Understanding the Distinction Between Competitors and Competing Alternatives (And Why It Matters)

Summary

In this episode of the Positioning Show, April Dunford explores the importance of understanding competition in B2B technology positioning. She shares a personal story illustrating the pitfalls of relying on customer surveys to identify competitors, emphasizing the need to exclude bad-fit customers and to consider the context behind data. Dunford advises that sales teams, not just customer feedback, should inform competitive positioning. She stresses the importance of regularly revisiting positioning strategies and teaching customers the correct frame of reference to compare products effectively.

Takeaways

• 📌 Positioning is about defining how a company wins in the market and the position it occupies compared to alternatives.
• 🔍 Customers may make unexpected comparisons, so it's crucial not to make assumptions about who they consider as competition.
• 🙅‍♀️ Directly asking customers about their perceptions of competition might not yield accurate insights due to the complexity of their responses.
• 📊 The importance of understanding the context behind customer responses to avoid misleading data interpretation.
• 🚫 Recognizing 'bad fit' customers who may not represent the ideal market and should not influence positioning strategy.
• 💡 The realization that data needs to be analyzed with context to identify patterns and meaningful insights.
• 🤝 The value of collaboration between sales and marketing teams to understand who the real competitors are in the market.
• 🛑 The understanding that companies compete with approaches to solving customer problems, not just with other companies or products.
• 🚀 The necessity to regularly revisit and adjust positioning strategies to adapt to the changing market landscape.
• 💡 The idea that great positioning can change a customer's frame of reference, influencing how they compare a company's offering to others.
• 📝 The importance of being clear about what makes a company different and better than the alternatives to help customers in their decision-making process.

Q & A

What is the main focus of the 'Positioning Show' podcast?

The 'Positioning Show' focuses on discussing topics related to the practical application of positioning for marketing, sales, and product teams, particularly for B2B technology companies.

Who is the host of the 'Positioning Show' podcast?

April Dunford is the host of the podcast. She is a consultant, author, and an expert on positioning for B2B technology companies.

What is the primary purpose of positioning in the context of the podcast?

The primary purpose of positioning is to define how a company or product wins in a market by occupying a distinct position compared to other alternatives.

Why is understanding competition important for positioning work?

Understanding competition is crucial for positioning because it helps define the company's unique position in the market and how it differs from other options that customers might consider.

What is the issue with simply asking customers who they consider as competition?

Asking customers directly about competition can be problematic because the responses can be too varied and unfocused, leading to confusion rather than clarity in positioning.

What did April learn from her survey about customers' perceptions of competition?

April learned that customers' perceptions of competition can be highly varied and sometimes irrelevant to the company's actual positioning, leading to the realization that not all customer feedback is equally valuable for positioning purposes.

Why did April's boss at the startup hate the Bank of Montreal as a competitor?

April's boss hated the Bank of Montreal because they had a bad experience with them in the past, having taken their money despite knowing it was a bad fit, which led to regret and a desire to avoid similar situations.

What is the significance of the 'build it yourself' or 'roll your own' category in the context of competition?

The 'build it yourself' category signifies that some customers prefer to use various tools to create their own solutions rather than adopting a ready-made product, which is a form of competition that needs to be recognized in positioning.

What is the importance of context when interpreting customer feedback in positioning?

Context is important because it helps to understand the customer's situation and needs, allowing for the proper interpretation of their feedback and the identification of what is relevant or irrelevant to the company's positioning.

Why is it a mistake to avoid talking about competitors or competing approaches in marketing and sales?

Avoiding talk of competitors or competing approaches can be a mistake because customers need to understand the differences and trade-offs between options to make informed decisions, and companies that clearly articulate their unique value proposition can be more valuable to customers in the sales process.

What should a company do if they find that their existing customers and prospects have different perceptions of their product?

A company should reevaluate and adjust their positioning strategy to ensure that both existing customers and prospects understand the product's value proposition correctly, potentially using a 'This Not That' approach to clarify their positioning.

What lesson can be learned from the Segway example regarding product positioning?

The Segway example teaches that if a company does not clearly position its product in a market category, customers may struggle to understand and categorize the product, potentially leading to poor sales and market confusion.