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How to Position Your Technology Product

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How to Position Your Technology Product
Over 100 marketing positioning points

Copyright 2001, Dorian Scott Cole

If you make a great product they will come, right? If it was that easy, inventors would be the only ones running businesses.

    The best products don't always sell.
    The best promoted products don't always sell.

It takes doing a lot of things well to get product sales. This paper, based on my experience, is offered in the hope that great technology will get matched with the right buyers. It isn't a formula - every situation is different.

Positioning is basically about putting your product at the right places to get sold. You position for customers and their needs. You position for markets. You position against competitors. You position for profit. You position to best use your assets. Positioning encompasses everything within your strategy for nudging your way into the marketplace to sell your product profitably.

Only a few products are exciting new technology that were developed without a need in mind, a solution in search of a problem. Most products are on the market because they were developed in response to a specific or general need. Responding to a need is a form of positioning, but not the end of positioning. Sooner or later, most products are a solution in search of a need, whether because their original purpose is going away or because expansion is desired. Positioning is always a growing requirement demanding constant review and change.

This paper explores positioning for:

  • The Scope of What You Are Selling
  • Industry Experience
  • First Impression
  • Technology Sales
  • Web Sales
  • Profitable Markets

Positioning for the Scope of What You Are Selling

First, know the scope of what you are selling. If products were hotdogs, you could set up a hotdog stand on the street corner outside your office and people would line up every day to buy one. Products aren't hotdogs and customers won't line up. Potential customers first want to find out many things about your company. For example, you will find that companies explore every aspect of your Web site, looking at the PR, business partners, service, and anything else that tells them about your company. Why? They want to know that:

  1. Your product can actually meet their need:
    Too often marketing literature promises everything, while the product delivers very little.
  2. You are authoritative and credible:
    You understand the full breadth of their need and have the talent and experience to properly address it.
  3. Your company is successful and stable:
    Others use you, and you will be there for them tomorrow.
  4. They can establish a working relationship with you:
    Too many products have quirks and bugs, don't fully address the need, and the companies who make them don't care and even go out of business overnight. Companies want to know that you care, you offer service and will be there when they need you, you will fix the things that don't work, and you will adapt your product to their changing and growing needs.

Rather than trying to position hotdogs left or right, with or without, higher or lower, instead give attention to selling the full scope of a solution. This will avoid an expensive and agonizing death, and lead to product sales.

Positioning for Industry Experience

Breaking into any industry is not as easy as selling hotdogs. Industries are formed by communities and networks of suppliers, customers, and insider voices who have invested their time and energy in creating a place for themselves. Customers and insiders know their suppliers and their capabilities very well, and they know what their tasks entail. Their network is difficult to breach.

Industries shun outsiders for good reason. When customers adopt a technology, their entire world links into that technology and becomes based on the way that it operates. Industries don't change the status quo unless there is a compelling reason. Changing their structure and inertia is an uphill battle, and you have to prove that your product is not only more capable, but actually worth making whatever change will be required, plus prove that you are committed to being there for them.

This often means partnering with some important entity in that industry and working hard to make your product a success in their environment. Making a product fit an environment is usually much more difficult than it sounds from outside. This is where overconfident companies fall apart because gaining inside knowledge is difficult. It is often easier to piggy-back in by partnering with a product already playing in that arena, allowing design problems to be forseen and addressed in a winning environment. When the product has been proven to answer a need, then, and often only then, can your product be sold to others in that industry. The bonus is, when you have satisfied that customer, then you have both industry experience and a sound reference that you can leverage into more sales.

Why not sell to everyone? It is exciting to know that you have developed a product with wide potential that should sell in multiple markets. But a focused plan of attack is necessary to gain you much more ground. Only when you have conquered the challenges in a vertical marketplace, is it then time to move horizontally in the marketplace.

Two companies are good examples of failing to do that. One company with a successful product tried to engage the entire market with a new product, never gaining any expertise in any vertical market. It took over two years to get any significant sales, and only then because it finally worked with a significant customer.

Another company also attacked the market horizontally, and before it realized this was a mistake and could engage a promising opportunity with a vertical market, they were out of business.

Leaving the door open to the wider market is good, but you have to find footholds before you can climb the mountain, and you have to climb a mountain before you can conquer the world of markets. Vertical comes before horizontal.

Getting into an industry and making a name for yourself is a matter of finding a customer who either has a new pressing need that you can fill better than any other, or finding a customer who is innovative enough to take a risk. The book "Crossing The Chasm," by Geoffrey A. Moore, provides keen insights into attacking this problem.

Positioning for First Impression

The first impression is a key indicator of future performance. There are a number of things you can do to prevent shooting yourself in the foot.

Cover all of the details during preparation. On one hand is the sage advice that helping an existing customer through a difficult time can actually strengthen a relationship, and a large company like Microsoft® can even stumble in front of the world and get away with it, but on the other hand, being unprepared or failing on the first visit is a bad indication to the customer and embarrasses the sales and technical crew out of trying again with any customer. It often spells the end of that sale and can damage future sales. Even if it was the customer's own system that created the problem, you neglected the advance preparation, and this says to the customer that you really didn't know their system. It's difficult to recover a fumbled ball.

Avoid the rush to market. On one hand, being first has advantages. You get to appear as the industry leader and innovator - the exciting company to go with. Sometimes this gains you the lion's share of the market. Innovation makes a big splash. But when new or existing manufacturers rush faulty products to market, they harness the customer to a product that doesn't work, and the customer's nose is rubbed in that fact every day. You lose two things and gain one. You lose your customers to competitors and lose a reference. You gain a bad reputation that will be very difficult to overcome.

Bad news travels quickly in customer groups, and it takes many positive steps to overcome one negative step. Rushing to market with a faulty product only helps your competitor and hurts you. It is far better to limit features to get the product out there quickly. Amazingly, existing customers are loyal enough to wait if you tell them you are, "For sure working on that feature and it will be better than the other guy's."

The rush to market almost destroyed a pioneer and market leader in capital equipment in the medical field. Besides driving the market to the competition, rushing to market drove a large number of the sales and service personnel away who couldn't live with selling around or fixing the problems, further damaging the product. Once wasn't enough, it happened in two different instrument lines. This also happens in software. Customers may like you, but they won't tolerate mistreatment. Take the time to do it right, and you will be around to be the innovator next time - that's what healthy competition is about.

First appearances count the most. Offer good presentations, and good marketing and technical literature, whether for public appearances, for mailings, or on the Web. The impression you create is what you will be known by.

Contact us to put your best foot forward in technical, Web, and marketing communications.

Positioning for Technology Sales

Technology products are not often sold by door-to-door sales people. If they were, with all of the companies out there trying to sell their products, there would be a steady stream of people walking in and out of corporate offices and no one in the corporations would ever get any work done. Companies successfully block access from marketing machines. Most companies don't publish phone numbers and hold telemarketers at bay by putting their phones on answering machines. Direct mail is screened out and has minimal effectiveness, taking three successive campaigns to fetch a 1% response. The resulting sales are even less.

Card inserts in magazines (card decks) get you responses from prison inmates, and little else. E-mail campaigns, which were proving much more effective than direct mail, will likely diminish in effectiveness and actually anger many potential customers unless they "opted-in."

Most of these mass contact methods depend on the delivery arriving at the exact moment when the potential customer realizes he has a need. How often are the odds with you? These methods of pursuing customers are lottery methods, which do work for some, but they a numbers game with a very poor cost to benefit ratio. What to do? Customers won't walk in your door to say they are ready, will they?

How then are products sold? To sell, there has to be an effective point of first contact that leads to direct contact. Mainly, this contact is accomplished by having a presence where people are looking.

  1. Opt-in e-mail newsletters serve the purpose of name recognition, branding, need accentuation, and establish you as an authoritative voice in the field. Opt-in newsletters that carry important and exciting information are often circulated within the organization and acquire more subscribers. Build your opt-in mailing list. If necessary, let a partner begin it for you.
  2. A Web presence puts you where people are looking more and more often for products. For many technology products, a survey indicates that the first place people search is on the Web.
  3. Partners and suppliers can carry you in with their product. Their recommendation is often all the customer will need. To do this successfully, reciprocity and a good relationship with all of their people is required. This often means joint technology development, joint marketing, joint pricing, and developing specifically for certain product applications to make sure technical problems do not arise and damage both products.
  4. Trade associations are one place that people inquire about products. Join them.
  5. Partnerships in which companies can tout their products on other company Web sites often carry a lot of weight with customers. For example, IBM® makes such alliances. This may require some degree of allegiance.
  6. Industry authorities, such as consulting groups, trade magazines, consultants, and independent publishers are often consulted by customers for product recommendations. Establish a good relationship with industry authorities. Sometimes this costs money to subscribe to their services. Refer to them on your Web site. Write articles for them.
  7. Conferences, seminars, trade group meetings, and any other public forum where you can display your product and speak, gets you in front of your customer. Speaking at conferences is especially important - it establishes you as an authority in the field and gets immediate contacts and leads.
  8. Build a real reputation in the field for a good product and service so that you are known as a good solution and are recommended by others.
  9. Advertising in trade magazines gets your name in front of customers - it needs to be often enough that it builds recognition and suggests that you can meet their need. But build the brand reputation first through solid performance rather than trying to launch with expensive branding advertising.
  10. Follow industry best practices. These words mean that you subscribe to best practices, that you are suitably knowledgeable of the industry in which your technology fits, and you avoid practices that can hurt the customer.
  11. Use all PR venues. PR is about what you have that is new. If it is new to five different types of customers, and reaches five different needs for each customer, then you have ten press releases that can be done over ten weeks, keeping your company in the press. Some trade associations and industry consultants have their own newsletters that reach high numbers of very targeted groups. If you are associated with any, use them.

No single method of marketing will lead to enough sales to support a company. But using many methods will get the marketing job accomplished. Contact us to knowledgeably deliver your marketing needs.

Positioning for Web Sales

The roles of the Web site are to enable the customer to find you, establish your company and solution as a major contender in the customer's mind, and provide contact information.

The Web site only suggests that a product can meet the customer's needs. The reasons that the Web site compels contact but doesn't try to "sell" the product are:

  1. No competitor will allow himself to advertise a deficient product. If you advertise that your widget Y has an angular proboscis, your competitor will match that feature and do you one better, whether he really can or not. Web competition is almost instantaneous.
  2. Similarly with feature sets, if you furnish a checklist comparing your product to other products, tomorrow your competitors will furnish a checklist showing why their product has better features. It is a race you lose as soon as you enter it.
  3. If you give the customer all the information that he could want about your product, convincing him beyond any doubt with an avalanche of information, then he no longer has a reason to contact you. And often, without consultation, the information he views is misinterpreted, pushing you out. If he doesn't contact you, then the door is open for your competitor, and whoever gets on site first protects his turf and will likely win the sale. The Web site should simply indicate that the product can probably meet the customer's needs, but to find out more they have to contact you.

Putting white papers, or position papers, on your Web site can help establish you as an authority in the field. It can move you in the customer's mind from being a contender to being a major contender.

The Web site can generate some leads by forms, especially for contact for more information, but more often it will lead to a telephone call later when the customer is more serious.

There are many other factors in Web site design that either drive customers to the competition or lead to contact. Which Web design factors are decisive? Contact us for knowledgeable Web site design.

Positioning in Profitable Markets

Creating a product that fills a need and is different from all of the other products sometimes puts you on the road to success. Differentiating your company and product for a competitive niche is certainly a necessity. But it is easier to identify a need than to identify a profitable opportunity, especially one that will continue to be profitable.

Many markets will be shrinking in the coming years, while many expand. Some shrink because of where they are in the business equation. Some shrink because of the dynamics of the industry. Some shrink because of changes in technology. Some shrink because a need can't be addressed profitably. Some shrink because of product price mismatches with industry size. Investors and acquirers always expect growing market performance, but once you are positioned, your fate is cast either to be part of a market whose revenues are continually shrinking, or to take part in an expanding market and growing opportunities.

What else do we know that will improve your profitability? For consultation and knowledgeable assistance with research on market and business positioning, contact us.

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Notices:
  o  No part of this document may be reproduced in any medium without permission. All rights reserved.
  o  The Visual Writer, LLC. is partially a virtual company, using identified local resources as needed.

Communications services are unrelated to the mission of the Visual Writer, LLC. Web site.

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Page URL:  http://www.visualwriter.com/CVP/HowToPosition.htm
Author, Webmaster e-mail: Dorian Scott Cole
Copyright © 2001  Dorian Scott Cole