COMPETITIVE POSITIONING

What sets your offering and company apart from your competitors? What value do you provide and how is it different than the alternatives?

Competitive positioning is about defining how you’ll “differentiate” your offering and create value for your market. It’s about carving out a spot in the competitive landscape and focusing your company to deliver on that strategy. A good strategy includes:

• Market profile: size, competitors, stage of growth
• Customer segments: groups of prospects with similar wants & needs
• Competitive analysis: strengths, weaknesses, opportunities and threats in the landscape
• Positioning strategy: how you’ll position your offering to focus on opportunities in the market
• Value proposition: the type of value you’ll deliver to the market
• Dominant competitive advantages: clarified, distinguished strengths of your organization
• Sniper advantages: specific and special dominant competitive advantages
• Competitive positioning strategy and action plan: a complete assessment of your current positioning, a determination of your desired future positioning, and your plan to achieve it

When your market clearly sees how your offering is different than that of your competition, it’s easier to generate new prospects and guide them to buy. Without differentiation, it takes more time and money to show prospects why they should choose you; as a result, you often end up competing on price – a tough position to sustain over the long term.

One of the key elements of your positioning strategy is your value proposition, or how you deliver value to your market. There are three essential types of value: operational excellence, product leadership and customer intimacy.

Here is a hypothetical example of each type of value.

OPERATIONAL EXCELLENCE

XTC Technology’s customers don’t want bells and whistles, just a good product at the lowest possible price. XTC focuses on operational excellence so they can continually offer the lowest price in the market. For example, they just patented a new machine that dramatically lowers their costs. They’re not trying to come up with new or better products; they just want to produce more volume at a lower cost. XTC’s value proposition is operational excellence; they convey it in their messages and in everything they do.

PRODUCT LEADERSHIP

Alpha Co.’s customers care most about quality – they want the best product. Alpha is completely dedicated to innovation and quality. They’re constantly working on product improvements and new ideas that they can bring to market. They know what their competitors are doing and are completely focused on staying one step ahead in order to capture a greater share of their market. Alpha’s culture is all about product leadership, and their prospects see it even before they become customers.

CUSTOMER INTIMACY

Starboard’s market is flooded with products at all ends of the price spectrum. Yet Starboard’s customers want more than a product off the shelf; they want customized solutions. So Starboard’s mission is to know as much as possible about their customers’ businesses so they can deliver the correct solutions over time. Starboard knows they can’t just say “We offer great service.” Starboard’s team knows they have to deliver on that value proposition in every interaction they have with prospects and customers.

These companies are totally focused on delivering their value propositions. They don’t just say it — they do it, and that makes it easier to win in their respective markets.

Rather than leaving your positioning and value proposition to chance, establish a strategy. Think impartially about the wants and needs of your customers and what your competition offers. You may find an unmet need in the market, or you may realize that you need to find a way to differentiate from your competitors.

As a result, you may decide to promote a different attribute of your product, or you may find entirely new opportunities to create new products and services. Either way, you’ll strengthen your business in both the short and long term.

Competitive Positioning Steps

Your competitive positioning strategy builds upon foundation of your entire business – it’s one of the first things you should do if you’re launching a new company or product. It’s also important when you’re expanding or looking for a competitive advantage.

Profile your market

• Document the size of your market, major competitors and how they’re positioned.
• Determine whether your market is in the introductory, growth, mature, or declining stage of its life. This “lifecycle stage” affects your entire marketing strategy.

Segment your market

• Understand the problems that your market faces. Talk with prospects and customers, or conduct research if you have the time, budget and opportunity. Uncover their true wants and needs – you’ll learn a great deal about what you can deliver to solve their problems and beat your competitors.
• Group your prospects into “segments” that have similar problems and can use your product in similar ways. By grouping them into segments, you can efficiently market to each group.

Evaluate your competition

• List your competitors. Include any competitors that can solve your customers’ problems, even if their solutions are much different than yours – they’re still your competition.
• Rate your own company and your direct competitors on operational efficiency (price), product leadership and customer intimacy. It’s easy to think you’re the best, so be as impartial as you can.

Define your value proposition

• There are three core types of value that a company can deliver: operational efficiency (the lowest price), product leadership (the best product), or customer intimacy (the best solution & service). Determine which one you’re best equipped to deliver; your decision is your “value proposition.”

Determine your dominant competitive advantages

• There are the strengths of your organization which make your firm truly unique. They are clarified, distinguished and memorable and fit a list of specific criteria. Not every company has dominant competitive advantages. If you don’t, choose a few to strive for and put together a long-term plan to achieve them.

Check for sniper advantages

• A sniper advantage is a very specific and special dominant competitive advantage, one that your competitors cannot duplicate or take credit for; or do not know how to implement or put in place; or are not even aware you’re doing it, which puts them at a significant undetected disadvantage.
• While you want to promote your dominant competitive advantages to your market, you want to keep your sniper advantage private. Once your competition learns of it, your sniper advantage is destined to disappear. It may take years, but it will happen.

Determine your positioning strategy

• When you put it all together, where do you currently stand in your market? Where do you desire to be in X years in the future? How are you planning to get there? These critical decisions lay the foundation for all of your future market penetration activities: branding, pricing, distribution, market messaging, selling and servicing customers.

Find a new market for an existing offering

• Identify areas where your competition is vulnerable.
• Determine whether you can focus on those vulnerable areas – they’re major opportunities.
• Identify products/services you can offer to meet the true needs of your market in a new and better way.

What’s next?

Develop your brand strategy to help you communicate your positioning, value proposition and dominant competitive advantages every time you touch your market. Together, these strategies are the essential building blocks for market penetration strategy.

Learn about Brand Strategy