Product Positioning strategy is a topic which often is given short-shrift, especially early on in the life of a hardware or software company. But it’s not an issue that is peculiar to tech startups. I’ve run into positioning issues in technology businesses of all sizes, stages and categories, regardless of whether they are mobile software, SaaS, hardware or semiconductor businesses.

The definition of product positioning
There are many definitions of the term “product positioning” which can vary slightly.
First of all, let’s clear up what positioning is not. It’s not just a tagline or marketing slogan. These are all important marketing derivatives which are taken from or informed by your positioning strategy.
So that we are working off the same page, here’s how I personally define product positioning:
Tech product positioning is a core marketing principle which defines how a company will market and sell its software or hardware product to its target customers. The essence of positioning is to create an image in the target prospects mind, which is intended to differentiate it from both direct competitors and other potential substitutes. The main derivative components of positioning strategy are the 4 P’s of marketing: Product, Promotion, Price and Place (Distribution).
Positioning of your company and an individual product can be different, but the process for creating optimal positioning strategies for each is essentially the same. As an example, the positioning of a single-product SaaS startup company is often effectively the same as its product positioning. But as a company grows into a business with a broader product portfolio – or even multiple portfolios, it is likely that each product will need it’s own separate positioning. It’s best if the overall business positioning serves as a rational umbrella for the positioning of the individual product portfolios. If not, you’ve essentially gone into the realm of a conglomerate, which is a separate discussion and has a number of drawbacks from a marketing and operational perspective.
The earlier you decide on product positioning strategy, the better
Product Planning and Product Positioning are NOT the same thing; but they are close cousins. The former refers to the upfront defining and building of a technology product, while the latter is the first step in the downstream go-to- market strategy and tactics. The common thread is that the optimal formulation of both relies on gaining an in depth understanding of the target market, including prospect pain points, needs and desires.
Ideally it’s best to think about and define your company and product positioning even before you start to build your website and product. Think of your optimal positioning as a high level definition of what your target customers desire in your market segment. So if you are able to define your product positioning properly at an early stage, it can serve as a high level guide for the development of a product that will achieve product/market fit. Product/market fit is of course a primary early milestone that every startup company or product group strives for. Achieve it on your first try or early on and you’re “off to the races”. Fall short, and your new company or product family risks meeting a premature ending.
Of course, this is easy to say and hard to do! But it all comes down to understanding customer pain points and needs. If you conduct your market research extensively and well, you may be able to understand customer needs ever better than customers can elaborate themselves. This takes hard work by marketing product planners and their developer/engineer counterparts. If you are able to come to this understanding early on, it will not only allow you to build product/market fit into the product up front, but developing your marketing messaging when it’s time to launch will also be a breeze. Your messaging will fall directly out of the positioning you established early on.
Far too often I see a product which is developed based upon a whiz bang technology, with minimal depth of market understanding prior to the downstream focus on go-to-market activities. The marketing positioning team then needs to try to fit this product into gaps in the marketplace. This can work if you’re lucky and often does, of course. But the odds of success become lower than if you’ve successfully established your positioning at an earlier stage. Unless you are lucky or your tech is truly a revolutionary breakthrough, the marketing and selling tasks will also be much more difficult than they could have been.
Specific benefits of good positioning
- Market more efficiently – good positioning will help you find prospects that desire what you have in greater numbers, for lower cost. Nearly every marketing method including SEO, PPC, traditional advertising, social media marketing and content marketing will all convert at higher rates when you have clear and differentiated positioning
- Sell faster – in addition to marketing more efficiently, excellent positioning can significantly shorten your sales cycles
- Sell more – The corollary of efficient marketing and faster selling cycles is that you will certainly sell more product, which is what really matters at the end of the day
Bad positioning can be confused with poor product/market fit
Even if you don’t start on your product positioning strategies prior to developing your product, it’s still possible and extremely important to get positioning right. Sometimes that product developed around whiz bang technology can not only find a market niche, it sometimes represents a large step forward in the marketplace.
But yes, unfortunately it’s not unusual to find good product development paired with poor marketing. If your messaging in poor because of confusing, overly complex or overly simplistic positioning messaging, even a great product will likely not sell well. Often this appears to management that the product is a poor fit in the market. This is because while the target prospect may actually gain significant benefit from the product, the marketing is unfortunately so poor that that don’t realize it. So if you find your company in this situation, before you tear apart your product and start over, bring in a skilled outside resource to see if a change in product positioning may make a difference.
Methodology of good positioning strategy
The most important point I’d make on tech product positioning methods, as alluded to earlier, is that both good product positioning and a good product definition should fall out of a sound product planning process. Make sure that marketing professionals are involved at an early stage. I’ve written extensively on the tech product planning process in past articles, so I won’t delve deeply here. If you’d like to dive into this in greater detail, you can take a look at High Tech Product Planning, Planning your SaaS MVP, You Should Hire Your First Product Manager When……. and How Much Product Marketing Does a Tech Company Need?
But in simple terms, here are some basic questions to ask yourself and to keep in mind during your prospect market research:
- What market segment do you know of that the technology is appropriate for?
- What is the profile of your ‘prime prospect” within that market?
- What are the key problems that you solve for these targets?
- How does your product work differently from existing solutions?
How simply and elegantly that you can answer these questions will tell the tale on whether or not your positioning is clear to your prospects. You can also utilize these questions to examine how well you understand the positioning of your mobile software, hardware or SaaS product.
A couple of things to keep in mind as you embark on this product positioning process:
- If your answers to the first two questions are too broad, you will likely end up with a positioning problem.
- For the third question, it’s common for folks to want to jump directly into describing their product or solution. . However, the key is to understand and describe the problem as completely and clearly as possible from the perspective of the target customer.
The positioning statement
Lastly, let’s discuss the positioning statement itself. Again, if you start early, this positioning statement can serve as an introduction in your business plan or product plan, labeled as the overall goal. This will effectively drive downstream product and go-to-market developments to reach for and fulfill this brand or product promise.
A few guidelines for a good positioning statement:
- Keep your positioning statement to 2 or 3 sentences at most; the shorter that it is, the better
- You are seeking to boil down your key product and brand benefits as concisely as possible.
- A corollary statement to the positioning statement is “the cost of doing nothing”. Often doing nothing is a major “substitute” available to target prospects. The cost of doing nothing is an important component, along with your positioning statement, in the development of your go-to-marketing materials and campaigns.
That’s what I’m thinking today about company and product positioning. Positioning is a complex topic, with many details outside of the scope of this short article. But hopefully I’ve provided some structure to frame your thoughts when you embark on this important exercise, whether for your overall company or a specific product. For those readers experienced in the positioning exercise, please use the comment field below to enlighten us with your thoughts. And if you’re new to positioning, feel free to use the same comment field to ask a question.
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