Positioning to win: The secret power of a Point of View

Mark Zuckerberg didn’t try to build a better Friendster, Instant Messenger, or email. He had a different point of view. Zuckerberg famously told Time Magazine, "I think as humans we fundamentally parse the world through the people and relationships we have around us…what we're trying to do is map out all of those trust relationships.”

Zuckerberg called this map a “social graph.” He built his company, product and marketing around the POV. Creating a new category of social network. As Facebook developed and marketed the value of a social graph, they became one of the fastest growing companies in history. Killing MySpace and Friendster while creating a whole new Internet experience for over 800 million people.

Larry Ellison of Oracle didn’t create the number three-software company on the planet by building and marketing a better database. He had a different point of view. Based on the insight that relational (vs. flat-file) databases running on multiple hardware platforms could be game changing. His POV made his product and company unique. And it was powerful positioning. He did not attack IBM head on. He disrupted an existing category with a POV, in order to create a new one. This tilted the game board to Oracle’s advantage. Today the relational database category is over $20B a year. And Oracle enjoys approximate 48% market share.

CEOs of legendary businesses take positioning seriously. They make a choice to be different. Purposely positioning their companies to create or disrupt a very big market category. They know the real power of marketing is to catapult the company into a dominant, defendable position in a hot category. That’s how they achieve higher growth rates, margins, and market caps (valuations) than their competitors.

Here are six steps to positioning with a Point of View:

1) Different, not Better

Many tech CEOs fall into the better trap. They truly believe winning is about having a better product and sales channel. “We make shit, sell shit, and everything else is bullshit” is their attitude. To win big, you must be different. Different works because it is intriguing and believable. Customers understand it. Choosing between different offerings is easier than choosing between similar offerings. “Should we have pizza or ice cream?” is an easier decision than choosing between two similar pizza brands. To make being different work, you also have to be clear about how your difference is super valuable to customers, partners, employees, and shareholders. Apple’s products and marketing are both different and awesome. Different sticks, better doesn’t.

2) Disrupt Or Create A Massive Category

You cannot build a dominant, defendable market position by playing the same game as your large incumbent competitors. You have to change the agenda in the market to give yourself a fighting chance. Netflix destroyed Blockbuster by disrupting the movie rental category with a different business model and service offering. Chrysler created the new category of Mini Van in 1983 with the introduction of the Dodge Caravan and Plymouth Voyager. A quarter century later they still dominate with 49% market share in the category they created. The best way to create or disrupt a category is with targeted PR, social media and word of mouth marketing. Your target audience must feel surrounded by the buzz about your new, new thing.

3) Market Your POV, Not Your Company or Product

Most tech CEOs are in love with their products/services. They truly believe that if customers could just see why their product is better, they’d buy it. Wrong. To build a dominant, defendable position in a market category that matters, the category must first exist. Whether you are creating a new category (Chrysler) or disrupting an existing one (Oracle) you must make customers believe that your POV about the market is right. Only when they believe in the what, will they buy your how. Said a different way, if you want people to buy bibles, first they have to be Christians.

4) Turn Your POV Into A Story

Before someone buys your product, service, or stock, they must buy your story. Messages, goals, product plans, and slogans are abstract and forgettable without a powerful narrative. With a two-word story ,“no software”, Mark Benioff communicated his POV and created the cloud-computing category. The positioning worked so well, he crushed CRM market leader Siebel Systems. Today Salesforce.com dominates the $10B category they disrupted. If you want your company to win, turn your POV into a legendary story.

5) Make The Product The POV

As soon as you interact with a product that is guided by a POV, you’ll know it. The service Facebook delivers is the living embodiment of Mark Zuckerburg’s POV. The minute people see it, they get it. And they are attracted to it. The same is true for the products/services built by Herb Kelleher, Steve Jobs, Jeff Bezos, and Howard Schultz. Southwest Airlines, Apple, Amazon.com, and Starbucks all deliver a unique customer experience that is rooted in a POV. To win, your product has be the POV. If not, you’ll end up competing on price and features.

6) Your POV Sets Your Market Cap (Valuation)

A powerful point of view sets the context for interpreting your quarterly financials. People relate to and remember stories, even people who make a living analyzing facts. This reality makes the story about your business more important than the facts about your business. Sound outrageous? Maybe, but it’s true. When commenting on a stock Wall Street analysts often say, “I like the story” or “I don’t like the story.” That’s because stories are more powerful than facts. Your story to investors must communicate the size and growth rate of your category and how you are positioned to win in the category, not just your numbers.

In conclusion, legendary companies have one thing in common. They achieve dominant, defendable positions in market categories that matter. That’s why they have higher growth rates, margins, and market caps than their competitors. Your POV sets the strategic context for your business. It’s how you communicate your strategy and value. It defines what category you’re in, what makes you different, and why people should care. Ultimately companies that have a powerful POV stand a much better chance of creating significant, long-term value than companies that don’t.

Original article source Sand Hill.com:
http://sandhill.com/article/positioning-to-win-the-secret-power-of-a-poi....

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