In this episode, Lindsey speaks with positioning expert and author of Sales Pitch: How to Craft a Story to Stand Out and Win and Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It, April Dunford about the realities of creating a category and defining positioning to win in SaaS.
Drawing from years of data and experience consulting for SaaS companies, April surfaces the signals indicative of a positioning problem, pinpoints where product demos go wrong and gets candid about VCs’ and startups’ illusions about category creation.
The red and beige flags of positioning
As a seasoned marketing leader and consultant, April has been around the positioning block. She’s developed a keen eye for the signs indicating a company’s positioning may be in crisis (red flags) and signs that their positioning needs tweaking (beige flags).
According to April, a significant shift in market forces constitutes a red flag. For example, did a top partner get acquired? Then, it’s time to revise your positioning.
Geopolitical events can also impact positioning. “A lot of companies came to me when Covid hit,” said April. “That was obviously a big, big change of affairs… Some companies had sections of their market that were closed basically, and so no business was gonna happen over there, but other sections of their market — [for example,] those that served healthcare or emergency response — [were extremely active].” Leaders should take a page out of Chandler Bing’s book in these situations and pivot.
But less apparent signs may also indicate a positioning pivot is in order. April advises marketing leaders to sit on sales calls to ascertain these potential hiccups. Do customers compare your solution to a market competitor? Do they fail to see the benefits of the solution? Or, equally importantly, do they seem confused by approved sales language? These beige flags suggest it’s time to revise positioning.
Category creation isn’t the end goal.
Many startup leaders have approached April for advice on “creating a category.” But April said category creation is far less glamorous than it may seem.
“I don’t believe that companies create categories. I believe that categories emerge, and some companies are wise to that. They see that problem early. They see this emerging need. Then they build a solution for that — but they didn’t actually create the category,” said April.
But there’s glory in creating a solution for a niche, emerging problem. Finding an emerging category is far more beneficial than attempting to create one from scratch. After all, building a category requires leaders to convince consumers of both (1) the problem and (2) the solution — double the work for the same number of conversions.
Product demos need an overhaul.
Does your company’s sales pitch start with a demo? If so, you’re in good company. But this age-old tactic may be burying the lede for new clients.
According to April, sales pitches walk a dangerous tightrope: They must establish the problem the solution solves, showcase said solution and differentiate from competitors. However, many pitches focus on differentiation too late in the process.
“We need to do a couple of things in the sales pitch first. Instead of jumping directly to features, we should explain the problem. And then, if we think about that, we can then look at all the alternate ways you could solve the problem and say, ‘There’s pluses and minuses to this,’ and then get the customer aligned with our way of looking at the world. And then, when we show the demo… [it showcases] the value we could deliver.”
Listen to episode 363 of SaaS Half Full for more of April’s insights.