Archive for the ‘audience’ Category

Whilst carrying out some research recently I realised that I need to arrive at a more granular categorisation of the types or categories of value propositions that vendors use.

And in attempting to do that I stumbled across an interesting read on the ITSMA site entitled Why You Need Three Different Types of Value Propositions. I hadn’t heard of ITSMA before but it appears that they  focus on helping high-tech organisations to market solutions and services. I’ll certainly track them from here on in because I felt that I could have written the blog entry myself as it matches my own personal experience very accurately.

The three types of value proposition that the author refers to are in fact not the same as the categories of value proposition that I’m looking for but more of that in a future blog entry. But, I was also struck by the process that the author Julie Schwartz advocates for developing value propositions see below:

Step 1. Understand the market and clients.

Step 2. Determine your true differentiators.

Step 3. Articulate unique value based on customer need.

Step 4. Quantify value.

Step 5. Elicit internal and external feedback and revise.

Step 6. Collaborate with sales to communicate value propositions.

as again it is similar to our own advice on building propositions in my blog entry from last November here.

1. Understand what the competition is doing

2. Understand your own capabilities and how you are different from the competition (*and change your positioning and messaging if required)

3. Understand where your prospects are still willing to spend money – the funded initiatives

4. Understand what pain is causing the prospect to still spend money – what are they looking to achieve?

5. Create messaging by mapping your own capabilities and differentiation, to the prospect’s pains and their willingness to spend

6. Retrain the sales force with the new focus/messaging

7. Use the right medium to get your proposition in front of the right person in the right organisations

Having said all of that, I do feel that there is a terminological difference between Julie’s value proposition and my own. I think the use that Julie has settled on, and let’s be clear there are no hard and fast defitions for the stuff – it’s a matter of personal preference, is similar, but not identical to some of the elements of what I would refer to as the positioning statement.

Personally, I use the value proposition term in two ways. Firstly, and very generally, the statement of the type of benefit that will be enjoyed AFTER a prospect has become a client.

Examples:

It will reduce the risk of failure

It will deliver projects quicker

It will increase profit

Secondly, the internal strategic marketing deliverable that product marketing/communications individuals are responsible for crafting is a formal definition of a specific proposition to a specific audience.

For this I usually follow a format similar to the one below:

1. A statement of quanitifiable benefit that a specific audience will enjoy AFTER they do business with you

2. An interpretation of what that benefit will mean for the specific audience

3. Proof of where the company has previously delivered this value to a similar audience and what the result was

An example (numbers only to illustrate the sections above):

1) By utilising our technology, mobile telephone operators can roll out new services between 2 to 3 months earlier than traditional approaches.  2) In a very competitive market this provides significant competitive advantage and increased revenues as enjoyed by 3) XYZTelco who we helped to bring a location-based SMS service to market in under 3 months from project inception. This led to them gaining a market leadership position for this service.

Anyway, I’ll revisit the categories of benefit/value that I’m really interested in an an up-coming blog but I thought I’d share this interesting read with you.

Danny Goodall

Carrying on from my blog on “corporate shyness”, I’m looking here at the different ways we evaluate information and make decisions. The first thing to say is that this is a big subject and one that others are much better qualified to cover than I am. Myers-Briggs has led much of the work on personality types and if you’re looking for in depth information that is not a bad place to start. But I am going to look at how personality traits influence the way we make decisions and what impact that might have on a marketing strategy aimed at influencing people.

Intuition

People who rely on intuition to make decisions typically believe that they see the whole picture.  They feel able to quickly see things in the context of a wider perspective.  When presented with details or detailed arguments, intuitive people will feel uncomfortable or even claustrophobic and will instead lean on what they instinctively believe.

Intuitive people are said to favour products that are positioned as breakthrough or next generation. Strategies like these speak to their self-perceived ability to see trends and to place their decisions in the context of these trends.

Intuitive people are therefore likely to respond well to high-level marketing materials that place a technology or a company in terms of trends or breakthrough strategies. Language that claims and defends a new product category for a company will be appealing to intuitives. Details will likely turn off intuitive people to a particular argument.

Thinkers

As the name suggests, the “Thinkers” classification is one that psychologists use for those amongst us who like to rely on their grey matter to arrive at decisions. They typically have very a highly developed sense of logic and enjoy the analytical element of decision making. Processing data and wading through information is what these people are all about.

When putting propositions to thinkers one should be aware that they will latch onto elements that flow logically. Claims that a product can achieve something without supporting information will be likely to turn Thinkers off. Claims that can be validated using their analytical capabilities will, by contrast, draw them in.

For example

Bad…

“The fastest product in the market”

Good…

“By combining ultra low thickness manufacturing techniques with multi-core processors, our new processors outstrip the competition by a factor of two”

Sensors

Sensors again like to deal in facts and distrust quickly formed opinions, generalisations and hunches. They prefer to deal in the tangible  raw information that is at hand. Facts are important and Sensors have the ability to wade through a great deal of detail and to see the facts in context.

Sensors enjoy messages and campaigns that allow them to rely on their “senses” and experience to understand. Messages that state facts that are “generally” understood work well with Sensors. Their ability to “know” that these claimed facts are true reinforces and validates their beliefs. “Service Oriented Architectures now dominate architectural design and ACME is the leading exponent…” may appeal to a Sensor because the fact that they “know” that “SOA dominates architectural design..” validates the statement in their mind.

Feelers

Feelers are a tough crowd in terms of Business to Business sales and marketing.  They tend to arrive at their decisions by trusting their emotions. Detailed discussions turn them off and instead they are sensitive to the feelings of others.

Third-party recommendations from people that Feelers trust or expert endorsement that “feels” real work well with Feelers.  ”Leading CEO Bob Trustworthy says he chose ACME because he trusted the people he was dealing with…” might be an approach that would work but to be honest this is a personality category that matters more in face to face sales situations than in outbound marketing communication.

It’s important to stress that whilst some of these traits discussed here will be dominant, we each of us has a mixture of these personalities traits and are not simply one or another. That said, psychologists do tell us that we fall into one of two broad categories.  We’re either predominantly Perceivers (Intuitives, Sensors) or we predominantly Judge (Thinkers and Feelers).

How does this manifest itself in marketing strategies and tactics?

Well we first have to ask ourselves if it is possible or realistic to create different marketing messages, collateral or  programs for specific personalities. It’s normally the job of the sales team to identify and exploit these personality traits in one-on-one meetings with their prospects. To expect the marketing team to cater individually for each personality type is pretty unrealistic.

It is however critically important to realise that you need balance.  This can be overlooked if your product management/marketing team is good at creating one type of collateral. For example- if the team naturally favours detailed technical specification and performance information, it is essential to realise that some prospects will positively avoid reading such material. Therefore you may need to balance such material with material aimed at other personality types as well.

It is worth stating that personalities types can congregate in specific job roles or even specific industries.  For example, it is common in my experience for there to be more Thinkers than Feelers in the highly technical discipline of software development. But as you move away from the coal face of the overtly technical disciplines and start to look at the management levels in the IT domain, it is my experience that you find people with a rounder set of personality traits.  (I am aware that this appears like a massive and clumsy generalisation – please see the small print below before suing me…)

The small print (Ironic eh?).

Please note that this is not precise science and that wide generalisations have been used to illustrate points. Subtlety and interpretation are critical when dealing with the psychology of product marketing. Lustratus helps technology companies to market themselves more effectively in a business to business context. As such some of the examples in this blog may not be completely relevant to other industries. That said I’m fairly confident that the principles apply across many industries.

Further reading – well anything on differentiation and specifically anything by Al Ries and Jack Trout.  Differentiate or Die by Jack Trout is a good place to start. Detailed information on the Myers Briggs psychometric studies can be found here.

Danny Goodall

Part 3 – Sell Differently

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

Perhaps the most obvious differentiator between organisations that have “broadly” similar technology, and an area that particularly hurts smaller or less well established software vendors, is the vendor’s approach to selling.

Which audience strata do you aim at and what do you say to them?

At its most crude this can be the difference between Vendor A talking to a technical audience about the features of Product A whilst Vendor B is talking to line of business managers within the same company about how their product will provide some business benefit or other. Two similar offerings, with similar capabilities being “sold” in very different ways to very different parts of the same organisations.

The benefit of selling at a business level is enormous.  Decisions get made at that level, budgets get signed off at that level and enterprise-wide relationships get built at that level.  However, the difficulty with this approach, especially for smaller or less well connected vendors, is that gaining access to senior management outside of the IT domain of their prospects’ organisations is very difficult.

It takes years of building credibility and demonstrating proof of delivering benefits (reducing risk, Increasing profit, saving time,removing cost, etc.) to buy a ticket to the business-benefits ball.  Unless you’ve paid your business benefit taxes, have documented how you’ve helped deliver benefits and have an army of references willing to stand up on your behalf you’re likely to not be taken seriously.

In addition, in my experience, the skills that a sales exec needs to credibly describe the features of a technical proposition are usually mutually exclusive from the ones they need to engage a senior C-level exec in a discussion about the business issues that keep them awake at night.

So where to start if you’re a technology-focused vendor looking to sell differently?

Well it’s a journey and will involve dramatically changing the way your organisation thinks, behaves and looks.  Many of your staff will have to undergo a dramatic transformation and many won’t make it (especially the sales team).  Then you need to look at developing marketing messages for IT Business and the Business audiences.  You’ll do this by talking less about specific product capabilities and instead aligning yourself with where the prospect wants to be AFTER they’ve done business with you.

What are their pains, what are they looking to achieve, how can you help them do this and what proof can you provide that you’ve done it before?

The marketing materials and programs that support such a business audience-focused sales approach are very different too.  And whilst this has a significant impact on the structure of the marketing organisation, perhaps the biggest challenge is that just because you’re now selling to a business audience doesn’t mean that you stop marketing to the technical audience.  We still have to convince these guys that we’re able to do the job. So now you’re waging a marketing battle on two fronts and this means significantly greater investment.

But before embarking on this approach you should ask yourself whether you’re committed to the journey.  I’ve worked for, and with many organisations that have seen “selling to the business” as the holy grail, the panacea to address their competitive losses and their inability to control the sale.  But embark on this journey without fully committing to the changes it WILL have on your organisation and it will lead to a bloody disaster.  I speak from bitter experience.

Well that’s about it for the “selling differently” approach to differentiation in a homogenised market.  The benefits of selling at the business level while your competitors are talking to “minions” in the technical side of the business are enormous, but as I’ve mentioned about it’s not an easy journey.

I’ll cover some more differentiation techniques in coming blog posts.

Danny Goodall

I’ve just had a conversation with a friend, an ex-colleague who was picking my brains (for free I might add!) about what he could do to make his sales year look better.

I asked him how his product was positioned and where his focus was on the market. He told me, and in doing so mentioned 3 industries, 3 market categories and 4 sub market segments, 4 or 5 target audiences and a similar number of problems they address in each of the 3 industries. I told him that this isn’t a focus. It’s a hedging of bets. It’s a baiting of many hooks in the vain hope of landing at least one fish. My mate was embarrassed. He knows this himself.

Focus, especially in these tough times is an absolute necessity. If you can’t focus to the point of one or two key problems you solve, you can’t expect your prospects to work out what you do and what you could do for them, and don’t expect to be in business come the economic recovery.

And my mate’s company isn’t a small, inexperienced company lacking real marketing talent. On the contrary they have really good people. So how did they get themselves into this situation? The answer is that sales management, worried about the lack of leads and general interest in the product in the market had put pressure on the marketing organisation to “aim wider”, to target some of the areas the competition and other vendors in adjacent market segments were targeting.

The result? They were “targeting” everyone.

So it was the sales departments fault then? Well despite being a paid up member of the Marketing Protection League, I’m not going to endorse the marketing=good, sales=bad stereotype here. The marketing team was at fault. Sure the sales team were acting without a plan and not working from common sense, but that’s understandable.  Just as we’re led to believe that waterboarding can make you say and do things that you don’t really mean, so come the end of the quarter when the members of the sales team has to put various bits of their collective anatomy on the line, they will happily advocate changing strategy 7 times a day, 5 days a week.

So it’s up to the marketing team to lead the company through these crazy times. Understand your ideal client and what their problem is, understand the value you can provide them that will make them want to buy from you and understand why you’re different from the alternatives. Perhaps most importantly make every effort to gather intelligence that will tell you where your prospects are still spending money. Focus is what you need in these tough times.

Of course that is only half the story. Marketing can hand a map with clear directions to the rest of the organisation but it won’t stop them all heading off in different directions and ignoring the map. So that’s where the close relationship between sales management and the marketing team comes into its own. One plan executed with focus and passion by two teams acting as one.

Simple.  Well not really, but it’s not rocket science.

Danny Goodall

In infrastructure software sales and marketing, Lustratus categorises the primary end user target audience as one or more of the following three categories:

• IT Technical – Represents the overtly technical disciplines within the IT organisation that have no management, strategic  or commercial responsibilities
• IT Business – Represents the higher management levels of the IT organisation that have strategic and/or financial responsibilities
• Business – Represents the line of business functions outside of the IT organisation

Whilst there are many subtle distinctions between these these layers a general description of the types of positions and the role of they play in enterprise software sales for infrastructure software is shown in the diagram below:

Danny Goodall

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

Part 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>

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>

Part 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>

Part 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>

Part 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>

Part 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?”

Whilst 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>

Part 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.

In 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.

Part 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 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.

When 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.

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 REPAMA research 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?”

Whilst 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>

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.

I often find that when building competitive strategies, vendors tend to focus all of their efforts on other vendors with similar products and technologies.  They believe that if they understand how the other vendors in their segment are taking their products to market, they will give themselves a good chance of winning business.  Whilst there is nothing wrong with this strategy, it is very easy to get trapped into the habit of seeing things only from a vendor perspective and forgetting that the customer always has a choice.

The result is that vendor A believes that as long as he/she builds clear differentiation versus vendors B,C and D he will win the business. The reality is that vendors need to build strategies to combat the other alternatives that might equally well serve the end user.  These alternatives might not be recognisable as a “competitor” at all.

I wrote in an earlier blog about the 8 fingered glove seller who might find that their competition doesn’t just come from other glove suppliers but also might come from sellers of coats with big warm pockets.  A little tangential perhaps and a better illustration might be a middleware vendor who believes that its competition for a piece of ERP integration business comes from other middleware vendors but who actually loses the business to an ERP vendor that addresses the problem within the ERP software.  The ERP vendor isn’t in the integration space, but they were able to eliminate the problem by changing their software.

Understanding all of the legitimate alternatives that a prospect has is essential and it is this issue that comes into sharp focus in a slowdown where the obvious alternative that presents itself to an organisation is to do nothing.  No amount of competitive planning and intelligence gathering will allow a vendor to win against a strategy of committed inaction.

This “inaction alternative” represents a double conundrum for early market vendors. The approach that that more mature vendors use to convince the customer to invest is to sell on value, or as part of a solution sale.  They demonstrate the value they’ve been able to deliver to previous customers, focus in on a pain that they perceive their end user prospects are experiencing and build investment justification for their solution.  It is this justification, if sold at the right level in the organisation, that can turn round a decision to do nothing.

Early market software vendors are typically trying to build brand new demand for their new technological approach.  As a result the ”need” does not already exist in their market which makes generating leads difficult when IT spend in under so much scrutiny. Secondly, early market vendors struggle to document the value they have delivered to existing customer which makes it difficult to justify investment. This is because their sales are usually made to the technical side of their customers’ organisations and their propositions typically focus on features and capabilities instead of business value.

A fantastic example of the dilemma that early market vendors face is found in the cloud computing space.  The cloud proposition is multi-layered, subtle and spans hardware and software but it effectively revolves around cost savings and on-demand scalability.  With corporations facing incredible pressure on IT spend, cloud computing should be able to save most large corporations vast amounts of money.  Obviously, there will need to upfront investment and it is also true that many cloud computing offerings need to mature to totally fulfil enterprise needs but the potential benefits are clear.  So it will be fascinating to see how these early market cloud and cloud-enabling vendors will tackle a market where investment in new concepts is tight.

The irony is that cloud computing offers not only the potential to shave a few points of the corporate IT spend but instead could completely transform the size and nature of IT budgets and departments.  It could be the killer application of the economic slowdown, but first vendors will need to convince enterprises to invest.

We’ll be carrying out a REPAMA Segment Analysis Study on the cloud space (Application virtualization/Dynamic Application Service Management) in the coming months, and will be fascinated to map the different go-to-market approaches that the successful and not so successful vendors are taking.

Danny Goodall

lustrat

If I were to write in this blog

“18th century art has always been my passion.  It’s my belief that since the mid-18th century, art, as captured by oil on canvas, has never been surpassed in terms of quality.”

You may ask what on earth that has to do with you – a visitor to a blog about high-technology marketing.  You’d be right to question it because I’d obviously written the wrong thing to the wrong audience.  My message may have been exactly what I wanted to say but I chose the wrong audience to deliver it to.  As it happens, I’m afraid I’m a bit of a philistine when it comes to art appreciation – but hopefully you get the point.

This happens a lot in the marketing world. Many hi-tech vendors are confused about who their audience is or should be for outbound communication.  Others are not confused but through desperation, they will simply throw out as many credible messages as they can, hoping that some of it will stick with someone.

As we know, effective communication comes from providing the right level of information to the right audience.  Just because a message “works” or seems credible, doesn’t mean it the right message for any audience.

When marketing high-tech products, you have a number of ways of communicating to the potential end user of the product.  But first you have to understand how your target audience is segmented and what each segment wants to hear.  Lustratus refers to this as the audience strata and we broadly categorise the segmentation for end-user consumers of IT products as follows:

IT Technical - Represents the overtly technical disciplines within the IT organisation that have no management, strategic  or commercial responsibilities
IT Business – Represents the  higher management levels of the IT organisation that have strategic and/or financial responsibilities
Business – Represents the line of business functions outside of the IT organisation

Both the language and the type of communication used at each level has to be directed specifically at the needs of the individual audience stratum.  Take the example below.  If I was communicating to the Business about our new product called “Product A”, would I write?

“Product A complies with the latest duplex standards (KPT2, RRI v4) and is able to perform the Smithson Benchmark is 18.2 seconds (19.2 with override).”

Or if I was talking to the IT Technical layer, would I write?

“Product A will make your software development team productive in a quarter of the time needed for traditional products”

Finally, is this of relevance to the IT Business layer?

“The risk of corporate governance failures is reduced dramatically with Product A.  Internal systems can be brought up to date quickly as Acme Ltd. found out.  They implemented a complete change of governance systems in less than 2 months, removing risk of failure and resulting in a 20% cost saving.“

The answer to each of these questions is obviously “no”.  Whilst each of these messages may be valid for the capabilities of Product A, we have to understand the specific needs and drivers of each level of audience.  The question as to whether one vendor can legitimately communicate to all three layers is moot, but selecting the most important audience constituent and developing messages that specifically talks to them is key.

After all whilst each audience constituent above might be able to understand the implications of the statement, in their day to day jobs these statements add nothing, solve nothing and give no value.

It’s not easy for early market or innovative companies to understand who their audience should be.  As a vendor grows and evolves so the audience that they need to reach will change.  A useful technique to ensure that you are saying the right things to the correct audience layer is to monitor closely what your competitors do.

The diagram below is taken from a recent REPAMA Segment Analysis Study (the vendor names have been changed to protect the innocent).

The Market Element Distribution diagram shows the priority of each audience strata for each of the different vendors in the study.  As you can see, there is a high degree of correlation between the different vendors as they are all very close to the market mean. If I were a vendor in this space, I would have two choices.  Either I assume that each of the vendors has got it wrong and I should aim at a different layer of audience.  Or I believe that my competitors each understands who the audience is, and I aim for the same category.

Either way understanding who will be most receptive to the value you can provide is essential.

All of the above will only makes sense you you if I’ve done my job properly.  That is, if I’m right that the average reader of the Lustratus REPAMA blog is a right-handed, 32 year old male product marketing manager living and working in the US.

So if you’re an art critic, apologies but you’ve come to the wrong place.

Danny Goodall