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Position the Problem, Not The Product

June 24, 2013

Positioning is arguably the most critical element of company strategy.  Before you can win business with customers they need to know what problem you can help them solve.  Your can either explain this to them directly, or rely on them to figure it out on their own.

Most positioning statements revolve around a company’s product or service.  Let me illustrate, using two leading companies from the emerging Big Data industry:

  • Hortonworks develops, distributes and supports enterprise Apache Hadoop.
  • BlueKai Data Activation System (DAS) is an enterprise-level, cloud-based platform that manages your data assets and provides a common data management system for all your marketing and customer interaction programs.

The problem with this approach is that it makes customers work too hard to find a connection between the product or service and a critical problem the customer needs to solve. If you know you need Apache Hadoop, you might want to talk to Hortonworks; otherwise, why would you ever contact this company? BlueKai tells you what their product does, but isn’t explicit about how this product can help you solve your company’s problems.

There’s a better way: position around the customer problem.  A good positioning statement makes it clear who the customer is and what business problem they need solve.  If you do a good job of defining the customer problem, you don’t need to describe your product; the customer will want to learn more in the next conversation.  Here are two other Big Data leaders; notice how they define their companies based on a customer problem:

  • ZestFinance helps lenders in all credit segments better assess the credit risk of potential borrowers.
  • Quid software makes sense of the world’s public data to help your company answer billion-dollar questions.

One of my favorite positioning statements comes from the electronics recycling company Gazelle:

  • At Gazelle, we pay you for the cell phones, iPads, Macs and other Apple devices you no longer need – helping you upgrade faster or just putting a little extra cash in your pocket.

I don’t know how Gazelle delivers this service– I just know that I need it.

The most effective way to position a company is to lead with the problem, not the product.  Of course, if you’re not sure what problem you solve for your customers, you may need to get outside the building and ask them directly.

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Follow Dave on Twitter: @wdavidpower

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