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.

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.

Even a world-class product, poorly positioned, can fail.

You’re stunned to discover the hit product at this bakery is just like yours—it’s full of nuts, seeds and dates... the ingredients are almost identical! But this muffin isn’t positioned as a “diet muffin.” In fact, they don’t even call it a muffin. It’s a “gluten-free paleo snack.”

“Find out who you are and do it on purpose.”

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 competitive alternative is what your target customers would “use” or “do” if your product didn’t exist.

Your unique attributes are your secret sauce, the things you can do that the alternatives can’t.

Value is the benefit you can deliver to customers because of your unique attributes.

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 opinion of your value does not count as proof; the opinion of customers, reviewers and experts does. Data or third-party opinions are difficult to refute.

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

What types of customers would you focus on and why? What are the characteristics of those customers that make them more likely to buy?

Declaring that your product exists in a market category triggers a set of powerful assumptions.

Your market category can work for you or against you.

Amazon also poses a huge threat to them, because it has the power to move into a category armed with its consumer behavior data and quickly dominate it. In response, big consumer brands are investing heavily in building out their own direct-to-consumer strategies that will allow them to build their own relationships with consumers.

Once we narrowed in on the happiest customers, we went looking for the reasons they were so satisfied while others were not. What was it about our offering that made them so happy with it, and what was it about those customers that made them such a good fit for us? Answering these questions helped us figure out what our value was, who it was resonating for and why—in other words, it helped us get a start on understanding what our positioning should be.

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

We increased our growth by concentrating on our best-fit customers.

The first step in the positioning exercise is to make a short list of your best customers.

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.

A positioning exercise that is not a team effort driven by the business leader will fail.

Customers don’t have the same baggage—they know nothing about the history of the product when they first encounter it.

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.

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.

Focus on your best customers and what they would identify as alternative solutions.

Sometimes it is helpful to think about the feedback you get from customers when you ask them why they chose your offering. You might be the only consulting business with a certain combination of skills and experience. You might be the only company with a certain technology or a certain set of partnerships.

Ease of use is another “feature” that I believe is really a value. What is it about your product that makes it easier to use and how do you prove it?

Third-party validation that your product’s feature is better than the alternative counts as proof. If an independent reviewer or analyst stated that your product is easier to use, that’s a fact. If a customer says in an approved quote that your customer service is much better than another company’s, that’s proof.

Every product has features that you can connect directly to a goal the customer would like to accomplish right now.

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.

For many consumer technical products, features are presented as valuable in their own right—but only because we do the translation to value automatically in our heads. For example, phone makers have often represented the quality of their cameras by talking about the number of megapixels. Consumers have been trained to translate megapixels to photo quality and therefore believe that cameras with more megapixels take better photos. Digging a bit deeper, the value of “better photos” for most consumers means sharper, more detailed images when printed or zoomed in.

It’s important to remember that although you have unique attributes that deliver value to customers, not all customers care about that value in exactly the same way.

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.

Now 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.

Great positioning resonates with your best-fit customers right now, and will evolve with them over time.

The advantage of positioning in an existing market category is that you don’t have to convince people the category needs to exist.

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.

Category creation is about selling the market on the problem first, rather than on your solution.

A product that is well positioned in a market can still be very successful without relating it to a trend. Ideally, if a current trend helps reinforce your positioning and the value that your offerings deliver, you can use it to your advantage.

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.

write a messaging document.

There are price expectations in each market category, so getting your pricing in line with those will help reinforce that your product belongs there. For example, we raised the pricing for our “CRM for investment banks” because our investment banking customers didn’t expect us to be the same price as a general-purpose CRM.

“If you want success, be unique.”

Use trends to make your product more interesting to customers right now, but be very cautious. Don’t layer on a trend just for the sake of being trendy—it’s better to be successful and boring, rather than fashionable and bewildering.

Knowing how to do something is not the same as understanding how to teach someone else how to do it.