Why Positioning Trumps Branding in High-Tech

by John Volkmann

Technology companies are admittedly some of the least marketing-oriented companies in the business world today.  Marketing is often an afterthought, to be considered only after the product is defined, the sales force has been staffed, and management has concluded “it’s time to show we can scale.”  Most entrepreneurs are not marketing experts, do not profess to be, and have learned what they know of marketing from prior experience or from well-intended but poorly worded advice from others.

If you've ever heard an entrepreneur tell you that marketing is identical to PR or "getting the word out," you've encountered this phenomenon up close.

As a result, marketing vocabulary can take on a life of its own, depending on the company, leadership team and or business they are trying to build.  It doesn’t help that much of today’s traditional wisdom in marketing has been developed for consumer packaged goods (CPG) like soda, beer and other ‘impulse’ purchases.   Applying popular marketing concepts to high-tech markets can be simultaneously humorous and dangerous.

"Brand" is a great example. Is the discipline of branding important in high-tech?  Yes.  Is it as important in high-tech as it is in consumer products?  Probably not … unless your high-tech product is more of an impulse purchase, where customer switching costs are low, and loyalty can be built on the same ethereal brand cues used to build loyalty for Pepsi and Budweiser.   Otherwise, focusing on branding at the expense of other, more important marketing decisions can be distracting or even dangerous.

At SeriesC, we have spent some time thinking about a new definition of branding for high-tech markets, specifically as it relates to positioning.

yinyangBranding and positioning are the “yin and yang” of marketing strategy in high-tech.  They are complementary, interdependent and - as a result - difficult to separate.

Positioning is rationalIt’s the expression of a company's strategy in precise phrases that convey competitive differentiation,  role and relevance.

Branding is emotional.  It is the expression of a company in tonality, color, design,    imagery and illustrations.

In high-tech, positioning is often more important than branding.

Why?  Because high-tech companies are often asking prospects and partners to make a commitment to something less than what today’s offering delivers.  Prospects are asked to buy into an upgrade stream, a continuum of capability, a solution only foreshadowed by today’s product and value proposition.  It’s risky and complicated.  If you are an IT decision-maker, you can lose your job if you choose wrong.  If you are a consumer, you may have blown one of the more expensive decisions of the year.   There’s safety in numbers.

Because of this, tech purchasers often seek numerous peer-level references before making a purchase decision.  The currency of these references is almost by definition the rational articulation of the company and its products.  The role you aspire to fill and your increasing relevance in the future.  Communicating these ideas is one of the most important jobs of the marketing team.  And the words are of superordinate importance.

So, is brand in high-tech unimportant?  Not at all.  Branding is an exploration of choices that are supportive of the positioning decision.  You still need to choose language, tonality, colors and images.  There’s a lot to decide.  Just try not to place undue emphasis on these as, in the long run, they are not likely to be as important as your precise articulation of your market position.