What is Product Positioning? Guide, Templates & Examples to Design Your Strategy

By understanding the specific nuances of product positioning for new B2B high-tech products, founders, CEOs, product management, marketers, and product marketing can accelerate product/market fit and new product revenue, maximizing their return on innovation.

‍

What is product positioning?

Product positioning is a critical aspect of marketing strategy for new products or services, especially for B2B technology and software products.

Given today's innovation speed and competitive landscape evolution in high-tech markets, it is essential to position innovations effectively to highlight their value, attract the right buyers and differentiate from competitors.

Product positioning is the process of placing your product in the minds of buyers relative to its alternatives, which may or may not be competitive products.

It involves identifying and highlighting your product's unique features, benefits, and value propositions and placing them in your target's minds in a way perceived as much-needed, credible, and differentiated.

‍

What is the difference between product positioning and brand positioning strategy?

Brand positioning focuses on helping established or mature businesses build a mental space or perception about several company attributes, like what they do, who they help, and their strengths to build long-term advantage and defensible growth.

Product positioning is about positioning a new product (in the case of new startups) or a specific product offering (in the case of established, scale-up, or mature businesses). Product positioning is also more focused on the specific scenario the buyer and end-user face.

Although there are some similarities, we will focus this article on positioning for new B2B tech/saas products and innovations.

‍

What is the difference between positioning, messaging and copywriting?

Positioning is strategic, defining the desired market perception of your product with a focus on differentiation and credibility, led by CXOs. It's your business or product North Star that defines the WHY, and WHO to sell to.

Messaging, also strategic, defines the WHAT to communicate to the market based on the WHY and WHO, usually crafted by marketing or product marketing leaders.

Copywriting is the HOW you communicate the messages. It is the tactical creation of clear and specific texts that convey the messages in the brand's voice and tone, typically done by copywriters and content writers. Each step builds on the last, from strategy to specific marketing assets.

‍

‍

Why is product positioning important in B2B technology and software markets?

The main difference in B2B technology buying decisions versus other products (like consumer or cheap products) is that they are high-risk decisions.

Technologies change quickly, providers are created and die every day, and products can require a steep learning curve, integration, and change management in the clients, putting the implementation projects at risk.

By building a strong market position, a high-tech product or business will help overcome market objections related to risk.

Great product positioning requires market research, competitor analysis, and segmentation to identify target market segments, customer needs, and preferences.

By understanding customer pain points and unique product features, CEOs and founders can inform product strategy and position their products in a way that resonates with potential customers.

A key component of new product positioning is developing a clear positioning statement that reflects the product’s unique value proposition, target audience, and competitive advantage.

This statement will become the guiding principle for your product, marketing, and sales teams, ensuring they align with the desired market perception you want for your product.

‍

‍

‍

What do all B2B technology category leaders have in common?

• All have a strong, differentiated positioning. The market knows, gets, understands, and is aligned on what they do, to whom, why, and when to call them.
• All understand that positioning is a strategic CEO-led initiative for accelerating revenue and commanding a higher valuation.
• All recognize that breakaway differentiation requires a predictable shift in focus: from technology to product to market to company, always with a buyer-centric positioning strategy.

‍

When is a positioning strategy most important?

• When a new product is developed, ready to launch
• When there is a lack of success in customer segment to date
• Erosion of market share or sales plateaus, like Crossing The Chasm.
• Introducing an existing product into a new application or use case
• Introducing an existing product into a new geographic region
• The competitive environment has shifted. This includes new competitors or loss of competitors, a major change in a competitor’s strategy, or when an alternative solution gains a toehold in the market.
• The market environment has changed. This includes new technologies arising, changes in economic forces, or when industry standards are stabilizing.

If any of those feel familiar, it is time to prioritize resources to rethink your product positioning strategy.

‍

What are the indicators of a successful product positioning?

• Your company has a strong point of view that captures the market's attention. The market knows why to call you and when.
• Your market ecosystem knows and is aligned with your positioning (market alignment).
• Everyone is on the same page in your company (internal alignment).
• Sales engage at a decision-making level.
• Your solution commands a premium price. Sales don't complain mainly about pricing.
• There is buyer urgency: your solution is a “got-to-have” rather than a nice-to-have.
• Analysts and customers are adopting your language and publishing you.

‍

What are the questions your product positioning strategy must answer?

• In which market/product category will you compete? Should you create a category or lead an existing one?
• Why should others (investors, employees, customers, partners, thought leaders...) believe in and commit to this business opportunity?
• Which market and customer segment to target? In which order? What problem or pain do you solve for them?
• How do you differentiate your product from competitors or status quo in a way that matters to the target segment?
• What evidence will you use to make the declared positioning strategy credible to the market?

‍

Positioning-to-market™: building an effective product positioning strategy

If you are familiar with our methods, the following process will resemble you to our 11-step go-to-market strategy framework, you're right.

We are working on this reduced version to put together the process of new product positioning and go-to-market strategy. We hope it helps you make the process more digestible.

‍

‍

As you can see, it's all about the value you're creating and communicating to your market.

This article will focus on steps 1, 2, and 5, which are the most commonly related to positioning strategy.

1. What are the elements of product positioning strategy?

Successful product positioning strategies are built at the intersection of 5 elements:

• Customer: Find out who your best-fit buyers are and what problems are relevant for them before considering what problem your product solves. Your strategy won't work if you’re different but irrelevant to your target buyers. What is critically important for your target customers? Where does your product fit in the market?
• Company (Strengths): Find the strengths and advantages that can make you a credible provider in the eyes of the buyer. What are your strengths (we call them crown jewels) that can be used to make your positioning more credible?
• Competition (Differentiation): Find what your competition is already offering. Most importantly, find the whitespace that nobody is serving to understand what makes your product different. Are the customer pains being underserved or over-served? How are you different from similar products in your niche, main competitors, or status quo? Think that your toughest competition might be behavioral change. That means you're creating a new category of product or market.
• Category: Sets the context to define your positioning angle according to your market category maturity, trends, conditions, and existing market beliefs. Also, to understand if you are creating a new market or category.
• Ecosystem: You can have a very well-crafted positioning spot, but without an ecosystem that helps you build that common understanding in the minds of your market, it won’t work. Actually, market ecosystems are what create categories (mental spaces). That’s why it is the first circle.

All these elements are grounded in deep research and understanding of your customer, your market and your competitors. With the raise of AI tools, you can streamline the market research process.

‍

‍

The market and industry context

The first step is to execute market research and understand the type of innovation you're launching and its location in The Technology Adoption Lifecycle curve.

Your market maturity highly influences positioning and go-to-market strategy decisions about your product:

• If you are creating an innovation that requires behavioral change, workflow change, or a lot of learning, you're making a new discontinuous market in an early market. In this case, you can position your innovation as a horizontal technology that targets multiple use cases and industries to discover your early customers and find your most lucrative market.
• Suppose you're creating a new product gaining traction from mainstream customers. In that case, you want to score your opportunities and find a beachhead segment or niche (Ideal Customer Profile) in which you can deliver the highest value proposition. This phase is about focusing your positioning, and you must be specific when defining all the e4C elements.

During this market research phase, you want to understand how market trends may impact your innovation.

Research the trends and revisit them when you're working on framing your product positioning.

Market trends and insights are an excellent way to frame the problem you solve and start your pitch. They grab your audience's attention by starting with something insightful and counterintuitive or a trend everyone knows and is relevant to frame your product with your storytelling.

For example, if you are launching software that helps your target audience save money in 2022 or early 2023 in the USA, you could use the economic downturn as a starting point to frame your solution.

Another way to start is by sharing an insight or point of view that makes your target think.

This step also includes understanding current market perceptions, how people are categorizing (the mental box in your customer's minds, like "CRM" or "email marketing platform") products like yours, and terms that are driving confusion.

‍

Strategizing relevancy: target customer research

The second element is understanding your target market and their motivations to buy profoundly.

For each potential target audience, interview 12 to 15 people and create a customer scenario with the patterns that you find.

Your scenario worksheet, for each type of buyer, should include:

You can also use tools like Wynter to research and get insights from your targets to complement your interviews.

We've created a visual example of a target scenario worksheet for the AI Meetings assistant tool fathom.video:

1. Define the high-level scenario and workflow of the end user and the problem you're analyzing:

‍

‍

‍

2. Define what is broken for them. Their pains, their struggles, their frustrations, and the penalties of doing it this way:

‍

‍

3. Define how your innovation or product attempts to solve the issues:

‍

4. Find out objections to buy and hesitations to understand the risk perception of your prospective customers. Then define whole product or business model attributes to overcome them. The next image follows fathom.video example to understand customer hesitations to buy and the solutions.

‍

‍

Strategizing credibility: strengths

Your strengths will make your position more credible and potentially challenging to copy.

Technology is easy to copy, but your knowledge, experience, insights, or customer base are almost impossible to replicate.

During this step, you must build a SWOT analysis and consider how your strengths and weaknesses can impact your positioning strategy.

You can think about strengths in different ways:

• If you're a mature company, you can use your track record, customer base, IPs, or expertise as a part of your positioning strategy for your new product. You already have company strengths.
• If you are a founder starting a new idea or innovation, you want to use your experience and knowledge as proof that product/innovation can make a change.

To go to market with a new innovation, it's okay if you can't prove strengths, as your early adopters don't care much about that. You can build your strengths as you gain more traction in the market.

‍

Strategizing differentiation: competitor whitespaces

You now understand your target customer's scenario, market context, and strengths.

By performing competitive research, you'll find whitespaces like different problems nobody has solved for your audience, different ways of solving them, or demonstrate better strengths than your competitors.

Your main competitor may or may not be an existing solution. It could be a current end-user behavior or status quo.

If you're in an early market, your main competitor is probably the status quo. The less risky decision for prospective buyers is to remain the same, even if this sounds counterintuitive. Most people don't want to change or risk trying an emerging innovation that requires workflow change.

That privilege is reserved for innovators and early adopters (16% of the population).

‍

Narrowing down your position or repositioning: scoring target segments

Your product innovation and go-to-market resources are limited. If you spread them by targeting multiple audiences, you will run out of money or resources before you find a profitable market. Imagine building features for diverse end-users, multiple marketing assets, value propositions, distribution channels... that's not an optimized go-to-market strategy.

The sooner you find a niche you can win, the sooner you can communicate that win as a competitive strength to drive credibility and go after a new segment from a stronger market and financial position.

‍

‍

Suppose you're in an early market with a horizontal product or technology, exploring multiple potential target customers or segments.

You can use this opportunity scoring template to find who can be the beachhead segment that will allow you to win and jump into adjacent segments by following the bowling pin strategy.

‍

The next image showcases the product positioning example of Stripe. They started narrowly by targeting e-commerce with an online payments API.

As they penetrated further and developed their product, they jumped and conquered into adjacent segments using the strengths and credibility build with the previous segments, expanding their customer base and becoming the absolute leader and de-facto standard. "The payment platform for the internet".

‍

‍

2.Communicating your desired market position: messaging

Once you have done all the strategizing work, it is time to put it in words and a document that you'll use to share with your team to drive alignment and communicate a clear strategic direction. You'll also update it as you learn from the market feedback loops.

This positioning platform is a set of marketing messages you will use to communicate your positioning strategy internally and externally.

Copy and paste the next outline to create a product positioning template:

• Definition of your market category — The mental "box" of types of products that people put you into. If you’re launching a type of product that requires a lot of change and nobody has ever seen before, you are creating a new category.
• Target — Segment + use case/application + industry priorities. Who has the authority to buy, and who influences the buying decision?
• Your angle or point of view — Sets the mindset in the audience to continue listening to you. What do you see in the market/industry that nobody else sees? What is broken in the market/industry? What is a market condition or trend that everyone believes and understands?
• Main problem or pain/challenge you solve — What do you help your customers achieve, and what pain/friction does your product address? Why should I act?
• Top competitors — Competitive solutions [mature markets] or an established behavior/status quo [new markets]
• Product Messages — How do you do it?
• Risk-Reduction Messages — What makes you a low-risk choice? Check our version of the whole product concept, The Brand Differentiation Wheel™.
• Differentiators [intangibles and tangibles] — Why you? What makes your product unique? If your competitor offers the same thing, it’s not a differentiator. Differentiators can be intangibles when in the mainstream.
• Product benefits — What are the outcomes your product provides?
• Sense of buying urgency — Why should I act now? What triggers the decision to buy because it is a terrible loss that needs a solution right now? What is a market or macroeconomic condition that may trigger the decision?
• Credibility statements — Why should I trust you?

‍

How to write a positioning statement?

A positioning statement is a great team alignment tool. It guides your product development, marketing strategy, and sales process by defining your market, competitive advantage, and the unique position of your product.

All this can be summarized in this product positioning statement template:

‍

‍

Product positioning example: the ConvertKit case

Convertkit is a real-world example of effective positioning to establish market leadership in a crowded mainstream category.

They started when the marketing platforms and email automation categories were already crowded and dominated by companies like Mailchimp, Active Campaign, and 100+ other tools in the same category.

Instead of competing with the hundreds of platforms and the existing market leader (Mailchimp), they discovered a lucrative underserved segment.

They focused all their efforts on building a complete product and differentiated value proposition for that segment.

Convertkit's positioning statement example:

‍

ConvertKit is the current market leader in marketing platforms for creators by using the magic formula:

SEGMENTATION + DIFFERENTIATION = MARKET LEADERSHIP

‍

‍

Testing your messaging

You don't want to launch a press release or communicate the general availability of an untested product that nobody wants or understands.

Test or validate to get direct feedback from your audience and understand how they view your product before it hits the market. You might even get your first customers.

Here are some real-world ways to test them:

1. Create a website/landing page and test it with Wynter.
2. Create a sales pitch and share it live with players in your market ecosystem (see step 3).
3. If you have a customer base, find who can be early adopters. If they might be interested, pitch them and see how they react.

That being said, the best way to test how you communicate your product's position is, well, sell your product!

Through this audience testing and feedback, you'll:

• Understand where your product fits in your audience's minds.
• Understand the features that might make your product unique.
• Learn what your audience thinks your product can solve.
• Iterate and improve your product positioning efforts.

All this testing is a market feedback loop that comes after and just after you have performed the initial market and audience research steps.

‍

Adapt your positioning strategy to the behavioral changes of your market

Positioning is not one point in time but a dynamic exercise because the types of buyers you'll find in a tech market make decisions based on different criteria.

Business leaders' approach to evaluating your product will switch as your market matures. You'll find new motivations to buy, which means they perceive the way value changes:

• Innovators (2.5%): want to explore new things or new technologies.
• Early adopters (13.5%): want a competitive advantage and stand out from peers
• The early majority(34%): wants to increase productivity, typically by solving a persistent problem.
• The late majority (34% of markets): wants cost reduction
• Laggards (16%): want to stick with the status quo

That means your value and how you communicate it must also change to keep in alignment with your market.

Because you don't know the type of buyer reading your website, you must provide all messages to position your product (and, when mature, your brand) as a highly differentiated, relevant, trusted, and low-risk solution.

‍

‍

3. Activating your desired product position in your prospects' mind with an ecosystem strategy

Your product or brand position exists in people's minds, not your words. You can't position your product; the market does it — influenced by the top 10% ecosystem players. You need them.

That's why helping your market make that mental space for your product with education and awareness is a must step in your product positioning efforts.

Every market has a set of ecosystem or infrastructure players between your product/brand and your potential new customers. 10% of these ecosystem players influence the other 90%.

These ecosystem players are the ones influencing the creation of mental positions and perceptions, mainly through WOM.

New product positioning done right includes a marketing plan to create your desired market position by educating your ecosystem players.

The next pyramid is a real-world example of the ecosystem map in the Incident Management software space in the USA in 2023:

Build relationships with the top 10% of players in the ecosystem, address their concerns about your product, and nurture them with custom messages they can share with the rest of the market.

Once you have your draft of your positioning strategy, follow these steps to introduce your product and start building your position:

1. Map your market infrastructure of players. Follow the pyramid and define the layers and individuals that compose your market infrastructure. Use Linked, Google, and Sparktoro as your tools for this step.
2. Research each player.
3. Create an outreach and content strategy for each layer in the pyramid. Use this Miro board to facilitate a team working session.
4. Assign an owner to develop a relationship.
5. Ask for feedback from the players. Fix their concerns and get back with your fixes in terms of product and messaging.
6. Keep the relationship warm. As you develop the relationship, you may want to co-author papers/posts, co-speak at events, go live with them, and contribute to industry reports...

The following image is an example of product positioning activation.

By securing a podcast interview hosted by a 3rd party thought leader in the market ecosystem of our client, the CEO was able to communicate their positioning strategy.

It helped them gain credibility and authority because they were invited by an objective, unbiased 3rd party player with no intention to sell.

‍

‍Understanding the market ecosystem forces and building relations with the top 10% of influencers is critical to increasing Word-of-mouth and building your market position.

‍Building this WOM system reduces customer acquisition costs, positions your product in the market, builds credibility and brand awareness, and optimizes market pull.

‍

Want more detail about the process of product positioning?

Watch our webinar on positioning for B2B high-tech 👇👇👇

‍

Let's summarize!

Product positioning is crucial to the success of new B2B technology and software products. It helps differentiate your new product from the competition and communicate its uniqueness to your target audience.

Take the time to evaluate positioning possibilities for your innovation, perform thorough market and audience research, identify whitespace, and develop a desired positioning strategy and activation plan to be seen as a credible, relevant, and differentiated provider by your target customers.

Email us to let us know what you think about the Positioning-to-market™ framework! Is it easier to follow than the 11-step go-to-market strategy? What do you like and what you don't?

‍