What is B2B Positioning?
B2B positioning is the strategic process of defining how a product or service stands out in the minds of target customers. It involves finding a competitive advantage and distilling it down to a simple yet impactful idea.
Positioning is inherently relative because it involves defining where your product or service stands in relation to other offerings in the market. Good positioning quickly gives customers context and helps them understand what you’re selling, faster.
B2B product positioning isn’t just a marketing exercise–it’s a business strategy. It’s your organization’s North Star, the bedrock of your sales pitch, and should even inform new product developments and pricing strategies.
10 Benefits of Good Positioning
B2B Positioning helps you stand out in a crowded marketplace and helps your target customers understand and value your product's unique benefits. Here are ten key benefits of good positioning.
1. Quickly adds context
Good positioning helps potential customers quickly understand what your product is about and where it fits in the market. This context is crucial as it influences their perception and willingness to consider your product.
2. Highlights unique features
Positioning allows you to highlight what makes your product unique compared to alternatives. By clearly communicating your differentiators, you can stand out in a crowded market and attract customers who value those unique aspects.
3. Enhances marketing and sales efficiency
With strong positioning, your marketing and sales efforts become more effective. It ensures that your messaging resonates with the right audience, reducing the time and effort needed to convince potential customers of your product's value.
4. Speeds up sales cycles
When customers understand your product's value and how it differs from competitors, they are more likely to make quicker purchasing decisions. This leads to shorter sales cycles and higher close rates, as prospects can see the immediate benefits of choosing your product.
5. Justifies premium pricing
Clear and compelling positioning can justify a premium price. Customers who see your product as uniquely valuable are less likely to object to higher prices and more willing to invest in a solution that meets their specific needs better than cheaper alternatives.
6. Boosts customer loyalty
When customers buy a product that is well-positioned, they have a clearer understanding of what to expect. This alignment between expectation and reality leads to higher satisfaction, lower churn rates, and stronger customer loyalty.
7. Aligns business strategy
Effective positioning informs and aligns various aspects of your business strategy. It influences product development, marketing campaigns, sales approaches, and even customer service tactics. This holistic alignment ensures that every part of your business is working towards a common goal, driven by a clear understanding of your market position.
8. Optimizes resource allocation
By knowing exactly who your target customers are and what they value most about your product, you can allocate your resources more efficiently. This means focusing your marketing and sales efforts on the segments that are most likely to convert and provide the highest return on investment.
9. Builds market credibility
A well-positioned product helps establish your company as a leader in your industry. When your product is clearly defined and differentiated, it enhances your credibility and authority in the market, making it easier to build trust with potential customers.
10. Supports scalability and growth
Strong positioning provides a solid foundation for scaling your business. As you grow, your positioning helps maintain consistency in how your product is perceived, making it easier to expand into new markets or introduce new products under the same brand umbrella.
Positioning Happens (By Us or To Us)
As humans, we categorize and group things based on our existing knowledge and experiences. When we encounter a new product or service, we instinctively place it within a familiar market category to make sense of it.
For example, if we introduce a product as a "smartphone," customers will immediately associate it with other smartphones like iPhones or Samsung Galaxy devices. They'll expect features such as a touchscreen interface, app compatibility, and mobile connectivity.
On the other hand, if we position our product as a "fitness tracker," customers will form entirely different assumptions about its competitors, pricing, and features. While both smartphones and fitness trackers may share capabilities like tracking steps and monitoring heart rate, they serve distinct purposes and target different user needs.
Despite these shared functionalities, customers perceive "smartphones" and "fitness trackers" as separate market categories due to their unique functionalities and intended use.
By positioning the product within the right market category, we can align customer expectations, highlight its distinct advantages, and carve out a clear competitive advantage in the minds of consumers.
If we don’t define a product's position, our competitors are happy to do it for us.
Product Positioning Example: Starbucks’ Cake Pop
One of my favorite examples of positioning comes from April Dunford’s book, Obviously Awesome. In it, she uses the analogy of a baker innovating with cake.
In this analogy, she wants to invent a cake that breaks all conventional dessert norms. People can walk around with it and drink coffee at the same time. This cake is portable, and more of a snack than a dessert.
As pitches her cake creation to customers, she positions it as “Cake 2.0,’ but she highlights where this approach falls short:
“Right up front, you set the context for what your product is all about. Your ‘default’ position was cake. But when we think of what makes a better cake, we think of bigger slices, better ingredients, and more frosting. The qualities that make your product special aren’t qualities that you would normally associate with cake at all. Sticks do not belong in cakes.”
Then, she suggests an alternative. Instead of positioning it as Cake 2.0, she positions it as a lollipop, or cake pop.
“Of course it has a stick. Of course it has a ball. Of course it’s a snack and not a dessert…. A cake pop is easy to understand and, for coffee-drinking grown-ups on the go, it’s a big improvement over your run-of-the-mill lollipop intended for kids.”
The new pitch gives customers a new context and frame of reference.
The hard part about positioning is that the best frame of reference isn’t always the most obvious one. Product positioning, when done right, helps us uncover the competitive context, or market category, where we’ll have the most success.
Positioning vs. Messaging
What’s the difference between positioning and messaging?
Positioning is the internal strategy that defines what sets your offering apart from competitors. It informs all messaging. Messaging is the external language used to communicate and reinforce your positioning.
Together, positioning and messaging are the foundation of your go-to-market (GTM) strategy. They ensure a consistent and compelling presentation of your offering to the market.
How is Positioning Different from Branding?
People use the terms “positioning” and “branding” interchangeably, but they are not the same. If you want to start a controversy, you can head over to LinkedIn and try to define branding. Everyone has a different definition. My favorite, though, is Austin McGhie’s definition. In his book, Brand is a Four-Letter Word, he writes:
“A brand is emotional shorthand for accumulated or assumed information. A brand is present when the value of what a product, service, or personality means to its audience is greater than what it does for the audience.”
In his book, he explains that a brand is a marketplace response. It is a prize that is awarded by the marketplace only after a company successfully positions its product or service. He says:
“You don’t build a brand–your audience does. You don’t give a brand to the marketplace–you get a brand from the marketplace. Until the marketplace says you have a brand, you simply have a product. And there’s nothing wrong with having a great product or service. Just don’t mistake it for a brand.”
In short, your “brand” is how customers perceive you. You can control and influence this through visual and written messaging, and your products and services.
Positioning for Different Growth Stages
Positioning changes as a company grows. In the beginning, you’ll cast a wide net as you look for high-level product-market fit. But as the company matures, you’ll need to focus more on what makes it special compared to other companies.
Eventually, when the company is more established, you’ll have to contend with new market entrants, shifting customer expectations, and other external forces.
Let’s look at how a company adjusts its positioning to match where it is in its growth journey.
Seed Stage
During the seed stage, your startup is still developing its product or service and validating its market assumptions. At this point, your goal is to understand customer needs and experiment with different messaging approaches to identify potential market fit.
With limited resources and data, your startup will make educated guesses about its positioning, often based on the founders' vision, market research, and early customer feedback.
At this stage, you’ll typically cast a wider net with customers to find which segments value your offering most. While it’s too early to do in-depth qualitative positioning research, you should apply positioning frameworks to strategic decisions.
Series A Stage:
By the Series A stage, your company has gained some traction and validated its product or service in the market. Positioning efforts become more focused as the company hones in on its target market and refines its value proposition based on customer feedback and market validation.
Your company should narrow down its focus and concentrate on points of differentiation.
Series B/C Stage:
In the Series B/C stage, the startup is focused on scaling its operations and expanding its market presence. Positioning efforts become critical for supporting growth initiatives and maintaining consistency in messaging across various customer segments and channels.
The company tightens its positioning further to ensure scalability, emphasizing its unique value proposition and competitive advantages to attract new customers and retain existing ones.
Later Stages/Maturity:
As the startup reaches later stages and matures, the market becomes more competitive, and customer expectations evolve. Positioning efforts shift towards refining the company's positioning strategy to stay ahead of competitors and remain relevant in the marketplace.
The company continuously monitors market trends, customer feedback, and competitor movements to identify opportunities for refining its positioning. This may involve adapting to emerging market needs, leveraging new technologies, or adjusting messaging to address evolving customer preferences.
Finding Your North Star
Strategic positioning is crucial for B2B success. It's about framing your product in a way that deeply resonates with your target market, transforming it from being overlooked to becoming a market leader.
Again, you can think of positioning as your company's North Star, guiding product development, marketing, and sales strategies. It involves identifying what makes your product unique, understanding the competitive landscape, and communicating your value to the right audience. This ensures your product stands out, attracts, and retains customers, and supports long-term growth.
Remember, positioning is not a one-time task but a dynamic process that adapts to market trends, customer needs, and competition. By mastering positioning, you unlock new growth opportunities and achieve lasting success. This strategic investment enhances all marketing and sales efforts, making it essential for any B2B company aiming to excel in today's competitive landscape.
If you need help defining or refining your positioning strategy, SharpStance can help. Let us guide you to find your North Star and steer your business toward success.
Subscribe to receive the latest blog posts to your inbox every week.
