Peter Drucker, the legendary management consultant, once said "that the purpose of marketing is to know the customer so well that the product sells itself." Good marketing makes sales easier. Great marketing makes sales superfluous. If you want to be a great marketer, you should grab a copy of Seth Godin's book, This is Marketing. It is a refreshing account on the art and science of marketing by one of the foremost thought leaders in the space.
In this article, we're going to do a deep dive into the XY Positioning Tool that Seth presented in the book. Here are some of the reasons why you should use the positioning tool in your business:
To plot out product - market fit
To define the problem that you want to solve for you target audience
To articulate your unique selling points of differentiation
To know when to sell a customer and when to refer them to one of your competitors
We did a podcast book review of This is Marketing on our show, Books and Ideas for Entrepreneurs. It is worth listening to, as there are several other invaluable tools and concepts that we cover in the episode such as the 5 Step Marketing Plan and The 3 Sentence Marketing Promise.
What problem do you solve?
Knowing your customer essentially comes down to two things; (1) understanding the specific problem that you intend to solve and (2) identifying the desired sentimental boost that the customer seeks when they buy your product. Let's unpack each component in turn.
Always Start with a Problem
According to Seth Godin, marketing is the generous act of helping your target audience solve a problem... their problem (not yours). In order to identify pain points and unmet needs in the market, the best place to start is by studying your target audience; interviews, ethnographies, analytics, the works. You should continue to investigate and analyze their problems until you find a point of tension, which is a point of great stress or pain that occurs when someone is being stretched in two opposite directions. Tension exists anytime two things are desired but are difficult to obtain simultaneously .
Suppose you needed to deliver diamonds across town (this is the hypothetical example that Seth shared in the book). Delivering valuables is a two dimensional problem. There is a tradeoff between security and speed. When delivering anything of value, there are security risks AND there is a natural tendency to want valuable items to be delivered as quickly as possible.
Using the XY Positioning tool, you can plot out the available options that customers have in each quadrant. This is the best way to segment your competitors and substitute products across two dimensions.
If a customer values speed but is unwilling to pay for security, he can deliver his diamonds using a bicycle delivery service like TaskRabbit. However, he bears the risk of something being loss or stolen (which carries an emotional cost). As you can see, BRICKS Armored Transportation is the runaway best option for customers who value speed and security and who are willing to pay for it. These are two clear differentiators that BRICKS can communicate to the market.
Speed and security are functional values. They are measurable solutions to the "diamond delivery" problem. Measurable solutions are important as they speak to the tangible deliverables that the client receives when he use your service or buys your product. It is equally as important, however, to keep in mind that your product also needs to satisfy your customer's emotional and sentimental desires, too.
Nobody Needs a Telsa
Nobody needs a Telsa to get from point A to point B. People don't buy Teslas for the functional value of the vehicle alone. People buy Tesla because the car reinforces a narrative that people like to tell about themselves. It signals to them (and to the rest of the world more importantly) that they are smart, cutting edge, innovative, and successful.
Every good solution is a coin with two sides. On one side, there needs to be explicit functional value that is tangible and measurable. The XY Positioning Tool is a good framework for identifying your functional, deliverables. These are your points of differentiation. However, to be a great marketer, you'll need to push pass the functional and tap into the emotional, deep psychological desires of your target customer. What are their emotional and sentimental wants? How can this product support the narratives that people like to tell about themselves ?
When a marketer understands the functional and emotional needs of the customer, selling becomes easier or superfluous. Great marketers know how to position and communicate product value so well that when a prospect doesn't get it, they are comfortable saying, "our product is not a good fit for you. I'd be happy to refer you to one of our competitors."
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