Positioning, as April Dunford, the founder of Ambient Strategy passionately explains, is one of the most powerful yet misunderstood tools in the SaaS industry. It’s often seen as a straightforward task, something akin to crafting a tagline or building a brand. But as April points out, positioning is much more foundational. Think of it as the base of a house: without a strong foundation, the entire structure of sales and marketing efforts is shaky.
So, what exactly is positioning? April defines it as “the act of making your product the best in the world at delivering a value that a specific, well-defined group of customers cares deeply about.” In short, it’s about creating a context that makes a product easy to understand and valuable to a certain audience.
Positioning as context setting
To illustrate the concept, April uses an example involving a rather quirky product – a muzzle designed to look like a dog’s snout. Without context, it might seem like a peculiar accessory or even a joke item, but once we understand its purpose, we can make sense of it. Similarly, a product positioned poorly lacks context for customers, leaving them wondering, “What is this, and why would I need it?”
The power of positioning lies in setting this context, which in turn influences customer perception. April shows this with another example: a product designed to cover your face while eating messy noodles. Without context, it’s puzzling, even humorous. But within the context of protecting one’s face during a meal, it suddenly makes sense and has a clear value.
Here’s the product without any context:
Here’s the product with context:
The challenge of positioning in tech
In tech companies, context is often built around specific product features, pricing models, or targeted customers. However, many companies make the mistake of jumping into the market without deliberate positioning. April shares the story of a tech company that pitched its product as “email for lawyers.” However, the product didn’t compete well with standard email solutions like Gmail because it lacked certain features – like a calendar – and wasn’t positioned to highlight its unique attributes. Instead, April suggested repositioning it as “team collaboration for lawyers,” which shifted its competitive landscape entirely.
Now, instead of competing with Gmail, it would compete with Slack, a category where customers would expect to pay more, instantly increasing the perceived value of the product.
The pitfalls of unintentional positioning
One of the biggest mistakes companies make is positioning products unintentionally. Often, a founder sets out to create a “better email” or a “better CRM” without considering the broader market context or the competitive landscape. Customers, however, don’t experience the product in a vacuum. They compare it to other tools they know and often fail to see the unique value if it’s positioned too generally.
April offers another example of a Canadian company that initially positioned their product as a “robot” for manufacturing plants. The problem? Manufacturing managers were used to robots and saw this as just another, pricier option. By reframing it as a “self-driving vehicle” for industrial settings, they shifted the product’s perceived value entirely, opening up new possibilities for differentiation and storytelling.
Why are we so bad at positioning?
Despite its importance, positioning remains a mystery for many companies. When April started her career, she found little practical guidance on how to do it. A popular book on positioning, written in 1982, inspired marketers to think about the concept but offered no practical steps. April, with her background in engineering, decided to break down positioning into its component parts, transforming it into a more logical, actionable process.
Components of positioning
April breaks positioning down into five interconnected components:
- Competitive alternatives: Understanding who you’re competing against or what your customers would do if your product didn’t exist.
- Unique attributes: Identifying the specific features or capabilities that make your product stand out.
- Differentiated value: Articulating what your product enables customers to do that no other product can.
- Target customers: Clearly defining the segment of customers who value what you uniquely offer.
- Market category: Setting the broader context within which your product operates, which helps customers quickly understand its purpose and benefits.
Each component feeds into the others, forming a cohesive whole. For instance, the unique value of a product only makes sense in relation to its competitors, and the choice of market category shapes how customers view the product’s value.
The impact of strategic positioning: A real-world success story
April’s favorite example of strategic positioning involves a startup that initially positioned itself as an “enterprise CRM.” Despite having a standout feature, they found themselves constantly battling larger competitors in a price war. However, a chance meeting with a potential client in investment banking led to an insight: what if they positioned the product as a “CRM for investment banks” instead?
This slight repositioning transformed the company’s trajectory. By carving out a niche as the go-to CRM for investment banks, they sidestepped competition with generic CRM providers, eventually growing from $2 million to $80 million in revenue in just 18 months. Ultimately, this strategic positioning led to a $1.7 billion acquisition, demonstrating the enormous impact a well-crafted positioning strategy can have.
Positioning as a path to success
It’s about understanding exactly why your product matters and showing it to the right people in a way that clicks. When a company knows the real, unique value it brings and presents it in the right context, suddenly everything aligns. Positioning can shift a product from just “another option” to the clear, must-have choice. Done right, positioning doesn’t just help you compete; it carves out your own space in the market and sets you up for lasting success.
