUCT removes up to 20% of data centre costs whilst reducing your carbon footprint
  • OUR PRODUCT starts reducing risk from day one.
  • OUR PRODUCT not only integrates with your existing systems but also provides comprehensive management capabilities
  • OUR PRODUCT ends world hunger (Well maybe not – but you get the idea)

Real world example

(If you have a specific interest in the SOA and ESB market you might find this section interesting…)  In our latest REPAMA Segment Analysis Study we looked at how a number of ESB vendors approach the market.  The vendors and products studied included Oracle’s Service Bus, Progress Software’s Sonic ESB, TIBCO’s ActiveMatrix Service Bus and Microsoft’s ESB Guidance.  Reverse engineering these vendors’ positioning statements gave some interesting insights and as an example I’ve listed Microsoft’s USP section below:

OUR PRODUCT provides a superset of ESB functionality, extending the ESB pattern to include modelling and execution of business rules, workflow, and adapter integration.

Here Microsoft selects a pretty strong USP.  They claim that UNLIKE other ESBs they provide extended functionality.  Whilst other ESBs may legitimately say  that they also offer extended functionality, these vendors may not actually be making that claim.  So this certainly passes Rosser Reeves’ test above.

The basis for this claimed USP is that their ESB Guidance is underpinned by their BizTalk product – which features broader functionality than other “simple” ESBs.  I think this is a pretty well constructed USP – despite the fact that the rest of Microsoft’s marketing for the ESB Guidance is pretty poor.  Perhaps this is a function of the non-product nature of ESB Guidance.

In summary when defining the OUR PRODUCT element we’re looking to communicate a specific benefit that will be delivered that none of the competitors or alternatives is able to offer, all of this couched in language that compels the prospect to take action.

So that’s it for the OUR PRODUCT element and for the positioning statement series too. <More information can be found in the Lustratus REPAMA Guide here>

Danny Goodall.

BTW
It should be borne in mind that Lustratus’ focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we’re dealing with a technical audience for infrastructure software.  So please bear that in mind for your own industry.

Posted in All Blog Categories, communication, Competition and Competitive Intelligence, differentiation, go-to-market, ideal customer, marketing, Marketing Strategy, positioning, product category, product marketing, product name, reason to buy, Uncategorized, usp and tagged , , , , , , , , , , , , , , , , , , , , , , , , .

One Comment

  1. Pingback: An Interesting Piece on Value Propositions from ITSMA | Lustratus REPAMA

Leave a Reply

Your email address will not be published. Required fields are marked *