Many companies are shifting business models, entering new markets, and trying to find ways to pivot during the COVID-19 crisis. Production positioning, the art of differentiating yourself from the competition, can set businesses up for success or doom them to an unsustainable future. This is also inherently true for marketing agencies and consultants who may be struggling to hold on to clients.
April Dunford is the expert on product positioning. She’s the author of Obviously Awesome, and a positioning consultant who has positioned herself to serve a select clientele: tech companies. She joined the Agency Ahead podcast with some insights that are exceptionally timely and relevant.
- (1:39) Conversations about positioning in the wake of the Covid-19 crisis.
- (4:04) How conversations with B2B companies change as the economy changes.
- (7:14) How tech companies are pivoting to adjust their positioning.
- (13:16) Why listening to your customers is key.
- (14:57) The big positioning mistake most agencies make with their clients.
- (18:06) The big positioning mistake most agencies are making in their own marketing.
- (22:12) Why positioning doesn’t limit you as much as you think it will.
- (24:53) April’s causes.
Don’t have time to listen? Here are the top insights.
Positioning in the wake of the COVID-19 crisis
“May you live in interesting times,” or so goes the old proverb, and all of us are definitely doing that. For April, this has led to a lot of interesting conversations about positioning, and whether or not the situation economically requires a shift for various companies.
Yet, she also reminds us that positioning has and always will be a living thing.
“[Positioning is] not something we get to just set and forget.”
People frequently ask her what could possibly change that would change her positioning.
“Well, there are things inside your company to change, like a product change. Your offering changes. Sometimes that creeps into a new market, so you need to think about positioning into a new market. Sometimes you have changes in the market itself, like if a big competitor enters and your differentiator is no longer as differentiating.”
She says throughout these conversations that she’s always stressed things beyond a company’s control.
“New industry regulation or government regulation that shifts priorities. Massive changes in economic circumstances like the 2000 Dot Com bubble or the 2008 downturn.”
The point being that there are always changes and upheavals, and companies have always and will always be forced to respond to those upheavals by altering the way that they position themselves.
How conversations with B2B companies change as the economy changes
Since April works primarily with B2B tech companies, she had a lot to say about sales messaging and how that can change.
“In B2B, if we abstract our value proposition for any B2B product, we really only have two buckets of value. We’re either helping companies make money, or we’re helping companies save money. In fact one of the things that make B2B marketing really hard is because we’ve really only got those two things and our value proposition can’t be so abstract. Otherwise we just sound like everyone else.”
The economy changes the “right” way to go about speaking to a B2B company.
“When the economy is good, and companies are growing, and doing well, making money is a more compelling value proposition than saving money. When the economy is good, operational efficiency is a weak value proposition. Nobody thinks that’s sexy and cool. Whereas doubling your revenue or skyrocketing new accounts is a strong value proposition.”
When we go into a downturn, everything changes.
“They look around and say, oh man, we can’t grow right now. People are worried about their cash. The company’s priority may shift from making money to making sure they can keep the customers they’ve got. All of the sudden operational efficiency sounds kind of hot.”
Since most agencies are businesses selling to businesses this is awesome advice. Just know who you’re talking to, as this crisis has created winners as well as losers.
How tech companies are pivoting to adjust their positioning
April says tech companies are all over the map right now. She says that’s not necessarily a bad thing.
“A tech company – is really going to have to spend some time talking to customers and getting inside their heads to figure out what their reality is. And that’s the only thing that matters. If your target customers have not shifted their priorities, then you don’t need to either. You’re good.”
For example, companies enabling remote workers are doing great. Med-Tech companies are doing great.
“Then there are some companies where customers are very cautious, are shifting their priorities, are not making new purchases, and their customers are saying, look, this isn’t a short-term thing for us. This is actually going to change the way we’re assigning budget and resources for the next 12 to 24 months.”
She says it all gets truly tricky when you’re in the middle.
“It’s going to take a very thoughtful, measured approach to react when you have some customers going crazy, some making long-term shifts, some hitting the pause button.”
Nevertheless, listening to customers and remaining connected with them is key.
In fact, you may even have to make decisions about whether to switch your position and come back, or whether you’re going to pivot and go all-in with that pivot.
“Take the temperature of your customers. Listen to what they’re saying. Some don’t think it will be a long-term impact, some are making fundamental shifts.”
The big positioning mistakes most agencies make with their clients
April says agencies often encounter a lot of pitfalls when they try to get involved with the positioning side of the business. She points out that even she, as a positioning consultant, is not cooking up positioning for the companies she works with.
“They have to do it themselves. Because there is no way, without being a full-time employee for months and months, that I would be able to understand and know their business and their customers deep enough to be able to make a decision about the strategic direction for the business, which positioning ultimately impacts.
So in the work that I do with companies, I’m giving companies a structured way to think about positioning and taking them through an exercise where they essentially, as an executive team, together, clarify their own positioning.”
She says this kind of work absolutely needs to happen before they can do other things like messaging, or go to market strategy.
“What I’ve seen is companies will go and say, hey, we need a new website, and because we’re going to have a new website, we’re going to need some copy on that website, so let’s go hire an agency.
And then they go to the agency and say: you guys should do messaging. And the agency says: of course we can do messaging. So, who’s your target client? What’s your value proposition? Who do you compete with? Why do you win? All of these are fundamental positioning questions.”
Probably every agency owner and consultant knows what comes next.
“Sometimes what you’ll get is the company saying: well, I don’t really know!” Or they give vague answers, list competitors, list a bunch of features, or just say “customer service.”
“This is where you get into deep, deep trouble,” April says. “Because you can write the world’s most amazing messaging, but if the inputs are bad the outputs are bad. It’ll be mushy. It won’t work. It won’t drive sales. And the company will come back and be all mad about that.
So positioning needs to happen first, and then once we have the positioning we can hand it off to the agency to build messaging around it, build branding around it, build look and feel stuff and all those other brand elements.”
The big positioning mistake most agencies are making in their own marketing
Agencies tend to make some mistakes when it comes to positioning their own products and services, and that’s one reason why securing clients and keeping them can be such a challenge.
“I’ve had a lot of agencies call me and say, we need help with our positioning,” says April. “But I don’t end up working with them for the most part, and here’s why.
In order for me to help you with your positioning, you have to be open to the idea that you’re going to position yourself to align with a market that you can win. Which, by definition, means that you’re accepting of the idea that there are markets where you’re not going to win and you’re not actively chasing that business.”
Aprils says that many agencies struggle with this. Many agencies feel they can do anything a client wants, and if they can’t they can hire someone.
“It’s hard for those businesses to get traction because they tend to avoid focusing on a particular area where they can really build some deep expertise, get those rates up higher, get known for this one thing so customers start coming to them.”
Agencies that don’t want to do this look just like everyone else.
She points to herself as an example.
“If I called myself an agency I could have come out of being a VP of Marketing. I could have hung up my shingle and said, anything you need a VP of Marketing to do, I can do. And that would be a stupid business, and I’d look like every other marketing consultant that way. Instead I went the opposite way. I just do this one thing. And I’m super-specialized about it.”
It is totally possible for an agency to specialize and to come out on top.
Compare to the ineffectiveness of a marketing agency that looks like every other marketing agency out there. Those aren’t partners, guys, those are tools you use.
If you’re struggling, figure out who you want to serve. You don’t have to drop your current clients. In fact, you should look at where most of your clients come from and start positioning yourself from there.
Why product positioning doesn't limit you as much as you think it will
The big positioning fear is, of course, the ultimate FOMO – what if you can’t get enough customers that way? What if you have to walk away from money because you’ve chosen mental health marketing and the odd lawyer you meet at a conference needs your help? What if the box is just too small?
Yet starting with one niche doesn’t mean abandoning all the others, forever and ever, world without end.
“There’s a great example in tech companies,” says April. “This is literally how every successful tech company starts. They start by dominating a very small, tightly-defined market, and then they move outward on that.”
She shares her experience working for an enterprise CRM company.
“CRM was our product. We eventually niched it down where we were positioning ourselves as CRM for investment banks. And that’s it. And so our investors didn’t like that, because they were like: that market’s too small, man. How many investment banks are there? We can count them! There’s not that many! But we had a very distinct competitive advantage in that market, and we knew we could win if we focused there.”
That tight focus led to big things.
“It enabled us to completely dominate that market, even though we knew we were a small team with a small marketing budget. Because we knew exactly the companies we were going after, we knew we could win if we got in there, and because we were so specialized, we jacked the price up.”
But they didn’t do investment banking forever.
“Once we dominate investment banking, we’re going to move out to retail banking, because that looks a lot like investment banking.
Our experience there is going to help us dominate retail banking. Then after we’ve got retail banking, you know, a lot of retail banking is not unlike insurance. Then we’re going to be the CRM for financial services at that point, including insurance. If we dominate insurance, heck, we’re a giant company at that point, and so then we can say you know what, we’re a CRM for all enterprises.”
They didn’t even have to get that far before they got an acquisition offer for a billion and a half dollars. The strategy works.
What’s your right now cause?
April has been doing a lot of work with a local agency in Toronto called Seeds of Hope. They have heroically continued to offer food and shelter to the homeless population of Toronto throughout the crisis, even when other agencies were shutting down.