Category Design Drives Markets

If you are not the Category King, winning your market will be much more challenging.

I would argue that marketing has only one task, drive business outcomes. In today's marketplace, the buyer has all the power. And for most company's it's not technology risk, but business risk, that is the greatest threat to the success of the company.

The B2B sales process today is fragmented and complex, with dozens of stakeholders needing to sign off on a purchase decision. And this renders traditional marketing ROI and attribution techniques ineffective. So what can we do when you have a buyer who cannot be easily defined or regimented into a persona? Design a category and own that category. Better yet, become the King of the category.

Your company should address the market by defining a problem and naming the solution as the category that your product fits in. This process is called category design. 

Category design is ruled by Category Kings, who take up to 76% of the entire market value, according to the marketing consulting team behind the book Play Bigger. 

Examples of Category Kings include Salesforce for the category of CRM and AWS for the public cloud. But, there are many many many more examples, including Apple, where the iPhone commands a disproportionate share of the revenue and profit generated by mobile device manufacturers.

The marketing function today breaks down into three main functional pillars, and they are Product and Demand Generation, which are very familiar to marketing leaders and CMO's. But the one that is perhaps less familiar is Category Design.

It stands to reason that if Category Kings take as much as three-quarters of the entire market, the only way to win is to be the Category King. 

Because many marketing leaders have not fully adopted category design as an imperative, I have found that it's surprisingly easy to beat the incumbent. Once the sector references the category as you've defined it, by proxy, your company becomes the category, which means you represent the most obvious choice.

What to know about the marketing pillars:

1. Don't talk features, talk problem-solution as a category. Information on your product is needed, and it should be easy to discover. The ultimate job of product marketing is to define the problem that you built your product or solution to solve in the context of a category that you have named. Careful naming of the category is required to be adopted by the market.
2. Demand generation is more than a KPI or funnel. Real demand generation only happens when you have built a category, and the market sees you as the default choice. In this scenario, your competitors must explain how they compare to you. As a Category King, you will benefit by knowing that the entire industry must tell prospects first how they are better/cheaper/faster than you before they can begin to talk about their advantage. And this advantage is worth 10x any marketing investment you could make.
3. Category design is the first and most critical step to becoming a Category King. The concept of Category King is covered in the book 'Play Bigger,' where Category King's are shown to command up to 76% of the market. As a result, the most logical path to business success is to become king of a category that you've defined.
4. If an organization embraces category design as a competitive imperative, everything the company does to market itself must be evaluated differently. Traditional marketing KPI's may not line up to define a problem where your product is the obvious solution, identifying the category. Decisions around events, partner marketing, content marketing, paid/performance media, email, SEO, and speaking, must all contribute in a coordinated way to building the category and establishing your company as the king.
5. Product marketing and category creation are the foundations for demand generation, and both are needed to be maximally effective.

Category design steps:

1. Problem definition can occur when you articulate your insights into the problems that you've been able to identify and outline the enabling technology that your firm has developed to solve the problem substantively. 
2. The category name should comprise the market definition, the nature of the problem, and who the problem most affects (the audience, or market). Do not be afraid to refine the name or change it as market feedback directs as this is often an iterative process. Remember, the name must stick for a category to be defined.
3. Documenting the category is essential. Begin by publishing a visual ecosystem map or graphical representation of what exists today and what will be live in the future.
4. Declaring a POV (point of view) is mandatory to frame the problem and articulate ramifications for the problem not being solved. The POV presents a vision for the future, with your solution as the obvious answer.
5. Category design should be led by marketing, though it requires the active participation of product and sales to capture a 360-degree view of the field, market, and competitive situation. Marketing may lead the mechanics, but the entire company must help once the design is complete and implementation commences. Category design requires CEO and founder support to be maximally effective.
6. The entire company coordinates a series of events known as 'Lightning Strikes,' designed to get the attention of the whole ecosystem to shine a spotlight on the category. Marketing will coordinate and lead these events, but the entire company should participate in carrying them out as an effective Lightning Strike requires cross-functional participation.

The Marketing Message framework:

1. When addressing the industry, it is important to speak in the context of the ecosystem, and your role as the leader with the most obvious solution to the problem that you have defined. From the days of the "Mad Men," catchy marketing slogans and titles have been effective. And to be sure, if you are in marketing and you've not read Ogilvy on Advertising or any of the other classic books on the subject of advertising and marketing, you should. But today's buyers are inundated with advertising and marketing messages, and if we aren't speaking to their need (pain), we won't be heard. This is why, appealing to the market in terms of problem and solution will yield the most enthusiastic response.
2. Too much marketing copy talks about the company or the product as a set of features. But, customers only care about the answer to this question: "Can you solve my problem?" Since everyone is looking for a solution to a problem, effective marketing can explain the problem even better than the customer can articulate it.
3. Effective account-based marketing (ABM) uses all of the appropriate marketing vehicles, tools, and channels to get this message in front of every buying constituent: "This is the problem. Here is the solution. And, this is what your life will be like after you choose us. Here is what to do next." Contrary to what some B2B marketers are saying, ABM is not dead. ABM represents the very essence of marketing today as it is the epitome of what I like to call H2H or human-to-human marketing. The only difference between ABM and "marketing" is that with ABM, we are very intentional about where our messages will be seen and by whom. If I know that a specific company has a need or requirement that is different from the industry at large, ABM seeks to make sure that messaging appropriate to that need is seen by the individuals responsible for making a buying decision.
4. Partners must be trained on how to represent the category. Being associated with the Category King is good for everyone active in the ecosystem. Many firms miss this critical step of partner training in the context of category design.
5. Presenting product features is best in the context of a category. Don't miss the opportunity to further strengthen your leadership role as the Category King by presenting your product relative to the category as much as possible. In time, the industry will begin to embrace you as the de facto "standard," which means you are now the King. Congratulations! 

What to do next:

If you feel that your marketing team is executing the classic corporate marketing playback, you aren't alone. The first and most important question is whether the marketing team starting with the leader, can adopt a new way of thinking and work. The typical campaign based approach of producing a marketing calendar and cranking out a prescribed set of deliverables is a default path. But go ahead and say it. This is boring! More importantly, the odds of a B2B buyer falling into a pre-packaged marketing campaign cycle are slim to zero. 

I am not saying that Marcom, product marketing, content marketing, and demand generation tactics are not relevant. What I am saying is that these marketing functions should be done in the service of category design to first define the problem that you are solving, and then win the category, to become King. To do this requires a different working cadence. Planning out nice 90 day campaigns may be possible, but likely won't be. And executing on messaging that is product rooted will do little to address the question your buyer has, "can this solve my problem?"

To drive any market today, marketing must have a deeper understanding of the ecosystem, not only the application of the product or solution they are selling but the actual needs and requirements of the market. The marketing team should come from the market and have a command of the ecosystem that their products fit into, with a high-level grasp of the significant technologies and how they relate to the competitive and industry trends.

To assume the challenge of building a Category King company requires a ton of grit, perseverance, and unwavering drive to win. For the marketing leader, CEO, and executive team who takes on the challenge and achieves it, there can be a no bigger pot of gold at the end.

If you are intrigued, confused, or just ready to build your company into a Category King, let's talk. I am a consultant and advisor to startups and growth-stage companies experiencing traction but who need the marketing program and systems built that will allow them to capitalize on the full potential of owning a market.

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ABOUT MARK DONNIGAN:

I am a revenue-focused B2B CMO who is a business builder. I work with technical founders to build marketing playbooks that have the best chance of achieving business success. As a value creator, I operate with a growth mindset and serve as a player-coach building innovative and disruptive companies in the areas of software/SaaS, technology, CE hardware, and consumer entertainment services. Working cross-functionally, I've led marketing, sales, and business development teams that have generated more than $500 million in revenue and shareholder value. If you are building the future, I'd love to hear about it. Let's talk.