Product positioning is the art of identifying and tailoring your product’s benefits to different segments of your target market.

For example, let’s say you’re a company who provides Health & Safety support to businesses. If you were targeting Site Managers, you might go in with the angle of making their life easier, saving time, and removing the risk of getting things wrong.

If you were selling to CEOs, on the other hand, it might be more effective to go down the legal route, highlighting how your service helps businesses keep compliant, avoid fines, and stay away from enforcement action.

As you can see, both are very different approaches, but both trigger emotions relevant to the audience. The result? Marketing activity that:

  • Reaches,
  • Resonates,
  • Connects, and
  • Converts.

Where to start

Before you can position a product you need to know where exactly it sits within the minds of existing and potential customers, and that means getting out there and running some research.

Without this first and fundamental step, essentially, you’re trying to be everything to everyone, and in today’s competitive market that just won’t fly.


This is the process of grouping customers based on common preferences and behavioural traits. The criteria used will inevitably vary from business-to-business and product-to-product, but some pretty standard ways to slice up your audience include:

  • Demographically,
  • Psychographically,
  • Geographically,
  • Behaviorally, or
  • By product benefits.

In terms of how to get this kind of intel, it’s usually a combination of CRM data, customer feedback, employee stories, interviews, focus groups, social intelligence, and website data.

Tip: if you’ve not got the resource in-house and have the budget to, it might be worth outsourcing this step. Not only will it speed the process up but a third party will be much more objective.

Evaluating what you’ve got so far

By this point, you should have several different segments at your disposal; but that doesn’t necessarily mean they should all be used.

To gauge whether or not a cluster’s got market potential analyse each with the following questions in mind:

  1. Is the segment big enough to warrant the marketing costs associated with bespoke positioning?
  2. Even if the answer to question one is yes, would the forecasted profits of marketing to this group outweigh the associated costs?
  3. Are enough similarities present to generalise how you market to them?
  4. Are the customer traits in this group different to those in other groups?
  5. Is this segment accessible to market to?
  6. Will these people respond better to bespoke positioned marketing than general marketing?

Once you’ve answered questions one to six and decided which segments to keep and discard you’re ready to move on to the positioning itself.

Picking out your benefits

The insights you gathered during the segmentation process coupled with your buyer personas (if you have them) can now be used to understand customers’ motivations and develop product positions for each.

Tip: if you’ve not already got buyer personas we’ve covered how to create them here.

In practice, pretending you’re a social media marketing agency, you should end up with something a bit like this:

Product positioning template

And to take it one step further, inspired by Arielle Jackson over at First Round, here’s a template to follow when solidifying each segment:

  • For (target customer)
  • Who (statement of need or opportunity),
  • (Product name) is a (product category)
  • That (statement of key benefit).
  • Unlike (competing alternative)
  • (Product name)(statement of primary differentiation).

Now, if you apply this to segment #2 from the table above you should end up with something a bit like this:

For small business owners

Who have little time,

Our social media management service is a one-stop-shop agency

That saves you time while winning more business.

Unlike trying to do it all yourself

Our social media service takes care of everything from ideation to analysing and unlocks your business’ social opportunities, builds your brand’s awareness, and converts users into customers.

Don’t forget about your competition

As well as creating marketing material that resonates with your audience you want to make sure it stands out from your competition too. After all, if you’re all fighting for customers with the exact same proposition what’s to make someone choose you over them?

So, conduct some primary and secondary research to get a good understanding of:

  • How your competitors are positioning themselves;
  • What strategies they’re using;
  • What is and isn’t working for them;
  • How your offering is different from theirs; and
  • Where you can get a one up on them.

Identify any gaps in the market

While you’re doing your competitor analysis take a step back and take a look at the bigger picture of the market too. Are there any tricks you and everyone else are all missing? Is there a gap in the market your product now, or in the future with a few tweaks, could fill?

But remember, the same way we said you shouldn’t automatically run with a segment just because it’s there, don’t go all guns blazing to fill a gap too soon either; do some number-crunching to make sure it’s profitable first.

Maintaining your product positioning

Products evolve. Buyer behaviours evolve. Customer wants evolve. Everything evolves. So don’t fall into the trap of thinking your first round of product positioning is gospel forevermore.

To make sure it remains relevant and effective make a point of periodically revisiting your results and answering questions like:

  • Has our understanding of the market changed?
  • Has our product changed?
  • Could we be wording our benefits better?
  • Have we entered any new target markets?
  • Have our competitors started doing anything differently?
  • Is our current approach working?
  • Are some segments proving more effective than others?