April 18, 2016
CEOs of legendary businesses take positioning seriously. They make a choice to be different. And they purposely position their company to create or disrupt a very big market category. They know the real power of marketing is that it catapults a company into a dominant, defendable position in a hot category. That's how they achieve higher growth rates, margins, and market valuations than their competitors.
But to be different, these companies must also be very clear about how that difference is actually valuable to customers, partners, employees, and shareholders. How that difference can solve a well-defined problem in a new way. Otherwise, who cares?
With a two-word story, "no software," Mark Benioff, the founder of Salesforce.com, communicated his difference by creating a new category: cloud-computing. The positioning worked so well, he crushed consumer relationship marketing (CRM) market leader Siebel Systems. Today Salesforce.com is the category leader, or "Category King", dominating the $10 billion CRM market they disrupted. And of course there's Uber who took an existing category – taxis – and turned it on its head by pairing drivers and ride-seekers with each other, bypassing the cab companies altogether. If you want your company to win, turn your point of differentiation into a legendary story.
While some industries may lend themselves more easily to creating a new category, medical device and diagnostic companies can still take advantage of this strategic opportunity. Take Intuitive Surgical. Intuitive took the world of surgery by storm in 2000 with the introduction of the Da Vinci robotic surgery platform.
They created a story around extending the surgeon's capabilities and the surgical world responded. Intuitive Surgical initially focused on urologists who were not trained in laparoscopy and were performing prostatectomies as open procedures. Their robotic technology gave them a platform that would turn them into minimally invasive surgeons. Robotic-assisted laparoscopic prostatectomies now account for more than 80% of prostate cancer surgeries performed in the U.S. With the introduction of the Da Vinci platform, Intuitive Surgical created an entirely new category for a product they pioneered – and then went on to dominate that market. Nearly 20 years after its launch, Da Vinci is still the only shop in town when it comes to minimally invasive robotic surgery. There are several competitors that will be entering the market over the next several years, but if they play their cards right, it's likely that Intuitive Surgical will remain the Category King.
Tell Your Story and Create Your Category
In the medical device sector, the vast majority of companies that launch new products are doing so in existing categories or markets. In almost every category, there is only one truly dominant player while everyone else is left fighting for a slice of the remaining pie. The real opportunities for these companies are not competing, it is in creating new categories. Even for established companies, when you're launching new technology, you want to be the company that creates a new space or a new agenda and educates the market on that story. When you tell your story well, you have market pull and you create a category.
So, whether you are creating a new category – like Salesforce.com did in the cloud-computing industry – or disrupting an existing one – like Uber did for the taxi industry – one thing is key: you must make customers believe that your point of differentiation is important.
Once customers understand how your product can solve a well-defined problem in a new way, they shift from the old to the new. As momentum builds, a Category King emerges and the space hits a tipping point.
Too many executives believe that customers will buy when they learn about the features of their so-called "breakthrough innovation." They think the products speak for themselves, leaving it up to their consumers to figure out why their product matters. But Category Kings define and lead. They evangelize the problem and how they offer a different solution. That's not competition, that's category design.
Becoming a Category Designer from the Inside-Out
How do you become a Category King? By designing the category yourself. Category Design is the discipline of creating and monetizing new markets. This requires companies to go beyond traditional thinking about marketing, positioning, product management and sales strategy to proactively condition a market to view their new innovations as:
- Different than what has come before,
- Solving a big, urgent problem in a new way,
- And worthy of increasing investment
Category Designers intentionally condition the market to their advantage. They know that companies and technologies need to be viewed in the right context before customers will start buying. They make a case for why their new product or service innovation is different than anything that has come before—and why customers should care.
What’s Next for Your Product?
In the current healthcare climate, providers and hospitals have new constraints around cost containment, clinical outcomes, and technology requirements. Patients are demanding more transparency, making more cost-conscious choices and shopping around for services. As a result, these stakeholders have different criteria about what actually matters when it comes to new technology investments. Specifically saving money and improving patient outcomes. Being effective and being efficient.
Becoming a Category King is a bold initiative, so it is important to take a hard look at your current product, how it’s performing in the market, and how your marketing strategy differs from the competition.
So, do you want to be a Category King? What’s your story?
At Grey Matter Marketing, story-telling is what we do best. We’re happy to provide our deep industry knowledge and marketing savvy to craft your story and help you map a pathway to becoming a Category King. Best of luck!