I saw a great thread by April Dunford on Twitter today about positioning.
April is a marketing consultant for startups and her idea agreed with my 10+ years of marketing experience.
Positioning a product (or company) when you have no customers (or very few) is different from positioning after you have some traction. New companies should keep it loose, but once you have some traction you need to tighten it up.
Great positioning very specifically answers the questions-What is this thing? Who is it for? Why should we care? Early on, you won’t know exactly who loves your product and why – you will have working assumptions, but they won’t be validated yet.
When the product is newly launched you want to keep the positioning pretty loose. You are trying to get experience with a range of customers doing a range of things with your product so you can start to see the patterns (related to who loves you and why) emerge.
Restrictive positioning early on – “We’re CRM for investment banks looking for new HNW clients” – can scare away prospects that might be a great fit for reasons you didn’t anticipate. Loose positioning keeps this more open – “We’re Enterprise CRM for salespeople that hunt”.
The analogy I use-You built a net to catch tuna but you haven’t fished with it yet. You could call it a tuna net, go where the tuna are and catch nothing. Or you call it a fish net, cast it wide, see what you pull up & position for that. Maybe your tuna net is a better cod net.
Once you have enough customer experience you will start seeing the patterns around who loves you and why. You can then focus on exactly the prospects most likely to love your stuff. Your positioning can get really tight at this stage to appeal to those “best-fit” customers.
I think of this as an “actionable segmentation” – meaning I can tell you, by looking at a prospect from the outside whether or not that company is going to be easy to close business with or not. If your segmentation doesn’t allow you to do this, it’s too broad.
“SMBs” is not an actionable segmentation. “Single-location food service businesses with fewer than 20 employees in NYC” is very actionable – I can design campaigns for that, I can give my sales team a list of companies to call, I can tell them who NOT to call.
When startups ask me for positioning help early on, I tell them not to worry about it too much until they see patterns. Once you know who loves you & why, you’re ready to deliberately position around your strengths & focus your marketing/sales efforts on best-fit prospects.
This is some great advice.
If you’re still pre-launch or new, it’s okay to have a niche (or not), just remember to hold your positioning a bit loosely until you figure out exactly who you’ll serve best and how.
If you’re established, it’s a good idea to regularly analyze where most of your member satisfaction and profit comes from. Look for trends and see if you can split your members into outwardly identifiable segments.
Then, once you see where your best opportunities are, tighten up your positioning to attract and retain more of your ideal members and less of the unprofitable/dissatisfied members.
Kevin C. Whelan
P.S. If you use Twitter, follow me at @kevincwhelan and say hi.