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Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It

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Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It

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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. At first you think this is a sales or marketing problem. 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 explaining what your product is and why anyone should care.

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

Positioning is a fundamental input into every tactic we execute, every campaign we launch, every piece of content we create, every sales pitch we make.

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

And it’s hard to blame the sales process when it takes several meetings for a customer to figure out what your product is, let alone whether or not they want to purchase it.

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

Without that context, products are very difficult to understand, and the whole company suffers—not just the marketing and sales teams.

Often, you’re too close to your product to realize that the market doesn’t think about it the way you do.

Positioning is a secret superpower that, when harnessed correctly, can change the way the world thinks about a problem, a technology or even an entire market.

“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.” MICHAEL PORTER

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

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.

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. In the context of a concert hall, Bell is perceived as producing something that is very valuable. He’s dressed to perform. He’s surrounded by an orchestra on a beautiful stage. The program tells people what awards he has won. Whereas, when he’s playing outside a subway station, everything around him has changed. He’s dressed like a street performer and standing beside a garbage can, playing for tips. His product—the music—hasn’t changed, but in this context, few people recognize its value.

“If you’re a baker, making bread, you’re a baker. If you make the best bread in the world, you’re not an artist, but if you bake the bread in the gallery, you’re an artist. So the context makes the difference.” MARINA ABRAMOVIĆ

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

Without meaning to, we trap ourselves within our own context. We don’t know how to shift the framework to best communicate what our product actually is or what it does. These traps usually take one of two forms.

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.

As product creators, we need to understand that the choices we make in positioning and context can have a massive impact on our businesses—for better or worse.

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.

The common failure in both of these traps is not deliberately positioning the product. We stick with a “default” positioning, even when the product changes or the market changes.

We generally fail to consider other—potentially better—ways to position our products because we simply aren’t positioning them deliberately.

“Find out who you are and do it on purpose.” DOLLY PARTON

Like Joshua Bell delivering a world-class performance in a context that didn’t ascribe value, lousy positioning makes your prospects work harder to figure out if you are worth paying attention to. Even if you do manage to capture their attention, ineffective positioning makes it hard for them to understand why they might want to buy what you’re selling. How you position your offerings is the underpinning of your entire business strategy and can mean the difference between success and failure.

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.

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

What do you call an exercise that produces something that never gets used? A big waste of time, that’s what you call it.

These are the Five (Plus One) Components of Effective Positioning: 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.

“You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time.” JEROEN DE FLANDER

The competitive alternative is what your target customers would “use” or “do” if your product didn’t exist.

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

  1. Unique attributes Unique attributes are capabilities or features that your offering has that the competitive alternatives do not have. Your unique attributes are your secret sauce, the things you can do that the alternatives can’t.

In general, 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.

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

Your opinion of your value does not count as proof; the opinion of customers, reviewers and experts does. Data or third-party opinions are difficult to refute. Your value needs to be provable in an objective and demonstrable way.

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.

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

You might sell a solution for small business that greatly reduces the time and complexity of invoicing. Any small business could use your product, but the ones that send a significant number of invoices every month will love you the most.

Declaring that your product exists in a market category triggers a set of powerful assumptions.

Your market category can work for you or against you.

Market categories help customers use what they know to figure out what they don’t. A well-chosen market category will help make your unique value more obvious to your target customers.

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.

“Sit, walk or run, but don’t wobble.” Zen proverb

In technology, we can think of market categories as groups of solutions that are similar and compete with each other. Accounting software, group chat, security systems, networking solutions—these are all market categories. 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.

Each component has a relationship to the others. Attributes of your product are only “unique” when compared with competitive alternatives. Those attributes drive the value, which determines who the best target customers are, which in turn highlights which market frame of reference is the best one to highlight your value. Trends must be relevant to your target customers, and can be used in combination with your market category to make your product more relevant to your buyers right now.

Our best market category depends on who our target customers are and what value we can deliver. The value we deliver depends on our differentiators, which depend on what alternatives we compare our product to. But the market category also tells customers who our competitors are. If everything depends on everything else, where on earth do we start in what seems to be a circular process?

Your best-fit customers hold the key to understanding what your product is.

“There is only one thing stronger than all the armies of the world: and that is an idea whose time has come.” Victor Hugo

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. They represent the perfect type of customer you want to buy from you (at least in the short term).

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.

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

keep in mind that 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. Customer-facing positioning must be centered on a customer frame of reference.

Investors are investing in what your company will be in the future; customers are buying a solution to a problem they have right now.

In general, 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.

In the early days of a company with a single product, positioning the product and the company as the same thing is the easiest path to establishing a brand in the minds of customers, because there are simply fewer things to remember.

If you are a single-product company that currently has a company brand and a product brand, I strongly recommend focusing on your product and putting your energy into marketing and selling that.

If sold individually, each product will have its own positioning that helps customers understand why they might consider buying it. Company positioning is a broader umbrella that helps customers understand why they should consider multiple offerings from the company.

A 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.

Who should be there? The person responsible for the business of that particular product must be in the room and be seen as driving the positioning effort. Positioning is a business strategy exercise—the person who owns the business strategy needs to fully support the positioning, or it’s unlikely to be adopted. In startups, the head is the CEO and/or the founders.

A positioning exercise that is not a team effort driven by the business leader will fail.

But marketing can’t “own” positioning, in the same way marketing can’t “own” the overall business strategy. It’s simply too broad and too important to live in one silo of the overall company.

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

“It’s no use of talking unless people understand what you say.” ZORA NEALE HURSTON

I’ve seen positioning team meetings run well with as few as three people and as many as twelve.

In order to consider possible new ways to think about a product, we have to consciously set aside our old ways of thinking about it. To do that, we need a common positioning vocabulary.

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

“We have the power to imagine better.” J.K. Rowling

The goal of the 10- Step Positioning Process is to find the best position for a product, one that puts the product in the context of a market where it can easily win because the product has obvious benefits over alternatives.

The reality is that most products can be many things to many types of buyers.

Market confusion starts with our disconnect between understanding the product as product creators, and understanding the product as customers first perceive it.

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.

If problems are the root, why not 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.

Understanding the customer’s problem wasn’t enough—to really understand how they perceived our strengths and weaknesses, we needed to understand the alternatives to which they compared us. Customers always group solutions in categories, but talking to them about problems doesn’t necessarily reveal those categories.

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.

The best way to understand competitive alternatives is to answer the question, What would our best customers do if we didn’t exist?

Focus on your best customers and what they would identify as alternative solutions.

In my experience, teams usually end up with a minimum of two and a maximum of five groups of alternatives.

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). I 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.”

Your opinion of your own strengths is irrelevant without proof.

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?

“We don’t know who discovered water, but we’re certain it wasn’t a fish.” John Culkin

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

Features enable benefits, which can be translated into value in unique customer terms.

Feature: Something your product does or has Benefit: What the feature enables for customers Value: How this feature maps to a goal the customer is trying to achieve 15-megapixel camera Sharp photo images Images can be zoomed in or printed in large format and still look sharp. All-metal construction A stronger frame that resists damage The frame lasts five times longer, allowing savings of $50,000 per year on frame replacements. One-click reports Fast, easy report generation Every part of the organization can make better decisions based on accurate, up-to-date metrics. 24-hour support Support that is always available Global operations have access to help across every time zone.

“The stone age didn’t end because they ran out of stones.” Unknown

Once you have a good understanding of the value that your product delivers versus other alternatives, you can look at which customers really care a lot about that value.

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.

In this step, you’ll 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. You can target your marketing and sales programs at them, but selling to them and keeping them happy isn’t going to be easy.

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

Could you hit your targets by focusing on only your best-fit customers? If the answer is no, you need to broaden your definition of “best-fit.” If the answer is yes, keeping your positioning focused on that segment is the most efficient use of your sales resources and the fastest and easiest path to hitting your sales targets.

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.” In general, 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.

You now have a good handle on your ideal prospects, your product’s unique attributes and the value those attributes can deliver. The next step is to pick a market frame of reference that makes your value obvious to the segments who care the most about that value.

We position our offering in a market to trigger a set of assumptions—about competitors, features and pricing—that work to our advantage.

Use abductive reasoning. The adage “if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck” also applies to new products. With abductive reasoning, you 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?

Examine adjacent (growing) markets. Another place to look for options is in the markets adjacent to the one in which you have been positioning yourself. Frequently, there are overlaps or blurry lines between markets.

Ask your customers (but be cautious).

Customers aren’t positioning experts, nor are they experts in how a market category works. Frequently they will attempt to position you in the most obvious market possible, and this market is often not the best one for highlighting your strengths.

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

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.

“If you don’t like being a doormat, then get off the floor.” Anonymous

You aren’t trying to change the game; you are winning—or attempting to win—at the game the way it is currently played.

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. Trying to beat an established market leader at their own game is a bit like trying to out-cola Coke. It would be foolish for a small company to ever try.

If you are fighting to unseat a leader in an existing category using the currently established criteria, you’re in a battle to prove that you can beat the leader at their own game. 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.

Many 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.

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

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

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

Just because your initial target market is narrow doesn’t mean you will stay narrowly focused forever.

If the category is not well understood, subsegmenting it is only going to result in further market confusion.

The work of Big Fish, Small Pond This 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. The work of this style is first to educate the targeted subsegment about how a general-purpose solution is not meeting their needs. You need proof points that show there is a clear gap in value between the general-purpose solution offered by the market leader and your more-purpose-built solution. You need to help the subsegment understand what’s in it for them if they do have those needs met. 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. You also have to show that you meet or exceed the existing category criteria (at least the ones that matter most to your subsegment). Remember that you aren’t redefining the category, you are merely trying to capture a piece of it, so 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.

We had a differentiator, but we struggled to map that differentiator to real value for a defined set of prospects.

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

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

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. Customers need to be aware of those things before you can successfully convince them to purchase any solution (including yours).

“The most successful efforts in category creation do not result from company executives creating an acronym at an offsite. Rather they are discovered from deeply understanding a narrow set of customers. These customers are often ‘freaks,’ extreme in their attitudes and behavior, forged by tectonic technological and societal shifts.

“The future isn’t a place we are going to go, it’s a place we get to create.” Nancy Duarte

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

It’s always better to be a little boring than completely baffling.

“If you change the way you look at things, the things you look at change.” WAYNE DYER

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.

Translating Your Positioning into a Sales Story

When selling to businesses, 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. An example would be, “Insurance companies today are trying to make their claims process less difficult for demanding digital-savvy customers,” or “Cash flow is critical to small businesses where an unexpected expense can kill a company.”

The point of working through the sales story is that everyone in the discussion can agree on how the positioning translates into a “pitch.” To do that, the team needs to agree on how to define the problem, current solutions, the gap and the key purchase criteria that a customer should have when looking for a solution in your market.

There are already stores full of books that can teach you how to do a better job of messaging, so I will give you just one tip that I think is important: write a messaging document. Every campaign you create or new piece of material you build is going to have a slightly different purpose and slightly different messaging. If there isn’t one master messaging document that is used as the starting point, your messaging (and often your positioning) will start to creep as messages are built on modified messages in a chain. A messaging document helps you keep a record of the accepted baseline messaging, gives everyone a common starting point for building specific copy for a specific purpose and keeps the language (and the positioning) from evolving too far away from the agreed-upon starting point.

Great positioning is usually strengthened over time with adjustments in features.

While most people think of positioning as a marketing concept, a shift in positioning feels more like a shift in business strategy. Every department inside the company is likely to be impacted over time.

I recommend checking in on your positioning every six months or when there has been a major event that could impact the competitive landscape or the way customers perceive and evaluate solutions.

A sudden change in the competitive landscape could signal a need to adjust your positioning.

If the arrival of a competitor does signal a change in the way customers think about a market, then you will have to revisit your positioning. Start at Step 4, considering your competitive alternatives.

Other outside forces can also change your market. New competitors aren’t the only factor that can upset your positioning. Outside forces can swing markets in ways that are often difficult to predict.

“If you want success, be unique.” NATALIE MASSENET

New technology can suddenly change what is possible in a market. Once customers understand it, purchase criteria can shift very quickly.

The attitudes and preferences of customers can shift over time.

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 alternatives to your solution will lead you to your 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. Don’t layer on a trend just for the sake of being trendy—it’s better to be successful and boring, rather than fashionable and bewildering.

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