This episode explains probably the absolute biggest concept that you must understand to have a growth company. And it’s the most misunderstood concept in marketing and sales. Bill Lowell and I untangle the great ball of yarn that is marketing in this video podcast.
The Idea a company “owns” in the mind of the marketplace.
The word of the day is “Positioning,” folks. Do you own an idea like Volvo owns the idea of “Safety”? When you think “cola drink” do you instantly think of Coca-Cola? When a potential customer thinks of his/her problems, do you “own” the idea of the solution – the “go-to people for X”?
The concept of positioning was introduced to the marketing lexicon by Al Reis and Jack Trout, two advertising executives, in their 1981 book “Positioning: The Battle for Your Mind.” The book has since established itself as a cornerstone of modern marketing strategies.
Positioning involves creating a unique image and perception of a brand or product in the minds of customers while differentiating said brand or product from its competitors.
Effective positioning helps brands and products to stand out in a crowded market, and it helps to establish long-term customer loyalty.
According to Reis and Trout, positioning is a mental game played in the minds of customers. The key to winning this game is to find the few key attributes that customers find most important, focus on those attributes, and emphasize them over time.
Put simply: find the thing that makes you different and is top priority for your customers and lean into it. As straightforward as that sounds, you can’t do it in isolation. In order to be “unique” in the marketplace, you need to actually know how the competition is positioning themselves – if at all.
In many cases, small and mid-sized businesses don’t have a strong, clear position. So if your competitive intel says “Nobody has a clear position” – simply having a position puts you at a competitive advantage.
To give an example, Apple has effectively positioned itself as a premium brand that emphasizes design, innovation, and user experience. If shown an Apple product with its logo covered, you could probably still tell who made it. This has allowed the company to differentiate itself from its competitors, and to establish a unique and compelling position in the market. Nike has positioned itself as a brand that is focused on athletes and sports, and that emphasizes performance, style, and innovation. You probably won’t see Nike making dress shoes or spatulas any time soon. This has helped the company to differentiate itself from other clothing manufacturers.
Reis and Trout’s concept of positioning is crucial to successful marketing for several reasons. Effective positioning helps brands to stand out in a crowded market. In today’s world, consumers are bombarded with marketing messages from countless brands and products. Positioning helps brands to cut through the clutter, and to establish a unique and compelling identity that resonates with customers.
Popeye’s Chicken? They own the idea of spicy chicken. Are there other places that sell Louisiana spiced fried chicken? Probably. But Popeye’s did it first. Usually the company that takes a clear position first in it’s category will be the leader of that category in market share and profitability for a very long time.
Positioning helps to establish long-term customer loyalty. Brands that are positioned well are those that customers remember and identify with over time. This leads to repeat purchases and long-term brand loyalty, which is critical for sustainable business success. Coca-Cola has become so ubiquitous that in some regions, “Coke” is used to refer to all soft drinks, regardless of type or manufacturer. If that isn’t good positioning, I don’t know what is.
Effective positioning can also help to increase brand value and profitability. Brands that are positioned effectively are those that command a premium price and generate higher profit margins. This is because customers are willing to pay more for products that they perceive to be unique and valuable, and that resonate with their needs and desires. There’s a reason people buy name brands when cheaper, generic alternatives exist: perceived value. They’re buying “the original” or “the best,” intangible ideas tied to a product that is easily replicable. That’s positioning.