Episode 101: Positioning Your Product with April Dunford

In this week’s episode, Melissa Perri invites April Dunford, author of the best-selling book Obviously Awesome, How to Nail Product Positioning so Customers Get It, Buy It, Love It on the podcast. April has 25 years of experience leading marketing, product, and sales teams and now runs her consulting firm, helping companies of all shapes and sizes, including Google, IBM, Postman, and Epic Games, nail their positioning. 

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Here are some key points April and Melissa talk about:

• April talks about her academic and professional background and what led her to write her book on product positioning, Obviously Awesome.

• According to April, product positioning is how your product is the best in the world at delivering some value that a well-defined set of target customers cares about. “Positioning is really about taking a customer that doesn't know too much about our [product] and orienting them towards it,” she tells Melissa.

• April describes an example of good positioning that a company can execute and how to assess if your product’s positioning is weak or strong.

• One of the key concepts in product positioning is looking at your product from the perspective of the consumer to determine what makes your product unique.

• It is best to build your product according to a positioning thesis based on information about your competitors and consumers. However, the thesis is usually wrong, so use your initial launch to improve it.

• The essence of product marketing is product positioning.

• Producing positioning can only succeed when the market managers work harmoniously with the product managers and sales team, to truly understand the products' place in the market.

• If we don't have an actionable segmentation, it doesn't matter if we have product market fit. 

• April shares her expertise on what product teams and marketing teams should be doing to truly understand and leverage their product positioning.

Resources

April Dunford on the web | Twitter

Transcript:
Melissa:
Hello and welcome to another episode of the Product Thinking Podcast. Today we're talking all about positioning, how to position your products and what does that actually mean. And we're joined by April Dunford who is a consultant in positioning and she helps some of the largest brands and companies around the world nail their positioning. So welcome April.

April:
Hey, it's great to be here.

Melissa:
And April also wrote a book called Obviously Awesome, all about positioning. You are now an expert on this. Can you tell us a little bit about, you know, how did you get into this and how did you concentrate on positioning?

April:
Yeah, so it's a bit of a weird story. So, you know, I didn't go to school for marketing, I studied engineering and when I graduated I just ended up at a startup and I got assigned to a product and my job was product marketing job. And so as product marketer for a particular product at this startup, and it was a loser. So the thing had been in market for six or seven months, we'd hardly sold any of it and the thinking was we were gonna kill it and instead we monkeyed around with the positioning on it. And we spent a few months on that and we didn't have any idea what we were doing, we were just kind of monkeying around with it. And if you had asked me at the time what we were doing, I'm not sure I would've known to call it positioning <laugh>, but the idea was maybe we could sell it in a different way.

So we monkeyed around with it a little bit. We finally got something that seemed to work. We kind of relaunched the product. The thing took off super successful, the whole company got acquired. I got made vice president of marketing, which is kind of hilarious because I'm like a year out of engineering school, I can't even spell marketing. And I inherited a bunch of products that seemed to have the same problem. Like some of them seemed like the positioning wasn't very good. So I thought, you know what? We should reposition those too. Only this time we're gonna do it properly, like the proper marketers do it. So I'm gonna figure out how we should have done this now that I know what it is. And so I got really interested in this topic. So you know, I went and had coffee with a bunch of super senior marketers and I read a bunch of books and I took a bunch of courses and what I discovered is that positioning is this really fundamental core idea in marketing.

And yet we at the time had no methodology for actually doing it, which I thought was insane. And so I spent probably the next 10 years of my career trying to figure out how to do that with this idea that hey, I've repositioned three or four things by now. There must be a repeatable way to do this. And so eventually this became my jam. You know, if you hired me as the VP marketing, you hired me because I could come in and talk intelligently about this is how we'll look at your positioning and if we think it's bad, this is how we're gonna go about fixing it. And a lot of other people could come in and have that conversation. So six or seven years ago when I was sick of being a VP marketing, I think I did seven companies as a vp, Mario, six. So those got acquired and I decided I was gonna switch gears and do consulting. And I thought, well this would be an obvious thing that I could teach people how to do that. It seems like most of the world doesn't know how to do it. And so here I am.

Melissa:
That's awesome. So lots of trial by fire. I love that you were an engineer that just kind of threw you into marketing. That's typically not what you'd hear from an engineering degree. Nope.
A lot of people out here, right, that listen to our podcast, they're product managers and they fall into product a lot of the times. And I find that product managers think about marketing as the thing that comes after we build products, we build the product. Yeah. And then they figure out how to market it and sell it. When you're thinking about positioning, like first of all, let's maybe talk a little bit about what does positioning actually mean, but two, when should you be thinking about positioning as well?

April:

Yeah, the funny thing about being a positioning consultant is, one thing that sucks about it is nobody really knows what positioning is worse than that. They think they know, but they're wrong. So people will say, oh, I know what positioning is. It's the same thing as messaging. And it's like, eh, yeah, not really. Like if I were to do messaging, there'd be a bunch of fundamental inputs to that. Like the first thing I'd say is, well, okay, who's our target people and what's our differentiated value? Who are we competing against? How do we win? And so positioning defines that stuff. It is kind of the fundamental input to almost everything we're doing in marketing and sales. But it, it comes before a lot of the stuff that we traditionally think of as marketing. So like my definition of positioning goes like this. Like positioning defines how your product is the best in the world at delivering some value that a well-defined set of target customers cares about.

Now another way to think of it is a little bit like context setting. Like context is how we make sense of the world, particularly things that we have never encountered before. So we'll look for clues in the context of what this thing is all about. Positioning is really about taking a customer that doesn't know too much about our stuff and sort of orienting them towards it. It doesn't take the place of messaging and and your sales pitch, but it is kind of a good starting point. Like if I say this thing is a crm, you got a lot of assumptions in your head about what that is, you're gonna assume that my competitor is Salesforce, you're gonna assume that my price point is somewhere lower than Salesforce because they're the leader in that market. You're gonna assume that there's a set of functionality that I do like tracking deals across a pipeline or whatever. So positioning helps us kind of orient customers around, well you know, what the heck is this thing? Why should I care?

Melissa:
So if you are thinking of like a company that completely nailed positioning, what would be the example you give people and how do they position themselves?

April:

Well, so there's a lot of things like most of the time if you are not in the target market that that company sells to, you would look at their website and you would know whether the positioning is good or not. So good positioning makes it really obvious what the company does and what the value is, but to these particular customers that are a good fit for it. So the example I used to use all the time, although I'm less certain about it, I really liked snowflake's positioning up until lately, which I think is a lot more complicated, their positioning. But when they started, it was just so clean. It was like, we know what a data warehouse is, but you know, if we're gonna have a data warehouse in the cloud, that's different. So we're a data warehouse that's been optimized for the cloud and so here's what that means. And so I thought that positioning was really clean, really clear. Now it's a little bit more confusing. It's like, you know, we're data for the cloud and we're not sure what data is <laugh>.

Melissa:
Is that because they expanded into too many things or is there they're attempting, they're getting squeezed on a bunch of different sides. They've got companies coming out and saying, well you know, you don't want just want a data warehouse, you also want a data lake. And so thank god, And everybody's like, what's the difference between a lake and a warehouse

April:

<laugh>? Well this is it. And so they got Databricks saying, well you know what, we got a thing that not only is it a warehouse, it's a lake too, it's a lake house.

<laugh>. So things are getting confusing.

Melissa:
It's gonna be like data condos pretty soon.

April:

<laugh>, right? And so, you know, snow's absolutely dominated this, you know, warehousing in the cloud thing and they're now trying to stretch the definition of what they do beyond that to be can do databases and data lake, which is really is a different thing than a data warehouse. And so we can do all this stuff. So we're kind of like cloud data, everything you wanna do cloud data. I don't know if that's really what they do. And I don't know if that's, you know, that's not quite as clear and simple as warehouse and cloud man that's, you know, again, I think it's hard to assess other companies positioning if you're not in the target market for it and you don't understand what it's positioning against. One of the key concepts in positioning is, we gotta think about this from the mind of a buyer. Buyer is looking at your solution and trying to figure out why should I pick your thing over all my other choices?

And so the other choices generally fall into two buckets. One is status quo, which is sometimes stuff that looks nothing like you. Like I'll use my accounting system to do that or I'll do it in a spreadsheet or I'll just do pen and paper, I'll hire an intern. But then there's also anything that ends up on a short list against you. So these are things that sometimes look quite a lot like you, your positioning basically has to answer the question, why pick us versus those things. If you're not in that market, you don't actually know what those things are. And so you might look at someone's positioning and say, well that's really confusing. I don't know what that is. But if you were in an actual purchase process, you would know your status quo, you would know what else is there. And maybe that positioning is doing an amazing job of answering those questions.

Melissa:
Yeah, so I imagine like companies like Snowflake and other growth stage companies, we hit this point where I feel like, and this is many of the companies I work with, but we nail our first product, we got a foothold in the market area and now we're trying to expand and we expanded to different problems, different target markets, all this stuff. And it sounds like you know, that's what snowflake's doing. I imagine refining your positioning at that point becomes a challenging thing and it does. How do you think about that? Do you have to figure out what your positioning is first before you start expansion? Or do you do that after? Like I said before, I feel like a lot of product managers, yeah or people building product think like, oh we'll just build it and then we'll figure it out the marketing piece later. But right. It feels like all these things kind of go together.

April:
Here's the way I look at it. Generally what you've got is there's a vision then this is if you're a venture backed startup, this is the thing, you sold the VCs, right? There's this vision 10 years from now we got this thing all singing, all dancing. It's amazing. You know, it does all this stuff. And then you have the reality of where you are right now. I got the amazing thing and I've got the kind of crap thing that we have right now and there's a strategy that says we're gonna get from here to here. And sometimes that strategy will have steps in it like you know, we'll build this thing and then we'll have this and then we'll do this acquisition and then we'll have this and then our data set will expand and that'll give us the ability to do thi and then we're going to get here.

So there's vision where you are right now and the strategy to get there. Positioning is the story we tell at every step in that journey. So again, the positioning is why buy me over the alternatives right now. So it's not so much about in the future, whatever, it's, it's the why. Why buy us right now? So the way I like to think about this is we don't take this positioning and just carve it in stone and never touch it again. Like it's usually evolving over time. The part where I think people get this wrong is they think this is just messaging. So all we gotta do is come up with some nice words about why buy our stuff. And marketing can do that on their own. They'll just come up with the nice words and then we'll sell it. So product will throw the product over the wall, marketing will come up with the nice words, generate some leads and then sales will sell it.

The problem with that is nobody's actually thinking about this story as we're building <laugh>. So like as we're building, no one's thinking about this, like is this actually differentiated from the other things in the market? If I'm a customer sitting here and trying to decide should I buy this versus this? Like what is the story and how does that come together? Now there's some exceptions in this. So I think it's important to think about what the positioning is as we're building it because somebody's gonna have to sell this thing at some point. So do we really understand what's differentiating? What's the value that we can deliver that no one else can, which is what we're gonna go sell on. So you know, we should be thinking about that while we're building. Now that's edge. I work a lot with really early stage startups or at least I used to.

Now startups I work with now are tend to be bigger. But when I started this work, I work with really early stage startups and they'd come to me and say, well look, I don't have the product in market yet, but I wanna make sure I get this positioning really nailed before I launch it because I, I want it to be perfect. And here's the reality of that. There's a brand new product we've never launched before. If you've done your homework, you know you've gone out and you've done customer discovery and you've done a lot of things to try to figure out what it is we're gonna build. What you have at that point before you've launched it is what I would call a positioning thesis. So the positioning thesis says, based on our research and all the stuff we did, this is who I think we compete with.

This is the capabilities we have that are differentiated, those map to this value. This is the value we can deliver to customers that no one else can. And these are the kind of customers that really care a lot about that value. Therefore this is the market we're gonna win. So that's our positioning thesis. But here's the problem, we're always wrong <laugh>, like before we launch it, we're always like, sometimes we're really wrong, sometimes we're just a little bit wrong. But we are always wrong, at least a little. So I actually think when a product first gets launched, we should have a thesis, we should write it down, we should be building a product to that thesis. However, when we launch it, we should assume that at least part of that thesis is wrong. So our first wave of customers, and depending on how you launch, like maybe this is your beta or your alpha, but your first wave of customers is all about validating the thesis.

Now if you go into that first wave with the assumption that my thesis is probably wrong, you don't actually wanna have your positioning, the external positioning that's facing the customers. You actually don't wanna tighten that all the way up cause it's wrong <laugh>. So what you actually wanna do is leave it a little loose and see if maybe the market pulls you in a slightly different direction than you thought. So this is my terrible analogy, this is the only one I got. So, but it's the one I'm gonna use cuz this is the only way I know how to describe this. But let's say you got this positioning thesis. Your thesis is you built a fishing net and fishing net is amazing for catching tuna. It's the world's greatest tuna fishing net. You're gonna sell it to the tuna fishermen, it's gonna kill the tuna fishing net business.

We're gonna win that. But you dunno, like maybe it works really good for tuna fish and it maybe it doesn't, right? So when we launch it, we could just say tuna fishing net, the tuna fishermen try it and it doesn't work. And then we're all sad and we go into business or we could say internally we're trying to test this tuna fishing thesis, but externally we say, you know what man, he's a net for fish. All kinds of fish, big fish, probably big fish. It's just a net <laugh>. And then we just get it out there and let all kinds of fishermen try it out. And then let's just see what we pull up and maybe what we pull up is grouper and then we're like, oh crap, we never really thought about gruper. And it turns out we got the world's greatest group of fish net.

Now I've been through this first wave of customers, I know that now I can tighten up the positioning really hard on that and go out and kill the group of market. So I actually think that it's important for us to have the thesis and it's important for us to understand internally what the thesis is and we all, but we also need to understand that our first wave of customers is about feeling that thesis out. And I think we're better to leave it a little loose just to see a little bit where the market pulls us. Now that's gonna feel really uncomfortable in marketing and sales cuz it's a shitty sales pitch, right? Like you're like eh, it's kind of a net net <laugh> <laugh>. But it enables us to get to a place where we learn a whole bunch and then we can tighten it up. And so having it loose in the beginning usually doesn't stop us from doing a decent beta or alpha cuz we gotta network our way into those first customers anyway. And then once we've got that first wave of customers through, we know a lot more and then we can tighten it up and go run after that.

Melissa:
like it. It's like a very experimental approach, like what we talk about in product of you know, put your product out there and just watch people use it and then take that information. I don't fine with it.

April:

And I've worked on products where we did, in my opinion, amazing customer discovery and then we, you know, and then we launch it and we're like, what the hell man? Like we <laugh>, we never predicted this. Where did this come from?

Melissa:
You never know until somebody starts using it.

April:
We're always wrong.

Melissa:

So when you are thinking about positioning and like actually executing on it, whose job is positioning? Is it marketing, is it product? Who should be like leading this?

April:
Yeah, so you know, when I started on this work, again I, I thought of marketing positioning's a marketing thing, right? So in my opinion, and even more specifically I'd, I'd say it's a product marketing thing. If you were to ask me like what do product marketers do? Like the essence of what product marketing does is positioning, right? They're gonna babysit the positioning, they're gonna be the stewards of positioning. So it would make sense to me that product marketing owns that. You know, they figure it out and then they disseminate that amongst the company. I was super wrong about that <laugh>. So my going in assumption was that's how it worked. But then I figured then a few things happened. Like one positioning that got built in the marketing department without anybody else's involvement tended to get ignored. It wouldn't stick. Like I go over to sales and say, Hey we did this great work and this is how we're gonna position it whatever.

And sales would just get kind of squinty eyed at me and just go, nah, we don't buy it. We disagreed, right? And sometimes they disagreed for no good reason I didn't build it so I'm not buying it. But sometimes they were disagreeing with very good reason because they knew stuff about what worked on the sales side that I didn't, I had the same problem in product and often with other parts of the executive team, like the CEO would just be like, no, I don't see it like that April too bad. And I'd be like, oh I did all this research, I did all this stuff and they'd be just like, nah, when, no, you know. And so I quickly learned that if I treated positioning like this little thing that happened in the marketing department, it would never leave the marketing department, it would just stay in the marketing department and we'd be this like splinter group with our own middle positioning and everybody else would be positioning it another way, which is a recipe for customer confusion.

So then I got this idea, well could we do this as a cross-functional exercise and would that be better? And the answer is, yeah, it would be way better because if we think about positioning, I can break positioning up into component pieces. So part of what we're trying to figure out in positioning, like the first thing is what do we gotta position against? So what's the status quo in the account and who else then lands on a short list? Sales knows that if you have a sales team, sales knows that they know the answer to that question way better than we do in marketing. The next thing I gotta figure out is well okay if this is what I have to position against, what do I got that the competitors don't have? Capabilities wise product knows this, right? But again, better than anybody else in the organization, that's their job to know that.

So if I could get sales and product in the room, then I could have a really good and bring in the CEO maybe customer success and everybody else, then we could have a really substantive conversation about what do we have, we got a position against what have we got that the competitors don't have? And then when I've got this list of capabilities, then I can go down that list of capabilities and translate that to value for customers. Like okay, we got this feature, so what? Why does a customer care? What's the value to that feature enables? And this is the marketing people understand value. So then now I've got differentiated value. Once I figure that out, then I can say, all right, well I can go sell this thing to anybody, but some companies care a lot about the value that only we can deliver and so what are the characteristics of a target account that make them a really good fit for my product?

And that's where we want marketing and sales to focus their energy. So my thinking then was like, okay, I gotta get everybody cross-functionally together in the room and maybe marketing spearheads that and is the person that convinces everybody to get together. But when we're creating the positioning, we actually want input from product and sales in particular, but we also want the c e O and everybody else because as we're working through these component pieces, I need to get everybody in agreement and alignment around that. And then if I can get everyone in agreement and alignment around it, then every group can then go and execute against it and we're all circling around the same positioning. And then moving forward maybe product marketing becomes the keeper of that and the positioning police to make sure that everybody's consistently executing on the positioning and product marketing may also be the person that puts their hand up and says, Hey, something new has happened in the market here. We might need to go back and check in on the positioning, but I think if we're actually gonna work on it, it needs to be a cross-functional effort. So positioning that just happens in the marketing department is kind of stupid and useless. Like I think it's actually a cross-functional effort because we're all gonna touch it in some way.

Melissa:

Yeah. When you're saying executing on the positioning too, what does that look like in the different teams? Like what does it mean to actually execute on the position between marketing, product, sales, everybody?

April:
Yeah, so there's a bunch of things. So the most immediate thing is, so we've got this positioning, right? So this positioning says look, here's what we compete against, here's how we're different. This is the value that only we can deliver. Here's the companies we're trying to go after, this is the market we're gonna go in. So the immediate places we execute on that is the messaging. So marketing's gonna go build messaging and that's all the words we use on the homepage and in our campaigns and all you're gonna build campaigns to go after these people with this message. Um, in sales it's the sales pitch. So how does the salesperson tell the story that makes it clear why pick os over the other folks? When we get to product it gets a little more confusing because product's got a few things to worry about. So products actually, they're not just worried about today, they're worried about the vision and where we're gonna go, but we also need to make sure, sure that at each step towards that vision we can win on the step that we're on <laugh>. So sometimes what happens when we go through this exercise, when we get everybody together in a room and you know, we'll get to like, okay, here's who we position again so this is how we're different, this is our value. And then we'll get to this point where we're like here's the characteristics of a target company that really cares a lot about our value. And sometimes we have a bit of a oh shit moment at that moment where we're like, there actually aren't that many companies that fall into this bucket <laugh>.

And that's where we got product problems basic. If we get to this point and we're like, okay, the only people that care about this are dry cleaners in the state of Kansas, of which there are 29, you know, then we're like, well shit, you know, we gotta do 50 deals to make our numbers. So this is not good. And so the only way to fix that is product. I don't get to just make up value outta nowhere. It comes from our differentiated capabilities. So it's product or we're gonna have some capability of the company, but typically it's product. So sometimes we get to this point where we're like differentiated but not in a meaningful way for a big enough target set of customers and we're gonna have to fix that, otherwise we don't get to survive to get to the vision thing.

Melissa:

So when you're thinking about product marketing and product working together, this is again like I don't know what you've observed having worked in this in a while, but I find that there's a lot of companies out there that don't understand the difference between product and product marketing now. And I think because some product people did come out of product marketing and then went towards product management, there's a lot of companies that just kind of merge those two things together. When you're thinking of like what does product marketing do versus what does product management do, how do you think about the roles and responsibilities there and how they work together? And I guess specifically around positioning, but a little bit more general too for people wondering about this.

April:
Yeah, when I worked at ibm they had a product marketing role there, but they used to call it market manager and I thought that was, that was kind of a genius way to position it, right? So we had product managers and we had market managers and so product managers were sort of working with the product team on product market managers, were thinking about how do we fit in the market? And so the market manager's job was to be able to work, was really working on the story about here's how we win, meaning here's how we beat the competition. And that's positioning. And so if I think about what the job of a product marketer is, is to own that story and then to work with the other teams like marketing and sales primarily on are we communicating that story in a way that's really effective?

So the first thing you gotta figure out is what's the story? Which is there's the, the inputs to the story are these piece parts, who do we compete with? How are we different? What's the value only we can deliver? And then how do we develop a narrative around that that is a salesperson can use when they're sitting across from a person that doesn't know too much about our stuff, how do we tell the story that makes it clear here's why a company like you should choose us over any other thing they could pick. Now it's also their job to work with marketing to make sure are we developing the right content to describe that so that people really understand it and really understand like what's important and why is our differentiated value important in the first place? What is it that customers need to understand about the market in order to understand our differentiated value?

I also think it's product marketing's job to work with product to think about that stuff. So when we're developing new things, what is the differentiated value in that? How does it fit into our current positioning? Is that actually gonna mean that we have to shift the positioning and if so, what's that gonna look like? And so I think product marketing, product management should be working hand in hand thinking about how does this product stuff get sold <laugh> and like does it help us win in the market? And if so, what way and how does it relate to the way that we're positioned right now? Somebody has to be deep deep on this positioning stuff because it's generally a story with some nuance and not everybody's thinking about the nuance all day, but I think it's product marketing's job to be able to say, look like you know the, the whole reason you pick us is cause of this, right? And there's three or four key concepts on that and if this isn't helping build that story then then we better think about that hard because that what that means is we're shifting into something else and we gotta figure out how we're gonna win. And that's something else.

Melissa:
You know, I think that's really interesting cuz you're touching on something, it's making me think about this term that we use in product management about product market fit and we've always talked about that. Oh yeah. In like lean startup, you know mode. Yeah of iterate on it until you find it. But it's almost like we're looking at product customer fit when we're refining the ui, making sure it solves the needs there. But this is making me think there's this higher level stuff about the positioning in the market that needs to happen to actually have the product market fit. Do you ever work on those types of things or how do you think about,

April:
Okay so this product market fit thing drives me absolutely. I'm old enough to remember time before we did not have those words <laugh> and then all of a sudden some VC comes up with this concept, there's this product market fit. And what it actually represents is this moment where everyone says like how do you know you're there? And it's like, oh it's a feeling, you'll just know it's there. You know know. But what happens when you have product market fit? We all agree on what happens once we have it. Once we have it, we're gonna smash our foot on the gas lead generation, hire all the salespeople, grow, grow, grow like crazy cause you know we got it this fit thing. And so this drove me absolutely freaking bananas. But where when I was a vice president of marketing and this term pops up, you'd be having these conversations with your CEOs CEO and say, I got it, the product market fit feeling, I'm feeling it <laugh>, it's here.

So go April, smash your foot on the gas and you know, go, go go. The way this works in marketing is typically when we're an early stage startup, we can't smash our foot on the gas cuz we don't know how and it's cause we're still mucking around, which is what I think people mean when they say pre-product market fit. What it really means is I don't have a really clear definition of why and where we win in the market. So I don't really know what my differentiated value is and I don't really know what my definition of a best fit customer is because until I've got that I can't smash my foot on the gas cuz I don't know who to sell to. I don't know where to go fish for them. I don't know what bait I'm putting on the hook to get them.

And so at the beginning, your're thrashing around and you're trying to figure that out who loves our stuff and why? And if I can get, and this is what we call actionable segmentation, I need a segmentation that's really actionable. Like these are the people and I know if I get in front of a customer that tick these four boxes, we win all day and here's why we win. This is our value proposition for them. We beat everybody, we crush it there, but it usually takes us a while to get there in a new product at a new company. And so I really hated this concept of product market fit because you know, there's this whole idea, it's feeling whatever, whatever, but I'm the VP marketing, I'm the person that's doing smashing on the gas. So you come to me and you say I got the product market fit feeling, I'm like I don't give a shit if you have the product market fit feeling, if we don't have an actionable segmentation.

So it doesn't matter if we have product market fit or not. What matters is I have a segmentation that I can go shoot at. Once I have that then I can st put my foot on the gas. So I think that's what people mean by product market fit. I just don't like it as a concept because I can't measure it, I don't know if I have it, I have it and then it goes away and ugh, it's a feeling all this stuff. But I do know how to get to an actionable segmentation, right? Which is basically what I'm describing is really tight positioning. I know exactly how I win and who I win with. Once I know that I can run campaigns all day and fill you a funnel full of great leads, which is what we actually want once we have achieved product market fit.

Melissa:
How many people do you need to get to that actionable segmentation? Because I've met a bunch of founders who think like I got three companies signed up up, I've got product market fit <laugh>, which is probably not enough. Yeah,

April:
Yeah.

Melissa:
What's it take? Like what kind of volume are we talking about to get that feeling just like roughly?

April:
Well so here's the thing, it depends on the narrowness of your segmentation. And so part of that depends on the size of the deal. So let's say you're selling really big enterprise deals, you got a thing and it's for call centers of banks or something like that. These might be deals that take a year to close. And so you may only have three customers but you might have 20 in the pipeline. And those 20 in the pipeline are real deals. They're cooking, they're just making their way through. So you actually know a lot about 20 or 30, even though you've only got three customers that have been all the way through close the deal and whatever, you actually know more than you think you know. And because we're talking about a fairly narrow segmentation like it's call centers at banks, they're all call centers at banks, I got 20 of them.

That would probably be a lot for me to see the patterns of who loves us and why. Now if you're selling something that's really mass market, let's say I'm selling a restaurant, you know, and I got 50 customers, but you know it's one in every state and every restaurant is different. Some of them are a little we and some of them are big, some of them are quick service, some of them are sit down, do I actually know enough about who loves my stuff? Maybe not. And so what you really want is enough customers or enough customer experience that you're seeing the patterns and who loves our stuff and why. And so if the deals are smaller but, and the market is more general, we need more of them. If the market is more narrow and the deals are bigger, then we actually learn a lot more in a fewer number of deals. So it's impossible to actually pick the number but it's, it's the moment when we, when we can really say we've done enough of these deals. Now that we know if I got a customer that tick these five boxes, I'm pretty much gonna win those deals every time. Like once we start feeling some confidence in that, then I think we got it.

But if we're kinda like, I dunno, restaurants, well I know <laugh> and it's like well do we, do we know, are we better in quick-serve restaurants versus sit down restaurants? And your answer is, I don't know, like you're not there yet.

Melissa:
Is that because like with restaurants it is such a fragmented, not fragmented, but segmented, let's say market cuz you've got like your fast casual, you've got your fine dining. Is that because like restaurants just too broad of a market that we started with and we had to refine it? Or is it more that there's so many restaurants out there? We don't know.

April:
I think it would depend on the product that we're talking about, right? But the assumption here is I've got a product that the value might be different in quicker versus sit down and I don't know the difference and there's a lot of them. And if I'm gonna run a campaign, like it's kind of hard to just run a campaign at restaurants. Like they're all so different and do I really know if one's better than the other? So I would wanna be able to narrow that down a bit so that I can focus my marketing on something where I think I'm fishing in a pond where I can catch all the fish. Okay. And so if things are too broad like that, then it's usually a sign that we don't actually know. I was talking to a customer the other day, our company the other day and they had 40, 40 clients that they worked with and they did a very specific thing for IT departments that have a specific set of software.

But that if you looked at the 40, there was no pattern in there. You know, there were all industries, some of the companies were really big and the deals were big, some of the companies were really small and the dollar value on the deal was small. And I'm like, so what do you wanna be like, do you wanna be an enterprise product or do you wanna be a low end thing? And there's no answer to that question. And so part of it was, you know, I, I'm not sure you can do both. Like these guys have a different expectation on service and support and everything else than these guys do. This is a fundamentally different business than this. And so you either need to figure, keep doing deals to try to figure out which one is better fit for you or if they're both a great fit for you, you're gonna have to pick one <laugh> and make a strategic decision about what this company is about. But while you're doing both, I don't know how to position for that. They're fundamentally different markets, they're totally different comparisons, totally different competitors, everything's different.

Melissa:
And that doesn't mean that they can't go into that second market later or it just means they have to concentrate on one now. Absolutely. Okay.

April:
Yeah, absolutely. And a lot of these companies do they just pick the easy one to go after and establish a beachhead and then spread out into all the other ones later. Salesforce a great example of this. Like everybody forgets that when Salesforce started, like they were selling at the very bottom end of the market, their original target market was less than five salespeople in the company, which is laughable now. I mean less than five salespeople in the company. You'd kind of be nuts to go with Salesforce at this point. Like it's way too expensive, way too complicated, way too hard to get your reps trained. So you know, they've abandoned that market completely really, but have done an amazing job of going way upstream and now they're like big banks and insurance companies and they're absolutely dominating the enterprise part of that market.

Melissa:
I didn't even know that. I think that's a really, a really good one. Yeah,

April:

Everybody forgets like, everyone's like, oh you know I don't wanna move upstream. And then little people that started with me, they're gonna get mad. I'm like, is anybody mad at Salesforce? <laugh> <laugh>? Nobody remembers. Yeah,

Melissa:
I think they're doing OK

April:

<laugh>. Yeah, I think, yeah. Lastly checked doing all right,

Melissa:
When you're thinking of good advice for how product marketing can work with product management around a bunch of this stuff around positioning, but in general, like what would be your advice, let's say specifically for product managers on how to use their product marketing counterparts and how to work with them, what should they be working on together? What should they be asking? How should they be leveraging them?

April:

Yeah, the teams that I've worked at where I've had a lot of fun, you know with product management and product marketing working together is where the product marketing is really pulling on product management for deep product expertise. And so there's all this stuff you need to understand about differentiation with the other things in the market. And so I think product marketing should becoming a product management for that to really deeply understand this differentiation stuff. But I think that product management needs to be going to product marketing to understand the market better and sales better and how do we win better? And you know, we're gonna build this stuff but how do we commercialize it? How does it actually help us make money? Okay,

Melissa:
That's kinda how we, and so when you are thinking through this too, they're coming back asking questions about like how do I commercialize it? How do I make money? Like what are good questions? Product managers should ask about that because I think where a lot of product managers struggle, especially like new ones, let's say they just got into the role, they just learned how to work with developers. I found that their knowledge of how the business runs or how we make money, all of that stuff like is still new to them. They don't connect the dots as much so right. What's like a great conversation to have with a product marketer about that? Like how would you kick that off? What would you ask them?

April:

One thing that you've got over in product management that happens a lot. Like there's two things actually where I think the product managers get a bit hung up. One is they're working on some feature and everybody's so excited. Oh my god it's so cool cuz technologically it's really cool and they've looked at the competitors and the competitors don't do this thing and this thing's gotta be so cool. But what they're not necessarily thinking about is the value. So yeah, it's cool, but so what for our champion, like the person that we're selling to, how do we actually describe that value? Is the value a lot or a little and like can we actually measure that? And if I was to sell this thing to somebody, like I got this thing and it's so cool and it's so different and sometimes we'll get caught up in this thing like we know our stuff really well and we know our product really well and we'll say this is amazing, it's gonna save people all kinds of time.

Then you get the product marketer that says, yeah but so what, how much time? Like a minute or two hours? And so what if I save two hours so I actually care, like what am I gonna do with that two hours that I didn't do before <laugh>? Yeah. And so sometimes you'll have this thing that you just think, well it saves them time. So they want that, right? Well maybe they don't and maybe it's not enough time to make a difference. And so it's, it's those kind of conversations. I think product marketing should have the ability to sort of be in the in there trying to say, well okay, so how do we sell that? You know, I've got this feature, it has this benefit, this is the value to the customer. Like how do I actually make that real for a customer? What am I gonna have to prove show in order to actually get that thing sold?

Melissa:
I try to describe it to to product managers cuz a lot of product managers complain to me like they can't do it all. It's true. You can't do it all. But <laugh>, I think if you think about the things of like if you can work with the product marketing team to help you do the competitive analysis, understand how big that market is too, right? Right. When people are learning product management on an individual level, we focus a lot on granular details of like features and products that are small. But where I think product marketing becomes really powerful is how do we calculate out what that potential of impact is on the whole market, like you were saying, right? Right. It saves you two hours. Who cares? Because what's the benefit, right of two hours to a market that has, you know, a hundred million dollars of TM out there. Like is it gonna be right that big? Is it gonna be you know, that impactful? Do we really wanna concentrate on that? You know, has it scale? And to me I've always felt like that's where product marketing becomes incredibly valuable cuz they connect the like hey we could do all this stuff that solves problems but like how big of a problem is that when it actually hits that market?

April:

Do you notice the other thing that I notice a lot is, you know, when we're thinking about positioning in particular, it surprises me whenever I go in to do a positioning exercise and we have sales and product in the room, you know the thing they disagree on the most is who's our competition?

And that's because they're looking at it in different timeframes. So product management is thinking about the future of the product and where we're gonna go and they're often tracking this really long list of what I would call horizon competitor. So competitors that might be causing us some pain next year or the year after. Whereas sales, and this is very true in positioning, if they don't, competitor doesn't land up on a short list against me, I don't have to worry about positioning against them cuz in the minds of my customer they don't exist. So we get to actually simplify this down quite a bit when we're doing positioning work. So often what we'll get in product management is product management will get a little bit over their skis and so they'll have this thing like, oh we're gonna do this thing as really differentiating against the competitor we never see so who cares? <laugh>.

Melissa:
Yeah.

April:

And this is where sales gets really mad cause they'll be like, who cares about this thing? Like no one cares about this thing. And so that conversation is often really interesting when we're having positioning things cuz you know, I'll say who do we compete with and product management gimme this great big long list. And then I'll say, okay but who do we actually see in a deal? And sales will say, Oracle just Oracle. That's all we gotta worry about is Oracle.

Melissa:

That's really interesting.

April:

So I think there's a bit of tension there. We want product management thinking about the future. We want product management to be ahead and building the thing that's going to maintain our differentiation way out there. But at the same time, I can only sell what I got on the truck right now and the thing that I gotta sell on the truck right now is often competing against a very small subset of that long range of competitors and we can't lose sight of that. And so I think product marketing can be a good person to remind everybody like <laugh>, we don't actually have to care about those guys right now from a sales perspective. We just gotta beat this, this and this. And oh by the way, like 70% of our deals we're losing to Excel <laugh>. So let's just beat 'em on that.

Melissa:
Yeah, it's always Excel too <laugh>,

April:
It's always Excel, b2b, it's always Excel.

Melissa:

That's a really good way to look at it. So we've got like the product managers that need to be worried and thinking about the future, but we've got product marketing that's making sure that we could sell what we have now and keep money right in the short term. And I think that's always gonna be attention but it's a good tension. Yes. Cause you gotta make money today and you gotta make money tomorrow so somebody's gotta be thinking about both

Melissa:
Yeah. This has been incredibly insightful. Thank you so much April for being on the podcast. If people wanna learn more about your work or potentially work with you, where can they go?

April:
Uh you go to my website April done for.com and yeah I wrote a book about positioning so if you're interested in positioning you can go read my book. It's called obviously Awesome. I put it on my shelf so that I can do this. Looks like this.

Melissa:

I like it. Straight hair in the background. Where would you prefer people to buy it? To Amazon or anywhere else?

April:

Anywhere. Like most people buy it on Amazon that I think that's most low friction place to go buy it but you can buy it anywhere. Like it's, you know, it's just that if you go to your local bookstore, they might not have it in stock but you can order it and ask for it. You don't like Amazon, you can go in and say I want this book and they can order it. Good. If they tell you they they can't, they're lying cuz it's true. They can.

Melissa:
Good to know. I actually don't know if they do that with my book too. <laugh>. No, I know I

April:
Can't. No, for sure they do, for sure they do. Yeah. You got i d N number you for you for sure.

Melissa:

Cool. Well thank you so much again for those of you listening to the Product Thinking podcast. If you enjoyed this episode, please subscribe so that you never miss an episode. We're live every Wednesday with one and next week we'll be back with another Dear Melissa. So make sure that you submit all of your questions to dear melissa.com and we'll see you next time.