Lustratus REPAMA - Strategic Marketing Analysis

An ESB is an ESB is an ESB - n'est pas?

As the saying goes, if it looks like a fish, smells like a fish and tastes like a fish then the chances are that it is a fish.  Likewise by any measure the products in the recent REPAMA study into the ESB market segment certainly appear to be ESBs but why then is none of the vendors content with describing their products simply as an "ESB".

As the REPAMA Marketing Element Distribution (MED) chart below shows, the ESB vendors in the study (Microsoft ESB Guidance 1.0, Oracle Service Bus, Progress Sonic ESB, TIBCO ActiveMatrix Service Bus) used the following adjectives, qualifiers, modifiers and euphemisms to describe the offer category of their "ESB".

• A loosely-coupled messaging environment
• A comprehensive Enterprise Service Bus offering
• Architectural guidance, patterns and practices
• Messaging-based Enterprise Service Bus
• Enterprise-class SOA Enterprise Service Bus
• High performance, scalable SOA integration backbone
• Lightweight Enterprise Service Bus
• Mediation Layer
• Enterprise Service Bus

Words are wonderful things and marketing organisations as experienced as these wouldn't use words without a reason.  As mentioned previously in this blog entry, when a category becomes as ultra-competitive as the ESB space, vendors will attempt to segment and re-segment the market on their terms and the product category is the first place they start.  

As a result, there is a raft of valuable competitive intelligence in this simple list of words above (visualised by wordle.net).  Why is each vendor modifying the product category in this way?  Answer that question and you'll gain an insight into the particular position within the ESB segment that each vendor is trying to own.

Danny Goodall.

Enterprise Service Bus (ESB) REPAMA findings published

Just a A quick note to say that the REPAMA Segment Analysis Study into the Enterprise Service Bus (ESB) has been published on the Lustratus.com site.  The ESB is a segment that Lustratus knows well as we've carried out strategic marketing work for most of the key protagonists at some point.  That said, there were a number of surprises - chief amongst these was some of the competitive differentiation strategies that we saw as well as the markedly different approach taken by Microsoft.

The study reverse-engineered the go-to-market strategies of the following vendors and products:

• Microsoft ESB Guidance 1.0
• Oracle Service Bus
• Progress Sonic ESB
• TIBCO ActiveMatrix Service Bus

In reaction to client feedback, we've published two sets of reports with this particular study   I've created a summary report that contains a management summary of the state of vendor marketing strategies in the ESB market segment as well as the results of the full-blown REPAMA Segment Analysis Study. 

Danny Goodall.

Part 8 - The "OUR PRODUCT [has this unique selling proposition] element from the positioning statement

Throughout this series of blogs I've been examining the format of the positioning statement that we use in our REPAMA consultancy and analysis services.  In this final entry in the series I'm going to close out by looking at the pay-off, the crescendo, the exclamation mark at the end of the positioning statement - the USP or unique selling proposition.

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 USP is one of those over-used terms that has found friends at all levels of responsibility throughout sales and marketing organisations.  I've heard everyone from line of business managers, to sales people to CEOs use this term.  Everyone feels they have a handle on it and over time the term has come to generically mean "differentiator".  Whilst I'm in favour of strategic marketing concepts finding friends throughout an organisation, there is a considerable amount of subtlety and craft missing from the "common" understanding of the USP.  So let's start with some definitions and perhaps a little bit of history.

Rosser Reeves - what a great name.  He sounds like he should have been some shady 1940s London underworld gangster.  But he wasn't.  Instead he was an advertising man, one of the first in fact and it was he who brought us the concept of the unique selling proposition.  For him, its use and definition were rooted in (print) advertising and as such the formal definition assumes that the USP is being used in some form of promotional campaign.  There was also an implied assumption that we were dealing with business-to-consumer advertising too.  Since then we've broadened the definition to think of it as any general proposition made via any medium (adverts, web site, emails, phone calls, face-to-face conversations, etc.) whether that be business-to-business or business-to-consumer based.  Whilst the use of the USP may have changed, the disciplines and thought processes used in its creation are still valid today.

The definition below is taken from the book Differentiate or Die (survival in our era of killer competition) by Jack Trout and Steve Rivkin.  In this book the authors refer to Rosser Reeves' 1961 work Reality in Advertising from which they quote Reeves' three-part USP definition:

1. Each advertisement must make a proposition to the consumer.  Not just words, not just product puffery, not just show-window advertising.  Each advertisement must say to each reader "Buy this product, and you will get this specific benefit."
2. The proposition must be one that the competition either cannot, or does not, offer.  It must be unique - either a uniqueness of the brand or a claim not otherwise made in that particular field of advertising.
3. The proposition must be so strong that it can move the mass millions (i.e. to pull over new customers to your product).

As I mentioned above, whilst many of these disciplines are still valid, there is now so much competition in just about every market category, segment and sub-segment that being "unique" is increasingly more difficult.  So it's no surprise that many of the USPs I see when reverse-engineering vendor's positioning statements are often just SPs - with little or nothing unique about them.

When looking at the USP in the context of the positioning statement its important to remember that the "OUR PRODUCT" positioning element is typically paired with the "UNLIKE" section.  The UNLIKE element sets up the main alternative and the OUR PRODUCT element describes the USP that the alternative doesn't have.  As shown below:

UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition]

The biggest challenge in defining this element of the positioning statement is in defining that unique space (number 2 on Rosser Reeves' list above).  With product categories, segments and sub-segments so granular across many markets and with ultra competitive competitors competing within each of those segments, finding a position that only you can own is not the work of a moment.  In addition its important to remember that we're not just trying to find a unique space, but a unique space that has compelling value to the consumer/customer as outlined in Reeves' point 1 above. 

In reality what tends to happen (in my experience of the infrastructure software space) is that the first entrant to the market (first mover) aims for something unique which is then "flatteringly" copied by later entrants to the market.  To later entrants this makes sense as they want to have some of the pie of the first movers and are happy to trade uniqueness for being perceived as similar to the market leaders.  Understandably it makes sense to "look" like the first mover.  This tends to lead to what I call "standards-based marketing" and simply creates a homogeneity of messages and propositions amongst the market protagonists.  This leads to little real differentiation and leaves prospects studying highly technical features to really understand the differences between products.

Examples

• OUR PRODUCT removes up to 20% of data centre costs whilst reducing your carbon footprint
• OUR PRODUCT starts reducing risk from day one.
• OUR PRODUCT not only integrates with your existing systems but also provides comprehensive management capabilities
• OUT PRODUCT ends world hunger (Well maybe not - but you get the idea)

Real world example

(If you have a specific interest in the SOA and ESB market you might find this section interesting...)  In our latest REPAMA Segment Analysis Study we looked at how a number of ESB vendors approach the market.  The vendors and products studied included Oracle's Service Bus, Progress Software's Sonic ESB, TIBCO's ActiveMatrix Service Bus and Microsoft's ESB Guidance.  Reverse engineering these vendors' positioning statements gave some interesting insights and as an example I've listed Microsoft's USP section below:

OUR PRODUCT provides a superset of ESB functionality, extending the ESB pattern to include modelling and execution of business rules, workflow, and adapter integration.

Here Microsoft selects a pretty strong USP.  They claim that UNLIKE other ESBs they provided extended functionality.  Whilst other ESBs may legitimately claim that they also offer extended functionality, they are not actually making that claim.  So this certainly passes Rosser Reeves' test above. 

The basis for this claimed USP is that their ESB Guidance is underpinned by their BizTalk product - which features broader functionality than other "simple" ESBs.  I think this is a pretty well constructed USP - despite the fact that the rest of Microsoft's marketing for the ESB Guidance is pretty poor.  Perhaps this is a function of the non-product nature of ESB Guidance.

In summary when defining the OUR PRODUCT element we're looking to communicate a specific benefit that will be delivered that none of the competitors or alternatives are able to offer, all of this couched in language that compels the prospect to take action.

So that's it for the OUR PRODUCT element and for the positioning statement series too. <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.

Part 6 - The "THAT PROVIDES [main benefit]" element from the positioning statement

In this series of blogs I'm exploring the format of the positioning statement that Lustratus uses in our REPAMA research methodology.  Today I'm looking at the "THAT PROVIDES [main benefit]" element.

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].

In my experience, this positioning element is often watered down so that it lacks any real convincing power.  The purpose of the THAT PROVIDES element is to describe the main benefit that your product or service provides your customer.  It details the value that your target customer can potentially derive and should be compelling enough to provide a reason for them to buy from you.  Instead of this, I often see this element used as a place to add another ho-hum feature or an also-ran benefit.  The question that should be asked is:

"What benefit or value will compel the target customer to want to go through the process of buying from you?"

Whilst this is not a hard and fast rule, the THAT PROVIDES element is often paired with the WHO [has this specific pain or problem] element of the positioning statement.  So that the WHO section  sets up the main pain experienced by the target customer and the THAT PROVIDES section often outlines the solution or antidote to the pain.

It's worth stressing one more time that the positioning process should produce a description of your approach to the market so that a target customer feels that you, and you alone a) understand their problem b) have the most compelling solution.  They should be left feeling that you went into business simply to solve their specific problem.

Examples

• THAT PROVIDES a reduction of up to 20% in data centre costs
• THAT PROVIDES a 15% reduction in the time to bring new products to market
• THAT PROVIDES complete alignment between corporate objectives and IT infrastructure
• THAT PROVIDES complete, accurate and timely visibility into corporate risk
• etc.

The impact of this positioning element is improved dramatically If the benefit can quantified or at least expressed in detail.

There is often a temptation when creating this element to fill it full of technical features or justification.  This is especially true of early market technology companies.  Whilst it is a generally held rule that it is better to concentrate on what the product leaves behind (i.e. the benefit), it is OK to focus on the technical value of the product IF the target customer or at least the target audience within the target customer, is highly technically-focused. 

(This section for those interested in the SOA and ESB market only...)  I'm using an extract from one of Lustratus' REPAMA reports to illustrate "real-world" positioning statements.  Here I've reverse-engineered the positioning statement for Microsoft's ESB Guidance product.  According to their outbound marketing, Microsoft sees the following as the main benefit they provide their target customer (BizTalk developers):

THAT PROVIDES an infrastructure for enabling service oriented architectures

This example falls into the "vanilla" category and certainly doesn't really cut it as a compelling reason to buy.  That said, for the target audience (technical) within the target customer (BizTalk Developers), it represents a clear and (if overtly technically) compelling proposition.

OK so that was the THAT PROVIDES section. In the next blog entry in this series I'll be looking at the "UNLIKE [the primary alternative or competitor]" element.  <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.

Part 4 - The "OUR [product name]" element from the positioning statement

In this series of blogs we're looking at the elements of the positioning statement format that Lustratus uses in our REPAMA research methodology.  In this entry I'm going to tackle one of the easier elements, where little specific planning or strategy is needed.  So here we're looking at the "Our [product name]" section of the positioning statement.

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].

Having said that little planning or strategy is required here, what I should have said is that from the perspective of the product marketing task of creating the positioning statement, the product name is usually already in place.  But not always.  Obviously an incredible amount of effort, research and focus group feedback can go into selecting the product name. And whilst the name doesn't usually change based on the ideal customer or the pain that they have, it might be that specific products are "created" so as to appear focused on a specific audience and/or problem. 

I've had experience of companies (mea culpa!) where the engineering effort required to bring such a product to market stretches only as far as to add an adjective or a noun to a product name in order to make it appear more targeted at a specific problem or prospect. 

Whilst the science of product naming is outside the scope of what I want to cover here, if you're interested there is an good discussion on that subject, as well as many others in the seminal book by Ries and Trout "Positioning: The battle for your mind".  It's a good read even if its roots are in advertising and it appears a little dated now.  Perhaps I'll revisit it later with a book review. 

So other than that, that is the product name section - really just a place holder for, as you might expect, the name of the product (or service).

<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.