“What is this thing? And why should I care?”
When you have a product ready to go to market, these are important questions to answer.
The answers to these questions help you figure out how your product is the best in the world at providing something that a certain set of customers care a lot about.
These answers determine your positioning.
Market positioning is one of the most misunderstood concepts in marketing. When you think about market positioning you might think of:
- A tag line
- Point of view
- Go to market strategy
But none of these things are positioning. Ideally, all of these things flow from positioning. It’s the context setting for products.
What does ‘market positioning’ mean?
April broke it down for us.
Customers use what they already know to make sense of what they don’t.
Customers use what they already understand to make sense of new things (your product) that they don’t already understand.
Positioning is a powerful tool you can use to help your customers understand the new thing (your product). Market positioning sets off a set of assumptions in the mind of customers about what the product is all about.
If you position your new product in an inaccurate market category, the customer’s assumptions will be inaccurate. If that happens, your sales and marketing teams will have to undo the damage of the inaccurate positioning and assumptions.
An alternative approach is to accept the weak positioning. Run with it. Why not?
April tells us why not. If your positioning is weak and inaccurate, nobody will understand the product or service because their assumptions are all wrong. If they don’t understand the product or service, chances are they won’t want to buy it either.
It doesn’t matter how genius your marketing is if nobody understands what you’re marketing.
With this in mind, it’s shocking that we’re rarely deliberate when we choose the market category.
Example: What if I told you your database is not a database?
April’s eyes opened to the power of market positioning when her company’s new database was falling flat for potential customers.
Their database could complete complex data queries in record time. What used to take several hours was done in minutes! The product was a miracle. It was time to take the ‘database’ to market.
Sales meeting after sales meeting ended without result. April watched as her prospect’s eyes glazed over at the mention of a “new database”. Her sales rep gave presentations to an audience that had switched off in the first few minutes.
Their prospects already had a database! As soon as they heard ‘database’ it was over. The context was given and assumptions were made.
Their product was amazing, but that didn’t matter because they had positioned themselves out of the conversation.
Until one meeting.
The sales rep finished presenting and the prospect was confused.
“This isn’t a database!”
What do you mean? Of course it’s a database! It’s our database!
“Well… you do this one analytics thing really really well. You’re not a database, you’re a… business intelligence tool.”
There might be something to that. April and the team went back to the drawing board. They repositioned from a database to a business intelligence tool and their growth exploded. The growth continued and the company was acquired for a lot of money.
All it took was some repositioning with the potential customer in mind.
From traditional to customer-centric
The traditional positioning statement looks something like this:
“For [target market], [our offering] is a [market category] which provides [benefits] unlike [competitor].”
There are 5 components to this:
- Market category
- Competitive alternatives
- Unique attributes
- Customer segments
Each component is connected to the others. Your market category connects to your competitive alternatives, customer segments, and your value. Your unique attributes help determine your value and your customer segments.
For example, if you’re in the automobile category, your competitive alternatives are:
Your value and unique attributes help make that distinction.
To bring some clarity to the positioning process, April introduced customer-centric positioning.
Customer-centric positioning is done in 5 steps. List your:
- Competitive alternatives
- If you didn’t exist, what would customers use? (HINT: This might not be your competitors – it could be a spreadsheet or an intern)
- Key unique attributes
- What features/capabilities do you have that alternatives do not?
- What value do the attributes enable for customers?
- Customers that care
- Who cares a lot about that value?
- Market you win
- What context makes the value obvious to your target segments?
If you follow this process, your market category will be accurate and your potential customers won’t be confused.
Conclusion: Position Deliberately
Mis-positioning a product is an all too common mistake with massive consequences. We think we know our product. We assume the market category, customer segment, and value without considering key details about our customers.
- Missed opportunities
- Confused potential buyers
- Untold value left on the table
But you can avoid this fate if you’re deliberate in the positioning process.
You can also read April’s book, Obviously Awesome, and nail product positioning so that customers:
- Get it
- Buy it
- Love it