Positioning Strategy: A Guide to Defining Your Business to Customers

Updated December 31, 2019

The difference between a prosperous business and a struggling one lies in a company’s ability to define how its brand is positioned in the marketplace. It’s a key skill because success means a company’s products and services are embraced by customers and sets your company apart from the competition.

Kleenex is a perfect example. Its brand is so defined in the minds of customers that the company name is interchangeable with its facial tissue product. This is the concept of positioning at work.

Without a positioning strategy, others will characterize your brand in ways you may find unfavorable. Moreover, once a brand’s positioning is solidified in the minds of customers, it’s nearly impossible to change. That’s why creating a positioning strategy is essential.

Overview: What is a positioning strategy?

Positioning refers to the place a brand resides in the mind of customers. That brand can be a company’s products and services, or the company itself. It defines the sales and marketing approach used with customers, and can even affect the content of business proposals.

While positioning influences what customers think of your brand, it can’t convince a customer of a concept they don’t believe. Therefore, positioning must align with the already-established beliefs of your customers, and the strategy is constructed around this.

For example, an accounting firm that wants to market to small and medium-sized businesses (SMBs) might position its services as fast, inexpensive, and tailored to the unique needs of SMBs.

If the company does not take charge of its positioning, potential customers might create their own, such as accounting firms charge a lot of money for very little work. As a result, SMBs may decide not to use the company’s services.

At the same time, the accounting firm cannot create positioning that states no effort is required on the customer’s part since it’s common knowledge that providing business records and other documentation is necessary for accounting work.

Hence, this type of positioning is not believable and will turn off potential customers, since it can create the perception of low-quality or untrustworthy work.

In addition, positioning ensures alignment within an organization on how a company’s brand is presented to customers. This affects the work done by the marketing department, particularly the content used for various marketing tactics, and is especially important for B2B marketing strategies.

Positioning also affects the sales process and sales techniques such as how a B2B sales team pitches to potential clients.

If positioning is not well-defined, it leads to inconsistent communication of the company’s brand to customers, even to the point of individual sales reps conveying different messages to the customer.

Since customers might interact with various sales reps during the sales cycle, this inconsistency creates confusion and mistrust among customers. That’s why establishing your positioning strategy must come before any outreach to customers.

Types of positioning strategies

Crafting brand positioning requires a positioning strategy. A business can choose from several positioning strategies. These are some of the most popular positioning strategies you can use to leverage your business.

Positioning based on product or service attributes

This is a common positioning approach. It focuses on how your product or service solves a problem for customers.

For example, if your company sells toothpaste, you might position it based around features such as teeth whitening or tartar control. This type of positioning also works well with an account-based marketing approach because you can take a list of product features and easily tailor it to fit a specific client.

Positioning by price

A company can use price to differentiate its offerings from competitors. This involves either positioning as a premium brand or as an economical one, and is tied to the company’s pricing strategies. The premium brand positioning involves touting high quality and exclusivity. The economical brand position is about access and affordability.

An example of positioning based on price is Rolls Royce. Its automobiles are expensive relative to most other cars and that is part of its appeal and brand identity with customers.

On the other end of the spectrum, Dollar Shave Club positions itself as affordable and convenient; in fact, its price positioning is in the company’s very name.

Positioning for a specific use

In this positioning strategy, the product or service targets its use in specific situations. This strategy is most often employed when the company’s offering was made for these situations.

For example, Vicks offers two products to relieve symptoms of a cold where one, DayQuil, is positioned for use during the daytime, and the other, NyQuil, is positioned for use at bedtime.

Competitive positioning

This positioning focuses on how the company and its offerings are better than the competition. In this strategy, the business explicitly compares itself to competitors. Companies use this approach by employing phrases such as, "still the best," and "We try harder."

Positioning by user group

This type of positioning targets a specific group of customers and explains why the company’s offerings are directly relevant and applicable to this group. Examples here include how Johnson and Johnson’s baby shampoo positions itself as gentle for children, and Axe body spray targets men.

How to create your own positioning strategy for your small business

Crafting your own positioning requires a dedication to understanding your target customers and the marketplace you’re operating in. Translation: You’ve got to perform research.

When I built positioning for my digital products and services, I spent time researching. This included ethnographic research because customers sometimes are not aware of their own pain points. Observing them perform their work allows you to discover challenges they’ve unconsciously adapted to that your offerings might be able to solve.

As we walk through the steps of defining your positioning strategy, keep in mind that varying degrees of research are required at all phases of this process.

Step 1: Evaluate the current brand

The first step to build your market positioning is to analyze your brand, both at the company identity level as well as its products and services. Also, evaluate how you sit relative to competitors. Then factor all of these elements together to determine what you’d like your positioning to be.

Considerations to make include:

  • Characteristics of the customers you are targeting: Here, a buyer persona can help. A buyer persona represents the ideal customer match for your company’s offerings, and includes factors such as income level that play a role in product fit. By defining these characteristics, you acquire a clear understanding of your customers.
  • The problem you are solving for customers: Every customer has a need, which is why they are considering products and services like yours. How are you solving that need? What makes your offerings different from competitors?
  • Market factors: What’s the size of the market you operate in? What stage of growth is your company at, and what is its growth strategy? What kinds of competitors exist?

Pro Tip: Your company’s mission and values are key elements in determining how to present your business to the marketplace. For example, Nike is committed to innovation in sports apparel, and hence, positions itself as offering top-quality athletic attire that incorporates cutting-edge technology. This has allowed Nike to attract top athletes to its brand.

Step 2: Consider the competition

One of the main functions of positioning is to crystalize in the minds of customers how your company differs from competitors.

Therefore, a deep understanding of your competitors is necessary. This understanding includes how customers perceive the competition, and the strengths and weaknesses of these competitors.

Pro Tip: Examine the positioning of competitors. By understanding how the competition approaches the market, you can identify unique marketing positioning strategies that will set your company apart.

Step 3: Identify your uniqueness

After studying the competition, it’s time to identify how to set your company apart in the market. An important component of successful positioning is to define what makes your business unique. So at this stage, begin to zero in on your differentiators.

Pro Tip: Your unique differentiator should involve how your company solves a meaningful problem for customers. For example, a car that offers a unique exterior paint color is not going to set it apart for many people, but being able to state that your car is the highest rated in safety, a point made in Tesla’s positioning, is meaningful to those seeking a safe vehicle for their families.

Step 4: Create a positioning statement

The positioning statement distills all the research performed in the previous stages into a succinct summary of what your company represents to customers in relation to competitors.

This is the heart of your positioning strategy, crystalizing your strategy for use in external marketing to customers, and internal communication to align teams within the organization.

Use this template to create your positioning statement:

For [your target customers] who [define customer need], [your company, product, or service name] provides [main benefit that serves as a compelling reason to buy]. Unlike [main competitor], [state what differentiates your offering from competitors] because [reason why target customers should believe your differentiator.]

For example, Tesla vehicles, including its new Model Y, have been given top ratings for safety. If the company wanted to focus on this aspect as its primary positioning for the Model Y, its positioning statement might look like this:

For families who care about a safe car, Tesla’s Model Y provides the highest safety ratings available. Unlike other electric cars, Tesla’s Model Y is designed to be the safest vehicle in its class because its low center of gravity, extensive crumple zones, and solid body structure provide unrivaled protection.

Pro Tip: A positioning statement is not to be used as written in external communications. It’s meant as a north star that guides all company activities and content around its brand. For instance, in the Tesla Model Y example, safety is featured on its website, but not its actual positioning statement.

Step 5: Validate the positioning statement

Once you’ve crafted your positioning statement, you’ve got to test it with customers and collect feedback to validate that the positioning works. Customer surveys are one method of doing so.

Send your customer base a survey via email, and give them an incentive to respond in a timely manner, such as a gift card for the first fifty respondents.

Once positioning is introduced into the market and takes hold in the mind of the customer, it is very difficult to change. Therefore, testing your new positioning statement will help avoid the need for revisions later.

Pro Tip: Some CRM software can help with marketing research by providing automation tools. CRMs like HubSpot allow you to create and automate the distribution of emails that contain a request to complete a survey. This allows you to streamline the process of sending out survey communications.

Hubspot CRM's workflow screen can help you build automations by setting specific triggers to activate different actions.

HubSpot’s automation features are simple to implement.

A final word on positioning strategies

One last point about positioning: Despite best efforts to avoid it, your company may need to reposition its offerings at some time in the future. This happens for many reasons, such as shifts in customer needs, changes in technology, the advent of new competitors, or even because the current positioning limits company expansion.

For example, Kia is known for its low-cost automobiles and its positioning was as a budget auto maker. But when Kia wanted to expand into higher-priced vehicles, it needed to reposition its brand to establish a line of premium cars.

Based on company need, be open to introducing new positioning.

By continuously staying abreast of how your customer needs evolve, your company’s positioning strategy can remain relevant and strong in the minds of your clientele.

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