For entrepreneurs, product positioning can be even more important than the product itself

Here are 3 strategies for smarter product positioning.

In the 1930s, the copywriting legend Claude Hopkins helped boost the sales of the American beer brand Schlitz. He did so through a rather straightforward ad campaign that focused on the purity of Schlitz beer, touting lines like: “We wash our bottles with live steam!”

The campaign was all true. But what most consumers probably didn’t realize was that all beer producers steam-cleaned their bottles. Schlitz was simply boasting about a product feature that was neither original nor uncommon, a strategy that later became known in the advertising world as the preemptive claim. 

Watch the full video on Outlier:

Schlitz could have given consumers many different reasons why they should buy its beer over other brands, but Hopkins distilled it to one: purity. It proved effective. Schlitz soon became the best-selling beer brand in the U.S., not by changing its own product but by reframing how customers viewed the rest of the market.

“[Customers were] looking at any other beer, and you’re like, ‘Gross, I bet they don’t steam-clean those,’” said Aaron Rasmussen, co-founder of MasterClass and founder of Outlier. “[Schlitz] figured out how to reposition the entire market with something they already did.”

The importance of positioning 

How entrepreneurs position their idea can sometimes be more important than the idea itself. But what is positioning, exactly? Rasmussen summed it up with a few questions that entrepreneurs should ask themselves when starting a business:

“How do you figure out the most important part that you need to tell people about? How do you decide on what your unique selling point is? How do you distill the incredible complexity of your business and your idea into one single point? That’s what positioning is.”

It might seem overly reductive to break down your business idea into a single point. But one important thing to realize about product positioning is that, while you might have clever and well-thought-out reasons for why your idea is superior to others, you’ll never get an opportunity to fully explain it to customers. Your idea may only get a split-second first impression. 

Rasmussen went through his own positioning process in the early days of building Outlier, an online education platform where students can earn associate degrees in applied computing, liberal studies, and business administration. Ultimately, there were many potential reasons why someone might want to choose an online education over enrolling in a conventional college or university. 

Rasmussen talked it over with a friend and eventually realized that the best selling point was relatively simple: price — specifically, the money students would save on gas. After all, commuting to a campus every week can quickly become expensive.

“It sounds like the most boring thing ever, in a way, but it perks them up,” Rasmussen told Freethink. 

How to best position your idea 

There are two broad ways to approach positioning a product or service:

  1. Frame the rest of the market as being out of date
  2. Frame your idea as a new benefit to the market

Schlitz touting its not-so-unique bottling procedures is a clear example of the first strategy, which can spur consumers to suddenly rethink the familiar brands they’ve been purchasing over the years, maybe for no other reason than familiarity. Meanwhile, Outlier leaning on price to entice customers would fall into the second category of bringing a new benefit to the market.

With a broad approach in mind, Rasmussen recommended a three-step process for determining how to best position your idea.

  1. List out the features, benefits, and applications of your product or service.
  2. Narrow it down to a single reason why consumers should choose your idea over others.
  3. Figure out how to best deliver that selling point to consumers.

Narrowing down all of the reasons why customers might like your idea over others can be tough. Considering these five common product positioning strategies can simplify the process, and help you better categorize all of the things you listed in step one. 

  1. Characteristics-based: Highlight a specific quality or attribute of your idea. Example: Volvo has long positioned itself as the safest car brand. 
  2. Price-based: Highlight the savings customers will enjoy if they choose your idea. Example: True to its name, Dollar Shave Club makes it very clear what its single selling point is.
  3. Competitor-based: Compare your product or service with the existing market, and differentiate it in a favorable light. Example: Dove has frequently used comparative advertising to make its products stand out, often portraying its competitors as offering personal care products that are relatively unpleasant to use. 
  4. Application-based: Focus on how your product or service is used or experienced. Example: Clif Bar & Company, which makes snacks geared toward outdoorsy types, focuses on the portability of its product with the slogan “Feed your adventure.”
  5. Quality-based: Highlight the luxuriousness or top-of-the-line quality of your product or service. Example: Mercedes leans on luxury with its slogan “The best or nothing.”

Ultimately, Rasmussen said that landing on a positioning strategy is about asking why you created the business in the first place.

“This isn’t a mission question, this isn’t about you saving the world. This is, why should this exist? Because somewhere in there is going to be what your positioning should be. That’s a really good place to start from.”

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