In my previous post, we reviewed how brand perception specifically impacts company growth and profitability. Now we’ll cover the keys to building the foundation for communicating about your company.
When companies start out, they usually have a very clear understanding of who their customer is, the problem they are solving, and possibly, how they are different. This is typically because they have a single product for a single market segment where they’ve achieved some level of success. But over time, as companies and markets evolve:
In addition, early-stage companies often grow opportunistically. Targeting and focus can easily get lost over time. While not deliberate, this evolution can lead companies toward becoming “all things to all people” without clear focus or differentiation. To paraphrase the famous management guru Michael Porter, “being in stuck in the middle is not a good place to be.”
Not surprisingly, this has a negative impact on revenue growth and on how the company is perceived in the market. To try to get ‘unstuck,’ it’s common for companies to become reactive, conducting random acts of marketing to try to fix things.
Before worrying about random marketing tactics, you first need to clearly define how you are positioned against competitors in the mind of your customer (i.e., market positioning). You need to accurately define who you are, what you do, the value you deliver, and how you’re different. The key is finding the intersection of what’s most important to the customer and where you are perceived to be stronger against the competition. Sounds easy – but it’s tricky.
This requires you to really listen to the market and base your messaging on who you are, not just on who you want to be. You must be credible and believable to your customers and target markets. If your positioning is true to who you are, and highly relevant to your customers, then your organization will more likely line up behind it.
The first step in determining market positioning is to gain insights across three dimensions:
1. Customers - Have you put yourself into your customer’s shoes? What’s important to buyers in each market segment? How do they make decisions? What drives their profitability? How do you fit into their business?
Here are a few ideas on how to better understand what’s important to your customer:
2. Competitors - Do you know how your competition is positioned in the market? What are they known for being very good at? What is their growth and profit strategy?
Here are a few ideas to better know where your competition is strong (and unique):
3. Company - Have you done an honest assessment of your own company’s strengths and weaknesses? What is your organization passionate about? What are you particularly good at? Who are your most/least profitable customers and why?
Here are few ideas to better understand your company strengths and weakness:
Using these insights, you can begin to define why you matter to your customers. The following graph illustrates how you can frame up what you do, your relevance and your differences:
(From the book The Growth Gears: Using a Market-based Framework to Drive Business Success)
Sometimes, you may find that there is no clear differentiation against competitors – but that doesn’t mean you can’t own a point of difference. If the competition is leaving spaces or attributes undefended, then focusing on those areas can be a great opportunity. Those who execute a position more strongly and consistently over time will often own that point of differentiation.