Nov 1, 2024 | Branding, Customers, Marketing
Imagine you’re at a bustling cocktail party.
The room is filled with chatter, each person vying for attention.
Now, picture your company in that room. How do you make sure it’s the one everyone remembers?
That’s where positioning comes in.
What is Positioning?
Positioning is like choosing the perfect spot at that party, and being interesting enough to attract others into your conversation. It’s not about changing who you are, but about how you present yourself to leave a lasting, positive, and compelling impression. In the business world, it’s about carving out a distinct place in your customers’ minds.
Think of it this way: When I say “safety,” you might think “Volvo.” When I say, “overnight delivery,” “FedEx” might pop into your mind. That’s not by accident – it’s careful positioning at work.
Why Does It Matter?
In today’s crowded marketplace, being good isn’t enough. You need to be memorable. Positioning helps you cut through the noise and stick in people’s minds.
Remember, your customers don’t care about all the features your team has painstakingly built. They care about how those features solve their problems or improve their lives. Positioning is about highlighting that connection.
How Does It Work?
Positioning isn’t just a catchy slogan or a clever ad campaign. It’s a strategic framework that guides everything from product development to sales pitches. Here’s how you can make it work for your company:
- Find Your Niche: Even if it’s small, being a leader in a specific category is powerful. It’s better to be a big fish in a small pond than a minnow in the ocean. However, like everything, there is a limit. There may be a niche in the market, but you had better make sure there is a market in the niche.
- Simplify Your Message: In the world of positioning, less is more. Aim to “own” a word or concept in your customers’ minds. Make it easy for them to understand and remember what you stand for.
- Align with Customer Needs: Your positioning should resonate with your target market’s specific needs and expectations. A product that seems irrelevant to one group might be a game-changer for another if positioned correctly.
- Create a Mental ‘Box’: Help customers categorize your product or service. If they can’t quickly grasp what you offer, you’ve already lost them.
- Be Flexible: As markets shift and your company evolves, be ready to adapt your positioning. What worked yesterday might not work tomorrow.
Putting It into Practice
Imagine your company has just developed a new line of double-glazed windows and doors. Instead of listing all the technical specifications, you might position them as the solution to high energy bills in harsh Australian climates. Suddenly, you are not just selling windows and doors, you are selling comfort, savings, and style.
This positioning would then guide everything from how your R&D team refines the product to how your sales team pitches it. Effective positioning creates a coherent story that resonates across all departments and customer touchpoints.
The Bottom Line
As CEO, think of positioning as your strategic compass.
It is not what you say about your product, it is what your customers believe about it that counts.
When done right, positioning:
- Gives customers a clear reason to choose you over competitors.
- Aligns your entire organization towards a common goal.
- Makes your marketing more effective and efficient.
Remember, in the crowded marketplace of ideas and products, it’s not the loudest voice that wins. It is the one that resonates most clearly with its audience.
That’s the power of positioning.
What position do you want your company to occupy in your customers’ minds?
Answer that challenging question, and you will have taken the first step towards market leadership.
Oct 18, 2024 | Communication, Customers, Marketing
The sales funnel, often depicted in materials promising a path to riches, has profound flaws.
It implies two misleading concepts:
Gravity: The notion that business arrives at your door via discrete steps in a gravity-driven funnel is nonsensical.
No customer focus: Until the bottom of the funnel, where deals are signed, the emphasis is on marketing tactics rather than the customer.
Success demands that a customer is willing to pay for a need to be filled, an itch scratched, or an aspiration fulfilled that’s worth more than the price paid. Value must be created for the customer.
Even for everyday consumer goods, not everyone is in the market all the time. For most products, consumers are only occasionally in the market. In B2B sales, buyers may only appear once a decade, and they’re often not the ones who ultimately make the decision to buy and authorise payment.
These factors lead to the conclusion that the standard templated sales funnel is fundamentally flawed.
My alternative, displayed in the header, is more realistic. It shows progression through a sales process powered by the quality of attraction at each point. It starts with the customer being in the market only occasionally. At those times, you must be included on their list of possible solutions, usually weeded down to a shortlist for further investigation.
At each stage, customers face friction, go/no-go decision points, as they move towards a transaction. Your marketing collateral and overall impression contribute to overcoming this friction. For example, a potential car buyer will suddenly notice many shortlisted brands on the roads simply because they’re now aware of them.
This process is called the “frequency illusion” or its formal name: the “Baader-Meinhof phenomenon” (A scary name for those over 65.) It involves two related psychological concepts:
- Selective Attention: Once aware of something, your brain automatically looks for it, making it more likely to be noticed.
- Confirmation Bias: Encountering the thing you’re now aware of, your brain notices it, making it seem more prevalent.
Templated sales funnels tend to oversimplify the complexity of a customer’s journey towards a purchase. They rarely accommodate the differing behaviours of potential customers, lack recognition of the reasons one prospect drops out, and others circulate between stages as they reflect on the purchase. They completely ignore the impact of competitive activity and offers that may emerge, and tend to emphasise quantity over quality of prospects gathered.
By starting at the exact opposite end, where the potential customer lives, you should be much better able to craft marketing collateral and action points that reflect the real position in a purchase journey of a prospective customer.
Oct 14, 2024 | Analytics, Marketing
Against my better judgment, I recently engaged in a conversation about the ‘Law of Purchase Duplication’ with a young marketer. He seemed quite convinced that he was delivering a groundbreaking insight to a marketing dinosaur.
In essence, the law argues that the larger a brand’s market penetration, the more likely a consumer is to purchase alternative brands within the same category. Smaller brands, on the other hand, struggle with loyalty, relying primarily on occasional or incidental purchases when they fall within a larger brand’s ecosystem.
This concept, while not new, remains fundamental to understanding brand dynamics in the marketplace.
Back in the day, we referred to it as the purchaser’s ‘acceptable pool of brands.’
This young hot shot expanded on the advantages of being the dominant brand, and how it becomes self-sustaining through positioning, weight and quality of advertising, brand salience, product accessibility, and consumer perception. While this may all be true, the notion of it being ‘self-fulfilling’ is a step too far.
The reality is that maintaining market dominance requires constant effort and adaptation to changing consumer preferences and market conditions.
During our discussion, the topic of brand loyalty surfaced, leading to several useful questions about what brand loyalty truly means in today’s fast moving consumer markets:
- Does it mean that no other brand will ever be purchased under any circumstances?
- Does it only matter when a preferred brand is unavailable?
- Is there a sliding scale of brand loyalty that correlates to price differences?
- How does this law of duplication apply to sub-categories within the same brand?
- What are the varying impacts of demographics and psychographics of consumers?
- Could brand loyalty simply be a combination of awareness and preference, disconnected from actual purchasing behaviour in-store?
These questions highlight the complexity of consumer brand loyalty and the need for an understanding of the nuanced drivers of consumer behaviour in every market.
Over the years, I’ve been intimately involved with several instances where this so-called ‘Duplication of Purchase Law’ played out in real-world brand battles:
Meadow Lea Vs all comers. The rapid ascent of Meadow Lea margarine in the late 70s and early 80s was astonishing. The brand evolved from one of many competitors to a market leader, at its peak dominating with three times the market share of its nearest rival. Although it was driven by exceptional advertising, there were several alternative brands consumers could have turned to. However, consistent availability, competitive pricing, and in-store sampling helped cement its position. These instore marketing activities supported the brand advertising that built long term brand salience and loyalty.
Yoplait Vs Ski. The yogurt wars between Yoplait and Ski during the 80s and 90s are another example. Yoplait initiated huge market growth by making yogurt mainstream when it launched. This left Ski, the previous leader, floundering and scrambling to recover. Both brands became largely interchangeable despite product differentiation. Yoplait strawberry was an acceptable alternative to Ski strawberry, and vice versa. However, this dynamic didn’t extend evenly across other flavour categories or packaging formats. If Ski strawberry was unavailable, Yoplait strawberry was more likely to be purchased than an alternative ski flavour. These inconsistencies across the product categories and pack sizes, highlighted how nuanced and context-specific the Duplication of Purchase Law can be.
Having reliable data from the likes of Ehrenberg-Bass provides the statistical credibility necessary to sell what to date have been qualitatively understood wisdom, to the boardroom. However, it’s crucial to remember that this qualitative wisdom, built over time, should never be discarded or obscured by academic multi-syllable descriptions or management jargon. One-dimensional data cannot replace the wisdom accumulated by thoughtful marketers over time.
Oct 2, 2024 | Communication, Marketing
Marketing is about stories, and most stories start with an event, situation, or circumstances recorded in narrative form.
Being a marketer, I write frequently. Some of my musings are published on the StrategyAudit blog and often elsewhere. I also keep extensive files on ideas, snippets, URL’s of interest, anecdotes, and potentially useful metaphors. Usually it feeds my own interests, ‘ideas bank’ for this blog, and serves my clients.
Writing provides clarity, it helps give ideas substance, and form, and reveals holes. It also makes them stick in memory. Writing well will become even more critical as we spend more time prompting machines to give us answers. Machines are literal, failing to interpret the nuances of language we usually do not see.
When a piece is evolving towards publication, there are 4 basic rules of editing gleaned from experts I set out to follow.
- As short as possible, no shorter
Short, simple words make writing clearer and provide a better base for the reader’s imagination. I keep in mind Ernest Hemingway’s challenge to write a complete story in 6 words. His famous contribution was: “For sale: Baby shoes. Never worn.”
Remove words that do not add meaning. Words such as just, very, and so.
- Strong and simple words only
Using a weak verb with an adverb is both weak and adds unnecessary words. Find strong verbs to replace weak verbs and adverbs.
E.g. “Susan sprinted to the gate” instead of “Susan ran quickly to the gate.”
Similarly, use strong nouns.
E.g. Use “mansion” instead of “grand house,” or “athlete” instead of “outstanding runner.”
Ditch the thesaurus, those long, flowery words impress only you, not the reader.
- Replace passive voice with active
Passive voice is an engagement killer. It removes room for the reader’s imagination.
E.g. “The bully stole the boy’s bike” instead of “The boy’s bike was stolen by the bully.”
E.g. “The storm destroyed the garden” instead of “The garden was destroyed by the storm.”
Along with adding unnecessary flowery words, using passive voice is my most common error.
- Edit and edit again
No first draft is ever perfect. Ensure the basic stuff like spelling, grammar, capitalization, and comma placement are correct. Make sure each sentence is as short as possible and contains only one thought. Then read the copy aloud, or have a tool read it to you. I use the read function in Word to avoid the trap of reading aloud what should be there rather than what is there. It is amazing how many simple mistakes are revealed by having copy read back aloud.
Application of these four rules does improve the understanding and readability of your copy. This post has been edited, and re-edited numerous times with these 4 rules applied.
How did I do?
Sep 30, 2024 | Branding, Marketing
Pareto’s 80:20 principle applies universally, though its proportions vary across markets and circumstances. While media choices have proliferated over the past 25 years, the core drivers of consumer behaviour remain largely unchanged. However, brand loyalty has eroded as information became ubiquitous, and price promotions ‘trained’ buyers to prioritize ‘value,’ often misinterpreted as the lowest price available.
In Fast-Moving Consumer Goods (FMCG) markets, the Pareto curve is typically flatter than in Business-to-Business (B2B) sectors. The rise of house brands has further flattened this curve, resulting in a significant percentage, often a majority of sales, occurring at discounted prices.
The work of the Ehrenberg-Bass Institute has refined Pareto’s rule into the ’20:30:50′ rule. This suggests that the heaviest 20% of buyers contribute around 50% of total purchases, the middle 30% account for 30%, and the lightest 50% of buyers account for 20% of purchases.
Market variations significantly impact purchase behaviour, influencing marketing strategies. For example, household laundry detergent is a category with near-universal penetration but relatively low purchase frequency, driven by household size and composition. In contrast, the disposable diaper market has low penetration but high purchase frequency among households with babies.
The choice of media, weight of media, and the nature of the message delivered will vary significantly between these two different categories. This is before considering the different behaviours and preferences of individual buyers in these markets.
These complex and interrelated success factors are often overlooked by amateur marketers, but are always considered by experienced professionals.
Sep 27, 2024 | Customers, Marketing
‘Marketing’ is a word used and misused widely. Perhaps that is because there are so many definitions around, including my own: ‘The generation, building, protection and leveraging of competitive advantage’
After 45 years of marketing, I have gained some experience. Often it has been painful, coming from the unexpected. Distilling all those lessons into a few headline statements has been a mission to help others.
Not all you try will work.
Marketing is about the future, trying to shape behaviour of your customers to remain with you, entice others to try you out, or for them to do something new. As a result, not everything you try will work. This is an unchanging truth irrespective of all the resources devoted to any project, or set of initiatives.
The customer is not always right.
Some customers, often many that are chased most seriously, simply do not matter. They will cost to capture and keep more than you can ever make from them. However, the right customers are always right. The challenge is defining who they are, recognising their pain points, gain points, articulating the value you deliver, and focusing resources on them.
Digital marketing and it’s ugly brother social media is not a silver bullet.
More often than not, relying on digital in the absence of other wider strategic considerations will result in you shooting yourself in the foot. Digital marketing in all its forms, is just another tool in the toolbox. Like any tool, it can be used well or badly depending on the context of use, and the skill of the user.
Customers articulate your brand better than you do.
Meaningful conversations around the board table that seek to define what your brand means to customers is nowhere near as effective as getting the meaning straight from the horse’s mouth. Your brand is what your customers say it is, not what you might wish for, believe, or what some consultant says is ideal. It is almost certainly not what your partner says it is.
Trends go both ways.
The positive trend in your market, your sales, customer attitudes and all the other things tracked will at some point turn and become a negative trend. Nothing lasts forever. Relying on a trend to continue driven simply by its own momentum is a dream. It might be OK in the short term, it will never be OK in the long term. Your task as a marketer is to identify the drivers of the trend you can influence, and do so, while acknowledging those you cannot control, and responding to them.
Success comes from being different.
Different requires risk, going against the grain and the crowd, and often internal naysayers. Success rarely comes from just being the same as others but slightly better. Being incremental can result in you holding your place in an ever-increasing pace of change occurring in every market, but it will never allow you to break the mould and build anything remarkable. It is remarkable that creates real success. The forces arrayed against being different are so powerful that it is an extraordinarily difficult path both for an individual and an enterprise. Perhaps that is why we focus attention and eulogise those few who do break through and generate something truly different
Addendum December 31, 2024.
Playing around with some AI tools, I stumbled across one called infography https://app.infography.in/ that turns text into infographics.
For fun, I tried it on this post, originally published some time ago. 30 seconds, and it gave me the infographic below.
