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- [00:00]
April Dunford
So you can't tell just using, you know, what I would call the grandmother test. You know, would your grandmother understand this? Well, unless you're selling to grandmothers, it doesn't matter if the grandmother understands it. So some people will say, well, we need to dumb this down and we need to have it so that anybody understands it. I super disagree with that. In B2B, if I'm selling a specialized thing to specialized buyers, it just needs to resonate with them. It's okay if it doesn't resonate with your grandmother.
- [00:40]
Shane Parrish
Welcome to the Knowledge Project. I'm your host, Shane Parrish. In a world where knowledge is power, this podcast is your toolkit for mastering the best of what other people have already figured out. If you're listening to this, it means you're not a supporting member. Members get early access to Episodes. My personal reflections at the end of Episodes, which a lot of people say is quickly becoming their favorite part. No ads, exclusive content, hand edited transcripts, and so much more. Check out the link in the show notes for more information. My guest today is April Dunford. Her book, obviously awesome, totally changed how I think about positioning when it comes to business. This interview originally aired as a members only episode, but I had so many requests for members to share it with their team at work that I decided to make it public so everyone can benefit. April is an expert in product positioning and this episode goes from high level to very detailed examples. We discuss the critical role of positioning as a strategic approach, not just a marketing exercise capable of totally transforming a product's trajectory. April illustrates this with the example of labeling a muffin a muffin and not a cake, demonstrating how effective positioning can shift perceptions and and drive sales. If you're interested in getting more sales, loyal customers, and bigger promotions, this episode is for you. It's time to listen and learn.
- [02:03]
April Dunford
My dad works in B2B marketing. He came by my school for career day and said he was a big roas man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B, but with LinkedIn.
- [02:20]
Shane Parrish
You'Ll be able to reach people who.
- [02:22]
April Dunford
Do get $100 credit on your next ad campaign. Go to LinkedIn.com campaign to claim your credit. That's LinkedIn.com campaign. Terms and conditions apply. LinkedIn the place to Be To Be.
- [02:36]
Shane Parrish
I want to start with the basics. What is positioning?
- [02:40]
April Dunford
It's interesting. So I'm a positioning expert and when I started out as a consultant being a positioning Expert. The worst part about that is nobody knew really knows what positioning is. They think they do. So people will say, positioning, that's just like messaging, isn't it? I'm like, actually, no, it's not quite that. Or they'll say, positioning is like a tagline. We're coming up with a tagline. And I'm like, oh gosh, no. There's a lot of things that we do that aren't tagline related. My personal pet peeve is when people talk about brand positioning. That drives me nuts. There is positioning and there's branding. Those two things are actually really separate. So most of the things that we confuse with positioning are actually things we do with positioning once we're done with it. But positioning isn't input. So if you think about it this way, if everything we do in marketing and sales is the house, positioning is the foundation upon which the house is built. So my definition of positioning goes like this. Positioning defines how your product is the best in the world at delivering something, some value that a well defined set of customers cares a lot about. Now, that's a bit of a mouthful. A lot of the folks that I work with are not marketing people. They're CEOs of tech companies. So they don't have a background in this stuff. So I think the best way to think about it is it's like context setting for products. It's the context I position my product in such that customers kind of have an idea like, what is this thing? What's it all about? Why should I care? It's a starting point for a conversation with a customer.
- [04:17]
Shane Parrish
Can you give me an example?
- [04:18]
April Dunford
When one of the things that really stuck out to me, I was always trying to explain to tech company CEOs with a tech company example. And whenever I did that, the tech company CEOs would say, well, that's a database that you know, and we're not like a database. So I thought, I need some examples that have nothing to do with technology. They're really simple. So I was trying to come up with an example and I was on my way to work and I went to Tim Horton's coffee shop in Canada. So I standing in line and the guy in front of me is ordering breakfast. It's 8am and he orders this thing, which is a double chocolate salted caramel muffin. And I was like, that is some genius marketing stuff right there. So I've got a piece of cake. It is double chocolate caramel cake. But if I put it in the muffin format and I call it a muffin. Everything about that is different. The whole context around it is different. It is socially acceptable to order double chocolate caramel. Whatever if you say it's a muffin, because I'm now comparing it differently. So if I said it was cake, what's cake? Cake competes with other things that are like dessert. It competes with ice cream and tiramisu and other things you would order for dessert. What does cake cost? Well, if in a restaurant it's $10, $15, where do I get it? I might go to a bakery, but I get it at a restaurant too, when I'm talking about a muffin. Well, muffin's totally different. A muffin's breakfast, it competes with a bagel and a donut. What do I charge for a muffin? I charge a dollar two for a muffin. The whole context around it is different. The product, however, is the same. Like that thing that you're eating is a piece of cake, whether. Whether it's in cake form or muffin form. So I can choose to position it as a muffin. It's the same product, but the assumptions about that, the competitors are different, your value is different. The assumptions that customers have about that product are different because I've placed it in a different context.
- [06:24]
Shane Parrish
What are the most common misperceptions about positioning that companies have?
- [06:28]
April Dunford
I would say that most companies just don't think about positioning at all. In the vast majority of cases, the companies that I work with, the positioning feels obvious. It feels like you couldn't possibly position it as anything else. So it started like this. The founder woke up one morning and said, you know what sucks? Email sucks. We're going to make way better email. It's going to be fantastic and it's going to fix all these things I hate about email. And then they launch it and customers say, I like this part, I don't like this part. They change it. It evolves over time. Maybe the whole market evolves. If we fast forward two years from now, the founder and everybody inside of the company still says email. We're building this email thing. But maybe that product actually looks more like chat, because that's kind of like email too. And so we'll start having this disconnect where the customer sees it and the company is saying, well, this is email. Look at our amazing email. And the customer's like, I don't know. That kind of feels like chat. You're calling email. I feel like maybe it's chat. And now I'm confused. And I don't really know what this thing is anymore. When the company figures out they have a problem, like, oh, maybe this isn't email. Maybe we should reposition it. Nobody knows what to do at that point because they never deliberately positioned it or did a thing to decide. It was email in the first place. It was just obvious. Of course it's email. That was our idea. That's what we're going to do.
- [07:54]
Shane Parrish
Product positioning is basically shaping the environment in the consumer's mind by which they draw comparisons and know what to expect.
- [08:03]
April Dunford
That's a good way to describe it. It's a bit like the opening scene of a movie. So you walk into the movie. Let's say you're going to the movie theater. You walk into the movie theater, you know a little bit about it. You bought a ticket. But the job of the opening scene in the movie is to set context for the movie because you have these big questions. Where are we? What time frame is this? Who are these characters? What is the vibe of this whole movie? You need to get these big questions answered before you can settle in and pay attention to the details of the story. So if we take. I usually use Apocalypse now as the example of a great opening scene. The opening scene of Apocalypse now starts with a shot of the beach. It's palm trees. It's all nice. It's lovely. You walk in and you might think, oh, you know, I know it's called Apocalypse now, but maybe it's not Apocalypse right now. Maybe it's apocalypse 30 minutes from now. So you walk in, but suddenly this thing changes. Like, the music gets a little bit more intense. We see this thing, it looks like smoke, dust. And you're like, oh, it's actually smoke. Helicopters go. Goes by and boom, the beach is on fire. And all of a sudden, we're in the middle of the Vietnam War. And then the scene changes and it's Martin Sheen. He's in his hotel room, he's drinking, smoking. He's clearly in distress. He walks over the window, he peeks out the blinds, and we get the first line of dialogue, which is actually his thoughts of the movie. He looks out and he says, Saigon. Shit. I'm still only in Saigon. Every time I think I'm going to wake up back in the jungle. So here we are, we're three minutes into a three and a half hour movie. And we know a lot like, where are we? We're in the middle of the Vietnam War. Specifically, we're in Saigon. Our lead character has been there before. It didn't go so, well, he has ptsd. This movie is not going to be funny. It's going to be kind of intense. Now I can settle in and pay attention to the details of the story. Positioning works the same way if I walked up in Shark Tank or I forget what we call it here in Canada. What's it called? Dragon's Den. So let's say we have weirdo Dragon's Den. And I'm not allowed to give you my whole pitch for something. I'm just going to talk about the market category. So the category that the product is positioned in. So I walk out and I say, I've got this amazing thing, it's revolutionary next generation thing, but it's CRM, Customer relationship management. If you're tech people and you know what a CRM is, you will make a whole bunch of assumptions about that product just because I called it a CRM. So you'll say, well, you must compete with Salesforce. They're the absolute leader in that market, the gorilla in that market. So I will just assume that you compete there. I will make assumptions about what that product does. I will assume that it tracks deals across a pipeline. I will assume who the buyer of that is. I'll assume it's the head of sales, vice president of sales. I'll even make an assumption about the pricing, even though I said nothing about what that thing is or who the expected customers are of that thing. But if you assume that Salesforce is my big competitor because they're the absolute leader in that space, I'm not charging more for my CRM than Salesforce is. So this is how this works. What it does is I position that product in a market category. That market category has set off a set of assumptions in the customer's mind about that product. If I do this well, it sets off a set of assumptions about that product that are true. And that's great. Now, I've saved marketing and sales a whole lot of time, energy, effort. I don't have to tell you exactly who my competitors are. It's assumed I don't have to list every single feature. A lot of that stuff is considered table stakes in the category. But it works the same way if I do a terrible job of it. So if I do a terrible job of it, I position my product in a market category such that it sets off a set of assumptions about my product that are not true. Now, marketing and sales has their work cut out for them on doing this damage that your positioning has already done where they're like, no, no, no, we don't do that. No, no, no, I know you think that. No, no, no, it's not that. It's this other thing.
- [12:07]
Shane Parrish
So if I'm trying to compete with Salesforce, should I do that in a way where I have a product, it's probably inferior because I'm a startup, right? And so we can't go toe to toe on every aspect. How do we position that in a way to a consumer, which in this.
- [12:25]
April Dunford
Case would be a business, a business that's a buyer. The most common way that tech companies successfully position is they find an underserved sub segment of the market and then they attempt to dominate that sub segment and then push out from there. So I can give you an example. I worked at a company called Jana Systems, and at the time, this was quite a while ago, so Siebel or Salesforce was a small company at that point and only selling to the very low end of the market. But the gorilla in that space at the time was a big, big company in Silicon Valley called Siebel. And so they were fantastic company. 2 billion revenue. Fastest company to ever get to a billion revenue in the history of Silicon Valley. Amazing success story. They were positioned as enterprise CRM. They were the absolute kings of enterprise CRM. We had a product that was also enterprise CRM. So we would position ourselves as enterprise CRM. And so, not surprisingly, we would get a meeting with a customer and the customer would say, okay, so your enterprise CRM, their enterprise CRM, how are you better? And the answer to that question was we simply weren't better than them. They had, we had, you know, we had 2 million revenue. They had 2 billion revenue. They had 400 customers, we had 6. They had thousands of employees. I was employee 26 or something. They, I mean, we were just no comparison at all. However, we had a feature that they could not copy that was really interesting and we thought it would be really valuable to customers. We didn't really understand the value of it for customers, but we always showed it in meetings. So we'd go in, we'd show the thing and it was this neat feature. And we'd say, hey, here's the feature, it's really great. And customers would look at us and say, hey, that looks cool. What do we do with that? And we'd say, anything you want. And then the customer would say, hmm, okay, well, that's confusing. What else you got? And then we'd say, well, you know, we're really cheap if you want us to be really cheap because we're desperate to close business. How we got out of that mess and eventually landed on positioning that was really good for us is we, we sold a deal to an investment bank and it was kind of by accident. We hired a sales rep that had a relationship with somebody very senior at the investment bank that we did a good pitch in there. We showed him our magical feature. And what that customer taught us is that feature was actually very, very valuable to investment banks and the way that they wanted to manage relationships inside the bank. Once we figured that out, then it was like, okay, we actually have a feature that's really, really valuable for a sub segment of this big market. And we knew at the time SIBO couldn't copy us on that feature. So we narrowed down the positioning and instead of saying we were enterprise CRM, we were CRM for investment banks. And the great thing about that is that we never got into a real head to head against those guys again. So we would come in and say, hey, we're CRM for investment banks. And the customer would say, oh well wait, doesn't Siebel do that? Like don't you guys compete with Siebel? And we'd say, ah, Siebel, we love those guys. So big, so smart, so many people. They're like the world's greatest general purpose CRM for like call centers and manufacturing plants. And I don't know what, but not you, Wolf of Wall street. You need something special. Let me show you this thing. And then we would show them the thing and talk about the thing. And so our plan was to absolutely dominate that space. And then once we had dominated that, we would be building the product and making the product more mature. And our dominance in investment banking was going to allow us to get into retail banking. So we were going to expand the market from there. And then if we were successful in retail banking, that would allow us to get into insurance. At that point we would reposition ourselves as CRM for financial services. If we were successful there, then we'd be big enough and successful enough to challenge the market leader and take over and be enterprise CRM, which was still the long term goal.
- [16:34]
Shane Parrish
So is this about shrinking your target market or your ecosystem in a way in which you're going to compete to one where you have an advantage or an edge over somebody else and then expanding from there?
- [16:46]
April Dunford
Often in technology companies, that's exactly what we're doing.
- [16:50]
Shane Parrish
That seems, yeah, that seems like very intuitive.
- [16:53]
April Dunford
Why don't you. It seems very intuitive. There's a lot of reasons. So the biggest one is people get very worried about what we call the addressable market. So if I was trying to fundraise and went to an investor and said, look, I want to build a thing and it's just CRM for investment banks. The investor would say, well, how many investment banks are there in the world? I need you to be $1 billion business. That's not $1 billion business. I don't know how you're going to do that. So they, for a investor, you need to talk about the long term story. Where do we want to be in 10 years? Where, you know, how do we, what is our path to getting to be $1 billion? And if I look at that example I just gave you, we had that long term vision. We were going to be a billion dollar company eventually. But for most companies, when you start, I'm not trying to do a billion dollars this year, I'm trying to do a million, I'm trying to close five deals, I'm trying to close 10 deals. And in order to close any business at all, you have to be the best at something. Like a customer's not going to come in and say, you know, there's these three options and I'll pick this one, that's just okay. No, the customer says they want the best thing for their particular thing. So great positioning is all about defining where do you win? Like where are you the best in the world? And even if that market is very small at the beginning, you need to have a pathway to get to this bigger market. So I'll win here, then I'll win here, then I'll win here and the market will expand. So the vast majority of companies that we know did exactly that. Like Salesforce is actually a great example. When they started out, the enterprise part of CRM was absolutely dominated by a big competitor. So it didn't make sense for them to enter that market there. Instead, they entered the market at the very bottom. So they were selling to small, medium businesses and their secret sauce or the thing they could do better than anyone else is they were one of the world's first SaaS businesses. So it was hosted in the cloud. The value to the customer was that you could get CRM just like the big companies had, even if you didn't have an IT department to babysit it. So their big slogan of no software was all about that. They were selling to tiny companies that had no IT department that could never touch CRM and there was no competition there. So it's very easy for them to go in. And I was working at Siebel at the time. And when they started down at the bottom, we were like, we don't care about that market. We're not going to chase them down there. We sell great big million dollar enterprise deals.
- [19:31]
Shane Parrish
Never read the Inventor's Dilemma, I guess.
- [19:34]
April Dunford
We had no interest in that. Our goal was to just. Was to just sit in the rare air at the very top of the stack and just sell all of that. And that was it. So of course what Siebel did was they started at the bottom and then crawled their way up.
- [19:48]
Shane Parrish
That's fascinating. So basically, to compete from a staffing point of view, from a VC funding point of view, you sort of say our total market is huge. But then on a practical basis, to develop a product you have to start small in a land and expand sort of fashion.
- [20:07]
April Dunford
Generally, if you look at most the vast majority of successful companies, they've started by dominating a market that was too small for the market leader to care about.
- [20:18]
Shane Parrish
Mm.
- [20:19]
April Dunford
They dominated that market. And then what they did was they proceeded to push the boundaries of that market and creep closer and closer and closer to whoever the market leader is.
- [20:29]
Shane Parrish
What's the difference between B2B positioning and B2C? Like business to business positioning versus business to consumer positioning?
- [20:37]
April Dunford
There's a lot of things that are different, kind of if we think about the core of good positioning. The core of good positioning is thinking about what your differentiated value is, meaning the value you can deliver for a customer that no one else can. And then great positioning puts that in a context that a customer can understand it. If we think about value in B2B, it's very different than value in consumer products. Value can be all kinds of things in consumer products. You know, I might buy shoes because I just like the color green man. Or I'm buying consumer things because I think it makes me look rich or it's going to get me a date or there's a lot of different things that are valuable in consumer. In business to business. It's very different. In business to business, typically there isn't one person buying. Typically there's a group of people. The average B2B deal, there's five to 11 stakeholders in the deal. So if I'm buying accounting software, my boss comes to me and says, hey, I don't like the accounting software we have right now. You go buy us some. That's terrifying. My neck is on the line. If I make a bad choice here, I look bad in front of my boss. The end users don't like it. Maybe the software screws up, I get passed over from promotion. I might actually get fired. So there's stakes in a B2B purchase decision. The way we think about value is also really different. We. I can't go to my boss and say, I just like the vibe of this software. You know, I have to make a business case to my boss for why we should buy it. And in businesses, I mean, we kind of only have two things. We're either helping you make money or we're helping you save money, and that's about it. So, you know, I might make a very irrational decision about a product. And often we do make very irrational decisions, even in B2B about a product. But I can't say that to my boss. I still have to go to my boss and say, here's why we picked it. Here's the list of reasons.
- [22:45]
Shane Parrish
There needs to be some justification.
- [22:47]
April Dunford
That's exactly it.
- [22:48]
Shane Parrish
That's explainable to somebody else.
- [22:50]
April Dunford
Exactly. So we think a lot about, you know, in consumer. Consumer marketers talk a lot about emotion and invoking emotion. In B2B, the granddaddy of emotions is fear. Fear making a poor choice, fear of looking bad in front of my boss, fear of getting fired. Like fear of making a mistake drives a lot of decisions in B2B. This is why incumbents, like whoever's the leader in the market has such an advantage in B2B technology, because it is the safe decision. Nobody is going to get fired for picking Salesforce at this point. They have double the market share of their closest competitor. You can go to your boss and say, look, I looked at all the other options, but I picked Salesforce because everybody uses Salesforce. They have a big ecosystem. They have the best this, the best that. They're the biggest. It's the safe choice to make. If you're trying to compete against Salesforce, that's really hard gravity to pull against. It's very risky to pick you if the choice is you versus Salesforce or an established market leader.
- [23:56]
Shane Parrish
When you think about consumer positioning, I'm really interested, and I know this isn't your sort of area of expertise, but when you walk into, like a Louis Vuitton or Hermes, how do you think about positioning such that they can charge, I don't know, 30, $40,000 for a purse.
- [24:14]
April Dunford
34, $40,000 is the point. Right. I'm not buying that bag because I think it's $30,000 better than a bag that costs 20 bucks, although it probably is finely crafted and all that sort of thing. A lot of times I Think luxury goods are really about a signal to the market. It's like, I'm a rich, successful person that has made enough money that I can carry a Louis Vuitton bag or wear a Rolex watch or whatever luxury things are. It's outside of my wheelhouse. But, you know, again, when we look at consumer stuff, value comes in all sorts of forms. Like, we buy things in very rational ways in consumer products. We're also irrational in B2B, too. But most of that irrationality is around fear. It's like, I just don't want to make a bad choice here and look bad in front of my boss or do something that the company's all mad at me about later. The thing we have in B2B that's actually a real problem is it's so scary to purchase something in B2B that 50 to 70% of the time, a deal that gets started actually ends in no decision. And the no decision isn't, they voted to stay with the current product that they have. It's usually no decision because everything looked the same. I couldn't confidently make a decision that I was sure I wasn't going to get in trouble for. So it's easier to just go back to your boss and say, you know what? Now's not a good time. Let's buy the accounting package next year. You know, we don't. We don't need to get into this now. And the person who's been tasked with making that decision is just crossing their fingers that they don't have to be on the hook to make the decision next year when the decision comes up again, like, okay, let's go and look again. They just don't want to be the person that has to stick their neck out to advocate for something which is totally different from how we buy a pack of gum or buy fizzy water at the corner store or buy a purse.
- [26:16]
Shane Parrish
The downside there is really small and at work, the downside's huge, and the upside's like, nothing.
- [26:22]
April Dunford
Right.
- [26:22]
Shane Parrish
So if you advocate for a different product that's outside of standard best practices or standard industry standard, then if you're successful, everybody forgets that you advocated for it.
- [26:34]
April Dunford
But if it fails, I mean, in rare cases. Exactly. In rare cases, you'll see senior executives at companies where their role is to change things. So their role is transformation in some way. Innovation transformation or a digital transformation. You see a lot of companies right now that have been tasked by the CEO, where there are teams that have been tasked by the CEO to figure this AI thing out and make sure we're not falling behind. In those cases, the person driving that program, if it is successful, is going to get a promotion, they're going to get a raise. You know, it's going to look really good on them if they can successfully do it. If it's not successful, then they're a bum.
- [27:20]
Shane Parrish
Would you say the biggest mistake then that you see, especially with software products, is competing and positioning in too big of a market?
- [27:29]
April Dunford
That's one of the things, I think a lot of times, if you look at the positioning that the company has, the biggest mistake is not deliberately positioning. I think a lot of companies start looking at their product in isolation, almost like there are no competitors. You see it a lot in the way companies do sales pitches. Like they'll walk in and they'll give this sales pitch and they'll talk about the product with this great feature, that great feature, this great feature. It's amazing. You should buy us. But the buyer on the other side of that conversation, they're terrified of making a bad choice. And they're sitting there going, well, that's all great, but I just had three other sales calls with your competitors. Some of that stuff sounds the same. And so we walk into these situations as vendors in general, thinking that the question we're trying to answer is why pick us? But the real question we have to answer is, why pick us over the other guys? And I think most companies don't really wrestle with that. They don't sit down, put themselves in the shoes of a buyer, recognize how hard it is to make a purchase decision, and think, like, how do we position versus everybody else?
- [28:43]
Shane Parrish
Well, it's really easy to go with the incumbent, the largest, really. And then you have to basically get people out of that default.
- [28:50]
April Dunford
Exactly, exactly.
- [28:52]
Shane Parrish
That's fascinating. Can you tell me about a time when repositioning a product failed and what happened?
- [28:59]
April Dunford
Yeah, so I worked at a company where we were building a thing. The original conception of this thing was that it was a database, but it was a really fancy database that could do a certain kind of query really, really, really fast. It was originally developed for a bank, and there were a set of queries that the bank did that were so difficult to process that they would run them on Friday, and the query took all weekend to get the answer back. So you're asking the data this question, and it took three days to get the answer back. So these folks, couple super genius database guys, came up with this database to fix that problem, and it could run that query in Seconds. So it's amazing technology, fantastic. They got patents on it. Nobody's seen a database like this before. Really, really innovative. So the original conception of this thing was that it was a database. I joined as the head of marketing and we were having a terrible time selling. The positioning was terrible. Nobody wanted a new database. There's an absolute giant in that market. They're called Oracle. Everybody standard on Oracle, everybody gets certified on Oracle. Companies don't want to have multiple database solutions to do something. So we would come in and say, we've got this nifty new database. And the customers would say, well that's, you know, we're Oracle shop. Like we're not married to Oracle. We don't think Oracle is the best thing. But we can't bring in another platform. We eventually repositioned it as a data warehouse, which is a specific purpose built kind of database for doing analytics, which, which is exactly what we're doing when we're doing this big query. So we did that repositioning and it was much, much better, much better. First call was better, much better than we were doing before. The problem was when we looked at, we had an assumption that if you had these queries that took three days, you would want to be able to do them in 10 seconds versus three days. And it turned out that assumption was wrong. So when we went to the other banks and said, hey, you're doing this thing and it takes three days and you could use this thing and it would take three seconds and they're like, it's okay, nothing's, nobody's really doing anything over the weekend anyway. We don't need the answer right away. So then we had this question, well, who needs the answer right away? And we had never asked ourselves that question. Like our whole value proposition is speed. Doing this query fast. It turned out the only customers that needed the answer right away were customers that were doing the query for customer service. So their customer calls in, they're on the phone and they're like, hey, I need to know this thing. Well, I don't want to wait three days to get the answer. They want to do it in seconds. And then we looked at the universe of companies that had data of a scale where our thing was appropriate and needed this query answered to do customer service. And There was literally 10 companies on the planet and that was it. So the addressable market was so small that it wasn't a viable business. So we had essentially built a product that nobody wanted. It was neat, it was really innovative, it was really cool. But there was no market for it. It didn't solve a problem that anybody really had.
- [32:22]
Shane Parrish
So if you're a startup, you have limited resources and how do you go about identifying those pain points then to better position your product?
- [32:29]
April Dunford
I mean, the idea behind the famous book on this is Eric Ries, Lean Startup. And the way the lean startup describes this is you should be out doing something called customer discovery. So before you write anything, you should be out interviewing customers or potential customers and validating the assumptions that you have about this market. Is this a thing that people would pay for? How many, how much would you pay for it? Are there a big enough group of people that have this pain to solve it? And in a perfect world that's what we would all be doing. But often products just don't happen that way. Like, often products, you know, like this, this particular company, they had built it custom. They had done the deal with the bank in such a way that they owned the ip. It seemed like a good idea. They had a bunch of assumptions baked in there. They never tested those assumptions until later. But it was good enough to go raise money. They just went and raised some money and okay, now we're going, we're doing a thing. So I don't think a lot of startups do enough customer discovery at the beginning to make sure that they've got a thing that people really want. The second thing is that even if you do do customer discovery, it's really hard, it's really difficult. Customers will sometimes tell you things that aren't true or they'll say, yes, yes, we would buy that and we would buy it for this much. But by the time you've actually built the thing and you have a prototype of the thing and you get it in customers hands, like actually there's a different way to do this and we decided to do it this different way or there's, you know, that customers have lots of options. So startups are very hard because we're, we're dealing with uncertainty, we're dealing with a certain amount of assumptions. Our assumptions may prove to be wrong and we have to be able to move and pivot and look for other things. And sometimes our first crack at it isn't going to work. Then we're going to have to go to the draw back to the drawing board and kind of invent something else and see if that works.
- [34:24]
Shane Parrish
How do you position your product on a page? A lot of B2B starts with a sales rep or somebody looking at a page for a product. How do you position that product within you probably, I don't know, 10 seconds to get somebody's attention.
- [34:38]
April Dunford
Yeah, 10 seconds to get somebody's attention. So the way I think about positioning is this way. I like to position. I like to break positioning up into a set of components. So the component pieces of positioning are competitive alternatives. So if you didn't exist, what would a customer do? And then we need to understand what makes us different, which is our differentiated capabilities. Like, what do we got that the alternatives don't have? The thing that we really need to understand is why those features matter. So what is the value that those features can deliver for a business?
- [35:10]
Shane Parrish
And you mean the features that no one else have that nobody else, that.
- [35:13]
April Dunford
No one else has? So that's our differentiated value. It says, look, we can do this for your business, and no one else can do it. And then the next thing we have to understand is, who cares a lot about that? Because just because we have that thing, if only three people on the planet care about that, that's not a viable business. So we need to understand that. So what is it? What are the characteristics of a target company that make them really, really care a lot about the thing that only we can do? Once we have all of that, then we need to build messaging around that. So if we think about typical homepage of a product, it needs to communicate what is the value that we can deliver that no one else can? And is this for me? Me as the browser, the person that's there? So I need to communicate, who's this for? Why is it different? Why is it better? And that's really hard to do on one page. You don't have a lot of copy to do that. You don't have a lot of ways to do that. But that's what we really have to focus on. The biggest mistake I see technology companies making is they're so certain that their features are valuable and people will just understand what the value of those features are. They're talking about the features, but they're not talking about why the features matter.
- [36:25]
Shane Parrish
So they're not talking about the benefit.
- [36:28]
April Dunford
Exactly. So if I use the example of the CRM company I was talking about earlier, we had a feature, we just assumed that customers would look at that feature and know what the value was. But they didn't. They didn't. And so we all we did was talk about the feature. We're like, look, you can model relationships this way. And they were like, but why? Why do I actually want to do that? And what's that? What's that good for? And we're like, what's good for anything you want to do with it? Like, you figure it out. And I think in technology companies, we get. We're very technical people, we know a lot about technology. We get so close to it, we just assume that the customer can make the translation from feature to value, but a lot of times they can't. And in particularly with something that's really innovative, really new, they've never seen it before. We're going to have to help them understand why those features are important. If we think about a lot of consumer tech, we've been trained how to do this. Like, if I tell you I've got a phone on my camera and it's 2,000 megapixels, you know, 2,000 megapixels is way better than 100 megapixels. You've been trained. We know that. But the first time anybody ever talked to you about megapixels, you had no idea what a megapixel even was. Companies had to teach you why that was important.
- [37:45]
Shane Parrish
It's interesting because that's sort of gone away at this point. Like, nobody's asking how many megapixels are in their phone.
- [37:51]
April Dunford
At one point, it was a big differentiator.
- [37:53]
Shane Parrish
That's right. That's a good sort of segue into my next question, which is, how has the digital transformation over the last 25, 30 years changed positioning?
- [38:05]
April Dunford
I think the fundamentals of positioning haven't changed at all, is my opinion. If you read the original book on positioning was called Positioning the battle for your mind by these guys, Riesentrout. They came up with the concept. They published a book in 1982. And if you read that book, the first chapter talks about, why do we have to worry about positioning? Why is positioning important? And they talked about how it's important because previous to that, in any given market category, there were only a handful of products. So consumers just made a choice between the two or three choices that they had. But it wasn't all that important for companies to really differentiate between those choices. But in 1982, oh, my gosh, we have so many choices. Now. Positioning is really important because the customer has thousands of choices, hundreds of choices. Now if we look at the difference between 1982 to now, that has just exploded. Like, I think it's much more important now to really establish that position. It's much harder now to stand out in a world where we're exposed to millions of advertising messages a day. Like, think about digital stuff. I am Constantly bombarded with messages from companies. I cannot avoid it. It's millions a day compared to 1982. So in order for customers to really stick out. Sorry. In order for companies to really stand out in a market that is so crowded and so overwhelmed with messages from brands, we're going to have to get really succinct on what is this thing? What is the value of this thing? Who is it for? How is it different from the other things in the market? And we're going have to be so clear about that to break out from.
- [39:58]
Shane Parrish
The noise and why you should trust us. Because if we're a small company, we've got like five employees and we're competing with Salesforce, but we have one particular feature that they don't have, and we have our sort of positioning in our niche market.
- [40:10]
April Dunford
Right.
- [40:11]
Shane Parrish
Well, now there's still a brand issue because it's like nobody's ever heard of you.
- [40:15]
April Dunford
A lot of this stuff. So if we think about. So if I go back to that example of that CRM company I was in, the great thing about that was we managed to establish ourself in this little bubble of investment banking. And once we had done two customers in investment banking, we were the kings of investment banking with only two customers. Because we could walk in and say, well, you know, Goldman Sachs and Merrill lynch, what do they got? They got a bunch of call centers and a bunch of manufacturing. And so we could put a circle around it and kind of make like the rest of the market doesn't matter to you. Investment banker. Like, you don't want the world's greatest general purpose CRM. You want the world's greatest CRM for people like you. That's how we win in this thing. If I walk in and say, we're just CRM, We're CRM for everybody, and we're just the greatest CRM ever. Nobody wants that.
- [41:09]
Shane Parrish
It's like you're changing the frame almost exactly taking a photograph. Like, there's this great quote about, you know, what makes a great photograph is knowing where to stand. And it's like you're basically almost picking somebody up and you're being like, look at this way.
- [41:24]
April Dunford
Yeah, this is the. This is the Warren Buffett quote. You know, how do you beat Bobby Fischer? You play him at any game but chess.
- [41:30]
Shane Parrish
How do you go about evaluating product positioning?
- [41:34]
April Dunford
This is an interesting question. People want me to look at their website and tell me whether or not their positioning is good. And in B2B, that is almost impossible. Almost impossible. So you have this thing, it serves a market. I am not the buyer for that thing. So I could look at your website and say, I don't have a clue what this is all about. But the thing you sell is for airplane mechanics. It's fine if I don't have a clue about that. It needs to resonate with airplane mechanics. So you can't tell just using, you know, what I would call the grandmother test. You know, would your grandmother understand this? Well, unless you're selling a grandmother's, it doesn't matter if the grandmother understands it. So some people will say, well, we need to dumb this down and we need to have it so that anybody understands it. I super disagree with that. In B2B, if I'm selling a specialized thing to specialized buyers, it just needs to resonate with them. It's okay if it doesn't resonate with your grandmother. What it does mean is if we're trying to assess the positioning, what really matters is when we are, when we have a brand new prospect that comes in that doesn't really know too much about us, how long does it take us before it clicks? And they're like, oh, I get it. Oh, I get why you're different. Oh, I get why that's good. Oh, I get why. In my career, so I used to be an in house vice president of marketing. And so the latter part of my career, I was very focused on positioning. So if the CEO hired me, they hired me because I could talk intelligently about how we were going to fix this positioning. I would come on board and what everybody would want me to do is just run campaigns, April, make the revenue go up to the right. And I was always worried about running campaigns on weak positioning because it's a bit like pouring water into the leaky bucket. And so what I would do to assess the positioning, whether it was good or not, is I would walk over to sales and there would be people doing salespeople doing first calls with customers. And you hear it in a first call and it sounds like this, your sales rep is doing a great job. They have a pitch, customers there and the sales rep has, has a pitch that's maybe a dozen slides long. And they're saying, okay, here's what we are, here's what we do. We do this thing. They're getting into the pitch and you'll see the customer. If it's a video call, you'll see the customer and they'll be making this confused face like. And what will happen is, and they're not saying too much And a good rep will stop and be like, are there any questions? Like, are you with me still? And the customer will go, yeah, yeah, yeah, just back it up. Can you just go back to the beginning? Back it up and go back to the beginning. Like, pitch it to me again. And. And there's this fundamental disconnect. Like, I don't even know what bucket to put this thing in. Like, is it a. Is it a database? Is it a business intelligence tool? Is it a thing?
- [44:26]
Shane Parrish
Like, you haven't framed it?
- [44:27]
April Dunford
Figure, you know, and so there's something in that positioning that is just confusing the heck out of the customer. That's the most common sign you see is the customer's looking at it, and they're like, I just can't figure out what this thing is. The second common sign you'll see with weak positioning is the customer thinks they've got it figured out, but they're actually comparing you to something that you don't actually compete with. So you'll get to Slide 3 or 4, and the customer will say, yay, I get it. You're just like Salesforce, and you're nothing like Salesforce. You don't compete in that market. You're not that. And then the rep is like, no, no, no, no, no. Let me go back. I'll go back to the beginning. We'll do this again. So you'll hear that a lot. The other thing you'll hear, and this is almost the most terrifying one, is in these early conversations with a prospect, the prospect will say, I get it. I get what you are. I get who you compete with. I just don't really get why we would pay money for that. Can I just do that with a spreadsheet? Can I just do that with my accounting package? Couldn't I just hire an intern, do that? Why would I pay money to do that? So they kind of understand the product, but again, they don't understand the value of it. Why would I give you money in exchange for that thing?
- [45:35]
Shane Parrish
Who's in charge of positioning at a company?
- [45:38]
April Dunford
Good question. This has traditionally been seen as a marketing function, and even more specifically in tech companies, we often say this is a product marketing function. But I don't believe that. I think that's not the right way to think about it. If we really think about what we're doing in positioning is we're getting really tight on who's our competitor, how are we different, what is the value we can provide to the customer, and who exactly are those customers? If we made a change in that that would be a big change in the business. If I think about again my CRM example, if we switch from being general purpose enterprise CRM to CRM for investment banks, that's a whole different company. So I don't think marketing has, first of all, they're not talking to customers every day the way sales is. They don't necessarily understand the differentiation amongst competitors the way the product team would. And sure as heck the CEO is going to have something to say about where we're selling and how we win in the market. So in the work that I do with companies with positioning, we do it with a cross functional team. So we bring together product marketing, sales, customer success, support, and we bring everybody together and everybody comes with what they understand about customers and how we win and we work through the positioning together as a group exercise. Now somebody needs to be the steward or the police of that positioning, once we've said it, to make sure that we are consistent about that in the way we're using it in marketing and the way we're using it in sales. And that's typically marketing that does that. I also think it's good to have somebody be the person that puts their hand up and says, you know what, things are changing in the market, we maybe need to come back together and check in on that positioning. But I don't think that marketing should be able to change positioning or look at positioning or do it on their own. They could try, but it won't stick because sales won't believe in it, the CEO won't believe in it. What we actually need is a cross functional team to get together and look at it, make some decisions, get everybody in agreement and alignment on it, and then we can all go execute on it and in our respective departments. And then marketing can be the steward of here's the positioning, here's how we define it. This is the messaging that comes out of that positioning. And then marketing be the person to put their hand up and say, you know what, this big acquisition just happened in our market and we might need to step back and look, relook at the positioning.
- [48:21]
Shane Parrish
It's interesting that you say that. When we were talking about a salesperson and the first call I was thinking, oh look, if things don't go as planned, the salesperson points to marketing, marketing points to the salesperson, everybody points to product. But you even expanded this so you have a cross functional team of sales, marketing, product, customer success, support, and then you have the CEO involvement at some point in there too.
- [48:45]
April Dunford
Exactly.
- [48:46]
Shane Parrish
And when things are going well, everybody is a winner and everybody's responsible for success. But the minute you have a problem, everybody starts pointing the finger at everybody else. How do you determine when that's a positioning problem versus a larger problem?
- [49:02]
April Dunford
It's interesting because, you know, I do this as work as a consultant, and sometimes companies will call me and they think they have a positioning problem, and then I have a conversation with them and I'm like, I don't actually think that's a positioning problem because there's lots of reasons businesses aren't successful, and positioning is just one of them. So typically. So sometimes companies will come to me and they'll say, you know what? Every company we talk to loves us. If we can get them in a meeting, we close. All that business. That tells me the positioning is good. You're just not getting enough meetings. You're just doing a terrible job at lead generation. You should go fix that. You just need to get more at bats. Sometimes what you have is a sales execution problem. Like, there's something in the way you're executing in sales that isn't working. So my test is often like, so first of all, do you have good, happy customers that stick with you and love you and are referenceable and whatever? Most of the companies that come to me and say, yes, yes, we have that. Okay, do you have confusion when, at the beginning of your sales process where they come in and they just don't get it? That gap between what a customer knows and what a prospect knows, we can close that gap with good positioning.
- [50:18]
Shane Parrish
What role does storytelling play in all of this?
- [50:22]
April Dunford
Storytelling is one of these things. Marketers think a lot about storytelling and obsess a lot about storytelling, particularly on the consumer side. Business to business marketers like to think about storytelling. I don't think a lot of B2B companies are doing an amazing job at storytelling. What's really funny about that is if you go over to sales, sales doesn't care about storytelling. They never talk about storytelling. And yet they're the ones that actually are face to face with a customer. And if anyone should be telling a story, maybe it's your sales team. Most of the storytelling stuff that you see, or at least what I learned as a marketer going through. If you go to marketing school and learn storytelling, a lot of what you'll see is this hero's journey structure for storytelling, which is very common in entertainment. It's the way most movies are written. A lot of stories are written with this hero's journey. So in B2B storytelling we think about the hero as the customer. So the customer has a problem, they embark on this quest. They meet a guide. That's us. We're the guide. And we give them a plan, and we help them be successful and avoid defeat. We have this hero's journey. The problem with that storytelling arc is there's kind of no competitor in there. And if we think about what a buyer is actually trying to figure out is, why pick you over the other guys? A hero's journey doesn't really give us an arc to do that. In the work that I do with customers, we start with positioning so we get really clear on what's the value we can deliver that no one else can. Who are the customers that really care about that? And then we want to build a story around that. The story that we're trying to tell needs to answer this question. Why pick us over the other guys? So in that storytelling framework, we need to have a spot in that framework to paint a picture of the whole market and then show where we fit and where everybody fits. So we shouldn't actually be just talking about us. We should be talking about the alternative approaches to the problem, which means we're going to talk about competitors, or at least the approach that the competitors take. In the work I do, we take the positioning. We translate it into a sales pitch. That sales pitch has a storytelling structure that starts with a conversation around the market. So we'll talk about, look, we look at this market in a different way than our competitors. And because we look at it in a different way, we've built the product in a different way. And you're a customer. You have lots of choices. There's other products that you could buy. There's other approaches you could take to this problem. Let's talk about that. We think about this all day. We have opinions about it. We want to hear what you have to say about it too. So this is the way we look at it. You could do it this way, this way, or this way. And here's the pluses and minuses of these different ways of solving this problem. And this is a conversation with the customer more than me telling the customer stuff, but at the same time, I'm teaching the customer about what we think is important in a purchase decision, which most customers don't know. Early in their purchase process, they're trying to buy accounting software. Half the people doing a purchase in B2B have never purchased a product like yours before. So they're doing this for the first time. They're overwhelmed with information on the Internet, every vendor says we're the best. No, we're the best. No, we're the best. What we need to do in good sales storytelling and B2B is help customers understand how to confidently make a decision. In order to do that, I have to paint a picture of the whole market so they feel good that they understand, ah, if I choose this, I'm choosing to go big on this and low on this. If I choose this, here are the trade offs for this. If I choose this, here are the trade offs for this. Or you could choose us and here's the trade offs for us. Are we a good fit for you or not? That's what we should be doing in a good sales storytelling, in my opinion.
- [54:26]
Shane Parrish
And who does that really well, in your opinion?
- [54:28]
April Dunford
I have a bunch of clients that I've worked with, but one that I think is doing an amazing job of this for a really technical, complicated product is a company I worked with in San Francisco called Postman. Postman does essentially a platform for developing APIs. This is a new concept. Nobody had this idea of a platform for APIs before Postman came up with it. They do an amazing job, I think, of talking about why APIs are important. So important that you actually don't want a set of disjointed tools across your organization to work on them. Why that's important. They've coined a concept called an API First World, and then they've done an amazing job of storytelling around that. So if you go on their website, on their homepage and you scroll down about halfway, they have a graphic novel called the API First World. And it's a graphic novel designed for technical people to understand this story of what's an API, why is it important? Why do we really want to have high quality APIs? Why is that important for your business? And why do we need a platform to enable that? So I think they do an incredible job of that and they do it in a thousand different ways. Like if you see the CEO do a conference talk, he's actually not talking about the product as much as he is talking about the market and this concept and why we need to think about APIs differently. But if you are aligned with his point of view on the market, you got to buy this product. But they've really done a good job, I think, of developing a point of view on the market, helping customers understand the context around their product and the things that you need to understand in order to understand why their product is valuable and why you might pick it.
- [56:27]
Shane Parrish
How Important is that from a CEO perspective at conferences and talks and media, to basically put yourself out there and say, I see the world this way, which is slightly different than most people see it.
- [56:38]
April Dunford
I think it's super important. I think this concept of having a point of view on the market is really, really important. Most founders that I've worked with, if you talk about how the original idea for the product came up, they'll say, you know, I was really frustrated. I looked at all the databases and I decided all the databases were doing it wrong. And if you were smart and you knew what I knew I had a.
- [57:03]
Shane Parrish
Better way to do it.
- [57:03]
April Dunford
Yeah, you would build a database like this. Part of what we need to communicate to customers is we kind of need to take them on that journey. Journey and say, look, we have a different perspective on this. Like, we look at this problem different. We, it's not the problem. It's we see a problem inside the problem. We have a perspective on the problem that if you understood it the way we understood it, you would pick our stuff.
- [57:30]
Shane Parrish
Right?
- [57:30]
April Dunford
So that point of view, I think is really super important. And if you can nail that, it is the key to selling lots of stuff.
- [57:38]
Shane Parrish
And how important is it to you mentioned coin the term, like, how important is it to define the vocabulary by which the customers use ultimately to make a choice or to own a term so that if it becomes top of mind to them, nobody else has that term.
- [57:55]
April Dunford
It's really important if you are doing something that is truly innovative, like an emerging thing. So earlier we talked about market categories, and most of the time, if you look at the way most successful companies do this, they're going into an existing market category and they're serving an underserved corner of that and they're expanding from that. About 10% of the time that's not true. 10% of the time we have something that is emerging. It's a market that is emerging. There is no leader in that market right now because that market doesn't even exist right now. This is something brand new. You could never even do this before because technology wouldn't. Wasn't there to do it. And so it's emerging. When it's emerging, there's no good vocabulary to talk about it because we've never talked about it before. And often in those cases, what we're doing is we're defining or attempting to define what the boundaries of that emerging market category are, what's important and what isn't important in that emerging market category. And in those cases, we often very Much do want to put some names on things. We may want to specifically name the market category in a way that advantages us. We may want to name key concepts inside that in a way that helps customers understand why this is an important key thing that you need to understand in that.
- [59:24]
Shane Parrish
That.
- [59:25]
April Dunford
And so if you see companies that have truly done category creation, often they've done a very good job of helping customers understand key things that they needed to understand in order to understand. Ah, this is a totally different problem. I didn't even know I had this problem, you know, because if the customer knew there was a problem and they have that problem, there would be a categories of solutions to solve it already. In emerging markets, we're often addressing a problem that customer doesn't even define it as a problem. They don't even know this is a problem. This is just the way the world works. There's no way to solve this problem. If we can help them become problem aware, then that's a step closer to that. Well, now that you know that you have a problem, we're the thing to solve that.
- [60:14]
Shane Parrish
How do you think about independent bodies that play a role? And I'm thinking in cybersecurity there's the Gartner quadrant. And if you're not on there, like people won't even consider your product. But that sort of limits your ability to.
- [60:27]
April Dunford
Absolutely.
- [60:28]
Shane Parrish
How do you think about that?
- [60:30]
April Dunford
I spent a lot of time working with Gartner in my past roles as a VP marketing. Not every market segment has an analyst or an expert body or somebody whose opinion matters a lot. But in some segments we do. So I spend a lot of time in the database market. No large enterprise buys a database without talking to Gartner Group first. So in that case we spent a lot of time helping Gartner Group understand what our stuff was about, why it was important, why they should include us in the quadrant because we literally needed them to position us properly to clients that called them and asked for advice. I've had other markets that I've been in where the buyers simply don't call Gartner Group because they don't care what Gartner Group has to say about that because Gartner Group doesn't cover that space. And Gartner Group does a really good job in enterprise it. Outside of enterprise it, they're a bit less influential. I think it's important if we're a vendor to understand where do our customers look for advice and where do we need to educate those people or those entities because they're giving advice to our customers. Sometimes that's industry analysts like Gartner. Sometimes it's service providers or system integrators like Deloitte. And they'll go to Deloitte and say, what do you think about this? We're being doing a big digital transformation. You're our trusted advisor on digital transformation. What do you think about these products? In which case, maybe I need a partnership with Deloitte because they're not going to recommend my stuff if they don't get some kind of money off of that. So it's important to understand who influences your buyer as we go down market. It's interesting. There'll be people like you, like podcasters that people listen to, people that are experts in things. People ask me my advice about marketing technology all the time. So in a small way, I'm an influencer there in the work that I do. Companies will often ask me, well, you know, we now need to do all these things in sales. Who do you know that's really good in sales? Is there a particular technology you should recommend in sales? The important part as vendors, I think, is we need to understand who has influence on our buyers and do we need to invest some energy and attention in making sure that those influencers understand our stuff and are positioning us?
- [62:54]
Shane Parrish
Well, what are the most interesting mistakes you've seen people make when it comes comes to positioning so many things?
- [63:01]
April Dunford
The first mistake is not thinking about it at all and just assuming that there's only one position we could possibly take. Most products, we could position them in a dozen different markets. And if we really stepped back and forgot about the history and where we came from and looked at it with our fresh eyes, we might see something really different. So we need to think about this in a way customer thinks about it. So not thinking about positioning at all is the first mistake. The second mistake is, as we talked about before, treating it as a little marketing exercise. We're just going to put some new words on the homepage and that's it, we're done. But sales has no idea how to pitch it. Product doesn't really understand it. It doesn't actually represent the truth of our product at all. It's just nice, pretty words. This is not repositioning. This isn't going to move the dial on anything. And then lately, what I've seen is companies that love the idea of category creation are attempting to create a category when they obviously fit in an existing market category. And it's kind of wishful thinking that this is a new category. So they'll say, no, no, no, we don't have any competition. This is a brand new thing. Nobody works like this. And the result is the customer is like, but wait, aren't you just a CRM? Why are you using all these other words? I'm just confused. So I've seen a lot of companies have come to me that have attempted to do category creation or pretend that they're doing this new category of things, and then it's been a disaster. Customers are just very confused. They don't understand why this is different from the existing things they're doing. They can't figure out what bucket to put it in because they're trying to create a new bucket. And it's been a disaster. And then they come to me and they're like, now we got to fix this. And how do we do it? When there's an obvious spot where they could easily position in a very big sub segment of an existing market category and that would be way easier to sell, way easier to tell the story, way easier to do deals. So I see a lot of that right now.
- [65:14]
Shane Parrish
What's the difference? Or maybe what do schools get wrong about B2B marketing? That when you. In the academic environment, that sounds good, but in the real world it falls flat.
- [65:25]
April Dunford
Oh, my gosh, so much stuff. Most of the research that's been done in marketing, like when I went to marketing school, it was so disappointing. All of the research is done on consumer packaged goods, all of it. And often what you'll get is a professor inside a marketing department at a university taking these things that we've learned about consumer packaged goods and then stretching it out and saying, well, obviously this works in B2B exactly the same way. And it's like, well, wait a second. So we'll see things like I must have this conversation about once a week where people will talk about, what's that water? Liquid death.
- [66:07]
Shane Parrish
You know this, I don't drink that.
- [66:09]
April Dunford
The marketers are marketers obsessed with this thing called liquid death. And all it is is fizzy water in a can made to look cool. And they sell it at bars. So you don't want to. So you don't want to consume alcohol, you're not into booze, you go to the bar, you still want to look cool. You can order this liquid death. It's got skulls on it and stuff. They do all this really creative advertising and all this stuff. And the B2B marketers look at that and say, why can't we do that? Like, why can't this Just be marketing. Why do we have to worry about product at all? And often you'll get these marketers say, look, can we really differentiate on product? Because people can just copy our product. Eventually everyone will just catch up to us and all the products will be exactly the same. And if you're in tech, that is nonsense. That is nonsense. That would be like saying you don't think any of the innovation that Apple's done matters. They could have just. It's just marketing. Do you really think that? So there is kind of this belief that we can take these things from consumer and apply it to a very considered purchase. In a B2B situation where there are stakes involved, where the person making the decision might get fired and say, oh, yeah, that's just like buying fizzy water. Oh. At the end of the day, these people are all people and they're driven by emotions. We have to connect with their emotions. I agree with that. But the emotion is fear. It's not looking cool. It's not, hey, I like the one with the skulls. I can't go to my boss and say, I bought the database with the skulls, man. Come on. I just can't get away with that. And so I've heard a lot of things in marketing classes where I've leaned back and said, okay, man, if we're selling toothpaste, fine, but if I'm selling a million dollars worth of middleware, not fine. These rules do not apply. So I think in schools, we don't teach enough about B2B. We don't teach enough about the difference between a highly considered purchase versus an unconsidered purchase. I don't think we talk enough about buying committees. I don't think we look enough at the research around how difficult it is to get over indecision in a B2B purchase process and what that means for our positioning, for the way that we do sales pitches, for a lot of the stuff we do. So I don't see that covered enough in schools at all. Every great B2B marketer I know has learned this on the ground, hands on, doing it in companies. We're all starting from scratch.
- [68:45]
Shane Parrish
What do you know about B2B decision making that you would say most people get wrong?
- [68:51]
April Dunford
The biggest one is this idea of customer indecision that people do not understand how difficult it is to make a purchase. If you understood the research on that, it's amazing. Anything gets bought at all. There's a great book out there. It's by this guy, Matt Dixon. It's called the Jolt effect. And the research in that is incredible. So when we went into lockdown in Covid, he took this opportunity to study sales calls, because all of a sudden all the sales calls were happening. Virtually everybody was doing them on Zoom. And so they took some AI and they analyzed two and a half million sales calls, and they did it in partnership with these companies so that they could look at what happened on the sales call. And then what ultimately happened? Did we get the deal? Did we not get the deal? What works and what doesn't work? And that research is terrifying when you look at it like that's where this number comes from.40 to 60% of B2B purchase processes end in no decision. This is the most fearsome competitor we have in B2B by far, is no decision. And this no decision is not because we've made a decision to stay with the thing we have because we think it's better. It's because we look at our choices. We can't figure out how to do that in a way that we're sure isn't going to get us into trouble. So we just don't do anything. If we really understood that, I think we would operate very differently in B2B. You can see the difference in people that get that and people that don't.
- [70:26]
Shane Parrish
What's fascinating, I think it's really interesting to sort of think of sales cycles. I like the fear concept. My friend who runs a cybersecurity company, I was like, oh, put me in charge of sales. He's like, what would you do? I was like, I would show up with a binder of newspaper clippings about companies that got hacked and be like, my job is that you don't appear in this book. And that would be my entire sale. Like, they don't care about the technical feature. They're not buying features. Right. They're buying the benefit. And when you're selling something negative, which, you know, doesn't contribute to revenue directly, Right. You're basically selling the prevention of something negative from happening.
- [71:02]
April Dunford
Right.
- [71:03]
Shane Parrish
How do you do that? I was like, why wouldn't that be effective? I don't know.
- [71:06]
April Dunford
Right.
- [71:07]
Shane Parrish
This has been a fascinating conversation. We always end with sort of the same question, which is, what is success for you in life?
- [71:14]
April Dunford
Oh. So I feel like I. So I spent my whole career being a vice president of marketing. I did that for 25, 30 years. And the thing about being a vice president of marketing, it's a really hard job. You have to know a lot about a lot of things. Marketers Talk about being T shaped. You have to know you have to be this deep on so many things and then usually you have one thing that you're really deep on. For most of my career, I was a T shaped marketer and the thing I was really deep on was positioning. Now I'm a consultant and I just get to do that thing that I love. And so that has been such satisfying work. It's been so satisfying to work with companies, wrestle this thing that is really thorny, really hard. And when it clicks, it feels like magic. It feels like magic. Good positioning. When you look at it afterwards, people will say, well, of course that's what they are. Of course that's what they do. And you're like, actually that was really hard for us to get there. And if you had asked us two years ago, we had no idea what that is. And now it's this. And it seems obvious, but it wasn't obvious obvious. That is very satisfying work to do. So I just feel that is success for me. When we get to the end of these projects and everybody in the room is like, this is so much easier to sell. This is so much easier for customers to understand. I had a client come to me two weeks ago and they're doing the first rollout of these new sales pitches that they're doing. And so the first pitch that they did and they were very scared to do it because a brand new pitch and it was a really high profile client, really big deal. They went in and it's a competitive deal, so they know that the prospect has talked to their two competitors and then they're coming to talk to them. And the CEO sent me an email and said after we did the pitch, the prospect CEO pulled him aside and said, I have never seen a sales pitch as good as that in my entire life. And like, we've seen a lot of sales pitches like, that was really great.
- [73:18]
Shane Parrish
That's awesome.
- [73:19]
April Dunford
And so that is the most satisfying thing. And so he's happy, I'm happy, everyone's happy.
- [73:26]
Shane Parrish
You also hit on something in that answer that I think goes underappreciated in life, which is avoiding your weaknesses. So doing the thing that you're really good at and structuring your life in a way where you're not. You're doing a lot of the things that you either don't want to be doing or that you're not as good at.
- [73:43]
April Dunford
It's so amazing. I wish I had been doing it sooner in my career. Although I don't know if I'd be as good at this if I didn't have 25, 30 years of being a hands on Vice president of marketing. But this does feel like the reward phase of my career that I just get to work in my little zone of excellence doing this thing that has really big impact on companies. I love it, they love it. I'm happy, they're happy, everybody's happy. It's if this is all I do for the rest of my life, perfect.
- [74:20]
Shane Parrish
Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts and more, go to FS Blog, Podcast or just Google the Knowledge Project. Recently I've started to record my reflections and thoughts about the interview. After the interview, I sit down, highlight the key moments that stood out for me, and I also talk about other connections to episodes and sort of what's got me pondering that I maybe haven't quite figured out. This is available to supporting members of the Knowledge Project. You can go to FS Blog membership, check out the show Notes for a link and you can sign up today and my Reflections will just be available in your private podcast feed. You'll also skip all the ads at the front of the episode. The Farnum Street Blog is also where you can learn more about my new book, Clear Turning Ordinary Moments into Extraordinary Results. It's a transformative guide that hands you the tools to master your fate, sharpen your decision making, and set yourself up for unparalleled success. Learn more at FS Blog Clear until next time.