In my previous blog, “What Tech CEOs Get Wrong About Positioning,” we introduced the concept of market positioning – and specifically, how it helps your customers connect the dots between their needs and your product or service.
Of all the marketing strategy lessons we at Chief Outsiders share with founders and business leaders like yourself, positioning ranks among the most critical. It truly is a difference-maker for businesses that wish to become the leader of the pack -- to become, in fishing parlance, the big fish in your pond.
But, how do you go about achieving this top-level market mastery? It starts with a keen understanding about how you scale your business and execute on your go-to-market plans. Ramping revenue and scaling operations before you’ve defined a unique and sustainable market positioning can be very risky in the long term.
At a more granular level, we need to understand: Is your initial target customer segment the right target (think ideal customer profile, or ICP) for your business that permits the greatest product-market fit and long-term growth opportunity?
The person who wrote the “book” on product/market fit, Marc Andreessen, defined it as solving a market problem at scale and went as far to say it is “the only thing that matters.”
This determination of your initial customer target segment is an important discussion, because it becomes the pond for you to dominate or lead. Equally important is the solution you develop for your target customer. If you tailor your solution specifically to that segment, you risk:
The permutations on customer and solution are endless.
How do you avoid this trap? It starts by defining your business, customer, and unique proposition, and then create a unique story you can own — call it your brand. It’s the perfect way to be the big fish in a pond that you decide you can dominate and lead in order to build your company.
At Chief Outsiders, we love the big fish/small pond approach for B2B tech strategy. Turns out that authors you might know, like Geoffrey Moore (of “Crossing the Chasm” fame) do as well. Mr. Moore would counsel that you should be known for something specific. Once you achieve that position (or rung on the ladder inside your customers’ mind), it will be difficult to unseat you. Once someone gains top-of-mind status, they’re hard to supplant. For example: When you’re about to sneeze, don’t you always ask for a Kleenex®, regardless of the brand at hand?
Consider for a moment the lesson of startups. According to global investment firm Cambridge Associates, there were more than 16,000 start-ups – more than 60 percent of the total -- that failed between 1990 and 2010. During the dot-com bust of 2000, the failure rate topped out at 79 percent. Failure was defined as returning a 1X return or less to investors.
At Chief Outsiders, we think a large chunk of the 60 percent represents companies who jumped too early in racing to revenue without a clear definition of their business, their unique solution, and their target customer -- in other words their market positioning.
It’s all about the trust you build with your buying audience -- which is fundamental to that buyer’s psychology. You have the opportunity to drive every conversation through the way you present yourself. We advise clients to position carefully, establishing your company as a unique and trusted long-term solution for a known market/customer problem, rather than a reaction to a short-term challenge. Tell your unique story believably and credibly, in their language, and you begin to define your pond as focused, smaller, and relevant; and a pond within which you can be a player or leader.
You must define your company and your value proposition in an exclusive way before you can communicate anything to customers. Your story disappears when it isn’t unique or is too complicated for customers to understand, or both.
In his book, “Positioning,” Al Reis states it succinctly: “The best approach to take in an over-communicated society is an oversimplified message. In communication, as in architecture, less is more.”
How do you apply Reis’ reasoning to your specific instance? Solve a need your consumer knows they have now, so you can earn the right to solve other needs subsequently that they may not yet have identified. Do this right by keeping things simple, because simple can still be powerful.
Everything you communicate today across all your marketing channels will echo for years to come. A single, consistent, specific, and relevant story puts you in an optimal position to be considered a big fish in a small pond. Define your pond, and dominate it!