Unclear positioning – the negative effects no one realizes

Unclear positioning – the negative effects no one realizes

“How can I reduce the waste in my sales pipeline?”

It’s a question I received this week – and there are likely many answers to it. One area I’d certainly look at is how you position your SaaS business.

Positioning is an art: Getting it right is magic. Unfortunately, getting it wrong is costly.

The most obvious areas where unclear product or brand positioning hurts are lengthy sales cycles, low win rates, and low prices i.e. the need to give a lot of discounts.

But there are plenty of effects we don’t recognize easily – and these become silent killers of our business. Here’s just a few of them:

  1. Underperforming marketing metrics.
    When your positioning is off – the cost to attract new leads will rise. Your promotions compete with all the others in your product category who are claiming exactly what you’re claiming. Your customer’s perception of who to work with, and who not, will naturally gravitate to the most powerful brand (likely not you). Besides that, the only ones that benefit from this are Google, Linkedin, and Facebook.
  2. Waste in your pipeline.
    At first glance, your sales pipeline looks healthy. It’s 3x, 4x, possibly even 5x of what your target is. Everyone believes marketing has done an excellent job and that making sales targets is just a matter of math. The reality is often different. Because your positioning is too wide and vague, the bulk are ‘tire-kickers,’ people who do not need what you have and will for sure not make a purchase decision.
  3. Low sales productivity.
    Unclear positioning results in sales being ‘busy’ – which effectively means they’re wasting time chasing the wrong deals. They use all their creativity making up their own competitive position and brand promise with potential buyers, and don’t get to spend enough time closing the deals with our ideal target customers. This hampers growth.
  4. Your product strategy and roadmap are all over the place.
    The unclarity of your positioning puts your development in limbo. Because it’s not clear where and how you help your customers make the most meaningful difference, you’ll set them up to fail. They’ll shoot too wide, spread resources too thin, and have an inability to deliver remarkable product attributes to your niche market with laser precision.
  5. Profitability under pressure.
    When positioning is off, profits suffer. Here’s why: You won’t be able to create enough leverage from your development, sales, and marketing efforts. And that’s not the only issue. On top of that, your cost of doing business will be far higher than your peers that get positioning right. So it’s hitting you twice – resulting in unnecessary pressure from your investors. And all know what that can lead to – unpopular measures….

So here’s a question for you to reflect upon.

Is your SaaS business growing in line with the benchmark for companies of your size?

If not – you might be underpositioning yourself

The formula to get turn this around is straightforward: Create a narrative around your company’s offering that helps the right people instantly understand it and relate to.

Use simple words that give them a compelling reason to act and say ‘That’s what I need/want!’