Is Xerox Wasting Their Money?

The Wall Street Journal announced last week that Xerox Corp. is launching its most expensive advertising campaign in two decades with the hope of repositioning the company away from being just a copier maker and expanding into business services.  In fact, Xerox has already purchased outsourcer Affiliated Computer Services to help it do just that.  It now faces the tough task of changing the perception customers hold of Xerox.

This announcement begs a question to be asked.  Why do some companies, such as Apple and IBM, have such great success reinvigorating growth through market repositioning while others like Xerox, Polaroid, and Kodak struggle?

All of these companies have a few things in common.  They have all had success selling their products and, as a result, are known for something.  Once their growth rate slowed, each of them invested in launching new products and services.  Some, like Kodak, have even won awards for them.  However, the market has not rewarded all of their efforts equally. 

We all know how Apple has transformed from a computer company to a mobile device and entertainment company with their slick iPod, iPhone, iPad, and iTunes products.  As a result, they are now the most valued technology concern on the planet.  Similarly, IBM moved from being predominantly a hardware/mainframe business in the 1990s to being one of the largest IT integrators/outsourcers.  Their reputation for being technology experts has given them the right to do this in the minds of their customers.  In contrast, Xerox has tried for years to move from being a manufacturer of photocopiers to a document management services company.  They have had marginal success.

I believe the answer lies within how these companies repositioned themselves.  Both Apple and IBM found an important problem the customer was struggling to get done, developed a superior and sustainable solution, and then provided clear and credible points of distinction to help build their “story” in the minds of their customers.  They connected who they are to how they can help customers get other jobs done.

On the other hand, Polaroid and Kodak, both known for early innovations in photography, have failed to carve out a valued position in the digital world.  They have struggled to develop new products AND tell the world why their products are superior to other solutions already on the market.  To customers, there was no clear link between what they were known for and the new solutions they had launched.

Now, Xerox is planning to launch a very expensive ad campaigns to do just that – tell the world why they should consider Xerox for help with mundane business processes.  Will they be successful?  Have they “earned the right” to do this from the customer’s perspective?  This depends on whether or not they help customers see how a copier manufacturer can be much more than that.  If they don’t, then they are just wasting their money.

Why Apple's iPad is a Success

A few months ago, I predicted that Apple’s iPad would not be a success.  To summarize the reason I made this prediction, it appeared at launch that Apple was simply going to position the iPad as a device that sits between the mobile smart phone and the laptop.  As I stated at the time, I did not believe that consumers would want to purchase yet another hand-held device.

In hindsight, I was wrong.  The iPad has been a runaway success and has compelled others to create new tablet devices.  However, even though I was wrong in my prediction, Apple was also wrong in how they saw the iPad being positioned in the minds of customers.  The iPad is not perceived by consumers simply as a device in the middle-of-the-size continuum.



Despite it’s form factor, consumers judge products based on the jobs it helps them get done.  As a result, the iPad is being grouped in the minds of consumers with other portable electronic reading devices like the Amazon Kindle and the Sony Reader.  What all these devices have in common is that they enable people to read books and keep up with information while on the go.

My theory about why the iPad is selling so well has to do with this grouping.  When we begin to seek out a solution to a job we are trying to get done, it is because we want to get that job done.  However, when we make decisions about what product or service to purchase, we do so by comparing one option against alternative options.  We then base our purchase decision based on how well we believe the solution will allow us to get the job done.  This includes everything from making the purchase to learning how to use it to maintaining it and, ultimately, disposing of it. 

As a result of the iPad being grouped with these other devices, consumers are choosing to purchase the iPad because of it’s perceived superiority in how it gets the job of reading books and keeping up with information done.  It’s intuitive user interface, numerous apps that seamlessly sync desired content, and high resolution color screen are all often given as examples of why it is a desirable solution over the Kindle and Reader.

From Apple’s advertising and marketing campaigns, I do not believe they intended to have consumers pair their new device with these other e-readers.  Rather, consumers have done this on their own based on the job they are hiring these solutions to get done.  As a result, Apple has a product consumers are choosing to buy more often than not.  The only question that remains in my mind is whether or not Apple could have even more success with the iPad if they purposely positioned it in this way.

Repositioning Financial Services?

An interesting article in the WSJ today talked about whether financial services are headed to a new venue.  That is, the supermarket.  The article speculates what might be a sign of things to come based on a recent deal by Sam’s Club to offer small-business loans up to $25k in stores through a partner lender.

What’s interesting is that this idea is not new.  Sears bought Dean Witter back in the 1980s to combine retailing and financial services.  Also, banks have had branches and ATMs in supermarkets for years and H&R Block has offices in strip malls throughout the country.

The idea goes something like this.  Consumers shop in retail stores.  Consumers need financial products like checking accounts, mutual funds, and loans.  So, put these together and we have an “innovative” approach to selling financial services.

The question that needs to be asked is, “Are these really related in the mind of the consumer?”  In other words, do consumers really see financial services as part of their weekly grocery shopping experience?  It is understood that having them physically located in the same place makes sense from a convenience perspective.  That’s not really what I am talking about.  Rather, in the mind of the consumer, does Sam’s Club “have the right” to offer financial products.  Is the Sam’s Club brand connected to financial services?

Many companies try to make this leap by extending their brand to other product categories.  Some are quite successful, like Virgin Group extending from record labels to transportation (airline, trains) and video/game stores, while others fail miserably diluting their brand value by confusing their customers.



In financial services, the WSJ article reasons that it makes sense to combine products that have largely become commodities (like mutual funds) with either trusted retailers or financial information-providers, such as Microsoft and Yahoo, who have built up goodwill and a brand name with their financial websites.  However, if I were an executive in one of these companies, I would really want to know how the brands are connected in the minds of the target customer before I spent billions acquiring companies hoping to extend into financial services.  What do you think?

What makes a great market position?

The short answer is a position that is important to the customer, can be satisfied in a superior and sustainable way, and provides a clear and credible point of distinction.

There are several paths available from which companies can choose to reach this preferential destination.  One is to both innovate around the core job your customers are trying to get done and around the “consumption” of the products or services your company provides.  Some examples of this include Apple (their products are clearly innovative, but their stores, web site, and App store are remarkable for their ease of purchasing) and Google (they are innovative in both helping people search for information and consume the ads/information as a result of a search).

Another approach companies like Progressive and Enterprise Rent-A-Car have used is to innovate around the delivery of products/services and to stake a position on that.  These two examples have not fundamentally changed the solution required to address the core job of protecting yourself from financial loss as a result of an accident or hiring a car to get from point A to point B, respectively.  They just make it much easier to consume auto insurance (through Progressive’s rate comparison process, on-site claims, and concierge service) or to rent a car (through Enterprise’s ubiquity and pick-up service) once a consumer decides that is the solution they need.



As a result of their efforts and market positioning, Progressive has become the fourth largest auto insurance carrier and doubled the number of new policies it has written in the last 3 years and Enterprise, with its iconic wrapped car, is the largest car rental company in North America with over 91% of “local” car rentals going through them.

As a consumer of auto insurance and rental cars, can you see how these companies positioning passes the test of “great” (important to you, superior to other solutions, sustainable in their delivery, clear positioning, and credible marketing claims)?  What other companies can you think of that have also taken this path towards growth?  What do you think is stopping many others from pursuing this?

Communicate the Position

Armed with a clear idea of how the company’s product or service is positioned in the market and a compelling customer value proposition, you are now ready to begin promoting your offering. The ideal messaging will help your customer understand how your company’s brand delivers on its promises at all levels in the brand-promise hierarchy as follows (starting from the bottom):

• Product or service features are tied to specific under-served functional jobs and outcomes that they address


• A link between what the customer is trying to get done and how they want to feel or be perceived as a result of getting a job done is effectively made


• The customers’ values, personality, and lifestyle are taken into account to understand their frame of reference when selecting solutions and executing the job

A great example of this type of communication comes from PNC.  Their Virtual Wallet product was created to address unmet customer needs when managing money.  They are targeting younger savers who do not think managing money is fun and have better things to do with their time.  To compensate, they created messaging that is upbeat and straightforward, connects with their target audience’s lifestyle, and explains what jobs and outcomes they are helping customers satisfy.


To achieve your desired market position, your marcom team needs to formulate a communication plan by connecting the functional and emotional needs of the target audience.  This includes making a number of decisions:

• What are the objectives of the planned campaign? What do you want to happen as a result of your marcom activities?


• What message are you trying to convey? What do you want your target audience to know?


• Which communication medium(s) best convey your message?


• At what points in the customer buying process do you want the message to be released?

	Customer Buying Process
	Figure out needs	Identify options	Evaluate options	Choose an option	Purchase	Modify the choice	Re-new
Objectives
Message
Medium

As a result, a detailed communication plan can be prepared that allows you to develop a winning winning market position that resonates with customers, align internal and external stakeholders on the value of a brand so that messaging is clear and consistent, and own a repeatable and sustainable process for developing focused and effective marketing campaigns.

Achieve a New Market Position

Once you understand how your company’s brand and competitor brands are perceived by your customers, you are ready to begin to stimulate your company’s growth through more effective positioning.  If you need to review this prior step, please refer to my previous post.

The primary mechanism used to position your offering is a customer value proposition (CVP).  A CVP is a statement that is intended to be shared with internal stakeholders (e.g., sales force, support staff, etc.) and external partners (e.g., distributors, ad agency, etc.) to provide a common understanding of the unique value a product or service strives to provide to the market.  It explains why a customer should buy your offering.  Too many companies fail to truly consider what unique value they offer to customers and this leads to a poor or no position in the mind of the customer (see my post on the iPad for an example).

Many people at this point either say, “We already have a customer value proposition” or, “Why do I need one of these?”  To answer the latter, it is estimated that the average American is exposed to hundreds of advertisements a day and this number is only growing. The only way to stand out from the competition is to establish a clear and credible point of distinction in the mind of the customer.  A CVP helps you do this by forcing your company to rigorously focus on what your offering is really worth to your customers (please see this HBR article for more on why you need one of these).

With regards to the former statement, I say, “Congratulations!”  However, I’d ask you if your CVP was developed using the customer’s measures of success so that it resonates with what the customer is trying to get done rather than simply providing a list of all the benefits a customer receives from your offering or a few favorable points of difference you provide versus the competition.  The reason this approach is preferred is that it acknowledges that the customer is already overwhelmed with marketing messages by seeking to deliver only the one or two key points of difference (and perhaps a point of parity) that will deliver the greatest value to the customer.

To be able to do this successfully, you must understand the jobs and desired outcomes customers seek to satisfy when they use your or your competitors’ offering.  Once you have collected these and know the importance and level of satisfaction customers attribute to each measure, you can select which ones to work with to form the basis of your CVP.

A well-written CVP answers who the target customers are, what they are trying to accomplish, when the product or service should be considered and why, and what the key discriminating features of the product or service are.  An example of the output from this process is provided below:



After developing the CVP, your next step is to reposition your offering by communicating and delivering on the brand promise to your customers.  This is the topic of my next post.

How to Reach an Achievable Market Position for Your Brand

In this blog, we have defined positioning innovation and provided examples of how some products are currently positioned in the market.  So, for this post, I’d like to touch a bit on how marketers can successfully reach an “achievable market position” for their brand.

There are several steps involved with successful market positioning:

1. Determine how your brand is currently perceived in the mind of your customer


2. Achieve a new market position


3. Communicate and deliver on the brand promise to your customer

Determining how your brand is currently perceived in the mind of your customer

When positioning a brand, marketers must understand not just the functional and emotional needs of customers, but also the context or situation in which the needs occur.  The combination of the context in which customers are trying to get a job done and personal/social factors shapes the customer’s “frame of reference.”  Research shows that not only do customers’ frames of reference influence perceptions of how well they get a job done, but also helps determine the parameters for the consideration set of brands from which a customer will select a solution.

For example, when shopping for a new vehicle, consumers who live in a place where they need to drive in snow and bad weather, do not want to worry that their car will not make it, and want to be perceived as “outdoorsy,” look for tough, dependable, all-wheel-drive types of vehicles.  This means, vehicles that are perceived as luxurious or up-scale (such as BMWs or Cadillacs) will likely not be considered.  On the other hand, brands such as Subaru or GMC have positioned themselves as optimal choices for customers with this frame of reference.  As such, visit any mountain town in the U.S. and you will likely find many more Subaru cars and GMC trucks than BMWs or Cadillacs.  That was exactly my observation when visiting Park City, UT, last month.

Most likely your customers already have a very specific perception of your company’s brand and what it can be relative to their frame of reference.  As a marketer, your job is to determine what this is, including the situation/context in which they are trying to get a job done, how satisfied they are in getting it done, and their feelings/perceptions as a result of doing the job.

To do this, you need to first gather and prioritize all the desired outcomes folks have when getting the job done for which your product has been hired and the emotional jobs they want to satisfy as a result.  By collecting the situation/context in which they execute the job, which solution they use, and their level of satisfaction, you will be able to ascertain along which dimensions and when your product is perceived to deliver superior vs. inferior results as compared to the competition.

After segmenting and profiling the market, you are now ready to begin positioning.  However, if you skip this step and try to position your brand too far from your customers’ frames of reference, you likely will confuse them and be unsuccessful in your positioning efforts.  In my next post, I will talk about achieving a new market position.  Stay tuned.

Apple's iPad to Follow the Path of the Palm Pre/Pixi

I finally was able to make it into an Apple store this weekend and get my hands on the Apple iPad to see if all the buzz about the device was warranted.  As a follow-up to my post about the iPad, I'd like to make a prediction.  I do not believe that the device will sell nearly as well as all the analysts predict. 

I say this despite the fact that it technically is great.  The screen resolution, responsiveness to the touch, and ease of use is really as good as people have been exhorting.  However, I cannot help to wonder what its positioning is in the mind of the customer.  In fact, as I stood in the Apple store playing with the iPad, a gentlemen came up to me and said, "Why do I need this?  Is it any better than what I have here?"  He was pointing to a MacBook he had tucked under his arm.  I responded by repeating some of the benefits I had heard, but ended the conversation thinking that perhaps he has a point.

As a precursor, the Wall Street Journal is reporting today that Palm is looking to sell itself.  Despite the fact that its new webOS has received very favorable reviews and hits on many of the unmet needs customers have while being mobile, the company has had a difficult time gaining sales.  I believe this is absolutely due to their lack of a valued position in the market.  RIM has unambiguously staked its claim for the BlackBerry as the device for mobile professionals who need to stay connected to the office and Apple has positioned the iPhone as the elegant, sophisticated multimedia and gaming hand-held.  Even Google has pushed Android as the open platform for the "techies."  What comes to mind when consumers think of the Palm Pre/Pixi?  Not much, that is the problem.

Back to the iPad.  As long as it is positioned as another hand-held device rather than a replacement for the computer, I don't think the masses will buy it in volumes.  Sure, the "innovators" and "early adopters" will get theirs.  However, I believe without a clear and credible point of distinction in the mind of the consumer, like Palm's Pre/Pixi, this product will struggle, at least by Apple's standards.  What do you think?

Position Your Way to Growth

Innovation has been a buzzword in business circles for some time now.  When most people write or talk about innovation, they are focused on the process of developing new and improved products or services to better satisfy the needs of customers.  This, no doubt, is a good thing.  But, creating new things takes time, effort, and money.  So, no matter how well you understand customer needs, there is still a risk that the investment will not pay off.  However, another kind of innovation is possible that can dramatically improve growth, but requires a much lower up-front outlay.  I call this type of innovation "positioning innovation."

The basic approach to positioning innovation is not to create something new, but to change what is already in the mind of the customer.  That is, take what is existent and manipulate the perceptions and beliefs customers have about it.  The way to do this is through communication and messaging, as any brand strategist knows.  However, to be effective, it must resonate with the customer, not your ad agency, your marketing chief, or your boss.  In other words, it's all about how the customer receives your message and not what others believe about the sending of the message.

Dan Ariely, a professor of behavioral economics at Duke University, wrote in his book Predictably Irrational that "we not only tend to compare things with one another, but also tend to focus on comparing things that are easily comparable--and avoid comparing things that cannot be compared easily."  The implications of this for marketers trying to position their offerings in the market can be quite interesting.

Instead of simply looking at the competition and then deciding to demonstrate how your product is different or choosing to simply act as if the competitor's position did not exist, marketers must study how their product stacks up against the competition (especially market leaders) from the customers' perspective.  Then, they must determine against which products and along which dimensions to position their offering.  Choose incorrectly and you risk confusing the customer or not creating a distinct positioning for your company's brand.  In either of these cases, customers most likely will not choose to purchase what you have to offer.

On the flip side, if you position your company's offering against the competition along dimensions that are important to the customer and allow them to easily get how your product is unique, then the likelihood customers choose what you have to offer goes up dramatically.  All without making any changes to the product.

Apple's iPad Positioning

With all of the hype and hoopla of Apple's upcoming iPad launch, I think it is timely to discuss its positioning in the market.  I am as excited as any gadget-lover to get my hands on one of these devices and see what it can do.  However, as a consumer, I can't help to wonder, "How am I supposed to perceive this new technical masterpiece Apple is pioneering?"

In the presentation Apple CEO Steve Jobs gave introducing the new product, he showed the iPad "positioned" between the iPhone/iPod Touch and the MacBook.  In doing this, Jobs is positioning the iPad based on form factor--it's bigger than a smart phone, but smaller than a laptop computer.  However, that may or may not be a valued position in the market.  To determine if it is, we need to look inside the mind of the customer.

A valued position is one that emphasizes jobs and/or desired outcomes that are important to the customer, that can be satisfied in a superior and sustainable manner by the company, and that provide a clear and credible point of distinction to customers.

What set of jobs will the iPad help people do or do better?  One answer to this question was proposed by Walt Mossberg in the WSJ.  Mossberg states, "If you're mainly a Web surfer, note-taker, social-networker and emailer, and a consumer of photos, videos, books, periodicals and music—this could be for you.  If you need to create or edit giant spreadsheets or long documents, or you have elaborate systems for organizing email, or need to perform video chats, the iPad isn't going to cut it as your go-to device."

Based on this article, Mossberg is making the statement that the iPad helps you get a set of jobs done around consuming content and not around creating content.  Apple appears to be thinking in a similar manner given that their launch ad displayed on their website shows someone consuming content. 

Let's get back to the devices Steve Jobs used to position the iPad in his presentation.  From a jobs-to-be-done perspective, a computer helps you both create and consume content while a smart phone helps you consume content and stay connected while being mobile.  Given the success of computers and smart phones in the market, we know that these sets of jobs are important to customers.  However, in positioning the iPad, is it sufficient to simply be the device that enables you to consume content?  Will that be compelling enough to mainstream consumers to purchase another device and drive Apple's sales?  The answer, of course, depends on whether or not it is perceived to be clearly superior to computers and smart phones for content consumption and distinct enough in the minds of customers as a go-to device while being on-the-go.  If not, Apple may need to rethink the iPad's positioning.

Positioning Innovation Defined

Most marketers know that the process of positioning a product or service in the market is the key to driving profitable growth. Ever since Al Ries and Jack Trout wrote a series of articles for Advertising Age back in 1972, the discipline has been part of the marketer tool kit.  Defined by Wikipedia as "the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization," positioning is even more important today with the explosion in the number and type of products and brands available to customers. However, repeatable and sustainable positioning success has been elusive.

A big part of the problem is that most marketing literature and text books define specific types or categories of positioning. For example, they say that a company can have the lowest prices, the best products, or the best service. Furthermore, conventional wisdom holds that companies can try to do 1 or 2 of these well, but rarely all 3. The problem with this perspective is that it is "inside-out" thinking. The customer does not think in these terms. Companies do.

Customers hire products and services to get specific jobs done.  They measure success in getting these jobs done by specific metrics or desired outcomes.  To innovate, companies must understand what jobs customers are trying to get done and where they are struggling to achieve the desired outcomes they are seeking. Through this approach, companies can approach innovation systematically.

Marketers can approach positioning in a similar systematic fashion. By uncovering the functional and emotional jobs customers are trying to get done when "hiring" their company's products and learning what is important to them, but not well satisfied, marketers can find the "holes" or opportunities in the market. If their products or services address these needs well (or at least better than the competition), then marketers will be able to develop a unique and valued position for their product or service that successfully resonates with the customer. They will own that position.

This is not limited to 2 or 3 types of positions. Rather, it can be based on the myriad of jobs and desired outcomes customers are trying to achieve.