Unlocking Effective Product Positioning Strategies

Sometimes a product that was well positioned in a market suddenly becomes poorly positioned, not because the product itself has changed, but because markets around the product have shifted.

The traditional positioning statement fails in several critical ways:

• It assumes you know the best way to fill in the blanks. It might do a good job of capturing your current thinking, but it doesn’t give you any clues about whether your positioning is good or bad.

•It reinforces the status quo. Most offerings are not explicitly positioned because people believe there is only one possible “default” way to position their product. Rather than helping companies think creatively about what they do, the positioning statement encourages them to look at the market the way they have always looked at it. Status quo thinking will almost always put the existing market leaders at an advantage and leave you blind to potential shifts in the way your customers see your market.

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.

OUR CUSTOMERS OFTEN do not know nearly as much about the universe of potential solutions to a problem as we do. As product creators, we need to be experts in the different solutions that exist in a market, including the advantages and disadvantages of choosing them. Customers, however, have often never purchased a solution like yours before. They are approaching the solution to their problem with a clean slate and little knowledge of what “state of the art” in your domain looks like. You may worry a lot about an up-and-coming startup in your space, but your customers have likely never heard of them. In business software, the most common competitive alternative is a combination of general-purpose business software (spreadsheets, documents, presentations) and manual processes.

For service businesses-like consultancies, agencies and custom-development shops-the unique attributes are often related to a combination of expertise and experience. For example, you might be the only design and user experience (UX) agency with experience in training design for large enter-prises. You could be the only group of Python developers that also has significant experience with retail point-of-sale systems.

If unique attributes are your secret sauce, then value is the reason why someone might care about your secret sauce. 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 value needs to be provable in an objective and demonstrable way.

Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offerings. FOR BUSINESSES, BIG-PICTURE characteristics include things like industry, location and company size, but those are rarely enough to identify a customer who is a great fit for your product. You might sell a solution for small business that greatly reduces the time and complexity of invoicing. Any small business could use your product, but the ones that send a significant number of invoices every month will love you the most.

Declaring that your product exists in a market category triggers a set of powerful assumptions. CUSTOMERS NEED A way to make sense of the overwhelming number of products on the market. When they are presented with a new product, they will attempt to use what they know to try to figure out what it’s all about. Market categories are one way that customers organize products in their minds. Declaring that your product exists in a certain market category will set off a powerful set of assumptions in customers’ minds about who your competitors are, what the functionality of the product should be and what the pricing is like.

Market categories help customers understand what your offering is all about and why they should care. Trends help buyers understand why this product is important to them right now. Trends can help business buyers understand how a product aligns with overall company priorities, making it a more strategic and urgent purchase.

INVESTORS are investing in what your company will be in the future; customers are buying a solution to a problem they have right now. Investors want to hear your vision for what your company will look like five or ten years from now, and how you intend to be a leader in a large, preferably fast-growing market. Customers, for the most part, are making an immediate decision to spend money they have right now to get immediate value and relieve an immediate pain.

Source : Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It by April Dunford

Goodreads : https://www.goodreads.com/book/show/45166937-obviously-awesome

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