What is positioning?
Positioning and messaging are two different activities.
In this blog, my goal is to clearly articulate what is positioning in marketing with some real-life examples.
Positioning is at the brand level or product level. In general big enterprises normally have both brand and product positioning. Positioning is a marketing strategy to create an image of your product in the mind of the target customer.
It is the foundation on which other stakeholders like sales. marketing and engineering base their work. The result of stakeholders not buying into the messaging can be disastrous. Particularly it can affect both sales and product roadmap.
While Positioning is at the brand or product level messaging is at the individual feature level. Positioning comes first. Messaging needs to align with positioning.
Why is Positioning important?
Sales pitches, marketing messaging, and product roadmaps are all driven by the positioning statement. For example, If a product is in the luxury category the messaging and sales pitches have to convey that idea.
If your sales pitches don’t resonate with customers it can affect revenue. This is why positioning strategy is important for any company.
1. What category does your product belong to?
Identify what market category your product fits in. For example, Netflix is streaming, Uber is ride-share, Airbnb is home-share and Door Dash is food delivery. Examples could be a product that fits in the CRM for Small and Medium business category. This helps customers understand the category of your product. Consequently your job is to identify and then target the specific customers who will be interested in your product. In the long run this will increase the sales of your product and hence your revenue.
2. Market Research
Research your target market. By that I mean find the target market that will be most inclined to buy your product. Why would they do that? The reasons would be that your product solves a pain point that they have. A pain point could be a task that takes a lot of time that your product automates. It could be something that transforms them into a desired state like looking better or feeling better. It could also be that your product is easy to use compared to the competition to complete a particular task. You are looking for the unique value(s) that your product provides that will solve a customer problem. Researching the target market will lead you to define your Ideal Customer Profile (ICP) as well.
3. Research your competition
This is important because you want to uniquely position your product compared to the competition. If there is no unique value your product provides then the customer has no reason to choose your product. Some ways you can research your competition are talking to your sales teams, searching for keywords that represent your product to find your competition and looking at review sites that provide reviews on your product category. These are just a few examples of how to approach this problem. There could be many others depending on your product or service. A few questions to ask are:
- How is your competition positioned?
- What are they doing well?
- What are they not doing well?
- What customer reviews are there on review sites and what they do say about the competition?
- What information is there on social media regarding the competition that might be useful?
- What is their pricing, promotion, and messaging?
4. Proof of your Benefit
Proof of benefit is evidence that supports the claims made in a positioning statement. It can be in the form of statistics, testimonials, or expert endorsements. Proof of benefit helps to make the positioning statement more credible and persuasive.
Run beta programs and solicit testimonials for SaaS products. To get early adoption SAAS companies can attract initial users with promotions and pricing.
For examples of proof of benefit check out how these companies use them. You may have to scroll down below the fold on the home page to find the proof of benefit in some cases.
Proof of benefit is an important part of any positioning statement. It can help to convince potential customers to buy the product or service. Getting proof of benefit takes time. Positioning statements don’t require a proof of benefit. It is powerful if it can be included. Proof of benefit may be relevant based on the product or service.
Three tips for using proof of benefit in a positioning statement
- Be clear and concise. The evidence you provide should be easy to understand and remember. It should also be brief enough to fit in a positioning statement.
- Use a variety of evidence. There are many different types of evidence that you can use to support your claims. Consider using a combination of statistics, testimonials, and expert endorsements.
- Make sure the evidence is credible. The evidence you provide should be from a credible source. It should also be up-to-date and relevant.
By following these tips, you can use proof of benefit to create a more persuasive and effective positioning statement
Common positioning strategies
The strategy you choose will depend on your market category, product benefits, the competition, and the target market. There could be many more strategies based on the above factors.
- Competitive positioning
This is where you compare your product to that of your competitors and identify your unique value(s). You can position your product as more affordable, more luxurious, or more effective to name a few examples.
- Differentiated or product positioning
This strategy focuses on your product benefits that might not be easy to replicate. For example, you might position your product as eco-friendly, high quality, or easy to use based on your unique features.
- User-based positioning
This strategy is based on the people who might use your product. A few examples are hikers, dog owners, HR teams and marketing teams.
- Perceptual positioning
This is based on how your product makes the target customer feel. This is targeting a more emotional response to your product from the customers.
This involves positioning your product as more exclusive, more fun, or more effective than the competition.
- Situational Positioning
This strategy is where you position your product as the perfect solution for a specific problem or need. You could position your product as the perfect gift for runners or as a product for busy executives.
How to leverage the 4 Ps for marketing in positioning?
Positioning strategy can use the 4 Ps of marketing to articulate the value proposition of a product.
Product positioning
This form of positioning is based on the products features and benefits. Use this when following a competitive or differentiated positioning strategy.
Examples:
Tesla is positioned as an environmentally friendly high-performance luxury. Its CEO Elon Musk talks about the mission of transitioning the world to using sustainable energy. The company invests heavily in R&D to keep innovating and keep ahead of the competition.
Apple’s iPhone is positioned as an innovative high-quality smartphone. Its advertisements tout its sleek look, advanced features and simple to use interface.
L’Oreal positions its cosmetics as high-quality luxury products. It uses celebrities in its advertisements to promote its products as luxury items.
All the companies that use product positioning generally invest heavily in R&D to innovate and keep ahead of the competition to provide unique features and benefits to its target customers.
Price positioning
This form of positioning is as the name suggests based on your product pricing. Some ways to position products based on pricing are as follows:
Low-cost pricing
Pricing products lower than your competitors. Examples of this are Walmart and IKEA.
Premium Pricing
This is mainly where you want to price your product as a high-end product. Examples are Rolex, BMW, and MacBook. These companies provide a level of customer support and service as well that commiserates with the price.
Penetration Pricing
This is where companies provide a product for a very initial low price to attract customers. SAAS companies can do this to increase the adoption of their products in the initial stages of product launch. Examples are Netflix, Canva, MailChimp, and Slack.
Place positioning
Place positioning involves companies using their location as a key benefit to their target customers. Examples would be Costco whose warehouses are located in Urban areas and cover a large area with ample parking and provides products wholesale for customers who like to buy in bulk to save money. Whole Foods is positioned as a high-end grocery located in affluent neighborhoods and sells organic products targeted at high-income customers.
Promotion positioning
In this type of positioning, companies use advertising to position the product to its target customers. For example, Red Bull is positioned as an energy drink that keeps you alert and allows you to perform at a high level. They advertise using athletes competing in extreme sports for example. They also sponsor a lot of extreme sports. Another example is Dove which advertises its products using people of all shapes and sizes who are confident and beautiful in their own skin promoting self-esteem.
Types of positioning used by SaaS companies
Focus on the unique features and benefits of the product to differentiate it from the competition.
A SAAS company whose product is a cloud-based marketing automation software can position itself as easy to use and affordable for small and medium businesses. AISERA for example uses its unique AI capabilities to position itself in the customer service market resolving most tickets automatically without human intervention.
Examples of SaaS companies positioned using features and benefits
Slack is a collaboration tool that is positioned as an all-in-one solution for teams. It has useful features like chat, custom emojis, file sharing, and integration with other apps.
Dropbox is a cloud storage service that is positioned as secure and reliable. It allows sharing of large files, file versioning, and syncing across multiple devices that are useful to its target customers. Its positioning is based on the features and benefits of the product.
Zoom is a video conferencing platform that positions itself as the “easy” and “affordable” way to connect with people. It offers features such as HD video, high-quality audio, and screen sharing. Zoom’s positioning is based on the benefits that it offers to users, such as convenience, affordability, and flexibility.
By positioning your company effectively using features and benefits to the target customers you can increase adoption, reduce churn, and in turn increase revenue.
Focusing on a specific industry or vertical.
SAAS companies can target verticals like health care industry, financials industry, ITSM or entertainment industry. For example, a SAAS company can create a CRM product catering to any of the above verticals. By focusing on the verticals SAAS companies can tailor their product features and benefits to fit the needs of the specific vertical.
Benefits of focusing on verticals:
- A deep understanding of the industry and the needs of the target audience. This helps to create products that are custom-made for the target audience making it easier to position the product.
- Strong relationship with the customers. Focusing on an industry helps the company build strong relationships with customers and help them solve their unique problems. This will also help to retain those customers and prevent them from churning.
- Opportunities for growth. Focusing on a vertical allows SAAS companies to build expertise in the industry and its unique problems and provide solutions that can attract more customers belonging to that industry. Building a strong brand focused on a vertical help to attract more customers from that industry
Examples:
- Veeva Systems is a SaaS company that provides CRM and marketing automation solutions for the life sciences industry.
- Zoho is a SaaS company that provides a suite of business applications for small and medium-sized businesses.
- Intuit is a SaaS company that provides financial software for individuals and businesses.
- ServiceTitan is a SaaS company that provides software for the home service industry.
- Toast is a SaaS company that provides point-of-sale software for the restaurant industry.
Provide excellent customer service.
SAAS companies can position themselves by providing customer service in various ways like using chatbots, email and messaging available 24/7 to quickly resolve customer issues.
Benefits of focusing on customer service:
Increased customer satisfaction: When customers are happy with your product and service your chances of retaining them go up dramatically. It can also lead to referrals leading to increased adoption of your SAAS product or service.
Enhanced brand status: A good reputation helps attract new customers and retain existing ones. Customers appreciate great service. It lowers the friction when interacting with a company.
Increase sales and revenue: As a result of attracting new customers and retaining existing ones your sales and revenue will also increase. They will also be likely to buy any new products or services that you offer as well further increasing your top line.
- Zappos is an online retailer that is known for its excellent customer service. Zappos employees are empowered to go above and beyond to help customers.
- Airbnb is a home-sharing platform that is known for its customer service. Airbnb hosts are always available to answer questions and help guests with anything they need.
- Uber is a ride-sharing service that is known for its customer service. Uber drivers are always available to help passengers with their luggage and directions.
- Netflix is a streaming service that is known for its customer service. Netflix customer service representatives are always available to help customers with any problems they may have.
- Amazon is an online retailer that is known for its customer service. Amazon customer service representatives are always available to help customers with any problems they may have.
Building a strong brand
Companies can build strong brands by focusing on the needs of their users and providing a high-quality product or service. By positioning your SaaS company on a strong brand, you can attract more customers and generate more revenue.
Benefits of a strong brand for a SAAS company:
- Increased customer loyalty: When customers have a strong connection to your brand, they are more likely to be loyal customers. This means that they are more likely to continue using your product or service, even if there are other options available.
- Increased sales: A strong brand can help you attract new customers and increase sales. When customers are familiar with your brand and trust it, they are more likely to buy your products or services.
- Improved marketing and sales: A strong brand can make it easier to market and sell your products or services. When customers are familiar with your brand and trust it, they are more likely to be receptive to your marketing messages.
- Increased employee morale: A strong brand can help to improve employee morale. When employees are proud of the brand they work for, they are more motivated and productive.
How to build a strong brand for a SAAS company?
- Focus on the needs of your users.
The first step to building a strong brand is to focus on the needs of your users. What are their pain points? What are their goals? Once you understand the needs of your users, you can start to develop a product or service that meets those needs.
- Provide a high-quality product or service.
Once you have developed a product or service that meets the needs of your users, you need to provide a high-quality product or service. This means delivering on your promises and providing excellent customer service.
- Be consistent with your brand messaging.
Your brand messaging should be consistent across all channels, including your website, marketing materials, and customer service. This will help to create a strong and unified brand image.
- Invest in marketing and sales.
A strong brand can help you attract new customers and increase sales. However, you need to invest in marketing and sales to reach your target audience.
- Be patient.
Building a strong brand takes time and effort. Don’t expect to see results overnight. Just keep focusing on the needs of your users and providing a high-quality product or service, and eventually, you will build a strong brand that will help you achieve your business goals.
Examples of SAAS companies positioned on a strong brand.
- Zoom is a video conferencing platform that is known for its ease of use and high-quality video and audio. Zoom is also known for its affordable pricing plans.
- HubSpot is a CRM platform that is known for its comprehensive features and intuitive interface. HubSpot is also known for its strong marketing and sales automation tools.
- Asana is a project management tool that is known for its simplicity and flexibility. Asana is also known for its integrations with other popular productivity tools.
SAAS companies can use a mix of the above common positioning strategies based on their product or service, target market, and competition to position themselves uniquely. This can help attract new customers and reduce churn and increase sales and revenue.
Repositioning
Last but not least positioning is not a set-it-and-forget-it exercise. Positioning is revisited as necessary based on changing market conditions, competition or technology.
A great example of repositioning
Old Spice was a well-known brand of men’s deodorant and body wash, but it was struggling to compete with newer, hipper brands like Axe. In 2010, Old Spice launched a new advertising campaign that completely changed the brand’s image.
The campaign featured Isaiah Mustafa, a muscular actor with a charming personality. In the commercials, Mustafa would deliver humorous lines about Old Spice products. The repositioning as a brand for young men was successful as the commercials went viral. The video on YouTube has over 61 million views.
Old Spice also updated its packaging and website. The new packaging was more modern and eye-catching, and the website was more user-friendly. These changes helped to make Old Spice more appealing to a younger audience. It also used social media effectively to reach the young audience which saw the marketing efforts go viral reaching a larger audience.
As a result of the rebranding campaign, Old Spice saw a significant increase in sales. The brand went from being a struggling brand to one of the most popular men’s grooming brands in the world.
Example of SaaS company repositioning
Slack was initially positioned as a messaging app for teams. It was meant for teams to communicate and collaborate more efficiently. The initial target market was small teams.
Slack repositioned itself as a collaboration platform. In addition to messaging, it offered file sharing, video conferencing and integration with other apps. The original positioning targeted a smaller market. The new positioning targeted larger teams and enterprises. This increased its target market by targeting a wider range of customers.
Slack is now a very successful SaaS company and is used by a lot of startups and also by large enterprises.