How To Nail Product Positioning So Buyers Get It, Buy It, Love It

Nothing has led me to read more business books than Co-founding Outseta. As a founder the need to “go deeper” and figure things out for yourself is very real—if you don’t do it, nobody else will!  

While that’s the case, I tend to agree with the sentiment that most business books really just share an idea or two that you can take and apply to your own context and business. On top of that it seems like publishing a book is more en vogue than ever before—if you haven’t published a book yet what sort of self-professed guru are you? All of which is to say that I don’t feel compelled to write book reviews very often… but here I am doing just that!

April Dunford’s Obviously Awesome: How To Nail Product Positioning So Customers Get It, Buy It, Love It is a must read for any marketer or founder that’s struggling with product positioning. What I love about this book is that while the concept of positioning is frequently discussed in the marketing world, I agree with the author’s assessment that there’s a remarkable lack of resources out there that teach you how to actually do it. In a nutshell that’s what this book does—it’s a straightforward, no-nonsense, and highly tactical guide that any marketer or founder can use to sharpen their positioning.

Why I care about positioning (and why you should, too)

Over the past few years as we’ve been building Outseta I’ve chatted with hundreds of founders that are bringing new products to market and consulted on growth strategy with many others. In both instances the ask that I hear most often is unequivocally “we need more leads.”

In my experience, probably half of the time that I hear “we need more leads” the company actually needs to do a better job of executing lead generation campaigns. The other half of the time I find that the company really needs to revisit their “positioning”—they’re simply pushing a message on the market that’s not resonating or showcasing their product in the best light possible. When companies sharpen their positioning, all of a sudden their existing lead generation channels start delivering a lot more leads (and sales) without any increase in spending.

As a result, a significant percentage of my consulting work has actually turned into positioning work. The process that I’ve typically used has been heavily influenced by David Skok and Mike Troiano’s article Clarity of Message: Why You Need A Great Message And How To Create It and has ultimately resulted in a positioning statement, a series of key messages, a value proposition, and a few other outputs. My process has been built on a lot of trial and error—the magic of Obviously Awesome is that it provides a step-by-step blueprint to tackle positioning that anybody can easily follow.  

I’ll start by sharing my own summary of the book before offering a few minor criticisms on how this book could have been even more helpful to me as an early stage SaaS founder.

My summary of Obviously Awesome

Here’s my summary of Dunford’s book—this is literally the lines of text that I highlighted as I made my way through the book. You should buy a copy yourself, but this will give you a good flavor of what you’re in for and can act as an abbreviated version for you or folks on your team.

Definition of positioning

“Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about.” — April Dunford

• Context enables people to figure out what’s important. Positioning products is a lot like context setting in the opening of a movie.

• Most products are exceptional only when we understand them in their best frame of reference.

How to know if you have a positioning problem

Talk to people who would be great prospects for your offering. Show them the product and explain what it does. Now ask them how they would describe what you do.

Likewise, ask existing customers about your offering and see what they say. If you see a disconnect between how your happy customers think about your product and how prospects see it, you likely have a positioning problem.

The 5 components of effective positioning

1. Competitive alternatives—If you didn’t exist what would customers use? It’s important to really understand what your customers compare your solution with because that’s the yardstick they use to define “better.” Understanding what your customers see as true alternatives to your solution will lead you to your differentiators.‍
2. Unique attributes—What features/capabilities do you have that alternatives do not?‍
3. Value (and proof)—What value do the attributes enable for customers? Value is the benefit you deliver to customers because of your unique attributes. If unique attributes are your secret sauce, then value is the reason why someone might care about your secret sauce.‍
4. Target market characteristics—Who cares a lot about the value? Try to identify the characteristics of a group of buyers that lead them to really care a lot about the value you deliver. Your sales and marketing efforts need to be focused on the customers who are most likely to buy from you. Your positioning needs to clearly identify who these people are.‍
5. Market category—What context makes your value obvious for your target customers? This is the market you describe yourself as being a part of to help customers understand your value. Market categories serve as convenient shorthand that customers use to group similar products together.

Because these relationships flow from one to another, the order in which you define the components is very important (follow the order in which they are presented above).

The step-by-step positioning process

Follow this process to define your product’s positioning.

1. Understand the customers who love your product—Your best fit customers hold the key to understanding what your product really is—look at ecstatic customers and their opinions vs. your overall customer base. Make a short list of your best customers—if you don’t have super happy customers already, hold off on tightening up your positioning. Until you have more experience with real customers, it’s better to keep our minds open and our positioning loose, and see what happens.‍
2. Form a positioning team (3-12 people)
3. Let go of positioning baggage—Get agreement from your team that although the product was created with a certain market and audience in mind, it may no longer be best positioned that way.‍
4. List your true competitive alternatives—The features of our product and the value they provide are only unique, interesting, and valuable when a customer perceives them in relation to alternatives. Start by asking customers what problems they are trying to solve. Understand what a customer might replace you with in order to understand how they might categorize your solution. Teams usually end up with 2-5 groups of alternatives.‍
5. Isolate your unique attributes and features—Strong positioning is centered on what a product does best. Once you have a list of competitive alternatives, the next step is to isolate what makes you unique or better than those alternatives. In this step stay focused on features and capabilities (attributes), rather than the value those features drive for customers. List all the capabilities that you have that the alternatives do not. ‍
6. Map the attributes to value themes—Features enable benefits, which can be translated into value in unique customer terms. Cluster the value into themes—look for patterns and shorten your list to 1-4 value clusters.‍
7. Determine who cares a lot—Once you have a good understanding of the value that your product delivers versus other alternatives, you can look at which customers really care a lot about that value. An actionable segmentation captures a list of a person’s or company’s easily identifiable characteristics that make them really care about what you do.‍
8. Find a market frame of reference that puts your strengths at the front and center and determine how to position in it. Make your value obvious to the segments who care most about that value. We position our product in a market to trigger a set of assumptions—about competitors, features, and pricing—that work to our advantage.

There are 3 types of positioning as you consider how to position in a given market

1. Head to head (to win a market)—You aren’t claiming to be better for a certain type of customer; you’re claiming to be better for most if not all customers. Only do this with a new product if a market leader has not been established. The advantage is you don’t need to convince people that the category needs to exist.
2. Big fish, small pond: positioning to win a subsegment of an existing market—You get the advantage of a well defined category without the stiff competition. Your focus is showing there’s a subsegment of the overall category with a specific set of needs that the current category leaders are not addressing. The subsegment needs to be easily identifiable—meaning if you had to create a list of prospective buyers, you could figure out a way to do that. First educate the targeted subsegment about how a general purpose solution is not meeting their needs.
3. Create a new game: Positioning to win a market you create—Sometimes a market can be created by combining one or more existing markets to form one with different buying criteria. Only use this when you have evaluated every other possible existing market category and concluded that you cannot position your offering there, because doing so would fail to put the focus on your true differentiators and value. To credibly create a new category, you need a product that is demonstrably, inarguably new and different from what exists in other market categories. Category creation is about selling the market on the problem first, rather than on your solution.

“The most successful efforts in category creation do not result from company executives creating an acronym at an off-site. Rather they are discovered from deeply understanding a subset of customers.” — Mark Organ, Founder of Eloqua

Positioning Canvas

This is simply a document or set of questions that you should complete as you begin the work of figuring out your positioning.

Putting positioning into play

Once you finalize your positioning, putting your positioning into play typically starts with developing your sales story.

1. Starts with the definition of a problem your solution was designed to solve
2. Introduces what the “perfect world” would look like
3. Introduces the product or company and positions it in a relevant market category
4. Flows into the value themes and a bit more detail about how the solution enables that value

Where Obviously Awesome could be even awesom-er

Ultimately I loved this book and found it extremely useful. However, there’s two specific instances where I felt like this book left me hanging a bit.

Positioning for an early stage start-up

Dunford writes, “If you’re a start-up and don’t have super happy customers already, hold off on tightening up your positioning. Until you have more experience with real customers, it’s better to keep our minds open and our positioning loose, and see what happens.”

I understand this sentiment—it reminds me Alex Turnbull’s article Attention Start-ups: Stop Selling To Start-ups where he makes the point that companies should widen their net rather than focusing at an early stage on the markets that are most familiar to them. Keep your positioning loose and your targeting wide and you might be surprised to find who is actually getting the most value out of your product.

While I appreciate that you don’t yet know who your best customers might be, I find that this advice isn’t terribly helpful. You need to think about positioning to some extent even as an early stage start-up, and I can’t imagine that loose positioning—we offer a product that’s CRMish—could possibly be helpful.

My own take is that you need to start with an educated guess with regards to your unique attributes, who cares about them most, and the market category you think you can most effectively position your product in. From there you should plan on running experiments to test the effectiveness of your positioning, moving rapidly to test new positioning if it doesn’t seem to resonate. In other words, systematically test new and different positioning until you find a position that seems to resonate rather than over-generalizing your product.

Positioning a platform solution

I didn’t read this book under the context that we have a positioning problem at Outseta—if anything, I’ve gotten feedback that prospects “get it” pretty quickly when looking at our website. What I have heard is that most prospects either consider us a “CRM” or look at us as an “Authentication and subscription management solution.” I think both categorizations make sense, but all things considered our positioning has been best articulated by this image.

This image has articulated Outseta’s positioning better than anything else to date.

Obviously Awesome is an incredible resource if you’re marketing a CRM, or an email marketing tool, or blueberry muffins. But when I turned this book towards our own business it wasn’t particularly helpful in helping me think about Outseta’s positioning—as all all-in-one platform solution, I was still left scratching my head a bit. Let’s talk through that.

First, I need to decide on how to position in a given market. Again the choices are:

1. Head to head (try to win a market)
2. Big fish, small pond (try to win a subsegment of an existing market)
3. Create a new category

Given that Outseta plays in a number of very mature and competitive markets—CRM, subscription billing, customer messaging, and help desk—I can easily rule out head to head positioning. We’re not going to win outright if we take on Salesforce. Or Intercom. You get the idea.

I initially thought about creating a new category—there really isn’t another product out there that offers the scope of capabilities that Outseta does to early stage SaaS businesses. But while our platform is unique in that sense, each of our key capabilities is already well understood as CRM, or email marketing, or subscription management, for example. Slapping a new label on these features in the vain of “creating a category” just doesn’t feel authentic to me.

That leaves us with big fish, small pond positioning—I can get behind that. We need to choose a market or category and fight for the subsegment of customers at the lower end of that market that’s typically defined as makers, indie hackers, or bootstrapped SaaS companies. Game plan!

But choosing the market category—and all the assumptions regarding features, pricing, and competitive offerings that comes with it—proves to be really challenging. Are we primarily a CRM? A subscription management platform? A customer messaging platform? A help desk?

The reality for us is that we offer the basic features and capabilities expected of software products in three or four preexisting and well understood software categories. In a lot of ways I don’t think it makes much of sense for us to have to choose to align ourselves with just a single one of these categories.

The fact of the matter is whichever of those existing markets we choose, our product is not going to be the most compelling when evaluated against the criteria that products in that chosen market are measured against. Outseta’s value comes from the breadth of the features we offer across the different categories of software that all early stage SaaS businesses need.

If we have to align ourselves with a pre-existing category, I’d choose either “CRM” or “subscription management.” But those markets themselves are pretty different—are we competing with Hubspot CRM, Pipedrive, and Copper or are we competing with Chargebee, Recurly, and Chargify? That’s a big decision with lots of trickle down consequences.

My gut tells me that at our core we’re primarily a subscription management platform, because our customers find us early on to help them manage subscriptions—the contact management and CRM aspects of the product come into play at a later stage. The alternative solution we hear a lot about at an early stage is companies building their own subscription management logic and other required scaffolding on top of Stripe.

But beyond just subscription “management,” I think our positioning likely needs to be something closer to a subscription “growth” platform. We’re not just managing subscriptions, but actively providing a series of tools to help you grow and support your subscriber base that the other subscription management platforms simply don’t offer. I’m not sold on that yet, but it’s the way I’m leaning.

These challenges or criticisms are fairly unique to our context and product, but in the vain leaving a balanced review they were the shortcomings of Obviously Awesome for me specifically. April Dunford’s book is gem—if you’re working on your positioning, it’s the best place yet that I’ve found to start.