What the hell is “Positioning”?
And why does it matter?
I’m going to start by saying that April Dunford is the guru of SaaS positioning and this post today is really based on her framework. If you want to dig deeper into it for yourself, you should consider reading her book, Obviously Awesome.
But the reason I wanted to write about positioning is that I’ve found it is universally a problem that product businesses have. I’ve been through the framework as a client of April’s and I’ve taken around ten companies through it myself. It’s one of those things that people think they kind-of sort-of have it figured out, but they generally don’t.
What is it?
Positioning is all about deliberately defining how your product is the best choice for a specific market. It’s not about branding or messaging. It’s about making sure that the people who are most likely to want it, understand why your product is the best choice for them.
For this you need to explain the context. An example that April Dunford gives is the story of the world acclaimed violinist, Joshua Bell who plays in concert halls where tickets are on sale for $300. As an experiment ran by the Washington Post, Bell busked outside a busy subway station. In the context of a concert hall he is revered around the world. But in the context of being a busker, would his natural talent shine through? Over 45 minutes, over 1,000 people passed him and only 7 paused to listen. He earnt $32.17 in that time.
This perhaps proves that a brilliant product, positioned in the wrong context, can fail.
A B2B SaaS example might be the company Telsen (who I work with). Their MVP was a platform for monitoring physical sensors. Whatever IoT sensor you had, Telsen could give you a dashboard to monitor it. But they came to realise that it was in the area of food safety where the customers who cared the most were. Check them out, now their positioning is entirely based on how their product solves the big safety compliance problems that these customers face (even though it could just as well be used by offices monitoring noise levels, for example).
The trouble is, unless you are deliberate about what that context is, people will fill in the gaps themselves - probably wrongly.
One further thing to note is - once you get your positioning nailed, your messaging becomes much sharper. It’s hard writing content that tries to be as generic as possible so as not to put people off: “No Job Too Big or Too Small”. Because what it ends up doing is not really appealing to anyone. You might run several restaurants and go to a website that talks about the many applications of IoT sensors and think, “hmmm this isn’t for me, I need something that has been designed for food safety”.
What are the key elements of a Positioning Strategy?
There are some specific things that you can consider when building up your own positioning narrative.
1. Competitive Alternatives
It’s worth trying to plot out the competitive landscape. What are people already doing to solve the problem you fix? It’s likely that some customers are doing nothing. And another has tried to fix it themselves.
Then you will probably be able to arrange competitors into groups. You might have a ‘legacy expensive dinosaurs’ category: they have loads of customers because they’ve been around for years but they haven’t innovated.
It could be that others fall into the ‘basic, cheap and cheerful’ category. Inexpensive but don’t really deliver the value that your product solves.
You may say there are generic tools that work across all industries (Salesforce for example), whereas others target just your industry.
Mapping this all out will help you figure where you sit in the landscape. It’s the context part that I spoke about earlier.
2. Unique Attributes
What is it about your product in the bit of the competitive landscape you’re in, that differentiates you from the others? Pro tip: it can’t be cost or user experience. Cost isn’t a product differentiator and nobody is going to say that they have terrible customer support, so hanging your positioning on that is going to make it hard for you to differentiate.
If you are in a sector that is served by large players who deliver the same service across multiple verticals, maybe your unique attribute is that you designed your service with the particular challenges that this industry has.
Alternatively, if your service works across multiple verticals but has a better way to deliver a ROI due to a feature unique to you, or you simplify a process that otherwise was cumbersome and time-consuming, then these are unique attributes.
If you have sold your product in a competitive market, there is a reason why they chose you over others. If it’s just because you halved the price .. then it’s not a sustainable unique attribute.
3. Differentiated Value
Differentiated Value is the “so what?” follow-up to your Unique Attributes. A unique attribute may be pretty cool, but what is the value for the end user? They don’t care how clever you are. They don’t even care how unique you are… that is unless there is something in it for them.
So if your product simplifies a complicated process, the ‘so what’ might be about saving time and freeing up expensive people to deliver more value to the company.
If it’s a tool that optimises your media spend, then the ‘so what’ might be a demonstrable percentage increase in revenues.
If it reduces missed issues in food safety, then the ‘so what’ is about ensuring regulatory compliance.
If you don’t articulate exactly what the differentiated value is, prospects will either not get it or make up their own.
4. Best Fit Customers
Based on the competitive landscape and your now well-defined differentiated value, who are the customers that care the most? It might be that your product saves customers $$$$s on recruitment fees, but it’s only worthwhile if that customer hires more than 5 people a month. The more precise you can be about the customers who care the most about your differentiated value, the sharper your positioning will be.
Just because your product could be used by anyone, it doesn’t mean that they will all care about the problem you solve equally. Take the idea of an HR system that manages the complex business of tracking employees’ salaries, bonuses, leave, probation, promotions, appraisals, direct reports, training etc etc. Brilliant. But if you only have 5 members of staff, probably not worth the money.
5. Market Category
A kind of optional extra: defining the market category you are in. Maybe it’s obvious, but maybe you need to create your own new one.
Drift (now part of Salesloft) is effectively a chatbot. An old fashioned chatbot was a pop-up that would search for static info when prompted. Chatbots were seen very much as an extension to customer support.
But Drift changed the context of what they delivered and framed it instead as part of sales and marketing. They observed that, done well, a chat tool could influence buyer behavior whilst they were on your site. Saying they were in the ‘chatbot’ category mischaracterized how they were positioning themselves, so they created a new Market Category and called it ‘Conversational Marketing’. They even wrote a book about it by the same name. I’m not sure how much Drift was acquired for by Salesloft (in 2024), but I did see some reference to them being valued at $360m back in 2018. Regardless, they were a successful business by anyone’s measure in part down to their smart positioning.
A big caveat here is that creating a whole new Market Category is not easy and not cheap. If everyone thinks you are in the Customer Relationship Management (CRM) game but you decide to create a new category and call it Salesperson Memory Enhancement (SME), then you better have a very strong and compelling reason why.
Sales Narrative
There’s a lot more to what I’ve just rattled through, but the output of all of this is a Sales Narrative. A Sales Narrative isn’t a word-smithed bit of copy, but rather a statement that helps everyone in the team consistently take the customer towards the ‘obvious’ conclusion that they should use your product. What you want to avoid, once you’ve figured out your Differentiated Value, is that everyone just ignores it and does their own thing. Having the website say one thing and the sales team say another about what makes you so special, is just confusing for the prospect. That’s why it’s helpful to write a Sales Narrative that everyone follows.
Specifically, it would cover:
The Problem
Your point of view of the world as it stands. How it’s broken and what the real challenges are that we see as a result.
For example, “Hiring a taxi to take you from one side of town to the other is messy. Firstly, you might not be able to find one. Then you have to explain to the driver where it is you want to go from the back seat. You have to make sure you have cash on you, or check that they take credit cards before they set off. When you get to your destination you have to work out the tip and ask for a receipt, which comes in various formats. You then have to store the receipt safely so you can later claim it back as an expense.”
The Promised Land
This is where you talk about a happier world where this problem was solved and how much better it would be for everyone. It’s your Point Of View on the world.
“We believe it shouldn’t be this way. We believe technology should remove the worry of not being able to find a taxi when you need one, not having the right money and not having to walk around with a wallet full of receipts.”
Introducing your Product
By talking about the problem and the promised land, the customers who care the most about what you are doing should be mentally (or physically) nodding along with you. They should be thinking, ‘yes, that is annoying and yes, solving that problem would make things a lot simpler.’ This allows you to introduce how your product delivers the promised land.
“Introducing Uber. A taxi service that lets you book a ride directly from your mobile phone. Enter your destination and get the price in advance. Once you arrive, simply leave the cab and get straight on with your day. The fare is automatically charged to your card and you can add a tip at your leisure..” Etc etc. You get the picture.
Recommendations
If you think you have ‘sort of’ figured out your positioning, in my experience, you probably haven’t! It might feel a bit like navel-gazing, but if you are slightly mis-firing you could be missing out. I would definitely recommend reading April’s book. And/or if you want some help to run a session with your team and get through some of the trickier questions, you know where I am.
