I often get the chance to talk with entrepreneurs. One of the things I always wait to hear is their description of what they do. Most describe their product offering using the word “and” several times. As soon as I hear this, I know they are usually not focused. Their market positioning and messaging is almost always weak. I have learned the hard way that you HAVE to have a clear and simple statement that describes the one thing that separates you from everyone else.
The problem is this is a LOT harder than it may seem. The temptation to describe what you are doing by talking about all the things you do is great. I often get asked, “But isn’t it better for investors and customers to know all the things my product does?”
The answer is an emphatic, “No.”
You need to be able to communicate a larger idea describing why you are the best, the first or the only company to do what you are doing. You have to be better in some significant and credible way.
The Best Selling Contact Manager
ACT! was a great case study for this. We launched the product in April, 1987. When asked what ACT! was we would reply, “It is a contact database and word processor and calendar, and report writer, and expense manager, and it dials the phone and automatically addresses your letters and faxes. Would you like to buy one, please?”
I knew we were doing something wrong, but I didn’t know what. I started reading books by Al Ries and Jack Trout, the guys who coined the word “positioning” in their classic book “Positioning.” (If you have not read anything by them, I strongly encourage you to do so. I also like the newer book “Focus.”)
I felt that they had the answer for our problem, but I did not understand how to specifically apply what I read to ACT!. So I called them. I got Jack Trout on the phone and said, “I know you consult with some of the biggest companies in the world, but do you ever work with tiny guys like us?” He said, “Yes, we do as long as we find it interesting. Plus, small companies will usually listen to us.” I sent all of our material to him and called him back in two weeks. He said, “This is very interesting, and you really need our help!” So we went to New York and spent a day with Al and Jack.
It radically changed our company.
First, they walked us through why we were creating a new category. Al said “you are the best-selling contact manager.” I chuckled and said, “I don’t feel comfortable saying the best cause we’ve only sold a few hundred copies.” Al asked, “Does anyone else call their software a contact manager?” I said, “No.” He said, “Well, that makes you the best selling!” From that moment ACT! was no longer ACT!. Everyone in the company was taught to always say, “ACT!, The Best Selling Contact Manager.”
It was awesome.
We no longer needed to describe all the things we did. We were simply the best. Ultimately, we had 90% market share at retail. Everyone wants to buy the best if they can afford it. We ended up selling over 6MM copies and still counting. We created the Contact Management category. They also made us change the name of our company from Conductor Software to Contact Software. That way all of our future competitors would have to use OUR word, Contact!
The answer for ACT! was turning “and” into “the.” In my next post I’ll discuss the positioning of Contatta, my newest product, and how we went from a “simple, sophisticated” positioning, to one that may result in the greatest thing I’ve ever done.