03018 Product Positioning: Where Do You Stand?

“Product positioning” is the high fallutin’ term for deciding how your product is unique and how it compares to the competition. Companies embark on a product positioning effort in order to be able make the product appeal to the specific type of customer the company has selected as the best prospect. This target customer may be defined as “best” for a number of reasons, such as being part of a market segment that is more profitable, easiest to sell to, easier to service, most like the existing customer base, etc.

In short, product positioning is how your product is different and special. Marketing works to define the positioning of your product, and Product Managers can play a vital role in this effort by providing detailed insight into how the product is stronger than its competitors, both in terms of features and types of customers it attracts.

Take a look at the pointers below to develop or enhance the positioning that helps your product make a powerful statement to potential customers, analysts, and the media, and makes the sale of your product a difficult task for the competition to overcome.


Less Is More

Rather than aiming your product at the biggest market possible (unless your product fits a huge market, like email or word processing, which apply to all people who communicate, and all people who produce typewritten material, respectively), focus your product to appeal to a market niche or limited purpose.

The more focused your product is, the easier and faster it is for:

    sales reps to determine if someone is a good prospect,
    prospects to determine if this product might be for them,
    the press to determine how to describe it,
    analysts to determine where your product fits,
    marketeers to determine the best prospects to target and how.

Even when the product could be used by a much wider market, you’re better off aiming for and selling to a more specialized or restricted group of prospects, unless your company has the resources to conduct separate targeted marketing campaigns for each market segment.

If you don’t focus on a limited segment, you wind up with a product that comes across as too general to appeal to most prospects.

Who’s Your Best Customer?

Instead of positioning the product to fit the whole customer or prospect base – that is of your existing customers and prospects – choose the type of customer who is your best customer. After all, these are the ones you want more of. You are not required to target every existing segment of your customer base, especially when certain segments are less profitable because they are higher maintenance or spend less.

What’s the Best Use of the Software?

Look for the most appealing use or uses for the software in the existing customer base. In this case, “best” means what makes the most compelling stories, because these stories are the basis for selling the product, convincing prospects of the product’s value.

It’s important to identify the best use not just in the eyes of your company’s management team – some ideas sound really sexy in theory, but make no impression on prospects working in the trenches – but also in the eyes of prospects.

What Can You Do That They Can’t?

You want your product to appear in the mind’s eye of your prospects as clearly different from and better than the competition. To do this, study the competition and select those areas where your product is strongest, ideally choosing functions performed by your product which the competition can’t do at all.

Build this into your basic description of the product, and focus on prospects and market segments that specifically want such functionality.

What Do They Do That You Don’t?

Similarly, identify areas where the competition is strong and your product is weaker or offers no equivalent benefit, and steer clear of these.

What Could You Do Quickly?

Fortunately, this is software, which means that more than other products, you can select capabilities to promote before they are completed and commercially available. If you discover important competitive weaknesses and there is work that you can do in a reasonable amount of time to shore these up, position the product as if the weaknesses don’t exist, and proceed with requirements and coding. Or, if you identify a critical benefit that prospects are looking for, and this isn’t provided by the competition or your product either, put it in the positioning.

The key here is to identify functionality that can be developed relatively quickly in order to back up your marketing and sales statements.

Who Cares?

Identify all the people, all job functions, consumer lifestyles, etc., that will care about the software, and exactly what it is that they value as a benefit. Then incorporate business language that addresses the benefits to these various groups.

This approach allows your sales reps to sell to multiple individuals at a prospect, and get those individuals to team together to push the purchase.

Note that this does not necessarily run contrary to the idea of focusing your target market segment. This pointer applies to the different job titles or lifestyles within a single customer or household.

Who Buys?

And never forget to position the product to appeal first and foremost to the person who holds the purse strings. If the CFO always signs the contract, then you had better include cost-cutting or savings in the product positioning.

If the head of customer service is the one who buys, you want to focus on better service and higher customer satisfaction.

Make a Compelling Statement

Once you have determined what the product positioning is, translate it into a compelling statement describing your product. This positioning statement then becomes the “elevator speech” that sales reps use to introduce the product to all prospects. This statement gets repeated, in whole or broken out into its separate elements, in product presentations and all marketing materials.

Pointing Due North

The product positioning serves as the compass that your company uses to know where it’s going with the product and get there as effectively as possible. Without a compass to guide you, any direction will do, but most of those directions will lead you somewhere you don’t want to go.

— Jacques Murphy, Product Management Challenges


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