The concept of product positioning was described in a classic book by my marketing heroes Trout and Reis (Positioning: the battle for your mind). It is human nature to categorize competitive offerings. Buyers create mental ‘ladders’ and position competitors on those ladders from top to bottom as a way to segment and differentiate products. Marketing’s role is to give the buyer a path to categorize a brand at the top of a ladder with a unique offering. In other words, marketing differentiates and positions a brand or product to distinguish it from the pack and make it stand out in the mind of the buyer.
The more a vendor can differentiate from the competition, the easier it is for a potential buyer to make a choice. When all of the vendors and their products look alike, buyers have to dig deeper and deeper and work harder and harder to figure out which vendor meets their needs the best. If there is no difference, then any choice will do, but it is not human nature to randomly make a selection. If there is no clearly differentiated offering, then skeptical buyers are forced into endless evaluation. The more we can differentiate our offering, the shorter the sales cycle because buyers will not need to spend as much time trying to pry apart the competitors.
However, the differentiation has to be with respect to something that matters to the buyer. Sounds obvious, but often when buyers have to search for the differences between vendors, they start looking at the edges or corner cases and get all wrapped up in things that ultimately just don’t matter. They fixate on some tiny difference and end up making their purchase decision on criteria that will never impact their success.
Over time, in a competitive market, all products trend toward commodities. Every new feature from one vendor is met by a covering feature from another. Eventually, all of the basic customer needs are met by all of the products, and innovations are happening around the edges where it simply does not matter to the majority of buyers. It is like word processors competing on who has a better footnote feature when hardly anyone uses that capability or cares. When buyers are confronted by a dizzying array of features, they can become overwhelmed by the possibilities and the complexity, which leads to analysis paralysis. They may just choose to put the project on hold rather than make a murky decision. Sales people often say that the biggest competitor is ‘do nothing.’
As products become commoditized or indistinguishable, the differentiating elements shift toward price, services and market presence or brand. This is when a vendor’s reputation and customer connections become critical. A vendor’s messaging has to demonstrate that they truly know their ideal customer profile and critical use cases. They have to show a real connection with customers, and they have to remember that buyers trust their peers, so case studies and testimonials can win the day.
In the end, if buyers really cannot differentiate vendors on anything meaningful, then it often comes down to price — “If I can’t tell you apart, then I will buy the least expensive alternative.” Unfortunately, some vendors start out with price as their primary differentiating factor. They make up for product/company deficiencies by offering a bargain price, or they focus on grabbing market share and not building a sustainable business. Bargain pricing is their ticket to adding lots of logos. Buying or selling solely on price rarely ends well.
In a sea of all the same, marketing’s challenge is to stand out as the clear choice. Positioning is the path to painting a stand out picture. I wrote about creating marketing messages with ‘edge’ in a prior post, and this is where it matters. Marketers have to develop a deep understanding of their target customers so that their marketing messages connect with buyers in a way that differentiates and positions the vendor at the top of a buyers mental ladder. When it works, the marketing magic acts like a magnifying glass to propel a vendor to stand out.