If the market for your product or service is taking off, you’re likely experiencing an influx of new entrants. Customers, potential employees and investors—who in the early days didn’t understand your product or were skeptical it would succeed—now tell you that “everyone’s doing that” and want to know “what’s different about you?” There are two key ways to differentiate yourself to grow in a crowded market. The first way to stand out is to refine your target market definition, which I wrote about in a post titled Sharpen Your Target Market to Build a Better Demand Generation Machine. The second way to grow in a crowded market is to improve your positioning.

I like to illustrate this with my take on an old joke: “While the optimist and pessimist argue whether a glass is half full or half empty, the marketer changes the glass.”

What is Positioning?

Positioning is a concept in marketing which was first introduced by Jack Trout ( “Industrial Marketing” Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestselling book Positioning – The Battle for Your Mind. There are as many definitions of positioning as there are marketing gurus and marketing textbooks. Here are just a few, starting with the original:

Positioning is not what you do to a product. Positioning is what  you do to the mind of the prospect. 

– Al Ries and Jack Trout in Positioning – The Battle for Your Mind

Positioning: How you differentiate your product or service from that of your competitors and then determine which market niche to fill.

Entrepreneur Small Business Encyclopedia

Product Positioning is consumers’ perceptions of a product’s attributes, uses, quality, and advantages and disadvantages relative to competing brands.

– Louis E. Boone and David L. Kurtz, Contemporary Marketing

Look At Things From Your Buyers’ Perspective

While some definitions, such as the one above from the Entrepreneur Small Business Encyclopedia, focus on the actions the marketer is taking, positioning is really about understanding things from the buyers’ perspective. So a good starting point for any positioning exercise is to do some first-hand research aimed at answering the following three questions:

  1. How do existing products or brands inhabit your buyers’ minds (i.e. the occupied spaces)?
  2. Where are the holes or unoccupied spaces?
  3. What is the best strategy and tactics to attain the desired position in the minds of your prospects (and customers)?

7 Steps To Position Your Startup To Grow In A Crowded Market

Coming up with answers to these three key questions isn’t a daunting task if you follow a clearly defined process. Here are 7 steps you can follow to position your startup to grow in a crowded market:


  1. Define the market in which the product or brand will compete (who the relevant buyers are)
  2. Identify the attributes (also called dimensions) that define the product ‘space’
  3. Collect information from a sample of prospects and/or customers about their perceptions of each product on the relevant attributes
  4. Determine each product’s share of mind
  5. Determine each product’s current location in the product space
  6. Determine the target market’s preferred combination of attributes (referred to as an ‘ideal vector’)
  7. Examine the fit between the product and the market

Craft a Succinct Positioning Statement

Now that you understand how your market looks from your buyers’ perspective and you’ve determined the best way to position your company/product to succeed, you need to capture and communicate it. The end result of a positioning exercise is best captured in a concise positioning statement. In his book, Crossing the Chasm, Jeffrey Moore provided a handy outline to help you craft a positioning statement:

  • For (target customers)
  • Who are dissatisfied with (the current market alternative)
  • Our product is a (new product category)
  • That provides (key problem-solving capability)
  • Unlike (the product alternative)
  • We have assembled (key whole product features for your specific application)

Keep in mind that you should use this template as a guide, rather than being a slave to this exact format.

Position Around Your Customers and Their Pain / Problem

A good positioning statement for a B2B product or service makes it clear who the customer is and what business problem they need to solve. If you do a good job of defining the customer’s problem, you won’t need to spend a lot of your time—or more importantly waste your prospect’s time—describing your product, because the customer will want to learn more in the next conversation.

bubble_carFocus On How You Can Be The Best, Rather Than Simply The Most Unique

Being noticed is not the same as being remarkable. Running down the street naked will get you noticed, but it won’t accomplish much. It’s easy to pull off a stunt, but not useful.

– Seth Godin, How to be remarkable

Buying criteria can differ wildly across markets and buyers. Some buyers are looking for performance, while other’s are looking for low price. Some look for value or a high performance/price ratio.

Regardless of the criteria, buyers are looking for the product or service that best serves their needs. When positioning your product, service or brand, resist the temptation to adopt a unique position simply for the sake of uniqueness. Otherwise, you may end up standing out for the wrong reasons!

What Makes a Good Positioning Statement?

According to Doug Stayman, Associate Professor of Marketing at Cornell University’s Johnson Graduate School of Management, these are the qualities of a good positioning statement:

  • It’s simple, memorable, and tailored to the target market
  • It provides an unmistakable and easily understood picture of your brand that differentiates it from your competitors
  • It’s credible, and your brand can deliver on its promise
  • Your brand can be the sole occupier of this particular position in the market, i.e. you can “own” it
  • It helps you evaluate whether or not marketing decisions are consistent with and supportive of your brand
  • It leaves room for growth

ZipcarPositioning Example: Zipcar

Here’s an example of a good positioning statement for Zipcar, as documented in Kellogg on Marketing by Alice M. Tybout and Bobby J. Calder.

To urban-dwelling, educated, techno-savvy consumers who worry about the environment that future generations will inherit [target and insight], Zipcar is the car-sharing service [competitive frame] that lets you save money and reduce your carbon footprint [points of difference], making you feel you’ve made a smart, responsible choice that demonstrates your commitment to protecting the environment [target’s goal].

Test Your Positioning Statement

Once you’ve created your positioning statement you should test it internally and externally to make sure it resonates. Here are a few questions to ask:

  • Is it clear who should buy, what they should buy and why they should buy?
  • If you substitute a competitor, is it still compelling?
  • Does the point of differentiation link to the buyer’s goals?
  • How does it resonate with your target customers?

Create a Communications Plan

Now that you’re done testing your improved positioning, make sure to put together a communications plan for rolling it out. The plan should address internal, as well as external communications, since the first step in communicating your new positioning is to make sure employees understand the motivations for the change and can communicate it clearly.

Did you enjoy this post? Please let me know in the comments! I’ll be reading them all.

Photo credits: Apples photo by StewC, Seedlings by Toa55Bubble Car by Zemlinki!, Ferrari by SoCal Car PhotographyZipcar sign by Josh NCinDC.


For more on this topic check out the following SlideShare: