What IS the difference between a value proposition and a positioning statement?

What IS the difference between a value proposition and a positioning statement? Until recently I wasn’t sure. Some product management and marketing professionals use them interchangeably.

Here’s an explanation that clearly states the difference between a value proposition and a positioning statement from Michael Goodman on marketing profs.com

“Technically they ARE different. The value proposition is the core benefit you would expect to get when you use/buy the product or service. The positioning statement is the way you want the brand to be perceived by the target audience. Since the positioning statement should be benefit oriented, it’s pretty hard to have a positioning statement that doesn’t capture your value proposition!”

This explanation makes sense as evidenced by the key differences and similarities in the basic format for each:

Value Proposition Template (from April Dunford via Crossing the Chasm)
For: (bulls-eye customer)
Who: (key purchase motivation insight)
Our product is a: (customer language)
That: (key benefit)
Unlike: (key competitors)
Ours: (key differentiators)
At a price: (less than, equal to, or higher than competitors).

Positioning Statement Template (from brandeo.com)
For (target audience),
(brand name) is the
(frame of reference) that delivers
(benefit/point of difference) because only
(brand name) is
(reason to believe).

Similarties

Both, the value proposition and the positioning statement:

• Are directed to a specific market segment (bulls-eye customer or target audience).
• Are customer-centric in their approach (customer language or frame of reference)
• Identify what is unique about your offering (key differentiators or benefit/point of difference)
• Are benefit oriented (key benefit or benefit/point of difference)

Both imply that certain activities should occur before you can effectively create either one. To identify those activities, look no further than the Pragmatic Marketing Framework:

• Market Definition to identify your specific market segment
• Buyer Personas to get that customer-centric approach
• Distinctive Competence to identify what is unique about your offering
• Competitive Landscape to validate what is truly unique
• Positioning to understand the key benefits of your product

Differences

• The positioning statement provides focus and clarity for marketing strategy and tactics.
• The value proposition provides focus and clarity for product strategy and tactics.

So there you have it. The value proposition and the positioning statement are similar in the nature of the information conveyed but different in their ultimate purpose.

Have I answered the question: What IS the difference between a value proposition and a positioning statement? Let me know what you think.

Definitions of Pragmatic Marketing Framework Activities in this post.

Solution (Illusion) Selling

If you are in sales, can you answer these questions:

Are you selling solutions or illusions? How do you know?

Before you sell that product or feature on the product roadmap, you should ask your product manager the following questions:

• When will the Minimum Viable Product (MVP) be available?
• What is in the MVP?

What is MVP? It means different things to different people. In this case, I am talking about MVP as defined by Marty Cagan:

“the smallest possible product that has three critical characteristics: people choose to use it or buy it; people can figure out how to use it; and we can deliver it when we need it with the resources available – also known as valuable, usable and feasible”

If MVP has not been determined, how do you know if the product or feature will effectively solve the customer’s problem? No MVP? Stop right there!

If you don’t know the answer to these questions, you aren’t selling solutions, you are selling illusions.

At this point you may be wondering why is this product or feature on the product roadmap in Q3 if it may not be released in that time frame? It’s there to articulate your organization’s strategic vision for the product(s).  In his book, “Agile Software Requirements: Lean Requirements Practices for Teams, Programs, and the Enterprise“, Dean Leffingwell explains that:

“The Roadmap, then, represents the enterprise’s current “plan of intent” for the next and future releases. However, it is subject to change—as development facts, business priorities, and customers need change—and therefore release plans beyond the next release should not generally be used to create any external commitments.

In other words, a roadmap is a strategic document and should not be confused with a tactical document such as a project plan.

Remember: No MVP means it’s an illusion and not a solution. Which would you prefer to sell?

Blogging Out Loud – Cranky PM

Out loud from Cranky PM – “…show some initiative and EDUCATE YOURSELF. Go to Product Camps. Read blogs and articles. Ask questions of people and LinkedIn. Watch online webinars or some of the free online courses. Join a local product management association that hosts monthly speakers. Read some books. NO EXCUSES! All this stuff is FREE or a complete bargain.”

Stop making excuses. Read No Excuses Product Management (Part 2)- Stop Whining About Training.

Blogging Out Loud – Jim Holland

Out loud from Jim Holland – “How can an effective product management leader identify, assess and develop the team while having another full-time job as an individual product management contributor? I believe you can’t. It places you in a position to lose credibility with your team and those you collaborate with throughout the organization.”

Make up your mind. Do you want to be a leader or an individual contributer? Read A Dichotomy – Leadership and Individual Contribution.

Blogging Out Loud – Tom Grant

Out loud from Tom Grant – “Unfortunately, opportunity and reality don’t always meet.”

Do your product managers have the ”authority, capability, and responsibility” to innovate? Does opportunity meet reality in your Product Management Organization?  Find out – read Product managers must have the opportunity to be leaders.

Blogging Out Loud – Rich Mirinov

Out loud from Rich Mirinov – “…we lead through credibility, marshalling of market insights, maintaining the long view, and appreciating functional experts for what they can do.”

How do you deal with market uncertainty?
Stop worrying and read: Market Facts, Judgment, Fallibility and Ownership

Blogging Out Loud – Cindy Alvarez

Out loud from Cindy Alvarez – “ Customers may not be able to articulate what they want, but they can’t hide what they need.”

What is customer development?
Answers to that question and more, read it all here: FAQ: Customer Development for Product Managers.

Blogroll for Product Managers

Updated list of Product Management Blogs – check it out:
Blogroll

Positioning 1-2-3: Selling Your Innovation

Tweeted by @Jim_Holland: “Dan Heath, co-author of Made to Stick on “Selling Your Innovation” [Link - see below] – great video on positioning #prodmgmt”.

Check it out:
Made to Stick: Selling Your Innovation

What’s the takeaway on how to position an innovative new product? Positioning in three steps:
1. Anchor to create understanding
2. A twist to showcase what’s different
3. TIVO: A VCR that enables you to record and pause Live TV

Of course, that doesn’t guarantee buyers will appreciate the twist. Maybe they would prefer a foxtrot or a polka?