Product Positioning Doesn’t Build a Brand, Because a Brand is More than a Product.

Last week, on a marathon drive from San Diego to Salt Lake City, I listened to an episode of the Pivot podcast, where hosts Kara Swisher and Scott Galloway praised Disney’s potential expansion into housing and more specifically retirement communities. Their praise was based on their personal frustrations as consumers researching housing options for their aging parents and the lack of a known and trusted category leader.

Anchoring purchase considerations in a known brand is a consistent approach when consumers enter new markets. We seek solace in the unknown by identifying something familiar.

The greater the importance of the purchase and the more options that exist, the greater the need for an anchor to guide your journey. Retirement homes for aging parents checks both boxes, thus Kara and Scott’s desire for a familiar, trusted brand operating in the space.

In Behavioral Economics, Anchoring is a particular form of priming effect, whereby initial exposure to something serves as a reference point and influences subsequent judgments. This is mostly applied to price strategies, but applies to other purchase considerations, as well. 

Brands with awareness and an existing affiliation in the mind of the customer have a head start in the competitive set because they already have a degree of familiarity. This is the premise behind the 95/5 rule in B2B marketing (only 5% of the TAM is actively in-market for your category). 

This singular anecdote is instructional when it comes to product positioning versus brand strategy conversation. SaaS and B2B businesses in general conflate the two. Conventional wisdom is to lead go-to-market with product positioning, as it positions the company as a solution to a specific, tangible problem/pain prospects know they have.

But positioning your company through the lens of your product is limiting, as it creates a narrow focus on product/feature/benefit with rational value props. This might work for product marketing but fails to impact the rest of the business, and ultimately leads to problems like SurveyMonkey’s.

SurveyMonkey kept expanding their product offerings until it felt its name no longer represented the product-first position it had invested in, so they changed the company’s name and moved SurveyMonkey to a product within the larger company, because they had positioned SurveyMonkey as a product and not a brand. 

Compare that to MailChimp’s expansion strategy. 

Product positioning can't build a brand, because a brand is more than a product. The product may be the most visible manifestation of the brand, but it isn’t the only one. 

But if product positioning solves a specific business problem for product marketing, what business problem does brand strategy solve? It provides the business with the foundation to develop an anchor in the market through a distinct, ownable, and defendable point of view to tell and sell your story with clarity and conviction. So the entire enterprise is aligned on the big change in the world, the problem you solve related to that, for whom, and why that matters. 

Brands are built on potent ideas planted in the mind of the consumer through market penetration and repetition. If you are changing your story every six months, as some product positioning experts recommend, consistency is lost and so are consumers. 

With a brand strategy, you gain differentiation through your strategy and not just your products, so when competition comes after you, they are copying your strategy and not your product. It’s really hard to commoditize a strategy. 

It’s important to ask yourself what makes your company stand out.

If Disney led with marketing their retirement communities with the square footage of the units, the menu of the restaurant, and the thread count of the sheets, they’d be leading with product positioning. Instead, they hold an idea of how they are different in the consumer's mind as a brand, and that idea begins the conversation.
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-DRMG