Entrepreneur April Dunford on product positioning, customer segmentation, and market category creation for early-stage startups
In this episode of Prime Venture Podcast, April Dunford, an entrepreneur and market positioning consultant, shares insights on product positions and customer segmentation for early-stage startups.
April Dunford is currently working as a consultant in the field of market positioning. She has already launched 16 successful products in the market and has previously worked with many companies as the CEO, COO, and VP of Marketing.
April is the founder of Ambient Strategy based in Toronto, serves as a board member at Sampler and MESH/diversity, and recently penned a book titled “Obviously Awesome – How to Stand out in Noisy Crowded Markets”.
On Amit Somani’s invite, April Dunford was recently available to share her expertise (and a few excerpts from her book) in a Prime Ventures podcast. The conversation touched upon the important points of how she positions her products, how to go about customer segmentation, and more. Here is a summary.
Product positioning – how to go about it?
April revealed that she has been positioning products for companies, both big and small, for 25 years now, and she has learned over the years that this is an important factor that all enterprises need to address.
During her initial years with a company selling desktop productivity software, she said that the first step she took after getting hired was to drive the product to end-of-life and connect with customers to understand how they would feel about it.
April found out that a majority of the target customers did not use the product, but the minority who did, loved it for a single feature. She took the product back to the drawing board, repositioned it completely, released it as a database for mobile devices, and it was a hit. The essence was to find that one feature that stood out and then gradually build on that.
Customer segmentation and expansion
In her book, April Dunford mentions that customers today are not only looking for a product, but also the context and trends around it. This swayed the conversation on how to launch a product where a giant competitor already operates. April recalled her time with a CRM company whose competition was with Seibel – a publicly listed company with a billion-dollar revenue. Most clients neglected April’s product saying – how are you different from Seibel?
However, customer segmentation came to the rescue. April repositioned her product as a CRM for investment banks. Her answer to clients was – Seibel provides general CRM, we are niche. Gradually, she moved on to retail banks from investment banks, then insurance companies, and slowly targeted the entire financial space. The trick to fight Seibel was to find the segment of customers who received the most value from April’s product. Expansion came next by approaching customers who are directly related to that specific niche.
Positioning in a crowded space
How do you position a startup in a market that already has 5,000 companies working in the space? April says that you will have to answer the following key questions first. What differentiates you from the 5,000 others? What value can you provide to your customers with that unique feature? Which section of the market cares about you? And how can you generate revenue by selling the unique feature to potential customers?
“During my pitch, I don’t sell the product. I sell my point of view. Then I ask the customers - do you agree? If yes, you need my product,” she says.
Positioning a market-defining novel product
“Don’t do it”, was April Dunford’s immediate reply. She said that by the time you create a new market category and convince your customers that they need the product, your investors will run out of patience and your company will fold. And even if you manage to find investors who stick with you, heavy competition will mushroom from nowhere and take over the new category that you just created. April advises, “Start in an existing market and allow the market category to take shape on its own. Ride the tide instead of focusing on disruption.”
Trends vs market
The conversation concluded with Amit Somani picking up another crucial excerpt from April’s book where she writes about the importance of trends.
“Trends are key for positioning a product because the media loves them. They will advertise the feature for you if you can include it in your product,” said April. She also pointed out that trends tend to create a sense of urgency. You can approach your customers and say that your competitors have tapped into this recent trend and if you do not make this deal right now, you will lose out.
Listen to the podcast here.
Edited by Megha Reddy