The Key to Unlocking Your Competitive Positioning Strategy

Effective competitive positioning involves much more than the products you sell or the services you offer. It’s about how consumers feel about your brand and includes the experiences you create across the entire customer buying journey. According to Salesforce’s 6th Annual State of the Connected Customer report, 80% of the over 14,000 customers surveyed said the experience a company provides is as important as its products and services.

This guide unpacks the essentials of what’s involved with a competitive positioning strategy. We’ll present insights about the importance of establishing yourself in the marketplace and some proven strategies for developing it. The best way to create a successful competitive positioning strategy is by having a clear understanding about why it’s so important to get it right.  

What is Competitive Positioning in Marketing?

Competitive positioning, in the context of marketing, is the process of creating a unique identity that resonates with your target audience and sets you apart from competitors. It considers your market environment, your customers’ needs and wants, and it’s increasingly tied to great customer experience. 

The way you position your company, and your brand is the foundation of your marketing strategy because it provides a roadmap for how you can highlight your unique value proposition across all your messaging and marketing assets. To be effective with positioning, you must go beyond product or brand promotion to truly unpack customer needs, competitor strengths and weaknesses, and your own capabilities. In other words, you must clarify what makes you special.

Competitive Positioning Examples

Here are some examples of what competitive positioning looks like for different business:

• Budget-Friendly Gym Chain: A gym chain positions itself as the affordable option for health-conscious consumers. They offer no-frills facilities with basic equipment at lower prices, appealing to cost-sensitive customers who prioritize function over luxury.
• Eco-Friendly T-Shirts: An apparel brand differentiates itself by using only sustainable materials and ethical manufacturing processes. They target environmentally conscious consumers willing to pay a premium for responsibly made clothing.
• Tech-Savvy Finance: A digital bank positions itself as the go-to option for millennials by offering a user-friendly app loaded with social sharing and gamification features, instant peer-to-peer transfers, and cryptocurrency integration.
• Personalized Skincare: A skincare company uses AI to create custom-formulated products for each customer. They position themselves as providers of truly individualized beauty solutions, appealing to those seeking bespoke experiences.

Types of Competitive Positioning

The above examples lean into what sets each company apart, how they compete, and what key problem (or problems) they solve for customers. They illustrate different types of competitive positioning including price, specialization, innovation, and service. Here is an overview of each one:

1. Price

• The budget-friendly gym chain differentiated itself on price and affordability. Companies lean into this type of cost leadership to attract budget-conscious consumers and outprice competitors. It’s a simple strategy focused on offering the lowest prices in the market – though obviously you need to be careful about maintaining profitability.

2. Specialization

• Specialization covers a gamut of issues from very niche markets to positioning focused on specific values like sustainability and waste reduction. Gain the niche market advantage by targeting a specific subset of customers with tailored offerings that speak to a specific issue or fill a very purposeful need. The main draw of this strategy is that you’re able to meet incredibly specific wants or needs for a slice of the market better than any of your competitors.

3. Innovation

• This a product leadership strategy focused on developing unique products to address specific customer needs or pain points. It may also be focused on a specific demographic – as the tech-savvy finance company in the above example illustrates. In that case, the bank is differentiating itself by focusing on mobile usability, social, and gamification features that appeal to Gen Z. The aim with innovation is to create a better product than your competitor and/or a product that resonates with a specific demographic.

4. Service

• Companies like Amazon, Apple, and Chewy differentiate themselves by focusing on operational and service excellence as a key positioning strategy. Service can also be a focus on hyper-personalized products or experiences – something that makes customers feel seen and heard whenever they interact with your brand. This type of competitive positioning strategy requires a deep understanding of your customers’ emotional needs – and enough data and technology to deliver the best possible service.

What is the Importance of Competitive Positioning?

In the Salesforce survey, people said they switch brands for a range of reasons including better deals, product quality, availability, selection, and because their needs and expectations change. Lack of brand loyalty is the biggest reason that a strong competitive positioning is important. Positioning solidifies your identity. It fortifies you against compounding factors that shift the market while also keeping you front and center on people’s minds. 

Here are some main benefits of effective competitive positioning strategy:

1. Increased Brand Loyalty

Customer loyalty is fickle, particularly since the pandemic when scarcity and supply chain issues forced consumers to switch products or brands to find what they needed. According to the Salesforce report, that’s a behavior change that’s continued. Thus, while a strong competitive position is not a foolproof way to keep customers from bouncing to a competitor, it helps to fortify your place in the market. It gives people confidence. 

Knowing what to expect whether it’s shipping, customer service, or product quality, gives people confidence in your company and highlights you’re the best choice among your competitors. A strong positioning can also build relationships, foster those relationships, and help you attract new customers.  

2. Increased Market Share 

Clear positioning makes you recognizable to customers. It turns your brand into a household name that’s easy to recall when there’s a need. Decision-making is easier for customers when you’re the first company they think about for delicious coffee or the streaming service they turn to on movie night. Effectively differentiating yourself makes it much easier to win new customers too because of referrals and ratings that instill confidence in your brand. 

3. Optimized Marketing Spend

A clear position is a focused position. It gives you an understanding of your customers – of who they are and where they’re most likely to be – that allows you to invest in the most effective marketing tactics and channels. It also informs your message and consumer outreach approaches, all of which can save you the time (and budget) on wasted efforts.

4. Higher Perceived Value

Clearly communicating your unique benefits and advantages creates a stronger value proposition for your customers. This means they’ll associate your brand with higher value products or services. Enhanced perception of brand value pays off since it justifies premium pricing. People have shown that they’ll pay more for the brands they love (e.g., Starbucks, Apple, BMW, etc.) Even when you can’t compete as a premium brand, you can differentiate your value by valuable attributes like good service, large selection, or convenience. Think of it as solving a problem better than any of your competitors.

How to Create a Successful Competitive Positioning Strategy

Crafting an effective competitive positioning strategy is a straightforward process requires a few intuitive steps. The good news is that it doesn’t need to be overly complex or time-consuming process, particularly since you probably already have some baseline KPIs and plenty of customer data. Here’s a step-by-step roadmap for getting started:

1. Get a 10,000-foot view of the market

Roll up your sleeves and get a big-picture understanding of your industry. Who are your top competitors? What makes your customers tick? It’s these insights that will drive your approach. 

2. Scope Out Your Audience

Get specific about who your ideal customer is. Look at typical things like demographics, psychographics, and behaviors. But you can also go beyond that by surveying existing customers, speaking with your sales team, and scanning social platforms and forums to hear from customers firsthand. The better you know your audience, the easier it’ll be to win them over.

3. Scope Out the Competition

What are your rivals doing right? Where are they dropping the ball? Understanding where your competitors fall short can help you fill those gaps and unearth key opportunities.

4. Define Your Differentiators

Clarify what sets you apart from everyone else in the market including the problem you solve. Make it incredibly clear how you can help improve your customers’ lives. Use this intel to pinpoint why customers should choose you over the other guys.

5. Create a Positioning Statement

This is a sentence or three that defines and distills what your brand means into something that resonates with your target audience. Think of it as your brand’s rallying cry. It should be meaningful, but also memorable. It’s not your tagline though and can be a bit longer. Here are a few examples of effective positioning statements from well-known brands:

• Nike: “At Nike, we’re committed to creating a better, more sustainable future for our people, planet, and communities through the power of sport.”
• Apple: “Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple’s five software platforms — iOS, iPadOS, macOS, watchOS, and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.”
• Slack: “Slack is the collaboration hub that brings the right people, information, and tools together to get work done. From Fortune 100 companies to corner markets, millions of people around the world use Slack to connect their teams, unify their systems, and drive their business forward.”

6. Launch Your New Positioning Strategy

Create a marketing strategy that supports and communicates your new positioning across all your assets (e.g., website, email, social media etc.) Execute a plan that includes multiple touchpoints and channels, but make sure to keep it consistent so that it resonates with consumers regardless of how or where they interact with your brand. 

7. Keep Refining

Continuously monitor performance and be ready to pivot if needed. Make sure to monitor your KPIs (e.g., brand awareness, sales, customer sentiment) so you can innovate, enhance, and adapt as your competition adapts and your customers needs change.