B2B Product Positioning: How to Be Certain Your Product Sells

Do you sell products in the B2B market? Looking for a model to clearly differentiate your product's value?

In this article, you'll discover a 5-step process for developing powerful B2B product positioning.

This article was co-created by April Dunford and Michael Stelzner. For more about April, scroll to the end of this article.

Why Product Positioning Matters for B2B Companies

Product positioning defines how your product is the best in the world at delivering value to a specific set of customers. It's an input to almost everything in marketing and sales, from messaging to sales pitches.

Weak positioning leads to confusion, longer sales cycles, and lost deals.

Weak positioning can manifest in several ways during sales conversations:

• Your customers will look confused and ask the salesperson to “go back to the beginning” of the pitch.
• Your prospects misunderstand your product and compare it to irrelevant competitors.
• Potential customers may fail to see the value of your product. For example, they may ask why they can't just use a spreadsheet or interns instead.

On the other hand, strong positioning leads to sales meetings where customers quickly grasp your value proposition and are ready to discuss pricing and implementation details.

“When you get positioning right, it feels like a cheat code. Great positioning just feels like everything's easy,” says April Dunford, positioning consultant and author of “Obviously Awesome: How to Nail Product Positioning So Customers Get It, Buy It, Love It.”

A 5-Step Process for Powerful B2B Product Positioning Strategy

This approach, developed by April Dunford through years of experience in B2B tech companies, provides a structured way to articulate your product's unique value and appeal to the right customers.

#1: Identify Competitive Alternatives

The first step is to identify your competitive alternatives. These aren't just direct competitors but also include competitive alternatives–how customers solve the problem today without your product.

Don't just focus on other software products as you go through this market research process. In B2B, you often compete against old methodical manual processes or legacy systems. 

Understanding these alternatives is crucial for effective positioning.

For a customer service software company like Help Scout, competitive alternatives might include:

• Shared email inboxes (e.g., [email protected])
• Generic help desk software (e.g., Zendesk)
• Manual processes or spreadsheets
• Legacy systems not designed for customer service but being used for that purpose
• Doing nothing (in rare cases)

#2: Define Your Differentiated Capabilities

Next, identify the unique features and capabilities that set your product apart from the competitive alternatives. These should be things that your competitors can't or don't offer. This step involves listing the specific functionalities and attributes that make your product unique.

The key is to identify capabilities that solve real, pressing customer problems.

When listing capabilities, keep asking, “So what?” until you reach the real problem it solves or the true value it provides customers. Dunford gives an example of a database product that could perform queries faster than competitors (2 minutes vs. two days). Still, this speed difference wasn't seen as valuable for many customers. 

For Help Scout, differentiated capabilities might include:

• A user interface that looks like a familiar shared inbox
• Advanced features like prioritization and assignments
• A focus on delivering a fantastic customer experience rather than just reducing costs
• The ability for customers to choose their preferred communication channel (email, chat, phone)
• Personalized interactions (e.g., addressing customers by name instead of ticket numbers)
• Features designed to improve customer loyalty and increase purchase size

#3: Translate Capabilities into Customer Value

Translate your differentiated capabilities into clear, compelling value proposition for your target customers. 

This step is crucial for turning features into benefits that resonate with decision-makers. Dunford emphasizes that this is often the hardest step, as value is in the eye of the beholder and may take time to emerge as a clear competitive advantage.

To uncover true value, conduct win/loss analysis interviews with customers. Ask about their decision process, what triggered their search for a solution, and why they chose you over alternatives. Dunford recommends having actual conversations with customers rather than relying solely on surveys. 

Ask customer feedback questions like:

• What were you doing before you started using our product?
• What made you wake up one morning and decide you couldn't keep doing it that way?
• Who else did you consider, and how did you make that list?
• Why did you choose us and not the other options?
• Now that you're using the product, has anything surprised you (positively or negatively)?

The value of Help Scout's familiar shared-inbox interface is that it's easy for sales reps to get up and running quickly. There's no lengthy training period, so a business can use it immediately, avoiding a backlog of tickets during implementation.

Help Scout's customer-centric product positioning looks like this:

• Capability: Focuses on delivering amazing customer experiences
• Value: Improves customer loyalty, increases purchase size, enhances referrals
• Further value: Drives business growth rather than just cost reduction

#4: Define Your Target Customer Profile

Based on the value you provide, identify the characteristics of customers who will care most about that value. This will help you focus your marketing and sales efforts on the right prospects in your target market. 

In B2B, you're not trying to sell to everyone but to those who best fit your unique value proposition. For example, Help Scout wouldn't be a good fit for large telecom companies looking to minimize customer interactions and reduce costs, as this goes against Help Scout's core value proposition.

For Help Scout, an ideal customer profile might be:

• Fast-growing e-commerce businesses
• Companies without physical locations who rely heavily on customer service for relationship-building
• Businesses that view customer service as a growth driver, not just a cost center
• Companies looking for a solution that can scale with them as they grow
• Organizations that prioritize personalized customer interactions

#5: Choose Your Market Category

Finally, select a market category to help customers quickly understand what you do and set the right expectations. 

This category should align with your value proposition and target customer profile.

Dunford explains that the market category is about helping customers put you in a mental box so they know who to compare you to and what to expect. Instead of generic “help desk software,” Help Scout might position itself as “customer service software for growing e-commerce businesses.”

Similarly, a CRM system could be positioned as a “CRM for investment banks” and a database product as a “data warehouse” to communicate its specialized capabilities better.

While you can create a new category for your product, it's often easier to leverage existing categories that customers already understand because you're building on something they already know.

 For instance, saying, “We're a CRM for investment banks,” immediately gives potential customers a framework to understand your product while signaling your specialized focus.

Other Notes From This Episode

• Connect with Michael Stelzner @Stelzner on Instagram and @Mike_Stelzner on X.
• Watch this interview and other exclusive content from Social Media Examiner on YouTube.

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