Five Steps to Positioning Your Product

If building products is hard, positioning your product is harder. No matter what you build and sell, how you position your product dictates what you do. How you prioritize, marketing campaigns, sales strategy, it all changes based on how your product is positioned.

So where do you start? How do you position your product?

Step 1: Understand why Your Customers use Your Product

Sean Ellis’ survey to discover if you’ve hit product/market fit is a great way to understand your customers. If you dig deep enough, you’ll notice it isn’t just a framework to see how many people love your product, but also to understand what they’d do if you did not exist, who your competitors are, and what value they derive from you.

Put simply, you should ask your customers these three questions to understand more about them:

1. If {Your Product Name} did not exist tomorrow, will you be unhappy, somewhat unhappy, or not disappointed? Why?
2. What primary benefit do you receive from {Your Product Name}?
3. What product will you start using as an alternative?

The second survey question is my favourite, especially when it enables you to map the benefit directly to a feature. It tells you the value your customers get from your product and which aspect of your product is key to them. It means you can then get your team to fix broken flows around it and double down to ensure more users see its value.

Step 2: Identify the Market You’re in and the Persona You’re Going After

You probably already had an idea of your market as you built the product. If you are building a CRM tool, you’re playing in the CRM space. Obvious and easy.

But it doesn’t end there. You’ll still have to answer questions such as whether the person you sell to is a manager or somebody involved in daily execution. Will you be selling to salespeople at tech companies or to retail businesses?

The data you get from your first step should ideally help you determine which market you’re in. You should start to see clusters of users with similar profiles, who all say they’d be disappointed without your product, and describe a benefit around a common theme.

Step 3: Determine the Market’s Maturity

The maturity of your market plays a huge role in determining your product’s messaging.

In a relatively new market, you have to first establish the problem before talking about what you offer. In an established market, simply stating you are in the specific market will be sufficient, but you’ll have to convince people why you exist. Not with features, but with benefits. For companies in a hypercompetitive market, like CRM, product features and benefits usually match those of competitors.

Differentiation becomes all the more important when products and services are indistinguishable — this is a process that begins with a story. My favourite example is Unilever personal care subsidiary, Dove. How do you differentiate a soap’s messaging? What feature could it have that other soaps don’t have? Or can’t copy from them? While other soaps in the market say their soap would make people’s skin fresh and clean, Dove has taken a different approach. It runs #MyBeautyMySay campaigns to reinforce its female empowerment story.

Step 4: Determine People’s State of Mind

A lot goes through someone’s mind when deciding if they should use your product. This can be summarised as four forces:

1. Push
2. Pull
3. Anxiety
4. Habit

When people switch from their current tool to yours, they are usually unhappy with their current way of working (push) and/or are attracted by what you have to offer (pull). Before people make the switch, you must address their concerns (anxiety), get them to trust you, and ensure they don’t have to go through a tedious process like learning a new flow to switch (habit).

For most products, it is usually a combination of push and pull that makes people consider your product. And once that is established, a combination of their anxiety levels and habits will determine if they will make the switch.

Step 5: Tying it Together

Using all the above data points, you should now pick a market frame of reference that makes your value obvious to the segments who care the most about that value.

This is harder than you might think. In the context of this step, a “market” needs to be something that already exists in the minds of your customers and triggers a set of expectations:

1. How your competitors can’t do certain things
2. How the lack of these capabilities bring pain to your users
3. Features you have
4. How these features give your customers the benefit

Positioning yourself as something that already exists in your customers’ minds will help you focus on communicating why they should choose you – the differentiator – and not the features.

The tone and the angle you use to position your product will depend on the market and the buyer’s state of mind you’ve surmised from steps 3 and 4.

A great way to bring it all together in words is to use the Before and After grid below. By using all the data points you’ve already collected, you can put into words how each customer segment thinks and feels before they use your product and after they use your product.

To explain the above table:

1. What do they have? – This should talk about their biggest pain point. For a manager, it could be a disorganized team.
2. How do they feel? – It is easy to simply stick to surface-level feelings like frustrated or unhappy. But when you dig deeper, and unearth feelings like being overwhelmed and insecure, you’ll hit a pot of gold that will help your positioning and messaging.
3. What is their average day like? – The average day for a manager who has a disorganized team is constantly to coach the team.
4. What is their status? – Your product could help a sales rep hit their targets consistently and get promoted to a managerial post.

We took this approach at Zepel, a project management tool we’re building. When our early prospective customers started to ask how we were different from the others in the market, we knew it wasn’t enough to just tell them we were building a faster, easier project management tool.

So we took a step back, looked into our data, and noticed the current tools catered to simple task and issue tracking when in reality, teams were trying to go beyond it.

Teams didn’t want to just jot down a list of user stories for their developers to work on, they wanted to be able to plan and conceptualize an entire feature before handing it over. They didn’t want to get different sets of updates from developers, designers, and their QA team on each individual tasks. They wanted to know the progress of an entire feature across every discipline.

And when they were on a deadline to not just ship the feature, but a quality one at that, they didn’t want to be overwhelmed with all the task level updates. They wanted to know how far away they were from shipping the feature and see if they needed to course-correct.

Once we had boiled this down, it helped us to realize we weren’t just building a faster, easier to use agile project management tool. We were building a project management tool to go beyond simple issue tracking, one that could bring members from every discipline together and adapt to the way modern software product teams really work. That way, everyone would get to do what they do best without having to babysit the tool.

Of course, like everything in building products, your positioning will go through iterations, change, and evolve. But once you get it right, you can pass every product, marketing, and sales question through a simple filter by asking “by doing this, are we strengthening our positioning or are we watering it down?”.

Conclusion

Customers seeking new products don’t have a single-minded focus: brands need to stand out clearly and connect with their audience. Doing that requires companies to go beyond just stating features and benefits. Focusing on the market and its maturity will let you weave a story that stands out, focus on the customer, and differentiate yourself.

Take Slack vs HipChat, for example. In a popular (and a must-read) article by Stewart Butterfield, CEO of Slack, he says: “What we are selling is not the software product — the set of all the features, in their specific implementation — because there are just not many buyers for this software product.” He goes on to add: “That’s why what we’re selling is organizational transformation. The software just happens to be the part we’re able to build and ship.”

Had Slack positioned itself to go after the same enterprise market as HipChat, it would most certainly look and feel very different. And we certainly wouldn’t have the fun, friendly chat tool that many of us love and use today.