James’ email question was logical – “This is a solution that hasn’t changed much in years, and the market is really mature. So we know a lot about how our buyers think. Is there a simplified way to make sure that our messaging is on target?”
I replied by asking about the top three criteria that buyers evaluate while choosing this type of solution. James answered quickly -- ease of use, market leadership, and cost.
A quick check of their competitors’ websites told me that each was focused on their market leading solutions, fabulous user experience (backed by customer quotes or case studies) and cost savings.
In a follow-up phone call James confirmed that discounting is a big issue for their sales people. I had expected this answer. When products and technologies are new, companies become accustomed to competing on unique features, functions and benefits. But almost every product eventually runs out of room to add capabilities that really matter to new buyers. Unless the company can find a premium-price position, the sales people will struggle for every deal through hand-to-hand combat and discounting.
It's likely that nothing in the past has prepared this company to choose a strategic approach:
- succeed as the low-cost provider (rare in B2B tech companies like James')
- sell the product to someone who can (IBM sold its PC business)
- leverage superior sales and marketing to justify premium pricing (IBM services)
I didn’t write about this aspect of the case study that's featured in my ebook, but as competitors copied our offering in the software escrow market, delivering the same solution for half the price, we raised our prices. A larger market allowed us to increase our marketing investment, and premium pricing was an important part of our strategy to own the position as the market’s most trusted solution.
Here are a few of the insights that would give us a chance to identify a premium-price position for James' solution.
If ease-of-use is important,
- What exactly does the buyer expect to be easy about this solution?
- What level of user will need to experience this solution as easy?
- What steps does the buyer take during the buying process to determine which solution is easiest?
- What did buyers perceive to be superior or inferior about ease of use for this solution and each of the competitors?
- For buyers who didn’t purchase this solution, how did “ease of use” factor into their decision?
I’d be looking for similar insights on the other points – what level of cost savings does the buyer expect . . . how did the buyer assess the cost performance of each of the options?
James happens to work for the market leader in this category, so he might be tempted to just check that box. But this answer often masks the buyer’s concerns about the consequences of choosing a solution that doesn't work. What exactly does this buyer see as reasons that she might not achieve the benefits she seeks (the Perceived Barriers insight)?
I don’t usually recommend that companies kick-off a buyer persona initiative by focusing on mature products. It takes skill to get buyers to disclose this information, and the company’s internal stakeholders are likely to resist new strategies for core products or markets they have long dominated.
But James saw the potential of this option, as well as the other dismal paths, and is taking on the challenge. I'm anticipating new insights that are both unexpected and clear.
How are you managing the positioning challenge for mature products?