Perception is reality. Or at least, that’s the case when it comes to how prospective customers think about your products. If your target market thinks your products are less-than-stellar, it won’t matter how much time you’ve spent on R&D. Their negative perception will be your unfortunate reality.
That’s why product positioning is such an important part of your business’s overall strategy. Whether you’re about to launch your first product or run an enterprise organization that offers multiple lines, a product positioning strategy can help you ensure your efforts hit the bullseye.
But, you may be wondering, what is product positioning? Why is it important? And does it only matter for traditional businesses or SaaS businesses as well?
We’ll answer all those questions and more – and we’ll even throw in a few thoughts about how June can help you position your products more effectively – in this brief product positioning guide.
What is Product Positioning?
To put it as succinctly as possible, product positioning is determining where your product fits in the overall marketplace. Unless you’ve got a truly revolutionary product on your hands, your product will likely face plenty of competition.
So, how do businesses stand out from among the crowd? They position their products in such a way that their unique features are evident to the people who will appreciate them the most. Then, they capitalize on that connection. It’s the power of finding a product’s niche and marketing it accordingly.
In the very early-stages of a company, cash-strapped founders might have to do some guesswork to figure out how to effectively position themselves in the market. However, once you have enough paying customers, product positioning must rely on effective data-driven analysis in order to succeed.
In other words, your product positioning must be informed by:
- The way customers interact with your products (through surveys, analytics and feedback)
- The different metrics that you’ve established to study and increase growth
Otherwise, you might just as well be throwing darts in the dark. We’ll provide a list of tactics later in the article.
Here’s an example from us:
Our messaging is simple, clear, and to the point. June is a product analytics platform for B2B SaaS companies that want to get actionable insights around how customers use a SaaS’s features. We specifically cater to the following customer segments which appear in the hero text: product owners/managers, product marketers, developers and SaaS founders.
As that is the foundation of our messaging, our Use cases and Templates pages elaborate on that fact, both of which show how simple and useful our reporting templates are. Our Blog also predominantly tackles topics around product analytics.
From your marketing assets to your cold outreach templates, everything flows out of your product positioning statement.
Product positioning will affect every aspect of your product and how it’s presented to the world, from how it appears on your website to how your sales reps communicate with your customers. And it’s not just for products that have already been created.
All this talk of target markets and niches may leave you with an important question - “Does having a product positioning strategy imply my product can only have one target market?”
Of course not! Your product may appeal to a variety of demographics. But if it does, you’ll need to find out why and remember that it occupies more than one position in the market depending on who’s buying it. This will help you make the most of your marketing strategies by tailoring your approach to the person who needs your product’s help.
Why is Product Positioning Important?
In a nutshell, product positioning can help you scale growth by:
- Identifying the people who need your product the most
- Recognizing the pain points that could drive them to choose you over the competition
- Developing messages that meet them where they are
Here’s an example of an online product that has nailed their positioning. After implementing the right onboarding flow and correct positioning of their CMS platform, Ghost was able to increase their conversions by 1000% without changing their acquisition channels.
The Elements of a Product Positioning Strategy
Now that you understand what it is and have a grasp on why it’s important, let’s take a look at a few core components of every product positioning strategy. These elements should guide your thinking every step of the way.
Your Product’s Mission
If you haven’t clarified your product’s mission, stop everything and get to it. Products need purpose. And not just for marketing, but for every aspect of their development and release. By keeping your product’s mission front-and-center, you’ll be more likely to have a product that’s helpful, valuable, and connects with customers.
Drift, a B2B company that offers SaaS solutions for businesses of every size, is a great example of this. They’re dedicated to offering what they term ‘conversational marketing.’ It’s a concept that encompasses chatbots, e-mail management, and much more. And it’s the core of their mission.
Every product they offer is designed to make conversational marketing possible – and as effective as possible. In other words, they’ve allowed their mission to shape and position their products so people know exactly who to choose if they want to build quality relationships with their clients through conversation.
Your Product’s Vision
Once you understand your product’s mission, you should lay out a vision for its future. Where do you want it to be in the next year? Five years? Ten years? How do you see it evolving? All of these questions are vital since they help you think about the long-term future of your product. This kind of forward-thinking approach will help you keep things from stalling after a few months have passed. And it keeps you focused on future growth.
Your Product’s Market
Next to its mission and vision, your product’s market is the single most important thing you can understand. You need to know what your product is all about, what kinds of people it appeals to, what it offers them, and how it’s different from the competition. All of this will help you understand the markets you’ll be targeting. If there are more than one, note each along with the characteristics that make them unique.
If you’re looking to position your products as effectively as possible, June can help you identify your power users. They are your most engaged active customers. They’re the people who jump into your product feet-first and don’t look back. But they’re so much more than users. They’re the kind of people who turn into brand evangelists for you, telling friends about how much you’ve helped them.
June allows you to identify your power users quickly and easily. We’ve even put together a step-by-step guide showing you how, so you can get started discovering who really loves your products before the day’s up.
Get started with June today and learn everything you could possibly want to know about your power users. Then, position your products accordingly. It’s quick, easy, and won’t cost you a thing to get started.
Your Customers’ Needs and Wants
Customers make purchases for one of two reasons: they want something or they need something. The things motivating them are called pain points, and they’re what you need clarity on as you develop your product positioning strategy. What problems are you helping your customers solve? How can you highlight the ways your product provides the answer they’ve been searching for? As you think about customer needs and wants, it might even be a good idea to develop a buyers’ journey map. This will help you analyze what your customers are thinking every step of the way.
When thinking about your customers’ needs and wants, you should consider using June’s Feature Audit template. It allows you to discover which product features your current customers are using and which ones they’re ignoring. This is the kind of valuable data analysis that can help you understand your clients better. Then, you can leverage that knowledge to offer more of what your customers want. Getting started with June’s Feature Audit template doesn’t take more than a few minutes – and it’s free.
Your Brand
Your brand isn’t just a name and a logo; it’s a way to develop meaningful relationships with your customers. Just think of how committed Apple or Starbucks fans are. That’s the power of branding.
In some ways, it’s like velcro, with every customer interaction or marketing effort leading to more ‘stuff’ getting attached. The goal is for it to be filled with positive words and ideas, like trustworthy, reliable, and beneficial. As you think about your brand, don’t focus exclusively on your company as a whole. Think about the branding elements of your individual products. While they should complement your overall brand, they can have a life of their own.
Your Competition
While knowing your own brand and product is essential, it’s not enough. You also need to know who you’re up against. This is why performing a competitive analysis can be a helpful way to better understand what your competitors are offering and how you can differentiate your products from theirs.
Your Product Positioning Statement
After you’ve spent some time thinking through these elements, you’ll be ready to put together a product positioning statement. This is a concise statement that identifies your target customer, pain points, product market, product benefit, competitors, and areas of differentiation.
Here’s a template you can use to develop a solid product positioning statement:
For [target customer] who [customer pain point(s)], [product name] is a [type of product] that [product benefits]. Unlike [competitor], [product name] is [areas of differentiation].
Developing a basic product positioning statement is as simple as filling in the blanks above. Then, you can tweak it until it fits your brand voice perfectly.
How to Nail Your Product Positioning
Product positioning is all about finding the perfect niche to market and sell your products or services. Once you’ve got an idea of how to sell your product, it’s time to get a sense of how well it’s performing. Tracking specific metrics ensures you know how well your product is doing, and what can be improved on. Here are some examples of analytics that you can measure to inform your product positioning.
Feature Audit
A feature audit measures engagement with a specific feature by both popularity and frequency of use. This will help you make informed decisions about which aspects of your product may need more focus or even which features should be eliminated altogether.
Make sure that your positioning anchors on the features in the top right of the the graph and not with the ones in the bottom left and that the audience of this reports contains mainly your paying customers . This because features in the top right are valuable for most users and are used by them more intensively compared to the other ones. For this reason if your positioning is pointing to such use cases there’s a good chance that new users will find the value of your product sooner which, in turn, would result in better activation and retention.
Funnel
A funnel describes a customer’s journey with you, from initially learning about your product or service to an eventual purchase. Understanding funnels can be particularly useful in detecting any bottlenecks or obstacles in the process.
June provides an intuitive funnel template so you can quickly track and compare your conversion rates that will help you find the optimal onboarding flow to boost engagement rates and attract the right people to your product.
By running the same funnel analysis on different audiences you can get a sense of who’s more successful in your product and understand if your positioning is coherent with what you are observing.
In the following example we look into two different personas that use our product: Product Managers and Engineers
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As you can see, conversion is 4X better for Product Managers. For this reason it would make sense to focus our positioning more on use cases for PMs rather than for Engs.
Activation
Activation describes the moment when a user finds something valuable to them in your product. Using an activation template can help you systematically test events and analyze which are most likely to keep your customers coming back again and again.
You should set up multiple Activation reports with all your main events and understand which are the ones that drive retention. Once these are detected make sure that once users land in your product it’s already clear in their mind what’s the action they should take and why they are there. How do you that? With a great onboarding and with the right positioning.
To go further on Activation have a look at our playbook.
Retention
Analyzing retention is an effective tool for measuring long-term users. An ultimate goal for a business is to attract customers who will stay with you for the long haul, rather than constantly gaining and losing users of your product. Once you’ve figured out your most retained customers, it’s time to position your product in a way that will attract these types of users.
June’s ready-made User Retention template is a great way to get a sense of how well you’re retaining users. It also provides key insights that can help improve retention rates and conversions.
Learning to incorporate these tools into your day-to-day product development can help you understand how different people use your products. Equipped with this information, you can experiment with incremental or sweeping changes that will make your product both more valuable to your customer and more profitable to you.
Competition Analysis
To nail your product positioning, it’s also useful to understand your relationship with your competition. When doing this, be sure to take into account both your direct competition (companies that offer the same thing as you) and your secondary competition (companies that offer something different that could potentially fill the same customer need).
When comparing your own offerings to your competitors’, take care not to focus too much on pricing. Instead, focus on providing superior value. By putting value first, you’re showing customers that they come first. It also helps avoid getting stuck in the discount cycle where your profits can quickly fade away. Tools like SparkToro and Ahrefs provide important insights on what your competitors are up to and trends to keep track of.
Create Your Brand Statement!
Based on this analysis, you can craft a brand statement that best reflects your company and its relationship with your customers. This statement should focus on emphasizing the difference between you and your competitors. Be sure to communicate what kind of value you provide and to directly address your primary customer segment. This way, your statement helps to sell you on its own.
Conclusion
You’re already spending time and resources developing great products and services. The least you can do is position them in such a way that they’ll find the right customers. And product positioning allows you to do just that.
By keeping these elements and strategies in mind, you’ll be able to ensure your products hit the mark every time. And with June at your side, you’ll have the analytics and reports you need to know your customers inside-and-out, making product positioning that much easier.
So, why not get started with June today? Join our free trial, and you can have detailed product analytics reports almost instantly.
