How do you decide product positioning?

This is a big question! I’m assuming we’re talking about new product positioning vs re-positioning an existing product. If you’re working on a mature product, it will be very difficult to change the position of that product in the market.

For a new product, I would research and consider the following perspectives:

• Company vision, narrative, and category - What is the vision for the company? What’s the narrative? Is there a category you’re trying to create or win? How does this product fit into the story of the business?
• Product-market fit - What does the product actually do? What are its key features? What are the use cases? Who is it for? Are the personas known? What does this product do that is 10x better than the next best alternative?
• Competitive positioning - What are the competing products in the space? What are these competing products good at? Is there white space where your product can wedge itself into the market?
• Adjacent offerings and services - Does this product interact with an existing suite of products? Does it come with professional services?
• Ecosystem - How does this product engage partners within your ecosystem? Why should your partners care?

Once you’e done this research, it’s time to put on your Geoffrey Moore hat and build a few 2x2s where you choose the x-axis (key benefit) and y-axis (key differentiation) such that your product is farthest in the upper right corner vs the competition. By this point you should have a pretty good sense of how you might position the product. Draft up some positioning statements and start testing them with sales, with customers, and with analysts.

Other than building a good product that solves real problems for customers, positioning is probably the most important thing to get right, because it's so strategic and foundational to how you go to market.

At its core, positioning is an internal construct. It’s what you tell yourself internally to align on your strategy, the perceptions you want to create, your differentiated role in the market, and your relevance to your customers.

I think about 5 main inputs when shaping positioning:

• Market Category – the space in my customer's mind where our company and/or product fits. This is the frame of reference for our buyers.

• Target Audience – our ideal customer profile + the buyer and user personas who are a good fit. BTW, I think of ICPs and personas as different but related things. ICPs are an output of market segmentation and reflect the characteristics of companies and/or teams that make a good fit for your products. Personas are the actual people in those companies/teams who buy and use them.

• Competitive Alternatives – how our target audience would try to solve this problem if we didn't exist, and why they'd fall short (de-positioning the status quo is so important).

• Value Proposition – the main problem we solve for your customers, and the key benefit we provide.

• Differentiation – how we're unique or comparatively better than alternatives.

While not critical, I also find that it can be useful to document the market perceptions of my company that we want to create, shift or reinforce. I like to describe this in a set of From > To statements. This is particularly useful if you are expanding into an adjacent market via acquisition or new product development, or as you're repositioning your company to respond to changing market dynamics.