How to nail your competitive positioning and product-market fit

5 tips to nail your competitive positioning and product-market fit

Posted by Maddy Leslie
Speed Reading Mode

The goal here is to accurately position your business and ensure there is a good-sized market for your product. Not too competitive, not too small. Just right. That Goldilocks zone.

In so doing, you might find that you are lagging behind your chosen competitors. However, leave your ego at the door and be open to the insights that will be valuable to your goal-setting and differentiation ambitions. Take a second to frame your expectations so that you come away from this exercise feeling galvanised about the opportunities that lie ahead.

1. Identify your competition

Zero in on around four or five core competitors that are similar in size, target market, location or brand positioning to your company. Throw in a few aspirational competitors if you prefer.

You may have some companies in mind that you’ve lost customers to in the past or that have won an award you would have liked for yourself (ouch).

2. Understand your objectives and parameters

When you benchmark against competitors, you are trying to achieve three aims:

  1. To study other businesses so you can learn how to be different from them, not the same as them (’The wise learn many things from their enemies' according to Aristophanes).
  2. To steal their brilliant ideas while avoiding expensive mistakes (as Picasso said, ‘Good artists copy, great artists steal’).
  3. Finally, to challenge cognitive biases and assumptions (‘Errors using inadequate data are much less than those using no data at all’ — Charles Babbage).

You’ll want to consider this from two different angles:

A) subjective and/or qualitative, and

B) data-driven and/or quantitative.

Both are useful. For example, you can look at a competitor’s homepage on their website and make design-related comparisons with your own (subjective), and you can run it through Google’s Page Speed tool to compare loading time on desktop and mobile (data-driven).

You may also want to take note of the latest news about a company, such as investment rounds, new hires, public revenue data and recent press releases, to contextualise your insights.

3. Include subjective insights

Start with overall impressions. How differentiated are these competitors? Does one stand out in particular? Why? If everyone else is in the Navy, who is the pirate? Who is taking a risk — and is it paying off? Apply the MAYA principle. Raymond Loewy a.k.a. the father of industrial design, originated this term, which stands for ‘Most Advanced. Yet Acceptable’, saying:

‘The adult public's taste is not necessarily ready to accept the logical solutions to their requirements if the solution implies too vast a departure from what they have been conditioned into accepting as the norm.’

Basically, which company in your line-up, including yourself, is pushing the boundaries but not going so far as to alienate the consumer? You could even use a grid with two axes, one for ‘advanced’ and one for ‘acceptable’, then position competitors in a visual way. See Gartner’s annual Magic Quadrant for an example of what this kind of competitive positioning looks like.

Then, consider the brand messaging — how clear is the messaging from each of these competitors? Can you discern the key messages that they are trying to get across? What words do they use to describe themselves? Who are they targeting? Are there case studies, reviews or testimonials? Do these competitors have the credentials to back up their claims?

Also, review their website design. A website represents the digital shopfront of any business. Is the logo modern? Does it use stock imagery or illustrations? What colours or fonts are competitors using? What are the similarities and differences in the visual branding choices that you and your competitors are making? What information are they putting front and centre, and what is buried deeper in the navigation? How are they presenting the hierarchy of that information, in other words?

4. Gather data-driven insights

Here, we’d suggest making a table and simply running the numbers, then analyse your findings in more depth afterwards. You can use a traffic light system to make this data more accessible. Here are some areas for comparison:

  • Website page speed (mobile and desktop) — A useful proxy for user experience and website sophistication, and an important factor in SEO. Find this information on Google Page Speed Insights, and GTMetrix.
  • SEO domain rank, backlink profile and traffic value — Measures SEO proficiency, online reputation and proxies for organic traffic. Find this information using tools at Ahrefs or Moz.
  • Site content format, readability and sentiment — A proxy for writing quality, user experience and branding as expressed through writing. Find this information at Sitebulb and HemingwayApp.

5. Check for product-market fit

Now, you want to sense-check your products or services and how they stand up to the test of market demand, and against your competitors' offerings.

David C. Baker, author of ‘The Business of Expertise’, says:

‘You’re attempting to craft a positioning where you are less interchangeable so that withholding your expertise has some practical impact. That’s the only power you have in a professional service context: to withhold your expertise… [So] for an expert within the professional services sector, the appropriate number of competitors is 10–200 and the appropriate number of prospects is 2,000–10,000.’

Of course, this isn’t a science, and it can vary from industry to industry. And, we’d add that product-based businesses may face a different competitive landscape. But the principle of the advice is sound: find where you fit.

Option one

If you’ve uncovered in your research that you have almost no competitors and very niche demand for your products and services, then don’t delude yourself into thinking you’re an early disruptor. It’s more likely you’re teetering on the cliff edge of insufficient opportunity. That’s an indicator that you need to pivot to broaden your offering and improve your product-market fit.

Option two

Now on the flip side, in the context of differentiation, say you’ve got a fair few competitors, and what you offer has value for a wide audience, too. Sounds grand, right? Bad news. This is also a danger zone. If you do not market your business carefully in this context, then you can end up part of the undifferentiated masses, offering everything to everyone (and interesting no one as a result). We see this a lot with managed service providers and cloud migration firms. Technically, they can work with any business that needs to modernise their IT systems. However. All marketing is targeting. Just because you can doesn’t mean you should.

All marketing is targeting

For those of you that fall into the latter option, we suggest taking a broad view of how well your products or services solve for certain segmentations of your client base. Break your audience into verticals, maturity, or location. Where have you seen success, historically? Who would you like to target next, and how well does your existing positioning meet that audience’s goals and pain points? Should you change your positioning to be more saleable in light of the information you now have? Be open to that change.

By adjusting your products, services or positioning to ensure market-fit, it’s much easier to outpace competitors and engage your audience with targeted marketing.

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