The Positioning Statement: Finding a Window Into the Mind

After accepting our incoming teams to the StartupYard 2014 accelerator, we sent all of them the same assignment. We asked them to fill in a “positioning statement.” It looks a lot like this.

Product Positioning Statement:

Our Product is

For (target customers):

Who (have the following problem):

Our product is a (describe the product or solution):

That provides (cite the breakthrough capability):

Unlike (reference competition):

Our product/solution (describe the key point of competitive differentiation):

Why A Positioning Statement Is Important

The positioning statement contains the core elements not only of a product, but also of its marketing and sales strategy. And while most of our teams have worked primarily on ways of describing their ideas, a positioning statement does more than this: it also justifies the notion of that idea becoming a business. As I’ve written here in the past, it’s important for a startup to have the concepts of saleability and market differentiation baked into the essence of the product. Writing a positioning statement, like writing a SWOT analysis, can reveal basic strengths and weaknesses in a product while it is still in the “idea” phase.

Even more importantly, a positioning statement is the basis for a lot of the work that will eventually go into making and marketing a product. By identifying the target market *before* developing the product, if possible, startups can save energy and time by focusing more on fulfilling the needs of the market being targeted, and not applying their energies to areas that are of little interest to that market.

And a positioning statement, well-executed, can be transformed virtually complete into the core marketing message for a product, once it is developed. Take this copy from Nest’s webpage. Nest was acquired by Google recently for $3.2 Billion.

“Our mission is to keep people comfortable in their homes while helping them save energy, and with the next-generation Nest Learning Thermostat, we’re able to spread that comfort and savings to even more homes – and to help higher-efficiency systems perform the way they were meant to.”

Here are all the elements of a positioning statement. If the Nest founders filled in our form, it would look something like this:

Our Product is

For: Upper-middle class and wealthy people

Who: Own homes and spend a lot of money on energy costs and heating/cooling systems

Our product is a: Smart Thermostat and related products

That provides: Savings and increased comfort by improving efficiency of existing systems. Unlike: manufacturer provided systems

Our product/solution: Learns and intelligently adapts to the inhabitants to increase comfort at all times, while saving money

Young lovers on the beach looking to buy seagulls? There's an app for that.

Young lovers on the beach looking to buy seagulls? There’s an app for that.

A Positioning Statement Tells the Truth

The above “translation” of the Nest positioning statement doesn’t say exactly what their marketing copy says of course. They don’t mention wealthy clientele for one thing. But at $130 for a smoke detector, and $250 for a thermostat, that is surely the market they are targeting. Their products are priced high enough to be clearly exclusive, but low enough not to seem extravagant or make a money-wise customer feel foolish for purchasing. And anyway, that messaging is not only found in the price, but in mention of homeowners, and of “higher-efficiency systems.” These subtle cues indicate to customers that the product is made for people who value performance, and are willing to pay to get it.

These are all elements of Nest’s marketing that are informed by the market segment they have chosen to address, from the quality of the products, to the design, to the sales language and the pricing. And so the marketing message that says: “this product is for you,” when speaking to its target client, is backed up by a product that is built with that person in mind. The mission is clear: this is not a product for anyone, but for someone very specific, so that when the customer comes across the product and thinks about buying it, he or she can immediately see that it is made for them. 

Also, while the statement doesn’t appear to mention the competition at all, it does backhandedly reference the existing market by calling itself “next-generation,” and referring to “helping higher efficiency systems,” indicating that the current competition, while hardly worth mentioning, is manufacturer installed equipment- equipment that is, again, not good enough for the demands of the target market; the market served by Nest.

The main difference between a positioning statement and a full blown pitch is that the positioning statement says in plain words, what is really true about who your product is for, and what you believe its market fit to be. This will help you to stay away from visions of (and talk about) your product changing the world, even if it doesn’t really have the capacity or the capability to be a real world changing idea. Not all products have to be for everyone, and many of the best products aren’t. It will also keep you honest and focused; force you to focus on the needs of the clientele you have identified and are targeting. In short, a positioning statement is more likely to change the nature of a product, than changes to the product are likely to change the positioning statement.

Position Statement as Framework

Positioning of a product has often been described as “the organized system for finding a window in the mind.” That’s what Al Ries and Jack Trout described it in their book Positioning, a Battle for Your Mind, a groundbreaking work from 1981. The positioning statement supports these efforts: it targets the product toward a window, an opening, that the founders believe exists in the minds of consumers, and it attempts to fit the product through that window.

What our teams will discover about their windows: where they are, how big or small they may be, will be subject to change for the StartupYard 2014 teams, and so their positioning statements must also change with these new realizations. But keeping and referring back to the statements will provide an excellent guidepost for applying these changes rationally, and purposefully.

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