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

by April Dunford

Focus on capturing the broader set without trying to decide what’s really important and what isn’t.

Value could be “photos that are sharp even when printed or zoomed in,” “a frame that saves you money on replacements,” “every level of the organization knows the status of key metrics” or “help is immediately available across every time zone.”

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

To group points of value, you need to take the perspective of a customer.

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.”

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.

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 consumers, a segmentation could include combinations of things such as other brands they own or like, stores they buy from, the job they hold or their music or entertainment preferences. 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.

If I wanted to increase my chances of landing a customer, wouldn’t I want to target as broad a market as possible? The reality is the exact opposite. The broader your focus, the more difficult it is to connect with prospects and convince them that your solution is the best one for them above all others.

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

I encourage teams not to get their positioning too far ahead of their business objectives.

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.

There is no need to make sure that your positioning will fit perfectly with where you or your product will be in ten years or five years or even two years from now. Similarly, your target customers will also evolve over time. Great positioning resonates with your best-fit customers right now, and will evolve with them over time.

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.

In the context of this exercise, a “market” needs to be something that already exists in the minds of customers (except in the very rare case where you make a conscious decision to create a new market—which we’ll discuss later in this step).

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?

Only choose a market if it makes your strengths obvious.

Also, customers will only try to position you in markets that are frequently linked to their industry or job function. Customers aren’t positioning experts, nor are they experts in how a market category works.

At a high level we can either choose to enter an existing market or create a new market. If we choose to enter an existing market, we can either compete to win the entire market or position our product to win a slice of it. The “style” of positioning you choose will depend on a set of factors including the competitive landscape and your business goals.

The only case where a company might want to position a new product in a known category is when the category itself is defined and understood by buyers, but a strong leader has not yet been established.

Second, take note of your competition. Sure, you’ve managed to pick a market that doesn’t already have a strong leader that you have to take on, but that doesn’t mean you are alone here. The fact that buyers understand what the market is all about means that there is market demand, and though the market feels uncrowded at the moment, it won’t stay that way for long. If you choose to enter this market, you will have to commit to moving quickly to establish yourself as the leader before someone else does.

The good news: if you position yourself in an existing market, you don’t have to teach buyers too much about the category itself and you can rely on what they already know.

The bad news: if you rely on what buyers already know, you need to fit within their existing definition if you want to win.

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. In marketing, the process of splitting up an existing market is called subsegmenting. A market can be subsegmented by industry (manufacturing vs. retail), by geographic region (North America vs. South America), company size and a myriad of other criteria.

In my experience, one of the best advantages of this style is that once you begin to get traction with some customers, your advantage in the subsegment tends to accelerate quickly.

Companies tend to shy away from this style because they are worried that moving from targeting the entire market to just a small piece of it will mean less opportunity. In reality the opposite is frequently true: you are simply unselecting the part of the market that was never going to buy your product anyway in order to focus only on customers where you have a distinct advantage.

You have the ability to meet the special needs of the subsegment much better than the category leader. The need of the subsegment must be clearly identifiable, but even when it is, your ability to meet it must be strong enough to convince buyers to go with you over the safer choice of the market leader.

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.

When to use the Create a New Game style Because this style of positioning is so difficult, it should only be used when you have evaluated every possible existing market category and concluded that you cannot position your offering there, because doing so would fail to put the focus on your true differentiators and value. This style can also work if your company is large and powerful enough to capture the attention of customers, media and analysts to make a case for why the new market category deserves to exist.

The most common way startups fail at this style is by working to build the market and then losing out on establishing themselves as its leader.

“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 category then emerges when and if the freakish attitudes and behavior become mainstream. Category creation is hard, slow work, but if you are successful the rewards are huge.”

Caution: if the trend doesn’t reinforce your positioning, it can also muddy your positioning waters.

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.”

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.

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.

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.

The story then moves to describing how customers are attempting to solve the problem today and where the current solutions fall short.

The next stage of the story is what I call “the perfect world.” It’s where you describe what the features of a perfect solution would be, knowing what you know about the problem and the limitations of current solutions.

The sales story goes on to introduce the product or company and position it in the relevant market category.

Next, the story naturally flows into talking about each of the value themes with a bit more detail into how the solution enables that value. A completed sales deck also adds some information, such as handling common objections, a case study or list of current customers. The story wraps up with a discussion of whatever you would like the prospect to do next.

The most common change happens when a credible, established competitor enters your market.

The addition of a large, potentially threatening competitor doesn’t necessarily mean your positioning should change. For example, if your strategy was to target a subsegment of the market, it’s possible a larger competitor isn’t going to serve that segment any better than the current market leader.

Knowing how to do something is not the same as understanding how to teach someone else how to do it. As leaders, we often become very good at doing things that we have a very hard time explaining to the teams that work with us.