You’ve developed an incredible product, one that genuinely addresses customer needs in your industry with innovative solutions. That’s fantastic! You’re already ahead of the competition in the race to sell more. Not everyone gets to market such a great product. If you do, consider yourself lucky – you’ve already won half the battle. However, relying solely on your product’s strengths can quickly lead to revenue stagnation. Even if you’re convinced you have a winner, your target audience might not share that view. That’s where product positioning comes in. It’s about crafting a unique identity and value proposition for your product in the minds of your target customers. Remember that crucial point. Effective product positioning isn’t just about highlighting your product’s benefits; it’s about identifying your ideal customers and making them perceive your product as the undeniable champion you know it is.

Grasping your product’s position compared to competitors is crucial to outselling them. In this article, I’ll guide you through five straightforward steps to create the perfect product positioning strategy, regardless of your product or service. We’ll delve into market analysis, crafting a unique value proposition, key messaging, success measurement, and more. Let’s get started.

What is product positioning?

Product positioning involves creating a distinctive identity or value proposition for your product or service and communicating it effectively to your target audience. The goal is to establish the perception that your product is significantly different and superior to the competition. Don’t fret if your product needs some work. Product positioning can emphasize its strengths and downplay areas for improvement. Is your product already exceptional? Even better. For you, product positioning is less about creating an illusion of uniqueness and more about showcasing reality.

Why product positioning is important

Exceptional product positioning demands a deep understanding of your target customers’ needs, desires, and preferences. It also requires understanding your competitors’ strengths and weaknesses. The significance of a customer-centric, or rather, customer-obsessed approach in today’s cutthroat market is constantly emphasized. And it’s true: businesses that prioritize understanding and serving their customers are the ones that thrive. This isn’t about being altruistic; customer-obsessed companies genuinely outperform those focused on themselves. In fact, 86% of customers will gladly pay more for an improved experience.

Product positioning not only prioritizes customer experience but also helps you cultivate a competitive edge, making your products stand out and ultimately becoming the preferred choice for potential buyers.

Free guide >> The 30 Best Ways to Promote Your Business (With or Without Money!)

5 steps for stellar product positioning

Ready to begin? Utilize this five-step system to achieve outstanding product positioning.

Step 1: Understand your market

“Know your market” is a vague marketing platitude. To truly grasp it, we need to dissect its two components: 1) Understand your customer, and 2) understand your competition.

Know your customer

Creating buyer personas is an excellent way to gain a deep understanding of your target customer.

Buyer personas are fictional yet realistic representations of your ideal customers based on market research and data from your existing customers. They uncover customer motivations, pain points, and purchasing behavior. Buyer personas are typically defined by:

1. Demographic information. This includes factors like gender, age, income, education, ethnicity, and socioeconomic status.
2. Consumer behavior. What conversion paths do your customers typically take on Google Analytics? Which product features or website pages are most popular? What are customers saying about your product in reviews, NPS surveys, or support interactions?
3. Objectives and goals. Prospects need a reason to purchase your product. Analyze the obstacles preventing your customers from reaching their goals and demonstrate how your product can help them overcome these challenges.

Know your competition

You might already know your main competitors from interactions with prospects. If not, there are foolproof ways to identify and outmaneuver them.

• Conduct commercial searches related to your products and services on Google. The businesses vying for attention in search results, both paid and organic, are your competition.
• SEO tools like Ahrefs or Moz can conduct keyword overlap analyses, providing a more comprehensive view of competitor keywords.

• Analyze competitor ad copy. What’s their core value proposition? What do their callouts emphasize? Are they offering incentives like free shipping or highlighting specific features you do or don’t have?
• For B2B businesses, equip sales teams with battle cards that directly compare your product to specific competitors.
• Conduct a SWOT analysis to identify strengths, areas for improvement, and your most promising opportunities.

Understanding your customer is paramount, but combining that with in-depth competitor knowledge empowers you to achieve powerful product positioning.

Step 2: Define your unique value proposition

You’ve probably encountered the term “unique selling proposition” (USP). But what is it exactly? A USP is a statement that clearly conveys the unique benefit your product offers to customers and how it fundamentally differs from alternatives in the market.

A strong USP helps a brand stand out, attract and retain customers, and ultimately, drive sales. Here are examples of powerful USPs:

• Saddleback Leather. Rugged Leather Goods with a 100-Year Warranty. While many companies offer warranties, a 100-year warranty is unique and memorable.
• Robinhood. Investing for everyone. This USP might not have aged well, but it allowed Robinhood to dominate by simplifying investing in a traditionally exclusive industry.
• Warby Parker. Designer eyewear at a revolutionary price. Tired of expensive and time-consuming visits to traditional eyewear retailers? Warby Parker offers a solution.
• Dollar Shave Club. A great shave for a few bucks a month. This demonstrates a deep understanding of their target market. Men appreciate saving money, making this USP appealing. By crafting a strong and memorable USP, you gain a wealth of messaging material for your ideal customer.

Step 3: Create a positioning statement

Sometimes, simplicity yields the best results. A positioning statement does just that. It’s a concise declaration that explains precisely how your product or service fulfills a market need. Here’s a positioning statement example from Apple:

This four-step formula is a classic approach to crafting a positioning statement, especially when tailored to specific products and target markets. Apple’s statement claims its products are superior. However, a product manager launching new AirPods would benefit from a product-specific statement, leveraging insights about AirPod buyers and competitors. Remember: clarity and conciseness are key. With a solid positioning statement, you can move on to broader key messaging.

Step 4: Define your key messaging

Consider your USP and positioning statement as foundations for your product positioning message. Here’s how to define your key messaging:

• Step one: Identify your product’s unique selling points and target audience.
• Step two: Craft a product-specific statement that clearly outlines your USP.
• Step three: Develop ad copy, landing page content, product descriptions, and more based on the previous steps. Messaging frameworks are flexible, like this one from Forrester:

Here, the top layers represent market research and USP. Level 4 is your positioning statement, and Level 5 is your key messaging. Each positioning statement should have several key messages answering this question: how does my product uniquely help customers achieve their goals? Effective key messaging can be found in compelling search ads and product descriptions, like this example from Harry’s:

USP: affordable, high-quality shaving products delivered conveniently. Key messaging: delivered to your door for less than $2 per blade.

Want creative ideas to include in your UVP? Free guide >> The 120 Best Words & Phrases for Marketing with Emotion

Step 5: Measure success, and test everything

Congratulations on establishing key messaging and launching your product positioning campaign! However, your work isn’t finished. Now you must measure its success and continuously test different messages to determine what resonates best. Here are effective strategies for testing and measuring your key messaging:

• Run A/B tests on Facebook Ads with different key messages and compare their click-through rates.
• Use website testing tools to experiment with landing page copy variations, tracking conversions to gauge success.
• Test different value propositions in your search ads and analyze their click-through rates.
• Create a video highlighting a feature your competitor lacks (identified through market research) and track user engagement based on time spent on the page. There are countless approaches to testing and measuring. The key is to continuously experiment and let potential customers guide you toward the most effective messaging.

Powerful product positioning in a nutshell

That covers the essentials! Follow this five-step framework to identify your ideal customer, address their needs, and outperform the competition. Here are the five steps for successful product positioning:

1. Understand your market
2. Define your unique value proposition
3. Create a positioning statement
4. Define your key messaging
5. Measure success, and test everything If you have any questions about product positioning, feel free to ask in the comments below, or contact us to enhance your marketing strategy.