Positioning & ICP
Why positioning? Let us start with a short story.
Mr. Smith owns a ramen noodle shop. The business has been steadily growing since its launch thanks to its innovative product. Unlike traditional ramen which relies on sodium, fatty pork slices, and rich oily soup for increased favor, Smith’s ramen uses clear broth and healthy ingredients such as nuts, edible flowers, and tomatoes while still delivering rich tastes. Customers at Smith’s are served yogurt as dessert instead of sugary candies.
The initial customers are from nearby offices who drink kale smoothies and frequent gyms. Mr. Smith's product gives this cohort of customers a chance to indulge in 'unhealthy' food while sticking to their healthy lifestyles. The business has found a niche market.
All this time, Mr. Smith positions his product as 'healthy ramen'. Creating such as positioning was so natural and easy, it was an after-thought after the product had been launched.
Three months later, Mr. Smith realizes a steep decline in repeat customers and noticed a new noodle shop has opened for business two blocks away. Every noon, a long line of customers queue up in front of -
the new store, and out of curiosity one day, Mr. Smith joins the lineup.
To his surprise, he finds himself among many of his ‘loyal’ customers. No one ever waited this long for my restaurant! Not for all my investment in the spacious floor plan! – grunts Mr. Smith who felt betrayed. Upon entering, he is further perplexed that neither the menu nor any of the marketing materials mention the word ‘ramen’ at all. The product is simply a small to-go cup that contains three bites of ramen noodles and an assortment of healthy vegetables. In the new store, a wall mural states “real food, real fuel, and no more protein powders.”
The new store is competing in the same customer segments as Mr. Smith’s. And with the sheer popularity of the competitor, Mr. Smith now faces mounting pressures: investors start to question his existing business strategy (vague term – Mr. Smith shakes his head), multiple adjacent noodle stores start to launch similar, to-go products to compete with the new store, the types of customers who now visit his shop, as well as the time of the day they visit, start to shift, and Mr. Smith can hardly describe his ideal customer profiles anymore. -
To whom am I selling my products? Is this a product problem? And wait, what’s my product – should it still be ‘healthy + ramen’?
Many businesses encounter this challenge. Just think about how many indistinctive noodles shops you drive by every day on your way to work. What Mr. Smith did not realize was that the moment he positioned his product as ramen, he made a set of substantive business decisions. These include the target customer profiles (incl. people who do not prepare their own lunch), where sales happen (e.g., in-store with a clerk), competitive alternatives (directly against other noodle shops), net margins (within a range compared to other bowls of noodles nearby), product roadmap (factoring in local food supplier seasonality, cultural zeitgeist, for instance, gluten-free, etc.) Product owners, founders, or main business operators are vulnerable to a presumption that the context or positioning of a product is what the development team set out to create. The lack of a proactive process to create, articulate, and evolve positioning, often leads to immense pressure to re-create products, reduce costs, refactor sales approaches, while not addressing the root cause.
Quick diagnosis for your business
Companies with weak positioning show the following signs:
One, the sales cycle is long – this makes it hard to understand funnel attributions or obtain reusable learnings. Prospects dragged on the evaluation period, and often remain undecided till the very end. Meanwhile, the close rates are low, and your sales team sense that they are constantly in competitor bakeoffs, and competitors are the top loss reason. Your sales team is not equipped with the right muscles to swing heavy punches and to close deals fast. Lastly, when your sales team loses deals, they often realize that the competitors were in fact a better solution for that customer’s needs.
Two, lapses and churns have become a major headache. At constant risk of losing users, your customer support teams chase after your product management team for never-ending features requests, while these requests are focused on retaining unhappy customers who are most likely to leave regardless. This happens often after a major sales and marketing push when the misleading positioning brought in an influx of users who chose your product for the wrong reasons, and now want to adjust your product to what they really wanted. New customers treat your product’ as sunk costs and become low-hanging fruit for your competitors, and in addition, volunteer as critics of your brand in the market.
Three, while existing users enjoy your product and provide positive feedback, your sales team reports that prospects have a hard time understanding what they are selling – in short, there is a divergence between the way existing users evaluate your product and how prospects perceive it. Your account executives are spending two, three, or even more engagement -
opportunities repeating what your products are, instead of closing deals.
Your accounts and sales engineering teams are constantly strategizing to reduce occurrences of ‘meaningless’ customer touch-bases and are frustrated with the sales development team. These are signs that your product has weak positioning, and when your prospects don’t understand your positioning, they will create one for you, either deliberately or subconsciously.
Four, pricing is never right. In your sales cycle, prospects often navigate their evaluations primarily on pricing, either stressing on a feature-by-feature comparison against your competitor or voicing that they don’t see the value from any premiums. Even with good customer research, your account executives still don’t have a good method to position your products cleanly above similarly priced alternatives. Although part of your technology demonstrates thought-leadership in a sub-segment, you are not confident to charge for it.
Why would a successful product or business face positioning or re-positioning challenges? In our experience, it can naturally incur during the course of your business or a product’s lifecycle. For instance, founder-led or product-centric startups might overly focus on the development roadmap and the agreed-upon product vision during the early phase of the business. These initial product visions are important guiding principles for successful development; generated at the onset of the development, they typically factored in (or assumed) the target market, key winning features, pricing points, competitive alternatives, and sales strategies. This approach provides maximum agility to the engineering team and leads to faster -
product deliveries (and happier investors). During the journey from a vision to a final market-ready launch, however, the product development process ingests prototyping feasibilities, customer feedback, scaling adjustments, experiment results, and without recognizing that the product has evolved into something else, an outdated or nascent positioning become a time-ticking ‘bomb'.’
It is also common in product-centric companies, that at launch, the leaders still firmly believe that the product’s ‘core’ or ‘fundamental’ offering has remained consistent. This leads to a confused market, where the press, the initial BD partners, and the customers find the original product positioning and sales pitches either too general, or inaccurate, and they have difficulties contextualizing the product with their practical needs.
A different scenario might occur when a product or feature, well-positioned at launch, abruptly plummets in popularity. The sales teams are waving red flags to the leadership, and the channel marketing team sees a decline in engagement and traffic metrics across the board. The positioning that has been winning deals till now stopped working, and in this case, the reason is also simple: the market has changed. This can result from strong second-mover startups’ market entry, existing competitors’ tech breakthroughs, user preferences shifted at mass, new policies, and the macroeconomy. It’s important at this junction to know that combating this market change does not always require reengineering the product. The product is still solving meaningful customer problems and should continue its existing development roadmap, but the company needs refreshed positioning for the new market or submarkets.
The cliche story of Joshua Bell
The Washington Post once conducted an experiment in which the renowned violinist Joshua Bell, whose concert tickets were often priced over one thousand dollars, dressed as a regular commuter, and played in a subway station during rush hour. You can read more about it here. In short, the result showed that out of over one thousand passersby, seven paused to listen to Bell. Further interviews unveiled that many were not in a rush at all:
a lottery buyer remembered every number purchased but only vaguely recalled the musician as a “guy trying to make a buck.” One adjacent shop owner complained about the music being too loud and admitted that she thought about calling the police to make Bell stop. It was not the music or (the product Bell presented) that changed, it was the positioning. Few recognize what was being presented, or its true value. We make sense of our world (full of concert hall musicians,
street performers, and tens of millions of products of various colors, shapes, and functionalities) with the help of context, and how everything is positioned. Without a great frame of reference, customers can be paralyzed by choice, overwhelmed by hype and noise, and resort to creating their own positioning for products with what they already know – ‘that app looks just like the other one but seems to do one thing.’ A powerful positioning makes all the difference.
A sensitive project to champion from within
A business’ positioning intertwines not only with its core business strategy but ongoing, day-to-day operations. The new positioning cascades into how the marketing organization refines messaging, devises campaigns, curates targeting, and more; sales and business development rely on positioning to inform their account-based tactics, talking points, pitch materials, and how they approach competitor topics; and the product management organization incorporates positioning into their planning. Thus, a senior leader or the founder must be present to drive the rebuilding of positioning, and furthermore, as positioning touches the goals and workstreams of various teams, the leaders of these business functions should align with and understand positioning. Therefore, each single-threaded leader across organizations is recommended to be involved in positioning development. In addition, select individual contributors can provide insights on product specs, existing product-market fit, and market intelligence also need to be looped in the process. We often find them in customer success, UX,
and sales engineering organizations. Nonetheless, although obtaining diverse representation from a wide range of expertise and leaders creates maximum value for the positioning development process, in our experience, a complex and fluid workstream such as positioning leads to both groupthink and one to two groups dominating the discussions. This is the reason behind re-positioning as an internal project work having low success rates – the internal “positioning champion” typically has a hard time being a punching bag, trying to reconcile arguments from multiple senior leaders as well as strong cases brought by the individual expertise. In short, creating a new positioning is a sensitive process.
Meanwhile, for a business to develop a new position, its core teams ineluctably require an equivalent understanding of the goal and the expected outcomes among themselves. The stronger the leadership team, the more often the business will find leaders come with a firm preconceived notion about what positioning is and how it should be re-created. This leads to another challenge that an internal workstream often devotes most-
of the time arguing about the definition of Positioning (“Aren’t we just creating a new positioning statement? or, No! What we want is a new set of Ideal Customer Profiles.”), or who owns the approval right(s); and even if a strong hand is placed to expedite the process, companies find dissent never resolved. In an alternative scenario, if the internal discussion focuses on playing devil’s advocate and fostering intense debates, the re-positioning process is prone to creating confusion among leaders. This confusion can result from different levels of ‘positioning inertia’ where founders and tenured leaders view the product from an accumulative, historic perspective, while new talents, more as customer-first or technology-focused advocates, do not.
Maplerivertree facilitates these discussions and makes the exercise more streamlined, balanced, and impactful, by ensuring leaders across the company suspend their opinions about the positioning of the product for the duration of the exercise, be open to new ideas, and thus catalyzing breakthroughs of long-held assumptions.
Where do we start? Product differentiators? Investor perspectives?
When it comes to recreating a positioning, the natural first plan of attack often starts with enumerating all unique, special, or invested product features – these are likely what the company was founded upon, and what the founders and the product owners are most proud of. This approach is commonly found to be competitor-focused (especially in the technology industry where early firms believe they must own product advantage to win funding) and leads to a granular comparison between technologies or products among all players. “What’s wrong with this?” - you might ask. The drawbacks of this approach are that one, customers don’t see your competitors the
same way you do, and two customers don’t see the comparison between you and your competitors the way you do either. And, in the end, the goal is to win customers and their voices, but not win in the headspace that your product is stronger. Meanwhile, investors’ frame of reference is set in the future – when you create positioning for your investors, you are framing the future of your business, whereas customers today are deciding between purchases to address a pain-point in their business (or lives) at present. Decision-makers in your target accounts often require instant pain relief and do not care as much about how an M&A of your company can consolidate a tech
vertical. This is also why your investor pitch deck will look vastly different from the narratives used in your sales pitch deck. The right first step for poisoning starts with your existing customers, in particular: your best and worst customers. Listen to how they recount their decision journeys, and what is going in their minds today. Many major accounts might also be part of a larger consortium – some of their opinions reflect other prospects’ thinking. In addition, understanding your best customers helps you find similar customers in the market. The key to effective poisoning lies with customers who know your product the best and love (or hate) it.
Maplerivertree provides full positioning and messaging services. Our team will conduct preliminary market, competitor, and customer research, form a positioning team from within your business, standardize a positioning dictionary, dive deep with key champions of your company into competitive alternatives and differentiators, clarify core features and products, run in-person workshops and simulations to discover target verticals and ICPs, provide a repeatable playbook for future positioning exercises, and execute on core positioning and messaging deliverables, such as webpages, collaterals, and sales enablement tools. ■