The significance of Product Positioning in your strategy

I've been reading a great book by April Dunford called "Obviously Awesome" which focuses the topic of product positioning an often misunderstood and under invested side of product. It often takes a back seat to more tangible aspects of product development and marketing.

While catchy taglines and sleek design are enticing, true product positioning goes beyond superficial aesthetics. It's about crafting a strategic narrative that defines how your product delivers unparalleled value to a specific group of customers. So, a good question we can all ask ourselves does product positioning really matter for your organisation? Let's delve a little into this crucial concept.

The Essence of Product Positioning

Product positioning isn't just about creating taglines that sound good. It's about setting the context for your products. It's about articulating how your product is the best in the world at delivering value that a well-defined set of customers deeply cares about.

When we nail down our product's positioning, we're essentially answering questions like: Who are our competitors? How do we stand out in the market? What unique value do we offer to customers that no one else can? Who are the customers who truly value this unique proposition?

In essence, it's about defining how we will win in the market. This isn't something that can just be a thesis in the creator's head, it's actually most impactful when it's clearly documented.

The Pitfalls of Neglecting Positioning

When products are launched without well-defined positioning, they are essentially launched into the unknown. Sometimes, they work fine, but a lot of times, they fail spectacularly. The issue often lies in the fact that the positioning was never formally established.

In other scenarios, if you don't clearly write down your positioning, you risk being blindsided by copycat competitors entering the market. Without a documented strategy, you won't know how to adjust to changing market dynamics.

One common outcome of poor positioning is creating a product that caters to various customer segments, resulting in an unpolished and unscalable offering. It's like trying to be everything to everyone, which rarely leads to success.

Finding your Positioning and wedge into the market

Effective positioning isn't about locking your company into a single, unchanging vision. Instead, it's about using positioning to carve out a space in the market where you can excel now while navigating to your big vision. As you capture more adjacent markets, your positioning can evolve.

This allows you to start small, with a concrete wedge into the market, and then work your way up to your grander vision. In this journey, a small group of passionate individuals can indeed change the world.

Sometimes starting with an embarrassingly narrow positioning may seem counterintuitive, but it can help you make a huge impact in the market by catering to a specific, passionate audience.

Measuring the Success of Product Positioning

Often people talk about "Product Market Fit" and the question it raises is how do you measure and test it out? Here are some key steps:

1. Actionable Segmentation: Clearly define your first target customer segments.

2. Value Proposition: Articulate what value your product offers to these segments.

3. Accelerate: Put your foot on the accelerator and execute your positioning strategy with this segment.

Geoffrey Moore's "Crossing the Chasm" framework can be a valuable resource for crafting your positioning statement. However, determining the best market category is complex, as it's intertwined with several factors.

The question you need to be able to answer is getting to your positioning are:

1. What are the competitive alternatives if you didn’t exist?
2. Differentiated capabilities what have you got that your competitors don’t?
3. Differentiated value, customers don’t care about features they care about the value it creates for them
4. Target segments who are the folks who are a good fit for our product now
5. Market category who am I email or chat?

In the end, it's all about understanding your best-fit customers, the value you provide, the market category you belong to, and how it relates to Geoffrey Moore's "Crossing the Chasm" and the Jobs Theory. Remember, it's not just about what you think the problem is; it's about the comparisons customers make and the problems they're truly trying to solve.

Lets look at the often quoted Jobs To Be Done story about Milkshakes

The Milkshake Dilemma

To illustrate the importance of understanding competitive alternatives, let's take a case: a fast-food company aiming to build the best milkshake. They initially thought they were competing with soda (Coke), but they were actually competing with different products that are actually related to breakfast.

What we learn from this is that starting with comparables is crucial. You must ask, "If I didn't exist, what would customers choose?" For this company, the key differentiators weren't just taste but the value of boredom relief and satisfying hunger during morning commutes.

The market category shifted from just "milkshakes" to "breakfast," changing the positioning narrative.

Consideration point

The question this has made me ask is, does the problem come as step 0 or actually if we start by exploring the comparisons do we break from making an assumption about the problem we are solving (as we know often assumptions are wrong) and back into the right problem to solve?

In summary, I believe product positioning shouldn't be an afterthought; it's a fundamental component of your business strategy. Neglecting it can lead to confusion, unrefined products, and an inability to win in the market now. Start with a precise wedge in the market, keep true to your vision, and remember that a small, passionate group can indeed make a significant impact.