Tuesday, November 09, 2004

Bulletproof Positioning Accelerates Market Success

When do companies fail? Companies fail for many reasons: bad business models, economic downturns, and competitive influences are just a few. Another is their attempt at selling a “brand” instead of their products and services. The dot-coms were classic examples where “brand” and “eyeballs” were more important than the products and services for which they could charge.

When do companies succeed? Sometimes a better product, a better price, or greater access to customers leads to success. Other times its better marketing and the ability to carve out a desirable and unique position in the prospective customers’ minds.

Assuming you have marketing’s 4 P’s in place – the right Product, the right Price, the right Promotional programs and vehicles, and the right Place to sell your products – proper positioning can accelerate market success.

Your ability to accelerate those other P’s is very difficult. Product development takes as long as it takes. ROI analyses and market research help you define your pricing, but pricing has a direct impact on your timeframe for profitability. Promotional programs have fairly set lead times. And, building channels or developing direct sales programs requires time and repeated customer touch points.

But, bulletproof positioning, when done correctly can be very effective quickly and have an immediate impact on your future success.

The Positioning Statement

The first thing to do to accelerate market success is to develop a positioning statement for your company and /or products and services. This is often more difficult than it seems. Often executives and marketing people are too distracted by their day-to-day activities to even bother with it. Other times, they are too close to their company that they are figuratively chewing on the bark of the trees instead of seeing the forest. They cannot objectively see themselves from a customer’s perspective. This is where having a positioning expert – an objective “outsider” – can accelerate the desired result .

So, what is a positioning statement? It is an internal statement intended to create focus, priority, and clarity about a company’s goals, unique value propositions, and culture. Although the positioning statement itself will never be used word-for-word as external copy, it serves as the foundation on which to build your messaging. It’s never going to appear on your Web site, for example. I say this because it’s not the most grammatically beautiful statement due to the template we use for creating positioning statements. This template is designed to identify four key elements into one sentence:

  • Your target market
  • Your frame of reference (or category)
  • Your point of difference
  • The justification for your point of difference

Formed into a sentence, the template reads:

To (target market), XYZ Company is the (frame of reference) that (point of difference) because (justification).

I’ll give you a few examples. When Federal Express first started, based on its marketing, one would surmise that its positioning statement was:

To deadline-oriented business people, Federal Express is the overnight package delivery service that is the most reliable because of its sophisticated package tracking system.

Breaking this down into the four elements of a positioning statement, you see:

  • Target market: Deadline-oriented business people
  • Frame of reference: Overnight package deliver service
  • Differentiation: The most reliable
  • Justification: Its sophisticated package tracking system

When Amazon.com started, it sold only books. Using the template, its positioning statement was:

To people who like to read, Amazon.com is the online bookstore that is the best place to purchase books because of its selection.

It’s interesting that Amazon.com didn’t justify being the best place to purchase books based on price or convenience. It justified it by going with “selection” – hence, the “Earth’s biggest bookstore.” Now that Amazon.com sells a variety of other products, its new positioning is the “Earth’s biggest selection” of products – staying true to its roots.

Building a Positioning Statement

The lifespan of a positioning statement should be about 12 to 18 months. Positioning statements can, and should, change over time. So, take both today’s reality and the reality of where you’ll be in 12 months into consideration.

In building your positioning statement, keep these criteria in mind. Your scope and message needs to be:

  • Large enough to justify why you’re in business.
  • Focused enough that you can specifically address customer pains. (Remember, the Federal Express example qualified “business people” with “deadline-oriented.”)
  • Meaningful to the customer – the more strongly customers feel about being part of this group, the better. The more precisely you define the target market, the more members will feel a part of it.

The frame of reference needs to:

  • Be a customer-defined grouping. In our Positioning Workshop, we often find that a company wants to “create a new category.” Sometimes, that is exactly the right thing to do. However, this new category still needs to be understood by the customers and described in the language they use.
  • Include all the options to satisfy a specific, identifiable need.
  • Take into account that when your company is positioned as a member of a certain frame of reference, you automatically accrue its benefits as well as its baggage.

The points of difference needs to be:

  • Fact based – You need to support it with undeniable facts.
  • Desirable – It must promise to meet the needs of the customer.
  • Preemptive – The stronger and longer customers associate your company, and only your company, with this point of difference, the better.

The justification needs to:

  • Include unique features, functions, characteristics, or delivery methods
  • Be unique and defensible – in other words, bulletproof!

Typically, companies have little difficulty identifying their target audiences and frames of references – unless, of course they are bringing a discontinuous innovation to market or establishing a new category.

Where they often have the most difficulties are in the areas of differentiation and justification. When I work with companies on their positioning statement, I often find that what they think is their differentiation is often a justification for an even more powerful differentiation.

For example, in the Federal Express example, they could have said that their sophisticated package tracking system was their differentiation and justified it with the years of development or their percentage of successful deliveries. However, this would have been less powerful because what the customers needed was the assurance that the package would actually get to where it was going overnight . . . every time.

In Amazon.com’s case, they could have said that their differentiation was convenience because you didn’t have to get in your car and drive to a bookstore. But this was common practice, and not that painful. The customer’s “true pain” was to actually get to the bookstore and find that it didn’t carry the book. Amazon.com communicated that when you come to its site, it will have the book you want.

Beyond Positioning

Once you develop a positioning statement, I often recommend that you look at your competitors’ communications and try to build positioning statements for them. Although this requires some extra effort it is important to ensure that yours is unique. Are you truly saying something different than everyone else is saying?

Once you’re sure that you have a positioning statement that is powerful and true, communicate it frequently and consistently throughout your organization. Help everyone understand how this positioning statement should help them create priority and focus in their role, and what each person can do to make this positioning statement a continuing reality.

Finally, a positioning statement is only as good as your ability to communicate it internally, your ability to translate it to external messaging, and your ability to “operationalize” it across the 4 P’s of marketing. This will be the topic of a future article.


About the Author
Jeff Wiss is founder of Jeff Wiss Companies. As a 20-year marketing veteran, he has successfully launched new companies and re-positioned existing companies in both consumer and business-to-business markets. Jeff’s expertise in the areas of company and product positioning, messaging, branding, and launch strategies has been recognized and utilized among some of the most successful companies worldwide.

You can contact me at 303-494-0682 or jeffwiss@jeffwiss.com. Or visit my web site at www.jeffwiss.com.

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