Marketing, Product Management, Strategy

Positioning Your SaaS Product For Success


Positioning is one of the most significant activities in product marketing.  As a product marketer, you have to know how your product differs from others, in order to describe it in a way that your market will pay attention.

But you really need to step back a bit. It’s critical to build the product in such a way that you’ll be able to draw a distinction with other products in the market. In a sense, you have to know how you want to talk about it, before you know what to build.

The positioning needs to be baked into the product strategy.

In the case of a startup, you’re figuring both things out at the same time. What’s that interplay like?

Hopefully, you’re not getting started too late!

What is Positioning?

Positioning refers to the tactics used to establish a place in the mind of your prospects about what your product is, and how it fits into the world of products they’re already familiar with.  To be heard, much less remembered, you need that place to be unique.

Nobody remembers the person who came in second place.  Who lost the Super Bowl two years ago? Here’s another similar example those football fans among you may be familiar with:

Forgettable: The second loudest stadium in the league.

Memorable: The loudest indoor stadium in the league.

Instead of being third or fourth in a bigger category, it’s better to create a space that no-one else occupies–your own category. Think big fish, small pond.

That space — in which you are tops among your own category — is now your position in your prospects’ minds.

Positioning drives messaging, which in turn drives product requirements, promotion and sales enablement.  Your position is a promise that describes how the product fits the market.

One of the best books on the topic is Ries and Trout’s classic, Positioning: The Battle For Your Mind.  Ries and Trout present the conceptual background quite well, though references to “market leaders” like Kodak and Xerox are quite stale.

Roger Cauvin offered a clear explanation of two of the interpretations of the word “positioning” in an interview with SPM Resources:

Positioning has two definitions:

    1. In the context of product strategy, a product’s “positioning” is the set of perceptions you wish to instill in the minds of the prospects that comprise the target market. The term “unique value proposition” in lean startup terminology is roughly equivalent.

    2. In the context of marketing tactics, “positioning” is the process of generating and shaping the intended perceptions in the minds of prospects.

In my experience, teams most frequently consider positioning when determining how to describe a product that already exists.  This can cause a disconnect between the way the product is described, and the capabilities it has.

Positioning should be captured in the business model / product canvas and the corresponding positioning statement, and carried forward through all subsequent activities. As you modify the canvas and positioning statement, all the subsequent activities are adapted as well.

If you’re doing a traditional business case (ack!), doesn’t the ability to successfully deliver on a valuable advantage against competitors provide some teeth to those revenue projections you’re promoting?  Try to find supporting evidence via interviews and surveys to show that if you build a product differentiated in a given way, your customers will see that differentiation as reason to buy!

Important point: Establishing your positioning does not mean you can’t pivot.

The market changes all the time. Your buyers’ and users’ needs change. You won’t be successful if you don’t respond to what you learn over time.

More on this in a little bit – let’s dig in a little deeper.

How is positioning captured and communicated?

One of the more practical frameworks is found in Crossing the Chasm, the classic marketing text by Geoffrey Moore:

For [target customer] who [statement of problem], the [product name] is a [product category] that [statement of key benefit(s)].  Unlike [primary competitive alternative(s)], our product [statement(s) of differentiation].

This format helps establish the product within its appropriate category, captures its key benefit, and further allows you to position against a key alternative product or group of products by highlighting the differentiation.

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While each of the statements can include one or more benefits, it is wise to keep this statement concise. You may need a different statement for individual market segments, or possibly for individual competitors. Spend some time to see what makes the most sense for you.

It’s also important to ensure the “THAT” part of the statement describes a benefit, not a feature.  Including a feature–even if you like it alot, or your customer development shows customers like it a lot–doesn’t explain the value they will get from your product. If the THAT isn’t a benefit, your positioning statement is invalid!

You have to know the market really well to establish positioning from day one, and stick to it. But if you’re able to do so before building the product, think of the clarity that can follow!  Here are some items that become less difficult if you have a globally agreed positioning statement from the beginning:

  • Which features are necessary to support your statement of key benefit
  • Which features are necessary to support the statement of differentiation
  • What benefits should be used to describe the product in marketing slicks
  • What benefits should be used to describe the product in sales decks
  • What benefits should be highlighted in your product demo scripts
  • Which words and ideas you may want to consider when naming the product
  • What benefits should be used to differentiate the product in competitive selling situations

When looking back on products I’ve managed in my career, I can easily see where lack of clear positioning led not only to extra work later, but to a product whose actual benefits did not support the differentiation that we later realized was most important to our prospects.

Of course that led to rework, but even worse, it led us to fail to capitalize on differentiation that was easily within our capability to deliver.  Unfortunately, we delivered on features that didn’t help differentiate us, which didn’t help close sales.

What about pivoting?

You’re a startup. You’ve gone after a particular market segment and delivered on a specific benefit they’re willing to pay for. But the world shifted under you, and you’re going in a different direction.

Now what?

First, let’s think about when it’s valid to define and capture a positioning statement. You shouldn’t be all-in on a segment, problem and core benefit unless you’ve tested your hypotheses to determine that you have found a sustainable business.

So rule #1 is don’t lock in too early.

Once you have clarified the value proposition and customer segments of your business model canvas, you can clarify your positioning. From that point, a lot of the ongoing learning you’re doing is tactical – how to execute on the value proposition you’ve identified for that market segment.

Steve Blank defines pivoting as changing the elements of the business model canvas. In my view, pivoting involves a change to the plan, not just to the execution.

If your business model is changing, so is your positioning.

Positioning Requires Choosing

One of the difficulties in getting wide agreement on positioning–especially in sales driven organizations–is narrowing of focus.  Sales organizations want to think of the product they’re selling as a universal fit for anyone with the primary problem that product addresses.

No product is a silver bullet.

The fact is, every product has strengths and weaknesses. Every product is better for some segments than others. To win, you need to take a position.

What should that position be?  What’s the feature that will lead to victory in a given segment?  This is where voice of customer / customer development efforts come in. Ask! Develop an MVP!

Sales organizations want to increase revenue, and so they want to sell your product to anyone it will help.  They don’t want to narrow focus and only sell it to people who fit a specific profile.

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That is, until the accounts they sold are unsatisfied and refuse to provide references, at which point the problem is perceived to be with the product–not with the decision to sell it to an improperly qualified prospect.

Go to bat for this.

If your product solves problems for several buyers well, you may need to establish a positioning statement for each–that way you can reference the appropriate statement when crafting messages directed at that buyer.

This is especially important for enterprise products which appeal to multiple buyers and influencers.  You’ll want to have positioning established for each, so that your marketing and sales teams know what to say to whom.

Ad campaigns have to be ruthlessly on-message so that the messages they deliver support the product’s position.  Ad agencies therefore have to ensure clear positioning when developing an ad campaign.

Many companies don’t actually know what their positioning is.  In this situation, the work required to identify and clarify positioning adds a great deal to the cost:

Agencies report that companies who have completed positioning documents will save 30% to 50% of their agency costs. Just as your local video store profits from late fees, the hidden costs of agency work come from all the re-work. Agencies often include an up-front cost allocated for discerning positioning from executive interviews.

So if you did not establish positioning before building the product, it will still help to clarify positioning as soon as possible–given that downstream marketing communications will still be more effective once you’ve done so.

Speaking To Be Heard

Ries and Trout position “positioning” as the way to reach the over-communicated masses. We all hear thousands and thousands of marketing messages in our lifetimes. We rarely remember them.

Your prospects’ minds are already populated with opinions, preferences, perceptions and needs. Your brain filters out noise that seems irrelevant.

If you speak in the words your prospect already uses to describe their problem, they’re more likely to hear you!

You have to communicate in language that already has meaning to the buyer.  By knowing your buyers intimately, including their concerns, perceptions and needs, you can better communicate your positioning in language that will cause them to notice you.

It does no good to build a differentiated product if you can’t get your prospects–who arguably would benefit from it–to notice you exist!

Does Positioning apply in SaaS?

To revisit my point from earlier, YES! It does.

I read this article by Ryan Battles, where he pointed out:

product positions…are re-iterated by the marketing, the pricing, and the design of the products themselves.

Exactly what I’ve been saying the whole time!

Battles goes on to suggest several typical approaches he spots by observing company websites, built around key benefits, key attributes, use cases, target customers and against-the-competition.

Without using each of the products he cites as examples, we can only assume their design lives up to the positioning by which their website copy was created.

I really like what Lincoln Murphy wrote about this topic a couple of years ago in an article in which he advocates that just because you’re SaaS doesn’t mean you can ignore positioning:

it’s time to do some deep soul searching, market analysis, and customer development to figure out why you exist and what your market positioning is.

You may be SaaS, but you still need to be strategic.

The question of why you exist reminds me of Simon Sinek’s Golden Circle. If you know that, and you know how you’re providing value in your own unique way for your own unique purpose, many of the other questions answer themselves.

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How else have you found positioning to be valuable?  Please share your thoughts in the comments below.

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