The Three Cs of Successful Positioning Part Two: The Channel

Introduction

It may seem counter-intuitive, but when it comes to successful market positioning for business to business (B2B) software, the best place to start is usually in the middle, with your sales channel. The channel connects you to the other crucial Cs of positioning—the customer and the competition. In this article, Part Two of this multipart series, we'll explore what you can learn from your channel, and how to use information from it in the positioning process.

This article series has been adapted from a series of workshops held in Seattle, Washington (US) and throughout the US.

This is part two of a multipart-part article.

Part One discussed the customer and positioning.

Start With Your Channel

To speed up the positioning process, start with your channel.
There are obvious benefits to maintaining good relations with your channel, whether you sell direct or through a reseller. One not-so-obvious benefit is the pivotal role your channel can play in positioning your B2B software for success. In this article, the second in a series on the 3Cs of positioning—channel, customer, and competition—we'll explore how the channel can enhance your positioning process.

In my last column, I introduced the 3Cs and summarized how your positioning effort can benefit from a thorough understanding of them. In this column, I'll explain why you should always start your positioning process with the channel, especially if you have limited time and resources. The next column in this series will explore channel relations and how to improve them.

Since the channel lies between you and prospective customers, you may think of it as a barrier, which it can be. But it also can be the most direct route to much of the information you need to determine the ideal positioning for your product or service. The channel is a conduit for the feedback that's crucial for understanding the intimate details of the sales process, your competitors and how they operate, your target market, and the personality of the target buyer for your marketing messages.

Talk about business intelligence! Learn what's really happening in the channel, and you will gain insights to guide your decisions during the positioning process.

Talk and listen to the channel first.
The channel is the point where you start the positioning process and is where you will eventually end by testing your proposed positioning statement and message strategy. It touches all 3Cs, so it has the potential to give you the fastest access to a wealth of information. Help the channel understand your needs, and you'll get customer contacts for interviews, receive great competitive intelligence, and find out what's needed to make it easier to win deals.

When you have good relations with your channel partners, you can make a few calls, and get some sense of how you might position your product. If you are under a tight deadline, it may be the only information you will have time to gather, but at least it will come from the source closest to the action.

Interviews with sales reps, VARs, channel managers, and prospects (whether they became a customer or end up selecting a competitor) will give you a head start in answering these questions:

• What are our prospects' and customers' most pressing problems?
• What do prospects and customers like and dislike about our product?
• Who is the latest competition? Who is the toughest competition?
• Do prospects and customers share our belief of why our product is better than the competitor's product'?

The channel also provides fast access to the following vital information:

• Ideal prospect profile
• Why we win and lose
• The sales process

What Really Happens in the Sales Process

The channel is your direct link to the battlefield where your product goes up against your competitors' products. Pay close attention to the intelligence you get from the "front." How do customers describe their most pressing problems during the sales cycle? What sales objections come up frequently? Who do they compare you to? (It may not be the competitor you had in mind.) All this impacts how you talk to your market and the materials you create to support the sales process.

By actively engaging with your channel, you'll understand the sales process in detail and in context, so you'll be able to match your marketing effort to how your prospects actually buy your product. Then you can identify marketing communications requirements and opportunities at each stage of the sales cycle. And you'll be able to select the marketing tools that best support and enhance the sales process—either through print advertising, direct mail, Web seminars, Web product demonstrations, brochures, product specification sheets, and ROI sales tools, just to name a few.

An aberration in the sales cycle
You can exploit channel intelligence even when the sales process seems to go sideways. While helping a client position a business-to-business (B2B) software application, our research indicated that about 50 percent of all deals went nowhere, usually because those prospects decided to stick with their existing solutions developed in-house with a generic tool. However, we knew our product was better than that and sought to determine why customers were not buying.

What we uncovered was a misperception about the product that had became a major factor in how it was positioned. Before prospects made their decisions, they had looked at a variety of products, including more expensive solutions that had more functionality than the prospects needed. The implementations for these products were long, involved, and expensive and customers were lumping our client's software solution together with those solutions. To move around this misperception, we emphasized the benefits of implementing a packaged application that could be deployed fast and was easy to learn and use. Now my client has advertising, marketing, and sales tools that all focused on overcoming the "no" decision because of the information we found from the channel.

The Ideal Customer Profile

I like to ask sales reps or VARs to describe their ideal prospect: "What tells you that this is a deal you can win?" I almost always get enlightening answers. For example, I started in the B2B software business with a company that developed accounting software for the digital equipment corporation's mini-computers. The company excelled at accommodating very complex financial and management reporting requirements.

I knew I had a good prospect when the decision maker said the organization had sophisticated financial reporting requirements, and the ability to meet them was an important factor in the final decision. When prospects asked me about my company, I'd provide a little company history about our heritage in public accounting, and then say, "Most of our clients select us because they need to do extensive financial and management reporting. In fact, in many cases, we were the only company who could accommodate their large account structure and complex reporting requirements." I wasn't just saying this to clinch a sale. This profile was critical in our success in finding and winning the right kind of deals where our product would do a great job for the right customer.

Good sales professionals—whether your own or your VAR's—will be able to quickly describe the ideal prospect, often in startlingly plain language. The ideal customer profile addresses demographic and psychographic characteristics. In future article in the 3Cs series, I'll discuss the customer much more extensively. The important point here is that the channel is where you start your search for customers to talk to and discover what message will get their attention. By working closely with your channel, you'll be able to identify a wide range of customers and prospects who will help you home in on the truth about your product, and how it stacks up in the market place.

Why you win and lose.
Good sales people will also be able to tell you why they win and lose, thus shedding light on the sales process, and how your message strategy can help it. Not surprisingly, you win deals when the prospect fits your ideal customer profile. And you take the time to let the prospect know it. Same holds true for your message strategy—talk directly to the right kind of prospect, not to everyone.

Another important factor that can impact your message strategy is your understanding of the strengths and weaknesses of your product and your competitors' products. For example, if you always win when the prospect takes a close look at both products, or when you do a proof of concept, then you may decide to orient your message strategy in a way that suggests a "bake-off" where your product is compared side-by-side with the competion. You may want to make a particularly bold statement about the benefit of your product that you competitor can't match. By emphasizing your strength in your message strategy and marketing, you may suck your competition into a battle you know you can win.

The competence of your sales force or channel plays a significant role in understanding why you win and lose. Channel-driven companies have to be particularly sensitive to the competence factor because VAR selling abilities range from excellent to marginal. You won't win many deals if your sales force or channel doesn't know the benefit claims and strategy and how to stay on that message. Therefore the ability of your sales teams to execute during the sales cycle can affect the way you craft your message strategy and marketing communications. Remember this important audience, too, so your message strategy complements its strengths or overcomes its weaknesses.

The size of your company and its standing in the market has a significant impact on winning and losing, and therefore on how you position your product or service. This is where reality sets in. Make claims that fit your standing in the market; in other words, make claims that are believable relative to your market status. Dominant players have more latitude than small players. It's just a fact of life.

Summary

In the 3Cs, your channel plays an important role in helping you gather research about the other two Cs—the customer and the competition. It is the battleground where marketing and reality meet to help you discover the truth about your product. It can offer you a competitive advantage if you are willing to face the truth because many B2B software companies never come to grips with this. A thorough knowledge of your channel can also add insights that impact positioning, and may ultimately identify the deciding factor for your messaging direction. Equally important, the ongoing nurturing of your channel will continue to provide timely information and feedback about the effectiveness of your positioning effort, so you can refine and strengthen your efforts.

The next column in the series will concern involving your channel in the positioning process and improving your channel relations, and your marketing efforts.

This was part two of a multipart-part article.

Part One discussed the customer and positioning.

About the Author

Lawson Abinanti is co-founder of Messages that Matter, a consulting firm that helps B2B software companies create compelling message strategies that build awareness and demand. Messages that Matter gives clients the knowledge and tools to develop powerful message strategies that differentiate products and services from those of the competition. Lawson has held strategic marketing positions with several B2B software companies including Navision, Applix, TM1 Software, and Timeline.

He can be reached at labinan@attglobal.net.