Rules for Raising Capital
December 2, 2008My Theme for 2009
January 6, 2009The Power of Positioning
You know who you are. But do your customers? Are you who you were last year? If not, have you communicated how you’ve changed?Many emerging growth companies struggle with the positioning of their firms, and the communication of what they stand for. Without properly communicating your position, the market doesn’t know whether to buy from you, whether you have the know-how they seek, and whether you’ll follow through and meet their needs.
Positioning is the process of distinguishing yourself from competitors in specific ways in order to be the preferred provider for certain market segments. Positioning is the act of designing your company’s offer and image so it occupies a distinct and valued place in the targeted customer’s mind. The main benefit of clear positioning is that it controls how the market perceives you and helps make your products and/or services more attractive. Convinced? Let’s rock. Here are my five steps to clarifying your company’s positioning.1. Assess where you are right now. Start with this exercise. Ask a customer, competitor, and journalist for the three adjectives they would they use to describe your company, products, and overall image. Then ask yourself the following questions: What’s working with my current position? What isn’t? Do I want to change my position in order to increase sales? Secure a new or different customer profile? Revamp my product line?
2. Determine how you want to be perceived. This is an intentional act. When you determine the specific position you want to occupy in your target customer’s mind, you can then craft your products, marketing messages, and image to convey and reinforce it. What are the meaningful differences between you and your competition? Take the time to do this right, as significant expenses will result when you redesign your Web site, marketing collateral, product packaging, as well as if you overhaul your staff training process.3. Select your target customers. All too often companies tell me their target customers are anyone who’s willing to buy what they sell. But this approach conveys desperation and a lack of focus Craft a strategy that takes into account the following important questions: Will you benefit from making your image more exclusive and inaccessible or more of a commodity and more accessible? How does your target market define value? How do they choose among vendors
4. Factor in current trends. You’ve probably heard the expression that if you want to be a market leader, find a parade and jump in front of it. Countless companies are jumping in front of the environmental/sustainability movement with “green” products and services and touting socially-conscious business practices. What trends are on the way in with which you could identify your company? Which should you distance yourself from, since they are on the way out?? 5. Formulate your four levels. Your business objective drives your business strategy which drives your market strategy which drives your positioning strategy. For instance, if your business objective is to have fewer customers who spend more per sale, your business strategy needs to reflect this in the products or services you will be offering. Your market strategy will be how to find those new customers and how to communicate with them. Perhaps you’ll stop attending certain trade shows and start attending others where your new target client will be.. Your positioning strategy will determine the messages you communicate to your target customer to drive sales of your more costly product line.If you aren’t happy with your business, or you want to stretch to the next level of revenue or profile, you’re ready to reposition your company. Let’s examine the specifics of the positioning process. First, know that it will take you about two months if you are starting from scratch. The marketing team needs to own this process, and you can outsource a fair chunk of the research work. Here are the steps:
- Determine emerging trends you can capitalize upon. This will yield your vision viability assessment.
- Determine core competencies. This will yield your competitive threat assessment.
- Clarify the problem/pain you are solving. This will yield your target markets and analysis of them.
- Articulate the benefits/drivers/impacts of your products and services. This will clarify how your customers buy and who they listen to/are influenced by.
From the above analysis you’ll be able to synthesize your opportunities, plus understand the value chains in your target markets. The result of combining these two outcomes will yield your differentiating attributes, which forms your positioning strategy and positioning statement. You can determine the net-net of your positioning statement by filling in the blanks in the exercise below.“For ______________________[customer segment] (which was derived from your target markets), __________________ [product/service] (your vision and offering) is _____________________ [the two to three most important benefits and reasons to buy] (your incentive value chain and core competencies). Because compared to _________________ [primary competitor/alternative], ______________________ [key reasons for differentiation] (these are your differentiating attributes).
Here’s an example:For high profile Fortune 100 CEOs, our Super Security Service provides discreet 24 hour manned protection by former Secret Service agents. Compared to simply hiring a body guard, you will feel safer with experienced professionals who’ve protected American Presidents.
Positioning is best done with a blend of internal marketing staff, outsourced researchers, and an outside marketing consultant versed in positioning practices. It’s tricky to clearly see how we are perceived and what specifically we need to change. I’ll share more in future growth strategy columns as I go through the reinvention and re-positioning process in my own business.What are your positioning dilemmas?
Download our four free business-boosting podcasts at www.mightyventures.com/gift
