Want to create better marketing content? Understand your value and differentiators better.

Want to grow revenue faster? Understand what makes a best-fit customer.

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.

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

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—the signs are there if you know where to look:

• 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.
• You’re under price pressure.
  

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.

How to Position Your Product like Your Company Depends on It (Hint: It Does)

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.
  

THE FIVE (PLUS ONE) COMPONENTS OF EFFECTIVE POSITIONING

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

1. Competitive alternatives. What customers would do if your solution didn’t exist.
2. Unique attributes. The features and capabilities that you have and the alternatives lack.
3. Value (and proof). The benefit that those features enable for customers.
4. Target market characteristics. The characteristics of a group of buyers that lead them to really care a lot about the value you deliver.
5. Market category. The market you describe yourself as being part of, to help customers understand your value.
6. (Bonus) Relevant trends. Trends that your target customers understand and/or are interested in that can help make your product more relevant right now.
   

Competitive alternatives

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.”

It’s important to really understand what customers compare your solution with, because that’s the yardstick they use to define “better.”

Unique attributes

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.

Value (and proof)

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

Target market characteristics

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.

You need to identify what sets these folks apart. What is it about these customers that makes them love your product more than others? How can we identify them?

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

Market category

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.

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.

(Bonus) Relevant trends

Trends can help business buyers understand how a product aligns with overall company priorities, making it a more strategic and urgent purchase.

I’ve determined that it’s critical to start with understanding what the customer sees as a competitive alternative, and then working through the rest of the components—attributes, value, characteristics, market category, relevant trends—from there.

STEP 1. Understand the Customers Who Love Your Product

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

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

STEP 2. Form a Positioning Team

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

In my experience, having one or at most two senior folks from a functional group is enough. With too many people in the room, it’s hard to hear from each group and you run the risk of having one or two groups dominate the discussion.

I highly recommend bringing in an experienced facilitator to guide the positioning discussion.

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

STEP 4. List Your True Competitive Alternatives

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.

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

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

What would our best customers do if we didn’t exist? The answer could be that they would use another product that looks like a direct competitor with you. But often that’s not the case. For many new products, the answer is “use a pen and paper” or “hire an intern to do it.”

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. Would a customer really use them if you didn’t exist? Probably not, since few of them are doing so today. What would the majority of your best customers really do?

Grouping the alternatives helps the team move to the next step. In my experience, teams usually end up with a minimum of two and a maximum of five groups of alternatives.

STEP 5. Isolate Your Unique Attributes or Features

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.”

In this step, list all of the capabilities you have that the alternatives do not.

Your opinion of your own strengths is irrelevant without proof.

STEP 6. Map the Attributes to Value “Themes”

Articulating value takes the benefits one step further: putting benefits into the context of a goal the customer is trying to achieve.

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

In your list, you should see a handful of themes start to emerge and the value those features deliver to customers. Now we need to organize the list. To group points of value, you need to take the perspective of a customer. What points would naturally be related in the minds of your customers and prospects? 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

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.

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.

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. Marketing and selling to these folks doesn’t take much effort once you’ve found them—they are “buying” as much as you are “selling.”

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

You are mapping the value that your product’s features deliver to a group of customers who have the highest affinity for your product.

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.
   

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

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.

The “style” of positioning you choose will depend on a set of factors including the competitive landscape and your business goals. Here’s my advice on how and when to use each of them:

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.

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

Once you have determined your market context, you can start to think about how you can layer a trend on top of your positioning to help potential customers understand why your offering is important to them right now.

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

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.

STEP 10. Capture Your Positioning so It Can Be Shared

Once you have worked through your positioning, you need to share it across the organization. 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.