Developing a Good Positioning is Critical

I have seen and read so many positioning statements that sound like wonderful features or wish lists from the organization. They are often written by people inside who want those on the outside to believe the fantasy--that they are what they claim in the positioning. Words like "best", "exclusive", etc., find their way into the positioning without any sense of internal challenge as to whether or not they can be defended or supported. Too often, outside firms that are brought in to help with the positioning only hurt the process further when they think of positioning as trying to influence the market rather than explaining choices form the market perspective.

Positioning solves a number of issues for an organization: it identifies the target, it establishes the point of differentiation, it frames a promise, and its offers a reason to buy, invest, join, etc. In other words, solving the positioning puzzle is one of the the most important steps in the strategic process.

There are a number of must haves in a positioning:

--First, it must have a target. The target can be stated in demographic terms, or psychological terms, or behavioral terms, or any other way that we normally segment a market and identify a target. It doesn't have to say that the product or service is intended for men or women or craftsmen or some other group, but it should say who the product or service is intended for.

--Second, the positioning must create a frame of reference. All brands create a promise of performance and positioning helps, as a major part of the branding process, to state the promise that the target will receive

--Third, the positioning needs to offer a point of differentiation

--Finally, the positioning should give a reason to buy. In other words, what does the target get out of this experience, investment, etc.?

Companies need to recognize that positioning is a competitive endeavor. In other words, one is not just positioning ones own company, but one is juxtaposing the company against competition. Everyone in an industry group has similar offerings. The question is why you are different? Why should I give you my time, money, etc. versus someone else? This is a zero-sum game. We need to assume that when one buys us they do not buy someone else, or the corollary, that when they buy our competition, they are excluding us. It is called positioning because we are trying to establish our position in the market. Our customers and other key stakeholders will determine where they position us. Hopefully, our desired position will resonate with stakeholders.

So, positioning is critical in marketing strategy and branding. Good positioning should create a bit of angst internally. It is a mirror to the company from the client or customer perspective. If it is universally liked it is, like works of art, probably not that good. Great brands are not universally liked, but they are absolutely loved by some-- enough people to make them valuable. We want to differentiate, not be universally loved in our positioning. If we are for everyone, we likely don't have much to offer. We need to figure out who really needs us and why and make that clear in our positioning.

Customer Service Becomes the New Brand Differentiator

Brand managers have always sought a point of differentiation for their brands. Typically, these were unique selling propositions or technical points that would convince a customer that the brand was different and worth more than competition. The field has typically followed the traditional marketing and PR formulas for finding differentiation, but what we should be realizing is that customer service is rising as a key point of differentiation and most companies do not do well.

If we look at ways that companies can differentiate, we have basically three choices: product innovation, operational innovation or customer innovation (we actually should think of this as stakeholder innovation since all stakeholders can derive, create or destroy value). The real winners differentiate in all three areas. Southwest Airlines gained customer favor by cutting costs through operational efficiencies while at the same time increasing customer service beyond the level found on most other commercial airlines. WalMart has been an expert in operational innovation, gaining its leverage through supply chain management that shifted the inventory burden from WalMart to its suppliers. This helped them to further cut costs and free up resources for customer service beyond the typical discount operation. Apple has been an expert in product innovation and customer innovation. The list goes on.

Increasingly, companies are finding that it is difficult to sustain differentiation in product and operations. These are fairly easy to mimic. There are many consulting firms that will help a company copy its best competitors. The really difficult task is excelling in customer service. And, increasingly this is separating the good from the also-ran companies.

While companies say they care about customer service, they really don't. Most customer service operations are looked at as being a cost center and a burden. Customer service people are not well paid. Often, customer service is outsourced and forgotten. Too often, companies do not know what it happening in customer service and actually reward people for getting in as many calls as possible--not solving the problem, but rather handling them.

A few companies, like Comcast, Southwest, IBM and others are excelling at customer service through the use of social media. They are listening and responding to problems and actually getting involved in helping people with their concerns.

For marketers who think in transaction terms of price, quality and service, it is time to shirt the emphasis to the latter. Price and quality can quickly come to parity, but customer service, which seems easy, is not and actually creates distinct advantage since it often exceeds expectations, which helps build loyalty.

It's time to take customer service out of the "back office" and make it front of the house.