Why does competitive positioning matter?

50% of businesses fail by their fifth year. There are many reasons businesses fail, but a lack of competitive positioning is a big one. After all, if you can’t express why your products are better and different than the competition’s, how will a customer ever make that choice?

You probably won’t find your competitive positioning overnight, and it may even change over time. These tips will help you find your competitive positioning now and stay on top of it as it evolves.

1. Ensure you know the market

First and foremost, you need to know where you fit in the market.

Start by running a market analysis. Review the landscape and note how many competitors are out there, what the potential market size and customer base look like, and what the average revenue is for businesses in this space. It’s also not a bad idea to conduct a tried-and-true SWOT analysis.

This is also a good time to start thinking about your ideal customer persona (ICP). Who is your ideal customer? What are their likes and dislikes? What are their major pain points? What about your product or service would appeal to them?

If your business is already off the ground, consider polling your current customers to gain useful insights grounded in reality.

2. Perform in-depth competitor research

Knowing your competitors is as important as knowing your own company and market, if not more.

Perform in-depth competitor research to find out:

• Who are the biggest competitors in your space?
• What do their customers like about their offerings?
• What are the biggest customer complaints about their offerings?
• Are there any gaps your product or services fill or could fill?

During this phase, pay special attention to customer complaints and any gaps you find. If the majority of competitors are receiving similar complaints about a product or a lack of an offering, this is a golden opportunity for you.

For example, say you run an online shoe store. If your direct competitors are all receiving negative marks about their return policy, you could position yourself as the “customer-centric” shoe store and offer a better return policy with a free trial period.

3. List out your objectives

Your positioning isn’t only affected by your company’s current status but also by your future plans and objectives. This is especially the case when fulfilling your objectives could result in your company pivoting in a big way.

For example, if your quarterly goal is to launch two marketing campaigns, this isn’t necessarily a pivotal moment for your company. If you have a fiscal year goal of launching a new product, that is something you should factor into your positioning.

Gather any relevant stakeholders and list out all your short and long-term goals and objectives. Then, review the list and determine which ones have the potential to impact your company’s positioning. Take note of these goals and factor them in as you move forward with the rest of this guide.

4. Lean into your niche

A core part of determining what makes you competitive is finding your niche and leaning in on it as much as possible.

Start by reflecting on your competitive analysis and your own products and positioning. Then, think about your key differences and list them.

Next, list every problem your target audience has that you intend to solve. Be realistic and only call attention to problems you can solve in the near future without any significant funding or company overhaul.

With your competitor knowledge and list of target problems, now it’s time to identify what makes you different. Figure this out by answering the following questions in as much detail as you can:

• What are the problems only you can solve?
• What is your company strongest at?
• What gaps can you realistically fill?

Answering the above questions will ultimately help you determine your niche—the position only your company and product(s) can fill.

5. Use gaps to define your competitive positioning

Once you understand your customers and competitors, it’s time to use that knowledge to position your brand and products competitively.

You do that by looking for gaps in customer needs that your competitors don’t fulfill.

Here’s an example. Let’s say all of your competitors provide a luxury experience at premium prices that solve the needs of high-income clients. In your customer research, you’ve identified a large segment of buyers who don’t use their service because of the price point but would if it were more accessible. So, you design a simplified “no frills” version and capture an underserved pool of eager buyers.

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