Positioning is a critical step in any business’ marketing strategy. It defines the company, forms the basis for messaging, drives the marketing approach and impacts the way in which products and services are priced. To be effective, positioning must be clear, compelling and, most importantly, differentiated.
One of the most common complaints I hear from sales people is that their company’s positioning sounds the same as everyone else they sell against. Their products are “innovative”, their services are “world class”, and they are “customer focused.” These are all examples of buzzwords that marketers use to try polish their position. But spin is not enough. Instead, business leaders need to find or create real differences they can leverage in the market.
Technology companies have been great at market positioning strategy. Take Apple, for example. Its components may not be that much different technologically, but its focus on both the physical appearance of its devices and their user interfaces have turned Steve Jobs' passion for design and simplicity into the most valuable company in the world. In its early years, Dell was able to turn commodity computer parts into a multi-billion dollar business by delivering a manufacturing process which enabled it to deliver customized PCs at low prices. It was a unique approach that drove the established PC manufacturers crazy and revolutionized the market. And, IBM has been able to strengthen its position by turning itself into a services juggernaut after moving through the Mainframe and PC eras.
The key is to find the hook that can set you apart from your competition in a unique way. Some ideas include:
Design – If you produce something physical, you may be able to differentiate based on a unique design aspect. Think, for example, of the bakeries or cupcake shops that develop creative cake designs or innovative flavors. They clearly set themselves apart from all the other cake and cupcake outlets and are able to charge premium prices for their products. Who ever thought someone would pay $5 or more for a cupcake, especially when there are so many lower-priced alternatives available?
People – This is probably the “differentiator” I hear most often when I asked CEOs what makes their business different. But it’s not enough to say “our people make us different”, there must be something specific you can leverage. Specialized knowledge, for example, is something concrete you can point to as is specific experience. Recognized business or industry proficiency can also be highlighted to demonstrate how your company and people are different from your competitors. The key here is to ensure the recognition moves beyond the individuals and is leveraged to the benefit of the company as a whole. Otherwise, you will face a gap if and when those individuals leave.
Service Model – One of the most effective ways to differentiate is to highlight your service model and processes. This can be an especially beneficial way to demonstrate how "your people” are different in a sustainable way. Do they follow a specific process for example, to onboard or service new customers that is different and more effective than others in your space? Companies that can demonstrate a more effective way to service their customers often gain a competitive advantage and a compelling way to differentiate.
Technical Expertise – This last one refers to domain knowledge, not necessarily technology (although that too can be a differentiator under the right circumstances). It has elements of the People and Service Model examples above, but goes beyond them to the level of institutional knowledge. It may, for example speak to the ability to address a specific concern – think of the mechanic who specializes in vintage cars – or deep-seated knowledge around a set of regulations. The breadth of expertise is just as important as the depth, as it will define the market you go after (all cars, only vintage ones or just a specific make or model?).
A differentiated positioning is not the end of the game. Once you have it you have to maintain it, as your competitors will not be standing still. Think of the Dell example above. After fighting the model for years, other PC manufacturers copied it or introduced their own enhanced models and Dell has struggled for years. Gourmet cakes and cupcakes are also no longer a novelty. With new shops opening in almost every town, and even some chain supermarkets getting into the game, the originals will need to keep finding new ways to differentiate to attract new customers.