What is product positioning and how do you do it
Product positioning is the set of choices that makes your product the obvious pick for a specific group of buyers. It names what those buyers would use if you did not exist, what you do that those options cannot, the value that creates, who cares most about that value and the market category that frames it.
On this page
- What product positioning means
- Why positioning matters for startups
- The five components of positioning
- How to do positioning step by step
- How positioning turns into messaging
- How to test your positioning
- Common positioning mistakes
- When to revisit your positioning
- Who needs positioning work
- Get positioning and copy done in two weeks
- FAQs
Key takeaways
- Positioning is a strategy your team agrees on. Messaging is the words that carry it to buyers. Do positioning first.
- Most frameworks use five components: competitive alternatives, unique attributes, value, best fit customers and market category. This order comes from April Dunford's book Obviously Awesome.
- Start with alternatives. Value only means something compared with what a buyer would do instead.
- Pick the market category last. The category tells buyers what to compare you to, so choose the one that makes your strengths easy to see.
- Build positioning from real deals and real customers. A competitor grid made in a conference room tells you little.
- Test positioning in sales calls and on your homepage before you lock it. Watch whether prospects can repeat it back.
- Revisit positioning when your product, your best customers or your competitors change. A company with paying customers usually outgrows its first positioning.
- Use the workbook exercises on this page to draft your own positioning as you read.
Your workbook
How to use this guide
Read top to bottom and fill in each exercise as you reach it. The exercises build on each other. By the end you will have a first draft of all five components plus a short statement your team can review. The worked examples use a made up company called Acme Billing, a fictional invoicing tool for small accounting firms. Acme Billing is an example only.
What product positioning means
Product positioning is the context you set so buyers understand what your product is and why it beats their other options. You decide that context on purpose. If you skip the decision, buyers decide for you, and they usually compare you to the wrong thing.
Every buyer who lands on your homepage wants to know two things fast. They want to know what the product is and why they would pick it over what they already do. Positioning is the set of answers. Your homepage and your sales deck then say those answers out loud.
April Dunford, author of Obviously Awesome, gives a clear example from early in her career. Her startup built a database that could analyze huge amounts of data fast. Buyers would not take meetings because they already had Oracle. The team repositioned the same product as a business intelligence tool. The product stayed the same. The comparison changed, and the value became obvious to the right buyers. She tells the full story in her post A Product Positioning Exercise.
That example shows the core idea. One product can be positioned many ways. The way you choose decides who you compete with and how easy you are to sell.
What positioning is not
Positioning is often confused with things that sit near it. Here is how they differ.
| Term | What it is | Who uses it | How often it changes |
|---|---|---|---|
| Positioning | The strategic choice of who you are best for and why | Your team, internally | Rarely, when the market or product shifts |
| Messaging | The words that express positioning to buyers | Marketing, sales, founders | Often, by channel and audience |
| Branding | Visual identity and voice | Everyone who touches the brand | Rarely |
| Tagline | One short line, usually on the homepage | Buyers | Sometimes |
| Positioning statement | A fill in the blank summary of positioning | Your team, as a check | When positioning changes |
| Value proposition | The specific value a buyer gets, stated for them | Buyers | Often, by persona |
For a deeper comparison, read the guide on positioning vs messaging.
Why positioning matters for startups
Positioning matters because it decides how fast a buyer understands you. When the positioning is clear, prospects arrive at the first call already knowing what you do. When it is unclear, every call starts with a long explanation and many prospects never book a call at all.
Weak positioning shows up in daily work long before anyone calls it a positioning problem. These are the signs founders describe most often:
- Nobody on the team can explain the product in one sentence, or each person gives a different sentence.
- The homepage gets rewritten every few months and never gets clearer.
- Sales calls start with "let me explain what we do."
- Prospects compare you to a tool you do not compete with.
- Investors ask you to simplify the pitch.
- New hires take weeks to learn how to describe the company.
- The site leads with features and buries what customers get.
- Your homepage could belong to a competitor with a logo swap.
Boundset calls the build up of these problems positioning debt. It grows as the product changes and the story stays put. Most founders can explain what their product does. Fewer can explain why anyone should care. By seed stage the homepage often describes the old company.
Good positioning also makes other work cheaper. A designer or a new marketing hire can start from a clear brief on day one. Sales reps stop improvising. Content stops guessing at the angle.
Measure your positioning debt
You need to know how big the problem is before you fix it. This also gives you a baseline to compare against later.
Ask three people on your team to write one sentence that explains what your company does and who it is for. Do not let them talk first. Paste their sentences below and note where they disagree.
Acme Billing example
Acme Billing. Founder: "Invoicing software for accountants." Sales lead: "We help small firms get paid faster." Engineer: "An AI tool that reads client emails and builds invoices." The three answers disagree on the category and on the main value.
You can also take the free positioning debt check for a quick score.
The five components of positioning
The five components of positioning are competitive alternatives, unique attributes, value, best fit customers and market category. April Dunford lays them out in this order in Obviously Awesome. Each one depends on the one before it, so the order matters.
| Component | The question it answers | Common mistake |
|---|---|---|
| Competitive alternatives | What would buyers do if you did not exist? | Listing only direct competitors and ignoring spreadsheets or doing nothing |
| Unique attributes | What do you have that those alternatives lack? | Listing features every alternative also has |
| Value | What do those attributes let customers do? | Restating the feature instead of the result |
| Best fit customers | Who cares most about that value, and why? | Describing a market so broad it gives sales nothing to act on |
| Market category | What frame makes the value obvious? | Keeping the category you started in out of habit |
Competitive alternatives
Competitive alternatives are what a buyer would use to solve the problem if your product did not exist. This is often a spreadsheet, an intern, an agency, an older tool or simply doing nothing. Your true competition is whatever the buyer would fall back on, and that is often a manual process.
Unique attributes
Unique attributes are the capabilities you have that the alternatives lack. They can be features. They can also be a business model, a delivery method, a data source, a team or a process. Dunford advises listing them without judging whether they are good or bad at first. Something that looks like a weakness can be a strength for the right buyer.
Value
Value is what your unique attributes let a customer do. Customers buy the result, so this is where positioning turns into something a buyer cares about. One attribute can create more than one kind of value, and several attributes together can create value none of them creates alone.
Best fit customers
Best fit customers are the specific buyers who care most about your value. Size and industry are a start. The useful part is the trait that makes someone care a lot, such as a workflow they run every week or a cost they feel every month. Best fit customers usually buy faster and push less on price.
Market category
Market category is the frame you put around the product so buyers know what to compare it to. Category sets expectations about features and price before a buyer reads a single word of your copy. You can win an existing category, carve out a subsegment of one or create a new one. Creating a new category is the hardest of these.
How to do positioning step by step
To do positioning, work through the five components in order using evidence from real deals, then pick a category and write it down. The method below follows the same sequence April Dunford teaches, with workbook steps added. Plan for focused work across several days. Rushing one step makes the next one weaker.
Step 1 Let go of the story you started with
Write down how you described the company when you started. Then write how customers describe it today. Most products drift from the founding idea. Dunford calls the original framing a default position and warns that teams hold on to it long after the product has moved.
Separate the founding story from today
The pitch you wrote at founding often anchors you to the wrong market. Seeing both side by side shows how far the product has moved.
Write the one line you used to describe the company at founding. Then write how your three happiest customers describe it today, in their words.
Acme Billing example
Founding line: "Acme Billing is AI accounting software." Customer words: "It sends our invoices for us." "We stopped chasing late payments." "It reads my client emails and drafts the bill."
Step 2 List your real competitive alternatives
Pull your last 10 to 20 won and lost deals. For each, write what the buyer was using before or what they chose instead. Group the answers. The groups are your competitive alternatives. Use deal notes and call recordings, since memory favors the competitors you worry about most.
Map your competitive alternatives
Value only exists relative to an alternative. If you get this wrong, every later step aims at the wrong target.
List what buyers used or chose instead of you in recent deals. Group similar answers and count how often each group appears.
Acme Billing example
Acme Billing. Spreadsheet plus email templates: 9 deals. A general accounting suite's built in invoicing: 5 deals. A part time bookkeeper: 3 deals. Did nothing: 2 deals.
The free competitive alternatives mapper walks you through the same step in your browser.
Step 3 Isolate your unique attributes
For each alternative, list what you have that it lacks. Be strict. If an alternative can do it too, cross it out. Ask your sales team which features they demo when they are winning. Ask customers what would make them refuse to switch away.
Find what only you have
Buyers pick you for the things alternatives cannot do. Shared features do not help them decide.
For your top two alternatives, list what you have that each one lacks. Cross out anything the alternative also offers.
Acme Billing example
Versus spreadsheet: reads client emails and drafts invoices; sends reminders on a schedule; shows which clients pay late. Versus accounting suite invoicing: built for firms with under 20 staff; set up in one afternoon; ~~sends invoices~~ (the suite does this too).
Step 4 Turn attributes into value
For each unique attribute, write what it lets a customer do. Use the customer's words when you can. A good test is to add "so you can" after the attribute and finish the sentence. If the result is still a feature, keep going until you reach something a buyer would pay for.
Write the value of each attribute
Customers pay for results. This step translates your product into the result.
Take each attribute from the last exercise. Finish the sentence "[attribute] so you can ______." Keep going until the answer is a result a buyer would pay for.
Acme Billing example
"Reads client emails and drafts invoices so you can bill the same day the work is done." "Sends reminders on a schedule so you can stop chasing late payments by hand." Combined value: firms get paid sooner without adding staff.
Step 5 Find who cares most
Look at your fastest closes and your customers who stay longest. Write down what they share. Go past firmographics. Find the trait that makes the value urgent for them. Dunford suggests a simple test. If you had to make as many sales as possible this month, who would you call first, and why?
Describe your best fit customer
A narrow, specific buyer makes every page and sales call easier to write. It also tells sales who to skip.
List your three fastest or happiest customers. Write the traits they share. Then write the one trait that makes your value urgent for them.
Acme Billing example
Shared traits: accounting firms with 3 to 15 staff; bill hourly; send more than 50 invoices a month; no full time billing person. Urgent trait: the owner does billing personally at night.
The free ICP sketcher helps you turn these notes into a short ideal customer profile.
Step 6 Choose the market category
Now pick the frame that makes your value obvious to the buyers you just described. Write at least three candidate categories. For each one, write what a buyer would assume about you if you used it. Pick the one where those assumptions help you. Dunford notes that you can stay in an existing category, own a subsegment of it or define a new one.
| Category style | When it fits | Main risk |
|---|---|---|
| Win an existing category | Buyers already shop for this and you can be clearly better on what they care about | You get compared to the leader on every feature |
| Own a subsegment | A specific group has needs the leaders ignore | The segment may be too small for your goals |
| Create a new category | No existing frame explains your value | Buyers must learn the category before they buy, which takes time and money |
Test three candidate categories
The category tells buyers what to compare you with. The right one makes your strengths visible in seconds.
Write three possible categories. For each, write what buyers would assume, who they would compare you to and whether that helps or hurts.
Acme Billing example
"Accounting software": buyers compare Acme Billing to full suites and see missing features. Hurts. "Invoicing tool": buyers compare it to cheap templates. Neutral. "Automated billing for small accounting firms": buyers compare it to doing billing by hand. Helps.
Not sure where to start? Try the free category picker.
Step 7 Write it down and date it
Capture the five components on one page. Dunford recommends dating the document so the team knows when the positioning was last reviewed. Share it with everyone who writes or talks about the company.
Many teams also write a short positioning statement as an internal check. The common template, often traced to Geoffrey Moore's Crossing the Chasm, reads: For [target customer] who [need], [product] is a [category] that [key benefit]. Unlike [alternative], we [differentiator]. Use it as a check that all parts fit together. Dunford argues that a statement alone is a poor way to do positioning, because it assumes there is only one answer and it rarely gets used again. Write it after the five components are done, and keep it off your homepage.
Draft your positioning statement
One sentence that connects all five parts shows you where they do not fit. Gaps become obvious when you have to fill the blank.
Fill in the template using your answers above.
Acme Billing example
For small accounting firms whose owners do billing themselves, Acme Billing is automated billing software that turns client emails into sent invoices the same day. Unlike spreadsheets and email templates, Acme Billing drafts invoices and chases late payments for you.
The free positioning statement generator builds this sentence from your inputs. The positioning canvas template gives you the full one page version.
How positioning turns into messaging
Positioning becomes messaging when you turn each component into words for a specific reader. The positioning document stays internal. The messaging document takes it one level deeper, with value statements for each buyer persona and approved lines for each channel. Dunford describes the messaging document as something that references the positioning, not a replacement for it.
A simple order to follow:
- Homepage headline and subhead come from the category and the core value.
- Supporting sections come from your unique attributes and the value of each.
- Proof comes from the customers who fit your best fit profile.
- Comparison pages come from your competitive alternatives.
- Sales talk tracks come from all of the above, ordered for a live call.
Write a short "what we don't say" list too. It keeps old positioning from creeping back into new copy.
Turn positioning into a homepage headline
The headline is the first place buyers meet your positioning. If it does not carry the category and the value, the rest of the page has to work harder.
Write three headline options that name the category or the value in plain words. Then write two phrases you will stop using because they belong to the old positioning.
Acme Billing example
Headline options: "Billing that runs itself for small accounting firms." "Send every invoice the day the work is done." "Stop doing billing at night." Stop saying: "AI accounting platform." "All in one finance suite."
The free headline tester and the messaging hierarchy builder help with this step.
How to test your positioning
Test positioning by putting it in front of real buyers and watching whether they understand it and repeat it. A positioning draft is a guess until prospects react to it. Test before you rebuild the whole site.
| Test | How to run it | What good looks like |
|---|---|---|
| Sales call opener | Open the next five discovery calls with the new framing | Prospects skip the "so what do you do" question and go deeper |
| Repeat back | At the end of a call ask the prospect how they would describe you to a colleague | Their answer uses your category and your core value |
| Homepage read | Show the new headline and subhead to a best fit buyer for ten seconds | They can say what it is and who it is for |
| Team alignment | Rerun exercise one with the same people | All sentences now agree on category and value |
| Wrong comparison count | Track which competitors prospects bring up | Fewer mentions of tools you do not compete with |
Positioning has no single metric. Watch whether the right buyers understand you faster and whether fewer wrong buyers show up. If you change who you speak to, traffic can dip for a while even as fit improves.
Plan your positioning test
Without a plan, you will judge new positioning on gut feel. A small written test keeps you honest.
Pick two tests from the table. Write when you will run them and what result would tell you the positioning works.
Acme Billing example
Test 1: open the next five discovery calls with "automated billing for small accounting firms." Works if four of five prospects skip the "so what is it" question. Test 2: ask each of those prospects to describe Acme Billing to a colleague. Works if three of five use the word billing.
Common positioning mistakes
The most common positioning mistakes come from skipping the evidence and writing what the team wishes were true. Each mistake below is easy to spot once you know to look for it.
- Starting with the category. Teams pick a hot category and then hunt for reasons they fit. Pick the category last.
- Ignoring the status quo. The real alternative is often a spreadsheet or doing nothing. If you only compare yourself to startups, you miss most lost deals.
- Listing shared features as strengths. If the alternative has it, it does not belong in your unique attributes.
- Targeting everyone. "Any company with data" is too broad for sales to act on. Narrow until sales knows who to call.
- Writing copy before positioning. A sharper headline on an unclear choice still confuses buyers.
- Treating the statement as the finish line. A filled in template feels done. The test with buyers is what tells you if it works.
- Never revisiting it. Features that were unique become standard. Competitors move. Review positioning on a schedule.
- Positioning by committee. Too many voices produce a blend nobody believes. Keep the working group small and let one person decide.
When to revisit your positioning
Revisit positioning when something it depends on changes. That usually means a new product line, a shift in who buys fastest, a new competitor that changes buyer comparisons or a funding round that changes your goals. Teams with paying customers often find their first positioning no longer fits.
Watch for these triggers:
- Your fastest closing customers look different from the ones you targeted.
- A feature you led with is now standard across the market.
- Win rates drop against one specific alternative.
- You are about to spend on outbound or a site rebuild.
- You raised a round and the pitch needs to match where the company is going.
Set your review triggers
Positioning drifts slowly. Writing triggers down means you notice drift before it costs deals.
Write the date of your last positioning review. Then list two events that should trigger the next one and who owns the review.
Acme Billing example
Last review: never formally. Triggers: launch of the payroll add on; accounting suite ships automated reminders. Owner: founder, with the sales lead.
Who needs positioning work
Any company that sells to buyers with other options needs positioning. It matters most for startups with a working product and real customers whose story has not kept up with the product. Very early teams still figuring out what to build should keep positioning loose until paying customers show who cares most.
| Stage | Positioning need | What usually works |
|---|---|---|
| Pre product | Low. The product will change | Keep a working hypothesis and talk to buyers |
| Early customers, story unclear | High. This is where positioning debt builds | A focused sprint or a structured do it yourself pass |
| Seed to Series A, scaling sales | High. New hires and channels need one story | A sprint that produces positioning and the copy built on it |
| Later stage, many teams | Ongoing. Positioning needs an owner | An in house product marketer, a facilitated workshop or a consultant |
You can do positioning yourself with this guide and the free tools. Outside help is worth it when the founding team disagrees or when you need finished copy fast. Compare your options in the guides on positioning agencies vs fractional PMMs, April Dunford alternatives and positioning sprint cost.
Decide who runs your positioning
Positioning stalls when nobody owns it. Picking the path now sets a deadline.
Write who will own positioning, whether you will do it yourselves or get help, and the date you want it finished.
Acme Billing example
Owner: founder. Path: run the exercises in this guide over two weeks, then test on ten sales calls. Deadline: before the site rebuild starts next month.
Get positioning and copy done in two weeks
Boundset runs positioning as a two week sprint for seed stage startups and beyond. You leave with positioning locked and messaging documented. You also get copy ready to use on your site and in sales calls. The sprint takes about four to five hours of your time across the two weeks.
What the Stake sprint includes, for $7,500:
- A 90 minute positioning workshop
- Positioning strategy grid
- Messaging matrix
- Use case messaging doc
- Minimum viable messaging doc
- Value proposition canvas
- Homepage copy with variants
- Homepage wireframe
- Brand vs founder guide
- Competitive positioning audit
- One activation asset you pick
- Ongoing Slack access
Stronghold costs $12,000. It adds three more pages, three activation assets and a year of async coaching in Slack.
Before you start you send a product demo, a recorded sales call, your current site and a competitor list. That takes about 30 minutes. Book a 15 minute call to see if the sprint fits.
FAQs
What is product positioning in simple terms?
Product positioning is how you make your product the obvious choice for a specific buyer. You decide what buyers would use instead, what you do better, what that gets them, who cares most and which category frames it. Your homepage and sales calls then say those choices out loud so buyers understand you quickly.
What are the five components of positioning?
The five components are competitive alternatives, unique attributes, value, best fit customers and market category. April Dunford sets them out in this order in Obviously Awesome. Start with alternatives because value only makes sense compared with what a buyer would do instead. Choose the category last.
What is the difference between positioning and messaging?
Positioning is the strategy. It decides who you are best for and why you beat their other options. Messaging is the words that carry that strategy to buyers in headlines and sales emails. Positioning changes rarely and lives inside the company. Messaging changes often by channel. Fix positioning first or messaging keeps drifting.
How long does positioning take?
A focused team can draft positioning in a few days of work, then test it on sales calls over a few weeks. Boundset runs it as a two week sprint that also produces the messaging docs and homepage copy, with about four to five hours of time needed from the founder.
When should a startup work on positioning?
Work on positioning once you have a working product and paying customers, and the story has stopped matching. Common signs are long sales calls spent explaining the product, buyers comparing you to the wrong tools, a homepage that keeps getting rewritten and team members who each describe the company differently.
Is a positioning statement the same as positioning?
No. A positioning statement is a one sentence summary in a fill in the blank format, often traced to Geoffrey Moore. It works as an internal check that your choices fit together. April Dunford argues the statement alone is a weak way to do positioning, so do the five components first and summarize after.
How do you know if your positioning works?
Test it with buyers. Open discovery calls with the new framing and ask prospects to describe you to a colleague at the end. Show a best fit buyer your headline for ten seconds. Good positioning means prospects understand you faster and describe you using your category and core value. They also stop comparing you to tools you do not compete with.
Can I do positioning myself?
Yes. Work through the five components using real deal data, then test the result on sales calls. The exercises in this guide and the free Boundset tools walk you through it. Outside help makes sense when founders disagree or when you need finished copy quickly.
How often should positioning change?
Review positioning when something it depends on changes. Triggers include a new product line, a shift in who buys fastest, a competitor that changes buyer comparisons or an upcoming site rebuild or campaign. Many teams also review it on a set schedule and date the document so everyone knows when it was last checked.