The $1 Million Positioning Strategy
HOW TO MAKE MORE BY DOING LESS
How many direct competitors does your business have? How many potential customers would you have if those competitors didn’t exist? How much could you charge if you were the only business or brand in your category?
What it sounds like is that you would benefit from having a strong positioning strategy for your business.
The amount of competition that exists for the average business today is ludicrous. Most businesses struggle to make the profit they deserve or are fighting constantly for enough business just to keep the doors open.
Why is this the case?
Because we fail to position our businesses correctly by focusing too much on the product and not enough on the problems of a currently unserved consumer. As a result our products and services are basically indistinguishable from our competitors. This leads to customers viewing our businesses as replaceable, they view our business as a commodity.
Commoditisation happens when the customer is able to compare our products and services to other businesses products and services as if they were the same, like comparing fuel stations. As a result, to continue to make sales, we have no choice to offer more for free or to reduce our price in order to make us a more attractive option.
There are almost unlimited examples of businesses that have failed to position themselves and are now fighting commodity pricing. One of the biggest victims are traditional and 24 hour gyms. These gyms have been forced to reduce pricing, ease up on contracts, and add more to their facilities just to stay in the game.
Sounds like a terrible situation…
You know you are in a commodity market when a consumer can look at your offerings and then decide to see what else is out there and is able to find a replacement that meets their expectations in a relatively short period of time. If you have a ‘me-too’ product or service in a commodity market then that time won’t be very long at all.
So what is the alternative? What can we do to be paid based on the value we bring? How can we stop consumers being price-driven and become value-driven when considering our products or services?
The answer, Positioning. Positioning is the ability for our brand to hold an association in the mind of the customer. It is about being the only option for providing the solution they are looking for. When you are positioned well then there are very few, if any, competitors that you can be replaced with.
Let’s explore some methods for doing this.
To avoid being seen as a commodity business we must first start by understanding our market and competitors and find ways to be different. To stop offering products and services the same as our competitors and start by changing the way we provide, support and sell these offerings.
When we do this to a very specific group of customers, your niche, you start to become better positioned to take control of a segment of the market, rather than just being another option. If you do this with focus and purpose you will start to be seen as a leader of your category. Think of how Apple did exactly this so successfully with tech, they turned their failing business around into what it is today by thinking differently.
Steve Jobs even came out and said “”We’re gambling on our vision, and we’d rather do that than make ‘me-too’ products.“
Apple stopped trying to be ‘better’ than competitors, whatever that means, and started focusing their efforts on increasing the impact by changing how specific targeted consumers saw them in the market. The changes to their positioning and by building products that were in alignment with their brand started the resurrection from the edge of bankruptcy to the Apple we know today.
It takes courage to take a niche position in the market, and an understanding of how the long term benefits far outweigh the immediacy of the short term revenue options. Once you hold this position, consumers no longer compare you to other businesses like we would compare apples to apples but instead the comparison becomes apples to oranges.
Once we have a very clear position in the market you will face a whole new batch of challenges. The biggest of which is resisting the urge to do anything that would destroy it. Most commonly done when a brand strays and develops un-differentiated products that are not in alignment with their brand or positioning. Think Cadillac, the luxury car maker, and their development of a Cadillac branded bicycle…
Adding more products and services often destroys strong positioning and association between your brand and its offerings. Why? Because now there exists a contradiction between what you say you do and what you actually do. As the old market saying goes “If you confuse them, you lose them.”
This also brings up a core issue operationally. When you have a more diverse list of products or services it takes up an increased allocation of resources for them to be maintained. The once focused marketing team now becomes spread across a number of different areas. Making it significantly more difficult to make an impact and getting the results you are after.
So avoid developing another ‘me-too’ commodity product, avoid adding things that are not in alignment with your brand and avoid thinking of tactics that provide short term gains without considering their long term impact.
Do this and you can avoid price wars, you can charge what you want and make more profit. Do this and you can build a respected brand and a category leader. A brand that is not compared to others, but instead stands free from competitors because they decided to be courageous and have a vision that was worth chasing.
Do you think it’s time to develop a positioning strategy and reap these benefits for your business? I do.