Wendy Kennedy has a great post (Sizzle without Steak) on developing positioning. You can’t position your product without understanding your customer, their needs, and how your product meets those needs. She offers the classic formula: "For customer X, we offer Y, which gives benefit Z." – what Jonathan Roberts and Rich Tong used to call the "XYZ’s" in our internal meetings at Microsoft.
Many companies understand positioning at a high level, but then fail on execution. They know the XYZ’s, but then can’t translate that into messaging. One of my favorite tools is a messaging framework. They’re easy to construct, and literally drive every communication vehicle you have from the web, to press releases, brochures, powerpoint presentations, and so on.
When building a positioning framework, my favorite route is to work from the bottom up.
Start by making a list of all the features and benefits of your product. Grab your development team, product managers, and marcomms folks, get a big whiteboard, and just start writing them down.
Next, group those features and benefits into no more than three categories of benefits. My favorite formula for grouping is Rich Tong and John Zagula’s Awesome, Awesome, Doesn’t Suck. Try to come up with two categories that have the features that will compel your customer to buy, and a third category that explains that using the product will be painless. Awesome, Awesome, Doesn’t Suck.
Finally, write the overarching "For customer X, we offer Y, which gives benefit Z".
Two things are going to happen when you go through this process.
The first is that you’re going to find that some of the benefits you thought were important just don’t fit the messaging you’re developing. Either your over-arching message is incorrect, or the benefit doesn’t matter. Do not shoe-horn the benefit message in somewhere where it doesn’t make sense. You simply dilute your message.
The second thing that will happen is that you will find (as if it were magic!) that suddenly the chore of writing copy is dramatically easier. Web sites, powerpoint slides, etc will practically write themselves.
So, what are they XYZ’s of your product?