SaaS Positioning: The Complete Guide for 2024

The world of SaaS is crowded.

If you go to the leading website G2 and look for mobile marketing software, you will be presented with 168 listings.

That's a lot of choices.

And even if you stroll through the list, you'll find a dozen solutions that offer similar features and benefits.

But that doesn't necessarily mean there's no space for newcomers.

The only way to beat the entire competition is by getting your positioning right and standing out in the minds of your prospective customers.

At Kurve, we've helped several brands transform into category leaders by assisting them in mastering their product positioning strategies and messaging. In this in-depth guide, we'll share our best tips and tactics for defining your unique value proposition, identifying your ideal customer, and crafting a messaging framework that resonates with your audience.

Whether you're just starting or looking to revamp your existing positioning, this guide has everything you need to succeed.

Table of Contents‍

What is SaaS Positioning?

SaaS positioning is how you present and describe your product or service in the market to convey its unique value to your target audience.

It sets you apart from the competition and ultimately drives growth and success.

Imagine your product was a person going to a party looking to impress everyone. Positioning means dressing up in the best outfit, highlighting the best qualities, showing off uniqueness, and making sure the right people take notice.

What's NOT considered SaaS positioning?

As the lines can quickly get blurry, you might incorrectly label certain marketing activities under SaaS positioning. Here are a few things:

Listing your product's features or functionalities
Simply comparing your products against competitors
Using generic or vague messaging language
Focusing solely on price or discounts

Positioning is all about standing out and conveying the actual value of your product or service in a way that resonates with your target audience rather than simply listing its features or price.

Why is the right positioning important?

Many companies put in a shallow effort and try to complete this step as quickly as possible. Take it from us - that's one of the worst things you can do for the business.

The positioning of a SaaS product will define its potential success and either see it skyrocket into a multi-billion dollar company or collapse into failure.

Benefits of getting it right

Let's look at some of the most significant benefits that make this one of the most impactful business activities.

Better conversions: Clear and compelling positioning helps your prospective customers understand the value of your product, which leads to higher conversion rates and more revenue.
Reduced churn: When you effectively communicate your product's unique value proposition, you attract customers who are a good fit and less likely to leave, leading to better customer retention rates and reduced churn.
Value-based pricing: Effective positioning helps you price your product based on its value to your target customers, leading to higher profit margins and improved revenue.
Shorter sales cycles: Well-defined positioning helps your sales team identify and focus on the right leads, leading to shorter sales cycles and improved sales performance.

Consequences of not getting it right

Just as strong positioning can do wonders for your SaaS business, an ineffective strategy can lead to many problems.

Poor quality customers: If you position your SaaS product poorly, you may attract customers who are not a good fit for your product, leading to bad user experience and negative reviews.
Reduced marketing performance: Without a clear and compelling positioning, your marketing efforts will be less effective in resonating with your target audience and driving conversions.
Higher CAC: Poor positioning may result in higher customer acquisition costs, as you will need to spend more resources to acquire customers who are a better fit for your product.
Low customer lifetime value: If you attract the wrong customers and fail to deliver on their expectations, they are less likely to stick around and renew their subscription, leading to a lower customer lifetime value.

The April Dunford Model: Five critical elements of positioning

Effective SaaS positioning is more than just how you communicate your product's value proposition. It's about understanding your competitive alternatives, unique offerings, target audience persona, value offerings, and market category.

April Dunford, a positioning expert, has developed a model that outlines these critical elements. Let's take a closer look at each of these factors.

1. Competitive Alternatives

This refers to the other options that your potential customers have in the market. By understanding your competitors' strengths and weaknesses, you can position your product to highlight your unique value proposition and set you apart.

2. Unique Offerings

This is the collection of features, capabilities, and benefits only offered by your product. By understanding what sets your product apart from the others in the market, you can develop a positioning strategy that showcases your strengths and helps you stand out.

3. Target Audience Persona

This is a detailed description of your ideal customer. By understanding your target audience's needs, goals, challenges, and pain points, you can develop a positioning strategy that speaks directly to them and resonates with their unique requirements.

4. Value Offerings

This is the overall value that your product delivers to the customer. By understanding the key benefits and outcomes your target audience is looking for, you can develop a positioning strategy that communicates the value of your product clearly and compellingly.

5. Market Category

This is the broader market context in which your product operates. By understanding the market categories your product fits into, you can develop a positioning strategy that places your product in the most favorable light and communicates your unique value proposition in the context of your market category.

6 Major Types of Positioning Strategies

When positioning a SaaS product, there are several approaches that you can choose.

While some businesses highlight the product's features, others emphasize pricing or customer service. Each strategy has its benefits and drawbacks, and the right one for your business and product will depend on your unique value proposition and target audience.

In this section, we'll explore six of the most common SaaS positioning strategies and provide examples to help you determine which one may be right for you.

Pricing-based positioning

Positioning your SaaS product based on pricing can be a powerful way to attract cost-conscious customers because it primarily focuses on the price of your product compared to your competitors.

The main advantage is that you can attract price-sensitive customers if your product is priced lower than your competitors. However, it’s a delicate balancing act. If your product is priced higher, you can position it as a premium product with advanced features and excellent customer support. If your product is priced too low, it can lead to perceptions of lower quality.

For example, Hubspot offers its inbound marketing and sales software at various price points, ranging from a free version to more advanced, paid options. By providing a range of pricing options, HubSpot can cater to different types of customers with varying budgets and needs.

Quality-based Positioning

Quality-based positioning is a popular strategy among SaaS companies that want to position themselves as providers of high-quality products.

The main advantage of quality-based positioning is that it can help establish your product as a premium offering, attracting customers willing to pay a higher price for the quality. The main disadvantage is that it can limit your market to customers who value quality over price.

Dropbox is an example of a SaaS company using quality-based positioning. The company has positioned itself as a provider of high-quality cloud storage by offering features like file versioning, file sharing, and file syncing across multiple devices.

Customer Service-based Positioning

Customer service-based positioning is a strategy that emphasizes a SaaS company's quality of customer support. By positioning themselves as excellent customer service providers, SaaS companies can differentiate themselves from competitors and attract customers who value customer support.

The main advantage of customer service-based positioning is that it can help build customer loyalty. The main disadvantage is that it can be difficult to maintain high-quality customer service as the company grows.

An example of a SaaS company effectively implementing customer service-based positioning is Zappos. They are widely recognized for offering top-quality customer service, which has helped the company build a loyal customer base.

Target Audience-based Positioning

Target audience-based positioning is a strategy that involves positioning your SaaS product to appeal to a specific demographic or customer group. By understanding the needs and preferences of your target audience, you can tailor your product and marketing message to better resonate with them.

The main advantage of target audience-based positioning is that it can help you differentiate your product from competitors and build a loyal customer base. The main disadvantage is that it can limit your market to a specific demographic or customer group.

Grammarly is an example of a SaaS company using target audience-based positioning. Grammarly has positioned itself as a tool for professionals and writers who need help with grammar and punctuation.

Differentiation-based Positioning

Differentiation-based positioning is a strategy that involves positioning your SaaS product as unique and different from competitors. By highlighting your product's special features, capabilities, or benefits, you can set it apart from competitors and attract customers who value those differences.

The main advantage of a differentiation-based product positioning strategy is that it can help your product stand out from competitors and attract customers who value the unique features or benefits you offer. The main disadvantage is that it can be challenging to maintain a competitive advantage over time.

An example of a SaaS company using differentiation-based positioning is Slack. Slack has positioned itself as a communication and collaboration tool that offers unique features like integrations with other apps, custom emojis, and channels.

Convenience-based Positioning

Convenience-based positioning is a strategy that involves positioning your SaaS product as easy to use and convenient for customers. By emphasizing ease of use and convenience, you can attract customers who value simplicity.

The main advantage of convenience-based positioning is attracting customers who value ease of use and convenience. The main disadvantage is that it can be challenging to significantly maintain a competitive advantage over time as competitors improve their ease of use and convenience.

Zoom is an excellent example of a SaaS company using convenience-based positioning. The company has positioned itself as a simple and easy-to-use video conferencing tool that can be used on multiple devices.

Step to figure out the right positioning

You understand the importance of positioning. You’ve studied the various strategies you can deploy. Now, it’s time to determine the best positioning for your SaaS product using this step-by-step guide.

1. Customer Research

The first step in developing an effective positioning strategy for your SaaS product is to conduct thorough customer research.

You can conduct surveys with tools like Google Forms, Typeform and SurveyMonkey to collect data about your target audience, their needs, and pain points. You can also schedule interviews with your existing customers to gather feedback on your product and understand their experience with it.

But collecting research doesn't necessarily mean you must always listen to your customer. You can also use data analytics to study customer interactions with your product, using metrics such as usage statistics, customer support inquiries, and reviews.

2. Jot down Features, Benefits, and Value

Once you understand your target customers, the next step is to list of your product's features, benefits, and value. Features are the functionalities of your product, benefits are the advantages that those features provide, and value is the outcome your product offers to the customer.

Here are some ideas on how to jot down your product's features, benefits, and value:

Start by listing all the features of your SaaS product, such as functionalities, tools, or capabilities. This could include data analytics, task automation and customizable dashboards.
For each feature, identify the corresponding benefit it provides to the user. This could be improved efficiency, cost savings or increased productivity. For example, data analytics may help customers make better business decisions, while task automation can save time and reduce errors.
Finally, think about the value your product delivers to the customer. This could be a specific outcome or result, such as increased revenue or improved customer satisfaction. For example, data analytics and task automation may increase revenue for a business, while customizable dashboards may help improve customer satisfaction by providing personalized insights.

The results of this exercise will come in handy when we get to creating your positioning statement.

3. Discover Unique Selling Propositions

After listing your product's features, benefits, and value, the next step is to identify your unique selling proposition (USP). Your USP sets your product apart from competitors and makes it stand out to potential customers. This step aims to determine the specific value proposition that makes your product unique and attractive to your target market.

To discover your USP, follow these steps:

Research your competitors to identify what they offer and what separates your product. Look for gaps in the market that your product can fill and find ways to differentiate yourself from your competitors.
Highlight your product's unique features or capabilities and focus on promoting those benefits to your customers.
Look at customer reviews to see what customers appreciate about your product and what they wish it had. Use this feedback to improve your product and highlight your strengths.
Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to identify areas where your product excels and where it could improve. Use this analysis to determine the unique strengths of your product that you can leverage to differentiate yourself from competitors.

4. Create a Positioning Statement

After conducting market research and identifying your unique selling proposition, it's time to bring everything together and create a positioning statement for your SaaS product.

A product positioning statement is a short, memorable statement that explains what your product does, who it's for, and why it's unique. This step aims to create a clear and concise message that communicates the unique value proposition of your product to your target market.

Here's a step-by-step guide to creating a positioning statement for your SaaS product:

Summarize what your product does in a few words or a sentence. Be clear and specific about what problem your product solves and what benefits it provides to the customer.
Example: Our SaaS product is a project management tool that helps businesses streamline their workflow and increase productivity.
Next, identify your target audience and what makes them unique. Consider demographics, industry, job title, pain points, and goals.
Example: Our target audience is small to medium-sized businesses in the tech industry that need help managing multiple projects and teams simultaneously.
Define the benefits and value your product provides to the customer. This could include improved efficiency, cost savings, increased productivity, or better collaboration.
Example: Our product helps businesses save time and money by providing a centralized platform for managing projects, tasks, and teams. It allows companies to easily assign tasks, track progress, and communicate with team members in real-time.
Merge everything and craft a short yet memorable statement incorporating the above elements and sharing your unique selling proposition.
Example: Our project management tool simplifies workflow and boosts productivity for small to medium-sized businesses in the tech industry.

5. Iterate and Improve

To ensure your product's positioning remains effective and relevant to ideal customers, continuously refining and improving it is essential. This involves monitoring customer feedback and the competition and adjusting your positioning statement and marketing efforts to resonate better with your target audience.

To achieve this goal, you can:

Regularly gather customer feedback to understand their suggestions and pain points, and use this information to improve.
Monitor your competitors and the market to identify new trends and opportunities and adjust your positioning accordingly.
Continuously refine your positioning statement and marketing messaging to ensure it resonates with your target audience and stays up-to-date with changes in the market.

Remember, your positioning strategy should be flexible and adaptable, as the needs and preferences of your target audience can change over time. By staying aware of these changes and continuously refining your approach, you can ensure your product remains competitive and resonates with your target audience.

In Conclusion

As a SaaS company, your product is only as successful as its positioning in the market. Getting the correct positioning can be daunting, but it's essential for attracting and retaining the best customers around.

By understanding the different SaaS positioning strategies and following our outlined steps, you can create a positioning statement that communicates your product's unique value proposition to your target audience.

At Kurve, we specialize in helping SaaS companies like yours identify and refine their positioning to drive growth and increase revenue. Our expert team works with you to understand your product, target audience, and market landscape to develop a positioning strategy that sets you apart from the competition.

If you want to improve your SaaS product's positioning and message, don't hesitate to contact us today and learn more about how we can help you succeed.

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