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

by April Dunford

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

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.

into an obvious, must-have purchase. I’ve seen customers struggle to understand products that my team found absurdly simple, and I’ve seen deeply innovative solutions misunderstood as totally irrelevant. Often, you’re too close to your product to realize that the market doesn’t think about it the way you do.

The concept of positioning first became a popular marketing construct in 1981 with the publication of Positioning: The Battle for Your Mind by Al Ries and Jack Trout.

In order to break through the noise, companies would need to take into account their own strengths and weaknesses, then contrast them with their competitors to create a unique leadership position in the minds of customers. While Ries and Trout defined what positioning was all about, they didn’t give us many clues for how to do

When positioning is not working, it often looks like a marketing or sales problem; dig a bit below the surface and you can see that something else is going on.

Do you spend more time explaining what you’re selling rather than closing deals? 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.

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.

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.

Understanding something new is challenging because we don’t yet have a frame of reference. When we lack context for a product, the easiest way to create one is by starting with something we already know.

We set out to build something (a new dessert or a new way of doing email, for example) and then almost unconsciously position our offering in that market (“dessert” or “email”).

Frequently, the product we end up with is not what we started out to build. Our email system seems more like group chat, our database seems more like an analytics platform and our cake has become muffins. This transformation happens so gradually that we, the product creators, often don’t notice it.

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. It’s easy to miss a shift that impacts nurses, housekeepers, insurance agents, restaurant workers or manufacturers while we’re drinking espresso and staring at our MacBooks in our exposed-brick, open-plan offices.

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.

Most offerings are not explicitly positioned because people believe there is only one possible “default” way to position their product. Rather than helping companies think creatively about what they do, the positioning statement encourages them to look at the market the way they have always looked at

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.

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.”

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.

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

However, if you are a small business you don’t have an unlimited marketing budget and a giant army of salespeople. 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.

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?

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.

For 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.

You would also naturally assume that my pricing is similar to Salesforce, both in the pricing model (a monthly price per user) and the actual cost.

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.

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.

the order in which you define the components is very important. I’ve seen teams start with defining key features, without looking at competitive alternatives, and the resulting positioning doesn’t connect with how customers really evaluate a solution.

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.

It makes sense for single-product companies to have the same name, brand and positioning for the company and the product, simply so customers don’t have to figure out two things versus a single thing.

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.

But when we asked them what they would use if our database didn’t exist, none of them named another database; instead, they suggested business intelligence tools or data warehouses.

Customers always group solutions in categories, but talking to them about problems doesn’t necessarily reveal those categories.