Obviously Awesome (Positioning)

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Summary

Overview

Positioning is “context setting” for products – deliberately defining how you are the best at something that a defined market cares a lot about.

You might have bad positioning if:

Your current customers love you, but new prospects can’t figure out what you’re selling.
Your company has long sales cycles and low close rates, and you’re losing out to the competition.
You have high customer churn because customers bought a product that had feature you do not
You’re under price pressure

Great positioning takes into account:

The customer’s point of view on the problem you solve and the alternative ways of solving that problem
The ways you are uniquely different from those alternatives and why that’s meaningful for customers
The characteristics of a potential customer that really values what you can uniquely deliver. The best market context for your product that makes your unique value obvious to those customers who are best suited to your product.

Components of positioning

We can break down positioning into five components (plus an optional bonus component):

Competitive alternatives. What customers would do if your solution didn’t exist. Alternatives to your product can be “hire an intern to do it,” “use a spreadsheet” or even “suffer along with the problem and do nothing.”
Unique attributes. The features and capabilities that you have and the alternatives lack. Your unique attributes are your secret sauce, the things you can do that the alternatives can’t.
Value. The benefit that those features enable for customers. Value is the benefit you can deliver to customers because of your unique attributes. If unique attributes are your secret sauce, then value is the reason why someone might care about your secret sauce.
Target market characteristics. clearly identify who those folks most likely from you are. They are the customers who care the most about the value your product delivers. Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offerings.
Market category. The market you describe yourself as being part of, to help customers understand your value. Declaring that your product exists in a certain market category will set off a powerful set of assumptions in customers’ minds about who your competitors are, what the functionality of the product should be and what the pricing is like.
(Bonus) Relevant trends. Trends that your target customers understand and/or are interested in that can help make your product more relevant right now. They can help customers understand why your offering is something they need to pay attention to right now. Trends help you capture FOMO

The 10-Step Positioning Process

1. Understand the Customers Who Love Your Product

Once you narrow in on the happiest customers, look for the reasons they are so satisfied while others were not. What was it about your offering that made them so happy with it, and what was it about those customers that made them such a good fit?

The first step in the positioning exercise is to make a short list of your best customers.

2. Form a Positioning Team

3. Align Your Positioning Vocabulary and Let Go of Your Positioning Baggage

4. List Your True Competitive Alternatives

Customers don’t always see competitors the same way we do, and their opinion is the only one that matters for positioning.

The features of our product and the value they provide are only unique, interesting and valuable when a customer perceives them in relation to alternatives.

start by asking customers what problems they’re trying to solve?

Understand what a customer might replace you with in order to understand how they categorize your solution.

you are an expert in solutions in this space and quite likely understand the real competitive landscape much better than customers do

The competitive alternatives often naturally cluster, and if so, it’s helpful to group them. For example, there might be a group called “do it manually” that includes “hire an intern” and “do it myself with Excel” and another group called “use a small-business accounting solution” that includes QuickBooks, FreshBooks, etcetera. Grouping the alternatives helps the team move to the next step.

5. Isolate Your Unique Attributes or Features

Once you have a list of competitive alternatives, the next step is to isolate what makes you different and better than those alternatives.

define features as something your product or company has or does. Some examples of features: “a 15-megapixel camera,” “integrates with QuickBooks,” “one-click installation” and “metal construction.”

list all of the capabilities you have that the alternatives do not.

6. Map the Attributes to Value, and cluster them into “Themes”

capture the value that each of your unique attributes enables for customers. Each feature can have multiple value points, and a combination of features can provide value as well.

Feature: Something your product does or has (15-megapixel camera)

Benefit: What the feature enables for customers (Sharp photo images )

Value: How this feature maps to a goal the customer is trying to achieve (Images can be zoomed in or printed in large format and still look sharp)

Clustering the Value into “Themes”

7. Determine Who Cares a Lot

not all customers care about that value in exactly the same way

An actionable segmentation captures a list of a person’s or company’s easily identifiable characteristics that make them really care about what you do.

determine what makes some prospects much more excited about your offerings than others—think of these as your “best-fit prospects.”

Great positioning resonates with your best-fit customers right now, and will evolve with them over time.

8. Find a Market Frame of Reference That Puts Your Strengths at the Center and Determine How to Position in It

a “market” needs to be something that already exists in the minds of customers

choose a market category by isolating your key features and their value, and asking yourself, What types of products typically have those features? What category of products typically deliver that value?

Pay particular attention to adjacent markets that are growing quickly. Positioning yourself in a growing market has obvious benefits: a rising tide of customer interest, media focus and buzz, and the appearance of being new and cool

The “style” of positioning you choose will depend on a set of factors including the competitive landscape and your business goals.

Head to Head: Positioning to win an existing market You are aiming to be the leader in a market category that already exists in the minds of customers. If there is an established leader, your goal is to beat them at their own game by convincing customers that you are the best at delivering the solution.

Big Fish, Small Pond: Positioning to win a subsegment of an existing market You are aiming to dominate a piece of an existing market category. Your goal is not to take on the overall market leaders directly, but to win in a well-defined segment of the market. You do this by targeting buyers in a subsegment of the broader market who have different requirements that are not being met by the current overall market leader.

Create a New Game: Positioning to win a market you create You are aiming to create a new market category. Your goals are first to prove to customers that a new market category deserves to exist, then to define the parameters of that market in the minds of customers, and lastly, to position yourself as the leader within it.

9. Layer On a Trend (but Be Careful)

Ideally, if a current trend helps reinforce your positioning and the value that your offerings deliver, you can use it to your advantage.

10. Capture Your Positioning so It Can Be Shared

This document should break down each individual component of the position, give enough detail for each to be understood and show how they interact with one another.

Positioning Canvas

Product name and one-line description

Market Category (and subcategory) — the market and submarket that you compete in

Market Category:

Subcategory:

Competitive Alternatives (what would customers use if your product did not exist?)

Individuals

Manual search via google, followed by manual analysis

Small Teams

Using software tools

Large enterprises

Using research companies and consultants

Unique attributes (what features/capabilities does your product have that the alternatives do not?)

AI-powered insights extracted from raw data
Data updates almost as soon as it's released
Dashboard creation and collaboration tools
Automated email/summary alerts when something interesting happens in the data or when it updates
AI-powered data recommendations and compound insights

Value (what value do those attributes enable for customers?)

100x faster data research
10x better insights from the data they’ve researched
Better collaboration with a team, reducing rework

Who cares a lot (what are the characteristics of a customer that makes them care about about the value you delivery?)

Key takeaways

Any product can be positioned in multiple markets. Your product is not doomed to languish in a market where nobody understands how awesome it is.
Great positioning rarely comes by default. If you want to succeed, you have to determine the best way to position your product. Deliberate, try, fail, test and try again.
Understanding what your best customers see as true alternative to your solution will lead you to your true differentiators.
Position yourself in a market that makes your strengths obvious to the folks you want to sell to
Use trends to make your product more interesting to customers right now, but be very cautious.

Highlights (for my internal reference only – not relevant for most people)

You’ve got a cool product, but nobody understands it. You think it’s simple, but customers don’t. They compare your products with those that are nothing like it.

If prospects don’t understand what your product is all about, it must be because they haven’t really heard you, or you’re not saying it clearly enough. But if that were true, then you would see additional marketing result in more sales, and your sales reps wouldn’t have to work so hard

every single marketing and sales tactic that we use in business today uses positioning as an input and a foundation. To put it another way—none of the new, cool stuff works without good positioning as a starting point.

Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about.

If we fail at positioning, we fail at marketing and sales. If we fail at marketing and sales, the entire business fails.

Like speaking Japanese slowly and loudly to a person who speaks only English, putting a bigger marketing budget behind confusing and unclear positioning doesn’t work.

it’s hard to blame the sales process when it takes several meetings for a customer to figure out what your product is,

“How do you beat Bobby Fischer? You play him at any game but chess.” WARREN BUFFETT

I like to describe positioning as “context setting” for products.

Without that context, products are very difficult to understand, and the whole company suffers

Customers need to be able to easily understand what your product is, why it’s special and why it matters to them.

Weak positioning leaves a trail— a) Your current customers love you, but new prospects can’t figure out what you’re selling.

If your prospects can’t figure out what you do—quickly—they will invent a position for you, one that potentially hides your key strengths or misrepresents your value.

Talk to people—not just friends and family—who would be great prospects for your offering. Show them your product and explain what it does. Now ask them how they would describe what you do. Likewise, ask existing customers about your offering and see what they say. If you see a disconnect between how your happy customers think about your product and how prospects see it, you likely have a positioning problem.

b) Your company has long sales cycles and low close rates, and you’re losing out to the competition.

Do your customers seriously evaluate your product, only to drop out at the last minute? Products with a strong position make their value obvious, attract suitable customers and sell quickly.

c) You have high customer churn. Do you have high customer churn shortly after purchase, and new customers who are constantly asking for features you have no plan to deliver? Customers who misunderstood your value chose you for the wrong reasons, and now they’re trying to recover sunk costs by turning your product into what they thought they were getting.

d) You’re under price pressure. Do customers complain that your prices are too high? You can’t charge a premium for a product that seems exactly like everything else on the market, and weakly positioned products are seen to offer little beyond their competitors.

POSITIONING AS CONTEXT Context enables people to figure out what’s important. Positioning products is a lot like context setting in the opening of a movie.

When customers encounter a product they have never seen before, they will look for contextual clues to help them figure out what it is, who it’s for and why they should care. Taken together, the messaging, pricing, features, branding, partners and customers create context and set the scene for the product.

Even a world-class product, poorly positioned, can fail.

The situation is even worse when we consider innovative products that people have never encountered before.

Most products are exceptional only when we understand them within their best frame of reference.

While we understand that context is important, we generally fail to deliberately choose a context because we believe that the context for our product is obvious.

The Two Traps Product creators often fall into the trap of thinking there is only one way to position an offering, and that we have no ability to shift that contextual frame of reference, especially after we have released it to market.

most products can be positioned in multiple different markets.

Trap 1: You are stuck on the idea of what you intended to build, and you don’t realize that your product has become something else.

Frequently, the product we end up with is not what we started out to build.

This transformation happens so gradually that we, the product creators, often don’t notice it. We still see the product as the thing we set out to build.

Customers, though, are often left confused by products that don’t seem to match up with the way companies are positioning them.

Trap 2: You carefully designed your product for a market, but that market has changed.

Sometimes a product that was well positioned in a market suddenly becomes poorly positioned, not because the product itself has changed, but because markets around the product have shifted.

You’re stunned to discover the hit product at this bakery is just like yours—it’s full of nuts, seeds and dates... the ingredients are almost identical! But this muffin isn’t positioned as a “diet muffin.” In fact, they don’t even call it a muffin. It’s a “gluten-free paleo snack.”

you had a great product but failed to adjust the positioning as markets around the product shifted.

You were trapped in your original positioning, even though the market had moved on.

For startups and tech companies, this problem is very common. Our markets are complex, overlapping and shifting rapidly. Our customers operate in a context that is often quite different from our startup or tech bubble.

How to Position Your Product like Your Company Depends on It

We generally fail to consider other—potentially better—ways to position our products because we simply aren’t positioning them deliberately. Cake is a pretty simple example, but we do the same thing with more complex technologies.

Positioning Story: From database to data warehouse

Our product was a special kind of database that could quickly find something in a very large collection of data, much faster than the popular databases on the market at the time.

The problem, of course, was that at that time the world didn’t know it needed a fancy new database. When we met with potential customers and started with “Hi, we’d love to show you our database...,” they didn’t even let us get to the part where we explained how ours was special and different from the database they already had.

They simply didn’t want something new, another product to learn, another database to integrate into their existing database systems. Besides, the database they already had was good at a wide range of things beyond analysis,

We spent half our time in every sales meeting trying to explain how our database was different from and better than the database they already had. Sound familiar?

When we tried to find investors for our company, they wouldn’t fund us for the same reason: the database market was mature and the big vendors were impossible to beat.

We broke out of this mess by changing our positioning. It started with a customer telling me he didn’t believe we were a database at all. “We aren’t?” I said, completely baffled. “What the heck are we?” He went on to explain that in his eyes we were more of a business intelligence tool, or even more specifically, a data warehouse

This wasn’t exactly true in our minds — we lacked some of the features associated with a data warehouse. We did, however, deliver value that was much more clearly aligned with that category of solutions than it was with databases.

In fact, in a side-by-side comparison, our database didn’t stack up that well against the leading databases on the market, but it blew the doors off the other data warehouses on the market because our analysis capabilities were so superior.

The repositioning didn’t stop with marketing and sales — it changed the way we viewed ourselves. We looked at the features we were planning to build in the future and adjusted them to fit our vision of a warehousing platform. We eventually revised our product roadmap — how should our product reinforce the value we were delivering, and how would we evolve into a better data warehouse?

Great positioning takes into account all of the following:

The customer’s point of view on the problem you solve and the alternative ways of solving that problem
The ways you are uniquely different from those alternatives and why that’s meaningful for customers
The characteristics of a potential customer that really values what you can uniquely deliver. The best market context for your product that makes your unique value obvious to those customers who are best suited to your product.

Somewhere along the way, we have confused teaching people how to do positioning with teaching people how to write down positioning.

Why You Should Never Create a Positioning Statement

THE TRADITIONAL POSITIONING STATEMENT FOR people who want a non-mainframe database, our non-mainframe database IS A non-mainframe database WHICH PROVIDES an IBM database that runs on platforms other than a mainframe UNLIKE all other non-mainframe databases WHICH PROVIDES everything a non-mainframe database provides.

The worst part of a positioning statement exercise is that it assumes you know the answers.

If you’re selling a “diet muffin,” this exercise doesn’t give you any clues that maybe you could reposition your product as a “gluten-free paleo snack.”

The traditional positioning statement fails in several critical ways: It assumes you know the best way to fill in the blanks.

reinforces the status quo.

It doesn’t give you any hints about what to do next.

It’s hard to remember.

We can break down positioning into five components (plus an optional bonus component) that come together to define what we do, why we are special, which customers we can best serve and the market we intend to win.

Competitive alternatives. What customers would do if your solution didn’t exist.

Unique attributes. The features and capabilities that you have and the alternatives lack.

Value (and proof). The benefit that those features enable for customers.

Target market characteristics. The characteristics of a group of buyers that lead them to really care a lot about the value you deliver.

Market category. The market you describe yourself as being part of, to help customers understand your value.

(Bonus) Relevant trends. Trends that your target customers understand and/or are interested in that can help make your product more relevant right now.

1. Competitive alternatives The positioning statement exercise includes a space for defining a competitor or competing product. For many products, however, there can be several competitive alternatives and not all of them will be “products” per se.

Alternatives to your product can be “hire an intern to do it,” “use a spreadsheet” or even “suffer along with the problem and do nothing.”

Our customers often do not know nearly as much about the universe of potential solutions to a problem as we

Customers, however, have often never purchased a solution like yours before. They are approaching the solution to their problem with a clean slate and little knowledge of what “state of the art” in your domain looks like. You may worry a lot about an up-and-coming startup in your space, but your customers have likely never heard of them.

In business software, the most common competitive alternative is a combination of general-purpose business software (spreadsheets, documents, presentations) and manual processes.

important to really understand what customers compare your solution with,

your solution might be much easier to use than the product that other startups are selling, but if the real alternative in the mind of a customer is Excel, you can’t say your product is easier to use unless it is easier to use than a spreadsheet.

2. Unique attributes

Your unique attributes are your secret sauce, the things you can do that the alternatives can’t.

For technology companies, these are often technical features, but unique attributes could also be things like your delivery model (such as installed on-premise vs. software as a service), your business model (think Rent the Runway upending retail by leasing instead of selling special-occasion wear) or your specific expertise (perhaps you have a dozen international banks as clients and therefore understand their business better than others in the market).

you will have many differentiators. The key is to make sure they are different when compared with the capabilities of the real competitive alternatives from a customer’s perspective.

3. Value (and proof)

Value is the benefit you can deliver to customers because of your unique attributes.

If unique attributes are your secret sauce, then value is the reason why someone might care about your secret sauce.

Value should be as fact-based as possible. Qualitative value claims, such as “people enjoy well-designed user interfaces,” are too subjective and customers won’t believe them.

Your opinion of your value does not count as proof; the opinion of customers, reviewers and experts does.

Your value needs to be provable in an objective and demonstrable way.

4. Target market characteristics

In most cases, the value you provide is at least somewhat relevant to a wide variety of customers.

However, if you are a small business Your sales and marketing efforts have to be focused on the customers who are most likely to buy from you.

Your positioning needs to clearly identify who those folks are. And simply put, they are the customers who care the most about the value your product delivers.

Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offerings.

big-picture characteristics include things like industry, location and company size, but those are rarely enough to identify a customer who is a great fit for your product.

Suppose your company was running out of cash and if the team didn’t close a certain amount of business by the end of the month, very bad things were going to happen. What types of customers would you focus on and why? What are the characteristics of those customers that make them more likely to buy?

We originally thought about our database target market as “any company with a very, very large amount of data.” But that wasn’t specific enough — loads of companies with a large amount of data only store it for backup and don’t care about fast analysis. Then we asked ourselves who cares a lot about getting answers quickly from a large amount of data. One group was banks that had a very time-sensitive need to analyze data to quickly identify a potential security threat. This specificity of positioning allowed us to be really targeted in our sales and marketing—instead of focusing our marketing on any company with a lot of data, we could specifically target banks.

5. Market category

Think of the market category as a frame of reference for your target customers, which helps them understand your unique value.

Market categories serve as a convenient shorthand that customers use to group similar products together.

Declaring that your product exists in a market category triggers a set of powerful assumptions. Customers need a way to make sense of the overwhelming number of products on the market. When they are presented with a new product, they will attempt to use what they know to try to figure out what it’s all about.

Declaring that your product exists in a certain market category will set off a powerful set of assumptions in customers’ minds about who your competitors are, what the functionality of the product should be and what the pricing is like.

example, if I describe my product as “a customer relationship management (CRM) tool,” you will assume my competition is Salesforce, because they are the leader in that market.

Your market category can work for you or against you. If you choose your category wisely, all the assumptions are working for you. You don’t have to tell customers who your competitors are. It’s assumed! You don’t have to list every feature, because it’s assumed that all products in the category have basic category functions.

However, a poor category choice can turn that power against a product. If the market category we select triggers assumptions that do not apply to our product, then a good portion of our marketing and sales efforts are going to be spent battling those assumptions.

Positioning Story: An email-for-lawyers solution that isn’t really email I once received a call from a startup with a product that customers loved but prospects couldn’t figure out. The founders were ex-lawyers who had set out to build “better email for lawyers,” and they walked me through a demo.

asked them to show me the calendar and they explained it didn’t have one. I was surprised, since calendaring is assumed functionality for any email solution. Interestingly, their happy customers didn’t mind. They chose the product for its ability to do secure, context-aware file sharing. Again, I was surprised. File sharing is a problem normally solved with team collaboration software, not email.

The product was positioned as “email” but didn’t have features we assume any email solution would have. Also, the key unique feature of the product was not expected or even particularly valued in their market (“email”). Repositioning the product as “team collaboration software” made it easier for customers to intuitively understand what was valuable about it, and avoided customers looking for functionality it didn’t have. Even though the product was developed with a certain market in mind, what the company built was a better fit in a completely different market category.

Market categories help customers use what they know to figure out what they don’t.

6. (Bonus) Relevant trends

Used carefully, trends can help customers understand why your offering is something they need to pay attention to right now.

It’s easy to confuse market categories and trends, but they are not the same thing. Market categories are a collection of products with similar characteristics. Trends are more like a characteristic itself, but one that happens to be very new and noteworthy at a given point in time.

Market categories help customers understand what your offering is all about and why they should care. Trends help buyers understand why this product is important to them right now.

Trends can help business buyers understand how a product aligns with overall company priorities, making it a more strategic and urgent purchase. Trends are important because, as customers, we want to learn about new, interesting and potentially disruptive technologies or approaches. Nobody wants to be left behind when a shift happens, so we’re constantly looking out for new developments that might have an impact on us and our business.

Trends help you capture FOMO

Buyers are always interested in how the world is changing and that makes them interested in trends. Media, blogs, magazines and books cover trends because they are new and interesting to read about. Buyers also worry about disruption and will often be looking to understand new technology and capabilities that they might need to know about or take advantage of for competitive reasons.

Trends in technology can be applied to multiple market categories. Blockchain technology, artificial intelligence (AI) and augmented reality are examples of trends that are relevant to multiple different markets. AI itself is not a market category and tells customers little about what a product is. AI-empowered CRM, however, tells us what the product is (CRM is the market category) and gives us a clue about what makes it special right now (the use of AI).

Using a trend in positioning is optional (but often desirable). Position your product in a market category that puts your offering’s strengths in their best context, and then look for relevant trends in your industry that can help customers understand why they should consider this product right now.

“Our solution helps them rapidly build out a targeted buyer list and get deeper insights about consumer behavior and preferences.” Sampler adjusted their positioning to describe themselves as “direct-to-consumer sampling” to make the link more explicit. “When we started to describe ourselves as “direct-to-consumer sampling,” brands made Sampler a priority and deals closed faster. Now we can clearly communicate how we tie into one of their most important initiatives—it really makes our solution more strategic to brands.” Sampler now works with brands like L’Oréal, Kimberly-Clark and Unilever for samples of everything from moisturizers to granola bars.

the 10-Step Positioning Process

STEP 1. Understand the Customers Who Love Your Product

we spent all our time looking for things that work, and then deciphering why. What marketing campaigns brought in the most leads? Which pieces of content were consumed the most? What events had the most attendees? Asking these questions led us to the happiest customers.

Once we narrowed in on the happiest customers, we went looking for the reasons they were so satisfied while others were not. What was it about our offering that made them so happy with it, and what was it about those customers that made them such a good fit for us?

Your best-fit customers hold the key to understanding what your product is. Looking back at the first few times I repositioned a product, I kept coming back to our happiest customers and how they thought about us.

In one case, we tried to survey all of our customers to see why they loved us, and the results were muddy. There didn’t seem to be any patterns in why people picked us. I wondered if the results would look different if I only surveyed the ecstatic fans and left the moderately happy customers out of it. Suddenly a clear pattern emerged: all of our customers could look like these very happy ones if we focused our marketing and sales efforts on companies with characteristics similar to the ecstatic fans.

We increased our growth by concentrating on our best-fit customers.

The first step in the positioning exercise is to make a short list of your best customers.

They understood your product quickly and bought from you quickly. They became raving fans, referred you to other companies and acted as a reference for you.

What if I don’t have any super-happy customers yet?

Think of your product as a fishing net. You have a theory that your net is good for catching grouper, but you haven’t fished with it yet so you aren’t certain what you might catch.

Positioning your net broadly as a “fish net” when you have little market experience is the best way to keep your options open until you have enough customer experience to start seeing patterns.

Your first instinct might be to consider your product and its special features and position around them.

But that’s a trap. If we start by laying out our unique features, we are unconsciously comparing ourselves to a set of competitors.

I’ve found this to be particularly true in technology startups that are keeping an eye on other startups in their space that are competing with them for investment dollars. That’s fine, and you will have to keep an eye on those threats as your business grows in the future.

most of your target customers have never heard of you or your rival startups—they simply want to know how your product compares to what they use today.

Shouldn’t we position our product for customers the same way we position it for investors?

Absolutely not! Investors are investing in what your company will be in the future; customers are buying a solution to a problem they have right now.

Customers, for the most part, are making an immediate decision to spend money they have right now to get immediate value and relieve an immediate pain. They generally aren’t that concerned about your plan for getting 1,000 more customers that look just like them

Your plan for the future from a customer’s point of view could look confusing, terrifying or both. When investors hear the word “disruption,” they see opportunity for new companies to expand and grow. But sometimes customers hear “disruption” as replacing things they have invested

your website, your sales and marketing materials, your pricing and even your immediate product roadmap will be designed to serve customers, and therefore should reflect your customer positioning not your investor positioning.

STEP 2. Form a Positioning Team

positioning process works best when it’s a team effort, ideally from across different functions within the company. Each team, from sales to marketing to customer success, can bring a unique point of view relative to how customers perceive and experience the product.

Positioning impacts every group in the organization. Consider these outputs that all flow from positioning: Marketing: messaging, audience targeting and campaign development Sales and business development: target customer segmentation and account strategy Customer success: onboarding and account expansion strategy Product and development: roadmaps and prioritization

You want engagement from every group because you need buy-in from every group.

STEP 3. Align Your Positioning Vocabulary and Let Go of Your Positioning Baggage

At a minimum, the team needs to be on the same page regarding: What positioning means and why it is important Which components make up a position and how we define each of those How market maturity and competitive landscape impact the style of positioning you choose for a product

most products can be many things to many types of buyers.

STEP 4. List Your True Competitive Alternatives

Customers don’t always see competitors the same way we do, and their opinion is the only one that matters for positioning.

The features of our product and the value they provide are only unique, interesting and valuable when a customer perceives them in relation to alternatives.

start by asking customers what problems they’re trying to solve?

Customers, although well-versed in their problems, are often terrible at describing them in a way that gives product creators enough nuance to make decisions.

You need to create a position that highlights the unique strengths of your product as customers perceive them.

Many companies have weak positioning precisely because they don’t clearly understand their true competitive alternatives in the minds of customers.

Understand what a customer might replace you with in order to understand how they categorize your solution.

(1) remain focused on the best-fit customer list and name only what those customers would see as an alternative, and (2) rank the list from most common to least common.

you are an expert in solutions in this space and quite likely understand the real competitive landscape much better than customers do. If a competitor has a small number of customers, they are likely to have zero mindshare with prospects and should not be listed as a real competitive alternative.

STEP 5. Isolate Your Unique Attributes or Features

Strong positioning is centered on what a product does best. Once you have a list of competitive alternatives, the next step is to isolate what makes you different and better than those alternatives.

In this step you need to stay focused on features and capabilities (also called attributes), rather than the value that those features drive for customers (we will get to that in Step 6).

list all of the capabilities you have that the alternatives do not.

List every attribute you can think of, even if it seems like it could be a negative to certain customers and even if you’re uncertain what its value might be.

Your opinion of your own strengths is irrelevant without proof.

Focus on the characteristics of your product or company that drives a potential benefit—ideally those features are based on objective facts and are provable. For example, I have yet to meet a company that believes they provide terrible customer service.

Ease of use is another “feature” that I believe is really a value. What is it about your product that makes it easier to use and how do you prove it? Do your competitors’ products require training and your product doesn’t? Can you quantify how long it takes to become proficient with your product versus alternative products?

Third-party validation that your product’s feature is better than the alternative counts as proof. If an independent reviewer or analyst stated that your product is easier to use, that’s a fact.

Be broad and creative with the attributes you list. They could be a proprietary process, expertise in a special area, distribution channels, partnerships or special skills.

Concentrate on “consideration” rather than “retention” attributes. Consideration attributes are things that customers care about when they are evaluating whether or not to make a purchase.

Retention attributes are features that aren’t as important when a customer is making an initial purchase decision, but are very important when it comes time to renew.

List as many attributes as you like at this stage. You’ll group them as you move to the next stage in the process. Focus on capturing the broader set without trying to decide what’s really important and what isn’t.

STEP 6. Map the Attributes to Value “Themes”

Attributes or features are a starting point, but what customers care about is what those features can do for them.

Attributes like “15-megapixel camera” or “all-metal construction” enable benefits for customers such as “sharper images” or “a stronger frame.” Articulating value takes the benefits one step further: putting benefits into the context of a goal the customer is trying to achieve.

capture the value that each of your unique attributes enables for customers. Each feature can have multiple value points, and a combination of features can provide value as well.

Feature: Something your product does or has (15-megapixel camera)

Benefit: What the feature enables for customers (Sharp photo images )

Value: How this feature maps to a goal the customer is trying to achieve (Images can be zoomed in or printed in large format and still look sharp)

Clustering the Value into “Themes”

For example, if you have attributes like “works on any mobile device” or “works without an internet connection,” those might both provide value to customers who would like to use the solution with field workers in remote locations or locations with intermittent Wi-Fi or cell access.

You could clump those attributes in a group called “supports remote environments.”

STEP 7. Determine Who Cares a Lot

although you have unique attributes that deliver value to customers, not all customers care about that value in exactly the same way.

Marketers call this step a “segmentation” exercise. In my experience, if there’s a marketing concept more widely misunderstood than positioning, it’s segmentation.

A useful segmentation, however, needs to go well beyond demographics or firmographics.

An actionable segmentation captures a list of a person’s or company’s easily identifiable characteristics that make them really care about what you do.

a segmentation could include combinations of things such as other brands they own or like, stores they buy from, the job they hold or their music or entertainment preferences. For businesses, it could be the way they sell, other products they have invested in or the skills they have or don’t have inside their company.

determine what makes some prospects much more excited about your offerings than others—think of these as your “best-fit prospects.”

Think about the difference between your best-fit customers and your other customers. Your other customers think your product is OK for the price, but they will jump ship if a different company offers a cheaper or better version. These customers are harder to close business with—they take their time making a purchase decision and frequently ask for a discount. In short, they like your product but they just don’t love it.

Now think about your best customers. Everything about doing business with them is different. They understood your product immediately and couldn’t wait to get their hands on it. They bought quickly and instead of asking for a cheaper price, they might have told you your product should be priced higher. They tell their friends about your product, and not only do they not churn, they will fight anyone who tries to take it away from them. They don’t just like your product, they loooooove it.

Target as narrowly as you can to meet your near-term sales objectives. You can broaden the targets later.

Great positioning resonates with your best-fit customers right now, and will evolve with them over time.

You are mapping the value that your product’s features deliver to a group of customers who have the highest affinity for your product. You need to focus on the value points that you listed in the previous step and repeat the question, Who cares and why?

A segment can be defined by narrowing the set of buyers you are targeting. For example, you might focus the category of “accounting software” to “accounting software for freelancers or lawyers.” You might narrow down “sporting goods” to “sporting goods for babies” or “for dogs” or “for octogenarians.”

the segment needs to meet at least two criteria to be worthy of focus: (1) it needs to be big enough that it’s possible to meet the goals of your business, and (2) it needs to have important, specific, unmet needs that are common to the segment.

STEP 8. Find a Market Frame of Reference That Puts Your Strengths at the Center and Determine How to Position in It

pick a market frame of reference that makes your value obvious to the segments who care the most about that value.

a “market” needs to be something that already exists in the minds of customers

We position our offering in a market to trigger a set of assumptions—about competitors, features and pricing—that work to our advantage. By choosing to position within a specific market, you’re giving your prospects clues about what products they should compare you with, your key features, your price and your benefits.

In Step 3, you let go of your “default” market—part of your positioning baggage—which was most likely the place where you started. Now you are looking to deliberately choose a market frame of reference that makes your value obvious to the folks who care about it the most.

Use abductive reasoning.

Examine adjacent (growing) markets.

Ask your customers (but be cautious).

“Can’t you just ask your customers what market you’re in?” My answer: “Sometimes.”

be extremely careful in seeking feedback from customers and prospects about what market they see you in. Prospects may see things differently than those who have already tried to make sense of your product one way and failed. Also, customers will only try to position you in markets that are frequently linked to their industry or job function.

Picking a market is like giving customers an answer to the question, What are you?

a high level we can either choose to enter an existing market or create a new market. If we choose to enter an existing market, we can either compete to win the entire market or position our product to win a slice of it. The “style” of positioning you choose will depend on a set of factors including the competitive landscape and your business goals.

1. Head to Head: Positioning to win an existing market

You don’t have to explain to prospects what the market is all about; they already know what it is.

Well-defined markets also have generally accepted purchase criteria.

When to use the Head to Head style If you are already the leader in the market, the status quo suits you. The way prospects define the market has worked well for you (you are the leader here after all!), and you would like them to continue to define it that way.

If you are launching a new product, particularly if you are a small business just starting out, the Head to Head style is rarely a good choice.

The only case where a company might want to position a new product in a known category is when the category itself is defined and understood by buyers, but a strong leader has not yet been established.

The advantage of positioning in an existing market category is that you don’t have to convince people the category needs to exist.

use this style of positioning, first you have to determine whether or not the category has indeed been created in the minds of customers. You need data that tells you unequivocally that the market already exists in the minds of a critical mass of buyers or is emerging quickly enough for you to meet your business goals.

Second, take note of your competition.

The fact that buyers understand what the market is all about means that there is market demand, and though the market feels uncrowded at the moment, it won’t stay that way for long. If you choose to enter this market, you will have to commit to moving quickly to establish yourself as the leader before someone else does.

If you are looking to bootstrap your business, this may not be the way you want to enter the market.

The work of Head to Head If you are already the market leader, you need to continually reinforce to your buyers that the current way of thinking about the market is the best one.

includes reinforcing the current buying criteria and reiterating why you are the best to deliver those things.

quickly and forcefully defend against competitors who attempt to convince buyers to pay attention to other, emerging criteria.

You have to clearly demonstrate to the market that you have a superior ability to deliver, and you need to support that claim with hard evidence and undeniable facts.

If you choose to use the Head to Head style... Be prepared to battle against multiple competitors who will be simultaneously trying to prove they are better than you are at the currently established buying criteria, as well as others who are trying to redefine the purchase criteria to their advantage.

2. Big Fish, Small Pond: Positioning to win a subsegment of an existing market

startups compete in established market categories and do so successfully by first breaking up the market into smaller pieces and focusing on one piece they can win.

The goal of the Big Fish, Small Pond style of positioning is to carve off a piece of the market where the rules are a little bit different—just enough to give your product an edge over the category leader.

Like the Head to Head style of positioning, here you are leveraging what buyers already know about the broader market category, but you are calling attention to the fact that some of the requirements for your chosen subsegments are different and not being met by the overall category leader.

You get the advantage of a well-defined category without the stiff competition.

You are not trying to change the purchase criteria for the overall category;

Your focus is showing that there is a subsegment of the overall category with a specific set of needs that the current category leaders are not addressing.

Dominating a small piece of the market is generally much easier than attempting to directly take on a larger leader.

From a marketing and sales perspective, smaller subsegments are easier to reach and target, and gaining traction in a market that is more homogeneous is generally easier.

List building is easier when you are targeting a subsegment, as is getting in front of groups of prospects. Your value proposition can be highly targeted to these prospects and you will generally have an easier time making your solution’s distinct advantages obvious to prospects.

once you begin to get traction with some customers, your advantage in the subsegment tends to accelerate quickly. For example, if you are targeting law offices or banks, success with even a single customer is directly applicable to the next customer and can help move the next deal along quickly.

Communities also tend to cluster and share information with each other. As you close more business in a particular subsegment, knowledge of your solution in the community will grow quickly because of the links between people in the segment.

Word-of-mouth marketing happens most naturally in tight market subsegments.

A caution here is that the subsegment must represent a large enough opportunity that you can meet your business goals, at least in the short term.

When to use the Big Fish, Small Pond style First, this style requires that the category is well defined and there’s a clear market leader—and you’re not it. People must understand what you mean when you talk about the category.

Second, there needs to be clearly definable groups of customers with unique needs that are not addressed by the market leader.

The subsegment needs to be easily identifiable—meaning if I had to create a list of prospective buyers, I could figure out a way to do that.

I would have a much more difficult time creating a list of companies that value design or happy people.

demonstrate that this subsegment has a very specific and important unmet need.

You have the ability to meet the special needs of the subsegment much better than the category leader. The need of the subsegment must be clearly identifiable, but even when it is, your ability to meet it must be strong enough to convince buyers to go with you over the safer choice of the market leader.

These buyers were getting along for the most part by buying a solution that didn’t do everything but was likely “good enough” for their business. Convincing them to switch will require showing them that you have deeply understood their specific pain and have fully solved the problem.

positioning style is often useful for smaller startups that are looking for a way to establish themselves in a market with a strong market leader that they can’t take on directly.
educate the targeted subsegment about how a general-purpose solution is not meeting their needs.
show there is a clear gap in value between the general-purpose solution offered by the market leader and your more-purpose-built solution.

There should ideally be a way to quantify the value to them if they choose your solution over the market leader’s more generic solution.

show that you meet or exceed the existing category criteria (at least the ones that matter most to your subsegment).

you aren’t redefining the category, you are merely trying to capture a piece of it,

while you are leading with your defining features and value for your subsegment, you still have to prove that you meet the underlying basic needs common to the overall market category.

If you are trying to dominate a subsegment, be careful that the market leader doesn’t turn their attention to the subsegment and try to offer a “good enough” solution with some features that at least partially meet the buyers’ needs.

Ideally your competitive advantage is something that is difficult for the market leader to copy, either because you own the intellectual property, or (more commonly) because trying to match your functionality might cause them damage in the broader market where they are winning.

3. Create a New Game: Positioning to win a market you create

When to use the Create a New Game style Because this style of positioning is so difficult, it should only be used when you have evaluated every possible existing market category and concluded that you cannot position your offering there, because doing so would fail to put the focus on your true differentiators and value.

You aren’t simply capturing demand that already exists; you have to spark some demand first.

This style is usually only possible when there has been a massive change with a big potential impact on what is possible or what is important in a market.

Often a category emerges when an enabling technology, a shift in customer preferences and a supporting ecosystem manage to come together at once.

Creating a new category is the most difficult style of positioning, even when the pre-existing conditions are aligned to support it, mainly because it involves the greatest amount of “teaching” the customer.

In the other positioning styles, you’re leveraging what folks already know about a category and building on that to create a position in the mind of customers. In this style, you are starting with a blank canvas.

Customers need to first understand why the category deserves to exist. Why is the problem unique? Why do existing solutions in other categories fall short of solving that problem? While you are convincing the market that this category should exist, you are also teaching folks how to best evaluate solutions in that category.

To credibly create a new category, you need a product that is demonstrably, inarguably new and different from what exists in other market categories.

be aware that the leaders of existing categories may claim that your new product is merely a feature or subset of their existing solutions.

To successfully create a new category, you need to have strong arguments against any competitor that tries to convince customers that what you are selling is “merely a feature” instead of a product in its own right.

To help customers make sense of why this category hasn’t emerged sooner, there should be a very strong answer to the questions, Why now? What factors have finally made this category possible and/or necessary?

Category creation is about selling the market on the problem first, rather than on your solution.

If the category doesn’t already exist, it means customers aren’t currently aware that they have a problem. They don’t understand the cost of not solving that problem, nor do they understand the potential value they can unlock by solving that problem.

This style is very, very difficult to execute, but if you manage to pull it off, the rewards are massive.

allows you to create a market that is perfectly tailored to your strengths and weaknesses. It allows you to set the boundaries of the market exactly where you want them and to define purchase criteria so they map exactly to the things you do best.

Anyone who successfully defines a market can become its leader because the market was specifically designed that way.

involves dramatically shifting the way customers think, and shifting customer thinking takes a very strong, consistent, long-term effort.

For smaller companies, this style generally requires the participation of deep-pocketed, patient investors.

If you choose to use the Create a New Game style... Follow a long-term plan. At every step, you need to defend yourself as the category leader, or risk having a competitor with more resources and name-brand recognition reap the rewards of your hard work in creating the category.

STEP 9. Layer On a Trend (but Be Careful)

Think of your product’s strengths, your market context and a trend that is relevant to your customer base as three overlapping circles. You are aiming for the center, where all three intersect.

Ideally, if a current trend helps reinforce your positioning and the value that your offerings deliver, you can use it to your advantage.

Aligning with a trend can help make your offering look current and relevant, particularly for customers interested in that trend.

Trends can only be used when they have a clear link to your product. Start by making the connection between your product and the market obvious.

If you find that you don’t have a way to pull trends into your positioning, there’s no need to panic. Many companies operate perfectly fine in markets that don’t have much sizzle and pizzazz.

STEP 10. Capture Your Positioning so It Can Be Shared

Positioning needs to have company buy-in so it can be used to inform branding, marketing campaigns, sales strategy, product decisions and customer-success strategy.

This document should break down each individual component of the position, give enough detail for each to be understood and show how they interact with one another. I’m a fan of having a shorter, concise version of the positioning that can be captured on a single page and easily shared across the company. I also try to capture the positioning at a higher level in a positioning canvas.

Positioning Canvas

Product name and one-line description

Market Category (and subcategory) — the macro-market and submarket that you compete in

Competitive Alternatives (what would customers use if your product did not exist?)

Unique attributes (what features/capabilities does your product have that the alternatives do not?)

Value (what value do those attributes enable for customers?)

Who cares a lot (what are the characteristics of a customer that makes them care about about the value you delivery?)

Translating your positioning into a sales story

once you have completed a positioning exercise, you can work through defining a story of how a salesperson would pitch the product

think of this as more of an exercise where you define the components of a sales story that will later be worked into an actual presentation for the sales team to use

a sales story generally follows a common arc. It starts with a definition of the problem that your solution was designed to solve. As a team you can succinctly define the problem your solution solves. In a final sales presentation, the definition of the problem helps to put a boundary around the discussion and frame it in a way that makes what you are talking about obvious to customers as well

story them moves to describing how customers are attempting to solve the problem today and where the current solutions fall short

The next stage of the story is what I call "the perfect world". It's where you describe what the features of a perfect solution would be, knowing what you know about the problem and the limitations of current solutions

The sales story goes on to introduce the product or company and position it in the relevant market category

Next, the story naturally flows into talking about each of the value themes with a bit more details into how the solution enables that value. A completed sales deck also adds some information, such as handling common objections, a case study or list of current customers. The story wraps up with a discussion of whatever you would like the prospect to do next.

Some key takeaways:

Any product can be positioned in multiple markets. Your product is not doomed to languish in a market where nobody understands how awesome it is.
Great positioning rarely comes by default. If you want to succeed, you have to determine the best way to position your product. Deliberate, try, fail, test and try again.
Understanding what your best customers see as true alternative to your solution will lead you to your true differentiators.
Position yourself in a market that makes your strengths obvious to the folks you want to sell to
Use trends to make your product more interesting to customers right now, but be very caurious.