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Positioning: First is Best, Better is OK, Nothing Else Matters

Updated: Jun 27

By Rob Meissner, TCV Partner -

Traditionally, marketing consists of 4 P’s: Product, Price, Place and Promotion. Yet, early in my career, I learned about a 5th P, Positioning, which is perhaps the most important.

Why is positioning so important? Because it ties all of the other elements together. Everything from your elevator pitch, to sales presentation, website, and collateral materials, will flow from a well-crafted positioning statement. In addition to crystalizing the marketing efforts, developing the positioning statement up front will help with the product development effort. In one company I worked for, we had a rule that development on a product could not start without an approved positioning statement. This ensured that resources were not wasted on projects that would not result in something that wasn’t going to be compelling for customers. This rule also helped make the development trade-offs that inevitably arise simpler to make. Was the proposed feature/function critical to achieving the product positioning or not.

So what is a Positioning Statement? A positioning statement answers the most critical questions in a single sentence, two at the most. To quote Shakespeare, “Brevity is the soul of wit”. To be effective, a positioning statement is clear, crisp, concise, and compelling.

What is the product or service? It is amazing how difficult it can be for a start-up company to define the product. Often there is a temptation to list all of the possibilities for fear of missing out on a potential opportunity. The result is often a lack of clarity on what specifically is the product or service being offered.

Who is the target customer? In defining the target customer, I start with filling in the sentence “This product is for ……. (type of person, their job title, type of company, etc.) who ….. (share a common problem/pain point/need.) Then I ask the question; “Who does this exclude?” If there are people included in my definition of the customer and the problems that they are trying to solve are not good targets, then I know that the definition is not targeted enough.

Frame of Reference. When encountering something new and unfamiliar, people often evaluate it relative to a category or product that they are familiar with. While not always required, defining the most appropriate frame of reference for a customer can be really powerful. As an example, Pillsbury initially positioned their Toaster Strudel as “Like a Pop Tart, only better”. While I don’t generally like positioning against a specific competitor, in this case it worked. By framing it as a Pop Tart alternative, potential customers immediately understood what it was (a pastry convenience food), how it was prepared, and if they were the type of person who would like something like a Pop Tart, only better.

Why should they care? What is the benefit? The first challenge is to distill it down to a single compelling benefit. You may have multiple features that are attractive, but what is going to get a customer to turn their head and say I want to learn more. The next challenge is to honestly evaluate whether the customer you have defined really cares about that benefit. Finally, while not part of the positioning statement, you need to identify the proof points that support or validate the benefit. In summary, if someone asked you why you bought your last car, I bet you would describe one compelling reason. For vehicles in its class, it offered the most comfortable ride, the best entertainment system, best gas mileage, most affordable, most leg-room, etc. You may then list specific features that back up your conclusion, but there was one compelling reason that you cared about the drove your purchase decision.

What is the competitive differentiation? A rule of thumb that I learned a long time ago for competitive positioning is “First is best, Better is OK, Nothing else matters.” Why is first best? First, it’s an explicit claim that no can competitor offer that feature/benefit. Second, people are creatures of habit. If your “first” is meaningful to the customer, they will tend to stick with you even after competitors release products with similar or even better features. If you are going with a “Better” competitive positioning, it needs to be substantial and meaningful. Having multiple features that are kinda sorta better doesn’t matter. Are there products that are launched into a crowded category with little differentiation and still do well? Sure. Sometimes a great sales team or clever marketing can succeed. Would I bet on it? No.

To illustrate what I mean, let me discuss a couple of examples. In the early 80’s, before there were laptops, Compaq Computers launched a product that was positioned as “The World’s First Luggable Computer”. The product was a computer and that meant that included a keyboard and a small screen. Its benefit for the target customer, people who traveled for business, was that it was luggable. The proof of that benefit was that the product contained its own case, could fit in the overhead bin of an airplane, and that it was under 20 pounds. Note that the benefit was not oversold. The product was luggable. It was certainly not light and easy to move about. That specific benefit further served to focus the definition to a target customer that had such a huge need to move their computer to different locations that they were willing to put up with the fact that moving it around was not easy. Finally, by claiming to be the world’s first, the positioning statement was claiming that no other competitive product provided the same benefit. They communicated all of that in five words. The product was very successful and positioned the company to be a leader in the laptop market for years.

Take another example, Apple used the tag-line “Our most personal computer yet” when they launched the Apple Watch. While this is their tag line, I suspect that their internal positioning statement was not that different. Since they were far from the first smart watch on the market, they needed to focus on the compelling benefit that made it better. First, they framed the product as a personal computer and not a watch. In so doing, it implicitly claimed that everyone can display the time, count steps, measure your heart rate, etc. What made this different and better was that it also integrated the functions of computer, displaying email etc.

Ok, large companies with established brands have somewhat of an unfair advantage because certain elements of their positioning can just be inferred. So, let’s look at a positioning statement that I developed for a start-up. The initial positioning statement was “The Sentence Wheel Mobile App is the first technology-based, supplemental education tool designed to enhance adult ESOL classroom instruction”. There are several things that I think this statement did well. The product is an App that serves as a supplemental teaching tool. By extension, it is not intended to be the primary curriculum content. The target customers are instructors of adult ESOL (English for Speakers of Other Languages) classes.

In summary, focusing on getting your product positioning statement right will pay huge dividends down the road. If you need help with your positioning statement feel free to contact me. Rob@TCV-Growth.Partners


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