Lustratus REPAMA - Strategic Marketing Analysis

Part 2 - The "FOR [ideal customer]" element from the positioning statement

As mentioned in the previous blog entry on the positioning statement, I'm going to continue to flesh out the details of the seven other positioning elements. This time its the ideal target customer, so let's first revisit the format of the positioning statement just to give us a context.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A [product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

The ideal customer allows the organisation creating the positioning statement to express the characteristics of their ideal target customer for the product or service they sell.  This can obviously be done in many different ways and I'll list some of the more common ones below.  In the previous blog entry I gave an example of the REPAMA reverse-engineered positioning statement for Microsoft ESB Guidance.  We saw that Microsoft's ideal target customer was defined as:

FOR Microsoft BizTalk Developers

Between you and I, this is not the most definitive classification of ideal customer I've ever seen, but when reverse-engineering a vendor's implied positioning from their outbound marketing communications, it's often as close as we can get. I suspect that Microsoft's internal classification will expand on this to include other characteristics that make their ideal target client more relevant to them.  That said, in the context of the ESB REPAMA Segment Analysis Study that we conducted, we're pretty confident that this ideal target client is correct for Microsoft.

Other customer characteristics that can be used to segment the market to effectively define the ideal target customer include:

• Industry/Vertical - Can you define the industry or vertical market that the ideal client belongs to?
• Geography - Where are they based?
• Size - What size of organisation? - by revenue or employees
• Reach - The reach of your organisation - local, regional, national, multi-national?
• Budget - Is the client able to be classified in terms of how much money they have to spend?
• Pricing - Are they sensitive to price?
• Job title - What is their position/job title?
• User - Who will use the product?
• Decision maker - Who makes the decision on this type of product?
• Image - What image does this client have? - Leading edge, conservative, well know, leader in their own market.
• Benefit - What will the product do to improve the client's life?
• Reason to buy - What compelling reason does the client have to buy the product?
• Use - What other complimentary or competitive products are they using?
• Concerns - What are the main concerns of your target client?
• Business type - What is their type of business?
• Business model - What is their business model?
• Competition - Who is their competition?
• Clients - Who are their clients?
• Problems - What are their problems?

So examples for a company that sells products used by telecommunications organisations might include:

For...

• Mobile telecommunications organisations
• Mobile telecommunications organisations concerned with adhering to new governmental regulations
• Mobile telecommunications companies that sell through channels
• Mobile telecommunications organisations that have a prestige image
• Mobile telecommunications organisations that operate at the budget end of the market
• Mobile telecommunications organisations that compete with RingRingTelco Corp.
• etc.

What we're attempting to do here is to segment the total available market so that we end up with a segment that is a) big enough to sustain us but b) small enough for us to dominate.  Obviously credibility and ability to reach these organisations comes into the decision.  So if I were a product marketing VP for a 10 man start-up software organisation, whist I might be attracted to an ideal target client of "the largest global banks struggling to implement a worldwide roll-out of XYZ application", I might lack the credibility or the reach to be able to deliver on this. 

So as we can see the ideal target client goes right to the heart of the business planning for the product unit or corporation and is incredibly important to define accurately. 

So that's ideal customer, I'll tackle the "pain" section in a future blog.  <More information can be found in the Lustratus REPAMA Guide here>

Danny Goodall.

BTW It should be borne in mind that Lustratus' focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we're dealing with a technical audience for infrastructure software.  So please bear that in mind for your own industry.

An "average" marketing strategy

Mean.  It's a great word isn't it.  But what does mean, mean?  If you see what I mean.  It's either hateful, the intended meaning of something or, as I want to use it here - an average.  In this case it's the "average" marketing strategy for a specific marketing segment.  What would be the value of knowing the "average" marketing strategy for any number of strategic marketing elements for the segment in which you compete?

i.e. on average for your market segment who is the ideal target customer organisation? On average what job roles do your competitors target? On average which vertical markets are favoured? On average who does your competition see as their primary competition? etc.

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The above Marketing Element Distribution(TM) charts are taken from a recent Lustratus REPAMA(TM) Segment Analysis Study into High Performance Messaging.  The study compared the marketing strategy of IBM's WebSphere MQ Low Latency Messaging (LLM), 29West's Latency Busters Messaging (LBM) and Solace Systems' Content Router.  Whilst the study contains full details for each of these vendor's strategies, the calculated "Market Mean" reflects the mean value of each of the marketing elements across those 3 vendors.

Lustratus produces this intelligence as part of the Lustratus REPAMA Segment Analysis Study and we obviously plot the positions of each of the vendors in addition to the mean, but this is relatively simple exercise to conduct for yourselves.  The question is what do you do once you know the mean?  Do you look to be outside of the mean?  The religion of "differentiate or die" suggests you probably do.  But the idea that what "most" of your competitors are doing must be right, suggests that you might want to simply track them.  Look at the Vertical Market Segmentation chart above and ask yourself whether you want to aim outside of Financial Services?  Well it might be an uncontested space, but at the same time their might be a lot of tumbleweed.

The answer of course is that whilst you can compute an "average" marketing strategy, the right strategy for your organisations depends on many factors.  Aiming at the average vertical market and at the average ideal customer might be valid strategies because it suggests that is where the rest of the segment feels there is opportunity.  But if you attack these prospects with "average" messaging and "average" differentiation it will be death by a thousand ho-hum cuts.

Either way, knowing what your competitors are doing is a good place to start.

Dan.