Positioning has a different job in greenfield, replacement and consolidation markets

“Who are we competing with?” is usually one of the first questions in any positioning discussion. And the answer is usually a list of companies that sell similar software.

But buyers don’t necessarily experience the decision that way. Depending on the market, your real competition might be something else entirely:

• Greenfield
  Doing nothing. Spreadsheets, shared drives, manual processes.
• Replacement
  The incumbent product.
• Consolidation
  Several existing products that could be replaced by one.

Same product. Very different buying decision. And therefore: very different positioning.

Positioning has a different job depending on what the buyer is replacing. A greenfield buyer needs a reason to act. A replacement buyer needs a reason to switch. A consolidation buyer needs a reason to simplify.

Greenfield: first make the problem worth solving

In a greenfield market, buyers aren’t walking around looking for your category. They may feel the symptoms, but they haven’t concluded that they need software to solve them.

So you’re mainly competing against: “This is annoying, but we’ve always done it this way.”

That changes the job of positioning. Before differentiation matters, you need to establish why this problem deserves attention, why now, and why software is a better answer than the status quo.

Your positioning needs to connect to something buyers already understand, rather than asking them to adopt your sophisticated view of the world first.

The irony: the newer your category, the simpler your positioning may need to be.

Replacement: the buyer already understands the category

Now imagine a buyer who is actively replacing an existing solution.

A lot of the educational work has already been done for you. They understand what a CRM, an HR system or a project management platform does. They know their requirements. They’ve experienced the limitations.

The question isn’t “Why should I solve this?” anymore. It’s “Why should I solve it with you instead?”

So positioning can become much more comparative and differentiated. The incumbent gives you something incredibly valuable: a reference point. You can position against what buyers dislike about the old way, without having to explain the whole problem from scratch. (More on that in how to actually win in a replacement market.)

Consolidation: the problem isn’t absence, it’s excess

Consolidation deserves its own place, because it often gets mistaken for replacement.

The buyer might have five products that each work perfectly well on their own. The pain comes from the system around them: overlapping functionality, multiple contracts, fragmented data, administration, integration complexity, different workflows and cost.

You’re not necessarily arguing: “Our product is better than Product X.”

You’re arguing: “You shouldn’t need X + Y + Z in the first place.”

That changes the competitive frame entirely. The positioning opportunity is the cost and complexity of fragmentation, not a feature comparison against one incumbent.

The same feature, three different values

Imagine your product automates invoice processing. How you’d position it depends on the market:

• In greenfield
  Stop typing invoices into your accounting system by hand.
• In replacement
  Automate the approvals your current tool still leaves to email.
• In consolidation
  Capture, approve and pay invoices in one place, instead of three separate tools.

Same capability. Different alternative, so a different problem, so a different value.

Features don’t have positioning in isolation. Their value depends on what the buyer compares them with.

Buyer maturity follows from this, but it isn’t the same thing

Greenfield buyers often have lower category maturity. Replacement buyers generally have more. Consolidation buyers can be extremely sophisticated.

But don’t automatically equate the two. You can have a sophisticated buyer entering a greenfield category, or an inexperienced buyer replacing a system they inherited.

So treat the market situation and the buyer’s maturity as two separate dimensions. Both shape your positioning, in different ways.

Your sales data can mislead you if you mix these together

Suppose you analyze 100 deals and ask: “Which messages correlate with winning?”

But 40 were greenfield, 30 were replacements and 30 were consolidation. Then you’re averaging three different buying decisions.

A message that performs brilliantly in replacement deals might fail completely in greenfield. The same goes for objections, competitors, sales cycles, willingness to pay, proof requirements and reasons for losing.

So before you draw positioning conclusions from win/loss data, segment it by what the buyer was doing before you entered the picture. Not only by company size, industry or persona.

Ask one deceptively simple question

“If they don’t buy us, what happens?”

Not only: who do they buy instead? The answer tells you which game you’re playing.

• Nothing changes
  Probably greenfield.
• They stay with the current product, or choose another one
  Replacement.
• They keep several existing tools
  Consolidation.

And sometimes you’ll find that the same company is playing all three games, with different segments.

Positioning starts with the alternative

Positioning isn’t only about who your customer is or what problem you solve. It’s also about what you’re asking them to change.

A greenfield buyer needs a reason to act. A replacement buyer needs a reason to switch. A consolidation buyer needs a reason to simplify.

If you use the same positioning for all three, you’re answering three different buying questions with the same answer.

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