Unlike your value proposition, positioning statements are directed towards a very specific buyer persona: a subset of the population your value proposition intends to target. Your value proposition can mimic or be composed of multiple positioning statements.
Essentially the positioning statement markets your value proposition to your company’s ideal customer.
Good positioning allows your team to create a more personalized experience for your customer and also helps to define your brand identity, product, and distinguishing features for your customers.
Buyer personas are only useful if you act as if the profile you develop is a real person. Use your buyer persona to inform everything from your messaging to the marketing channels you use.
Your positioning statement should:
- Be customized to the defined needs and behaviors of a target audience.
- Include your product name and market category.
- Highlight only the benefits relevant to the persona rather than the wider range listed in your value proposition.
- Illustrate competitive differentiation that is relevant to the persona and defines why your product is better suited to their needs than other options.
Let’s look at each of these factors more in depth.
Customized to Your Target Audience:
Instead of overgeneralizing and using resources to reach an audience that is not a good fit for what you sell, defining your target audience allows you to focus the benefit of your product or service towards your most likely buyers, and convert more of them as a result of speaking directly to them.
As an aside: A common criticism of creating a buyer persona is that companies become too focused on the defined limitations of a target audience and exclude other potential customers. As your service or product changes or expands it is important to adjust who you are targeting alongside those changes.
Include Your Market Category:
Your market category is your general line of business. Most businesses will define themselves as part of an established market category (for example “logistics” or “business insurance”) but in highly saturated markets with established players, defining a new market category can help your business stand out.
(One of the best-known examples of this is Hubspot essentially creating the category of inbound marketing software.) Beware, though, that defining your own market category can take years of effort and thousands, if not millions, of dollars in investment to ensure that your customers and prospects understand it as innately as they understand well-established categories.
And if your business seems too much like an apple, when your customers are looking for an orange, you may end up losing those customers altogether.
Let’s take a look at Next Insurance as an example.
Next Insurance is a financial services company, but plays in the niche of insurance services marketed to only small businesses.
Highlight benefits to a specific persona:
Let’s say for the sake of this example Next Insurance wanted to branch off into a new niche market. Instead of marketing to small businesses, they could decide to establish a category solely around insurance for 1099 contractors.
The trade-offs are:
- Less demand, but also less competition for a niche offering
- Higher resonance with independent contractors, but larger small businesses may feel excluded
- Better alignment of their solution to a smaller market category, but at the risk of losing revenue from a larger customer base
Regardless of the market category your product or service falls into, it’s a good idea to research the best niche in which to establish yourself. To do so, gather information on
- Who the current customers are
- How large the market is
- Where are they coming from
- What your competitors are offering, and
- Who is currently commanding the market
Illustrate Competitive Differentiation:
Competitive differentiation separates your company’s product from what your competitors offer.
While competitive differentiation should be employed regardless of market category, it is most essential if your market category is saturated. In an environment where there are many alternatives to your product, it is important to highlight why your product is unique and why it is preferable.
Some examples of competitive differentiators are:
- Product differentiators: features, benefits, design, quality
- Service differentiators: customer service call, live help chat, support email
- Price: how much you charge, how often you charge, different payment plans
Let’s look at an example:
“Mailchimp is an all-in-one Marketing Platform for small businesses. We empower millions of customers around the world to start and grow their businesses with our smart marketing technology, award-winning support, and inspiring content.”
Did they answer all the essential questions?
- Who is their target audience? Small businesses.
- What is their market category? Marketing technology.
- What is their product? An all-in-one Marketing Platform.
- What is the benefit? Their service allows customers to grow their business.
- Are there special features? They offer award-winning technology, support and inspiring content.
Mailchimp has included everything a customer needs to make a well-informed decision as well as included features that sets them apart from the competition. While their positioning statement is broader than some others, it gives this company room to expand their offerings to include more features and meet a wider range of buyers.
Your positioning statement is the connection between your marketing strategy and the consumer’s experience. Taking the time to position your offering strategically will set the stage for your company’s brand and messaging across all marketing and sales channels, and make all of your sales and marketing efforts more effective.