If you want your business to reach its full potential, your product/service must be positioned well to capitalize on this. These elements are a big part of what makes a business valuable, and that’s what we’re going to talk about today.
Start With a Great Product
All valuable companies have great products (or services). You plan the design, product features, branding, packaging, and define any additional services that enhance the purchase, such as support, warranties, and guarantees.
But don’t assume that just because you have a great product and it’s doing pretty well that you don’t have to pay attention to positioning. What sets your business apart? What makes it different from the competition? Why do customers come to you instead of the other guy?
Your Company’s Value Is Tied To Differentiation
The value of your company is intrinsically connected to how you differentiate yourself from the rest. If your product is better, if your marketing is more effective, if you’re seen in more places by the kinds of people you want to attract, your company will be worth more, have more longevity, and will sell for a higher price.
To get started, here are a few things to ask yourself:
How are we different or better to do business with?
How is our pricing, guarantees, or promises better or different?
Do you lead your industry in a way that positions you differently?
In the words of Philip Kotler, considered the Father of Modern Marketing, “Your company does not belong in any market where it can’t be the best along some valued attribute.”
Angie’s List, Homeadvisor or Houzz own the Google search for phrases like “roofing contractors near me” or “landscape contractors near me”. These services position themselves differently in the construction industry.
One of my clients a few years ago: Scarletts Landscaping’s brand promise is “You’ll love your outdoor space … we guarantee it.” It may sound cliche, but it is what they live and breathe.
How Does Your Business Model Reinforce Your Product Positioning?
Your business model must support and reinforce your positioning, meaning you need to establish business processes to strengthen your promise. One example of this that I use in the book is Domino’s Pizza. They promise to deliver in 30 minutes, or it’s free. To support this, they built low-cost locations near college campuses, as that was their ideal customer. Geico is another one. They promise “15 minutes can save you 15 percent or more” on your insurance. They were able to deliver those savings by cutting out the middle man. They developed a user-friendly online quote application that lets customers compare Geico quotes to their competitors’.
Think about your business model. Are your business processes aligned to support your marketing messaging and strategic position? Have you established procedures to ensure consistent and reliable delivery of your promise? Have you developed a reputation for doing things differently? And finally, have you empowered experts who are capable of delivering your product or service?
This last point is critical. Valuable businesses do not depend on the owner to make, sell, or deliver the product, nor are they the primary customer interface. The services must support the product. The better those services are, the more valuable the company. Your services are your products and should always be considered the same way.
What Business Are You In?
So when somebody asks you, “what business are you in?” How would you respond?
If you own a construction company, you might say, “I am a contractor. I build houses.” But if you are focused on sales and marketing, if you are an entrepreneur with a growth and leadership mindset, you might answer the same question by positioning yourself apart from your competitors. And that answer will usually lead to further discussion about your business, your purpose, and more besides. Once you’ve established your unique positioning, in their eyes, your value increases.
How Does Your Company Compare To The Top Players In Your Market?
If you want to build a strong company and increase your value, you’ll want to have several differentiators. Some companies can make an impact with only one or two differentiators. One or two might break a tie, but when you have several, you have a shot at dominating your market.
To see where you can distinguish yourself from your biggest competitors, you need to deep-dive into competitive analysis. Before you can gain market share, you need to carve out some mindshare – in other words, to be known for something that’s different than everything else that’s out there.
When you understand and can articulate how you are different, you won’t have to work so hard to build your audience. Without differentiation, it takes a lot more time, money, and energy to convince customers to choose you. In the end, you’ll probably end up competing on price. While that might work in the short-term, but it’s generally unsustainable.
Developing a Competitive Advantage
To develop your competitive advantage, start by listing everything that sets you apart from your competitors. Your biggest strengths often lie in your hidden potential, and these are the things that will help you grow your business.
Use a growth discovery process to discover your customer segment’s needs and compare them to your competitor’s. This exercise is a good way to reveal your positioning and identify unmet demand.
Come back next month when we’ll talk about People, easily your most valuable asset.