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:
- The competition becomes more intense, either through matching capabilities, building new capabilities or new competitors appearing.
- Customer needs and priorities change. What was important to a customer 3 years ago may not be as important today.
- The company enters new market segments or geographies. There may be subtleties between industries, regions and countries in terms of priorities and pain points.
- The company broadens its portfolio of offerings. As more products are developed and more problems addressed, there might be new buyers and other selling dynamics.
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:
- Clearly define your target buyer. Depending on the size of your company and the number and types of products you may need to define more than one target buyer.
- Ask your customers! Not just the happiest, or biggest. And not just once a year before renewal. Develop an ongoing customer satisfaction or NPS process. If you have the budget, you may want to consider a brand perception and awareness study that also includes a wider group of potential customers.
- Conduct regular win/loss analysis – not done by sales, but by marketing or even operations. Don’t only ask why they bought – but what was their buying criteria?
- Leverage Customer Service and Sales – look at customer complaints, talk to your front-line reps to understand what the customer is saying.
- Monitor your digital media – look at company review sites and website analytics to understand what your customers are saying, and how they are interacting.
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):
- Review websites, sales collateral, social media – including setting up Google alerts, Glassdoor reviews, Yelp, and referral sites like G2 Crowd
- Attend events, trade shows, conferences – look at the messaging at your competitors’ booths, talk to attendees to get their opinions
- Ask customers! Or have an outside resource do this if you want a more honest assessment.
- Ask industry influencers, analysts, industry associations, suppliers – anybody who might interact with competitors and have unique insights
- Shop your competition – if you’re comfortable doing so, a ‘secret shopper’ can sometimes get valuable information on how the competitors position themselves.
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:
- Acknowledge personal or internal bias – be honest with yourselves and avoid the ‘laundry list of strengths’
- Go beyond the top executives to get internal opinion – front line sales, customer service, product management, etc.
- Go beyond feature/function/capability – what makes the company different/better? Is it the way you deliver your services, your superior customer experience, domain expertise?
- Conduct win/loss analysis – why do customers buy from you? Why do you lose?
- Ask your customers! Or have an outside resource do this if you want a more honest assessment.
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.