The world of business advertising today is a far cry from the 50s and 60s when there was typically a direct correlation between advertising spend and business growth. The exponential growth in communication technology, products and services can leave us feeling saturated and unsure how to compete. Enter Positioning: an idea popularised by Jack Trout and Al Ries in their book ‘Positioning’. It helps us stand out in a crowded market place and explain why people should pay more for what we offer. 

The Positioning Concept

There are two important parts to the Positioning concept. The first has to do with the nature of the modern world. We are saturated with communication - everywhere we look (our smartphones, laptops, TVs, billboards, flyers etc.) there is advertising. Our minds are completely filled up to the point of overflowing. 

We are also overloaded with choice. Back in the 1990’s if you had a mobile phone you most likely had a Nokia. It was one of two or three available brands. Today if you want a mobile phone, there are hundreds of brands to choose from. I’d suggest they all spend money on advertising, yet most of us can likely only name the top two or three. It is difficult in the modern world for our communication to stick in people’s heads.

The second part of the Positioning concept is about how we cope with this overload, and it has to do with how the human brain works. Our brain wants to simplify incoming communication, avoid thinking too much, and looks out for something it recognises. It categorises information into lists, and whatever is first on the list is most likely to be remembered. In fact the human brain can only hold about five or six items on each list.

Let’s bring this concept to life and see the power of Positioning through some examples.

POSITIONING in action

If I asked you to name a brand of sliced bread, what would you say? I’m going to guess that Hovis is one of the first, if not the first, name to come to mind. Nearly 140 years after Hovis was founded in the UK, despite the explosion of competitors, it still remains top in people’s minds - and customers will still pay 50% more than supermarket own brands for a loaf. Why is that? I’d suggest that the primary reason is not taste.

Hovis were the first to create a bread flour that retained wheat germ that made bread more nutritious. They were then the first to promote the health benefits of bread. This created in customers’ minds a new category of bread (‘healthy bread’) and Hovis was top of the list. It is a memorable position that they still occupy, despite (you might argue) no longer being the healthy option when it comes to bread.

The second example are these. What is the first thing that comes to mind when you see this picture?

I’d hazard a guess at Boris bikes, or maybe Barclays bikes. Even though we are literally looking at the name and logo of a different brand, we still think of Boris or Barclays. That is the power of being first.

the positioning challenge

The question and the challenge of positioning is therefore how do we get to the top of the list? It’s hard work if you aren’t there already. You need to convince each potential customer to move you one by one up their list. Unless you are much cheaper, or offer a lot more for the same price, that can take a long time.

The other option, like Hovis, is to identify a quality around your business that sets it apart in a new category in people’s heads. That is the job of Positioning. Although people might be looking for that specific category less often, the advantage is that when they do you are top of the list.

the alternative

What is the alternative to Positioning? Firstly there is price. If you choose to compete on price you must race to the lowest price you can afford. You may be successful. There are businesses that dominate part of the market by being the cheapest; but they aren’t normally small businesses. To win on price you have to have lower costs than everyone else, more customers than everyone else, or more money behind you than everyone else.

You could also compete on quality. You could offer the same but do it better, or offer more but for the same price. The problem with this strategy is that it is easy to copy. If you start offering a free add-on to your services, after a while your competitors probably will too, and then you are back to square one. What can happen over time is costs go up, prices stay the same, and you make less and less profit. That is similar to what happens in a race to the bottom when we compete on price.

the positioning matrix

How do we find a unique business position? In the book ‘Positioning for Professionals’ Tim Williams introduces the idea of a Positioning Matrix. It says that we can find a differentiated position for our business by defining our brand boundaries - of which there are four:

• Calling - what you believe in, what you and your business is about, what you would resign to defend

• Customers - the type or category of customer a business services, whether individuals or other companies

• Competencies - the things you do that give value to your clients

• Culture - how we think, act and feel when we are at work in our business

Often a business position has elements of all of the above, but one will normally be dominant - and that is the one we are looking for. Once we have identified it, we can tailor our services, brand, marketing, people, partnerships, and price to fit it.

hate it or love it

One way to know that you have reached a strong and clear position, is that it will put some people off. In fact, successfully positioned businesses are often hated and loved in equal measure. That is because, like a good strategy, it says what you are doing and what you are not doing. What you are about and what you are not about. It can feel challenging to take that type of stance, and tempting to try and be all things to all people. 

We challenge you to be open to how far you can push your business position to end up in that place that is really clear and strong!