Positioning is the bridge from customers you have to the market you want

Here are a few unpleasant truths; 

* Your current customer base might not be representative of who you ultimately need to build a successful business 

* It’s hard to shift your marketing activities from one customer segment to a very different one, even if that’s your ultimate objective (say to go directly from SMB to Enterprise)

– – Positioning allows you to implement a multi-phased plan towards your ultimate objective. It is a bridge – from what your customers look like today to where you want to go next.- –

In my previous post I explained the importance of customer interviews. Armed with an understanding of who your current customers are and what they value most about your product or service, you should ask a few strategic questions:

* What is our product or service really “good at” in the minds of current customers? 

* Do current customers represent a big enough market opportunity and are they willing to pay the fees that will drive our next phase of growth?

* Who do we want to target for our next phase of growth and what are their pain points?

* Who is our competition in the target market – consider not just other companies but alternative methods to solving the pain points.  

* Based on what we’re really good at, can our product or service meet the needs of this new customer in a way that the competition is not?   

Once answered, these questions inform a clear positioning statement: 

“For [my new target audience] my product or service will address a [need unmet by the competition] so that my customers can realize [a unique benefit]”

In his pivotal marketing text “Selling the Invisible” Harry Beckworth demonstrates the power of positioning. In 1980 Scandinavian Airlines faced $20M in losses, so they decided to position the airline as “the business traveler’s airline” with the introduction of EuroClass (martinis with an olive, cushy seats etc.). They thought that this decision would force them to sacrifice the tourist customer who demanded low fares. Instead SAS generated an $80M profit in year 1 and with the high margins from business traveler fares were able to fill remaining seats with lower-fare tourist travelers, keeping the tourist market anyway.

Effective positioning is the bridge you build to take your company from its current customers, metrics and trajectory to the next stage of growth.