How to position your product on the market in order to make it a success?
The path rests on five fundamental concepts and ends with the creation of a narrative shared at all company levels and capable of driving sales.
Let’s start with a key concept: just as it is useless to speak slowly in Japanese to a person who speaks only English, in the same way it is useless to dedicate a large budget to marketing if the positioning is confused. Weak positioning negatively affects the results of any marketing and sales activity. If we fail in positioning, we fail in marketing and sales. And if we fail in marketing and sales, the company is lost.
The two traps
We often make the mistake of thinking that a single positioning is possible for our product, more so that once chosen it cannot be changed. These are two traps that we must avoid.
The first trap: we get fixated on the idea of what we wanted to achieve and we don’t realize that, in developing it, it is transforming itself into something else. Let’s say you’re a baker and want to make the best chocolate cake in the world. The exact moment you call it “cake”, you made a lot of decisions.
Buyers: as a cake, you can sell it to people looking for an elaborate dessert, buying it in the store, or to restaurants that offer elaborate desserts at the end of equally elaborate meals. You will be competing with cakes, ice cream, assorted desserts, and you will have to attest to their price range. Your potential customers eat elaborate desserts, so what will make your product special must leverage this desire to surprise, to be special. You could make your cake organic, or gluten-free, or add French salt to your caramel sauce.
Let’s say that, during the test phase, you realize that your cake is fine if made rather small. So small that it can be sold as a single portion or snack. More a muffin than a cake, actually. Everything changes: unlike cakes, muffins are sold in cafes and bars, competing with donuts, danishes and bagels. They sell for a couple of dollars, to people who willingly eat chocolate for breakfast, they don’t care about the origin of the salt you use in caramel, rather, they are happy if there is plenty of caramel …
The second trap is even more dangerous: you have positioned your product perfectly in a market, but then the market changes.
Keeping the example of the muffin: let’s say that your business is going well for a while; you put nuts and seeds in the recipe and reduced sugar and butter, and sell “diet muffins” to people who want to have breakfast with something appetizing, but not too caloric. At some point you notice a drop in sales, and you find that just around the corner from your shop your usual customers queue to buy a product very similar to yours, which is not sold as a “diet muffin”, but as ” healthy gluten-free snacks ”.
The market has moved, from the desire to stay (or feel) on a diet, we have moved on to the desire to feel healthy, and you have not noticed. This happens continuously, especially in the technology startup sector.
How to build positioning: 5 pillars and 10 steps
A good positioning takes into account various factors:
- the customer’s point of view on the problem you solve and on the solutions that already exist;
- the ways you uniquely differ from the alternatives and how this is significant for customers;
- the characteristics of a potential customer who truly appreciates what you can offer uniquely;
- the best market context for your product that makes your unique value evident for those customers who adapt best to your product.
One mistake to avoid is to rely on the “positioning declaration”, a tool widely used in the nineties.
The process suggests to follow, however, is the “positioning in 10 steps”, an effective tool that can be applied to any type of product and which is based on 5 pillars.
Let’s see them in detail:
- competition analysis. What would your customers do if your solution didn’t exist? It is important to understand what customers are comparing your product with, because this is the yardstick they use to call it “best”. For example, your solution might be much easier to use than that offered by other startups, but if the alternative in a customer’s mind is Excel, you won’t be able to say that your product is easier to use unless it really is compared to a spreadsheet;
- unique attributes. They are the capabilities or characteristics of your offer compared to your competitors. Sometimes, we try to capture this idea under the “differentiator” label. You will probably have many, but you have to be sure that they really are from the customer’s point of view;
- value. It is the advantage that you can offer customers thanks to your unique attributes;
- reference market. It is made up of all the customers who buy quickly, rarely ask for discounts and tell your friends about your offers. You have to identify what distinguishes these people from all the others. What can make them love your product more than their competitors? How can you locate and reach these people?
- market category. It is the framework that your customers use to group similar products. Claiming that your product belongs to a specific category triggers a series of hypotheses in people’s minds: who your competitors are, what the product’s features should be, what the prices are. If you choose your category wisely, you won’t have to explain much: it is assumed that all the products in the category have certain basic characteristics.
Let’s now see the 10 steps to take according to this model:
1. Understand the customers who love your product. What, of your proposal, makes them happy? Answering this question helps you determine what your value is, by whom it is perceived as such and why. Make a list of your best customers. Your first instinct will be to focus on the product, but it is a trap. It is on customers, that you have to shift your attention;
2. Put a team to work. The positioning process works best when doing teamwork, involving as much of the company’s functions as possible. Each sector, from sales to marketing to customer service, can offer a unique point of view on how the customer perceives the product;
3. Alignment. We need a common vocabulary and starting point for all team members, who should have the same opinion about what positioning means and why it matters;
4. A true analysis of competitors. Understanding the customer’s problem is not enough: to understand how our strengths and weaknesses are perceived, it is necessary to understand the alternatives we are confronted with. What would our best customers do if we didn’t exist? The answer could be: they would use another product that looks like a direct competitor. If the answer is trivial, of the type “would use pen and paper”, it means that the product responds to a need that does not exist: in other words, the product does not exist;
5. Select your unique attributes. Strong positioning is centered on what a product does best. Once you have a list of competitors, the next step is to isolate what makes you different and better from them. Start by making a list of what you offer and the others don’t, but remember: only your happy customers can validate it, your opinion, without this verification, is worth little;
6. Map attributes expressed as valuable “themes”. The features allow benefits that can be translated into value for the user. Group the functionalities around these themes, so you will shift the reasoning from functionality to actual benefit;
7. Identify who is strongly interested. Now that you’ve determined the value your product has over the alternatives, you need to determine who this value is important for. The most suitable customers for your product are the easiest to conquer and maintain over time;
8. Find the target market capable of putting your strengths at the center. There are several approaches to isolate, target and conquer a market. You may want to position yourself in an existing market, for example aiming to oust Coca Cola. Or you want to build a positioning suitable to conquer a sub-segment of an existing market: in this case, you want to sell Coca Cola for dogs. Finally, you may want to position yourself to conquer a new market: you must first demonstrate to customers that a new market category deserves to exist, then you must define the parameters of that market category in the minds of customers and, finally, position yourself as a leader within of it;
9. Take advantage of a trend, but be careful. Once you’ve determined the market environment, you can think about how to superimpose a trend on your positioning, to help potential customers understand how your offer is important to them right now. This step is optional, but potentially very effective, if you do it carefully: it is still better if your product is a little boring rather than disconcerting;
10. Synthesize your positioning so it can be shared. Placement isn’t useful until it’s shared with the whole organization. There are various ways to transfer the concept through the different functions of the company, the essential is that the 5 elements (analysis of competition, unique attributes, value, reference market, market category) are expressed effectively.
From positioning to narration: a sales guide
Once the work is completed, the positioning must be translated into narration, in order to transform it into a real guide for the sale. It starts with a definition of the problem that your solution solves. The definition of the problem helps to limit and frame the discussion, to make evident what you are talking about also to customers.
The story then goes on to tell how customers are trying to solve the problem, and how the available solutions are not up to the situation.
The next stage is what I call “the perfect world”. It is at this point that you will describe the characteristics of a perfect solution, something like “in a perfect world, customers could complete the whole complaint process without problems with their mobile device”.
The story continues by introducing the product and positioning it in the correct market category, explaining the values with a little detail.
In conclusion, remember that your product is not destined to languish in a market where nobody understands how fantastic it is.
If you want to be successful, you need to determine the best way to position your product. Understanding what your best customers see as real alternatives to your solution will help you understand how to differentiate yourself.
Position yourself in a market that manages to make your strengths evident to the people you want to sell to.