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Have you ever felt like something isn’t clicking? Like,… Your product SHOULD work, but… just doesn’t? The customer’s problem is real; you know that, people said they need your product. Yet, for some reason, they refuse to buy.
I know I have.
And, you know, we, as entrepreneurs, are quick to lay blame.
The marketing isn’t working.
Or the sales team doesn’t know how to sell.
Or the design just isn’t right.
“If only we could change that button to look a bit more attractive.”
What if you are looking for the solution in the wrong place?
What if marketing isn’t the problem?
What if the sales team consists of perfectly capable individuals?
What if that button is right where it should be?
What if you are failing much, much earlier? What if your product positioning sucks?
What is product positioning, and what is a product positioning statement?
Like April Dunford says in her book Obviously Awesome, product positioning is the context we give our clients so they understand the product better. This is usually done via a simple product positioning statement; a short, simple statement that articulates the unique value proposition of a brand or product.
- Compose bold, clear, mistake-free writing with Grammarly’s new AI-powered desktop Windows app.
- Rolex offers a wide assortment of Classic and Professional watch models to suit any wrist.
Think of product positioning this way: what do you want your product to be known for? When I say ‘proof reading’, you say Grammarly. When I say ‘luxury watches’, you say Rolex. That’s good product positioning. Grammarly and Rolex are well-positioned brands.
Actionable task: Create a positioning statement that describes your product and test by talking to people. How do they respond? Are they intrigued or confused?
Why is good product positioning important?
Positioning is all about understanding your target customer pain points (or better: needs) and then differentiating your product to meet those needs better than your competition. (Learn how to differentiate your product in this article.)
If you can’t differentiate your product from your competitors within the market, you will have to compete on price.
Before we dive too deep into marketing jargon, let me explain with a simple example:
Say you have 3 different bottles of water. They are identical. Which one are you going to pick? The one that’s the cheapest, right? Why would you pay more for an identical product?
Now imagine two water bottles are identical, with the label saying “water”, but the third one says “clean water”. The two identical waters are both $0.99, while the spring water bottle is $1.29. Chances are, you are now willing to part with those extra $0.30. Why? Because the third one has a larger value. That this company advertises fresh, spring water beats those additional $0.30 for you.
Now imagine, there is a fourth water bottle, costing you $1.59 but is made by company X that is really known for its water products. Chances are, you will grab that water without looking at the price. Why? Because in your mind company X = good water.
The first two water companies compete on price, because their product is generic. If you switch those waters with another two waters, you won’t notice the difference. The third one has clever marketing. The fourth one is the only logical choice for a selected group of customers. Customers who want to drink the cleanest water possible.
The first two companies compete on unit economics. They need to make their water cheap in order to sell. The third one can sell their water at a higher price, part of that extra profit goes to clever marketing efforts. The fourth one doesn’t need to compete on price. The fourth water company competes on brand. They figured out how to put their water in customers’ minds so that customers perceive their water as the water they want & need.
So no matter the price or product quality, well-positioned products have an immense advantage. It’s like when your favorite team is playing at home. Sure, the competitor has better players technically, but you have a roaring crowd cheering you on, and a ref on your side (wink, wink).
Interested in some help positioning your product? Here is a quick overview of my Positioning Workshop.
Actionable task: Scout your competitors and check their messaging. What are they emphasizing? What are they competing on?
Why will your marketing & sales fail?
You can think of positioning like defining the rules of the game. You can’t play the game if you don’t know the rules of the game. Or at least, you can’t play the game to win.
So if you went into business to play for participation trophies, go ahead, hope your marketing will work and that the sales will come.
But if you want to build a stable company, you need a solid foundation for sustainable growth. Positioning IS that foundation. It’s everything you do before you do a marketing plan. And that is true whether you are positioning a product or service, whether we are talking about positioning for small businesses or large corporations.
Positioning is the basis of all your external communication. Your ad messages, your landing pages, your website copy, your sales pitches, your product messaging,… Positioning is what you want your customer to know about your company. It’s how you solve a problem for the customer, how you are different to your competitors, it’s the values that your company provides.
How are you ever going to craft an effective product strategy without knowing what your competitors are doing?
How are you going to craft effective marketing messages without knowing what the customers’ pain points?
How will your customers understand that you are the only one who can effectively solve their problems if you don’t know how to explain the benefits of your product in their language and tone?
And that’s why, without a solid positioning strategy, your marketing and your sales will fail.
Small changes, big results
When I was working at KOBI, we had a positioning problem. For those who know the project, KOBI is an e-reader, helping dyslexic kids learn to read. It uses an innovative method of color-coding along with some more traditional techniques to teach kids to read.
When trying to penetrate the US market, our target audience wasn’t responding to our messages. We could get the users to download the app, but we couldn’t get them to register or convert. Our marketing & product development was based on hope, instead of strong fundamentals.
Our marketing numbers were high, our cost of user acquisition (CAC) was through the roof. We were scratching our heads for quite a while, doing market research, testing different marketing messages, testing different channels, even writing a book, in order to get our customers to respond.
But they didn’t.
Until we really thought about what we created and what are product is and repositioned the product from a mobile app to an e-reader.
See, when you launch a new product, a product that people don’t know, you have to give potential clients the context around the product for them to understand the product. Because our brain is funny. What you say and what your client hears are two completely different things. So when we said “KOBI is a mobile app”, in our customer’s mind, KOBI was something fun and energetic, an app where you collect tokens and learn along the way. Because that’s what a typical edutainment mobile app is.
However, KOBI is nothing like that. So when they came into our mobile app, they were disappointed. No tokens, no diamonds, no Talking Tom telling you you should bathe him in the next hour or so.
Because KOBI is nothing like Talking Tom. KOBI is a simple e-reader, with some bold letters and some colored letters that help you learn to read. It’s effective, but it’s nothing like Talking Tom. In reality, it’s more like Kindle than a mobile app. Kindle for dyslexics.
After repositioning, people started responding. An e-reader for dyslexic kids. Makes sense. And when the customer came into the app, the app made sense. Because he expected an e-reader and got an e-reader. Because we gave him the right context. We were no longer a poor mobile app; we were a good e-reader with some additional functionalities for the dyslexics.
This new positioning helped our marketing numbers A LOT. Our cost of user acquisition went down by 52%, we could now get 2x more users into the app for the same amount of money. This helped us test faster. Much faster. And months later we doubled down on our home market and grew by 100% in just 4 months. Would we be able to make the same decisions and grow without repositioning the product? Don’t know, but I certainly wouldn’t bet on it.
Interested in some help positioning your product? Here is a quick overview of my Positioning Workshop.
The experience thought me how slight changes in positioning bring improved results and sustainable growth, a theory that was later confirmed several times over when consulting for my clients.
How to design an effective product positioning strategy & how will it affect the product development?
An effective positioning strategy should only care about one thing: How to position your product as the top-of-mind solution for your target audience. The goal is to make your product unique and help it thrive. The goal is to stand out from the crowd.
The positioning process starts by looking at our product strengths. What does our product do well? Where will you compete with your competitors? You want your positioning strategy to highlight your best product features.
This is no “ultimate guide” or anything, but here are a few examples you can use to plan your positioning strategy.
Product positioning examples
Competing on quality
Let’s say you are building a high-quality product. Something that won’t break, no matter how you use it. This is an effective strategy, if someone who values quality used your product. Let’s say a photographer, who needs his camera to withstand heavy-duty work, or a car mechanic, who needs robust tools to do his job every day. If you can communicate your value clearly, your other product features won’t matter as much. In photographer’s example: Sure, our competition has the best software, but we built our product to last.
This is a strategy, that was used by Toyota for their Hilux trucks. Maybe the Hilux isn’t the most comfortable car in the world. It might not have the AC in the base package. But it will withstand whatever terrain you throw at it. And people are prepared to pay for that quality.
Competing on price (both high & low)
Competing on price means you are either developing a really expensive luxury product, or a really cheap product. Mind that luxury has no association to quality. Ferrari builds luxury, expensive cars, that might not be the most reliable cars in the world. Yet people are prepared to pay for it, because it caters to their need. It builds their image.
Competing on price is often the strategy taken by the companies in the beginning. Because the product doesn’t have any other outstanding qualities, the company decides to lower the price and sell the product by being cheaper. And let’s be honest for a second, product marketing is way easier when done this way. Handing out coupon codes is easy.
However, I don’t recommend competing on price at this moment. Although a legit strategy, competing on price in an economic downturn is dangerous. Think about what’s happening now. The logistics are getting more expensive, the workforce is harder to get, this is lowering your margin numbers, which, if you are competing on price, are already low. One day you may wake up and find that you are working for free and the company is in red numbers. (More on how to increase your prices in this article.)
That being said, this was the strategy used by Huawei, Xiaomi, and other smartphone brands so they quickly claimed their market share.
Competing on user experience
Competing by designing the best product experience you can. If your product is easy-to-use and your competition is offering complex, fully featured products with a steep learning curve, competing on user experience is your best bet.
This is almost always the strategy of every digital product when first launch. Why? Because the competitive products have been on the market longer and have tons of features, while your product does one thing right. But only having one feature means your product is uncomplicated – or easy to use.
Actionable task: Think about your product benefits. Think about what your product offers and offers well. Think how users use your product. Think about how the competitors position their products. Maybe even how your potential customers use other products. And come up with a product positioning strategy that will suit your product.
When you feel like something isn’t clicking, when your marketing numbers are poor and your conversions aren’t happening,… take a step back. Think about the basics.
Grab your product team, your marketing department, guys in support, and organize a brainstorming session. Or better yet, do a positioning exercise. Take a bird’s view of the product and try to understand how your user experiences it. What are our messages to the user? What’s the context we are setting? What are we communication and what is the user hearing? Are we in the right product category?
It’s all about customer perceptions. Confuse the user and they will never buy.
But communicate your core values correctly, get your product into your customer’s mind, and soon you will be able to halve your marketing budget, because your brand identity will do the rest for you and ensure your long-term success.