Category Creation – A strategy for competitive advantage

0:07 hey welcome back to revenue optimization radio it's the one show that takes a look at well how to optimize your revenue posted by Patrick Morrissey CMO of a hall safai revenue optimization radio is brought to you by those good folks so why hold back let's have to tell you more right now hi friends welcome to another edition of revenue optimization radio as you know if you happen to be a

0:38 listener and we thank you for that we oftentimes get into discussions about what does good look like in sales and marketing and where do you find competitive advantage and in this case we're going to zoom out a little bit and really think about competitive advantage not necessarily in hand-to-hand combat of sales but what does that look like in terms of how do you capture how do you own how do you dominate a market and for that oftentimes the solution to that

1:03 question is you need to build and own your own category and I'm excited to welcome Paul Mar to the program because he's somebody who's helping companies rethink not just their brains and their communications but actually their category and their go to market strategy holistically so we're gonna get into what that looks like what it means and why it's so critically important in the world we live in right now Oh welcome to the program thanks for having me Pat

1:27 delighted to be here and speaking to your listeners well and we're excited to talk to you and and have you dropped some knowledge on us but let's get a little bit background on you first of all because you and I have known each other for years but you are the founder and CEO of positive over here in London where I happen to be spending the week this week give everybody a little bit of background on who you are the positive

1:48 team and the type of work you do well I would describe myself I suppose most of all as a recovering journalist and I started off in as a tech journalist and then went on to have a career some of which as you know is crossed over with you so I think we both touch base at the dot-com boom that was the fastest growing peak consultancy ever science I've also had in-house roles at mercury Interactive HP and VMware where I headed

2:14 up comms for the Amir region the last 10 years I've been building a business which is called positive and we are one of the leading European base but global in span content marketing consultants that work with b2b tech companies and I'm very pleased to say that we've just been nominated for this year's Sabre as the best in a mirror for earn media it's not all we do but boy am i proud of the team and delighted to talk

2:39 to you guys because we've done some interesting work with Altaf I and others yeah and I'm excited to talk to you as well congrats on the Sabre award but going back to your specific background you have worked in really senior roles for some heavyweight brands B at HP VMware Mercury so you've seen at scale what what great looks like in terms of communications but more broadly go to market and when you fast forward to the present day and you look out at the

3:06 market and some of what you're working on with your clients and what you're seeing going on what role what do you think is critically important if you're trying to architect a go to market strategy and give me your perspective on the intersection between go to market and how do you build a category great question so for anybody that is trying to build the category categories are interesting if it can help you sell and that is initially why you need a great

3:29 category and category will help you sell more and proven research is that it will help you dominate in terms of margins so whilst companies like Apple may not have the most wizzy technology then probably in fact clearly at this point don't sell the most unset the most amount of margin out of the category of smartphones because of the way they've thought about dominated a category sales teams always need something to sell and the key word these days in b2b took it wasn't always

3:57 this because this was often an engineer led space is different you need to be different you have something different in your bag it's what everybody else is saying I think one of your sayings Pat that I like a lot is that you don't be fighting somebody else's battle it's important that you win in your own terms and that's why I category is critically important I would tend to agree with you for a whole variety of reasons but give

4:21 me a little bit of the foundation here Paul why does a company need to have a category or said differently I think a lot of us particularly the technology side and you mentioned some pretty high-powered names that owned multiple positions on the top right of the Gartner and quadrant so they're really spanning categories but give me the base case on from whether I'm a big company or I'm a small startup company why do I need a category yes

4:47 so I think that one of the things that's very obvious is we as humans have cognitive biases and you might dismiss that but your sales psychological game and there are certain biases in the book play bigger where a lot of the theses or early thinking around category design came from you'll find a people citing a lot of psychology there around things like anchoring effect which means the first time you ever hear about something like a service

5:14 like uber they become the service that you anchor to and compare to and so it's very hard to displace in a human buyers mind something like that so anchoring effect is one of them there's also other effects which play into the fact that categories are so powerful for us humans you know there's group thinking and there's the fact that once you've decided that you're gonna go with something and you regard somebody as a category leader it's very hard to think

5:37 of the number two or actually the three and four which is where it gets really tough to be the leader in that category and if you think about it from a bias perspective a lot of people you know not just procurement but just frontline enterprise buyers allocate in their mind they may not say it explicitly but they allocate a number or a percentage of their budget that they're going to spend for something and shifting that's really

5:59 hard unless you give them compelling reason in other words create a category in their mind that they haven't addressed or that solves a different problem yeah when is that you as it scales up you right at work with some multi-billion dollar organizations and we literally wrote the book on country design during the mercury days and when that got taken over by hewlett-packard and you know that was a north of four billion dollar deal but that was some of

6:23 the thinking that originated from that was women the company was much smaller and so there is a role for category at all stages in a company's growth whether you're a starter and you know I would say it's his fundamental as a starter and you're competing for VC money BC attention early market product fit for a market fit you definitely want to be talking category there even though it'll be a much scrap here the vision may not

6:45 be so fleshed out you may not have put as many cycles into it and it may be that you have to be quite light on your feet to pivot so I think that's pretty important at startup I would say it's scale up stage the category thinking is absolutely critical because if you're not clear at the point when you're trying to scale when everybody's competing for leadership in a category if you're not clear what's different about your approach then you will never

7:07 dominate the category and so I think the critical the scallops to start thinking that way it certainly have lots of experience in working including with yourselves on that sort of stuff and then if you'll post the category win let's say you didn't get to be the category king as they call it in the book and you don't dominate and you need to turn around I think trying to convince the world that you are viable and hot company that's

7:28 worth considering from a sales perspective in a turnaround situation I would say it's life and death I would say not having a category as you think about turning around is pretty terminal and I think some of the reasons that you'd want to do that includes keeping the best sales folks you've got right making sure that your marketing team is hitting customers with propositions that they like there's just a lot of research that says having being a category king

7:50 or being having a mission which means following a category is going to keep the best people which is obviously at all points in the journey critical you say I want to come back and touch again on something that you said that I think might be overlooked in this because category is great in theory it's hard in actual practice but the first question there and going back to what you said a second ago Paul which was this is

8:12 ponying in on what's different give me some examples you know big and small from from your background or your experience that kind of illustrates somebody organizations that have really made category stick and it's turned into you a large defensible position that's help them grow massive value right so I mean the obvious one that I can go to straight aways is obviously the moment I'm started to talk back to the world of testing so why would a small Israeli

8:38 founded company out of your hood actually become such a large acquisition for a global giant like HP and the answer to that is the thinking there amongst the leadership team was yes we are the reason we're talking about mercury in this case really interactive you have back in the back in the 2000s had a great sort of jump with its testing processes around the y2k yes you know I was looking really for the next you know the next trip and so what they

9:01 alighted on when the hell would the hell confirm the tree probably off so their crystal Lochhead was to come up with a category there allowed them to expand hours of testing and into the wider IT ops market and so category they came up with was business technology optimization any Intel just straight off the bat that talks to a large total addressable market that brings the company into direct conflict people that it was probably selling with to a certain extent in the OPP's market

9:27 but it also gives a vision of difference that somebody like a CIO can take back to their board and say look what are we doing on business technology optimization it's a new category that we're not really thinking about and so I'm gonna need some additional budget and so that really changed the game for that company I'll give you an example for the world of the wheel living like the world of consumers if you think about the automobile always we call it

9:51 over here the car market and you think about the journey that the humble SUV that Manny was drive these days has been on from a GP general purpose vehicle known during wartime is as a jeep and how that market has evolved so that you have today you have a myriad different subcategories of the SUV uber category if you will and the one that I like the best just because I happen to visit the factory recently is the way that

10:16 Lamborghini has taken the SUV and already you have like midsize SUVs yes it's cross-purpose SUVs etc etc and they take this the next stage and now they have their version of that which clearly they wanted to create a category and not just a model so they have the S SUV and you see other people doing this which is the supercar SUV and that's really an example of category thinking that has that has implications for everything around the market outside of the usual

10:44 stuff they could have just said hey it's like an SUV but faster but their decision was we're creating a category the category has one product in it right now there have been others and there will be others and it's called an S SUV so hopefully that explains the power of the category methodology it does it also explains the answer to the question how do I get from my home to Tesco's at 300 kilometres an hour and get groceries for

11:09 the family and get home as quickly as possible before the match starts absolutely and it's funny I was in San Agostino which is where they make these things they were building the line when I was there in summer and I was worrying to myself how long would it be before some snooty little kid was ferried to school in this thing and I think I saw one about two months later on the streets of West London so they did

11:30 something right they absolutely did and who doesn't want a Lamborghini SUV just on principle exactly and that's really it's about that creating the desire and causing the question internally it may be a question that then you've not asked yourself before me I certainly managed the rainy evening I've been coming back from a night out for lonely waving my linen Evening Standard what is it quite a smelly taxi that maybe someone just walked out with the McDonald's and maybe it smells like an

11:59 ashtray and the big chaps all surly and he wants to take cash only and it's just a horrible experience yeah this is you know you think about what ubers done and change the question completely change the paradigm and that has affected the entire market because now I'll guess what taxi drivers are a little bit more grateful they're machines that used to mysteriously break down when you want to pay by card don't break down anymore it really has changed the game and that's

12:24 it changing the question proving you're different is what category design is all about the advantage it gives sales teams who deploy it ya know welcome back to the sales piece in a second but I want to challenge you because there's a school of thought particularly in technology where you and I grew up that category is something that decomposes or maybe composes and shows up in real life as a Gartner Magic Quadrant and what you're suggesting is a little bit the

12:49 opposite that you've got to change the game and hone in on the different and carve out some space which would seem to suggest that it's not up to Gartner a Forrester the old-line group anymore what's your take there so when we're consulting on category projects with leadership teams we always insist that CEOs in the room no disrespect the CMO may not be there pat but the CEO and there preferably the founder is in the room so we can get right to the heart of

13:13 the problem and when you have those open and often quite vulnerable conversations with people whose genius is created with the technology that you're talking about that's when you find where the difference is now if I flip that forward and imagine that that you know somebody's created a product and typically this becomes a marketing issue and you know the sales teams to crying out for give me sir proof points what often happens all too often in my

13:37 opinion is that God gets called in or choose your vendor your own list of choice mm-hm and what really happens there is you take your different and you nail a 2x2 matrix around it that somebody else has decided is where you will play and we call that putting the nails in your coffin because once you've agreed complicit ly or explicitly to be part of a Magic Quadrant or a wave or whatever whatever you want to call it your fate is out of

14:03 your hands they will put you somewhere on a map and they will decide where that is and that is the exact opposite of proving what your difference is your difference will come from those key insights that the start of the journey of the catagory build where you see exactly what's out in the market and how you tackle a problem differently I honestly think that one of the worst things you can do both from a marketing spend point of view and more importantly

14:28 from a catagory point of view is call those guys in early now there's a role for all of those folks when you think about middle funnel decision-making and where they do some really useful work about consulting on the realities of implementing projects and putting technology in you know but is the sales strategy and a go to market strategy it's just asinine I tend to know a lot of people who would agree with you let's hold on there take a quick pause and pay

14:54 the bills and we'll come back to get some instruction from you on how do you actually one of the foundational blocks to bring a category to life stay with us we live in a subscription economy you're only as successful as your customers and that requires a mindset shift from what's our strategy for the customer - what's our customers strategy and how can we help focusing on your customers needs and providing value in every interaction is critical to building

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16:26 sustained revenue growth and sales success visit Alta Phi comm today to see how they help accelerate sales performance for some of the world's best sales teams including Autodesk Comcast ge Honeywell Salesforce tableau and unitedhealth group and with that we hand it back to Patrick and his discussion of welcome back we're getting a deep dive and an instruction from Paul Mar CEO positive on the

16:58 critical importance of category and Paul when we left off a second ago you were talking about the fact that hey there's a role for analysts but creating the category is not it that's more down funnel and that's farther down the maturity curve so I'm a CEO I'm a senior executive or Sales Leader and I'm thinking we've got a carve-out are different we've got a creator own space and and build a category give me the foundational elements about

17:23 what's required to bring a category to life sure thanks yeah I'm sorry if I call the analysts asinine man they're probably a little better than that but it's sort of from the heart so how do we start with category engagement well the first thing we do is I mentioned previously is we really like to get into the minds of the founder technical leads and the guys that have really created the technology because from them we will

17:47 find what we're looking for on the gold and the category is normally the problem that you're solving and we could be a bunch of closely related problems but describing the problem that you solve is surprisingly hard you will know this too but in terms of just getting what the first building block out of a bunch you've found a discovery and insight is is a thing called a POV or point of view which reads somewhat like a film script

18:09 but that document which may be no more than like a page and alcala pages of text is can take 30 plus revisions and as my latest obsession is is sleep and some great books on the power of sleep and for helping the creative thinking those 29 30 revisions may have to be subsequent days so they may be late you may go to a session and sweat on the problem then you know a smart thing to do is up and leave it for a weekend or a

18:34 few days come back at it chew it again and then just always with this very very high bar or is this point of view sufficiently different than everybody else in the market so point one is the founder discovery and then the point of view when you have that you can get close to naming your category again a process that could take dozens and dozens of iterations often does maybe you wanna share some of your stuff it

18:57 with CRO that'd be interesting and then the other bits you need a blueprint which is you can think of a blueprint a little bit like what they used to call them architecture a good way to do to build a great one of these is to think about the various personas that you've gotten and how can you fit all of those guys onto something that you can chalk and talk and whiteboard you know sort of like some

19:16 architectures not all but you know in a blueprint highly graphical format and then as you evolve when you start to see a little bit of future you go to a stage which is the fro to standard sort of consultants you know the current and the future States and then build out your ecosystem with who you see as players not just today but in the future when you have all of that done which is typically three to six months worth

19:38 depending on how fast you could move and really about decision making because this is about change management you'd then move to it strike cadence and you start figuring out how you're gonna take the outside world and let them know all about your category give me the two seconds on the strike because I heard and Christopher Lochhead interview and one of his insights around strike particulars a smaller or an insurgent trying to build brand and sales and

20:01 category is it's really tough to compete with the big guy so part of the inside around the strike is trying to crank up the volume level for a much shorter compressed period of time to really put a dent in universe give me a little bit more color from your perspective on what a good strike looks like and how do you catalyze the momentum of of trying to create a category in a way that becomes visible to the outside world yeah okay

20:24 so we're all in the tech marketing space and it's a well-known statistic the one thing that leads up a lot of your marketing budget will be events and we mention of good friends that in the analyst houses you have amazing events that are really expensive yeah money - there's the sticker price and then there's the all my sales guys are on Abby's looking at their iPhones price which is the you know lost productivity priced and then there's often the price

20:47 which is the opportunity cost what if those guys were actually out goes those and girls are actually out in front of customers on zooms selling as opposed to standing under a big expensive booth that's been shipped off around the world right and so when you go to do when you take your category out it's going to involve some marketing that's how you amplify the message and some elements of marketing are very expensive and chew up a lot

21:12 resources like events other elements of marketing don't need to be so it's pretty low cost to do LinkedIn and Twitter and social campaigns PPC SEO love that sort of stuff but that to me is just rolling thunder' that's low level works all the time not terribly expensive of course you should be doing it and then the danger is once you have the big items budgeted so that you're on several events and you've got your low level stuff going

21:36 everything else becomes sort of peanut butter afterthought we'll just do it without paying attention to it whereas strike idea takes away from all of that and it says let's look at my spend in its entirety let's figure out how to punch a hole into the stratosphere not all day every day because that's unrealistic but aligning everything you have to make a push at the right time so that involves everything so that involves the campaign's the branding

22:03 campaigns you've got running if you're gonna do a rebrand see great things to put into a strike it will involve a sales training to make sure everyone's aware of what the new strike messaging will come back when we're at Mercury we had a freeze on product development so if the guys didn't make the didn't get stuff into the release reduce slightly different now continuous releases but everything from sales through to products and engineering through to marketing was all focused on moments in

22:27 time when you could punch above the stratosphere get the big guys and then if you needed to because the budgets restraints just duck back down lick your wounds and stay ahead if you're not there already the king is well liked fight to see a guerrilla war fighting on all fronts it's just a smarter way to get your message and get your category one totally and actually what you're drawing to is so give me the outcome in

22:49 terms of sales or give me and give me an example of that because you want it what I hear you saying is go big maximize the effort everybody on the team is involved from marketing to sales to product to operations etc etc but really what I want to see is coming out of this thing is I want to see some forward momentum and some pipeline and some sales so what's the impact on sales yeah great so

23:10 we're working right now on an engagement with a European software company and the outcome for sales or the influence on sales of this cat we work has been significant so straight off the bat there was some changes with products and they would wait away products we change all that but in terms of go-to-market they looked at the sales they had these 20 products they looked at which products were actually selling and which weren't and when doing that analysis they realized

23:35 actually really only about two of their products possibly one of their products really really mattered and then when they looked at that and who was selling that it turned out that there were just a very few people the CEO included who could make those sales so our work on the category changed their entire thinking about how the sales team functioned we came up with a new POV for them we recommended a strike strategy and one of the first things that they've

24:01 done and this is highly recommended for sales teams for strike is they started certifying people on their new POV so from a sales perspective you are now not going to be able to make it effectively make your number but you will not be able to do high level sales engagements unless you're certified on the point of view and so how does that what does that mean from a day-to-day basis so now they will be taking some of that money that

24:22 they used - peanut butter on things like events which was very hard to measure and lots of sales teams involved and they will be doing one on one executive dinner type events you know about this yourself Pat where you can get close and personal on eyeball customers talk them through your difference on a very personal basis now these are not these are not inexpensive not insignificant uses of time but what it means from a sales person's point of view is hey I

24:47 have to get somebody to that table so it's really clear where my value is to the board right B I get to checkout line and I and I sheet show the skills they've just been certified on how well I can talk to the category and also it means that they have if they plan it right and they get their strike timing right they strike just ahead of when they need the sales so they're not asking for sales by the time when the

25:09 customers not ready they know that about the cadence they know they're gonna be popping up couple of times a year and they know when they need to put a squeeze on and they're not speaking when everybody's there at the Dreamforce we'll go out there or Forrester event all asking for check signings they've done their work ahead of time so it fundamentally changes the way that salespeople operate and that's I think maybe the most compelling piece of the

25:31 whole thing is the category not only changes the market perception but it changes the way sales operates which is really where the rubber it meets the road so I know you're a busy guy you got a lot of things going on two last questions for you Paul so first give me an example of somebody from a sales marketing leadership perspective that you worked with that stands out as best in class or taught you something that you take with you as

25:55 you advise clients and work to move the market now sure I'll pick on Bill Connor he's the chief executive officer of a company called SonicWALL out of Dallas Texas and Bill is just one of the most compelling spokespeople you've ever met were the most fantastic speakers I believe his background either related to the church was certainly preaching in some way and that is obviously a clear advantage for a salesperson but really whilst he's great in front of a room one of the

26:23 things that I've noticed he does just on a personal basis that really gets his team fighter and come-ons great loyalty this a guy whose company has 18,000 resellers of its products is that when he commits to something he really commits to it and when he's with you one-on-one he will come home exactly what it is that he said he would do and has done an example of that would be I forget the exact number but whenever

26:46 he's one-on-one in it with executives I watching pretty closely he reminds people exactly how many millions of lines of code he has created since they last met and that demonstrates absolute commitment to the folks that are trying to sell his products it differentiates him highly from a lot of people are just analyzing all the products in the space and it proves on a personal basis that he cares that you guys aren't there selling no he has your back he's gonna

27:13 put brand new products in front of you so very impressive individual if you get a chance to meet with him strongly advise it yeah sounds like the type of guy we need on this program I'm out listening to this and I need some help getting my message in order or maybe more importantly I need to rethink my category and my entirety of my go to market strategy how do I get in touch with you Paul thank you so yes so you

27:37 can just go write my website which is www.hyken.com you can get hold of me at P Mar that's Papa Mike Alpha hotel occur review at positive marketing comm and if I'm not out to sell I'd love to help anybody's listening spell we love to help create categories and we want to make the best categories we can for some of the best people we know fantastic well Paul I appreciate your time and the focus on different is what

28:01 sells and the the need to have a point of view that is so sharp and so explicit that even sales people can own it and deliver it every single day is being keys to the castle I thank you very much for your time and for your insights today and wish you and the positive team all the best thanks Pat thanks guys thanks everybody I'm great week you've been listening to another episode of revenue optimization radio busy host Patrick Morrissey from

28:29 ulta PI right here in the funnel radio network for at work listener you