How to improve product positioning

Many companies position products as a list of features. They solve a problem, but they don’t understand who they solve it for or the full context they’re solving it in. This leads to poor campaign performance, long sales cycles, and high churn.

According to Drift, the best companies take a different approach. They “use data and analysis from the frontlines” to figure out product positioning. Because they understand “The market isn’t attached to what YOU think your product is. The market wants to know what your product can do for them.” 

Quick refresher on product positioning 

Positioning expert April Dunford says, “product positioning describes the specific market you intend to win and why you are uniquely qualified to win it.” In her book Obviously Awesome, she elaborates that positioning operates as context: “Context enables people to figure out what’s important.” 

When customers encounter a product, they look for context in the messaging, pricing, features, branding, and testimonials to figure out, “what is this thing and what does it do for me?” 

But figuring out (not to mention communicating) a “good position” is really hard. There are multiple positioning options for any product. On top of that, markets, customers, and trends all fluctuate rapidly.  

The one thing you can rely on to make better positioning decisions? Input from your customers. 

How real customer insights shape great positioning 

In a workshop with Gia Laudi and Claire Suellentrop, Dunford outlines three ingredients for a well-positioned marketing strategy. Those inputs are: 

  • Ideal customer characteristics: who really benefits from your product?
  • Solution characteristics: what does your product do for your best customers?
  • Buying process: how does your ideal customer get to your product?

Here’s how you can use a stockpile of customer feedback to understand each of these more clearly. 

Ideal customer characteristics: who really benefits from your product?

Products have a range of users. Most of your users feel pretty “meh” about your product. A few hate it. And a precious number absolutely cannot live without it. That last group, the power users, is your gold. 

If you’ve been collecting qualitative feedback, you already have a pile of insights from them. 

You have insights* about:

  • Who they are
  • What context they’re operating in
  • Why they bought your product
  • How they use your product
  • What outcome they’re trying to achieve with it
  • Why they’d be crushed if you disappeared

This clear picture is the foundation of your positioning. Dunford says, “Once you figure this out, the world is your kingdom.” Here’s an example from her own experience.

*You may not know all of these things, and that’s okay. If you have holes, hop on the phone with some of your ideal customers, and fill in the gaps

Case Study: From near extinction to $1 billion in revenue

Back in the day, Dunford was working for a company that built a relational database. It wasn’t selling, and her boss wanted to pull the plug. Before he did, Dunford had to call up 100 customers to make sure they wouldn’t be mad about it. Most customers didn’t even remember purchasing the software—except the 21st person she called. That guy was doing something unique and he raved about it. Out of 100 people, 6 or 7 customers were doing that same thing.

Instead of killing the product, Dunford’s team decided to reposition it. She explains, “So, it started with insight into who loved our stuff and why. That got us to thinking about different competitive comparables and, therefore, different key features and, therefore, the different value we could deliver to the customer. We then chose different customers to target and, finally, we shifted our market category away from 'business productivity software' to an 'embeddable database for mobile devices.’”

It started selling like crazy and was acquired by a huge database company in Silicon Valley. It still exists today and, at its peak, was making $1 billion in revenue. 

Dunford called 100 customers because that product was installation software; they didn’t have customer usage data. Today, most companies do. And in learnwhy, you can instantly see how and why your power users are using your product. 

Solution characteristics: what does your product do for power users?

Once you know who your power users are and how they use your product, you can create a compelling story that attracts more ideal customers. 

How? Let’s go back to those power users. You want to look at two things in particular:

  • How they use your product
  • What they’d use if you weren’t around

The first bullet tells you what these power users hired your product to do. It also tells you which features they value the most. In April Dunford’s example above, her 6-7 power users were putting the software on a mobile device. They loved the software because it was compatible with their headquarter’s database (feature) and it was small enough to fit on a mobile disk (feature). 

The second bullet tells you who your true competitors are. Sticking with the same example, Dunford’s team originally thought Excel was their competitor. And that makes sense if users saw the product as a database. But for power users, Excel didn’t even cross their minds. The true competitor for that segment was a DIY solution. 

Knowing who your competitors are, in the mind of your customer, is how you identify what you’re uniquely good at. As Dunford points out, “You can't know what your distinctive value is without knowing who you're compared against.”

Buying process: how does your ideal customer get to you?

The final ingredient is the buying process. Your sales process is how you like to sell people. Your customer’s buying process is how they arrive at buying and liking your product. 

On RocketWatcher, Dunford illustrates the buying process like this: 


Via http://www.rocketwatcher.com/blog/2012/07/modelling-the-customer-buying-process.html


The bottom half of the image shows there are things that accelerate or decelerate your customer’s buying process. Things that decelerate the process are friction points.  

If you understand how your customers are getting to you and where they’re getting stuck, you can figure out how to get them unstuck. Meaning, you can keep them moving toward purchase. 

To uncover your customers’ buying process in learnwhy, dig into feedback from these customer segments:

  • Website visitors: what triggers people to consider your solution?
  • New signups: why did they sign up? What convinced them to? 
  • Recent upgrades: what pushed them to a bigger commitment? 
  • New cancellation: where did they get jammed up? 
  • Power users: why did these people in particular buy your product? 

Use these segments to identify patterns around how people get to you, what makes them hesitate, and what pushes them forward. Pay special attention to these elements for your power users. 

Better positioning gets you out of the “marketing cycle of meh”

Most marketing cycles look like this: 

Via https://www.forgetthefunnel.com/resources/build-saas-marketing-system

But this is a dangerous game because tactics come and go. Instagram used to be effective, now engagement rates are tanking. Organic search and Facebook are changing too. Marketers can’t rely on tactics alone. 

Via https://www.trustinsights.ai/blog/2019/12/12-days-of-data-day-3-instagram-brand-engagement-statistics-for-unpaid-content/


Via https://twitter.com/KateBour/status/1150790072230436864

Better positioning, based on customer insights, gets you into a totally different cycle. Instead of saying, “Okay, podcasting is hot, so I’m going to try that” you’re saying, “I know I need those people. They need to know these things about my thing, and this is the best way to reach them.” 

Via https://www.forgetthefunnel.com/resources/build-saas-marketing-system

You have a clear strategy. You have an effective way to drive leads to sales. You have a way to test assumptions and know what’s working. 

You have a better, stronger marketing cycle.

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