Podcast Transcript

[00:00:42] Sean: G’day everyone, and welcome to the ScaleUps Podcast, where we help first time Founders learn the secrets of scaling so they can fulfill a potential of their businesses, make bigger decisions with greater confidence and maximise the value and impact that they can have in the world. I am your host Sean Steele and I am joined today by John James - Director at James Hammond. Good day John, how are you?
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[00:01:01] John: Very well, Sean. Yourself?
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[00:01:02] Sean: Mate. Very nice to see you again, we know each other. I'll give a bit of context before we get too far into it, but fundamentally, you run a growth marketing agency. You are primarily focused around services and SaaS businesses. And you also host the champagne strategy podcast, which I love. It's about strategies. It's about growth. It's about marketing. It's about tech and a bit of champagne thrown in for good measure. Well, welcome mate. We've known each other for a few years now. If I could recall correctly, I was chairing a project advisory board for a client who was building a global expansion plan. And part of the requirement was that we needed to scale up the lead-generation or the sales and marketing efforts, essentially. And I said; hey guys, I can help you on the sales side, but I'm not really the lead gen guy. You know, once we get too far into the metrics and the actual strategy for execution on marketing, I'm probably going to lose a bit of credibility, so we need an expert. They found you, you and I got to partner on helping this client. And I was super impressed on the work that you did on the positioning and the messaging, the sort of the stuff that ended up finding its way into their landing pages and what media they used and how they measured and their metrics and how to sort of cut through the noise. So, in short, I've referred a whole bunch of clients to you since, all they've been impressed. And the majority of them, I haven't sent to you for sort of marketing execution from a metrics and analysis perspective, but more about positioning. And what I mean by that is I needed someone to work with these clients to help them figure out how to position their brand and product, and then have it supported by messaging strategy that was actually going to get cut through because these businesses are generally going very well. They're succeeding, they're mostly services businesses, they're profitable, they're happy, but they've been growing with usually a pretty unsophisticated approach to marketing. They haven't had a lot of structure. They haven't had a lot of expertise and now they want to scale, and that's great. But to scale, you have to kind of get past just sort of word of mouth or referrals quite often, and you need a bit more juice. So today for us is about, this is like the longest that I've ever, today is about unpacking, positioning, examples of what good positioning sort of sounds like, what bad positioning sounds like, and you're the interdependent ingredients around what sort of makes up positioning and how's that different from messaging and so on.
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[00:03:19] John: Yeah, well, that's great. I mean, you kind of just said the preamble, which is great. So, we can just dig right into a bit of the meat and veg of how to do it. But I just want to caveat, because when we're talking about position, there's two elements. There is brand, which applies to the whole organisation and multi products and there is products. So, do you want us to just sort of talk about just combined, like the product offering, which includes both in this conversation? Or should we do both independently? Maybe just combined. It's probably easier, I think.
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[00:03:49] Sean: Yeah, let's go combine, I think. Because there's often, as you said, they're a bit independent, right? You might be able to position a product, but then someone looks at the brand and the brand is really inconsistent. So, I know you're always thinking about how the whole thing happens together, so let's do that. Alright. So, talk to me about then right up front. Like what is positioning? How's it different to messaging? Where does like brand and product and messaging, how do they sort of interplay? Start there.
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[00:04:11] John: Yeah. Look, the science isn't really strong in positioning, and that’s a controversial statement, but ….
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[00:04:17] Sean: Especially from you, because you're the man who always produces models and I'm like, where does he get the time to produce these models? They're always so well thought out. They're backed by evidence and you're like the evidence guy.
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[00:04:28] John: Yeah, because there's a lot of like commentators out there and people who will do positioning and a lot of it's just based on anecdotal evidence. And it's really clear to make the distinction between the two. So, the science isn't great on positioning. Why? Because it's actually so complex and there's so many variables that go into positioning. But to answer your question, positioning is just where do you want your offering to be in the minds of your customers, and the last four words of that are the most important and the hardest, the start of that sentence. It's very easy to do. And you'll see this pop up in brand positioning, brand strategy decks that maybe a creative agency will do, or your consultant will do for you. And that's great saying that we want to be like this in their minds of customers, but actually getting into the mind of customers and for that to be accurate, that's the hardest thing.
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[00:05:16] Sean: It's like, I always talk to leaders about that when we're talking about, maybe they're having a challenge in a difficult conversation. I'm like, your communication is not effective unless the intention for the communication was transferred. Not just the words. Like they can hear the words, but if the intention is not transferred and that's not what they're hearing back then, that communication has not been successful.
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[00:05:36] John: Well, it's the same as brand, like brand is essentially a little piece of real estate in someone's mind and it's inaccurate, it decays over time. It's a little piece of real estate that you own, but unless you're testing and figuring out if it actually exists in the first place, it's just all discussions and talk. So, I'm really for the latter half of that position exercise, anyone could do the front half and go, we want to be like this, we want our product pitched like this and seen like this in the minds of the customers, but getting there is where the value is. And that's the sort of area that I deal with. And that, we are dealing with lots of different humans and they're all perceive offering in different ways and that's where it gets really complex. So, I suppose, coming back to what you said at the beginning, defining what that is relative to all other competitors in the market is really key. So, if I'm using the same positioning as somebody else, then it's not unique, and it won't really have any effect. And the best way to approach positioning is from reversing this perspective, going; if I'm a customer and I'm looking at all these different offerings, which one do I perceive as this and that and that, and that's the ultimate test of positioning.
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[00:06:43] Sean: And how do you, yeah, I like that. So, where does messaging fit into that? So, is the positioning figuring out where you want it to be in the minds of your customers? And you're like, okay, now that's clear. And I've sort of reverse engineered that given what they can see in the market. But now I actually have to get in there, like, I have to cut a slice of their brain and get this thing to land in there. Is that where messaging comes in?
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[00:07:05] John: Yeah. So messaging, specific messaging strategy precedes copywriting, which is like the actual words or the video story, the actual dialogue that you're hearing. Upstream of that is messaging strategy, which is how do we want to talk about ourselves to the market? Positioning is above that again, and it's more like, where do we want to be in the minds of the customers and this affects what I call or categories. And you may have heard pitching your thing or category creation. It's a bit of a buzzword in some of the SaaS world or software world, right? There's this very famous group, I think they call the Category Pirates. I just interviewed Karen about this and she's a big fan of the book. I think it's called "Play Harder” or something. Anyways create this bit of a cult around category dominance and being a category king. So, instead of being labelled as, I'm a service station that sells gasoline. You are positioning yourselves and you want to own convenience or something like that, which is a bad example, but that's the difference here in terms of like thinking broader beyond what your product is and what it does, adding bits of brand in there and going, okay, where in the world do we want to land and own some space in the whole market and really create a mode around that and protect it and be really clear about what we are and what we're not. And then we want to be known if we do that really well, the customers will sort of resonate with that. And then when it comes to the purchase choice, we'll be very distinctively different to the other ones they may be considering. And there's a lot of science and this is where the science comes back in, a lot of science about being distinctive, being that will attract our brain, because our brains are hardwired to notice what's different, not what's the same. So, it's less about being different for different sake or differentiation, which a lot of people talk about and being distinctively different. You could do the same things you could have, you know, I sell shirts and he sell shirts and they sell shirts, but then maybe there's these other elements that just this really cool idea and customers start to think, well, they're not just selling shirts, they're doing something bigger than that. Like Patagonia, for example, like what does Patagonia do? Do they just make t-shirts and really expensive puffer jackets or whatever, or is it something more? Which space do they own? And that's where it gets really interesting. So, there you go.
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[00:09:26] Sean: Okay. I like this. So, one of the brands, just as you were talking, one of the brands that was just filtering through to the top of my consciousness is Cirque du Soleil. I remember I had this fantastic CMO who worked for me a while back. And one of the first things he sat down with me is he talked me through Cirque du Soleil example where he said, you know, If you think about the entrance of Cirque du Soleil, and you put up this sort of this map of variables, he's like, here's all the, I guess essentially the features of the product of going to the circus. And that is essentially the space that Cirque du Soleil was competing against. You know, people who are willing to spend some money to go a kind of entertaining experience outdoors. So, what are all the functionalities. Ticket prices, do they have animals? Is it human performers? Does it have any music? Does it have dancing? Is it choreographed? Does it got fire breathing… like all these sort of things. And he said essentially, the biggest problem with trying to compete and looking at all your competitors in a sort of vanilla way is that if you try to compete on everything they already do, and then just outperform on a couple of things. First of all, it's not distinctive because people can't differentiate you really from the others because the difference between you and them is not big enough.
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[00:10:39] John: It's marginal.
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[00:10:40] Sean: It's marginal. And two, it's really expensive because you're trying to build out all the same features. And then you're trying to outperform on a couple and all of a sudden, your margins are just getting kind of eaten and you come a bit sort of nothing to no one. So, he said, well, if you think about Cirque du Soleil, they said we're not going to have any hero performers, so there's going to be no big brand names. There are no heroes in Cirque du Soleil. Second, we're not going to have any animals. It's going to be humans only. Third, and then they started looking at some of the things that people hated about circus. Okay, well, just the whole grubbiness of the tent and the dodgy seating and it's cold probably if it's outside at night-time and all this sort of stuff. So, they're like, we want amazing venues we're going to add dance and choreography that's never been in a circus before. We're going to add music at a level that's never been in a circus before. We're going to train these guys with an inch of their life as professional perform. Like they started to double down on all these other things, but they chose not to even get engaged on a whole bunch of features. So, by the time they'd finished that whole sort of strategy and they brought to life, it was like, as you said, it was like, in the service stations, but owning convenience, these guys were like, well, it wasn't about circus anymore. It was about this sort of outdoor experience. And how do we get people who would've come, who would go to the opera normally to actually come to these outdoor experiences because they value the, I guess the sort of appreciation of beauty and excellence. And so, I think it's always such an interesting example of how someone really kind of, maybe that's a category creation kind of opportunity.
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[00:12:06] John: It is. And this is really interesting because you kind of just got me thinking here. The way I break down and do this for people is I analyse their category entry points and there's a science again, CEPs or Category Entry Points. And other people call it jobs to be done. Or JTBD like Clayton Christiansen. He's a big guy in the tech world around, people are buying a product to do something with it. So, in the case of the entertainment, they're not buying a circus, they're doing a family outing or they're going to be entertained, that's the category that you're in. You're competing not just directly in your category of circuses, but you are competing in the category of entertainment, offsite entertainment, live entertainment, right? So, that means you're competing with the theatre, which obviously they took a lot of the theatrical components to put into their show. You're competing with events, live music things, obviously a lot of music in that circus. And then maybe going to an athletics event or some sort of other similar sort of categories. So, what happens is that sometimes when we are working in a business and like you said, we're hitting this point where we're going; how do we expand more? You're exhausting your oil well of market potential. So, the way I think about customers, I think of oil well. So, we've got this little defined market. That's this much. We pump up all the oil and it's going to get depleted, and then to grow, we need to shift to another oil well, and once you do that, a couple of times you, maybe you're shifting it and you're expanding outside your sort of product comfort zone and product offering in a whole. And then you're like, well, what are we now? And then you're like, well, how do we define ourselves? And it becomes really complicated trade off answers to this question. And this is what I help customers and businesses unpack is; well, where are we now? Where do we want to go to? What space do we want to own? And these are really hard questions to answer. And some companies, the answer is just stay in your lane, double down, maybe cut some things and focus even more narrow. For other companies, it's let's own this space. And if we add on that and we found products who buy our product for this often also buy this other product from another company. And maybe those two things are related, and this is what looking at the problem definition or problem solution of your product offering is really important. So, you analyse the buying situations in the context of the sale, and like, okay, why are you buying that product? What is it for? Example, you were moved to Coolum, right? And your sons, you're looking for schools. So really interesting, people go, okay, well, why did we send people to private schools? Is it for education? Yeah, of course. Often what comes out if you ask someone explicitly is, are we want to send them there for a better education. What does that mean, better education? And then they'll say, well, that means better quality teachers, maybe better curriculum, a bit more oversight, the teachers can be paid a bit more. So, there's a bit more that sort of market mechanism ensuring the quality of that school because they're reliant on private funding. That's a really good answer, but often, the recent people pick school assistant, none of that, I mean, that's sort of tables sticks, right? They all do that. The biggest thing…
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[00:15:06] Sean: Hygiene kind of level.
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[00:15:08] John: Yeah. It's hygiene level. So, it's like, okay, well now there's like 50 schools, it comes down to locality, right? So, it has to be somewhat convenient, not always. There's catchment areas and things into that, but also it's association, it's association with other parents of higher esteem of similar level for networking opportunities, and to get your sons and daughters are better rung and step up in life so that, you know, when they go for a job, they have a sort of network of other people who have a higher socioeconomic standing and you can leverage those connections. That's the reason you spend 20, 30, 40, sometimes 80k a year on private school education for your sons and daughters.
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[00:15:44] Sean: Well, actually, if you follow that example through, and then you think about positioning, if the school is trying to position themselves as exclusive, then they also need to ensure that sort of up and downstream that sort of feeds through everything. So, where does that play out? Okay. Well, some scarcity, you may or may not have actual exclusivity, but all of a sudden you're going to be charging $3,000 to put the kid's name on the list. Why? Because it feels more exclusive.
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[00:16:08] John: They use a lot of those sales tactics. They insert friction to the sales process. You know, it's like get on a wedding list. Oh then, oh, maybe, maybe, and then you actually want them more and you'll pay more. It's funny how they do that. Yeah.
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[00:16:18] Sean: That's interesting. Okay. So, what would be… sorry.
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[00:16:21] John: No, you go, I mean, I sort of finished the school example, but I mean, this is expressed in so many different ways, but if you don't understand the buying context, the buying situation, all that happens is that you're haling will be tunnel focus in terms of like the most tangible aspects, most obvious aspects of your product offering. And I won't think beyond that, and that's a bit of a risk if you want to grow and expand and really own a portion of the market, because like you said, you're just competing on product features and price, and it sort of sends into the discount trap, sort of one up and ship spiral that can be really strategically negative.
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[00:16:54] Sean: So, what do you say to a client, I'm just imagining a situation where a client comes to you and says; John, our number one differentiator is quality. They're a services business. And you're like, okay.
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[00:17:07] John: What does quality mean?
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[00:17:08] Sean: Yeah. So, gimme an example of like, how that conversation would play out.
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[00:17:12] John: Yeah. So, I mean, quality is one of those things like product offering quality. In a services context, quality is very variable in terms of the perceptions, when we've got a physical product. And like I said, I only work in services mostly, I do some work in product, but mostly services. Services has a lot more diverse perspectives of what is quality and what is value and what isn't, because so much is dependent on personal perspective because you can't touch and feel and hold the product often. So, what a lot of businesses do is they try to create a physical representation of the service with booklets or charts or PowerPoints and that kind of thing to help visualise that quality, but essentially, you're buying something inherently intangible. So, that's your first thing is like the variability in perspective over what is quality. So, one of the things you really want to delineate is what is table state's quality and what is quality that people are prepared to pay for that is different in the market. And when we're working in the business, in our business, we can really lose that perspective because we understand more via the curse of knowledge. This is a sort of human bias by the way that the more you know about your product and your category, the more you assume everyone else to know the same thing as what you do. And there's never the case, which is why the longer you are in your business, the harder this is and the more severe this bias becomes, which is why you always should get independent people or do rounds of market research on a really consistent basis to get that sort of baseline. So, when customers are making decisions, they're often making it without all that context and knowledge of your product quality. So, they don't know and they can't discern the same things in the same way that you can. So, often they're using piecemeal information, a tiny bit that they're using talking to a friend going, ‘oh, what do you think of that? Oh yeah. I think that company is good or, yeah. Okay.’ They don't understand why it's all just a vibe and a perception. So, the problem with quality is if you focus too much on the actual product offering engineering that too much, that doesn't increase the value perceptions by the customer, that is just a road to nothingness. It doesn't have any effect on your market. So, yeah, value breakdown is really key there.
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[00:19:22] Sean: It still look really interesting, you know, when you said, okay, there's like table stakes quality, and then there's, perhaps there's another level. And I always think, well, how are you going to prove that, like, don't write that you do quality stuff and don't stick it in your values and so on and so on, unless you're actually going to really defend it, you know, like if it's that big and you truly believe that you are so high quality, show me your guarantee. Show me the risk to you. Show me the penalty to you if you haven't done it right. So, as an example, I interviewed, Marc Meili, guy from Queensland who runs a big business called ProTech. They’ve over 16 years, went from zero sort of labour hire staff to 4,000. They got 4,000 staff and they realised pretty early on and he was an engineer by trade, and they realized that the most important thing in their business was the calibre of the person who showed up on site. Because you know, someone's like; Hey, I need five people to do this tomorrow. Okay, cool. Well, those five people are the brand. Like they are the entire brand experience practically. So, he is like, well, how are we going to engineer our processes to ensure that the right person turns up with the right information with the right attitude, et cetera, et cetera. And so, they put in all these big barriers, barriers to kind of getting a job through them. You know, they did all sorts of physical testing and mental testing and personality testing, and they built onboarding programs and so on, so on. And so, by the time that somebody showed up on site, they could have confidence in putting their brand behind that individual, even if they'd only met them three weeks ago. And so yes, that means they're a bit slower. Yes. It means they're harder to get jobs through, but the result is they've actually engineered the entire business around quality because that's what they think. And so, when you think about the positioning in that business, their ability to actually create messaging or a kind of cut through in the mind of their customer, because they're actually differentiating their processes to support what they think is the most special, most unique thing about them becomes far greater. And as a result, they scale to 4,000.
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[00:21:16] John: Yeah, I suppose you touch on good point here. I mean, the people are your product in services often, so like, if they're not high quality, then what are you doing? Like ‘show, don't tell’, like you said, like in marketing, everyone can talk about it. And this comes up to position. Anyone can say that they're like this, but unless they actually are in the minds of the customer, this like show it to me, don't tell it to me. And the same thing happens with frontline experiences. So, often they'll cheapen out on getting some kind of frontline phone answering person. That first interaction of a new prospective customer is the most critical make or break moment you can ever do. If you're going to export that to like some junior employer without any training or systems and processes, that's a really, really big risk. That's where a lot of new customer sales fall over, and that is only shown up in mystery shopping. But yeah, look getting back to positioning. I mean, the product quality is one thing, but engineering that quality throughout the organisation is the hardest thing. And in the case of pro core, was it?
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[00:22:10] Sean: uh, now I can't remember. ProTech.
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[00:22:14] John: Yeah, ProTech, sorry. PROCO is a software thing. In terms of those guys, I mean, they were positioning in terms of reliable quality. And when you're doing labour hire, I mean, that is one of the big key things that like either makes or breaks which company you hire. So, it is really important to the decision-making process of customers when they're searching for that. So, in that case, yes, I understand. But let's just say that that firm has two other competitors in the market of the same perceptual quality, which one do you choose as a prospective customer now becomes harder. Oh, what are we just going to out compete on vetting labour hire or maybe it comes down to just the invoicing or the operational efficiency within the organisation in the way that they can get someone out really quickly that's on time that can be briefed, you know, then it comes down to sort of operational hygiene. And maybe that's the way that you want to position yourself in the market. There's lots of different ways to do it. And this is why it's hard to talk about positioning because it's so specific to each company in each contextual situation and it's all dependent on other customers and the competitors in your market.
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[00:23:21] Sean: So, what's another example then if you could give us an example of positioning that you really think's been super effective or some positioning you think has actually been terrible. And it’ll be obvious to the audience just to give us some more kind of meat to chew on around. What does good positioning sound like?
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[00:23:36] John: Okay. I'll use a product example that everybody knows, and then I'll use a service one. And a lot of people don't know, I hate talking about apple, but they've done this very well back in the early days. I remember when I went to school, we all had Apple and computers and I was like, what the hell, everyone else is using PCs. But in the schools, they had a contract for Apple computers. So, they owned the education space very early on. And that sort of went out of a dip and your Jobs came back or whatever. Then their second iteration was they wanted to own this space with creative people. And I was working in early advertising agencies early in my career. Everybody used max in the studio, everyone in the whole creative thing, max, everybody on the account management and business operation side of the agency, all PCs. And I was like, what the hell is wrong with this. And I tried to do things on their computer and I couldn't, I didn't know which keys to press. It was like I was a noob, you know, like I was pretty young at the time. I don’t know how to use computers, but I never used Mac before. I couldn't use them. So, very early on and this sort of coincides of the whole thing, different campaign that really illustrated this in video form, but they owned the cool creative designer portion of the market. Nobody else could compete on that. So, Adobe and then were very close, because all the designers use Adobe suite. So, they made sure that there's really good congruence and updates with those two pieces of software under the OS and Adobe suite. And then that coolness and creative type spread because everybody else wants to be a creator, all designers and creators are kind of interesting people to talk to, for better or for worse. So, they own that space and then they sort of went mainstream from there, but they still hark back and you see all their stuff is all very simple. It's very creative, very visually distinctive. So, they still hallmarks from that initial positioning switch from schools to creatives. So, that's an example everyone can talk to. And now when you're buying Apple, you don't even think about this, but you think, oh yeah, that's actually designed well. Yeah, I'm creative. Yeah, I can create movies and things like that. Not many people do, but you want to, and that's kind of what you're buying into to a certain extent. That differentiates them in the market to just, oh, here's are two gigahertz chips, 60 DDR around whatever with this kind of monitor, like we're just talking about features. And maybe that's a really high-quality chip. Maybe it's a really high quality RAM and everything. And the screen's really 16 pixels, blah, blah, whatever. And when you see this in a difference between if you go to the landing page after this of Samsung Galaxy versus Apple iPhone, you'll see the complete comparison difference between the two. It's very stark.

[00:26:08] Sean: Very similar product, but very different positioning.
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[00:26:11] John: Exactly, they'll use the same chip manufacturers. Half of them, they use the same panel things, use the same battery manufactures. You know, it's not much differentiation there, but yeah, everything else that's very much brand and product positioning. So like, let's use another example. This is a bit of a bigger business. This is an auction house. They do high end auction. So, they buy and sell. They facilitate the sale of high-end artwork and jewellery. And anything else you have in your house that's, you know, we're talking over 5,000 to multiple million dollars per item. So, they sell an auction service and they're always canvasing on the sell side they're trying to get people with goods to sell of certain quality. So, they vet that, like you said, around quality. And then on the buy side, we have to generate people to debate on these things and to buy them.
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So, it's a sort of dual marketplace sort of business, which is very interesting. They used to be called Sotheby's. They had the Sotheby's license to use exclusively in Australia and they did so for the auction category. And then after 10 years, the license was up for renewal and this auction house was run in the early days by Jeffrey Smith and Gary Singer. So, after the license was expired, they just went well, actually, no, we're just going to call it Smith and Singer, the two last names because very important point, they were leveraging the brand and the acclaim with the Sotheby's, which is a very sort of like very old auction house, a lot of esteem and a claim. So, they're always doing the top end of the market, but the two principles running the business, the face of the business that had all the networks with very, very high net worth, very influential people in the country, which I can't talk about, they had very strong relationship with that and that's how they won work and sold their items because through that influence. So, essentially, they'd positioned themselves on a mixture of two personal brands and that filtered down throughout the whole organisation, people came to them to sell their goods and buy goods because they trusted the discerning nature of these two gentlemen. Both of them came from, well, one of them used to be the ex-curator of the NGV in Melbourne. So, he was the person buying all the artworks and managing the artworks on display. So, I obviously had that credibility, but then he'd become very revert in art circles for knowing all the different artists and everything. So, in terms of those guys, they position themselves on a personal basis going; well, who can outcompete a service organisation? You can’t clone those two people, can you? It's like it's a hundred percent defensible. So, they're owning that personal brand space. And when we switched from Sotheby's to Smith and Singer, and this is the best branding thing ever. Like, you know, when people do a rebrand, they get change all the logos and colours and all that kind of thing. They almost kept the same font, they kept the same colours, all they changed for the two words, Smith and Singer. Obviously, you had to make changes on the website and all those sort of materials and everything, but like, it was a very light rebrand. And then there was a couple of PR pieces that went out going, oh, we've changed our name, AFR and SMH and the age and that kind of thing. Anyway, zero negative effect on the. In fact, it went up. So, they do about 50 mil IRR give or take every year. They're sort of leading that category, who can outcompete to people without cloning them. It's impossible.
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[00:30:02] Sean: So interesting, isn't it.
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[00:30:06] John: I didn't have to do much from the positioning side for that client.
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[00:30:10] Sean: So, when you think about, you know, I'm thinking back to one of your early examples, I'm thinking about process, like, you're a Founder. You're thinking I've got a good business. It's doing 10 million bucks in revenue. It's got a couple of million earnings, we're healthy, the business is growing, but I know I really want to scale. When you take a client like that who wants to get the best sort of positioning possible. One of the things that you said first is, you actually need to get into the mind of the customer. So, how do you typically do that?
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Do you sort of organise some customer research? Because I know that was a part of when we helped this client, your first question was, well, let's talk to clients and you and I. Well, I certainly did. I spoke to a lot of those clients. I'm not sure if you spoke to them as well, but that was a big feeding input into the process.
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[00:30:55] John: Well, I read all your notes. Yeah, no, it was great. And this is, again, we want to step out of this reference effect that happens when we're working in our business for our business, as opposed to seeing it like other people do of differing levels of perception accuracy, and different levels of knowledge about the market and the product offering. And you need to be really clear about who those people are and how they see your things. So, you start with like any good marketing. You always start with research and insights and the findings of these can often be counter. How do I say, they could challenge perhaps the principles of the business' existing assumptions. So, there needs to be a mindset within the company that's open to hear that otherwise you get what happens, which is like, you know, like I don't want to listen to that. We are awesome, you know, our product is awesome. I tend not to work with this company. So, the first piece is mindset and willingness to listen, then you do the research, and then you ask them a series of questions, your primary and secondary research. You do three-pillar of customers. You do current customers, prospective customers and people that have churned. So, people who are not customers anymore. And it's really crucial to do all three, because if you just do current customers, you're going to get a buy sample. If you do prospective customers, probably the best, but if you do churn customers, you sometimes you'll find very, very interesting things.
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[00:32:13] Sean: I also, just to chip in there, I often like a fourth category, which I used to do a lot in education, which was, they're a bit harder to get access to, but there's usually a lot more of them because if you think about a typical, you know, if someone converts 10% of the leads or 20% of leads. Well, that means there's 80% of people or 90% of the people who didn't buy anything whatsoever. That's a big pool of people, right? So, you don't need all that many, but I love that sort of the lost category, you know, like lost, couldn't get them on the phone, not interested anymore, not engaging with any of our EDMS, whatever it is. It's like, these are the people who had some interest at some point, they came to you for a reason and then they've disappeared. So, they didn't even buy and then leave. They haven't even bought in the first place. So, what is going on there?
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[00:32:51] John: That's where I'd be.
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[00:32:51] Sean: A gold mine.
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[00:32:52] John: Oh yeah. Gold mine. Complete gold mine. So yeah, and then you ate the results like you did.
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[00:32:58] Sean: John, just before you get to the results, what are some of the questions that you…
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[00:33:03] John: Oh, there's a secret sauce now.
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[00:33:04] Sean: Ah, give us a couple of questions that you think you would ask that would add some value to someone who's thinking about how they do this?
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[00:33:11] John: Well, I'll give you one that, and I can't claim credit for this, because it sort of comes from another colleague in Melbourne, Everett Hunder, who's a very good marketer down there and I talked to him a lot, so credit to him. But he asked people who actually became customers. What was the thing that almost made you not buy from us? And that is really interesting because when I see a, a prospective customer, there's all this series of failure points that can happen up. And that can kill your sale and knowing what those failure points are is really interesting. And this is what I'm saying about, you have to research the buying context behind this and all the steps they go through. Some people call it customer experience or whatever. It doesn't really matter. You just have to find out where these failure points are in your business. And identify them and clamp down on them and reduce the percentage of turn you can each of those value points as much as possible. That question is looking for that value point. And that question is gold because not only does the new customer who you acquired enjoy sort of imparting their opinion on you, but like, it is something that you can then improve next time and go; Hey, thanks for telling us about that. We've actually done this the next time and really want to appreciate your feedback and you know, this is what we're doing. So, you know, thanks for that. And they go, oh f***. This company listened to us and made a change based on that. And you actually increased probably the loyalty of that customer over time as well in the process. So, you know you kind of win twice. But yeah, like I would say go back to the customers who are in your category however you want to define your category or pool of customers, and those are the people that are not your customers that are the opinions that matter the most, because that's where your growth potential always lies. Not in your little niche space that your own, if you want to grow.
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[00:34:56] Sean: And I often think about customers in a services context in three different buckets, the period before they get you on the phone or via email, like sort of the period before they engage with you, the period whilst they're engaging with you, and then the period after they engage you. And what I mean by that is. People often forget people. As Founders, we get very tied up in what it is that they're purchasing from us. And we think like, that's the thing, but generally speaking services are a mechanism to get from A to B something that you want. And usually, you don't want to pay for it. You don't want to take the time that it takes to do the thing. You probably won't even enjoy the thing sometimes, but it's a mechanism to get from A to B. So, it's the sort of vehicle of transformation if you like. So, that's fine, you can ask them questions about at the point of A, so at the point of about to engage with us, you know, who else were you thinking about? What were you thinking about? What outcomes were you looking for? Like, you've got all these sort of questions about what was going on in their mindset, but one of the questions I like is what was happening just before you decided to contact us, like, what was the thing that made you think that would be a good idea? And that trigger event is incredibly powerful to understand.
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[00:36:07] John: This is the jobs to be done or CEP that you're touching on, which is like the buying context and digging down a couple of layers, because they won't often tell you like the school example, the real reason why they're buying it. They'll say the most explicit things. So, like having conversation with that and then prompting them like you have done with like, tell me more about that and why is that important to you, things like that.
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[00:36:28] Sean: Let's take that example. You imagine that perhaps, I know for a particular parent, the thing that happened just before they decide, you sent us a request at like six o'clock on a Tuesday night, what happened during that day or what happened just before you actually sending that request that made you want to call us? And they're like, oh, well I saw a couple of the kids out, down around the town in the uniform and they seem to just be articulating themselves really respectfully to this shop owner or having a really engaging conversation. I thought, wow, they're really mature. And boom, the conversation they have with you on the phone is all about the school and what's the time table look like and where are the textbooks and how much does it cost and blah, blah, blah. That's all, as you said, transactional hygiene stuff. That's not why they're buying it. They're buying it because your job in that service is to match them back up with the thing that made them call you in the first place, which is not any of that stuff. That's what they're hoping for is this kid to be churned out the other side who is respectful and engages well, and that was their sort of view of success.
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[00:37:23] John: And anybody can say that, but you just saw a walking advertisement basically for that school. Didn't you?
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[00:37:28] Sean: A hundred percent. And then, if you think about the, okay, so that's the A section. So, I think B is, okay, let's just say B is the service bits or part one is the bit before. Part two is the bit whilst they're with you and often the things they're comparing you on what it is that you're going to deliver during the service. But then when you're thinking about product development, in particular. And I know we're talking about positioning, but there's a sort of inherent opportunity when you do this research to actually find out a whole bunch of things about where your business could go to and grow to because quite often, I always think follow the customer like, don't spend heaps of time worrying about, okay, well, we really want to grow this business. Like we've got to go and find new customer types that are going to buy the same thing or expand into all these new products and service that somebody else might want. So, like, hang on a second. You've got all these customers using already, what are they going to do after having your service or…
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[00:38:17] John: What else do they buy?
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[00:38:18] Sean: Well, what happens after that? What are the next things that naturally flow on? Okay. You're a recruiter. You've placed somebody in a role. Well, after they've placed that role, what's the next thing that that's happening.
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What's the next problem they're going to be solving? What's the next thing that relates to that individual? There's a whole bunch of other product service opportunities that come after that. Okay. Well, now that we've solved that problem, we've actually got problems in our leadership team. Okay. Well, if that's a natural next thing that comes or we're going to be working on culture in that person's area. Okay. Well, you've got these natural extensions that happen after the service that are often missed, but I always think if you're going to get people on the phone, ask them some good quality questions that are also going to give you some ideas, because that positioning allows you to think about your relationship with that customer. And if it's currently transactional, you're trying to turn it into relational. The relationship is in the bit after they've left, you not the bit whilst they're with you. So, what is going to happen after, how are they going to use your service? How do you make them a hero in doing so, but also where are the other opportunities?
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[00:39:15] John: And I think you raised a good point there, it's about reverse engineering what actually happens in the market, not trying to make your product fit into something that in a category that you are defining. So, when you're talking about CEPS, you're talking about buying a product in context with other things. Where were you at the time when you were doing this, who are you with? What else did you buy to go with that? Like you bought school uniforms. Who did you buy those from? Oh, maybe thinking from a product architecture. And this is why a lot of this work blends into then the next thing, which is product architecture that I do, which is; what's our offering, how do we categorise into different things with our organisation or pillars. And then how can we cross sell and upsell people between all those things and package it up into different offerings at different price points to cater to that broader market. And those are very hard things, but that's where you got a lot of growth from, from NBD, for example, or moving into other markets that maybe you hadn't considered. So, a lot of what I do sometimes like wash us out in this is not just messaging strategy, which you were talking about before of like, understanding like your kids are a walking billboard or for your school and then you get some really good ideas of like how to use that in messaging in your copy, but also just from product offering. And that's where the product strategy sort of leads on from this positioning stuff really well. And that's where you get these powerful growth leaps that a lot of other people don't just don't care, because they're stuck in their lane doing their thing that they've always, so yeah.
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[00:40:37] Sean: The thing I really like, it's easy to listen to this today and think, oh, this just sounds so complicated. And there's so many pieces and they're all entre, what about brand, and then you've got a product and then you've got messaging strategy and yada, yada, yada. But what you said, really articulately, because the reality is lots of people end up with positioning whether they think they end up with positioning or not, or whether they've hacked it together or they don't all need consultants. They don't all need experts.
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[00:40:58] John: It’s just a paragraph that sits on our document gathering dust, basically. That's where most positioning strategies lie that nobody really understands they're going. Oh, that sounds good. Yeah. We always wanted to be a winner in this category where we have some lofty promise woven into that. Customers don't care about the shit half the time.
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[00:41:11] Sean: But the thing I love that you said is, it's not an academic exercise. If you sit there in a room with three leaders from your organisation and you're like, okay, let's do a one-day workshop on how are we going to position ourselves in the minor clubs? You're all, you're all coming up with all these different assumptions. Well, I think they think this and I think they think that. It's like, hang on a second. Who's talking to the customers. Let's go and talk to the customers. Let's really dig into the psychology of the customers because in the absence of that, you have nothing to base your positioning on. So, what you are saying is that is actually where all the gold is that; that conversation, that research that is the, you can't do good positioning strategy unless you actually understand the psychology of customers that you are…
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[00:41:52] John: Yeah, I mean, it's a bit of both. It depends, obviously I'm sort of using my wisdom, having done this like multiple times and probably you, you know what questions to ask because you've repeated and you've experimented a couple of questions. You're like, oh, that question got some really good goal. Let's iterate within that question. So, some of it comes from science and secondary research, some comes from observational and personal experience and the rest comes from the market. And I think the more experienced to get, it's a dual edge sword. Sometimes you can rest on your laurels, and say, well, I've done this before. I know how this position works and blah, blah, blah. But each situation is quite different and it actually, and put on a bad lens if you're doing that. So, sometimes people doing this for the first time are actually be more open-minded. So, you have to be careful with that. But yeah, look, I'm the same, like it's all about your market. Like don't have a border room discussion without research basing this. And if you're choosing a consultant, most importantly go through their process. Like if they go, oh yeah, we call like five customers. Yeah. How do you do that? Where do you get the sample from? Is it representative of the market or you just doing convenience sampling based on your five closest friends and then notating it down. That's going to give you a really bad insight, but it's going to look like you're getting good insight. So like, you got to have a bit of discretion on that side of the things, and that's why I always recommend market research should always be independent outside your organisation and should be really careful about the methodology and pay for quality.
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[00:43:12] Sean: Yeah. I think that's really true. And that's why I've been running a growth insight service for clients for the last couple of years is because I often end up in these conversations and sometimes, they want somebody independent, they just happen to trust me, they know that I can get a good outcome in terms of just asking the right questions to the customers. Then I need someone with your kind of skill to pull together the information and think about how it's actually going to sort of turn into the positioning and the messaging strategy…
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[00:43:37] John: It's really hard too. Like Sean, like I did one for a client who you know about recently, which is a brand piece and inside there was positioning and I'm like, this is really hard because it was a kind of new product. I'm like, it took me a while to learn actually what they did and understanding completely. And then I was like, it took me probably a month to come up with it. And then I was like, oh, bang. I know exactly how to represent that visually. I know exactly where they should play. And then I pitched it to them. I pitched it to all their board and they're like, actually, yeah, that kind of makes sense to us. So, that's the test that you have to do and get buy in. If it doesn't make sense to them, it doesn't make sense to everybody. And now I'm testing with the market and it's going pretty well. So, you know, that's the ultimate test is the market. I mean, we can sit here and say our brand is this all we want, but ultimately, they decide.
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[00:44:17] Sean: So, John, if you are thinking about, okay, we've got a group of fans, I know we're and we're covering a lot of ground, it's hard to get granular on some of this stuff sometimes. So, if you think about, if you were going to guide our audience on, okay, we want to go away and do something ourselves, what would you, okay, we've talked about sort of step one in terms of doing your customer research, you know, get into the heads of the, all the things that we've already talked about, what else would you suggest they do in terms of sort of sequential pieces to help them think about if they want to sort of self-drive some improvements to their positioning strategy? What else would you recommend them doing?
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[00:44:48] John: Yeah, I mean, I'm not a big fan of looking over your shoulder at competitors, they're too much. But only when in context is important in the decision-making process of the customers. So, if you are coming up against, you know, the two or three same competitors or however many, they are make this 10, you should do an analysis and all 10 figure out how they position, how they talk, do a mystery shop through all of them, like phone or pretend you're a customer to see what happens, what experience you get. And that is really important because then that shows you where the potential gaps in the market are. So, there's nothing worse than a positioning strategy that you do, and then you send it to market and it's the same as a competitor you haven't researched. So, really important to do that analysis when you're doing positioning because otherwise it's just the mute-points. And when you do an analysis sometimes, you can figure out which space are they not playing in? And Kimberly A. Whittler, I did an interview with her. She's kind of like an academic in the US who has a book about positioning. And we talked to her about that and she uses the analogy of battleships. So, you know, we playing the game battleships, like which space are the enemy ships in. And where is the clear space that you can put your ships to survive, you know what I mean? And I think that's a really interesting way of looking at it. And yeah, sometimes that analysis will pull up some interesting uncompetitive space that you could move into.
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[00:46:07] Sean: Well, the reality is of when you put yourself in the customer's shoes, some people just think, okay, yeah, I'm in a really saturated market and everyone's pretty much pretty samey. And some people think they're incredibly unique, but it's actually exactly the same situation as the first one. Well, the question is, how does your customer think about your market and who their choices or who their alternatives are? Because you might think X, Y, and Z are competitors, but actually when you speak to the customer, they hadn't even considered those that might be considered something that's actually quite left here because they're thinking about how they deploy the money to get a solution to solve the problem. And that's where all of a sudden you start to think differently because they give you some information where you're like, huh? They're not ever thinking about us as a supplier of X. They're just seeing us as a solution to why, that it might open up a whole bunch of new product and service opportunities. It's like, how do we solve that problem for the client.
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[00:46:56] John: Yeah, and two videos that I think will hit this point home if people are listening and they want to watch, these are on YouTube. Again, the Apple cliche example, think different campaign where Jobs does this speech about values. You see it going viral on LinkedIn and Twitter, like every month on repeat, but not only does he present the idea very well on stage, it's very rehearsed and scripted by the way, but he executes it flawlessly. And then does the ad is so different to any other tech company at the time, and they're just like, this is the space we want to own. These are the people who buy our products or aspire to be, and this is us and everyone else can go over there and compete on features and all that kind of stuff. But hey, we're over here and this is where we're heading. And the other one is Clayton Christensen. So, Clayton Christiansen with a C, and his video about milkshakes and jobs to be done. I think that's a really good intro to just now to get rid of the facade of understanding, oh, that people buy things for a reason in a context. There's a bit more science over CEPS, but that's airing the bass Institute. That's probably a bit technical, but like I think jobs to be done is really easy way of understanding it for people for their first time. And I think difference is a really good campaign about really clear, differentiated positioning in the market.
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[00:48:10] Sean: Yeah. Awesome. Well maybe if you can give me those links John, we’ll make sure they end up in the show notes for everybody. And so, you know, if you're listening today and you're like, wow, that was a lot of information to take in. I think, start with the videos that John has recommended and realise, yes, it's absolutely valuable to find support. You can use people like John, you can use all alternatives, of course. I guess the key thing is, if you are in a business that where you really want to scale, you are going to be pushing up against businesses who are spending their time thinking about where they're actually going to position in the mind of their customers. And as John said and as we've talked about in some of our examples, you don't want to spend all your time focusing on the competitors because you sort of fall into this trap. You do need to consider them, but you don't want to end up …
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[00:48:57] John: to the mean …
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[00:48:59] Sean: Exactly. And so how do you find out, well, where is the positioning in the mind of a customer that would matter to the customer, because that's maybe what we haven't made clear enough is like, it doesn't need to be amazing to you. It needs to stick in the mind of the customer. So, in the absence of doing good research upfront, you really have a very difficult time. You're kind of doing a marketing exercise, it's not going to get the outcome that you're looking for. It might look nice and you mind it up with some nice…
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[00:49:30] John: The best analogy for this is, I'm not sure if you seen MGM, but you know, the tiger growling at the start of the, okay. So, around the gold emblems is this thing that says is in Latin, the loose translation is "Art for art's sake.” So, you know, pure art shouldn't be for a commercial purpose, right? That is wrong in business. So, positioning for positioning's sake is meaningless. Like there should be a commercial reason for your positioning and for your brand positioning, product positioning, for all your marketing. Otherwise, it's just art for art sake.
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[00:50:02] Sean: Very interesting. Well, thank you, John. I really appreciate your time today. I'm sure that has given some good questions for people to go away and wrestle with and some places that they can get started. If people wanted to learn more about what is it you do either through the podcast or through the agency, where would you direct them to?
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[00:50:21] John: Yeah. Just get a LinkedIn, do a personal connection request on there and just say, hey, you know, I listened to the Sean Steele thing and I found it really interesting. Take the conversation from there. Yeah, I'm sort of changing a couple of things, got a couple of projects in the background that aren't stated on there. So, that's probably the best way to contact me. And yeah, continue working with you, Sean. It's been a really good sort of duo there and two different perspectives and sort of meeting in between I think so, thanks for all your work as well. It's been really, really good.
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[00:50:48] Sean: My pleasure. Thank you so much. John. Thank you, JJ. Folks, if you got value from today, I would really value if you actually left us a review. I know everybody asked that on podcast and you get to the end you're like, oh, fast forward, delete whatever I go to the next one. But the reality is in the world of podcasting, it makes a huge difference to be frank to the team that put it together because it's a bit of nice feedback from them and they don't always hear it from everybody. And of course, it helps the algorithms get it into their hands of more people, which is about us being able to help other people create more impact through the information. So, if you can leave a review, we'd absolutely love that. Thank you so much. You have been listening to the ScaleUps Podcast. I am Sean Steele and I look forward to speaking to you again next week. Thanks so much, JJ.
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[00:51:29] John: Thank you.

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