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.

I like to describe positioning as “context setting” for products. When we encounter something new, we will attempt to make sense of it by gathering together all of the little clues we can quickly find to determine how we should think about this new thing.

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.

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

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.

Context allows us to make thousands of little decisions about what we should pay attention to and what we can simply ignore. Without context to guide us, we would be overwhelmed, maybe even paralyzed by choice.

“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.”

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.

most products can be positioned in multiple different markets. Your dessert might be better positioned as a snack, and your email solution might make more sense if it were positioned as chat.

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.

After we have an idea of what we want to create—a better email app, a faster database or a yummier chocolate cake—we go through a process of building prototypes, or ugly first versions, that we put in front of prospects to get their feedback. We then incorporate new ideas, adding and removing features based on that feedback. We repeat the cycle, often for months or even years, until we have something that our early customers really seem to love.

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. What else could it possibly be? Customers, though, are often left confused by products that don’t seem to match up with the way companies are positioning them. This disconnect leaves customers confused, or worse, they believe that the product is simply poorly conceived and therefore can be ignored and forgotten entirely.

The common failure in both of these traps is not deliberately positioning the product.

We decide the context within which our products operate, and in doing so we limit their reach. We don’t consider alternative contexts that could make the distinct advantages of our product more obvious to customers.

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.

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.

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

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). In my database-turned-data-warehouse example, our key unique attribute was our patented query algorithm.

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

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

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.

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.

Attributes of your product are only “unique” when compared with competitive alternatives.

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.

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.

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.

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 in—even though they might be ready to do that

in the future, they may not want to think about that today.

Companies that have multiple products in the market need to think about product positioning and company positioning as separate but highly linked things.

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.

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.

In my experience, having one or at most two senior folks from a functional group is enough.

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

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

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

Thoughts about the evolution of a product, from its conception to launch, are often baked into the initial positioning. Customers don’t have the same baggage—they know nothing about the history of the product when they first encounter it.

You might find that each team member has a different level of positioning baggage—founders and long-time employees might view the product from the full perspective of its history, while newer employees do not.

The most important part of this step is to get agreement from the team that, although the product was created with a certain market and audience in mind, it may no longer be best positioned that way. The team needs to agree to suspend their opinions about the positioning of the product for the duration of the exercise so they can be open to new ideas.

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.

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.

That’s fine, but I encourage the team to (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. This way, the team focuses on the most common alternatives and won’t worry as much about rare ones.

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.

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.