SaaS Product Positioning: A Brief & Practical Guide

What's Product Positioning?

How does your target market think of you compared to your competitor - that's product positioning. When you hear Salesforce, what do you think? Probably: an elaborate CRM for any use case. That's their positioning. There's no confusion about the positioning of Salesforce and Pipedrive .?

Why is it important?

Product positioning is crucial in buying, and it needs to have deliberate and conscious thought behind it. This moment is when you influence how your target market perceives you and forms an instinctual image. If a brand is not proactive about setting up this image, it seldom ends well for the brand. If you don't actively work to create a specific and orchestrated image, customers will still position you - based on 3rd party information (probably your customers). And it's not going to be pretty. A precise, concise, meaningful product positioning also helps your brand have a personality and an opinion. And that helps you cut through the relentless advertising and marketing noise of the marketplace. Product Positioning is about setting a context for your customers so your product messaging can be better heard and accepted.?

Positioning characteristics?

Product positioning aims to keep your product on top of your customer's minds when they're considering a purchase. Product positioning must achieve three objectives:?

• Differentiate your product from the competition's?
• Address critical customer buying criteria
• Articulate essential product characteristics

There is a tonne of overlap between product messaging and positioning.??

While generating product positioning strategies, regularly review them against the following criteria. Is your positioning -?

• Uni-minded—does it communicate one clear message?
• Meaningful—does it make sense for the target audience?
• Differentiating—does it contrast and establishes you as the better choice against your competitor?
• Important—is it relevant and consequential to the target audience??
• Sustainable— is it that big picture that it resonates with the target audience now and well into the future??
• Believable— will it be perceived to be authentic and genuine?
• Credible—can you prove what you say?

Positioning strategies?

Below are some common product positioning strategies. You will be the best judge on which fits your product -?

• Contrasted against a Competitor: Positioning your product directly against a competitor typically requires a specific product superiority claim. For example, while HubSpot claims it as 'The CRM with something for everyone,' Pipedrive positions itself as a 'CRM for salespeople, by salespeople.'
• Away from a Competitor: Position your product as the opposite of your competitor. It can help create a niche for your product in an already dominated, noisy market. A case in point is Salesforce, in its early days (20 years back), having the position that software is dead. A clear call to move away from on-premise software to cloud-based solutions.?
• Benefits: This strategy focuses on your product's benefit for your target audience. Examples include Hiver 's emphasis on ease of use and Intercom 's focus on scale and integrations.
• Product Attributes: Front-loading a specific feature or attribute can be very compelling at the time. Example - Userpilot focus on unlocking all parts of the journey for growth. On the other hand, UserGuiding specifically on onboarding.?
• Product Categories: Comparing a product to a product in a different category can be a way to differentiate your product. Airtable positions it similarly to Zapier (Connect everything to everything), but their classes remain pretty distinct.?
• Usage Occasions: This positioning focuses on your product's specific use cases. Figma and InVision do a lot of similar work, but Figma focuses on designer-related functions, while InVision is more general.?
• Users: Catering to a demographic of specific users is a good strategy. For example, Mailshake focuses on salespeople using their cold emailing tool, while lemlist is more general - Recruitment, Sales, SEO outreach, etc.?

Let's get into position

Successful product positioning strategies should differentiate your product, address necessary buying criteria, and convey essential product attributes. For this, you need to be clear on the following -?

? How is the buying behavior of your target market?

? What is the positioning of your competitor?

? What are your product's offerings?

The following three interrelated elements of the Positioning Triangle must be in balance for you to establish a competitive positioning -?

Step 1: Understand your target market

Interview your customers, shadow your sales folks, look at NPS feedback and dig up any other source possible to understand buying criteria your target audience prioritizes:?

? Which product features (i.e., customization, SSO, etc. ), if any, do they highlight?

?? Which product benefits (i.e., security, ease-of-use, etc.), if any, do they highlight?

List the buying criteria in order of priority. Assign a quantitative weight to each criterion.

Step 2: Understand your competition

Conduct research to uncover more details on how your competitors are positioning themselves.?

Step 3: List buying criteria against competitor's positionings

Note how each competitor positions its product against your listed criterion.

It may happen that:

? Multiple competitors are positioned for the same criteria?

? A competitor is split on positioning itself on multiple buying criteria (hence establishing a confusing product positioning)?

? Any competitor does not address one or more buying criteria?

? The market share leader is positioned on the most critical buying criteria?

Step 4: Asses where your product stands against each buying criteria?

Get your customers how they rank your various strengths. Otherwise, use your best judgment or your organization's tribal knowledge -?

Step 5: Do a gap Analysis

From your analysis, do you see a vacant position in the market? Does your product satisfy any vacant position effectively? Would it be beneficial enough? If there are no unfilled positions (or you're not interested in any of them), you have to ascertain which competitor to fight and which position you can win most effectively/quickly.?

Positioning Triangle Analysis: let's put it to use

The above table unveils many positioning opportunities -?

1. Company C is positioned as having the best design customizations, which is not your strong suit. It would be prudent not to compete in that position (even though it is the primary criterion for buying decisions). However, you might consider working on it in the long term.?

2. There are no contenders for the best at integrations yet. It might work for you, as it is one of your strengths.?

3. Company B holds the positions of customer support and security. Is there space for you there? Is focusing on two areas weakening their hold? Could you win in a head-to-head battle for support supremacy? Is it worthwhile to hire more customer support reps in multiple time zones to get this strengthened?

Once you determine your product positioning, use all the channels at your disposal (communications, pricing, distribution, product features, etc.) to make it so.?

P.S. advice

?? Having an in-depth knowledge of your market and competitors makes your positioning work.?

? Assess your products' positioning regularly to keep them updated with market changes.