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Positioning is sometimes referred to as the fifth P, along with product, price, place, and promotion. Founders spend the formative years of their companies answering a constant stream of questions from prospective employees, investors, and investors: What are you? Is that like so-and-so? How are you different from [insert large company that will no doubt crush you]? Developing a desired position, and formalizing it with a positioning statement, are critical steps on your way to profit and glory. – TM
A positioning statement is a short statement that demonstrates the value of what you offer, how it differs from your competition, and how it has a meaningful impact on your target audience. The positioning statement is an internal tool that you use to communicate your positioning. It codifies the customer benefit and the uniqueness of your product, service, brand, or company. It is the basis for all of your marketing messages and communications, including the development of a tag line. Other groups within your company can use the positioning statement to help them with their work. Your advertising team or agency, for example, can utilize the positioning statement as input to develop your advertisements. Understanding the target buyers, the value they see in your product, and how your product or service differs from competing products or services are essential components in creating a tag line that your target customers can identify with.
Developing a positioning statement requires a lot of hard work. The individuals involved need to question basic assumptions about their product or company, exchange opinions, resolve differences, and, most difficult of all, arrive at a final decision on a specific direction. Companies that lack the discipline needed to develop positioning and stick to a direction—and to the strategy that supports that direction—risk diffusing their marketing effort. The result is wasted time and, ultimately, wasted market opportunity.
The usual process for creating a positioning statement combines internal meetings and interviews with key stakeholders. Key stakeholders can include executives, founders, sales reps, and anyone you think really understands your customers and market. But even more important, and often missed, are interviews with customers, partners, and even prospects, if you can find them. Because the ultimate goal of positioning is to create a position in the mind of your customers or the market at large, understanding how your customers feel is essential to creating an effective statement.
Going further, you need to pay particular attention to your customers’ needs—what they are seeking in a product like yours—and how they perceive your product as different. A very difficult challenge in the positioning process occurs when customers feel differently about your product, service, or company than your executives do. Who is right? Do the customers just not get it? Or, is the company not delivering? Perhaps the company has never clearly articulated its position. As difficult as these discussions can be, this process can be a crucible from which something better can emerge.
After you have collected all of this feedback, the process of crafting the statement starts. Ideally, you should appoint a small group to complete the task. Otherwise, the process may never end. In the initial meeting, the group should collect as many ideas on the position of the company as possible. Its next task is to take a stab at crafting the actual statement.
The positioning statement should be an honest reflection of your product, service, or brand. The key to a good statement is specificity: capture what your company delivers and how it differs from the competition. In addition to being informational, the statement can also be aspirational. For example, if your company has a three-year plan to add features to a product, grow your footprint, capture market share, or achieve some other objective, the positioning statement can reflect these goals.
There are two widely used templates for positioning statements:
For (target audience), (product/service/ brand) is the (frame of reference) that delivers (benefit/differentiator) because only (product/service/brand name) is (reason to believe).
For (target audience) who wants/needs (reason to buy your product/service/brand), the (product/service/brand) is a (frame of reference) that provides (your key benefit). Unlike (your main competitor), the (product/service/brand) provides (your key differentiator).
The positioning statement must convey the purpose and impact of your business quickly yet convincingly. For this reason, both templates are short and concise. The second template more directly addresses your key differentiator and the contrasts with your competition.
Both templates include the basic components below. The second template is more explicitly aimed against a competitor and breaks out its name and the differentiator.
- Target audience – The demographic or psychographic description of your desired customer. This is who your product, service, or brand is intended for, and it includes customers who most closely represent your product, service, or brand’s most fervent users.
- Product/service/brand – What you’re marketing. This might seem like a simple step, but take a few moments to reflect on exactly what you are attempting to position. Is it the product or service itself? Or, is it your company?
- Frame of reference – The category or market in which your product, service, or brand competes. Establishing a frame of reference helps provide context for your brand and relevance to your customers.
- Benefit/differentiator – The most compelling and motivating benefit your brand offers your target audience relative to your competition.
- Product/service/brand name – The name of the product, service, or brand you are positioning.
- Reason to believe – Proof that your product, service, or brand delivers what it promises.
Here is how I position my book, The Professional Marketer:
For professional marketers who need to learn fundamental marketing skills, this book is a professional development tool that provides easy-to-understand and pragmatic advice to help them get their job done. Unlike searching through blogs or reading dozens of marketing texts, The Professional Marketer boils it down to provide a convenient and authoritative overview that can be applied directly to the job at hand.
After you have crafted your statement, it is essential that you test it. If the statement is going to inform your go-to-market plan and guide your marketing efforts, then it has to hold up. To ensure that the statement works, you need to ask a number of critical questions:
- Is the statement clear?
- Does it focus on and motivate the core target audience?
- Does it provide a distinctive and meaningful picture of your product, service, or brand?
- Does it differentiate your brand from the competition?
- Is it credible?
- Does it allow for future growth?
Make sense? Can you succinctly describe your startup in a way that answers these questions?
Startup Marketing Essentials is a series of excerpts from The Professional Marketer. I’ve pulled out what I think are the most essential skills a founder or a marketer at a startup would need.
Photo courtesy of MioszB