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One of the biggest problems with positioning is that it’s not static. Today, everything is going well, you are acquiring, converting customers for your AI solution. Tomorrow, every other competitor integrates AI, and your unique selling point evaporates. Poof. Suddenly, you’re competing on price, struggling to acquire users or to convert them to paying customers.
The Pitfalls of Price Competition
When your solution is similar to other competitors, the inevitable price war begins. This approach skyrockets your user acquisition costs and lowers your conversion rates.
The customer comes to the website. It’s an AI powered CRM. Goes to the next website. It’s an AI powered CRM. The customer will choose on price.
Many founders, in a bid to counteract this, rush to hire sales teams. But the sales doesn’t improve. Or they start micro-managing the marketing department. Trying to do more tests, growth hacking their way out of trouble. But the issue isn’t sales or marketing—it’s positioning. It’s standing out. It’s being different.
The customer doesn’t know why they should choose you over someone else. So they choose the cheapest competitor.
As you scale, without a clear positioning strategy that dictates your development, your product transitions from a “must-have” to a mere “nice-to-have.”
You have to understand that the moment your campaigns that used to be working start getting more and more expensive, the moment your conversion rates start dropping, you are losing your differentiation. And you should act on it before it’s too late, because this won’t fix itself.
Understanding the Tech and Product Adoption Curves
Let’s take the AI space, for example. The AI space is currently experiencing a hype, a bubble, similar to Bitcoin, cryptocurrencies, and the internet when I was younger and beardless. This hype, however, will eventually slow down and stop.
For AI startups, the current landscape is brilliant. There’s a high demand for AI solutions and not enough quality competitors. But as this bubble bursts, competition will intensify, and the pool of early adopters will shrink.
The challenge then becomes appealing to the early majority—those who aren’t necessarily tech-savvy. They’re not looking for a jack-of-all-trades product. They want a solution tailored to their specific needs.
The Transition from Early Adopters to Early Majority
So at the moment, many companies enjoy rapid growth due to the AI hype. But this success can be short-lived if you’re not managing it strategically. As the early adopter market saturates, companies must pivot to cater to the early majority. This group requires specificity.
To successfully bridge this gap, startups must:
- Analyze their customer segments: Understand who’s using your product and why.
- Refine their use case: Determine the specific problem your product solves and how it does so uniquely.
- Reposition for the early majority: Tailor your messaging to resonate with this new audience.
From $1M to $3M with the Power of Positioning
It’s exactly what happened to one of my clients a few years ago, a SaaS product in the client acquisition space. Initially, the company experienced fast growth, until generating about a million annually. When I came into the company their ads were getting more and more expensive, their conversion rates were falling.
After doing the initial market assessment, I found that this is happening because there are new competitors on the market and the company has no clear differentiation.
By reevaluating their positioning and refining their messaging, we managed to reignite their growth.
– implemented a survey to understand the customers better,
– then repositioned the company, and after being clear on a new position,
– we revamped the onboarding process,
– added a whole new gamification system to improve lifetime value, and even
– restructured their pricing strategy to maximize profits.
👉 Increased clicks, higher conversions, much improved email marketing, and the annual revenue that went from $1M to $3 million.
Experiencing stagnant growth and want to check your positioning? Reply to this email and let’s create a positioning offer your customers won’t want to refuse.
The tech landscape is changing fast. Those who adapt quickly, focusing on clear positioning, differentiation, will emerge as leaders. And if you are interested in talking more, do reach out and let’s grow your startup.