Are You in the Right Category for 2023?

In a very nice boardroom, the very smart leadership team of a very smart company is spending a surprising number of workshop hours nailing down something that seems very basic – what “What product category are we in?”

As 2022 races to a close, I’m running a 2-day workshop to help this company architect a short, sharp brand message. The shortest version of this message is called the positioning statement. The positioning statement has only three elements: 

  1. brand name
  2. category
  3. benefit

Picking Your Category Ain’t Easy

At first glance, picking a category looks like the easiest part of your positioning. But 500+ workshops worth of messaging experience says…nope!

Even great companies struggle with how to classify themselves. In my experience architecting brand messages, these struggles come from misunderstanding what a category is supposed to do. 

Businesses ask too much of a category. They often choose (or make up) a category to show that they are innovative or to show they are disruptors. In short, they ask their category to show how they are different. 

Categories Help Customers Find You

Too bad that differentiation is not what a category is for. The purpose of a category is to help customers find you! 

Let me say that again. The purpose of a category is to help customers find you. As a customer, I can’t want your car until I want a car. That doesn’t mean your car isn’t different. You’ll likely need to show me that difference to get me to buy your car. Before that can happen though, I must get into the ballpark of cars. If you sell cars, you’ll need to be in that ballpark or I won’t find you. 

Not Who You Are, The Kind of Thing You Are

Viewed through this lens, a category is nothing more than a grouping that helps customers navigate to the kind of product or service you offer. Chosen correctly, a category helps you win business because, it puts you next to your competition. 

An Example: Why Shops Cluster Together

This lens clarifies why competing businesses IRL so often cluster together. 

In one memory from a decade ago, I’m driving a motor scooter through a district of shops in Vietnam dedicated solely to rebuilding transmissions. “Why don’t they spread out”, I wonder? Why sit cheek by jowl fighting for customers? Then it hits me. This is a watering hole for customers. Everyone in Saigon who needs a transmission rebuilt knows where to go.  

What Would a Customer Google to find You?

In an online world, the grouping is linguistic rather than physical. A category is a virtual “location” where customers in search of that thing can go. Think of it as a search term. If a potential customer needs your product or service but doesn’t know your company exists, what term would they Google to find it? Those words should be your default choice for your category.

But wait, you might say! That dead-simple category of “HR software” or “toothpaste” doesn’t differentiate us from our competition! Right, it doesn’t. Because again, it’s not supposed to. Category is the GPS that helps customers get into the right zip code. You want to win, but first you have to get on the list.

So, stop worrying that your category isn’t a differentiator. If there are competitors offering anything at all like your solution, and customers are already shopping for it, rejoice! Be happy to join those competitors in the “district” where customers already know to shop. Differentiating and winning the business after that is up to a different part of your brand message.

Ninety percent of the time, you don’t choose your category. Your customers do. Start the new year right by making sure you’re there to be found!