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

by April Dunford

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 cu...

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.