Central Thesis
Positioning is the deliberate act of defining how you're the best at something a defined market cares deeply about. It's not messaging, not branding, not a positioning statement, it's context-setting: the frame that tells customers how to think about your product before they can even evaluate its value.
Most companies run on a "default" positioning, whatever emerged when the product was conceived, and never question it. The result: products customers don't understand, long sales cycles, high churn, and constant price pressure. All of that is a symptom of bad positioning.
"Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about."
"If we fail at positioning, we fail at marketing and sales. If we fail at marketing and sales, the entire business fails."
Dunford's central image: Joshua Bell, a world-class violinist, played in the Washington DC subway for 45 minutes. 1,070 people passed by, 7 stopped, he made $32.17. The same product in a different context reads as worthless. Even a world-class product, poorly positioned, can fail.
The Two Traps of Default Positioning
Trap 1: You're stuck in what you originally tried to build. The product evolved through iteration and user feedback, but the positioning stayed anchored to the original idea. A portable cake on a handle called "cake on a stick" flops because next to regular cake it looks poorly made; call it a "cake pop" instead, positioned as a lollipop for adults, and the stick and shape make instant sense.
Trap 2: The market changed, the positioning didn't. A "diet muffin" sold to office workers goes stale once the market shifts to "gluten-free paleo snack," same product, new competitors, new frame needed.
The fix for both: treat positioning as an active strategic decision, not something everyone just "knows."
The 5 (+1) Components of Effective Positioning
Dunford rejects the traditional positioning statement template because it assumes you already know the right answers, reinforces the status quo, doesn't tell you what to do next, and nobody remembers or uses it anyway. Instead, five components flow from one another in order:
| # | Component | Definition |
|---|---|---|
| 1 | Competitive Alternatives | What customers would use if your product didn't exist |
| 2 | Unique Attributes | Features or capabilities you have that the alternatives don't |
| 3 | Value (and proof) | The benefit those attributes enable, in the customer's terms, with objective proof |
| 4 | Target Market Characteristics | The traits that make certain customers value that benefit intensely |
| 5 | Market Category | The market you declare yourself in, which triggers useful assumptions in the customer's mind |
| +1 | Relevant Trends | Trends that make your product urgent right now (optional) |
Attributes are only unique relative to the alternatives. Those attributes create value, which determines who cares, which reveals which market category maximizes your value for that segment. Trends sit on top, optional.
The 10-Step Process
1. Understand the customers who love your product
Start with your best-fit customers, the ones who bought quickly, didn't ask for a discount, became evangelists, and use the product the way you expected. Surveying every customer produces noise; filtering to your most enthusiastic ones reveals a clear pattern.
2. Form a positioning team
Positioning touches the whole company: marketing, sales, customer success, and product. It can't be owned by marketing alone. Rules: the business owner (CEO or founder) leads it, every function is represented, cap it at 12 people, and bring in an outside facilitator if possible.
3. Align vocabulary and drop the "positioning baggage"
Positioning baggage is the cognitive weight of the product's origin story. Founders carry the full history; new employees don't; nobody has the fresh perspective of a first-time customer. Arm & Hammer was "baking soda" until sales fell as the baking market shrank in the 1970s. Repositioned as a fridge deodorizer, sales rose from $16M (1969) to $318M (1987).
4. List the true competitive alternatives
Customers don't see competitors the way you do. They compare against whatever they'd use if your product didn't exist, often not a direct competitor at all. In business software, the most common alternative is "Excel plus a manual process." Focus only on best-fit customers, ask what they'd do without you, rank the answers, and group them into 2–5 clusters.
5. Isolate the unique attributes
List every feature and capability you have that the alternatives don't: proprietary technology, unique delivery models, distinct business models, specific expertise, exclusive partnerships. Distinguish consideration attributes (what customers weigh when deciding to buy, relevant to positioning) from retention attributes (what matters for renewal, not the initial focus). Avoid vague claims like "great customer service" unless there's objective proof behind them.
6. Map attributes to value themes
The path is feature → benefit → value. A 15-megapixel camera (feature) gives sharp images (benefit), which means photos that stay sharp even in a large print or zoom (value). Group value points into 1–4 thematic clusters, the goal is highlighting the most critical differentiators, not listing everything you do.
7. Determine who values that value a lot
Traditional demographic or firmographic segmentation isn't enough. Actionable segmentation uses specific, easily identifiable traits that make someone deeply value what you offer. Target as narrowly as this year's sales targets allow, using at least two criteria: large enough to hit your goals, and with specific needs the market leader doesn't cover.
8. Find the market frame of reference
The market category is mental shorthand that triggers assumptions about competitors, expected features, and price. A bad category choice means fighting those assumptions instead of using them. Dunford's own database product, positioned as a "database," drew an unwinnable first question every time: "how are you better than Oracle?" Repositioned as a "data warehouse," conversations changed entirely and pricing went up.
9. Layer on a trend, carefully
Trends are optional but powerful, they tell the customer why the product matters right now, not just what it is. A market category is a group of similar products; a trend is a new, relevant characteristic that spans multiple categories (AI, DevOps, direct-to-consumer). Redgate, a database-tools leader in a "boring" market, built content around "database DevOps" and trained its sales team accordingly, inbound leads doubled. Long Island Iced Tea renamed itself "Long Blockchain" in 2018 with no actual blockchain strategy; it was delisted from the Nasdaq months later. Establish the market first, the trend goes on top of it, never in place of it.
10. Capture the positioning to share it
A one-page positioning canvas: product name and one-line description, market category, competitive alternatives, unique attributes, value, and who cares a lot, backed by a longer document explaining the reasoning behind each decision.
The 3 Positioning Styles
Head to Head: win an existing market
Aim to lead a category that either has no clear leader yet, or one you're already leading. The advantage: no need to educate the market on the category. The risk: challenging an established leader head-on is nearly impossible for a startup. Dunford's own database-turned-data-warehouse repositioning worked because the category existed with few commercial vendors and no clear leader.
Big Fish, Small Pond: dominate a subsegment
Capture a piece of an existing market where requirements differ and the leader isn't serving them. Janna Systems sold enterprise CRM into a market dominated by Siebel ($2B revenue). Its only real differentiator, modeling relationships between people, seemed unvalued until a New York investment bank revealed that bankers depended on exactly that to generate business. Repositioned as "CRM for investment banks," sales went from $2M to $70M in 18 months, followed by a $1.7B acquisition, at the time the largest ever for a Canadian software company.
Create a New Game: build a new category
Show that a new problem exists which no current category solves, define its parameters, and position yourself as its leader. The challenge: customers don't yet know they have the problem, so you have to sell the problem before the solution. Eloqua built "demand generation automation" in 2000, which nobody understood at first; it stayed profitable for fourteen quarters before raising capital, then the category exploded around 2005–2006. Recalibrated as "marketing automation," revenue grew from $12M (2006) to $96M at IPO (2012), and Oracle acquired it for $870M.
"Category creation is hard, slow work, but if you are successful the rewards are huge." — Mark Organ, Eloqua
After Positioning: Turning It Into Action
The sales story comes before messaging: define the problem, how it's solved today and where that fails, the ideal world, your product framed in its market context, the value themes with proof, and common objections. Messaging then translates the sales story into copy, anchored by a master messaging document so campaigns don't slowly dilute the original position. Positioning also shapes roadmap and pricing directly, a "CRM for investment banks" commands a higher price than a generic "enterprise CRM," which reinforces the positioning itself. Revisit positioning every six months, or whenever a credible new competitor enters, a regulation shifts buying criteria, new technology changes what's possible, or customer attitudes evolve.
Quotable Lines
"Context can completely transform the way we think about a product."
"Even a world-class product, poorly positioned, can fail."
"Your best-fit customers hold the key to understanding what your product is."
"Your target market is the customers who buy quickly, rarely ask for discounts and tell their friends about your offerings."
"If you don't own your positioning, you are putting your company at a competitive disadvantage."
Quick-Use Summary
The idea in one sentence: positioning is the deliberate context that lets customers understand what you're worth, and it should be actively designed, not inherited from the product's origin story.
The three most applicable concepts:
- The 5 components in order: alternatives → unique attributes → value → target market → category.
- Best-fit customers as the only reliable signal for what the product actually is.
- The 3 positioning styles, choosing Head to Head, Big Fish Small Pond, or Create a New Game based on where the real competitive gap sits.