How do you know you have a positioning problem for your SaaS product?

You may be losing money as a consequence of your positioning. Here’s why.

In my daily conversations with SaaS founders, I see many struggling with their growth that honestly don’t need to.

Whatever they do, nothing works well enough. They’re literally trying to break through something they can’t see.

Often, the answer is foundational: They’re not positioned well enough (anymore).

 

What I mean is not that it’s absent but that, over time, they’ve come to be positioned like everyone else. And that’s the worst ‘position’ to be in.

It made me think cause I’ve dealt with this challenge at Unit4.

 

My question: Why is it so hard to spot that you’ve got a positioning problem?

 

Therefore, I’ll drill into this question in this essay – because the earlier you can spot a pattern, the better you can arm yourself.

To start – the patterns can be found everywhere.

Here are the top 6 areas where you can spot patterns that indicate positioning problems.

Positioning problem area #1: Sales

This is possibly the most obvious area – simply because the signals appear so clearly.

Just look at some of the signals that are typical in the sales process:

  1. Sales is increasingly blaming marketing for wasting their time with bad leads.
  2. It takes longer for a customer to ‘get’ why they should choose you.
  3. You are having more and more trouble getting access to C-level.
  4. Sales were going well – but not anymore.
  5. Sales are going well – but not good enough to meet expectations.
  6. A growing portion of your prospects believe you’re too expensive.
  7. Sales cycles tend to take longer and longer.
  8. The amount of discount discussions starts to grow.
  9. Prospects start to compare you with irrelevant competitors.
  10. Etcetera.

Are these all positioning problems?

Maybe they are. Maybe not. It all depends.

And that’s what I’ll dive into with this essay.

But the one takeaway from this reflection: Look for patterns – the subtle shifts.

Positioning is never set in stone. The market is dynamic – and that requires adjustment.

It’s your job to see the patterns and understand their impact.

The better you do that, the better you’ll be able to stand out.

 


Question for you to reflect upon:

If you critically assess your sales process over the past quarter(s): Where do you start to feel friction that wasn’t there before? Why’s that happening?


Positioning problem area #2: Marketing

Sales is the most obvious area where this hits you in the face.

And marketing is for sure the next area.

Symptoms that reveal positioning problems are everywhere:

  1. You get a lot of business from word of mouth but not through your marketing.
  2. Your message doesn’t resonate the way it always did.
  3. The quality of your leads is not what it should be.
  4. You have trouble attracting the right persona.
  5. Customer acquisition cost continually rises.
  6. People come with the wrong expectations.
  7. Less and less MQLs turn into SQLs.
  8. Etcetera.

Let me share an anecdote from Annika Bjorkholm, CMO at Swipeguide.

“After our repositioning project,  leads became more qualified. They understand the value of our product way better when they do a call with us. They’re better educated about what we do and t what we don’t do, which is equally important.

When they book the demo, they know what to expect from our product, which shows they have buying intent.

Interestingly, those booking the demos are precisely the people we are targeting. The Operations manager was the top persona we identified during our positioning workshop. It’s the most valuable person that we should reach and resonate with. That’s a huge win. That’s the validation of positioning well done.”

Here’s the thing

For marketers, attracting many ‘leads’ is easy. But that doesn’t help the business.

The goal is to create a well-oiled machine that fuels short sales cycles, +60% win rates, and profitable deals – with the shortest possible payback time.

That is what positioning enables.

 


Question for you to reflect upon:

On a scale of 1-10, what’s the value of the last 100 leads your marketing team delivered regarding quality, intent, and persona match?


Positioning problem area #3: Product

Let’s dive into some less apparent areas to spot product positioning problems within your SaaS Business: Product.

You likely think, ‘Hey Ton, how can that be? Isn’t our product providing the soil for our positioning?

And you’re right – technically, your product should fuel your positioning, and if there are problems, they should appear elsewhere.

However, no business or market is static. Things change, and hence, that quickly fires back on you.

So, what are some of the symptoms that indicate positioning has had its best time?

Here are some I dealt with myself at Unit4 and see increasingly around me today with the SaaS companies I work with:

  1. Your product roadmap starts to feel all over the place.
  2. Resources are scattered, where they used to be laser focused.
  3. Budget is wasted more and more on features no one ever uses.
  4. Product stickiness is shrinking (daily active users (DAU) divided by the monthly active users (MAU)
  5. It feels like you need to spend more on product investments than your competitors
  6. Upselling to your installed base feels increasingly challenging.
  7. Increased pressure from your CPO for additional resources.
  8. Churn is growing.
  9. etcetera

These challenges often grow on you over time without you even noticing. The art is in connecting the dots.

It’s too easy to point your finger at Sales or Marketing for loosening the belts on the type of customers you attract.

Very often, it’s due to a combination of factors:

  • The rapid pace of new technology introduction.
  • New competitors are raising the bar in your market category.
  • The ever-evolving norms and priorities of prospects and customers.
  • etcetera.

All of that influences the strength of your positioning.

Tightening it allows you to create clarity within each department where their focus will be most impactful.

I’ve seen magic happening around product strategy after repositioning projects.

  • It provides structure,
  • Resets make/buy/partner decisions,
  • Streamlines product roadmaps,
  • creates resourcefulness,
  • etcetera.

All pretty important to win.

 


Question for you to reflect upon:

What are the biggest challenges faced in your product department right now? Could the root cause be a positioning problem?


Positioning problem area #4: Capped growth

Next problem area: Capped growth.

You might think this is a sales problem, but beware – this is much bigger than sales alone. It touches upon every aspect of your business.

Symptoms you might feel or see:

  1. You’re not growing as easy as before.
  2. Forecasts start to feel more unpredictable.
  3. Your revenue mix is changing shape. Some ingredients are growing, whereas others are stalling.
  4. Specific market segments are steady, while others are slowing down.
  5. Customer lifetime value growth shows some concerning areas: Some customer cohorts are less likely to expand.

Or it’s completely the opposite

  1. You’re growing OK – but could be growing much faster.
  2. You’re not capitalizing on the real opportunity in the market.
  3. You see competitors producing growing much faster than you do.

All symptoms that indicate different aspects of your market have changed (for good or for bad). Changing customer priorities, shifting norms, different alternative options, an evolving competitive landscape, etc.

No matter what’s the root cause (often there’s not just one) – it pays off to challenge the correctness and relevance of your positioning by digging into three questions:

  1. What’s changed to the objectives of our ideal customers?
  2. What’s changed to the value expectations of our customers?
  3. What’s changed to our ability to deliver on those expectations?

Answering these three questions will give you new insights on breaking the revenue cap you feel.

From there, it’s about how you realign everyone again. And recalibrating your positioning can accelerate this a lot.

It will give everyone clarity on how to contribute in the most impactful way – be it in the product, marketing, sales, service, or customer success.

 


Question for you to reflect upon:

If you look at the revenue mix inside your company, what’s changed over the last 12 months? What does that tell you?


Positioning problem area #5: Profitability drain

Moving deeper into the core of a B2B SaaS company, profitability drain is a serious area to keep an eye on when uncovering hidden positioning problems.

Here’s the thing

When positioning is off – it has direct & indirect effects on your profit.

  1. You often compete on price, making your margin per deal sub-optimal.
  2. You’re spending more time and resources to acquire customers, making CAC payback unsustainable.
  3. Attracting ‘sub-optimal’ customers often puts more pressure on your implementation team. These implementations will be less smooth than with perfect-fit customers – which you’ll see in your utilization rates, billability, and pressure on your best people.
  4. Customer Support & Success spends more time and effort to get sub-optimal customers to a ‘satisfied’ level – draining expert capacity and your margin.
  5. More often than needed, you end up with contractual clauses to your contracts to build additional functionality – often unique to the case, i.e., one-offs. One-offs don’t scale and, hence, cap profitability.

It all compounds:

  • Capped revenue & lower margin than necessary when you sell.
  • Higher cost of sale and ongoing service than necessary.
  • Less leverage than necessary due to more ‘one-offs.’
  • A continuing need to hire more people than necessary.

I deliberately state ‘higher than necessary’ because things don’t have to happen when you have product-market fit and dare to take a position.

And this is precisely where the problem hides: the fear of missing out on opportunity.

But as you can see, not being specific enough has a trickle effect across all departments and will compound for many years.

Don’t forget

Making SaaS business profitable is complex enough.

Don’t complicate it even further.

 


Question for you to reflect upon:

Looking at the profitability of your SaaS business, what could it have been if you’d more tuned your positioning to attract the right customers?


Positioning problem area #6: Scaling challenges

One area that’s critically important for any SaaS business is its ability to scale. If scaling feels hard, very often, poor positioning is a cause.

Let me illustrate this.

Scaling is, in essence, about this: Revenue and profit increase without a substantial increase in resources.

In other words – While adding customers and revenue exponentially, costs should only increase incrementally, if at all.

The opposite is often the case

  1. Making marketing and sales repeatable feels hard.
  2. Product implementations remain unpredictable.
  3. Customer success sometimes works well but is often challenged.
  4. ARR per employee remains far below the benchmark (or even declines)
  5. and so on.

And don’t get me wrong. You might still be growing. But that doesn’t mean you’re scaling.

Sharpening your positioning can do magic to turn this around.

  • It helps fix a lack of cohesion.
  • It focuses the business on what works consistently.
  • It gives every individual direction to make decisions to aid scale.

Question for you to reflect upon:

Do your costs increase linearly as you grow your SaaS revenue? What if it increased incrementally?


Summary: How do you know you have a SaaS Positioning problem?

If everything in your SaaS business goes smoothly, there’s no need to mess around with your Positioning. However, if not, Positioning is a very powerful measure for fixing problems at their core.

Remember: Poor Positioning is not a marketing problem; it is a business strategy problem. It’s often way easier to treat symptoms instead of root problems.

And it requires a strong leader to acknowledge this. I often see that egos are too big to question the foundation of the business. It’s way easier to blame external factors than to look inside.

The fact is that each day you pass without addressing a positioning issue accumulates debt and diminishes the perceived value of your SaaS business.

Getting over this mental hurdle, though, can be eye-opening.

The changes needed are often way easier to make and prevent a lot of unnecessary and ongoing pain, frustration, and stress.

Here’s a summary of the six problem domains where tuning your Positioning can help to prevent losing a lot of money and stress:

  1. Sales problems. It is possibly the easiest area to spot positioning problems. Look at the patterns. Where do you start to feel friction that wasn’t there before?
  2. Marketing problems. Positioning is not about attracting many leads. It’s about attracting leads with the right quality, intent, and persona match.
  3. Product problems. Symptoms of weak Positioning are unfocused product strategy, scattered resources, decreasing product stickiness, growing churn, etcetera.
  4. Capped Growth. Problems manifest in two ways: Growth slows down, or you grow but feel like you’re hitting a growth ceiling. The solution: clarify what’s changed around you.
  5. Profitability drain. The common problem is the fear of missing out on opportunity and hence not being specific enough. The result is higher than necessary cost, lower than necessary leverage, and lower than necessary growth.
  6. Scaling challenges. You might still be growing, but that doesn’t mean you’re scaling.

Clarity and simplicity in your Positioning have a positive trickle-down effect across all these areas. And the by-products are plentiful.

  • It helps with aligning teams across your organization,
  • It makes developing the best product way easier.
  • It makes everything flow more smoothly.
  • It sparks energy and grows confidence.
  • It makes hiring the right people easier.
  • And so on.

All that is noticed – by your target customers, investors, employees and competitors.

 


Question for you to reflect upon:

Where in your SaaS business are you accumulating debt and unnecessarily diminishing value due to poor Positioning? What would happen if you’d address that?


 

Here’s an essay to get you going: https://valueinspiration.com/positioning

 

Additional resources to help you create your perfect segmentation cocktail

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About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.