Obviously awesome
Mastering product appeal: understand, purchase, adore
Description
Positioning is crucial as it sets the foundation for successful marketing by defining your unique stance in something highly valued by your target market. With correct positioning, your marketing efforts gain momentum, making every strategy more effective.
Conversely, poor positioning can undermine even the best products. It's essential to establish a strong position to contextualize your offerings effectively. As Warren Buffett suggests, to outplay an expert, shift the game.
April Dunford highlights that excellent positioning amplifies marketing and sales, likening it to effortlessly moving with market forces, ensuring every marketing move is backed by a favorable wind.
Table of contents
01Understanding positioning
Positioning is essentially the art of providing people with a context regarding your product and elucidating how it can be beneficial for them. This context is crucial as it enables individuals to discern what is significant, akin to the introductory scenes in a movie.
The vast majority of products available in the market today are only deemed exceptional when they are viewed and understood within the correct frame of reference. Positioning furnishes precisely that context.
The concept of positioning first gained prominence in the year 1981 when Al Ries and Jack Trout published their seminal book titled "Positioning: The Battle for Your Mind." In their work, Ries and Trout posited that positioning was indispensable for distinguishing oneself from the competition during the 1980s. This notion holds even greater importance in the contemporary marketplace, where, as of 2019, Apple's AppStore boasts over 2 million apps vying for your attention, and Amazon's marketplace offers more than 580 million products for selection.
So, what does positioning entail in the tangible world? In its simplest form, positioning involves attempting to provide customers with contextual clues which will assist them in understanding who your product is intended for, the benefits they will derive from it, and the reasons why they should be interested. Positioning establishes the appropriate context for your product to be perceived accurately.
Context invariably matters. A notable experiment conducted by The Washington Post involved Joshua Bell, an internationally acclaimed violinist, performing outside a bustling subway station in Washington D.C. During his forty-five-minute performance, 1,070 people passed by, with 27 offering him money and only 7 pausing to listen, resulting in Bell collecting a total of $32.17. Conversely, later that same day, Bell performed the same pieces at a concert hall, accompanied by an orchestra, to a sold-out audience who paid $300 or more per ticket. This stark contrast underscores the significance of context in the perception of value and quality.
Marina Abramovic, the renowned performance artist, once remarked, “If you’re a baker, making bread, you’re a baker. If you make the best bread in the world, you’re not an artist, but if you bake the bread in the gallery, you’re an artist. So the context makes the difference.” This statement aptly illustrates that most products are identical in essence. They are only perceived as exceptional when viewed in their most favorable frame of reference. However, marketers and those who manufacture and sell these products might erroneously assume that the context is evident to the consumer, which is often not the case. Moreover, the context is more variable than one might anticipate. Instead of being confined to a single "default" context, you have the liberty to select a context that will cast your product in a favorable light.
02Strategic self-positioning in ten steps
The initial and most crucial step involves gaining a deep understanding of your customer base. This includes identifying those who not only comprehend the essence of your product but also hold it in high regard. These ideal customers are key to unlocking the true identity of your product and understanding what their peers seek. By familiarizing yourself with the characteristics of your most enthusiastic customers, you can then focus on attracting more individuals who share those traits. Start by identifying your top customers who quickly purchase your product and delve into the reasons behind their loyalty and advocacy. These customers are the ones you want to replicate, so it's important to pinpoint where they congregate.
For those with a newer product or lacking a base of highly satisfied customers, it's advisable to conduct further testing. Present your product to a broad audience and observe who shows the most interest. Maintain a flexible positioning approach until you have a substantial amount of data from actual paying customers to evaluate.
It's a common pitfall to prioritize your product and its comparison to competitors' offerings. However, most potential customers are likely unaware of your competitors. They are more concerned with how your product stacks up against their current solutions to their problems. Therefore, it's imperative to always consider the customer's perspective in all your endeavors.
Take Wave, the financial software company, as an illustrative example. Launched as Wave Accounting in 2010, it aimed to provide small business owners with cloud-based accounting software at no cost, planning to generate revenue through advertising and offers. By 2013, the user base had grown to over half a million businesses. However, it became apparent that advertising would not suffice as a revenue stream. The founders, Kirk Simpson and James Lochrie, observed that customers were requesting additional services such as digital invoicing and payroll. This led them to reimagine their company as a modern small business bank. Consequently, Wave rebranded itself as a financial services provider for small businesses, offering core accounting and invoicing for free and charging transaction fees for additional services like payroll and payments. Today, Wave has expanded its user base to over 4 million, managing more than $200 billion in income and expenses through its platform.
Positioning is not merely a business strategy exercise; it affects every aspect of the company. Therefore, it's crucial that all departments are involved in the planning and execution of positioning. While business leaders should steer the discussion, achieving consensus requires the participation of the entire organization. Assembling a team often reveals varying assumptions held by different company divisions regarding the product's attributes, value, and target markets. The initial meeting should bring these assumptions to light and work through a positioning exercise that aligns the team with the desired outcomes. The objective is to collaboratively develop a new position for the product that is universally understood and accepted within the company.
Positioning influences marketing, sales, development strategies, product development plans, and ultimately customer success. It is intertwined with the overall business strategy, which underscores the importance of involving everyone in the process. Engaging an experienced facilitator to guide the positioning discussion can be highly beneficial. An external facilitator can ensure a balanced and productive exercise, giving equal weight to all voices and challenging entrenched assumptions.
03Implementing positioning strategies
To craft a compelling positioning statement, one must embark on a meticulously structured journey. The initial step involves a deep dive into understanding the segment of customers who not only comprehend the essence of your product but also cherish and highly value it. These ideal customers are pivotal as they unlock insights into how your product is perceived through their eyes and what similar individuals seek.
By identifying and analyzing these ecstatic customers, you can pinpoint characteristics that define them, thereby enabling you to scout for more potential customers who share these traits. It's crucial to compile a list of your top customers who are quick to purchase your product and delve into the reasons behind their loyalty and enthusiasm. These customers are the ones you desire to attract more of, so understanding where they congregate is essential.
For those with a relatively new product or lacking a base of highly satisfied customers, the recommendation is to broaden the testing horizon. Present your product to a diverse array of potential customers and observe who shows keen interest. It's advisable to maintain a flexible positioning strategy until you've gathered substantial experience and feedback from actual paying customers.
A common pitfall is to prioritize the product over the customer, attempting to position it in comparison to competitors. However, this approach is flawed as most potential customers are likely unaware of your competitors. The focus should instead be on how your product stands out in comparison to the current solutions these customers employ to address their needs. Always prioritize the customer's perspective in all your strategies.
A prime example of effective repositioning is Wave, a financial software company. Initially launched as Wave Accounting in 2010, it aimed to provide cloud-based accounting software to small business owners at no cost, planning to generate revenue through advertising. However, as the user base expanded, it became evident that advertising alone wouldn't suffice. The founders, recognizing a demand for additional services like digital invoicing and payroll, reimagined their business model. This pivot transformed Wave into a comprehensive financial services provider for small businesses, dropping "Accounting" from its name and introducing a mix of free and transaction-fee-based services. Today, Wave has grown significantly, serving millions of users and managing billions in income and expenses through its platform.
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