In the previous chapter on ‘Setting Up the Invasion Force’, we established the point of attack on a target market segment filled with a problem that provides it with a genuinely strong reason to buy. We mapped out the whole product required to prevent this problem and recruited essential partners and allies to deliver it. Now the main problem is the competition. To successfully secure your beachhead, you need to understand who or what the competition is, their current relationship with your target customer and how you can sufficiently position yourself to get rid of them from the target market segment. This is what is meant by defining the battle. Any force can defeat another if it can define the battle. You mainly lose the battle because you fail to understand what your target customer wants, or you’re afraid to undertake the responsibility of ensuring that your target customer gets what they want. How far should you go to serve your customers? When crossing the chasm, pragmatists like to see viable competition. If you’re fresh from building a new value proposition with early adopters, that competition is unlikely to exist, at least not in a way that a pragmatist would admire. So what you should do is create competition.
As the technology adoption life cycle progresses, the nature of competition dramatically changes. These are progressive changes that one can say at more than one point in the technology adoption life cycle that a company has no real competition. Sadly, if there is no competition, there is no market.
In developing an early market, we have experienced that competition doesn’t come from competitive products as much as from alternative procedures. The goal in the early market was to enlist early adopters as sponsors to help tackle the resistance built through fear of risk or lack of strong reason to buy. Their competition has come from other individuals within their company who are pragmatists competing with the early adopters for money to fund projects. The general competitive solution of pragmatists is to invest money to avoid each problem at a time. Pragmatists strive to educate the company on the risks and costs involved. Early adopters fight with charismatic appeals in taking brave and decisive actions. The competition happens at the level of corporate agenda and not at the level of competing products. This is how competition occurs in the early market and not in the mainstream, as there are few early adopters, and the early adopters don’t like to be in the mainstream market. Now we are in the actual domain of the pragmatist, where competition is defined based on comparative studies of products and vendors in a common category.
These comparative studies provide the buying process with a sense of rationality which is extremely encouraging to the pragmatist. Pragmatists will not buy until they compare products for purchase. Therefore, competition becomes an essential condition for purchase. Thus, coming from the early market with no competing products, you need to create your competition if your goal is to enter the mainstream market. It begins with product positioning within a buying category that already has established credibility with the pragmatists. That category should be filled with other practical buying choices that the pragmatists are familiar with. In this situation, your goal is to position your product as the compelling correct buying choice.
However, the most significant risk here is manipulating the competition by creating a self-centered universe. This will not be pleasing or trustable to the pragmatists. You need to avoid this, and to do that, you should pay attention to the values and concerns of the pragmatists and not the early adopters. You need to start with ‘the competitive positioning compass’. This model is made to create a value profile of target customers anywhere in the technology adoption life cycle, discover what would appear to be the most practical competitive set in their view, and build comparative rankings in that set on the value attributes with the highest ranking in their profile and after that make the positioning strategy development around those comparative rankings.
High-tech marketing possesses four domains of value:
As products proceed in the technology adoption life cycle, the domain of most significant value to the customer changes. Where decisions are influenced by techies and early adopters in the early market, the main value domains are technology and product. Where decisions are influenced by pragmatists and the late majority in the mainstream market, the main domains are market and company. In this context, crossing the chasm represents a shift from product-based to market-based values.
There is a lot of information that needs to be noted in this model, so let’s explore them one by one:
Now let’s connect all this information to create competition. Any communication about a growing competitive set must be related to market-oriented concerns to win over sceptical pragmatists. This means we should transform the marketing focus from product-centric value to market-centric features. For example:
It’s the market-centric value system which is supplemented by the product-centric value system, that should be the basis for the value profit of the target customers when you’re crossing the chasm. Successively, this value profile will illustrate how the target customers will possibly perceive the competitive set and what position they are likely to give to a new player coming into that set. Particularly, creating competition involves using two competitors as guides to ensure that the market can locate your company’s unique value proposition. The first competitor in the market alternative who happens to be a company that the target customer has been buying from for years. This competitor’s problem is the one you will address, and the allocated budget represents the money you will be preempting as a new entrant. To have the right to this budget, you must use disruptive innovation to address an adamant complex limitation in the traditional offer.
The second competitor is the product alternative, which is a company adopting the same disruptive innovation that you are or at least almost positioning itself like you as a technology leader. Their existence gives credibility to the belief that it’s now the time to accept this new discontinuity. You intend to accept their technology but differ from them based on your specific segment focus.
Let’s see how this works in two real-life examples:
Dropbox was a simple file-sharing platform that allowed consumers to exchange photos, music, etc. As a result, workgroups in enterprises began to leverage as it was easy to use. However, due to its focus on consumer convenience, Dropbox didn’t heavily invest in enterprise features that IT departments demanded, and thus the search for a more enterprise-oriented alternative started.
This was when Box entered. Box’s challenge was that enterprises already possessed a broad, proliferated solution for end-user file sharing – Microsoft SharePoint. Meanwhile, Dropbox was a famous brand with an established consumer appeal. This was the perfect positioning scenario for Box. SharePoint represented the practical market alternative, while Dropbox represented the suitable product alternative. Box had to merely position itself at the intersection where Dropbox’s convenience of use joins with SharePoint’s enterprise standards.
By adopting SharePoint as its alternative, Box is going after the same use cases and the same budget inside the enterprise. Simultaneously, its disruptive innovation is radically convenient to use by using Dropbox as the product alternative. The company must still act on these promises and vigorously compete to win, but no one is confused about the game it’s playing.
In the 1990s, when PCs replaced terminals as end-user access devices, the first successful packaged enterprise applications were PeopleSoft. PeopleSoft crossed the chasm by targeting the HR department and providing a set of interactive functions that were never made available.
As time passed and the market transitioned from a “best of breed” orientation to a preference for integrated suites, PeopleSoft was defeated by two larger competitors, Oracle and SAP. Oracle established a hostile and highly competitive takeover that resulted in its acquisition of the firm.
Meanwhile, the founders of PeopleSoft were famous, so they used that product as their market alternative. For their product alternative, they chose Salesforce.com. The message was unmistakable. They were chasing PeopleSoft customers who were the people they sold to and the people whom Oracle owns, and they were providing these people with the benefits of SaaS, continuous releases and low switching costs.
By using these examples, Geoffrey A. Moore states that if you try to choose the competition and have trouble finding a single, clear market alternative or a trustable second vendor to leverage your kind of disruptive technology, you’re not ready to cross the chasm. Crossing the chasm requires a single target beachhead segment, and there needs to be an existing budget in that segment to buy your offer. Indeed, the budget will be misidentified. However, it should exist, or you can lose a whole year in educating the market to save money to buy your product in the next year. The solution to this problem is to select your reliable market alternative wisely, and as soon as you choose your alternative, you are in for the competition. Whoever this market alternative may be, it had plans for the money you’re targeting, and it undoubtedly considers that budget as its budget.
This is where the product alternative comes into play. You need to ensure that everyone involved in a technology shift is underway here, and those old solutions cannot keep up. On their best days, trade magazines cannot be interactive. Thus, market alternatives call out the budget, the market category and product alternatives call out the differentiation. It sounds like positioning, which we will be exploring next.
Positioning is the most discussed and least understood feature of high-tech marketing. The following need to be understood from making positioning mistakes:
Regarding positioning, most companies focus on making products easier to sell as they are worried about selling. They fill up their marketing communications with every potential selling argument. Prospects start reducing, which causes salespeople to chase them. Although the words address the customers’ values and needs, the communication focuses on the seller’s attempt to control these customers. This is obvious to the customer. When you think about it, most people don’t like selling but like buying. By focusing on a product which is easier to buy, you focus on what the customer desires. In exchange, they will feel this and purchase your product. Making a product that is easier to buy depends on the target customer. The goal of positioning is thus to create a space inside the target customer’s head named “best buy for this type of situation”. This space grows through the technology adoption life cycle. There are four essential stages in this process which match the four main psychographic types:
1. Name it and frame it – prospects cannot purchase what they cannot name, nor can they find the product unless the category to search it. This is the minimum positioning required to make the product easy to buy for techies. The goal is to produce accurate descriptions of the disruptive innovation that keeps it in its ontologically correct category with a descriptive modifier that separates it from other members of that category.
2. For whom and for what – customers won’t buy a product without knowing who will use it and its purpose. This is the minimum positioning required to make the product easy to buy for the early adopter. Early adopters don’t care about the ontology of the innovation but its impact.
3. Competition and differentiation – customers don’t know what to expect or pay for a product until they differentiate it. This is the minimum positioning required to make the product easy to buy for a pragmatist. This is a post-chasm scenario as pragmatists are sufficiently practical since several vendors compete to fill the same budget. For example:
These types of differentiation will help a pragmatist make purchases by creating reference points with people like them.
4. Financials and futures – customers cannot be convinced about a product unless they know a vendor makes it with staying power and will continue to invest in this product category. This is the minimum positioning required to make the product easy to buy for the late majority. Late majorities like Microsoft, IBM, Oracle and Intel.
Thus, what needs to be understood here is that positioning is more about the customer’s mental state and not yours. Unfortunately, this is what most companies fail to understand.
Out of these four components of the positioning process, the claim is the hardest to achieve. This isn’t because we lack ideas but because we cannot express ideas in a reasonable period. This is why you need to pass the elevator test; that is, can you explain your product in the time it takes to ride up in an elevator? Don’t invest if you cannot pass the test. Here’s why:
Thus, how can you guarantee passing the elevator test? First, you need to define your position according to the target segment you intend to dominate and the value proposition you want to dominate it with. This is only the ‘for who and for what’ positioning statement that resonates with early adopters and starts the early market competition. Meanwhile, you should predict the future of your mainstream market by leveraging the competition and differentiation positioning.
Geoffrey A. Moore had established a tested formula for this purpose which you can try out on your own company and for one of your products:
The issue with high-tech marketing is that it weakens once you’re used to something. This can be seen within the competitive positioning compass. By succeeding from the left to the right of the compass, you will trace the growth of desired evidence as the market grows from the techies to the early adopters to the pragmatists and the late majority. The main point to notice here is the transition from product to market matching to the chasm crossing. This confirms a fact that we’ve been making till now that pragmatists are more interested in the market’s feedback on a product than in the product itself.
What is weird for a high-tech company making this transition is that the significant sources of desired proof are not under the company’s direct control for the first time. This isn’t a problem of having the correct features but a problem for uninterested third parties.
For the pragmatists, market share is the more substantial proof of leadership and the possibility of competitive victory. If there are no numbers, they will look at the quality and number of partners and allies you possess and their scope of a clear commitment to your goal.
When a new high-tech product is introduced, it must first be briefed to the industry analysts and long-term lead press editors before the launch date for them to serve as references and then to the top company executives with the announcement leading to an event. These product launches work better when the product is new information, and then they are a good tool for early market development. However, they are unsuitable for crossing the chasm. At this point, the product isn’t hot news. The trade press isn’t interested in your product, even if you are Oracle or Microsoft. Thus, if the message isn’t “Look at my latest hot product”, what is the message going to be, and how should you get it out?
The message that resonates now is more likely to be “look at this new hot market”, which includes a description of the growing new market secured by a new approach to a problem which resists conventional solutions, fed by an increasing set of partners and allies where each provides a part of the whole product puzzle to the satisfaction of an increasingly evident and growing set of consumers. This is a good situation for small companies as it gives them a standing they cannot achieve alone. Their product doesn’t have to be the climax of the whole product, as it must only be an essential component. Now how can marketing communications improve your chances of winning such a position? Firstly, marketers must select the correct communications venue. There are two venues:
The goal of the whole product launch is to build relationships through the support of word of mouth. Developing relationships isn’t easy as you need to see who the prominent influencers are, get on the speed of the industry problems to ensure the relationship is continuous and valuable to both parties. Once these relationships are established, they represent a significant barrier for competitors to entry. Pragmatists and the late majority, who happen to be the core of any mainstream market, like to do business with people they are familiar with.
It’s essential to understand the competitive positioning compass, the process of positioning and how the whole product launch works with selecting the right communication venues such as the business press and vertical media to target your beachhead segment by defeating the competition.
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