What positioning is
You can think of positioning as the spot you decide to occupy in the minds of your prospects.
You occupy one particular spot by:
- Deliberately presenting reference points they are already familiar with
- Explaining your uniqueness using those reference points as anchors
Examples - Same product, different positioning: “The most secure email client”. I know what an email client is; My current email client is not secure; I am looking at an email client that protects me from cyberattacks. “Comply to confidential communication regulations”. I regularly communicate confidential information; I know I need to protect this communication to regulated organizations; I am looking at a communication tool that ensures this.
“I was on my way to work, and I went to Tim Hortons coffee shop in Canada. I’m standing in line and the guy in front of me is ordering breakfast. It’s 8:00 AM, and he orders this thing which is a double chocolate salted caramel muffin. And I was like, “That is some genius marketing stuff right there.” I’ve got a piece of cake, it is double chocolate caramel cake, but if I put it in the muffin format and I call it a muffin, everything about that is different. The whole context around it is different. It is socially acceptable to order double chocolate caramel whatever if you say it’s a muffin, because I’m now comparing it differently. If I said it was cake, what’s cake? Cake competes with other things that are like dessert. It competes with ice cream and tiramisu and other things you would order for dessert. What does cake cost? Well, if you’re in a restaurant, it’s $10, $15. Where do I get it? I might go to a bakery, but I get it at a restaurant, too. When I’m talking about a muffin, well, [a] muffin’s totally different. A muffin’s breakfast. It competes with a bagel and a donut. What do I charge for a muffin? I charge $1, $2 for a muffin. The whole context around it is different. The product, however, is the same. That thing that you’re eating is a piece of cake, whether it’s in cake form or muffin form. I can choose to position it as a muffin. It’s the same product, but the assumptions about that… The competitors are different; your value is different; the assumptions that customers have about that product are different because I’ve placed it in a different context.”
April Dunford
The moment you establish a specific position in the minds of your target audience:
- You provide your audience with a frame of reference and trigger automatic assumptions
- What kind of product is this?
- Is it similar to something I know?
- Is it relevant to me?
- What problem does it solve?
- What value do I get?
- How does it work?
- What alternatives do I have?
- You influence the way they will evaluate you and your product, even before they talk to you
- I need to compare this to A, B, and C
- This may replace tool D I am using, but not tools E and F
- I already have a solution for this / I don’t yet have a solution for this
- I expect to be able to get value G
- I expect it will work in this way
- This is probably within by budget / I probably can’t afford this right now
Optimal positioning enables fast growth
An optimal positioning makes your uniqueness obvious to the audience for which it is most relevant.
- You attract leads (both inbound and outbound) that are most likely to find you relevant
- Conversely, you avoid attracting irrelevant leads that would occupy your time
- You make it easy for your prospects to evaluate your product
- You deliberately choose which alternatives you are compared against
- You articulate your value in the best possible way
This enables fast growth.
Positioning Vs Messaging
Positioning is a keystone of your strategy. It is communicated to your audience through messaging.
Messaging is the story you tell your audience about you and your product.
By crafting your messaging in the right way, you consciously inform your audience about your positioning and enable all the positive effects of correct positioning.
Example: By describing yourself as “the best CRM for solopreneurs” as part of your marketing messaging, you let your audience know that you are a CRM and that your single focus is on solopreneurs. You also encourage them to assume that, given your single focus, you are the best choice for a solopreneur.
Note that messaging informs your audience about more than only your positioning. For example, it explains how value is created and what you do to deliver on the promises of your positioning.
Positioning is about today
While your long-term vision should be the lighthouse that keeps you on-track, your positioning should at all times optimize for the present moment.
You should take extra care to avoid that your company’s and your products’ strategic vision creeps into your positioning, the same way you ensure your investor pitch does not creep into your sales pitch.
In fact, when running your positioning exercise, I recommend trying to forget about your vision and only focus on your current capabilities and on what you want to do in the next 3-6 months.
To grow fast, you need to attract those customers who are:
- most accessible now;
- most likely to buy what you can offer right now.
At early stages, it typically means innovators and early adopters. This audience may be very different from what you have in mind for your product vision.
Bear in mind that positioning will change on a continuous basis and especially frequently in early stages when your product-market fit is still consolidating.
In fact, you can picture your positioning evolving as you move closer to your target vision. Trajectories will vary and may end up surprising you.
Today ⇒ Current positioning ⇒ Next positioning ⇒ Next positioning ⇒ Vision Today ⇒ Outreach tool for solopreneurs ⇒ CRM for solopreneurs ⇒ CRM for small businesses ⇒ One-stop shop for small businesses
Staying narrow: Competitive vs Contextual differentiation
Communicating your uniqueness (differentiated value) is key. There are multiple ways to do this. Two are especially relevant to consider for an early-stage startup.
Competitive differentiation
It is the most common definition: What I do differently than my competitors.
This approach may not work well for early stage startups. It may be difficult to provide competitive capabilities, since established competitors have more resources.
Contextual differentiation
It is an alternative approach based on narrowing your positioning and make yourself more relevant.
It is based on the following narrative:
- Here’s how you would normally do thing X
- Here are the limitations that you face in this specific context
- Here’s a better way of doing thing X in that context
Contextual differentiation is often a more effective strategy for early-stage startups.
Examples:
- If you work in the banking industry, we are the best CRM for you
- Most CRMs address a very broad audience
- As a bank, your needs are very specific and you need to heavily customize your CRM
- With our product, your requirements will be covered out-of-the-box
- If you often book meetings with prospects, we are the best solution for you
Avoiding automated thinking: competitors vs. alternatives
Your specific positioning will trigger specific assumptions in the minds of your audience, including which competitors to compare you against.
Choosing the right positioning is paramount to defining an effective competitive strategy. For example, by narrowing your focus to a specific context and position yourself as a complementary product as opposed to a replacement, you will avoid competing with stronger players or at least make them less relevant.
As your positioning changes over time, so will your competitors.
Every time you review your positioning, you should also review your competitive strategy.
Although competitors to your vision are important, you should focus on the alternatives that your current target audience has.
You should ensure you don’t get stuck with the same old list of competitors.
In fact, the word “competitor” suggests that the firm does something very similar to what you do.
My suggestion is to rather think of “alternatives” that your audience has to solve their problems and perform their job at best in the context of your current positioning.
Not all alternatives will be vendors. Think of the alternative of “not buying anything”. This is a very common deal-breaker for early-stage startups.
Alternatives that are vendors may not be the vendors you have in mind. As you move to specific use cases, people will compare you against different alternatives.
Putting it in practice
Now that you know what positioning is and why it’s important, you can start a positioning review exercise.