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The Importance of Value-Based Positioning

The old saying goes, “If a tree falls in the woods, and nobody is there to hear it, does it make a sound.”

Here’s the product version: If your product launches, and nobody understands its value, does it succeed?

Positioning isn’t a tactical marketing to-do item; positioning is a key deliverable in your product strategy.

Value to the customer is the key factor of positioning. Strong positioning defines what it is, who it’s for, and why they should care (ie., value). Positioning also explains why your product or service is different from the alternatives already available. Positioning should never be left to the last minute as a simple messaging exercise.

This value-based positioning of your product is so important, we cover it in our Principles of Product Strategy course. If you cannot clearly define your positioning at the strategy and business planning stage, how can you expect to get anyone in your organization excited about it?

Building on the Foundation of Your Product Strategy

Positioning serves as a foundation of an effective product strategy. Clarify the key thesis for your product strategy by explaining the strategic opportunity, your ideal target customer, and your competitive differentiation.

Strategic Opportunity

The Strategic Opportunity is your vision, your aspirations for the product. It is a concise summary of the opportunity, describing both the high-level problem and the results it will achieve for your business.

Ideal Target Customer

Your ideal target customer defines the market segment and persona you will serve. It starts with the problem you solve but should also explain the customers’ buying motivations.

Competitive Advantage

Your competitive differentiation explains the unique capabilities and characteristics that will put your product in a place to be successful and, at least in your ideal target customer’s mind, be the no-brainer solution for their problem.

With an effective product strategy, each of these is connected with the other. You will find that your ideal target customers are those people who value both your competitive differentiation and your solution aspirations.

Value-based positioning defines each foundational element in the context of its value to your potential clients. They don’t care about your product or your company or your strategy; they care about solving their problems in a new or different way. Positioning must focus on customer value.

The Core Components of Value-Based Positioning

There are three core components of value-based positioning for a product or initiative.

  1. The problems you solve;

  2. The value created for the customer by solving this problem; and

  3. The competitive differentiation you will leverage to do this uniquely.

Problems to Solve

Everything in product begins with the problems to solve.

A product is a solution to a persona’s problem.

If you want positioning that is clear and understood, you must begin with the problem as seen by the customer. Yet products and their messaging frequently neglect the customer perspective. Too often messaging explains the product and its features while omitting the problem the customer is looking to solve.

Value Created

Once the customer sees that you understand their problem, the next step of positioning is to help the customer understand the value they gain from solving this problem. This helps them understand why they should care about solving the problem; what gets better with buying your product.

We like to classify two types of value: tangible value and intangible value.

Tangible Value

Tangible value is value that you can measure and see. This is aspirin getting rid of a headache. This is increase sales or decrease costs. This is the functional outcome of solving the problem for the customer. The pain that goes away. The gain they achieve. Knowing and articulating the tangible value is critical for value-based positioning.

Intangible Value

Intangible value is the emotional or social value the customer gains from addressing the problem. This could be the peace of mind someone gains from knowing something is taken care of. It can be the status they gain by achieving something. Understanding and communicating the intangible value can be a superpower. It shows the customer that you truly understand them and what they value. Your ability to connect with buyers on the value they could receive is often the only differentiation you need

Your Competitive Differentiation

The final component of value-based positioning is to define why your product is different from other solutions. Products don’t necessarily have to be better; they must be different in a way that customers value. Differentiation could be a specific feature or capability, but it could also be an aspect of your company’s competitive advantage.

Get Strategic with Value-Based Positioning

It is not difficult to develop value-based positioning. You don’t even need an effective product strategy. But you do need a deep understanding of your market segment and its challenges.

Start by defining the problem from the lens of the customer. Then, define the tangible and intangible value created by solving the problem. And finally, define the competitive differentiation in your product that makes it better and different than alternate solutions.

Positioning isn’t messaging; that happens later.

Value-based positioning is a key element in your product strategy.


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