By David Ronald
Okay, so you’ve built an amazing product that has the potential to delight your customers and help them attain their business objectives.
A great product by itself, however, isn’t always enough—you need to communicate what makes your product different from every other product out there.
According to research by Gartner, 77% of B2B buyers state that their latest purchase was complex or difficult. This statistic emphasizes why clear and effective product positioning is crucial.
When products are well-positioned, it helps simplify the decision-making process for buyers by clearly communicating the product's value, differentiators, and relevance to their specific business needs. This can lead to faster sales cycles and increased buyer confidence.
What is Product Positioning
Product positioning is the process of defining where your product fits in the market and why it's the best solution for your customers. It helps you manage customer perceptions and communicate how you want users to think and feel about your product.
Positioning highlights your product's value and sets the context for understanding why customers should care.
It’s best, therefore, if you put yourself in the shoes of your buyers and take a user-led approach to positioning your product. Doing so will create a solid image in the perception of your buyer.
Developing Your Positioning
Product positioning is an ongoing and evolving process that needs to adapt in response to changes in your industry and your customers' needs.
Here are five steps you can follow to develop the best positioning for your product.
1. Identify Your Buyers
You cannot sell your product to everyone, because not everyone perceives your product to solve their problems.
The first step in determining your product positioning is to identify potential buyers.
Begin by developing your ideal customer profile(s) - an ideal customer profile (ICP) is a short description of your perfect customer, based on characteristics such as industry, company size, and requirements, that align most closely with your product.
Next, determine your buyer personas. There may, for example, be an engineer who is excited by the technical attributes of your product; there may be a someone in finance who understands the cost benefits of you product; and there could be an executive who appreciates the strategic value of your product.
2. Understand Your Buyers
Your customers decide to use your product over your competitors for a reason
If you can identify why that is and investigate what exactly makes them use and stick to your product, you can use that insight as the basis for positioning your product.The why could be factors like pricing, a specific feature, customer service, associations with the product, or ease of use. The better you understand why customers use your product, the more customer-led your positioning can be to make your place in the market more prominent.
Use on-site surveys on high-traffic product pages. Ask questions such as these:
- "Why do you use this product?"
- "How would you rate this product on a scale of 1–10?"
- "Which feature or product element do you use the most?"
- "How would you feel if you couldn't use this product anymore?"
In this example, Brand A is perceived to be higher price than alternatives but provides better quality. Brand B is perceived to be lower price than alternatives but provides lower quality.
You can use perceptual maps with different labels on the vertical and horizontal axes to uncover your strongest attributes in the eyes of your buyers.
3. Analyze Your Competition
In parallel with developing an understanding of your target buyers, you want to position your product as a better solution than your competitors. But you can't do that unless you know the competitor's product and how they're positioning it.
Conduct market research to analyze your competitors' new and old products to understand how they're helping customers, which features they have, and what benefits they offer.
Identify whether you have any distinct features that can set you apart. If not, iterate on your product and focus on being more customer-centric than your competitors, so you have something that sets you apart in the market.
4. Identify Your Value
Your value proposition should be compelling. It's insufficient, for example, to provide a 10% cost savings than the competition, or a 2x improvement in productivity than alterative approaches.
Your buyers need a value proposition that's substantial and motivates them to switch to a new way of doings. Otherwise, why should they go through the hassle of changing? In order to be compelling, your value proposition should offer a 10x improvement, or better.
Ideally, your value proposition has been built into the product from day one. If not, find a unique product feature that sets you apart from your competitors. It's okay to be niche, at least while you are gaining traction in the marketplace.
By developing a value proposition that is compelling and captures the attention of your buyers, you are going to make the lives of your sales team vastly easier, and they will love you for it!
5. Establish Your Positioning
A positioning statement is short description that says what your product is, who it’s for, and why exactly customers should care about it.
Here's a B2C example:
"For athletes in need of high-quality, fashionable athletic wear, Nike offers customers top-performing sports apparel and shoes made of the highest quality materials. Its products are the most advanced in the athletic apparel industry because of Nike's commitment to innovation and investment in the latest technologies."
Here's a B2B example:
"Slack is the collaboration hub that brings the right people, information, and tools together to get work done. From Fortune 100 companies to corner markets, millions of people around the world use Slack to connect their teams, unify their systems, and drive their business forward."
One of my favorite quotes is from Donald Knuth, a computer scientist & mathematician, who stated that, "Premature optimization is the root of all evil”. In other words, don't rush to conclude that your have nailed your product positioning.
Test your positioning with your employees (especially your sales teams), your buyers, and anyone whose opinion your value (such as investors and industry analysts).
Keep your Positioning Up to Date
Your product will evolve as you grow, and customer behavior and buying trends will change with time.
So it's crucial to iterate on your product positioning to ensure it stays relevant and differentiates your product in the market.
Regularly ask yourself these questions to ensure you're leading with the right product positioning:
- Have market trends or customer needs changed?
- Are there any new products in the market similar to yours? Are they doing something differently?
- Have you introduced any new product features or new products altogether which offer a new benefit to your customers?
Is there a better way to communicate your product positioning?
Are you getting good results with your current strategy? Compare your past and present metrics like sales, customer retention, conversion rate, referrals, social media engagement, and signups to get data-driven insights.
The answers to these questions will tell you if you need to revisit your product positioning strategy and make it more relevant for customers.
Wrap Up
By conducting thorough buyer and competitive research, identifying your compelling value proposition, and crafting a clear positioning statement, you build a strong foundation for downstream deliverables. Your messaging framework, for example, will be informed by your product positioning (watch for an upcoming blog post on that topic).
The idea is to tell the customers what they need to know about your product so that they'll believe in it and purchase it.
Thanks for reading all the way to end.
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