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Positioning's comprehension isn't as straightforward as assumed. Gather twelve senior marketers, query them on its definition, and receive twelve diverse responses. When addressing positioning, I often begin by outlining its contrasts: Positioning is not equal to messaging, taglines, brand story, vision, or random marketing concepts.

So, what precisely is it, and more crucially, how do we execute it?

‍"Positioning establishes your product as a leader in delivering what a specific group of customers highly values.”

Yeah, that sounds a bit complex, but positioning is made up of a distinct set of components. Those components and their relationship to each other is where the magic happens.

Product positioning serves as context-setting for products, akin to the opening scene of a movie. Just as the initial scene of a film orients us, positioning establishes key elements. It addresses fundamental queries: Where are we? What's the timeframe? What's unfolding? How should we feel? Who are the main players? With context established, we delve into the narrative's nuances.

Consider "Apocalypse Now's" opening scene. Amid tranquil swaying palm trees, a helicopter and smoke hint at turmoil. Jim Morrison's cries ignite the trees, underscoring the Vietnam War's intensity. Martin Sheen's disheveled hotel room appearance further enriches our understanding. His "Saigon. Shit." dialogue unveils past trauma. Within minutes, viewers grasp the setting, character history, and tone.

Similarly, positioning a product in the market directs customers and conveys vital details. It forms assumptions about competition, features, target audience, and pricing—aligning everything within a comprehensible context.

Pitching a product with minimal information, say just "CRM," triggers initial assumptions: competition akin to Salesforce, targeting sales leadership, specific features like deal and account tracking, and even pricing below Salesforce.

Effective positioning generates accurate assumptions, while poor positioning sparks inaccurate ones, burdening sales and marketing teams with correction. Consider "email" versus "chat" as examples. Despite feature overlap, each triggers distinct expectations. Email entails spam filters, conversation organization, and calendar integration, while chat suggests instant delivery and read receipts. Shifting positioning can revolutionize product perception, influencing success or failure.

Positioning's vital, but how to achieve it? First, what to avoid. Many learned positioning through the "Positioning Statement," a fill-in-the-blanks format from school. This exercise oversimplifies, assuming single answers per blank.

However, most products could easily be positioned in multiple different market categories, with different competitors, providing different value for different kinds of customers

So how do we find the best positioning for our offerings?

We need to break positioning up into its component pieces, find the best answer for each piece, bring the pieces back together, and voila - great positioning.

Breaking positioning up isn't hard because we generally agree on the components. These are, in essence, the blanks in the positioning statement. The components are:

Easy. Now, all we have to do is figure out how to get the best answer for each component. Now here's where things get a little tricky.

If you look at the pieces, you quickly understand that each component has a relationship with the others. For example, the unique value that you can provide to customers is completely dependent on your differentiated features. Your differentiated features are only "differentiated" when you compare them to competitive alternatives. Your best-fit target customers are customers that really care a lot about your unique value. And lastly, your best market category is the context you position your product in such that your unique value is obvious to your target customers. So, if every piece has a relationship with every other piece, where do we start?

We start with competitive alternatives, or what would customers do if our solution didn't exist. Once we have that, we can ask ourselves, "What do we have that the alternatives do not?" That gives us a list of differentiated features or key unique attributes. We can then go down that list and ask ourselves, "So what for customers?" Put another way, what is the value those capabilities enable for our buyers? Once we understand what our differentiated value is, then we can move to customer segmentation, or who are the customers that care a lot about our value. There is likely a wide range of buyers that care about that value, but certain customers care a lot more than others. What are the characteristics of a customer that makes them care a lot about your differentiated value? That gives us an idea of who our best-fit customers are. Lastly, we move to market category. Our best market category is the context we position our product in such that our value is obvious to our target customers. Put another way, it is the definition of the market we intend to win.

Once you understand the flow, conceptually, it's pretty easy. But that doesn't mean there aren't a lot of ways you can mess this process up. Here are the two most common traps:

The most common mistake I see startups make is in how they define the competitive alternatives in the first step. A better way to think about competitive alternatives is to ask yourself, "What would a customer do if your offering didn't exist?" Sometimes the answer to that question is "Do nothing." What that really means is the customer would stick with their current way of solving the problem. That could mean using a spreadsheet, using a manual process, or hiring an intern to do it. In enterprise software, we typically lose 25% of deals to "no decision." Your positioning needs to position you against the status quo if you want to convince customers to act.

Next, I see companies listing what I would call "phantom competitors" in step 1. Phantom competitors are companies that theoretically could compete with you; you just never actually see them or lose to them in deals. Until you do, you are watering down your positioning by trying to position against them. Step 1 in the positioning process is to identify what your customers see as alternatives. This isn't a test of your internet research skills, and just because a company could compete with you doesn't mean they ever will. The product team might want to keep an eye on them as a future competitive threat, and if you do start to see them in deals, you can adjust your positioning at that time. Until then, you will weaken your positioning by trying to position against competitors your customers never even consider.

When selecting a market category, you can either choose to position your product in an existing market category or attempt to create a new category in customers' minds and then position your product as the leader in it.

The first option allows you to use what customers already know and understand about a market to help them understand but what your product is and what makes it uniquely special. If I tell you my product is an "embeddable database for mobile devices" you have the benefit of understanding what a database is. "Embeddable" and "for mobile devices" narrows down the field of alternatives to a market niche where this product is not only different from the leaders in the more generic "database" market category, but much better for a particular kind of buyer.

Creating a new market category, on the other hand, is where you invent a new frame of reference for customers. The obvious downside to this strategy is that you first have to make the category mean something in the customer's mind before it can serve as a meaningful context. So instead of being an "embeddable database for mobile devices," you choose to be a fluflommer. Yep, a fluflommer. Customers have no idea what that is because you've just invented it, so be prepared to spend a significant amount of time and effort making that term mean what you want it to mean.

Positioning is a misunderstood concept but I believe that if you master it, it can be the most powerful strategic tool you have at your disposal. If you are interested in learning more, I’ve got a set of templates to go with it that you might find helpful.

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