Whenever we facilitate a strategic issue analysis of a business, the question about how the business is positioned in the market always seems to be greeted with silence. Digging deeper, we ask who their target market is, and invariably we get an answer along the lines of: “Anyone who needs our products or services.”
This vague reply is not only a cop-out, but it also suggests that little or no thought has actually been put into the positioning of the business. Why is this such a common problem? Well, my guess would be the main culprit is FEAR.
When we recommend taking a more focused positioning stance, we often hear responses such as, “If we focus our positioning, we will miss out on lots of other potential business outside that focus” or “We don’t want to alert our competitors to the areas of the market we are focusing on.”
Contrary to such opinions, in today’s increasingly competitive market, precisely positioning your business is exactly what you need to do if you want to succeed in 2023 and beyond.
The Future’s Bright, The Future’s Focused
Positioning is a forward-looking exercise. It’s about targeting future business in a market where you have or are building, deep expertise. Done well, positioning will attract customers from outside of your main target market, and you will be able to easily handle such work provided it meets three criteria:
- You have the expertise
- You have the capacity (without negatively impacting your main clients)
- You can do the work profitably
The goal of positioning is not to go narrow, it’s to go deep. Narrow is simply the route to depth. Good customers will be willing to pay more for your expertise. By outwardly promoting your particular focus you amplify your expertise and attract good customers.
Beware, however, of falling into the trap of competing for work outside your focus area. When you compete for jobs outside your proclaimed specialisation, you are effectively saying to your target audience that your company is not really a true expert in the field, more a generalist that merely expounds a PR spin as an expert.
So if a prospective client contacts you and asks you to do a job that is outside your stated focus, take it if the three criteria above are satisfied. If, on the other hand, you are required to go into a competitive pitch with others for the work, politely decline; otherwise you are not walking your walk.
5 Mistakes to Avoid When Deciding Your Positioning
1. Delegating the positioning decision
The positioning of the business is the responsibility of the CEO or business owner, period. It is not a task to be delegated to senior or middle management. Why? Because each of your managers will have their own agenda for their area of the business and you will end up with a compromise that confuses both those in the business and, more importantly, your customers and prospects in the outside world.
2. Don’t try to be too inclusive of past work
In refining your focus, you will naturally want to look back at work you’ve done.
That’s all well and good, but don’t try to pull into the future positioning everything you’ve done in the past. If you do, there won’t be clarity and there won’t be depth.
3. Lack of clarity as to why people do business with you
Understanding the real reason why people do business with you is vitally important. It is easy to fall into the trap of thinking it is your products or services that determine whether or not people buy from you. But it’s not. It’s why you do what you do that matters, so you have to be very clear on this when finalising your positioning.
4. Focusing on implementation and delivery
Ideally, you want your positioning to enable you to command a premium price for your product or service. To achieve this, your positioning needs to be tied to your thinking, your strategy, and not to your doing. The implementation/delivery side of your business is relatively easy to replicate and so is more commodity-based when it comes to price. Your thinking, on the other hand, is unique and therefore valuable, driving margins commensurately higher.
5. Arriving at a positioning that doesn’t resonate with prospects
It can be tempting to try to squeeze two or more specialisations into one and create a position around this. It rarely works. Not only does the positioning end up not being focused, but it also becomes very difficult to market to your target audience. They will more than likely be confused and therefore walk away from your business, and they certainly won’t be willing to pay a premium price.
Seven Tests of Your Positioning
i. Does it excite you?
If you’ve gone through the positioning process thoroughly, when you’ve finalised your positioning, you will feel excited and optimistic about the future. You will be confident about your ability to attract customers who value your expertise.
ii. The Instant Coffee Test
Like it or loathe it – and personally, I’m not a fan – the advantage of instant coffee (as the name suggests) is it takes just seconds to make. Similarly, if you can’t express your expertise quickly and concisely and in a compelling manner, it’s unlikely to ring true. And, of course, if your positioning isn’t genuine, you’ll be pushing water uphill trying to convince prospects of said expertise.
iii. Are you attracting attention?
If you’ve got your positioning right, your marketing communications will be attracting the kind of customers you are looking for. Your business will stand out from the pack and win the attention of your prospects.
iv. Are your customers willing to pay a premium price?
The profit margin you can command will be the ultimate indicator as to whether or not you have successfully differentiated your business. If your prospects have fewer alternatives to your offer, you will be able to demand a premium price and hence be more profitable. As a specialist, you want to win more whilst charging more and delivering a superior product or service.
v. Do you attract customers who are not local?
Customers will be prepared to travel significant distances to gain access to your specialist knowledge and expertise. Your ability, therefore, to attract ‘out-of-town’ customers is a strong indicator of the perception of your expertise.
vi. Do you control the buying agenda?
Ultimately, the impact you exert on the buying process comes down to the uniqueness of your positioning. The more alternatives there are to your product or service, the less control you will have and the more you will have to bend to the buyer’s wishes.
vii. Have you got time to think?
To provide value, you have to have time to think. If you are busy fools, you will be too focused on meeting deadlines and fire-fighting to commit time to thinking. It is, however, time to think that will give you the edge and keep you ahead of the pack.
Why positioning is so important in B2B marketing
Geoffrey Moore, author of Crossing the Chasm, says: “Positioning is the single largest influence on the buying decision.” He describes a position as a buyer’s shorthand for the best solution for a particular problem.
Good positioning attracts prospects, encouraging them to learn more about your offering. It’s like the ‘ante’ each player in a game of poker has to put in the pot even before the cards are dealt. If your positioning is on the mark, prospects will respond to your message by thinking either “that’s just what I’m looking for,” or “that’s not for me.”
When you create a positioning statement it articulates a high-level, abstract benefit. This needs to be supported by a few backup points, such as client testimonials, that show how your products or services will deliver these tangible benefits.
Your statement has to make it clear why your target audience needs to care about your claim and take action. Once right, this positioning statement will become the central theme for all your marketing communications, from your website to PR to advertising.
No matter how well thought out or compelling your positioning statement is, however, it won’t stick unless it is executed consistently and repeated over a long period.
Stand out from the crowd
Effectively implemented, positioning quickly tells the prospect of your marketing message, why they need your product, solution, technology or service. It distinguishes you from the competition and enables you to control the buying process and charge a premium price for what you do.
Unsurprisingly, due mainly to the differences and challenges each individual industry faces, there is no one standard solution to creating your strategic B2B positioning. So, if you’re still feeling overwhelmed by the prospect of working out your B2B positioning, why not leave it to the experts here at Leapfrog?
Drop us a line (or give Alan Myers a call – 0116 278 7788) – we’d be more than happy to help.