6 Product Positioning Mistakes That Cost You Deals

Six product positioning mistakes cause most of the damage I see in B2B

• picking your best customers on revenue
• guessing at what buyers compare you to
• listing features without saying why they matter
• using company size as a segment
• accepting whatever market category you fell into, and 
• writing a positioning statement nobody can repeat. 

They run in that order for a reason. You can't pick the right market to compete in until you know what buyers compare you to, and you can't know that until you've worked out which customers to ask.

The sequence below comes from April Dunford's Obviously Awesome. It's the best book written on positioning and I send it to clients before we start work.

What positioning decides

Positioning is your answer to the question every buyer asks in the first ten seconds. What is this, and what do I compare it to?

Once they've answered it, everything else follows. Decide you're accounting software and they expect a certain set of features, a certain price, and a certain list of competitors, and they've judged you against all of it before reading a word of your homepage. Dunford compares it to the opening scene of a movie, which tells you the genre before anything actually happens.

Get that first answer wrong and your best features start to look like missing ones.

One example runs through this piece. A scheduling product sold to independent medical practices. Swap in your own as you read.

Mistake 1: Picking your best customers on revenue

Your best-fit customers, meaning the ones who fit what you sell better than anyone else, are the ones who understood the product immediately, bought fast, told other people about it, and would be angry if you shut down on Monday. Not your biggest accounts. Not the logos on the site. The ecstatic ones.

Dunford found this by accident. She surveyed an entire customer base to learn why people picked them and the results came back muddy, with no pattern in them anywhere. When she cut the list down to the ecstatic fans only and ran it again, a clear pattern showed up, and it pointed at a set of company characteristics she could go find more of.

That's why this step goes first. Averaging across all your customers gives you the average of several different buying reasons, and that describes nobody.

Sizing comes after. Once you have the list, check whether there are enough companies like them to hit this year's number, using these five:

• Customer satisfaction score
• 12-month retention rate
• Lifetime value
• Acquisition cost
• Cost to serve, including support hours

If the answer is no, widen your definition of best-fit until it's yes, and no further. And if one of those accounts is on a $400 plan while taking 11 hours of support a month, fix your pricing, because that's a different problem wearing a positioning costume. More on scoring customer fit.

Mistake 2: Guessing at what buyers compare you to

What would your best customers do if your product didn't exist? Ask it in those words, because it gets you different answers than "who else did you look at."

Dunford tells a story about a database company that asked customers what problem they were solving. The answers came back technical, precise, and useless. When the team asked what they'd use if the database didn't exist, not one customer named another database. They named business intelligence tools and data warehouses, which meant the market the team thought they were competing in was not the market buyers had put them in.

For a lot of B2B products the honest answer is a spreadsheet, an intern, or nothing at all.

Every company watches one competitor too closely. Usually it's the one that shows up in the same funding announcements, or the one whose VP of marketing is annoying on LinkedIn. I've seen teams build an entire battlecard around a head-to-head competitor that showed up in fewer than 1 in 10 deals, while the thing they lost to over and over was "we'll handle it manually for another year." Those two losses need different arguments. One is about features and price. The other is about whether the problem is worth solving this year, and no comparison chart has ever won it.

Group the answers and rank them by how often they come up. You'll usually land on two to five groups, and the rare ones you can ignore.

Mistake 3: Listing features and calling it differentiation

Write down what you can do that those alternatives can't. Then, next to each one, write what the customer actually gets out of it, in words a patient would understand.

The first list is features. The second list is the reason anyone should care. Most homepages only have the first one.

Start from the groups you just made, because the same feature means different things depending on what you're being compared to. Against a receptionist with a phone, the scheduling product's advantage is that it books appointments outside office hours. Against a spreadsheet, it's that two locations can see the same calendar. Against the big practice management suites, it's that setup takes a week and touches nothing in the electronic health records system (EHR). Same product, three different answers.

Then turn each one into what the customer gets. Booking outside office hours means appointments that would have gone to voicemail get made at 9pm. One shared calendar means the front desk stops double-booking the Tuesday dermatologist. A week to set up means no clinic has to stop seeing patients to install anything.

Sort those into three or four groups. Those groups are what the rest of your positioning gets built on, and if you can't write one without using the word "solution," go back to the customer transcripts.

Mistake 4: Using company size as a segment

"US clinics with 10 to 50 staff" is a filter for a media buyer. As a segment it tells your messaging nothing.

A segment you can use has two properties. You can spot one from the outside, and the companies in it care more than average about the specific thing you're good at. Both halves matter. A segment you can describe beautifully but can't find in a list is not usable, and a segment you can find but that doesn't care more than average is just a list.

Two clinics of the same size, in the same state, with the same specialty buy for opposite reasons. One had a front desk person quit and nobody has covered the phones since. The other runs three locations with no way to see who's double-booked across them. Same company profile, different reason, different first sentence on the homepage.

Take the groups from the last step and ask who cares and why, over and over, until the answer is specific enough that a salesperson could spot one on a call. Interviews get you there faster than surveys, because the useful part is always the follow-up question.

Five questions worth asking every new customer in month two:

• What happened in the two weeks before you started looking?
• What did you try first?
• Who else had to approve this, and what did they push back on?
• What almost stopped you from buying?
• What would you go back to if we disappeared?

Two tests before you commit. Is the segment big enough to hit your goals, and do most of the companies in it share the same unmet need?

This is also where things go wrong in the other direction. Around year two, your ICP, meaning the short description your sales team uses to decide who's worth a call, starts collecting attributes. Industry, size, tech stack, funding stage, buyer title. Four profiles, four messaging houses, and a sales team that opens whichever deck loads first. Go as narrow as you can while still hitting your near-term sales targets. That's the test, and it gives you a number rather than a preference.

Mistake 5: Accepting the default market category

Your market category tells buyers what to compare you to and what to ask about on the first call. Call the scheduling product "practice management software" and discovery becomes billing, claims, and EHR migration, because that's what the category promises. You lose on features you never claimed to have.

Here's the default:

"Practice management software for modern clinics."

Here's the same product in a category it can win:

"Front desk scheduling that cuts no-shows. Live in a week, no EHR migration."

The second line sets up a comparison against a receptionist and a phone, which is what these clinics are running today.

To find your options, work backwards. What kinds of products usually have these features, and what kinds usually deliver this benefit? Then look at the markets next door, especially fast-growing ones, keeping in mind that wanting to be in a market doesn't qualify you for it. Pick one only if it makes your strengths obvious.

Be careful asking customers which market you're in. Dunford is blunt about this: customers aren't positioning experts, and they'll put you in the most obvious neighbouring market, which is usually the one that flatters the incumbents. Counting how many prospects ask about EHR integration in the first five minutes tells you what your current category is making people assume. It doesn't tell you which category to pick.

There are three ways to play whichever market you land on. Head to Head means going after the market leader and trying to beat them, which is expensive and rarely available to a small company. Big Fish, Small Pond means picking a slice of the market where you're the obvious best choice and leaving the leader alone. Create a New Game means inventing a category that doesn't exist yet, which means convincing people the category should exist before you can sell anything inside it. Most companies reading this want the second one.

Mistake 6: Writing a positioning statement nobody can use

Most companies write their positioning as a fill-in-the-blank sentence. "For [customer] who [need], [product] is a [category] that [benefit]." It gets written, approved, pasted into a wiki, and never said out loud again, because it's too short to hold the detail and too stiff for anyone to remember.

Write a document instead. It holds each piece with enough detail that marketing, sales, and product can all work from it, and it shows how the pieces connect, which is the part a one-liner always loses.

Then put a single page on top of it with five columns:

• Market category
• What customers would use instead of you
• What you can do that those alternatives can't
• What customers get out of that
• Who cares most, and how to spot them

Give your team one claim they can say from memory and let the evidence change by audience, so the dermatology deck cites dermatology numbers and the dental deck cites dental numbers while the claim underneath stays identical. If a segment looks like it needs a genuinely different claim, you may be looking at two products that each need their own positioning, which is a bigger conversation than a messaging fix.

Questions I get about this

How do you know if your positioning is wrong?

Three signals. Deals stall in the middle rather than the end, discounting creeps up with no competitor to explain it, and your own team describes the product differently on three consecutive calls. One of those alone is noise. All three together is a positioning problem.

How often should you revisit positioning?

When something changes rather than on a calendar. The market shifts, you add a product, or your best customers stop looking like the ones you built the positioning around. Positioning follows the market, and the market moves without telling you.

What's the difference between positioning and messaging?

Positioning is the decision. Messaging is the wording that comes out of it. Positioning says you're front desk scheduling for multi-site clinics and the alternative is a receptionist with a phone. Messaging is the 40 ways you say that on a homepage, a cold email, and a sales call. Messaging fixes rarely solve positioning problems.

Can you fix positioning without doing customer research?

No. Every mistake above comes from guessing at something a customer already told somebody on your team.

Where to start this week

All six mistakes share a source. The answers are sitting in your customer conversations and nobody has read them in order.

So start there. Pull your last 10 closed-won deals and your last 10 closed-lost, read what the buyer said in their own words, and mark every place your published positioning claims something no buyer mentioned. Each of those is a line you invented. Customers find out during onboarding, then they churn, and you get to have the whole conversation again in 18 months.

If you want the full method rather than the six places it breaks, read Obviously Awesome. The ten-step process, the positioning canvas, and the three styles are all hers.