Strategic Positioning – A Simple Guide To The Most Important Question In Business

What’s the most important part of any brand identity?

The two that get the most airtime are vision and values. A bit too much airtime, in my opinion, but that’s for another day.

The most important part is one that we love to ignore. In fact many “brand bibles” don’t even include it.

Countless pages dedicated to vision statements, values and tone of voice, while the absolute core of the brand (and business) doesn’t get so much as a mention.

It’s the question of what we do and who we do it for.

We call this strategic positioning, and there is nothing more important in business.

Yet how many companies can answer the question with conviction? 10%, perhaps?

Probably less.

So here is a simple guide to help you understand your source of strategic positioning.

If you get to grips with just one aspect of your brand, for the love of Michael Porter* please let this be it.

*The business/strategic god on whose work the contents of this slideshow are largely bastardised. Remember “Porter’s 5 forces”? Yeh, that bloke.

 

Strategic positioning – a simple guide to the most important question in business

If we want to avoid competing on price, we must identify our strategic position in the market. In other words – what we do and who we do it for.

These are big questions, so it can help to understand the categories most great companies fall into.

Best in the world at one thing

For example – Head & Shoulders do shampoo for people with dandruff. They may “flex” this position with varieties that also offer shiny, silkier, hair, but they never ever move away from dandruff – that is their position.

Advantage – super easy for customers to understand.

Disadvantage – often loads of companies trying to occupy this space so highly competitive. The relationship with the customer becomes intrinsically linked to the specific feature or benefit in question, so if some new solution emerges that renders yours obsolete, you’re screwed (a particular issue in technology markets!).

 

Complete solution for one audience

For example – Harrods don’t specialise in any particular product. Instead they solve a whole bunch of solutions for rich people. If you have more cash than sense, they can help redress the balance.

Advantage – they know their customer intimately and can design every part of the experience around that demographic. There are endless opportunities for upselling and as your relationship is not based on any single product/service line, it has fantastic resilience.

Disadvantage – can be an operational minefield as now you have to make sure you’re competent in 100 different things. It also tends to be highly competitive as, like being the best in the world at 1 thing, it’s kind of an obvious thing to do so loads of brands try it.

 

Two or three competencies combined that offer a unique source of collective value

For example – An accountancy firm that also offers certain HR  products, or a golf course that adds an on-site gym.

Advantage – It allows them to extend their relationship with the customer but in a controlled way that’s still operationally manageable. In most markets, this is the place smart new entrants begin as it’s much easier to “find a gap”.

Disadvantage – it requires a good understanding of the audience so that you understand the special value of this combined offering. It also demands a level of discipline to not endlessly add other competencies just because you see a chance to make a quick buck.

 

Access based positioning

Your village hairdresser probably isn’t the best hairdresser in the world, but there’s a good chance they’re the best hairdresser in the village. Likewise a motorway cafe doesn’t need to worry about being a great cafe, only marginally better than the dreadful ones either side of it. Access based positioning can also occur online – a business that dominates the search engines for its keyword category has, in effect, carved out a unique route to its audience.

Advantage – access based positioning, particularly geography, offers businesses one of the easiest ways to gain market traction. Relationships with your audience can become extremely resilient and offer all sorts of upsell opportunities.

Disadvantage -geography imposes a big barrier on scalability. This isn’t the case online, but for that reason channels like SEO have become saturated. It therefore usually needs to be combined with some other form of strategic position, which takes me to my final point…

While there are distinct categories of position, most brands actually leverage a blend. Identifying that blend and building a long term strategy around it is the single hardest thing to achieve in business.

It’s also the single most important.

Contact us here to find out more about strategic positioning.