How to Develop a Winning SaaS Market Positioning Strategy: A Complete Guide
Denis Shatalin
Founder of SaaS Camp
Market positioning is something that pretty much every founder I talk to knows they need to be thinking about. But very few are doing it in a way that truly sets their SaaS product or service apart.
Everyone knows the basics—creating an effective, memorable brand voice, choosing the right keywords to include in your messaging, and running targeted campaigns. But what many don’t realize is that all of these activities should be focused on reinforcing one core positioning statement that makes you stand out from the competition.
In this guide, I’ll be sharing eight actionable steps to help you create, refine, and own a truly distinct position in the SaaS marketplace. From understanding your competitive landscape to understanding your target market’s needs, this guide will provide all of the advice and insights necessary for developing a winning positioning strategy.
Let's get started!
Everyone knows the basics—creating an effective, memorable brand voice, choosing the right keywords to include in your messaging, and running targeted campaigns. But what many don’t realize is that all of these activities should be focused on reinforcing one core positioning statement that makes you stand out from the competition.
In this guide, I’ll be sharing eight actionable steps to help you create, refine, and own a truly distinct position in the SaaS marketplace. From understanding your competitive landscape to understanding your target market’s needs, this guide will provide all of the advice and insights necessary for developing a winning positioning strategy.
Let's get started!
What is Market Positioning?
Let’s start even simpler—what is market positioning?
The short answer is that it’s the way users (and potential users) see your SaaS product in relation to competitors. Maybe they see it as more reliable, budget-friendly, or feature-rich—all of these differentiators can play a role in your overall market positioning.
A market positioning strategy is how you proactively shape this perception, and it needs to be a core part of any long-term SaaS growth plan.
It helps you:
It also helps to guide your decisions around branding, pricing, features, and marketing.
The short answer is that it’s the way users (and potential users) see your SaaS product in relation to competitors. Maybe they see it as more reliable, budget-friendly, or feature-rich—all of these differentiators can play a role in your overall market positioning.
A market positioning strategy is how you proactively shape this perception, and it needs to be a core part of any long-term SaaS growth plan.
It helps you:
- Stand out from competitors
- Reach the right people
- Show customers why they should choose your product
It also helps to guide your decisions around branding, pricing, features, and marketing.
Why Is Market Positioning Important for Enterprise SaaS?
Around 90% of SaaS startups never make it past their first year.
Sure, many of them will have struggled with technical or design flaws, but I’m willing to bet that many of them simply failed to differentiate their products from others in the market. Why? It’s something I see all the time with startups I work with—especially when they’re targeting mid-market and enterprise customers.
Here are a few reasons why market positioning is so important:
Sure, many of them will have struggled with technical or design flaws, but I’m willing to bet that many of them simply failed to differentiate their products from others in the market. Why? It’s something I see all the time with startups I work with—especially when they’re targeting mid-market and enterprise customers.
Here are a few reasons why market positioning is so important:
Key Strategies to Get Your Market Positioning Right
Enterprise Buyers Have Clear Buying Criteria
Enterprise customers are much less likely to be won over by flashy features or clever marketing campaigns than consumer-facing customers. They’re looking for solutions that fit specific criteria, and they need to know exactly what makes your product stand out from the competition.
Market Positioning Helps You Define Your Target Market
It’s not enough to simply have a good product—you also need to understand who you should be targeting. Market positioning enables you to focus your sales and marketing on the right customers, which can help you maximize returns and minimize wasteful spending.
It Allows You To Set Realistic Pricing
One of the prerequisites to value-based pricing (something I’ll cover in-depth later on) is understanding exactly what your product is rescuing your customers from so that you can calculate its true value. A market positioning strategy forces you to think about what you do for customers, which means you’re much less likely to undervalue your product down the line.
8 Strategies to Get Your Market Positioning Right
1. Define the Problem You’re Solving
The first step in this process is clearly and concisely defining the problem(s) your product solves.
Why? Because this is your in with your ICP. They have a list of problems they’re looking to solve, and you have a product that solves them. Part of the goal of your market positioning strategy is to make that link as clear and direct as possible.
So, to kick this process off, think about the overarching problem that you’re solving. There’s a good chance it falls into one or more of these buckets:
This is your initial hypothesis. Through the steps below, we’ll slowly but surely refine it until you have a unique—and powerful—position in the market.
Why? Because this is your in with your ICP. They have a list of problems they’re looking to solve, and you have a product that solves them. Part of the goal of your market positioning strategy is to make that link as clear and direct as possible.
So, to kick this process off, think about the overarching problem that you’re solving. There’s a good chance it falls into one or more of these buckets:
- Save time (e.g., “Agencies struggle to maintain creative workflows.”)
- Generate extra revenue (e.g., “Amazon sellers are losing revenue due to poor ad management.”)
- Decrease risk (e.g., “Software developers need a secure way to test new releases.”)
This is your initial hypothesis. Through the steps below, we’ll slowly but surely refine it until you have a unique—and powerful—position in the market.
2. Analyze Competitors’ Positioning
You can learn a lot from your competitors’ messaging and positioning. Just to be extra clear, we’re not interested in the details of competing tools at this stage (that comes later)—we want to understand their approach to market positioning.
Start by creating a definitive list of tools that solve the same customer problem as you. Then, run through this list of questions for each competitor:
You’re doing this to get a sense of what works for them and why.
Obviously, you want to do better than them by improving on weak points—but you need to start from a strong foundation. And since every competitor that’s on your radar will be doing at least a few things well, you can borrow from their foundations to build our own. Look for patterns in pain points, technical language, and overall messaging.
For example, if you’re targeting SMBs, you might find that “ease of use” is a major messaging component for 90% of your competitors. This is a pretty clear sign that “ease of use” is something you should emphasize. For more on how to use these insights in your marketing efforts, see our guide on developing a SaaS marketing plan.
Start by creating a definitive list of tools that solve the same customer problem as you. Then, run through this list of questions for each competitor:
- Who uses their solution?
- How do they define the problem?
- How do they define their solution?
- What messaging do they use?
- Do they mention certain pain points consistently?
- Are there any recurring words or phrases that their messaging often includes?
You’re doing this to get a sense of what works for them and why.
Obviously, you want to do better than them by improving on weak points—but you need to start from a strong foundation. And since every competitor that’s on your radar will be doing at least a few things well, you can borrow from their foundations to build our own. Look for patterns in pain points, technical language, and overall messaging.
For example, if you’re targeting SMBs, you might find that “ease of use” is a major messaging component for 90% of your competitors. This is a pretty clear sign that “ease of use” is something you should emphasize. For more on how to use these insights in your marketing efforts, see our guide on developing a SaaS marketing plan.
3. Find Weak Points Using Review Sites
It’s time to start differentiating your product from the competition. To do that, you’re going to need to figure out their weak points—the areas where they’re falling short in the eyes of your target market.
At this stage, I always recommend analyzing reviews on sites like:
G2 and Capterra are especially valuable because of how through the review gathering process is. They also give you a ton of options to find the information you’re looking for — you can filter by keyword, common phrases, industry, user demographics… you name it.
At this stage, I always recommend analyzing reviews on sites like:
- G2
- Capterra
- TrustRadius
- GetApp
- ProductHunt
G2 and Capterra are especially valuable because of how through the review gathering process is. They also give you a ton of options to find the information you’re looking for — you can filter by keyword, common phrases, industry, user demographics… you name it.
What are you looking for when reading and analyzing reviews? Here’s an overview:
1. Identify product offering weaknesses. This will be things like onboarding, customer support, and user experience—anything that comes along with the product that you can improve.
1. Identify product offering weaknesses. This will be things like onboarding, customer support, and user experience—anything that comes along with the product that you can improve.
2. Find weak features. Look for features that are there, but that are either rated poorly by customers or show up in a negative context in written reviews.
3. Identify missing features. What features are customers mentioning in reviews that they’d like to see? This can be tough to search for, but the keyword “I wish” will often help you find results. With bigger competitors, you can also look for public feature request boards (preferably with voting).
4. Look for pricing insights. Customers leave reviews about pricing all the time—usually not positive reviews. Since people are highly biased toward not spending money, it’s more valuable to keep track of the proportion of pricing reviews that mention something positive (e.g., “fairly priced”, “affordable”, etc.).
Every weak point we find is a potential point of differentiation. For example, we see from Mixpanel’s ratings that customers find the setup process to be more difficult than average—that means onboarding and customer service are potential points of differentiation.
Don’t worry, I’ll cover this process in the next section.
Don’t worry, I’ll cover this process in the next section.
4. Turn Unresolved Market Demand to Your Strength
As a said in the last section, every weakness a competitor has is a potential point of differentiation between you and them.
But you’re not really interested in differentiating yourself from a single specific competitor (that comes much later)—you want to find a market-wide opportunity. This means finding and capitalizing on unresolved market demand.
How do you do this? The simplest way is by looking for common weaknesses shared between all (or at least the vast majority) of your competitors. So, turn to your notes and start analyzing the data you’ve collected:
This isn’t the only method you should use, though. Markets are constantly changing, so you need to try to think about how the needs of your target market have evolved (and where they’ll in the future). A few years ago, generative AI was a novelty—now it’s a core feature across all kinds of SaaS categories.
Accurate predictions are tricky, but the good news is that you don’t need to make them yourself.
There are full-time market researchers whose job it is to track trends and spot opportunities. They write reports and articles that you can leverage to help you plan your product’s roadmaps and uncover insights.
You can also use customer interactions as a testing ground for your ideas. I always recommend getting into calls with your target market as early as possible because they're a great source of feedback.
But you’re not really interested in differentiating yourself from a single specific competitor (that comes much later)—you want to find a market-wide opportunity. This means finding and capitalizing on unresolved market demand.
How do you do this? The simplest way is by looking for common weaknesses shared between all (or at least the vast majority) of your competitors. So, turn to your notes and start analyzing the data you’ve collected:
- What product offering components were missing or rated poorly?
- What features were badly executed?
- What features were missing?
- What prices do users feel are fair?
This isn’t the only method you should use, though. Markets are constantly changing, so you need to try to think about how the needs of your target market have evolved (and where they’ll in the future). A few years ago, generative AI was a novelty—now it’s a core feature across all kinds of SaaS categories.
Accurate predictions are tricky, but the good news is that you don’t need to make them yourself.
There are full-time market researchers whose job it is to track trends and spot opportunities. They write reports and articles that you can leverage to help you plan your product’s roadmaps and uncover insights.
You can also use customer interactions as a testing ground for your ideas. I always recommend getting into calls with your target market as early as possible because they're a great source of feedback.
5. Sell the Dream Outcome
It’s a cliché at this point… but sales is about selling a dream.
If you can get a potential user to visualize your product helping them achieve their biggest goals, you have a good shot at getting them on board. To do that, you need to understand what those big, long-term goals are.
Earlier, I mentioned three categories that user problems usually fall into—the same categories work for goals, too:
Figuring out which category your users’ main goal falls into is the easy part—making it specific is much, much harder. And it needs to be specific if you want to truly sell the dream outcome. You want leads to see revenue projections, timelines, etc. that align with their internal goals when they click onto your landing pages.
So, how do you make goals specific? Talk to your leads.
Seriously. Just call them up and talk to them. You don’t need a formal questionnaire—just an open conversation about their plans, challenges, and expectations. This can can feel one-sided. But your leads are looking for a solution that works for them, and you’re trying to build one. It’s a symbiotic relationship that you both benefit from.
If you can get a potential user to visualize your product helping them achieve their biggest goals, you have a good shot at getting them on board. To do that, you need to understand what those big, long-term goals are.
Earlier, I mentioned three categories that user problems usually fall into—the same categories work for goals, too:
- Save time
- Generate extra revenue
- Decrease risk
Figuring out which category your users’ main goal falls into is the easy part—making it specific is much, much harder. And it needs to be specific if you want to truly sell the dream outcome. You want leads to see revenue projections, timelines, etc. that align with their internal goals when they click onto your landing pages.
So, how do you make goals specific? Talk to your leads.
Seriously. Just call them up and talk to them. You don’t need a formal questionnaire—just an open conversation about their plans, challenges, and expectations. This can can feel one-sided. But your leads are looking for a solution that works for them, and you’re trying to build one. It’s a symbiotic relationship that you both benefit from.
I recommend making this the fourth phase of your demo calls:
There are five stages after this that you can learn about in my book (+240K ARR Playbook). Or, you can check out my SaaS demo script video on YouTube for an in-depth overview of the whole process.
- Building Rapport: Build trust with expert-level questions (don’t focus on small talk—it doesn’t work).
- Framing: Set the tone for the call and tell the prospect what’s going to happen. Don’t let them dictate the structure of the call (e.g., “No, I want to hear your best price first”). Stick to the plan.
- Qualification: Ask questions to determine whether the prospect is qualified to buy from you.
- Dream Outcome: Get to know the prospect's ultimate goal and understand how you can help them reach it.
There are five stages after this that you can learn about in my book (+240K ARR Playbook). Or, you can check out my SaaS demo script video on YouTube for an in-depth overview of the whole process.
6. Understand the Message-Market Fit Formula
Message-market fit is something you need to understand in order to create effective messaging that contributes to lasting growth. There are lots of components, and you need to understand how they interact.
To help founders out with this, I’ve created a simple formula:
Each of these components is integral to successful messaging. There’s no one “right” answer, but taking the time to deeply analyze each element of your message-market fit can have a huge payoff in terms of customer acquisition and retention.
By understanding the Message-Market Fit formula and how it works, you can create targeted messages that resonate with customers—leading to greater customer success for your business for your business. Each component can be experimented on and optimized independently to lead to a market positioning strategy that’s highly profitable.
I recently worked with MiloTree to help them refine their message-market fit strategy, and the results were incredible. After a bit of fine-tuning, we were able to close their first cold lead in just 6 days.
To help founders out with this, I’ve created a simple formula:
- Right Audience + Right Pain + Right Message + Right Channel + Right Timing = 20% MoM Revenue Growth
Each of these components is integral to successful messaging. There’s no one “right” answer, but taking the time to deeply analyze each element of your message-market fit can have a huge payoff in terms of customer acquisition and retention.
By understanding the Message-Market Fit formula and how it works, you can create targeted messages that resonate with customers—leading to greater customer success for your business for your business. Each component can be experimented on and optimized independently to lead to a market positioning strategy that’s highly profitable.
I recently worked with MiloTree to help them refine their message-market fit strategy, and the results were incredible. After a bit of fine-tuning, we were able to close their first cold lead in just 6 days.
7. Break the Better Trap
The “better trap” is the way I define competing on features.
If you share a task management feature with your competitors, it’s tempting to try to make the case that your feature is better than theirs. This is a big mistake.
For starters, better is a sense you develop after using two (or more) tools and comparing the experiences—users just don’t have this reference pint. Then there’s the simple fact that by competing on features, you’re asking users to compare your product to other tools.
Instead, you should focus on category design—positioning your tool as the only option in its own category.
A massive example of this is HubSpot. They invented the term “inbound marketing” all the way back in 2004, and for a brief (but very profitable) period of time, HubSpot was the only “Inbound Marketing Hub”. A smaller-scale example is Zendesk’s “customer support as a service” positioning.
How do you create your very own category? By changing an existing one in a way that highlights a positive new direction:
I actually used this exact process to differentiate my SaaS accelerator from competitors. The main issue with “accelerators” is that they don’t often personalize the experience around a startup’s actual performance. Hence, the category I created for SaaS Camp—Performance-Based Accelerator.
If you share a task management feature with your competitors, it’s tempting to try to make the case that your feature is better than theirs. This is a big mistake.
For starters, better is a sense you develop after using two (or more) tools and comparing the experiences—users just don’t have this reference pint. Then there’s the simple fact that by competing on features, you’re asking users to compare your product to other tools.
Instead, you should focus on category design—positioning your tool as the only option in its own category.
A massive example of this is HubSpot. They invented the term “inbound marketing” all the way back in 2004, and for a brief (but very profitable) period of time, HubSpot was the only “Inbound Marketing Hub”. A smaller-scale example is Zendesk’s “customer support as a service” positioning.
How do you create your very own category? By changing an existing one in a way that highlights a positive new direction:
- Determine what niche or category you currently fit into. This will be the foundation for your new category.
- Use differentiating language. Choose words by highlighting the main problem(s) with the legacy product category.
- Find open-minded early adopters. These users will spread the word and help you refine your message.
I actually used this exact process to differentiate my SaaS accelerator from competitors. The main issue with “accelerators” is that they don’t often personalize the experience around a startup’s actual performance. Hence, the category I created for SaaS Camp—Performance-Based Accelerator.
8. Find the Right Price for Your SaaS Product
The final market positioning topic I want to touch on is pricing. This is one area where I see tons of founders struggling—usually because they don’t understand the true value of their product.
Every transaction is an exchange of value. You get money, the user gets… something. Typically, founders have a vague idea of what that something is, but it isn’t particularly useful. As a result, they set prices based on shaky experiments, competitors who are also unsure, or gut feelings.
The approach I recommend is value-based pricing.To dive deeper into this concept, consider my SaaS Pricing Guide, which provides extensive insights and strategies for pricing your SaaS product effectively.
I have my clients calculate the exact economic value of their product. This is the amount your ICP is currently spending to solve their problems without you. For example, if your SaaS helps businesses automate document processing, calculate the cost for manual document processing.
Enterprise users don’t choose products that save them $50 to $100 per month—they look for solutions that save them tens or even hundreds of thousands. Don’t be afraid to ask them to pay what your product is really worth. For more specific strategies tailored to larger businesses, check out our detailed guide on Enterprise SaaS Pricing.
Factors that add to this number include:
Some of these can be tricky to calculate, but it’s well worth the effort. I like to tell the story of one founder I worked with who was charging $100,000 for an annual license in the biotech niche. When we worked out how much his solution was actually saving his customers in terms of time and money, it turned out to be a saving of $6 to $20 million.
With that kind of savings, a $500,000 annual price tag doesn’t seem unreasonable.
Every transaction is an exchange of value. You get money, the user gets… something. Typically, founders have a vague idea of what that something is, but it isn’t particularly useful. As a result, they set prices based on shaky experiments, competitors who are also unsure, or gut feelings.
The approach I recommend is value-based pricing.To dive deeper into this concept, consider my SaaS Pricing Guide, which provides extensive insights and strategies for pricing your SaaS product effectively.
I have my clients calculate the exact economic value of their product. This is the amount your ICP is currently spending to solve their problems without you. For example, if your SaaS helps businesses automate document processing, calculate the cost for manual document processing.
Enterprise users don’t choose products that save them $50 to $100 per month—they look for solutions that save them tens or even hundreds of thousands. Don’t be afraid to ask them to pay what your product is really worth. For more specific strategies tailored to larger businesses, check out our detailed guide on Enterprise SaaS Pricing.
Factors that add to this number include:
- Revenue growth
- Labor savings (e.g., not needing to hire, pay, and train additional staff)
- Overhead reductions (e.g., fewer physical office spaces)
- Increased customer retention
Some of these can be tricky to calculate, but it’s well worth the effort. I like to tell the story of one founder I worked with who was charging $100,000 for an annual license in the biotech niche. When we worked out how much his solution was actually saving his customers in terms of time and money, it turned out to be a saving of $6 to $20 million.
With that kind of savings, a $500,000 annual price tag doesn’t seem unreasonable.
Wrapping Up
A good market positioning strategy is a must for any SaaS business that wants to succeed. It helps to create and maintain a strong brand voice and message, attract the right customers, and maximize revenue.
If you want to learn more about how to create an effective market positioning strategy for your SaaS business, reach out and let’s talk. I help businesses create strategies that bring real results and tangible ROI.
And while you’re at it, check out the +240K ARR Playbook. It breaks down the exact strategies I use to grow B2B SaaS startups by 240K ARR in less than 6 months.
If you want to learn more about how to create an effective market positioning strategy for your SaaS business, reach out and let’s talk. I help businesses create strategies that bring real results and tangible ROI.
And while you’re at it, check out the +240K ARR Playbook. It breaks down the exact strategies I use to grow B2B SaaS startups by 240K ARR in less than 6 months.
+240K ARR Playbook
How you can add $240K ARR to your B2B SaaS in less than 6 months using a Hybrid Customer Acquisition System (without increasing your marketing budget)
*Currently still available for download; file access may be restricted at any time
