3 biggest mistakes that marketers make when positioning their solution

I was recently speaking with a client about some of the positioning mistakes I have seen and wanted to share some of that conversation with the readers of my blog.  Following are the three big mistakes I have seen marketers make:

Mistake #1: Many marketers/agencies want to invent a new category when positioning their solution, so that they can call themselves a leader of that new category. This can be a huge mistake. So many successful companies have come out of market segments where there was already a dominant player, when they started.  Its OK to be a niche player in a market, if you can create a great product market fit in that niche AND then evolve over time into a broader market. For example, let’s look at customer feedback market. When Qualtrics entered the survey market, SurveyMonkey was already an established player in DIY survey market. Enterprise surveys market belonged to market research consulting firms. Instead of targeting a very big and already established mid-market for surveys, Qualtrics focused on owning the Education 250 market, targeting marketing and sociology departments (a very niche and narrow segment).  Once they got success there, they evolved their product to become “sophisticated enough for a PhD, but easy enough to use for an intern” and the successfully entered the enterprise market, eventually leading to a $8B acquisition by SAP (and then a later spin-off/ IPO).  They did not position themselves in the enterprise market, until they had captured a large % of the schools market and evolved their product. Similarly, Fluidware started as a niche survey tool for the Canadian government market (using the advantage of locally hosted data) and then grew into a tool for Canadian schools/state and local agencies.  Their key value proposition, in addition to being a user-friendly tool, was that the customer data was hosted in Canada. Eventually their solution became sophisticated enough for them to successfully target and win in the enterprise survey market, before being acquired by SurveyMonkey.  Most large companies follow the 70-30 rule, by targeting the 70% of the market that fits their existing successes and stay away from 30% that they consider niche. For example SurveyMonkey did not want to make their product complex by targeting enterprise segment and stuck to their core segment profile, creating opportunity for entrants such as Qualtrics and Fluidware to enter and establish themselves in the niche markets, and then eventually evolve into broader players.  Look at all the niche enterprise vendors that are very successful in focused markets (for example, specific verticals), even though that market is dominated by three giants – SAP, Oracle and Salesforce. We are already seeing some of these vendors successfully move from their narrow focus into the broader target markets of these larger vendors.

Mistake #2: Many marketers use a big bang approach to positioning, only to find that it is not fluid enough to evolve, as the market dynamics change and their product advances.  You need to revisit your positioning every year to ensure it is still aligned with the current market opportunity, and make changes to it, as needed. Remember Vision and product strategy is how you want to win longer term, but positioning is how you want to win today, based on your current product market fit. And product market fit always changes with time. Qualtrics repositioned (and simultaneously pivoted) itself in the enterprise market when their customer feedback and interest pointed them in that direction, not before.  And this also underscores an important point – positioning is a company exercise, not a marketing exercise. 

Mistake #3: Marketers often use internal gut instincts to do the repositioning without a ton of customer feedback. My recommendation is to speak with as many paying customers and interested prospects as you can, to understand and internalize the various use cases of your product.  It will help you identify new areas where your customers want to take you, but you are not telling that story yet. Both Qualtrics and Fluidware discovered that customers were taking them into enterprise segment and used those insights to successfully pivot. Do a deep dive into win-loss analysis to understand why and where you are winning and more important, why and where you are losing. The competitive losses can give you deep insights into

a) If you have product-market fit issues. For example, you are not ready for a pivot to the next level of your target customer profile. or

b) Your positioning has not kept pace with where the market is now. For example, your competitor has successfully repositioned themselves based on their new capabilities, but you are still messaging based on your positioning established from a while ago, and your prospects no longer see you differentiated enough.

A solid positioning, aligned with your current product market fit and your key differentiators today, will help you maximize your win-rate and best enable you to hit your revenue/bookings targets.