The easiest way to think of product marketing vs. portfolio marketing is the age-old motto, the whole is greater than the sum of the parts.
Your portfolio has more market and customer value than the sum of the products.
What is Product Marketing?
In B2B, product marketing is focused on articulating the value of individual products. The intent is to describe how those products make individual users quantifiably better at their job in ways that have strategic value to the customer organization.
For example, your accounts payable solution gives organizations a more accurate/predictable cash flow (strategic value) by eliminating invoice errors that lead to overpayments, underpayments, and penalties (tactical problems) that can distort its cash position (consequences).
Product marketing’s role is to promote the value of the product, build quality sales pipelines and make sure the sales force can easily articulate the value story throughout various stages of the sales process with supporting tools.
The bottom line in product marketing is to drive more revenue from existing products and ultimately grow market share of each product in support of the organization’s financial and strategic goals.
What is Portfolio Marketing?
Portfolio marketing in B2B is focused on articulating the value of your portfolio to vertical industry segments like retail, healthcare and manufacturing. The intent is to communicate how your portfolio makes organizations in those segments stronger in their own industry or discipline.
For example, if you’re marketing the value of your “enterprise financial management” portfolio to hospitals, you’d communicate how it ultimately gives them a competitive advantage (better patient experience) via greater financial flexibility to execute their top strategic priorities.
Product Marketing is Key to Portfolio Marketing
Product marketing is the second tier of portfolio marketing that addresses specific needs in accounts payable, accounts receivable, asset management, treasury management, budgeting, financial reporting, compliance, etc., to the benefit of the finance department and ultimately the customer organization.
Here’s the difference. In portfolio marketing, the positioning of each product is tied back up to the common industry value theme in order to create a cohesive and highly relevant value story for each market segment (e.g., healthcare).
In other words, the value your products deliver collectively across multiple customer functions like accounts payable, accounts receivable, asset management, treasury management, etc. give the hospital a financial advantage over their competition that ultimately makes them a higher quality healthcare provider because they can invest more in areas that make them a top-tier provider.
Think of it this way. The traditional product marketing model is part of portfolio marketing. It’s just done in a more coordinated fashion across all products with a much higher relevance factor to each vertical market.
Portfolio marketing’s role (also known as industry marketing) is to promote the value of the portfolio to named industries and make sure the salesforce can tell a more strategic/differentiating value story in each market segment throughout various stages of the sales process, again with the supporting sales tools.
In B2B, it’s far more advantageous to market the value of your portfolio, even if customers buy products or modules individually because the relevance factor is higher when it’s industry specific. It also demonstrates that your vision for success in each vertical market aligns with the vision of your target customers.
The bottom line in portfolio marketing is to drive more revenue and greater market penetration in specific segments regardless of the product mix. In other words, product revenue and product market share play second fiddle to industry revenue and industry market share (number of customer accounts).
If your organization doesn’t target specific vertical markets/industries, you can still practice portfolio marketing, however you lose one of the biggest benefits which is the industry-relevant messaging.
Which Approach is Best For You?
Here are some general rules of thumb.
If Your Products Are a Commodity
If you’re in a crowded space where the competition is high and differentiation is increasingly difficult (most B2B companies), portfolio marketing is the easiest way to differentiate because your marketing and sales dialogues are far more relevant to buyers in each segment.
Speaking their language from a marketing and sales perspective is one of the simplest ways to differentiate because it creates the perception that because you understand the industry better, your products must also be better.
If Your Product Category is Relatively New
If you’re in a relatively new product category and your goal is to grab market share, you can certainly succeed with product marketing and take a more generic approach to messaging, marketing and selling because much of your marketing content will be educational.
If you take a more generic approach to marketing, just keep this one thing in mind – buyers don’t always buy what they do understand, but they never buy what they don’t understand. Relevance is the lynchpin to strong messaging and nothing make your messaging more relevant than industry speak.
As the market gets more crowded, the case for going to a portfolio marketing model gets stronger as it will be required to sustain your growth.
Making the Transition to Portfolio Marketing
Here’s the easiest way to make the transition from product marketing to portfolio marketing. Look for market segments where both of these factors are present.
- Industry segments where you have the most successful/happiest customers.
- Industry segments that are adopting your product category the fastest.
Create your top-line industry messaging and then weave in your product messaging with strong context for each industry vertical. Mobilize it across your salesforce and marketing channels, build out the sales tools and programs and you’re on your way.
Product Marketing vs. Portfolio Marketing: The Big Picture
The manner in which you market your products is largely an extension of the go-to-market strategy employed by product management.
Most B2B companies are afraid to target specific vertical industries for fear they’ll miss opportunities in other verticals outside your focus. It’s a case of trying to be everything to everyone.
The real truth for most enterprise B2B companies is that 80% of their revenue comes from five or fewer industry segments. So why not just start with those five segments and be better than the competition as long as there’s enough runway remaining to support your growth goals?
It’s easy for product marketing to go vertical but product management has to back them by sprinkling in a few industry-specific features (20%) into a mostly horizontal (80%) platform.
It also helps if product management is practicing a portfolio approach because they can deliver far greater value when all product teams view their markets holistically through a common lens versus each product team looking at their markets in a silo.
The decision of product marketing versus portfolio marketing comes down to deciding which approach is most conducive to your organization’s success.
Is it more beneficial to your organization to be a market leader in fewer industry segments or will they fare better delivering, marketing and selling a generic solution to all segments?
Product Management University teaches courses in product marketing and portfolio marketing and can help you make the shift from one to the other. Contact us about a personalized hands-on training program for your product marketing or industry marketing team and learn how to market new solutions without any new products!
by John Mansour on November 14, 2022.