Play to Your Strengths – Strategies For Product Positioning

The past few months have had me thinking a lot about product positioning. Several projects that I’ve had, and more than a few business plans I’ve reviewed recently, struggle with the concept of their product’s strengths. This can apply to companies as well as a positioning message of what they offer over competitors. Product positioning is all around us, whether you notice or it or not.

The goal of product (or service or company) positioning is to keep you in the customer’s mind at the time they are looking to purchase. A positioning strategy feeds into the marketing message in terms of how you talk about the product. The strongest brands and products you know about have succinct positioning statement.

But how do you get there? Define, then refine.
Much, if not all, of the data we’re going to look at below can be used for other product areas – price forecasting, operational improvements and marketing messaging around the product; but for today, we’re looking at positioning.

Define as much as possible about the product:
Product attributes and market segmentation: is it a luxury item, a mid-tier market, or economy based? Obvious examples of this are hotels: the Ritz Carlton (luxury), the Hilton (mid) and Comfort Inn (economy); each are positioned within a market segment.

  • Benefits to the customer: what will the customer gain from your product or service? The affluent traveler looking for an experience (Ritz Carlton). Ideal for ease of business travel – cookie cutter accommodations/amenities (Hilton). Inexpensive, and won’t break the bank for quick trips or family vacations (Comfort Inn).
  • Characteristics of the customer: define a couple of scenarios of ideal customers, including demographic information. What target features are they looking for? Where would your product ideally reach them? What would drive them to purchase from you?
  • Characteristics and strengths of competitors: conduct analysis using publicly available data; company annual reports, industry news and blog posts. Create an evaluation of their strengths and weaknesses to determine your competitive advantage. Opportunities for competitive pricing, improved distribution and product refresh cycles can be derived from analyzing your competitors.
  • Analyze gaps between your product and your competitors. Understanding these gaps will help you determine where your product positioning strengths stand out. These are areas which your product (or service offering) can easily target (to become)? market leaders.

Note, in some market segments the product gap could be very small, in which case your product might be competing with an established brand if it’s new to the market. Incumbents to a marketplace could be entering a profit-limiting segment.

To arrive at a product positioning statement, refine the ideas from the analysis narrow it down. Identify the top 10 items/concepts from the exercise. Then hone to the top 5, then finally the most important 3. Those 3 should be distillable into 3 words. You’ve arrived at the product positioning and the basis for your product/service/company’s marketing message.

Put it out there on all the channels used to connect to customers.
Do the concepts resonate with customers? Are you getting more sales or inquiries?

Market positioning for products change over time. Changes,whether economic or innovative, are constant in marketplaces and customers’ needs. Assessing your product positioning at regular intervals allows for retaining the competitive edge of customer needs in your market area.

Is your product playing to its strengths?

Opportunity Cost Analysis – How Much Will You Give to Get?

Over the past few months (and even before that, with mentoring), I’ve been evaluating businesses in the many stages of inception – including getting to becoming a start-up. One of the questions I ask of whomever I’m meeting with is, what is the opportunity cost?

An opportunity cost analysis is a useful exercise to run for a company/product idea, a new project or simply assessing a decision to be made.

Conducting an opportunity cost analysis allows you to study possible benefits and risks associated with taking one action instead of the alternative action in an effort to determine if the possible benefits would be worthy of those risks.

This allows you to take assumptions you’ve made about the company/project/decision and run through scenarios with some of the following questions.

How much will it cost in estimated outlay; labor, hard costs (computers/equipment), and time vs. what (revenue/exposure) can be gleaned from the idea in a space of time, such as revenue and/or exposure.

Who else is in the market space? Would you be first? (and can you set the pricing based on being first?)

What is the risk of not doing it? Less revenue, lower market share, or another company will execute the idea. Could the time and money be used elsewhere for a higher benefit?

Like most other information freely available on the internet, there are many examples of analysis questions and examples that could be run through (many including calculus equations).

However, when you own, (or are a part of), a small business (or start-up), determining an opportunity cost can be a challenge. Here’s a marketing example of a friend who owns a photography business.

The photographer is looking to grow their business in the corporate market space within 60 miles of their location. One idea they have to accomplish this is through a direct mail postcard campaign.

Let’s say the postcard cost $2500 to print and mail 500 pieces, ; the mailing list purchase of businesses in the area adds an additional $500, and the graphic designer another $200.

Total money outlay $3200 + time the photographer spends choosing images and writing copy.

My first question is: Is direct mail still an effective marketing tool? Do people still look at their physical mail? (And if so, are there current response rate statistics out there?)

How many jobs booked at what dollar amount would need to occur to recoup the postcard cost? To make a profit?

Are there other marketing avenues opportunities the same $3200 (and time) could be spent at for less risk and higher return?

Are other photographers in the area marketing this way?

Once they she gathers all the information, my friend will able to make a more informed decision based on an opportunity cost analysis.

In looking at the example above… what would you do?

 

 

 

 

 

 

 

 

3 Tips Channeling a Negative into a Positive – Moving Forward in Business

Transforming the negative of your day or week into an upwards positive takes effort and determination. Last week one of my friends had (what I think) is one of the touchiest business situations to overcome, one of her freelancers filched a client from her. Yes, business is rarely nice or fair, but the blows that catch you unaware seem to be toughest to get back up from. Stuart Goldman explains why you should never, ever act from negative energy.

These are 3 tips I’ve learned for getting it all back together:

1. Shake it out/shake it off

While you might be a bit peeved (to put it mildly), breathe, take a walk around the block, exert some energy – what ever works for you to let go of the initial anger, stress and hurt. I’ve found getting out of my office, taking a walk and calling a good friend to vent works for me. You really can shake it off.

2. Make a list/Assess your position 

Collect your thoughts. Consider your options. Make a list of pros and cons of the situation. Assess the impact and build a plan. Understand the financial impact of losing this client and what it will take to regroup. Perhaps this was a client who required extra management cycles, and distracted you from other tasks like growing your business. Or perhaps their departure will allow you to explore other markets (or customers) without concern of conflict of interest.

3. Do or create something that moves your business agenda forward

End your day (or week) feeling like you’ve moved your business agenda forward. Update the company blog, attend a networking event, or schedule the launch of a new project. Also, take advantage of this small dip in time to clean up old projects, organize your desk or client files that have been lingering. If you’ve been redoubling your business efforts, you might not have time later. 

In the case of my friend, after she vented and told me how hurt and understandably upset she was, we spent some time reworking her monthly company business newsletter to better highlight some of their more lucrative client services. My friend’s goal in doing such is to push forward into a market space where her company has just begun seeing an upswing of interest, and to attract new clients.

Good or bad, a lost client took time, energy and resources to land. Even if the short term loss of a client can be overcome, the inbound costs of landing a new one may be even higher. Now is not the time to sit back and play the victim or be outraged over unfairness. Re-channel, refocus and prepare for success!

What’s the worst negative business situation you’ve had to recover from?

Building to What? 3 Reasons Your Business Needs an Exit Strategy

There’s some controversy out there about how creating an exit strategy is akin to setting your business on the road to failure. Unless your exit strategy is to immediately get up, power everything off, lock the door and toss the keys, there is much you can learn about putting some thought into an exit strategy. 

An exit strategy is more than “When can we sell?”; for some, it’s succession planning, and for others, a set of metrics for deciding “Am I still interested and engaged in what I’m doing?”.  Every strategy is as individualized as the business it’s tied to.

While I was running my manufacturing company, after getting it off the ground, I wasn’t sure how long I’d want to continue. The startup phase was high-risk, high-pressure and encompassed all the interesting business challenges I enjoyed tackling, but was I interested sticking around forever? Was there something in between?

Below are 3 advantageous reasons in taking the time to think about an exit strategy:

1. Frame your company goals

With either a long or short term enterprise,  scheduling check up points to figure out where your equity actually is versus where you want it to be is critical for aligning your business plan goals. 

Is the direction you’re headed the right one for the market and revenue stream, or do you need to change tack? 

2. Drive how you do business

Customer and market share acquisition could be your main focal point, or aligning yourself with one larger customer whom you’re interested in selling to in the future; both are key business drivers and are also dependent on your company’s goals.  

3. Position yourself for the future

It’s ok to imagine your life post-business; whether you want to be seen as an industry expert, mentor or to springboard (or launch) what you’ve learned into your next venture. You’re going to put a lot of yourself into building your business, so what do you want leave with?

For me, I had hit the goals I wanted to achieve with my product and the business. On the personal side, I felt I was burning out. These were signs for me to kick in my exit strategy and find a buyer.

The strategies you form now can change over time; it’s your business to build. 

Regardless if you’re pro or con about having an exit strategy, don’t create a job for yourself that you can’t leave.

Do you have an exit strategy? Did you create one as part of your business plan?