Positioning: Dare to Differentiate

Most of us occasionally suffer from a “following the herd” mentality, but effective positioning requires companies to deviate from the norm and establish their own unique position. When formulating a positioning statement, the statement should (1) clearly articulate the company’s understanding of market needs and (2) present a defendable value proposition that is meaningful to target audiences. We find that this second requirement is particularly challenging for young companies.

In a recent client engagement, we conducted a competitive positioning audit and found that 6 out of 7 companies in the space claimed a market-leading position. Yet our client was hesitant to drop “leader” from their positioning, fearing that potential customers would not consider them a viable market player.

This line of reasoning is prevalent in the technology industry. If ‘Company A,’ the true market leader as defined by market share, claims it is the leading provider of widgets, the new market entrant ‘Company B’ claims it is the leading provider of next-generation widgets, and so on until you have the whole sector claiming they are “the leading provider of [insert adjective] widgets.”

How can a defendable value proposition be created by following the herd? The answer is that it isn’t. It doesn’t matter what a company believes or wishes to be true. Positioning is about how companies are perceived in the minds of their target audiences. And I have yet to meet a prospect who cares to split hairs over a company’s messaging semantics.

Dare to put differentiation back into positioning by answering the prospective customer’s question, “Why do people choose your company?” (Hint: it isn’t because you are one of six “market leaders.”) To find the real answer to this question, try talking to your customers, prospective buyers, and competitors’ customers (if possible).

A defendable and meaningful positioning platform requires that you understand the factors that motivate the buying decision within your space. So ask customers what factors they considered when making their decision (i.e., quality of offering, breadth of offering, depth of offering, pricing, innovation, value, credibility, market expertise, etc.) and then divide those attributes into the following hierarchy:

• Compelling Attributes: What attributes compel them to buy from you instead of the competition?
• Differentiating Attributes: What attributes begin to differentiate your company from the competition? You may share these attributes with some but not all of your competitors.
• Necessary Attributes: What attributes establish you as a viable vendor but do not differentiate you from your competition?

When you understand the attributes that compel someone to buy your product/service instead of the competition’s, you can begin to define a differentiated and defendable position.