Eran Livneh
MarketCapture
elivneh@MarketCapture.com

"You take a very simple story and you tell it in a very complicated way."

That's how Baz Luhrmann, the director of Moulin Rouge, described the secret behind one of the most amazing movies made in recent years.

The secret of positioning is doing exactly the opposite: take a complex solution and simplify it. Or as Al Ries and Jack Trout say in their classic Positioning book: oversimplify it.

Admittedly, simplifying things is far from being a simple task. It means taking everything you do and reducing it to the core.

Your product: It does a lot of great things. It has dozens or even hundreds of wonderful features. But when you think about the positioning of your product, you need to give up the desire to tell about all of them. Instead, you need to focus on one or two critical benefits your product delivers and no other can match.

OK, we opened the Pandora box when we said "no other can match." I've heard many entrepreneurs say "we have no competition." Unless your product enables something that has truly never been done before (such as traveling back in time), there is always competition. Your competition is the "old" way people arrive at the goals your product helps them achieve. For example, when Quicken first came out, it defined its competition as the paper-based checkbook.

Defining the competition is an important part of the positioning process. Having a reference point in mind helps people understand what your product can do for them. It also gives you the opportunity to demonstrate how your product can do it better.

Your market: While you may have the potential to be the leader of a huge market, your positioning should reflect a realistic vision of the market you can address and the benefits you can deliver at each given time. When you get started, the key to your positioning is defining a small enough market segment and solution category in which you can be the leader. As Geoffrey Moore calls it, you want to be the big fish in a small pond.

Speaking of Moore, I like the positioning statement format proposed in Crossing the Chasm. It boils down the positioning to five sentences:

1. Who you're selling to
2. What problem you solve for them
3. What your product does
4. How it solves the problem
5. How it is different from the competition

The tricky part is reducing each of these to a single sentence. Once you have done this, you have a very powerful way of presenting your business, both internally and to the rest of the world.

Now that you've defined it, how do you use your positioning?

Everything we covered so far has been a refresher to Positioning 101. What we would really like to talk about is what you do after you've defined your positioning. There is little benefit in crafting your positioning if you don't use it. Here are some of the ways your positioning can provide guidance to your day-to-day marketing decisions.

Branding and messaging: your brand and message should match the target audience defined in your positioning, and should convey an image that fits the benefits and values you want to be recognized for: if you target a specific industry, use the industry's terminology and familiar images in your marketing communications; if the benefit of your product is speed, then speed should jump out of everything you do, from the words you use to the graphics in every marketing communication piece; if your differentiation is simplicity and ease-of-use, make sure your website reflects these, both in content and in form.

Product development: with every new release of your product, hundreds of decisions are being made regarding product architecture and features. These decisions are influenced by customer demands, technology considerations, and competitive pressures. While these will continue to play a role in your product decisions, it's important that you also keep your positioning in mind.

Here are some simple steps you can plug into your product management processes to make sure this point is not forgotten:

• Add a column in your decision matrix to indicate how each development request contributes to the strength of your positioning.
• In the final review of your next release plan, ask yourself whether the new release will enhance your positioning, maintain it, or maybe even damage it.
• One of your senior executives should be the "positioning advocate". It can be your VP Marketing, VP Product Management, or even the CEO. She or he should represent these positioning enhancing line items in the battle to make the cut for your new release. To make it real, give them some power: require a signature of this executive on the release plan.

Revisiting your positioning

As much as your positioning is the compass for your decisions, it too must evolve over time.

As you grow, you need to expand your solution as well as your market. Don't get stuck in your initial positioning, or you will end up a beached big fish in a dried up pond. You have to do it carefully; since most buyers are conservative, they don't like drastic changes in positioning. Leverage your initial success by gradually expanding your positioning, while maintaining your existing customer and solution base.

At the same time, you may need to trim, refocus, and eliminate aspects of your positioning that have become obsolete or stopped serving their purpose. What used to be a differentiator yesterday may be a "me too" today. It is important that that you make these adjustments consciously. Define the new positioning first, then make the appropriate product and marketing decisions.

Positioning is about telling a complex story in a very simple way.

Eran Livneh writes The MarketCapture newsletter which covers strategic and tactical issues faced by marketing executives in software and other high-tech companies. Sign up by visiting http://newsletter.marketcapture.com

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