Marketing Positioning: 6-Step Guide

Dear Trencher,

In this guide, I’ll share with you a proven framework used by B2B tech and service companies that are killing it in highly competitive markets.

Let’s get right to it.

What is positioning in marketing?

Positioning is about the perception your customers and prospects have of your brand or product in relation to competing brands or products within a specific category.

But positioning is also the process of influencing the perception your customers and prospects have of your brand and your product. This process is the sum of your marketing messaging, campaigns, and the experience your customers and prospects have with your brand and your product.

In a nutshell, it’s what you’re all about.

Why marketing positioning is a must-have for B2B businesses?

Guess when this was written?

40 years ago.

In their legendary book “Positioning, a Battle for your mind”, Al Ries and Jack Trout described the market conditions in 1980 as a “communication jungle”.

While it was so hard to stand out back then, how will you stand out now, when:

• Your buyers are in a crisis mode and more critical than ever before

• Your competition is growing exponentially (e.g. the marketing technology space grew by 5233% since 2011)

• Your buyers’ attention is under a constant barrage of messages, updates, and even interruptions from their families as they try to focus on their work!

But see, marketing positioning is more than just cutting through the noise of the “communication jungle” out there.

When your prospects don’t see any clear difference between you and your competitors, they will just focus on things like:

• Price

• Customer reviews

• Integration

And in our world of virtually infinite supply, this translates into an uphill battle: Your marketing campaigns have low response/conversion rates. Your sales cycles are long. You have to fight hard for every deal — and maybe even give discounts to close deals.

Developing a strong marketing positioning is not nice to have anymore. It is a must.

Effective positioning helps you:

• Stand out and cut through the noise of the over-marketed environment and attract your clients without being spammy

• Win the client when other serious players are bidding on the project too

• Win the right type of client who will:

  • Value and appreciate your product and gladly refer you to others

  • Partner with you in creating exceptional client results

• Command premium prices

• Make your business easier to sell, or to get an investment

• Make better decisions with more ease, and say “no” with more confidence, which in turn allows you to focus on the 20% of actions that generate 80% of results

In addition, it allows service-based companies to simplify their proposals and systematize their delivery. This in turn creates more time to work on business development and allows them to shift from being “bodies for hire” to becoming a go-to expert in their niche.

The 6-Step process to define your marketing positioning

If you want to create or update your positioning, here are the 06 practical steps you need to take.

Step 1. Choose your focus go-to-market segments

Imagine you’re scaling a SaaS company and searching for a CRM. You’re looking at two options:

• A CRM that gets your sales organized

• A specialized CRM that helps to organize your sales, track recurring revenue, and the churn rate

Which one will you choose? The second one seems like a natural choice for a SaaS company.

That is the power of market segmentation.

Most B2B companies skip this step and create a customer avatar that’s essentially the lowest common denominator of their potential customers. This leads to two most common mistakes that rob B2B companies of revenue: one-size-fits-all positioning and broad targeting.

Step-by-step:

• Export a list of your customers from your CRM / accounting software, including the total amount you invoiced

• Segment them by industry, revenue, team size, products or services they bought from you

• Define what segments have the highest LTV and generated more revenue than other segments

• Pick the most promising segments and potentially brainstorm additional market segments, ending up with 5-10 segments to evaluate

• Make a copy of the market segmentation template below

• Below the standard criteria outlined in the template, outline other criteria: person’s and company’s characteristics that make them really care about your unique approach and features. E.g. amount of purchase orders and invoices in different formats, technology stack, size or growth of a specific department, the background of the decision-maker, ad spend, etc.

• For each segment:

  • Describe the real reason companies in this segment (would) buy your product and what challenges you solve for them

  • Rate every segment on all criteria

  • Pick a segment or two (depending on your resources) to focus on. Note that you’ll need a separate ICP (next step) for each segment you choose

Step 2. Develop an Ideal Customer Profile (ICP)

Your ICP helps you capture the information you need to target and qualify prospects who are more likely to convert, stay longer, generate more revenue, and give you the best referrals, testimonials, and case studies.

An ICP is a list of characteristics that your best customers from a specific market segment have in common.

It describes who they are, their challenges and goals, the value they get from your product, their buying process, objections, and purchase criteria, and why they choose your product instead of competitors.

A common mistake companies make is to produce a generic version for all segments — or base it on their biased interpretation. You need up-to-date (post-COVID) data from in-depth interviews with your best customers from the target segment.

Step-by-step: Check out our detailed guide on how to develop an ideal customer profile.

Step 3. Analyze your competitors

The essence of positioning is about how your customers perceive your brand or product in relation to the competitors they’re comparing you to.

You’re usually compared to two types of alternatives:

• Your direct competitors — global or local market leaders, or products in a similar price and feature range

• Other alternatives, like Excel or ‘hire an intern’

The latter is especially important if you’re operating in an emerging category, of which most of your prospects are not aware. For example, when Drift was starting, most marketers were not using chatbots on their websites, so they had to position themselves against lead generation forms.

Step-by-step:

• List the competitors that you’re coming up against in your sales

• In your ICP interviews, include questions like:

  • What have you tried in the past to deal with the challenge you’ve just described?

  • What did you find lacking – and what do you think the right solution should have been?

  • What other solutions did you consider in the past (and why did you choose us)?

• Analyze the competitors’ marketing positioning strategy.

  • Do they have a niche focus?

  • How do they differentiate themselves?

  • What arguments do they highlight on their main web pages?

  • What do they call themselves?

  • Analyze their reviews: what do their customers really like about them and what are their main complaints?

• Make a SWOT analysis. Considering what matters to your ICP the most, what are your strengths and weaknesses, where do the competitors fall short (opportunities), and how do they beat you (threats)?

Step 4. Pick your market category

From the perspective of your client, a market category is what they’ll label your business or your product with.

“Oh, it’s a CRM system”, or “ah ok, they’re a marketing agency”, they may say when they learn about you the first time.

Each category comes with a set of expectations (about features, prices, business models…) and determines which competitors you’ll be compared to.

You cannot avoid being “put in a box”, or labeled with a market category. It’s how your prospects deal with thousands of solutions and products fighting for their peace of mind.

But you can influence how your customers and prospects perceive your brand or product in relation to others in the category. That is what a positioning strategy is all about.

Here are the 12 most common positioning strategies and examples for B2B tech and service companies.

• Strategy #1: Head to head: winning with superior experiences

• Strategy #2: Change the battlefield: pivot to an adjacent category

• Strategy #3: Vertical positioning: “Big fish, small pond”.

• Strategy #4: Niche down

• Strategy #5: Positioning for B2B services.

• Strategy #6: Challenge the status quo by going all-in on unique features.

• Strategy #7: Challenge the status quo by addressing a common objection.

• Strategy #8: All-in-one or one-stop-shop

• Strategy #9: Head to head: redefine an emerging category

• Strategy #10: Create a new category: The work in creating a new category requires a lot of teaching because unlike with other positioning strategies, you cannot rely on what people already know about the category. You need time, patience, and often, deep pockets.

• Strategy #11: The power-up add-on: With this strategy, you position your product as an add-on to other products — or you use the add-on strategy as a part of your go-to-market mix.

• Strategy #12: Change your position in a review site category: Change your position in an existing category; Enter a new category; Highlight your position as the leader in something specific; Petition G2 to create a new category.

Step 5. Develop a Unique Value Proposition: be different in a way that matters

As explained above, value proposition is a key marketing message that communicates why you are different and worth buying. Essentially, it communicates why your positioning matters to your ideal customers.

Note the two elements: differentiation, and relevance to your ideal clients.

Step 6. Update your marketing message with a new positioning

The last step is updating your marketing message with a new positioning to influence the perception of your customers.

At a bare minimum, you should update the key marketing and sales materials:

Your homepage, about us page, and product/services pages

Your company’s social media profiles, and LinkedIn profiles of your founders, sales, and marketing people

Your sales presentation and proposals

But changing the way the company thinks about itself, brings about a new sense of purpose and creates a new momentum and energy.

You’ll likely get inspiration for your product roadmap, the way you service your clients, and sometimes also on the business model.

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See you in Trenches 😉

Adechina D. ODJO