Product Positioning 101

The past two days in my new job have been a whirlwind. We’ve been in a 2-day leadership summit spanning all of the existing product groups, and the marketing and evangelism teams. During the conversations one of the topics turned to product positioning. Not because Telerik has any particular issue with positioning, but rather because, as the company grows there is some concern about how we can keep the positioning and messaging of both the company and the products consistent as our customers engage with different team members across the various divisions, including our marketing material, website, team member engagements at events, and customer interactions with our sales and evangelism teams.

This is not a unique problem to Telerik or even to small growing companies. I wrestled with this at my last job overseeing a large product (Visual Studio) at Microsoft. This is a pain felt by anyone responsible for a product, a product line, or ever their company positioning. Not a new problem and easily addressed with some conscious work to create a positioning and messaging document. This will be the touchstone for anyone that will talk about your product. It will inform them of how to position the product in the market, and provide the specific messages (talking points) to use depending on the context of the conversation.

Typically you would want to create the positioning statement (the primary component to your positioning document) early in the product development phase. As it turns out, that is exactly where my new product division is – the concept has been proven and demo’ed (which is what drew me here) and now it is time to create a product and a business. For me it’s about applying the basic structure for product positioning, which has been around ever since Eve tried to convince Adam to eat an apple.

A product positioning statement has four main components – the target, the frame of reference, the differentiation, and the reason(s) to believe. Allow me to elaborated.

THE TARGET
The target is who the product is for – who is the target user or customer of the product. The key to a good target definition is to balance being specific with being concise, you need to describe the target well enough that they can be identified, without being so verbose that your positioning statement goes beyond one or two sentences. Using the Adam and Even example, the target for positioning the apple is “hungry men willing to be adventurous with their palette” (after all, Adam had never had an apple before).

THE FRAME OF REFERENCE
The frame of reference is the known object or subject area that The Target can refer to in order to understand what the product is. Before the TV there was little or no easy comparison, so the frame of reference may have been something like “an entertainment device that blends the in-home enjoyment of radio with the visual stimulation of live theatre.” For the apple referenced above this may be something as simple as “a natural snack food.”

THE DIFFERENTIATION
The differentiation is the thing or things that set your product apart from similar offerings from your competitors (let’s face it, if there is no differentiation then there is no reason for a customer to choose your product over a competitor). The differentiation can come in may forms – feature deltas, price, quality, support, social acceptance, etc. For example the differentiation of a Sony TV and Samsung TV may be Sony’s reputation in the electronics business, or their track record of performance, since both TV’s likely have the same features. Samsung’s differentiation my be price (Sony is likely to charge more for their reputation). Going back to our apple, the differentiation may be that it “is sweeter and juicier than any other fruit in the land.” Of course, that a big claim – and that is what differentiation is, nothing more than a claim – and it needs to be backed up.

REASON(S) TO BELIEVE
The reasons to believe are the proof points to back up your claims of differentiation. For example you may claim better quality than your competitors, and now you need to provide the reason to believe you, which may come in the form of independent analysis (e.g. JD Powers & Associates Award). The reasons to believe should help your customer believe the claims you are stating to be fact, not simply your opinion. For the apple, it may not be about independent verification (since there was no one to verify it except for what my daughter refers to as the “sneaky snake”), but rather a believable piece of evidence, like “it was grown in the most fertile soil in the land – the Garden of Eden.” While this isn’t specifically proof that the apple is “sweeter and juicier than any other fruit in the land,” it is believable that the Garden of Eden would produce better fruit than anywhere else.

Once you’ve gone through the effort to define the four components, you can pull them all together into something like, “For hungry men with an adventurous pallete, the apple is a natural snack food that is the sweetest and juiciest in the land because it is grown in the most fertile soil in the land – the Garden of Eden.”

Clearly this is a simplified example, but the format and components are time tested and proven. Once you have your positioning statement you are ready to move on to defining the specific messaging that goes along with your product (how will everyone in your company talk about your product).

I’ll cover messaging next time.

D7

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