EP 20 – Crafting Unique Value Propositions with John Steele

Dave: Hey everyone, Dave here with another episode of the Philly Tech Connect podcast. Today I’m going to be talking with John Steel who runs John Steel Consulting, a fractional marketing agency for startups. He’s been working in the startup world for over a decade, he’s helped one company raise hundreds of millions in their investment, and another get to their exit. And he’s seen a lot of unique marketing challenges Founders face and mistakes that we’re all making. So, we’re going to be talking about how we can remedy some of these issues. John, how you doing?

John: Doing well, Dave. Thanks for being on the show. I always forget, like, did I pronounce your last name right? Is it Steel?

Dave: That’s right, Steel. That’s an awesome last name. Yeah, it’s probably one of the best last names, I think, I’ve heard. So, that’s cool. But that’s not really why we’re here today. We’re here to talk about marketing and USPs and things of that nature. But first, you know, there was something that kind of came up in the intro, a fractional marketing agency, um, term that some people might not be familiar with. Can you tell me about what it means to be a fractional marketing agency or fractional CMO?

John: Yeah, so there’s a couple of things there. One, I would say, you know, the term is really hot right now and it describes the sort of relationship between, you know, Marketing Executives or Executives of several functions and the companies that they work for. Basically, you’re coming on either on retainer and a part-time role or sort of as a Project based situation. And so, I think that’s what fractional means for a lot of folks. What it means for me is, you know, I’ve worked with these startup companies for the last 10 years and something kept happening where, you know, you would get in, they would have these big thorny problems that you had to work out, whether it’s data integrity or, you know, a revamped content strategy, you know, big problems that you have to sort out, sort of marketing operations and how things function day-to-day. And once those problems are all solved and everything is sort of straightened back out, then the job pivots to, you know, sort of a day-to-day maintenance, and companies really don’t need an executive at my level. You know, I have, you know, over a decade of experience doing this stuff, and they really don’t necessarily need an executive at my level yet or they want to hire someone more permanently and they just want to get their company, their marketing operation in place in order to do that more functionally. And so, you know, I thought it would be a better relationship with me and my clients and I had already had some sort of side clients that I was working with to sort of make that relationship be my every day. And so that’s what I’m trying to do with JSC.

Dave: That’s awesome. Um, and I, you know, it makes sense like what you’re saying. So, if you’re targeting companies that maybe don’t have a full-time CMO or they need some kind of fractional marketing help and by Nature they’re likely to be maybe a little bit younger, earlier in the journey, potentially a bit smaller. Um, one of the main challenges for younger companies and sometimes older companies, honestly, is USPs, like unique selling propositions, you know, about positioning and how do we kind of tell the brand story. So, tell me a little bit about what a USP is and what it isn’t. And then, you know, we can talk a little bit more about some of the common pitfalls and mistakes you often see companies making in this area.

John: Yeah, unique sales proposition or unique value proposition, as I like to call it, is, you know, the story you tell about your relationship to your customer. So, that’s the way I like to position it. So, you know, some people think of it as, you know, what makes your product or service unique in the market and I think that only goes part of the way because there are some products or services that are, by their nature, not unique. There’s enough of a market that they can serve that market and different niches within that market, but they’re doing effectively the same thing, they just do it in a different way. There are a lot of companies that find themselves there. So, then when you say to them, well, hey, we need to come up with your unique value proposition or your unique sales proposition, they sort of look at you sideways like, well, why do we have to be so unique? I mean, we have a reputation, we have a client base, we can sell ourselves on that. And I think that will only go so far for you, where you’re telling that story, but if someone new comes along or someone new and exciting comes along, they may be able to tell a better story than you and then they end up in a better place than you. And I think people misread what their clients actually want from them and they’ll focus on services or prioritize parts of their offering that are not a great fit for the clients that they’ve put themselves in place on. I think, if people are looking for resources, there’s a woman named April Dunford who I think is a brilliant mind when it comes to positioning. And one of the things that she’s talked about is a company that she worked with that was, you know, they had thought of themselves as a data warehouse and they were actually better served as being a database, a smaller, you know, more searchable, more flexible Tech offering. And she tells this in a whole case study in her book that you guys can go check out. But I think it tells a really good story about, you know, a company that was sort of pitching themselves as one thing among a bunch of competitors but then trying to say like, we’re a different kind of data warehouse. And it’s like, actually, that’s not what people think of when they think of a data warehouse. So, you’re in the wrong lane entirely, you should move over here. It’s not that their product needed to be super unique, it’s that their product wasn’t what they were calling it and they were confusing people. And, you know, they had some customers from that data warehouse space but once they opened it up to, well, this is what we actually are, this is what we actually offer, these are the things that we do really well that our competitors don’t, once they were able to figure that out, they opened themselves up, it was like fishing with dynamite, they just moved their fishing spot to a better location and they ended up doing much better. So, yeah, I think that explains it pretty well, you know, trying to write a better story that will focus on the things that your customers truly care about.

Dave: Yeah, I mean, when people, you know, we talk about like telling the story, um, a lot of people get fixated on certain things like maybe price or, you know, user friendliness. We’re like them but cheaper. Um, what do you think about things like that for a USP? Can they be a USP or it’s just not, that’s not enough to kind of hang on to? Like, what are your thoughts on things like pricing, user experience, uh, reputation you mentioned for service industry, you know, how are those enough for a USP?

John: In my experience, in the B2B SaaS world, I would say that, of the three you mentioned there, experience is the closest thing to focus on, I think, because people’s experience with you is more than just, you know, how the product works for them or the process of buying your product or the process of using it or distributing it among their members. It’s how the product makes them feel from Soup To Nuts and sort of the story that you’re telling from their first interaction with you to their final sale to them as a customer has to sort of be a unified experience that tells the same story all the way through. And I think the reason for that is because you want to find out like Dolly Parton once said, you find out who you are and do it on purpose, right? So, you find out who you are and you make it your whole thing. And I think that will build the sort of not only customers but evangelists that we’re all sort of after, right, is you build an experience that your relationship with your customers is what’s unique, right? And so, you can do that through pricing but I think the idea of it is to, like, you want that to speak to your overall story. So, if your story is ease of use or Simplicity or, you know, no BS, then you want your pricing to obviously reflect that. So, I’ve worked with companies, for example, that’ll say that they’ll say, we’re all about ease of use, we’re all about transparency, we’re insurgents, we’re coming in and taking over for these big dinosaurs. And then they all like be shady about their pricing and it’s like, well, you can’t do that because then that sort of defies the story you’re trying to tell, right? You’re trying to tell this story and then somebody goes to your pricing page and they’re like, well, I don’t know what this means, you know, you’re trying to do a little shell game with your sales. And look, I get it, but, you know, you are gonna have people who sort of raise an eyebrow at that. And so, you know, some people may be like, I’m fine with that, I’ll take that hit. But I think you create a stronger relationship with your customers if that story is kind of ingrained in everything you do, consistent, yeah, throughout everything.

Dave: Yeah, throughout everything. Where, you know, we mentioned young companies as the ones that, you know, maybe you’re more inclined to be working with by nature of a fractional CMO, you know, where does a USP fit in for the journey? Is it something that should be done from like day Zero, like, hey, before I build anything, before I start sculpting wire framing, hiring people, like, I need to have a USP, otherwise, like, we’ll have no direction? Is it something that evolves over time? And if so, how often should we be sort of like revisiting it, you know, like how often should we be kind of saying, is this the right USP for us right now?

John: Yeah, that’s a great question. Um, so, I am definitely, you know, in favor of companies thinking about this sooner than they typically think they need to. But I will say the idea of product building, finding your MVP, all of that I think are still super important. Sorry, MVP is minimum viable product for anybody that doesn’t know. Your product needs to be there, you need to have a concept, you need to have proven a market that you’re going to go after and you may be aiming in the wrong place at first. But I think the idea needs to be, we want to serve a need that we know exists. And so, you know, you may find that in building your product, you find features that are more used and are more effective for people than you thought. And that’s when the story needs to sort of change. But I think you need to have that initial product in place and you need to have sort of a belief in what your company is setting out to do. And then, once you have that, then somebody like me can come in and help you out. I think where I’ve come in for companies a lot of times is either they’ve raised a first round of funding or they’ve, you know, made some hires on the engineering side and they’ve got their Engineering Process sort of in place and they have a basic pitch for sale. And then once they’ve sort of got that direction, then we can sort of decide, okay, you know, this is what you want to be, this is where you want to get to, how do we tell a story that will reach the best set of customers for you. So, I definitely think it needs to be thought about sooner and I think if you’re bringing in someone to consult on that, then that’s a good place to start is, okay, we have this product idea, we know vaguely who we want to serve with it and now we need to make that brand story, we need to stress test that brand story first. So, understand does this meet enough customers, does this bring us enough income, and then, you know, are we, do we feel comfortable about that positioning? And then, once we sort of tested through that, then we sort of tell the story that can optimize that.

Dave: Yeah, I like that answer a lot. I feel like, you know, it’s a lot of pressure to kind of come up with that, you know, just Holy Grail USP from the very get-go, especially when you know, in all likelihood, you maybe don’t necessarily have like a lot of market research, maybe you don’t have a lot of data from people using a product and things like that. On the flip side though, if you don’t think like the longer you don’t think about, the longer you put it off, the more risk you run of just kind of, kind of like building something that nobody really wants or nobody really needs. I think, um, I’ve personally made this mistake even recently where I had basically started, you know, a software in the HR space sort of operating in the assumption that the market was kind of big enough that like we’d figure it out as we went along, we didn’t, you know, just like eventually we just kind of figured out what we figured out was that, you know, there really wasn’t like a USP, like the fact that it was a little bit cheaper, a bit more user friendly, a bit of this, a bit of that just kind of really wasn’t enough to stand on. And, you know, if we had really kind of thought more upfront about what we wanted it to be and stress tested it like you said, making sure that there’s actually like a need for this in the market, maybe could have saved ourselves a bit of a headache there. Um, John, it’s been really awesome talking with you. For people that want to learn more about what you do at JSC and you know, where to find you, where to get in touch with you, how can they do so?

John: Yeah, uh, feel free to check out John Steel Consulting.com. That’s j h n s l consulting.com. You can Google John Steel Consulting, should come up there pretty high. And, uh, I have a lot of information about the various services that we offer there and some clients that I’ve worked with in the past. You can also feel free to set a meeting with me there. I am happy to jump on a call at any time and just talk through anything for about 30 minutes or so and I’d love to learn about your business and talk about how we can help you with any of this stuff.

Dave: Awesome. Thanks a lot for being on the show, John.

John: Absolutely, Dave. Thank you.