Positioning and Pessimistic Product Thinking

Mar 14, 2024

One of the neat things about being a consultant is that I get to see patterns across dozens of companies that I didn’t see when I was an in-house exec. One pattern I have seen that holds companies back from nailing their positioning is what I call “overly pessimistic product thinking.” This is where the team has decided that their product is an undifferentiated loser despite all evidence to the contrary.

Marketers are often worried about being overly optimistic.

I’ve found that marketers generally assume that companies are overly optimistic about their product’s ability to win in the market. I think this comes from the (often unrealistic) pressure on marketing to deliver big results quickly. I’m not saying that some teams aren’t overly optimistic. For example, I’ve seen several companies that started with a much better product than their competitors and clearly differentiated value, but they didn’t seem to notice as fast-moving followers largely closed the gap or surpassed them. Part of the reason my positioning exercises focus so much on differentiation vs alternatives is an attempt to combat that. We don’t win deals where the alternative solutions deliver business value beyond what we can.

Product pessimism is worse.

But interestingly, I’ve seen the exact opposite happen in a way that I think is even more dangerous to teams. These teams become so fixated on the deficits that their product has compared to competitors (real or perceived) that they fail to see the places where they are clearly at an advantage. Because they are blind to their strengths, they fail to strongly position themselves around those strengths. I have found that this attitude often starts from a well-intentioned but overly competitor-obsessed product team and spreads from there - usually first to marketing and then everywhere else.

Gaslighting the sales team

In positioning workshops with companies that have fallen into this trap, the product team will strenuously argue that the product is far behind the market, and any well-informed prospect would choose a competitor. These product folks tend to fully ignore their own sales teams. When folks in sales talk about a specific won deal, the pessimistic product team will argue that, no, the prospect was simply incompetent at evaluating the options - they picked us even though we were clearly inferior. Every deal was a lucky one, they argue. Growth will eventually stall. The product roadmap is a long list of “catch-up” features - designed to get the company to a point where they are equal to competitors (of course, assuming the competitors deliver absolutely nothing in that timeframe). When we get to the part of the positioning workshop where we list the company's capabilities and product where we are superior to any alternative, their lists are incredibly short - if they admit to any at all.

You are winning in the market - you don’t know why

Here’s the remarkable thing - these companies drive significant revenue (generally more than $20 million annually, in several cases, hundreds of millions) and are doing so with significant growth. I wouldn’t be working with them otherwise. Every day, customers choose them - over the status quo and over a shortlist of direct competitors. They are winning business in the market, yet the team is blind to the reasons why.

Product pessimism = commercial poison

Product strategy is not my area of expertise, and I’m not here to argue for or against working to match a competitor’s feature set in the future. Positioning, however, is all about clearly communicating how we win in the market right now. From a positioning standpoint, an overly pessimistic attitude is absolute poison for the company commercially. How can we effectively talk about value the team doesn’t recognize? Worse, this thinking ripples across the organization.

In sales, this pessimism creates trouble. Newer sales folks will quickly blame product shortcomings for any lost deal, and experienced salespeople will hesitate to get the product team involved in deals where their pessimism might lead to lost business.

Marketing, on the other hand, will start to worry that the sales team’s opinions can’t be trusted and the product team isn’t giving them anything they can work with. They are then forced to rely solely on customer research to solve the “riddle” of why we are winning deals - research that can be expensive, time-consuming, and frequently poorly executed. Don’t get me wrong - as a marketer, I love (good) research! But if that’s our only trusted source of market knowledge, our understanding of customers will be one-dimensional at best. If a B2B marketing team starts every conversation with “We don’t know anything until we do customer research,” - it’s a sure sign the company has some deep cross-functional dysfunction.

Four signs of pessimistic product thinking and what to do about it

What does pessimistic product thinking look like? What should you do if you see it at your company? I don’t have all the answers, but here’s what I’ve experienced and a few things you might want to try.

1. Symptom: The internal definition of an ideal customer is extremely broad, leading the team to conclude that they should win almost every deal. Every lost deal is “proof” that the product just doesn’t cut it.

If the company doesn’t know its differentiated value, it will be difficult to recognize a prospect who cares a lot about that value. In B2B, we should not try to sell to everyone. We should obsessively fight for deals where we know we are the best solution for the customer but we should also happily walk away from bad-fit prospects early and often in the sales process. Many times, a lost deal is simply a deal we should have disqualified earlier in the process.

Potential remedy: Narrow down your ideal company profile. Ensure teams participate in win analysis.

Companies with weak positioning often have overly broad best-fit customer definitions. A good positioning exercise can help the team understand what value the product can deliver that other alternatives cannot. Once we understand that, we can ask ourselves - “What are the characteristics of a target account that make them really care a lot about the value that only we can deliver?” The answer should help us get a much tighter definition of what an ideal customer looks like.

I’ve seen companies where the product team is only involved in problematic, “bad-fit” deals that the company ultimately loses. I believe this can give product teams the false impression that the current product falls short for most prospects instead of just the problematic ones. I believe win analysis is more important than loss analysis because if we know how we win, we can figure out how to win more. Product and marketing teams should be getting regular exposure to wins so they understand where and why the product wins over the alternatives.

2. Symptom: The product and marketing teams have a much longer list of competitors than the sales team. When asked about differentiators, folks will point to the long list of potential competitors as “proof” that the product has none.

By definition, the product management team lives a little more in the future than the marketing and sales teams. The product team understandably needs to consider “horizon competitors”—products that don’t currently make it to a prospect’s shortlist but might at some point in the future. Marketing’s weakness is that we love great marketing and often assume noisy companies are causing us pain in sales.

Often, strong differentiators get ignored because folks can identify a competitor that has the capability and can, therefore, deliver the value we deliver. But if that competitor never shows up on a prospect’s shortlist - we can and should claim it! We win deals based on the value we deliver that the customer’s other options cannot. It doesn’t matter if there is some other company your prospects have never considered that might be able to do what we do - we are only getting compared to the status quo and the shortlist.

Potential remedy: For sales and marketing purposes, narrow down the list to the set of “true” alternatives. Respect what the sales team knows about this.

Often, when teams narrow down the list of alternatives to just those that prospects seriously consider in deals, the differentiation becomes crystal clear. Sales knows what the status quo is in a prospect account, and they know who else ends up on the shortlist. Everyone else in the company should pay close attention to what sales has to say about who we really compete with.

3. Symptom: There is zero respect internally for the sales team’s opinion about where and why the company wins deals

Hey, I get it - sales has a bad reputation for blaming lost deals on “that one missing feature” and pushing the product team to prioritize features that likely would never have won the deal, regardless. And every marketer on the planet has heard sales complain about lead quality. However, we cannot ignore that the sales team spends much more time with customers across a purchase process than product or marketing ever could. There is a skill to extracting good information out of sales professionals and it takes an effort to develop it. Highly experienced salespeople are an incredibly valuable source of information that product and marketing teams need to develop.

Potential solution: Create opportunities for product, marketing, and sales to work together where everyone’s input is valuable

Positioning work can help bring the teams together. Sales input is critical to positioning work - they understand how a prospect works through a purchase process. They know a LOT about why customers buy and how we win. Putting the teams together in a situation where sales aren’t there to push a feature request or blame marketing for lousy leads is a decent start to building some productive cross-functional team trust.

4. Symptom: The product team sees themselves as “problem identifiers” instead of value architects.

In the worst cases of product pessimism I have seen, the product team seems to take pride in pointing out problems with the product and does not see themselves as responsible for delivering truly differentiated customer value. The product roadmap looks like a game of catch-up - new features are prioritized to fill perceived gaps between the product and the competition.

I listened to a great conversation between Lenny and product management consultant Marty Cagan this week. Marty talked about “feature factories” vs. what he calls a true “product” team. One of the main differences is that product teams are empowered to deliver outcomes for customers rather than just features. I suspect feature factory product teams are inherently more pessimistic than empowered ones, and perhaps this is the ultimate root cause of what I’m trying to describe here.

Potential Remedy: Ensure the team understands the company’s distinct point of view on the market: How do we win business today? How will we win business in the future? Why us?

Customers have problems, and there are many different ways to solve them. Features don’t win deals - being able to deliver business value that the alternatives cannot is what wins us business. Everyone in the company needs to understand the “Why us” story. The team needs to deeply understand why customers choose us and how we win in the market today. That doesn’t mean we aren’t striving to be better! But it does mean we understand and respect where we win in the market today - complete with the limitations of that.

Pessimism is dangerously contagious.

It spreads to sales and marketing and makes it exponentially harder for those teams to focus on where and how we are currently winning in the market. This kind of pessimism eventually sucks the winning mojo out of the entire team.

Getting the teams together to work on positioning or crafting a sales narrative is a good place to start aligning them more around the strategy and story for winning. An outside facilitator can also help identify any baggage the teams bring with them—whether that baggage is overly positive or negative.

Am I the only one that sees this? Sound off in the comments.

Positioning with April Dunford

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