This is a series about building and testing your messaging, positioning, and value proposition

#1 - Messaging & Positioning Template for Social Impact Leaders
#2 - Messaging & Positioning Template: (i) Customer Unmet Needs & (ii) Worksheet
#3 - Messaging & Positioning Template: (i) Ideal Client Profile & (ii) Worksheet
#4 - Messaging & Positioning Template: (i) Differentiators & (ii) Worksheet
#5 - Messaging & Positioning Template: Market Category
#6 - Overcoming Objections to Positioning: (i) Proof; (ii) Workflow Redesign; (iii) Offers
#7 - Messaging & Positioning Template: Testing
#8 - Messaging & Positioning Template: Learning from Data

Market Category - A Powerful Positioning and Messaging Shortcut You Shouldn’t Ignore

In many ways, this is equivalent to the “topic sentence” of your entire value proposition, which is why I recommended we tackle it after you’ve clarified unmet needs and your differentiator.

Defining your Market Category establishes the competitive space in which you operate, defining your natural competitors and your buyer’s expectations for your product.

At Joyful Ventures, our innovation advisors specialize in helping social impact leaders like you create people-first innovation that maximize your and your organization’s impact.

Market Category: Example

An example Market Category is a customer relationship management (CRM) system. By saying you’re a CRM, people will immediately think of Salesforce or Hubspot, and immediately get an idea of what you do.

Using a Market Category is ultimately a powerful messaging shortcut, quickly enabling your audience to understand what you do with only a few words.

Yet choosing the right category can also be incredibly tricky, requiring you to be thoughtful about which relevant category you are most likely to win because your success will be compared to existing features market leaders offer.

Say you are a new innovation with limited resources. Choosing to play in the CRM category could be an uphill battle. Salesforce and Hubspot have spent millions in the last decade developing vast feature sets, marketing engines and social proof, and proven capabilities.

But you can still win in certain instances. For instance, selecting a growing market with core unmet needs, where you have major differentiators Salesforce lacks.

This is in fact how many high-growth innovations get their start — and why we spent significant time thinking through your target market in this series.

So you might be thinking, “how do I find out what these categories are to begin with?”

Step 1: Start with your bright spots

Re-review the work you did on identifying your target segment’s top current solutions and workarounds.

Talk to your segment

Ask your top customers (or prospects) — or review your customer notes or existing data online, such as online groups.

You can ask them questions like:

How would they describe your solution to a colleague?

Who (or what workaround) do they see as your natural competitors?

Categorize

What categories do your main competitors or alternatives use to describe themselves? Return back to the work you need in

🪴

Customer Unmet Needs: Messaging and Positioning Template

Look at their websites, social media, or databases like Crunchbase or TrustRadius to see how they’re categorized by industry analysts.

This is also a good opportunity to learn:

How do they describe your common target market and their top core unmet need?

Their differentiation?

What does or doesn’t resonate with you?

Step 2: Brainstorm

Learn from best practices to identify more options.

Route A: Adjacent

Select an adjacent, rapidly-growing category

Looker's journey illustrates the potential of this approach. The company initially faced a growth crisis, failing to compete with established solutions in the “database” category like Oracle and Microsoft SQL Server, lacking essential features such as robust data blending and user-friendly interfaces for large datasets.

After a customer suggested that they seemed more like a “business intelligence” or “data warehouse” tool, rather than a “database,” they decided to experiment. These were two rapidly-growing (but smaller) marketplace categories better known by forward-thinking data teams.

Looker ultimately repositioned as a “business intelligence” platform, leveraging its unique LookML modeling language and Google Cloud integration. With these two differentiators, Looker bridged a real core unmet need, experienced rapid customer growth, ultimately leading to a $2.6 billion acquisition by Google Cloud.

Route 2: Creative

Create new or reinvent existing categories

Creating a new category carries significant risks, especially when introducing an unfamiliar concept. This approach may confuse your target audience with new terminology, and the lack of established search terms can impede discovery.

However, this strategy can prove effective in saturated markets where entering existing categories is challenging, and you're not prepared to substantially modify your core offerings.

Success in category creation often hinges on a few key elements:

Reframe: Reframing existing concepts with highly-growth or well-established terms or concepts that have the potential to create new winners or losers in the marketplace

Reputation: a strong reputation as a thought leader with a wide audience can facilitate promotion of the new category with a strong narrative

HubSpot's approach to "Inbound Marketing" exemplifies this strategy. They became closely associated with an trending marketing approach, positioning their product as a key supporter of this methodology, while technically competing in the CRM category. This effectively established them as leaders in this redefined space.

Route 3: Established

Compete in a crowded or established market category.

Competing in an established market category can be tough, but it’s definitely possible if you have the right advantages.

This might mean having unique technology, forming partnerships with rapidly growing companies, or using a business model that really shifts the risk or benefit—like purely outcome-based pricing.

Take Looker, for instance.

Even though they did choose a less competitive category, it was still a thriving one. Their partnership with Google Cloud gave them a solid edge in the crowded business intelligence space.

Uber’s disruption of the “taxi” category is another great example. They leveraged new technology to enable dynamic pricing and an asset-light marketplace business model to compete effectively in a highly-competitive, well-established market.

Step 3: Prioritize and Select

Understand the strengths and weaknesses of each Market Category you’ve identified.

Here are some criteria to score each category against from 1-5:

How well does your target audience understand this category?

How likely are you to succeed in this category based on your differentiator and unique advantages?

What is the growth rate of this market category?

As usual, if you’re finding lots of ties, use the tie breakers already mentioned, such as evidence quality and market size.

Example: Market Category

Revisiting our ongoing example, "Donor engagement platform" category was chosen.

Customer Unmet Needs

DonorFamily: We are a Donor Engagement Platform helping Community health fundraisers personalize donor campaigns without tedious data segmentation or inauthentic messaging at scale -- Minimizing churn and growing thriving donor communities

This choice was strategic, positioning you in a space adjacent to the highly-competitive CRM sector.

You saw potential for high growth in this area, and after carefully evaluating your competitors' strengths and resources, we determined it was a market we could effectively compete in.

This evaluation was was based on an honest assessment of our differentiators and how they stacked up against existing players in the field.

Now, it's your turn to apply the steps we identified to prioritize a good market category.

Market Category Worksheet: Get Ahead With Less Confusion

Now it’s your turn to apply these principles to your innovation.

Step 1: Copy the Worksheet

Fill this out. Provide comments on this article.

Request access. I give access to those who fill the form out above.

Step 2: Fill out the Market Category Tab

This is the key information that will help you select the best market category.

Go to the tab “Market Category.”

Review the top alternatives from your work in

🪴

Persona Worksheet: A Systematic Approach. Identify the market categories they use to identify themselves by using the sources suggested above.

Add more market categories by applying other strategies in

🪴

Market Category: Messaging and Positioning Templateto generate more market category options

Score them to prioritize your top market category

Finally, open up your

🪴

Persona Worksheet: A Systematic Approach to fill in the “market category” row to complete a rough draft of your positioning statement.

Step 3: Send Me Your Worksheet

That way I can take a look and give you feedback.

Next: Overcoming Objections

This next section are methods that help you overcome objections through the use of Social Proof, a Use Case Statement, and an Offer. These help you improve the believability that you can in fact help your target segment get from their current state to dream outcome.

What is your biggest challenge in this process? Share your feedback here or hit the toggle button (+) on the left.

Sleep / Parenting Metadata (Ratings, Phases)

Table view

Name

See the next article in the series below

This is a series about building and testing your messaging, positioning, and value proposition

#1 - Messaging & Positioning Template for Social Impact Leaders
#2 - Messaging & Positioning Template: (i) Customer Unmet Needs & (ii) Worksheet
#3 - Messaging & Positioning Template: (i) Ideal Client Profile & (ii) Worksheet
#4 - Messaging & Positioning Template: (i) Differentiators & (ii) Worksheet
#5 - Messaging & Positioning Template: Market Category
#6 - Overcoming Objections to Positioning: (i) Proof; (ii) Workflow Redesign; (iii) Offers
#7 - Messaging & Positioning Template: Testing
#8 - Messaging & Positioning Template: Learning from Data

Three Opportunities with Joyful Ventures

• Want a Template? Request one here
• Looking for guidance? Get your free innovation audit
• Want updates? Subscribe below 👇

Proof: Overcoming Objections to Your Messaging and Positioning Differentiators: Messaging and Positioning Template

Dan Wu, JD/PhD

Market Category: Messaging and Positioning Template