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What is Positioning?
Positioning is the foundation of marketing and sales. It defines how your product is the best at delivering value to a specific set of customers. It’s not just messaging or a tagline; it’s about setting the context for your product so customers understand what it is and why they should care. Think of it as the starting point for a conversation with your customer.
Positioning vs. Branding
Positioning and branding are often confused but are distinct concepts. Positioning is about defining your product’s value and context in the market, while branding is about creating an identity and emotional connection with customers. Positioning is an input that informs branding, not the other way around. It’s crucial to separate these two to effectively communicate your product’s unique value.
The Muffin vs. Cake Example
Positioning can change the perception of a product. Take a double chocolate salted caramel muffin, for example. It’s essentially cake, but calling it a muffin changes its context. As a muffin, it’s a breakfast item competing with bagels and donuts, priced at $1-$2. As cake, it competes with desserts, priced much higher. The product is the same, but positioning alters customer assumptions and value perception.
“”Positioning is the foundation upon which the house is built.””
Common Positioning Mistakes
Many companies don’t think about positioning at all, assuming there’s only one way to position their product. Often, products can fit into multiple market categories. Another mistake is treating positioning as a simple marketing exercise, like changing words on a homepage, without aligning sales and product teams. Positioning must be deliberate and cohesive across the organization to be effective.
Positioning as Context Setting
Positioning is like the opening scene of a movie. It sets the context for your product, answering key questions like where it fits in the market and who it’s for. Just as a movie’s opening scene sets the tone and expectations, positioning helps customers understand your product’s value and differentiators, saving time and effort in marketing and sales.
Finding Your Market Niche
To successfully position a product, especially in tech, find an underserved market segment and dominate it. For example, a CRM company might focus on investment banks rather than competing directly with giants like Salesforce. By excelling in a niche, you can expand into adjacent markets over time, eventually challenging larger competitors.
“”Positioning defines how your product is the best in the world at delivering something.””
B2B vs. B2C Positioning
In B2B, value is about helping businesses make or save money, and decisions involve multiple stakeholders. Fear of making a bad choice is a significant factor. In B2C, value can be more emotional or personal, like the appeal of a luxury brand. Understanding these differences is crucial for effective positioning in each market.
The Role of Fear in B2B
In B2B, fear is a powerful emotion driving decisions. Buyers fear making a poor choice that could cost them their job or reputation. This is why incumbents have an advantage—choosing a market leader feels safer. To compete, you must address these fears and clearly communicate why your product is the better choice.
The Importance of Differentiated Value
Great positioning focuses on your product’s differentiated value—what you offer that no one else can. It’s not just about features but why those features matter to your target customers. Understanding and communicating this value clearly is essential for standing out in a crowded market and attracting the right audience.
“”It’s the context I position my product in such that customers kind of have an idea.””
Positioning in Emerging Markets
In emerging markets, where no clear category exists, defining the market and its vocabulary is crucial. Coining terms and concepts helps customers understand the problem and your solution. This positions you as a leader in the new space and guides customers in recognizing the value of your innovative product.
The Power of Storytelling
Storytelling in B2B should answer ‘Why pick us over others?’ It involves painting a picture of the market, explaining different approaches, and highlighting your unique value. This helps customers make informed decisions and understand why your product is the best fit for their needs, beyond just features and benefits.
Cross-Functional Positioning
Effective positioning requires input from across the organization—marketing, sales, product, and even the CEO. It’s not just a marketing task. A cross-functional team ensures alignment and understanding of the competitive landscape, differentiation, and customer needs, leading to a cohesive and effective positioning strategy.
“”The assumptions that customers have about that product are different because I’ve placed it in a different context.””
Evaluating Positioning Success
To assess positioning, observe early sales calls. If prospects are confused or compare you to the wrong competitors, your positioning might be off. Successful positioning means prospects quickly understand your product’s value and differentiation, leading to smoother sales processes and better customer alignment.
The Risk of No Decision
In B2B, the biggest competitor is often ‘no decision.’ Many purchase processes end without a choice because buyers fear making a mistake. Understanding this helps tailor your positioning and sales approach to reduce indecision, emphasizing clear differentiation and value to give buyers confidence in their choice.
Positioning as a Competitive Advantage
Positioning isn’t just about standing out; it’s about creating a competitive advantage. By clearly defining your product’s unique value and target market, you can effectively compete even against larger incumbents. It’s about changing the frame and playing to your strengths, making your product the obvious choice for your niche.
“”Most companies just don’t think about positioning at all.””
Frequently Asked Questions
What is the difference between positioning and branding?
Positioning defines how your product is the best in delivering specific value to a well-defined set of customers, while branding is the overall image and perception of your company or product in the market. Positioning is about setting the context for your product, whereas branding is the emotional connection and identity that customers associate with it.
How can tech companies effectively position their products in a crowded market?
Tech companies should focus on identifying an underserved sub-segment of the market where they can dominate before expanding. This involves understanding their unique value proposition, differentiating features, and clearly communicating these to the target audience to avoid confusion and establish a strong market presence.
What common mistakes do companies make regarding product positioning?
Many companies fail to think deliberately about positioning, often treating it as a simple marketing exercise rather than a foundational strategy. They may also confuse positioning with messaging or branding, leading to unclear communication about their product’s value and competitive advantages, which can confuse potential customers.
