Positioning strategies for products and services often involve the same inputs: competitive analysis, customer and market research, unique value propositions, and the like. Armed with the research and analysis, marketers and strategists go about crafting a positioning strategy that will shape how customers and clients view the product or service—and help them determine whether to buy it or go with something else on the market. It’s a critical exercise for any product or service—especially in a crowded market or one in which a few competitors have the majority of market share. Marketers, product owners, and subject matter experts have to answer the customer’s “why should I buy?” question in clear and compelling terms.
But answering that question has become increasingly difficult as more products and services flood the market. In our experience, a couple things are often missing from the positioning and messaging process, which can make all the difference for how successful the strategy is.
Understand the influence of your overall brand
Most people—and potential customers and clients—have an existing perception of corporate brands. When those companies launch new products and services, anything that falls too far outside of that frame of reference presents challenges that marketers have to work harder to overcome. Take insurers such as Geico and Progressive, for instance. Their brand positioning is largely rooted in cost savings and convenience. A brand like Allstate, however, is positioned as being service oriented and offering comprehensive coverage, and the target market may care less about cost savings and online convenience than they do about having an agent handle everything for them. What happens if any of those brands rolls out a new product or service that falls far outside of that brand frame of reference—for instance, a premium, white-glove service or product offering from Progressive or an inexpensive, bare-bones product from Allstate? Will it click with potential customers? It could work, certainly—but it will take a lot more effort for marketers to convince customers to buy in because they already have a perception of the brand.
Right now, we’re seeing more companies traditionally in the services space—particularly large professional-services companies—launching product portfolios that include software-as-a-service (SaaS) platforms. They’re seeking to embed their subject matter expertise and breadth and depth of client experience into a licensed product. One of the biggest hurdles for those companies is getting potential customers and clients to associate their brands with software in the first place. Too often, marketers leave this out in their desire to “productize” a service—but it’s a critical step in the process. Through strong positioning and messaging, traditional service providers can first associate their brand with products and then combat the perception that they’re inferior when competing with SaaS companies.
Establish how you stand out from—but also what you have in common with—competitors
When it comes to positioning a product or service competitively, all companies have to determine what their competitive advantage and points of differentiation are. Yet there’s often an overemphasis on those factors and not enough attention given to points of parity, a concept Dartmouth marketing professor Kevin Keller has introduced and examined in a number of publications. Companies offering similar products and services that solve the same set of pain points or business challenges are competing for the same clients and customers. To compete at all, they need to achieve a certain set of must-haves. Professional services firms, for example, need to have the table stakes expertise and years of client experience to solve their clients’ problems effectively and efficiently. Cloud-based SaaS programs need to meet a number of baseline safety and security requirements and standards for uptime and downtime.
These things sound simple and obvious, but marketers often leave them out of positioning strategies, not realizing how much value they hold for potential customers. If they fail to show their offering is just as good as competitors, it opens the door for competitors to use those points of parity to their advantage. The goal when it comes to points of parity isn’t to beat a competitor on a given dimension (say, speed of customer service responses) but to remove it as a differentiator.
We can look to the failed streaming service Quibi as an example of what happens when a product focuses too much on its point of differentiation and not on its points of parity—the ones that customers actually value. Quibi’s main points of differentiation were custom, short-form content (all television episodes, many featuring high-profile celebrities, were ten minutes or less) and the fact that it was a mobile-only platform. So from the get-go, Quibi couldn’t compete with other streaming services like Netflix and Hulu, or newer ones like Disney+, because it failed to achieve points of parity—such as allowing customers to watch on multiple devices and providing a mix of content—that the target market actually really values. In the end, Quibi handed its competitors an advantage by turning something that should have been tables stakes—watching a show on a TV—into a differentiator.
Positioning and messaging strategies are essential for successfully marketing a product or service—there’s no question about that. Across every industry and category, competition is growing, and innovative new entrants are coming on the scene—take Zoom upending the video conferencing market, for example. By incorporating these oft-missed elements into positioning and messaging strategies in addition to the typical inputs, companies can develop clearer and more compelling answers to the “why should I buy?” question—and better position themselves to defend their place in the market when new competitors emerge.