Strategic Positioning: Why Your Positioning Strategy Matters to Growth
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“Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect.” - Jack Trout and Al Ries, authors of “Positioning, The Battle For Your Mind.”
Some believe all you need is a great product.
So why do inferior products outsell the competition?
Because an effective positioning strategy is about being different, not better.
Forget a New York minute.
What happens in a minute on the Internet is overwhelming. In 60 seconds, there are:
To stand out and rise above the competition, you need to create a clear position in the customer’s mind.
That’s what positioning is all about: creating a clear and compelling position in your customer so they chose your product for their problem.
But simply creating a clear position may not make you more money.
In order for the message to sell, you need a compelling story. And an effective story needs to weave itself into your entire company.
Let me repeat that for emphasis (or in case you’re skimming): an effective story (i.e. brand position) needs to weave itself into your entire company.
Your story will influence your product’s placement. It will shape your pricing strategy. And it will help you map your promotion channels. And even improve the product.
To do this, you need to develop your positioning strategy that resonates with your customers.
"Er" is the most over-used tool in the marketer's belt. And as a result, it’s one of the least effective.
Consider these words: Faster. Cheaper. Higher-end.
Can you create a search engine that’s faster than Google? And even if you can, how will you convince others your search engine is faster?
Can you create a department store cheaper than Walmart?
What about a computer brand that’s higher-end than Apple?
A key reason positioning strategies fail is the co-founder tries to be better instead of becoming different.
But be careful.
Just because you can be different doesn't mean you should. Should a toothpaste brand place their product on Safeway or Albertson’s shelves? For brands like Crest and Colgate, this is a must.
But Tom's of Maine was originally stocked only at Whole Foods and other organic stores. Why? Because it fit Tom’s differentiation story as the natural toothpaste.
When Tom’s began, they could have positioned themselves in many different ways. They could have helped you have the brightest smile. Or become the leading dentist recommended toothpaste. Or even become a cupcake-flavored toothpaste for kids.
The customer Tom’s wanted to serve preferred natural toothpaste. So this is the story they told.
Once you find how your brand is different, you need to create to craft a compelling story. Then you need to relentlessly share that story with everyone who will listen.
Thus positioning strategies often fail when a startup acts against the story they are telling.
At some point, the competition will create “me-too” products. This confuse your customers because they’re using the same points of differentiation. Do an Amazon search for “natural toothpaste” and you’ll see what I mean.
Your best strategy is to keep telling this story. If the customer knows you were first, the other brands will look like knock-off copycats.
Thus...
The moment you change your story, you will damage your brand and confuse your customers.
After Tom’s of Maine chose the position as the natural toothpaste, everything needed to flow from this story. So they created their product, crafted their messaging, and cultivated their promotion around this narrative. Then Tom’s became relentless sharing this story with everyone who would listen.
Volvo became the leading car brand for "safety." And except for 1977, Volvo was the largest-selling imported luxury vehicle from 1975 to 1992.
Other brands have launched safety campaigns, including Honda, Toyota, Nissan, Mercedes-Benz, Ford, and General Motors. But Volvo told this story first. Unless safety fit their story, each competitor slowly killed their story.
Soon Volvo made the mistake by differentiating themselves with a new slogan and ad campaigns.
Here’s the problem. Because humans cannot process all the information, Volvo diluted their brand when the message didn’t communicate safety. As a result, customers think Volvo is trying to please everyone.
And as savvy co-founders know, pleasing everyone is a quick path to failure.
So if it’s not enough to be better or different, what should you consider when positioning your brand?
Here are three questions to ask yourself:
This sounds lucrative and it is. But becoming #1 is often easier said than done. That said, becoming #1 is possible, even if you're not first.
MySpace, Friendster, Hi-5, SixDegrees, and even LinkedIn all came before Facebook. Apple wasn’t the first personal computer either. Acorn Computers, Commodore International, Atari Inc., and a dozen other brands came out before Apple.
Many markets start with dozens if not hundreds of brands. There are over 300 brands of personal computers. And in four years between 2005 and 2009, it’s estimated there were 956 energy-drink brands launched in America.
But with the majority of markets, the profits go to the #1 and #2 leaders. McDonald’s and Burger King. Pepsi and Coca Cola. Red Bull and Monster.
The greatest challenge of this positioning strategy for many co-founders is pride. It’s ingrained into startup culture to be #1. Even more so, it’s ingrained into Western culture. “If you’re not first, you’re last.”
But there’s a key piece to this strategy founders often overlook.
Once you hold the #2 position, you are within striking distance of #1. At this stage, you should create campaigns to position yourself against the entire market. Consider how Apple lumped the competitors as PC’s in their “I’m a Mac, and I’m a PC” ads.
If you can’t be first and can’t be second, then you should consider creating a new category.
Here are some opportunities to create a new category:
Walmart wasn’t the first department store. But they exploited a missing place at the low end of the market. The same went for Whole Foods at the high end of the grocery market.
When Howard Schultz envisioned Starbucks, he didn’t focus on creating better coffee. Instead, Schultz wanted to create the third place after the home and work environment.
The circus industry was shrinking and fiercely competing for top talent. Ringling Bros. and Barnum & Bailey set the standard as #1 and #2. So rather than compete in the bloody red ocean, Cirque du Soleil reinvented the circus. They did this by combining circus and acrobatics to target a higher-end clientele, one business magnates were proud to take clients to see.
Marketers call this last point "creating a blue ocean,” as made famous by the book, “Blue Ocean Strategy.” This is what I did when doing a search on Reddit earlier in this article.
To create an effective positioning strategy, you need to begin by understanding the conversation going on in your customer’s head.
Here is the 10-step process we use at Growth Ramp to develop a positioning strategy for our clients:
Every customer has different desires, pain points, outcomes they want, and competing affections.
Therefore the customer persona you choose first changes what they are thinking about and what you need to do to avoid adding to the noise.
Typically the best customer has the highest pain. As a result, it will become easier to get them to switch to your solution at a higher price point.
For more on choosing a customer persona, read: Customer Personas: Creating Personas You'll Use (and Profit From)
People are terrible at predicting the future. But customers are more than happy to share their stories, especially when sharing something they’ve felt frustration.
What should you ask your customers?
Anything that helps you find out about their current frustrations and desires. What keeps them up at night? What do they dream of doing?
What solutions have they used in the past? What did they like about your competitors? What do they wish were better? Why did they switch to your product?
What do they like about your product? What do they wish were better? If they were to sum up your product in three words, what words would they pick? What is the primary benefit they receive from your product?
The 80-20 of buyer psychology and messaging begins by asking the right questions and using their words in your copy. As you interview each customer, write down the exact words they use. You’ll use this to craft your brand messaging.
For more on talking to your customers, read: “Customer Discovery Interviews: A Secret of Successful Startups.”
If you need help learning how to do email outreach, read: “This Dastardly Email Outreach Program Put Us in the Top 25th Percentile of All Marketers.”
What your customers say and what they mean are often very different. As such, you need to research your competitors to see first-hand what your customers said about your competitors.
Keep in mind a lack of clear communication applies just as much to your customers as it does your competitors. And even worse, some things your competitors promise they never deliver on.
As a result, you should gather competitive intelligence on their website, review sites and blogs, on social media, and forums. Even better, you buy your competitor’s product to get the full customer experience yourself.
For more on researching the competition, read: “Competitive Intelligence How to Deal with Startup Competitors”
At this point, you should have a clear picture of:
Next you should brainstorm a list of positions. Don’t worry about how profitable each position is right now. Just list out every idea that comes to mind.
For every opportunity you spot, list out a potential solution. And with every threat, list out an opportunity to exploit the weakness.
I like to use Reddit’s search to consider new markets. Let’s say you wanted to start a lavender farm. With a quick search you will find a list of subreddits, or communities around a specific interest. I then ask myself a question to think about the opportunity
Putting aside some communities related to the plant, here are a few subreddits I found people posting about lavender:
Again, don’t worry about the potential opportunity. Just focus on getting ideas down on paper.
After brainstorming positioning ideas, you are now ready to evaluate each and establish your brand position.
First, you need to examine the market and be brutally honest where you see your company fitting in the market.
Are there enough opportunities that threaten the #1 leader? Is it possible to become a solid #2? Or do you need to create a new category?
Second, you should check what the market demand is now, and where it is likely to go.
You should conduct market research to find out what the market desires.
If after you talk to customers you are at a loss, I’d recommend doing keyword research to estimate the demand for your brand position. You can do this by using a tool like Keywords Everywhere or Ahrefs and seeing the monthly search volume.
After evaluating the current demand, you can use tools like Google Trends to see the value of future demand. Keep in mind that Google Trends maps historic data. Talking to customers will give you a better pulse of where the market is going before Google Trends does.
Remember: Your brand position will weave itself into your entire company. Therefore you should talk to your team before making a decision. This includes your co-founders, key employees, and investors.
You’ve established your brand position. How will you live this story out in your company?
NetFlix set out to make movie enjoyment easy. As a result, their product, pricing, placement, and promotion had to revolve around this promise.
Delivering DVDs by mail with no late fee fit this promise. Then they went to online streaming, which again fit their position. But charging $50/month would not fit the story to make movie enjoyment easy. This would be true even if they provided more value to justify a higher price, as Amazon Prime does.
Before you promote your product, you need to make sure your messaging also matches your story.
Go back to your notes from customer interviews. What words did they use to describe your product? Which phrases relate to your position? Are there certain testimonials packed with emotion?
By taking your customer’s words and stringing them together, your customers will feel like your message speaks directly to them.
As critical as research is, there’s always a chance your message will miss the mark. In fact, you won’t know how well it will do until you test it.
There are many ways you can test your messaging, from using Google or Facebook ads to doing formal A/B tests.
Keep in mind that A/B tests require a high amount of traffic.
If you don’t have at least 2,000 people who will see your message in a month, it’s unlikely an A/B test will create a high enough impact to matter.
The traffic you need may be higher, depending on:
This step is optional, but recommended to make sure your message matters to your market.
Similar to your message, you need to craft your message tone and voice. In other words, what do you want your audience to feel when they read your copy?
Here are a few questions to help you shape your message tone and voice:
As your product gains attention in the market, competitors will get jealous.
Once their market share starts to dwindle, it’s not uncommon for them to come out swinging. For example, Blockbuster tried to paint NetFlix as the company you had to “Wait by your mailbox.”
You can choose either to grow your brand, or prepare a counter campaign. After Blockbuster’s attack, NetFlix countered with “There’s a movie already waiting for you at home.” This redirected Blockbuster’s energy to NetFlix’s favor.
An effective positioning statement will help your team understand the brand positioning strategy in a simple manner.
It should cover three core areas:
You can then turn your positioning strategy into a simple statement using this formula. “I help [audience] solve [problem] by [your solution].”
You know you’ve created a powerful brand message when your best customers read your website and say, “This speaks to me. It fits exactly what I’m looking for.”
The goal of messaging is to:
Consider some of these examples of brand messaging done right:
You can then simplify your message into a simpler slogan:
What’s powerful about these slogans is how they stand for something their audience desires. Let’s take a look:
Effective brand messaging, whether that’s a slogan, a Facebook Ad, or your website copy, should tap into your audience’s core desires.
At this point you’ve decided on your positioning strategy. This is either:
Further, you have your decided on what your positioning is, which will shape your brand messaging. Your product and marketing message all matches this position.
If you pre-sold your product, you should have around 10 customers. Now you are ready to move forward to get 100 customers.
To effectively go from 10 to 100 customers, you will need to craft your go-to-market strategy.
Then apply to hire Growth Ramp. You also can learn more how our brand strategy services fit our product marketing services to get 1,000 customers in a year.
Then apply to hire Growth Ramp. You also can learn more how our brand strategy fits our product validation services to get 10-100 customers.
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