Your SaaS positioning is the reason why you are losing money
March 26, 2023
Your SaaS positioning is the reason why you are losing money
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This article is for SaaS businesses that forgot who they are.
Or never even knew who they were to begin with.
There are more of them than you think.
Maybe you are one of them?
There is no shame in that. In fact, it’s an understandable struggle: you create a software to fill a gap in the market, you start developing it, implementing new features, finding out more uses to it than you thought, and soon, you don’t even know how, it becomes all overwhelming, your messaging is not clear anymore, your target audience fail to understand your value, and your revenue slows down.
How did it all happen?
It happenned the moment you skipped one important step: definining your SaaS product positioning.
Let’s get clear on the definition of SaaS positioning first, then I’ll tell you more about how a bad positioning can become problematic and impact your revenue.
What is SaaS positioning and how does it differ from SaaS messaging?
SaaS positioning, or SaaS product positioning, is the position your company choose on the market. It’s the angle the company takes to respond to a problem/demand, namely:
- What the company/product is
- What the company/product does
- Who it does it for
- How it does it
- How it is different from competitors.
Every SaaS company should be able to define its positioning in one sentence.
Here is an example: “We are a time-tracking software that helps freelancers to track and bill their working time in the most easy and frictionless way”.
It’s clear, it’s easily compehensible, and your audience will never find itself wondering “what does this company do exactly?”
A strong positioning will help you to find your target audience (and at the same time will allow your target audience to find you), your place in the market (and what differentiates you from competitors), and guide you through all your sales and marketing efforts. It is the identity of your brand.
By keeping your positioning in mind, you will be able to communicate and market effectively, to stay on brand in every business decision you make, and in every product improvement you implement. Your SaaS product positioning is your North Star. ⭐
Here is an example to illustrate this: if you sell a software designed to help freelancers to track their working time and easily report it in montly invoices, you know that your product doesn’t need any new complicated new feature, for freelancers are working alone and value simplicity. Your clear SaaS positioning helped you to not loose the best interest of your buyers.
Your SaaS positioning is not your messaging nor narrative
Now, to avoid any confusion, let’s make things clear right away.
Your SaaS positioning, as I already explained, is the angle you take, the position of your brand, the exact spot WHERE it stands on the market.
It shouldn’t be confused with your product narrative and messaging.
👉 The product narrative is the emotional value tied to your brand. The feelings you want to attach your product to, the emotional way your customers think of your product, the WHY behind what you do.
If we go back to our time tracking software for freelancers, the product narrative may be the belief that freelancing is the activity of a free and independant mind, and the software wants to support these types of individuals by giving them the necessary tools to be able to accomplish complex tasks (such as tracking, budgeting, invoicing) autonomously, without extra external help.
As you can see, it is an important aspect of your branding as well — you are working with human emotions and associations, this is the pilar of your storytelling. But this deserves a separate post.
👉 Messaging directly derives from your product positioning and narrative. It it WHAT your are saying to communicate the uniqueness and problem-solving quality of your software. It comes after you have clarified your overall positioning, and captures the benefits, promises, and the usefulness of your product.
After you have figured out your messaging, you can easily write any kind of copy. It starts with your website’s pages, up to the ads, emails, and your content marketing strategy.
Elena Madrigal puts it very well in one of her LinkedIn posts:
As you can see, SaaS positioning is the source of well-aligned communications, sales, and marketing.
And even if a company’s positioning is decided upstream, it would be reflected in all its messages. Thus, you can analyze a company’s positioning simply by reading their homepage. I’m saying this because this is exactly what we are going to do in the following paragraphs.
Example of successful SaaS positioning
A good SaaS positioning solves concrete problems for a concrete audience; an excellent SaaS positioning stands out from its competitors.
A strong SaaS positioning example would be ClickUp. This is a project management desktop app, allowing to work as a team on a common online workspace.
But instead of presenting itself as simply a project management app — which is a very common positioning and dozens of software already solve this problem — ClickUp chooses another unique angle.
The company noticed how many teams suffer from the use of too many tools, which slows down productivity. They decided to solve that problem, and to sell their software as the one app that will replace all the other apps.
It is clearly communicated in its messaging “One app to replace them all”.
This directly resonates with Clickup’s target audience and it proves that the company understands the reality of their market.
They could have done it differently, and the results would have been much different.
“The best task management app for remote teams” → not unique enough
“The productivy app that will help your business grow” → how exactly?
“We help teams to keep their projects organized” → Is it really the main problem that the target audience encounters?
See why these alternatives are not as good? Don’t worry, we will dive deeper in a minute.
How do you know you have a SaaS positioning problem
Oftentimes, you think you have a sales/marketing problem, but actually you have a positioning problem.
How can you tell the difference?
Here a 5 signs your company’s difficulties may actually lie in your SaaS positioning.
You have tried it all, you even accepted to film Tiktok videos, but your marketing metrics are lower than ever.
It seems like you have so much trouble bringing your message out to the world.
Maybe it’s simply because your message is unclear? Or because it doesn’t resonate with anybody? (We’ll get to that soon.)
And the most frustrating: your CAC (Customer Acquisition Cost) continually rises. Your ads and organic posts are competing with all the other companies claiming to do the same thing as you, and you don’t stand out enough to attract customers.
Lack of qualified leads
Even if you manage to attract leads, those are not qualified ones.
Yes, you have traffic on your blog, a lot of impressions from your promotions, but still, no conversions, no sales.
The only people who book appointments with you are not your targeted customers, and it results as a waste of time for everybody.
Low sales productivity and bad profits
You sales team looses their time on unqualified leads, blames the marketing department for it, stresses over bad results, and feels powerless.
But stagnant profit is not always the fault of the sales people.
Especially, if the problem is recurring, and when the sales team seems to have trouble to put a cohesive messaging together.
Unclear product strategy and development
You feel like the development of your product goes in all directions, the budget is often wasted, and there are features nobody ever uses.
Plus, you have the suspicion that you spend more in product investments than your competition.
Resources are too spread out, and are not used to build a laser precision machine able to break into the market.
Lack of cohesion and clear direction
Even your team seems to disagree when you discuss business decisions.
Without clear guidelines, and a positioning that is as stable as the constitution of a democratic country, your SaaS company risks to forget what rules it obeys and what future it aims at.
Common SaaS positioning problems
If you encounter the misfortunes listed above, you might be interested in finding out what exactly you are doing wrong.
Here is a list of common SaaS positioning problems we have noticed.
You market on features
Instead of focusing on your customer’s problems and what you can do for them, you spend your marketing efforts highlighting your product’s features.
There is nothing wrong with bragging about your amazing product, but that’s not how you are going to sell it.
People don’t care about your software’s new update or its revolutionnary tools. What they care about is their own problems and how to solve them.
So stop saying “me, me, me”, and start saying “you”.
You can see a perfect example of a company marketing on features when visiting Pipedrive’s homepage.
The messaging above is not bad, it’s just not convincing enough.
The only understanding you get from this homepage is that you are dealing with a CRM platform, that has x, y, z features.
Nice, but how it that actionable? What does it do for me exactly? How is it going to change my daily life?
Wouldn’t that be better if your homepage answered these questions?
Here is an example of a homepage that does it well.
As you can see, Close is another CRM solution. But this time, instead of listing its features, the company clearly shows what it can do for its public.
It talks to sales people directly and tells them concretly what advantage they will get from working with their software.
The positioning of this SaaS company results in a compelling messaging and effective marketing.
You try to be everything to everyone
Another common SaaS positioning problem, is when a software tries to be everything to everyone.
Let’s take Hubstaff, a time-tracking tool, as an example.
Right away, from its homepage, you can see how vague this app’s messaging is.
It used to be a time-tracking tool. Now, it has workforce management and productivity metrics as well. When you look at its list of features, you are close to forgetting what this software was all about in the first place.
By trying to do too much, it looses its primary concept. Instead of improving what works, Hubstaff went on enlarging its list of features, completly loosing the direction of its positioning.
At the end, who is going to be interested in the product? For people who need a time tracking tool, this is too complex.
For those who need a project management software, this is not complete enough.
Instead of being everything for everybody, try to be something for somebody
This is proof that positioning problems exist in larger companies too. Usually, these types of companies grow through outbound strategies, but are unable to carry inboud marketing projects when the time comes for those.
Or, because of the lack of a clear direction, they develop features in all directions, and loose their North Star.
Without a compass, Hubstaff becomes much more vulnerable to competition.
Compare it to Toggl and its clear positioning.
This softwares messaging’ is way more convincing, because it has found its unique angle: frictionless, painless, easy. This will immediately resonate with users who were previously annoyed by complex time tracking processes and just want to be more productive.
Everhour chose another angle — it markets the fact that it’s easy to integrate with project management software.
This SaaS positioning decision makes it very appealing to those who were looking for a way to combine time-tracking with their usual project management tools.
It touches a concrete problem users experience in their daily working life — it puts itself in their shoes.
You try to solve a problem people are not ready to pay/migrate for
When thinking about problems your software can solve, you have to consider profit.
You can’t make money out of problems that are not profitable.
Typically, those are:
- Problems for which people are not ready to pay for
- Problems for which people are not ready to migrate for.
Maybe your software is better than your competition, but if it involves migrating huge amount of data, it is not worth being reconsidered.
Nobody will ever give more than they receive. If your solution asks for a considerable amount of trouble and work, then it better be something revolutionizing the industry.
In the same way, if the problem your software solves is too minor, then it might be considered as not worth the money.
For example, nobody is going to pay for an online calculator. Yes, maybe it’s more convenient than carrying a physical calculator around, or more responsive and advanced than Windows’ free calculator tool, but who would pay for that?
This type of SaaS positioning problem mainly concerns early-stage startups, during the product development phase.
How you can fix your saas positioning
Enough of analyzing what doesn’t work, let’s find out how to fix problematic SaaS positionings.
Robert Kaminski has a great post on Linkedin where he presents 6 ways to choose a positioning for start-ups.
If you are not a start-up, but you feel like your business may need to reconsider its positioning, we have a two-steps process for you.
Use Jobs-to-be-done (JTBD) to position your SaaS product
To discover why users should be interested in your product, you need to investigate their needs and problems.
To do so, you can use the Jobs-to-be-done framework.
Put yourself in your users’ shoes, and identifiy what jobs they need to be done.
Some of them can be small jobs (writing a welcome email), other big jobs (doubling ARR this year).
By looking at jobs, you can focus on problems instead of people and truly connect with your audience.
➡️ Discover how we use that same framework to ideate content topics in our SEO strategy for SaaS companies
Try to frame JTBD in this fashion (this technique comes from Intercom’s e-book):
“When I _____, I want to _____, so I can _____.”
This will help you to see Situation/Motivation/Outcome.
Let’s look at a real-life example.
Here is what a user that needs a chat support tool may think:
“When I see a customer that needs help, I want to provide support as fast as possible, so I can reduce my churn rate.”
By understanding this churn problem and this need to be faster in providing support, Intercom designed a chat support tool and accentuated the timing issue in their messaging.
Use customer interviews for better SaaS positioning
The problems you think your solution solves may not be the one that is actually selling your product.
Once more, here is a real life example.
When I saw Prezi’s homepage, I was really surprised.
It says that Prezi is a solution to connect and engage more.
I’ve been using Prezi for years, but to me, it’s the best tool to create original and attractive presentations.
I never thought of it as a connection tool.
More than that, this tool was recommended to me by a friend, who told me she stopped using PowerPoint and switched to Prezi because it really made her presentations look like she has spend hours designing them, and they looked really impressive.
As you can see, the value we see in that tool and the problems it solves for us are very different from the ones the company markets.
It doesn’t mean other people are not using Prezi for connection and engagement, but it is worth investigating.
And in order to do that, you need to conduct customer interviews.
The goal of customer interviews is to understand:
- What people use your product for (it may be different from what you created it for)
- What made them buy it
- What the buying process was like
- What emotional states they went through, and what triggered them.
You want to remove assumptions and guessing from your decision-making.
To do this, you’ll have to:
- Find a sample of customers to interview
- Write a questionnaire/script
- Record and transcribe the interviews
- Drive parallels and conclusions
By combining the JTBD framework and customers interviews, you’ll be able to understand your winning assets and decide your unique SaaS positioning.
The rest will follow in a waterfall effect.
Frequently Asked Questions About SaaS Positioning
Yes. When you’ve grown your SaaS business through outbound strategies, you actually can have a positioning problem that reveals itself when you shift your focus to inbound.
No, the product positioning comes before messaging. First, you decide what’s your product’s positioning (problems it solves), then you find ways to express it (the messaging).
The best SaaS positioning strategy is to use the Jobs-to-be-done (JTBD) framework in tandem with customer interviews/research to find out your customer’s problems, then based on this data, to conceptualize your unique SaaS positioning that will be reflected in all your sales, marketing, and product growth efforts.
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