Positioning: The Most Powerful Concept in Business

Ever feel like your product is lost in the noise of the market? You’re not alone. Effective positioning can make all the difference.

Positioning is a term that describes two different things. It describes how customers think about your product compared to other options. And it also describes the set of activities your company takes on to influence market perception.

The first part is just a fact about the world. No matter what you do, customers will position your product somewhere. The second part is what you control.

Conflating Positioning with Messaging and Other Traps

It's critical to distinguish between positioning and messaging—while messaging supports positioning, it is not the entirety of positioning. Features, pricing, service offerings, channels, and partnerships all play a role in how your product is positioned.

Some other common positioning errors include:

• Producing a compelling high level narrative about market trends but stopping short of fully attaching the story to product capabilities.
• Emphasizing a product's extensive feature set but failing to connect them to customer jobs-to-be-done.
• Handing off pricing to the "quants" and positioning to the "creatives."

These errors stem from teams that over-rotate on a particular positioning approach. Let's take a quick look at where these tendencies might come from.

The Positioning Godfathers

In 1981, Al Ries and Jack Trout published "Positioning: The Battle for Your Mind," emphasizing the need to view the market from the customer's perspective. They argued that in a noisy market, your positioning must be simple and distinctive. However, they offered little in terms of a playbook for execution.

Enter the New Voices of Positioning

In 2016, Andy Raskin highlighted that great positioning involves placing the customer at the center of a hero's journey. This narrative approach emphasizes the significance of a major change in the world, creating a new, high-stakes game that you (the vendor) are uniquely suited to help them win.

In 2016, Madhavan Ramanujam and Georg Tacke published Monetizing Innovation. This guide to building products around value and price is not explicitly about positioning. But pricing is always relevant to positioning.

In 2019, April Dunford published Obviously Awesome, focusing on product-centric positioning. She argues that understanding how your best customers use your product is key to determining the market category that amplifies your strengths.

A Unifying Framework

To effectively position your product, it’s essential to balance these approaches throughout the customer journey:

Early Conversations: Setting the Stage and Creating Urgency

• Andy Raskin's approach is particularly effective early in the buyer's journey because it allows you to focus on your customer's business and the opportunities and threats they face, rather than prematurely jumping to a discussion of your product. This creates relevance and urgency, making potential customers eager to learn how your solution can help them navigate this new landscape and achieve success. This narrative positions you as a trusted advisor, or in Raskin's words, "a guide." For those familiar with "The Challenger Sale," this method of providing market insights about the cost of inaction will be familiar ground. It creates relevance and urgency, making potential customers eager to learn how your solution can help them navigate this new landscape and achieve success.

Solution Evaluation: Highlighting Unique Strengths and Customer-Centric Value

• Once your potential customers are engaged and evaluating your solution, shift to April Dunford's product-centric positioning approach. Focus on deeply understanding how your best customers use your product and why they love it. Highlight specific features and benefits that resonate most with these customers. Emphasize how your product uniquely addresses their needs and solves their problems, positioning it within the appropriate market category that amplifies its strengths. This is about solidifying your value proposition and differentiating your product from competitors and setting the stage for a pricing discussion grounded in value. If you are familiar with "Solution Selling" or "Customer Centric Selling" this approach will be familiar.

Audit Your Message for Simplicity and Consistency

• Apply the principles of Al Ries and Jack Trout to ensure your messaging remains simple, clear, and distinctive throughout the customer journey. Is your strategic narrative clear and impactful? Are you highlighting only the features related to your customer's jobs-to-be-done? Is it clear that your product will deliver the promised land? Regularly audit your positioning statements, marketing materials, and customer communications to maintain consistency. Make sure every touchpoint reinforces the core message of your product’s unique value and market position. By keeping your message straightforward and aligned with your customer’s perspective, you’ll maintain a strong, coherent positioning that resonates and builds trust over time.

Step-By-Step Positioning Playbook

You understand how the pieces fit together. But how do you start?

Step One: Pre-Launch Diligence

A new product might start with wireframes and move to prototypes, alpha, beta, etc. At each step, the product team is engaging with potential customers in order to understand what they value and how much they would be willing to pay. Pricing research reveals whether your customers believe your value story. All of this work enables the team to zero in on a target segment.

This is how you define a segment, a set of people who are willing to pay more for given features than other people, because they value them more. -Madhavan Ramanujam and Georg Tacke, Monetizing Innovation

Product research is relevant information, but solidifying your positioning requires structured feedback from paying customers that have used your product extensively and love it.

Step Two: Identify Best-Fit Customers

Once your product is live and has faced real market pressure, a subset of happy customers should emerge. These customers will have shorter sales cycles, higher average contract values, and heavier product usage.

You will want to understand what these customers would do if your product did not exist. This is the market category according to your customers. That is, the way your best customers describe the alternatives to your product is how they position your product in their minds.

Customers don’t always see competitors the same way we do, and their opinion is the only one that matters for positioning. -April Dunford, Obviously Awesome

To understand why your best customers love your product, list all of its attributes, not just its features. List pricing, packaging, sales process, implementation service, support levels, channels, partnerships, company brand, etc. You are not just producing a ranked list of product attributes. You are seeking to understand why these attributes are valuable to customers. Understanding how your customers uniquely use your product to create value is your key to winning in the market.

PSA: You should be using AI tools to synthesize and categorize all engagements with customers: emails, form fills, calls, etc.

Step Three: Understand Customer Life Before Your Product

The next step is to get a picture of what life was like before your best customers used your product. What prompted them to make a change? How did they go about looking for solutions? What initially prompted them to engage with your company? Understanding what life was like before your customers engaged with your company will help you create marketing campaigns and sales presentations that actually work.

Step Four: Identify Your Category

If you are going after a market leading incumbent in an established market, you should have strong conviction that your product delivers somewhere between 5x and 10x more value on either price, speed, or quality. Back in the day, Red Hat Enterprise Linux running on commodity x86 hardware was 90% cheaper than Sun's Unix offerings. Red Hat drove the market even though some Unix purists argued that Linux was an inferior OS. If Red Hat was just 25% cheaper, this positioning strategy would not have worked.

The alternative way to attack an established market is to niche down. Find a subsegment of the market where your product can dominate. You should have a good indication of where these subsegments might be based on your customer interviews. If you take this approach, make sure that the subsegment is large enough to support your revenue growth goals.

If your product truly is creating a new category, then you will be doing double duty. You must both educate the market on why this new category matters and why your product is the best choice. The prospect of creating a new category can be seductive. After all, as the category creator, your product will be the leader by default. But don't try to create a new market just to clear the competitive field. This will confuse the market. In order to create a new category, your product should be clearly different from what exists in adjacent categories.

Step Five: Reframing Around A New Game With Your Customer as the Hero

This step is focused on helping customers understand the cost of inaction. It requires reframing the decision to act within the context of an undeniable change that will create winners and losers and high stakes. This change has created a new game that the winners are already playing. It is also about de-positioning competitors as not really understanding the new game.

Again and again, I’ve noticed that successful teams come to view their customer’s transformation story as the primary thing they’re building. -Andy Raskin

Ready To Roll

Consider how aligned positioning can boost all functions at your company:

• Marketing: With an understanding of how best-fit customers use the product, campaigns are highly targeted and messaging resonates.
• Sales: Sales territories are designed around prospects that match the profile of best-fit customers. The pipeline becomes higher quality and win rates improve.
• Customer Success: Expectations set throughout the buyer's journey match the capabilities of the product. Churn and contraction decrease and account expansion increases.
• Product: The product team is aligned with sales and CS on best-fit customers and user personas.

Positioning is a matter of winning or losing.

What could be more important?

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About Matt Mattox

I help B2B tech companies improve their Go-To-Market effectiveness. Message me on LinkedIn to get in touch.