A New Chapter on Differentiated Value

Customers don't actually care that much about features they care about. How is it going to help me personally or how is it going to make my job easier? They're worried about the value of those features and the question is then, "So what? Why does a customer care?" Sometimes we have to save so what several times to get what's really important for the customer. Sometimes we don't. The trickiness in this exercise is we want to say, "So what, so what until we get to the exact moment where the light comes on for the customer?" The customer says, "Ah, I get why this is valuable." Welcome to another edition of The Positioning Show with me, April Dunford. Hey, glad to be back. We're in the middle of a short, like, mini-series of podcasts, where I'm going through the specific things that have changed from the first edition of my book about positioning called, obviously, awesome, and the second edition, which really represents my change in thinking about some of the basic things related to positioning over the past six, seven years. So we started this by talking about how I had changed my thinking about things we needed to do to prepare for a positioning exercise. There's a specific set of decisions that need to get made in my opinion. And then there's some pre-work that needs to happen. And then we switched into the positioning exercise itself, which now focuses on the five component pieces of positioning. So the competitive alternatives, differentiated capabilities or distinct capabilities, differentiated value, best fit account profile, or who's your best fit customer, and then lasting market category. In the last episode, I talked a lot about competitive alternatives and how my thinking had changed with that. The second component piece is distinct capabilities. I really think my thinking has changed that much about that. And that step is generally the easiest step when folks go and do a positioning exercise. We start out by figuring out who the actual competitors are. And there's a little bit of thinking that needs to go into that step. But then we get to distinct capabilities. And it's really like what have we got that the other guys don't have. And that's feature function of the product, but also capabilities of the company. Like maybe you do pricing in a different way or professional services in a different way or something like that. So that chapter didn't change too much. And the way I do that with clients right now hasn't changed much at all. Those are kind of the two steps that we do to set up the third step, which is differentiated value. And there's a reason we do those two steps first. So if I think about back when I was an in-house product marketer and I was thinking about positioning, if you got a cross-functional team of folks together and said, "Hey, we're all going to work on positioning," and didn't have a process for them to follow, what everybody would skip to is kind of the question of like, why does everybody love us? Like, why do people pick our stuff? Which is kind of the answer to the differentiated value question. And if we went directly to that without doing these first two steps, what we would get is one, it would just be everybody's opinion, like, you know, I think people love us for this, right? I think people love us for that. And it would just be opinions. People generally wouldn't agree. And so usually the founder's opinion was what we went with. Sometimes it was a VP sales. It was never marketing. It was never product. But it would just be, you know, if we're just going to have a bunch of opinions, then everybody liked theirs the best. Didn't that's how that would go? So after doing that a bunch of times, I thought, well, okay, if we're going to get everybody together, we got to have a process. I explained in the last episode why I thought starting with competitive alternatives was a good idea. Like the thing about starting with competitive alternatives is we can kind of put a stake in the ground and say, this is what we have to position against or put another way. This is what we have to beat in order to win a deal. And those are kind of just facts. Like if I'm selling with the sales team, we kind of know the answer to that question. We know what that is. And then we can go to the next step, which is, well, what have we got that the other guys don't have? And that's capabilities of the product, capabilities of the company. If we're just talking about feature function stuff, we're pretty good at that. That tech companies. We love talking about feature function. Here's where things get hard. Then we get to the next step, which is differentiated value. So here's the thinking on this. Customers, they're interested in your features. And if they're highly educated technical buyers, they might come with a checklist of features and say it's got to do all these things. But in general, customers don't actually care that much about features. They care about what's this feature going to enable for my business. How is it going to help me personally or how is this going to make my job easier? So they're worried about the value of those features for themselves for the company, for whoever. So we need to get at differentiated value. Now, when I first wrote, obviously, awesome. There's a couple of pages in there discussing what do we actually mean by value? And I've changed my thinking about that a lot because I've had to explain this concept of differentiated value in almost every workshop I've ever done, all 300 and something of them. And if folks don't come from the marketing side of the house values, a bit of a foreign concept. And I've decided that the way they teach that in marketing school and if we want to get really intellectual about value is kind of unnecessarily confusing. So in marketing school, we're generally taught that there are features. The features have benefits and those benefits can be translated to value. And where people get really confused is what's the difference between a benefit and value. And I've decided that for B to B products, it just doesn't matter. It doesn't matter. Like a much better way to think about it instead of trying to get all caught up on the minute differences between benefits and value or whatever the way marketers want to define it, it's much easier to just say, we have a feature. Let's say we have a brand new AI-powered capability. It's really exciting. We got this feature. Now the question is then, so what? Like, why does a customer care? Well, what's it going to do for my business? What's it going to do for me? And it's a better way to just think about it that way. Now the trick to this is that sometimes we have to say, so what? Several times to get at what's really important for the customer. But sometimes we don't. One way to think about this is that we have the feature and then we have value. And those two things exist on a spectrum. And so I can say, well, I've got this brand new AI-powered thing. And customer might say, well, so what? And then you'd say, well, it makes this process more efficient. You can get it done in less time. Now, customer might care about that. The customer might go, oh, that'd be great if we got it done in less time. Because we got it done in less time. Then we could do the process more often. That would actually help us make money. Or the customer might look at it and say, so what? Like, they really care if this gets done in less time. And you may have to explain that to them. And you may have to answer the next so what? And say, well, you know, if you could get it done in a lot less time, then maybe it would require less manual effort to do it. So maybe you could reduce your headcount. And that would save you money. Or you could say, you know, you could get it done in less time. So you could have more throughput, which would allow you to produce more, which would allow you so more, which allow you makes money. Now, just to make this extra spicy, if we think about B2B, we don't have a lot of points of value really. Like at the end of the day, we're helping the business make money or we're helping the business save money. And that's it. If I look at a feature and keep saying, so what, so what, so what, so what? Eventually, what I get to is it's going to help you make money or it's going to help you save money or like, you know, sometimes there's risks. That's it. That's another one. But most of the time it makes money save money. That's all we got. And so the problem is if I did this the way they describe it, marketing textbooks and went all the way out, it's a pure, pure textbook value, I'd sound like everybody else. That's how like everybody else. I'd say, oh, this thing's going to help you make money. And all your competitors would say, yeah, that's two. That's two. We're going to help you save money, make money. Yeah, we do that too. And so the trick on this is what we want is differentiated value, which is the value you can deliver that no one else can. The trickiness in this exercise is we want to say, so what, so what until we get to the exact moment where the light comes on for the customer and the customer says, ah, I get why this is valuable while retaining our differentiation. This makes it actually really, really, really hard, really hard. Most of the companies that I've worked with, we spend, you know, way more time on this step in a positioning exercise than we spend in any other step. And the companies that contact me that have attempted to do the positioning exercise on their own just using the book, if there's a spot where they're going to get stuck, it's this. And so when I look back at the way I had described how this worked in the book, the original version of the book, it was pretty short. to be honest. I think I spent a few pages describing differentiated value and it's maybe not surprising that people got stuck on that spot or maybe didn't fully understand it. So I wanted to really expand that both to introduce this idea of value on a spectrum and to also maybe just help people with some other practical tips when they're trying to do this translation from features to value. A couple of other things to think about here. So one is when we're at this step, and I mentioned this before in the previous episode, we really need to think about value for the champion. It's not necessarily going to be the same value for every stakeholder in the buying team. In fact, a lot of the stakeholders may not have an opinion about value at all. In fact, a lot of the stakeholders that are there just to make sure that this thing doesn't make their life miserable. So if you think about a typical buying team, I might have people on the business side of things. I have folks from IT, maybe I've got somebody from security, maybe I've got legal involved, maybe I've got purchasing involved. There's maybe an economic buyer who's the boss of the champion involved. And so if you think about it, the champion is assessing the value of this thing and trying to decide, should this make it on a short list, should this not make it on a short list, should I purchase your thing at all? The champion is they're going to have to run around and get agreement from everybody else. And those other people might just be, well, if it doesn't meet our security standards, we can't buy it. Or if it doesn't meet this legal requirement that we can't do it, if it doesn't meet our compliance standards, we can't do it. So a lot of times the other folks on the buying team don't actually care about value. Like what they care about is they have a bunch of objections and you need to, you need to basically arm the champion to handle those objections. But we don't need to sit around and think about distinct value for everybody on the purchase team. It's really the champion that we're thinking about. So the more we understand about this champion, the better we can get at what is the differentiated value that gets us on a short list, keeps us on a short list. Now it's not always quite that clear cut. Sometimes what we've got is a champion that's really smart and has purchased other things. I mean, they may not have purchased something just like yours before, but they've been through a purchased process on other things. And let's say they're over on the business side, they might be smart enough to anticipate the objections. They're going to get over on the IT side, for example. And so when looking at value and deciding whether something's going to end up on a short list or not, they may take into account the requirements of another powerful stakeholder and say, look, like it's got to take these boxes or else we're not going to put it on the short list. The more you understand about how the champion thinks about that and how the champion actually assesses value, the more you're going to have a better time at this step in the positioning exercise. It can be quite complicated. And often what you've got is two, three points of value and depending on who the champion is and depending on the type of organization, the order of the points of value changes. So it might be, well, if we have a champion that looks like this, then we have value point one value point to value point three. But if we have a champion that looks something else, then we'd have value point two value point three and then number one would come last or something like that. So those are some things to think about. I've found if you're attempting to do this exercise on your own, I've found that often at this stage teams will get really, really hung up in copywriting. And so one of the things you can do to make your life easier at this step is to get everybody aligned on the idea that what we're actually talking about here is concepts. So we want to get agreement and alignment on conceptually, what is this value theme? We might not have the perfect words for it, but conceptually can we all agree that this is what it is. And then we, we all agree that a copywriter, a talented copywriter will figure out nice words to use to say this. So sometimes when we do this as a group in an exercise, we end up with a value theme that the words are kind of clunky and the theme itself is sort of long and has a lot of ideas in it. But but if we can all agree that this is a major point of value that our competitors cannot do. It's worthwhile writing it down and we'll just say conceptually that's it and we'll worry about copywriting later. I cannot stress this enough because people will get really hung up on the individual words. And what we want to do is kind of coach the team. Let's not get to hung up and copywriting. We just want to all get agreement on that on the concept. There's a couple of other things I think that are important here. We don't want a large number of value themes and in fact a smaller the better and look it back at all the workshops I've done. It's not unusual for us to have just one. Sometimes we have two often we have two, three, you know, that happens to if you start getting on beyond three, though, I would question if you've really got it. And this four or five point, five points of values way too many in my opinion, like even four points of value. That's just a lot for a customer to hold in their head. And ideally you want to keep this really simple. You want to say, hey customer, you want to pick us because we're the only solution on the planet that can give you this. Or were the only solution on the planet that can give you a combination of this value plus this value. So we're trying to keep this down as small and as tight as we can get it. Now often when I do these workshops and I'm working with teams on this you'll find this too if you do it yourself. There'll be themes that actually kind of naturally fit together. And so you can collapse them and put to get put them together is the same thing. That's one thing. The second thing you'll get is you'll often get a point of value. What folks think is a point of value that is an important point. But it's not actually value what I would call it is objection handling and the test for this is, would you care about this thing if you hadn't already decided to purchase. So for example, the fact that you are really, really easy to deploy this could be value or it could just be objection handling sometimes it's value because maybe every other competitor you've got is just a horrifying mess to deploy. To the point where a company wouldn't pick them because it takes a year to do an deployment. And if they pick you maybe they're going to be able to get you know to value in a couple of weeks. But in general, you don't care that much about deployment until you've decided that the product is worth deploying. Usually the company's going to be sold on the value like how is this going to help us make money. How's this going to help us save money. And then when they're kind of sold on that they'll say, OK, now how bad is it going to be like you know, is it going to be too expensive. Is it going to be too hard to deploy. Is it going to take too much professional services. How are we actually going to get that done. So I would try to take these things that feel a bit more like objection handling off the table. And when we get to translating this into a sales pitch or telling the story around this. We can represent those things as handling an objection. But they're not going to take up space necessarily in our core value points because these are the core things we need to sell you on before we get to that other stuff or you even care about that other stuff. And it causes on that as well when you're thinking about this particular step. Lastly, I'd like you to just kind of sit with this idea for a bit like some companies will come to me and they'll be like no, our, our buyers are really smart. They're really technical. They really do their homework before they show up. And so we don't have to tell them what our, what the value of our features are like they they know it. We can just state the feature and they know. But here's the thing when you think about a customer trying to make a decision. And if you think about what really makes your solution different and better. It's usually because you've got to some stuff that the other guys don't have. So you have some capabilities that the other guys don't have you have some features that the other guys don't have. And because those features or capabilities are unique to you. That means customers have never actually come across them anywhere else before. And so if they have not been your customer previously. Then they're not just going to understand what the value of that feature is. Like I give example this I worked for a company we had this data thing and it we had a patented algorithm. It was this fuzzy logic algorithm. But we were the only ones that had it because we owned the patent on it. Now I couldn't just walk in there and say, hey, I got the fuzzy logic man. I think everybody to understand what that is and why they needed to get the fuzzy logic they didn't worry the only ones that had the fuzzy logic. So it was on us to educate the customer about why the fuzzy logic was important. And that's what differentiated values all about. So we can't just say it's the fuzzy logic, you know, go on the website and figure it out. So the hard job to actually explain well the fuzzy logic allows you to do query analysis in a different way. Well, so what well if you do query analysis in this way. Then you know it's very different from the way everybody else does query analysis. So therefore we could do it much much much faster. Well how much faster well you know the query before we take two days and now we can do a query in three minutes. And they might say, "Mmm, that sounds pretty good." And you'd say, "Yeah, it's really important. If you got a customer online and a customer has a question, you have to run this query to answer the question." And now you can, you know, the end result of this is like really great customer satisfaction 'cause you can get back to your customers really quick. That's the value. That's the value. So it's these kind of things that you gotta think about. So again, I think value is hard. I would caution you that when you go into a positioning exercise, the better job you do on the first two steps, which is competitive alternatives and distinct capabilities. The better job you do there, the easier it's gonna be when you get to differentiated value. The more you caution the team to stay away from copywriting and to just agree on things conceptually, the easier this will be. The more you sort of take things that sound like objections and put those off to the side and say, "That's not value, that's objection handling. We're gonna focus on this." Then I think the better chance you'll have of successfully getting through this step in a positioning exercise. In my opinion, differentiated value, it's the key, it's the core, it's the center. A lot of people think that market category is the most important thing that we can do in a positioning exercise. And I really disagree with that. Differen shaded value is the answer to the question, why pick us over the other guys? It's the key to do and deals. If we can't succinctly describe the value we can deliver that the other things in the market can't, then it means we're not doing a very good job selling. It means we're not doing a very good job pitching. It means we're not doing a very good job, teaching a customer why they should pick us versus everybody else. We don't deserve their business, to be honest. So this bit, I think, is really, really super important. It's worth spending two, three hours in a positioning exercise just on this step. To make sure that you really, really nail it. So that's it for this episode. If you look at the new version of the book, the second edition of obviously awesome, there's a much expanded differentiated value section. This is my attempt to make this easier for people. I would love it if you read it and gave me some feedback on what you think about the new version of that. But I think if there's one thing that's greatly improved from the last version of the book to this version of the book, I think it's precisely this step in the process. Anyways, that's it for today. There's a couple more in these series. I think the next one I'm gonna talk about market category and the way my idea about how to think about market category and the importance of a market category in a positioning exercise. That's changed for me a lot in the last five, six years. And so I'm gonna peel that one off in the next episode in a couple weeks. Thanks for listening. Bye.