by Tim Williams
Is doing better enough? Marketing professional Harry Beckwith asks us to imagine the typical year-end company meeting in which the CEO’s approach to continued success is "Let’s look at what we did last year, and do at least 15% better." Beckwith observes that “Fifteen percent better works fine — for a time. That time comes when another company comes along and does business 100 percent differently.”
Harvard’s Michael Porter — one of the most important thinkers in the area of business strategy — reminds us that while companies are busy making product improvements, uniqueness is discretionary. Good work, by itself, is usually not enough to make your firm stand out. (No doubt you’ve had the experience of stumbling upon an agency that does remarkable work, but nobody’s ever heard of them.)
Different But Not Differentiated?
Differentiation, irrespective of a business strategy, is valuable in and of itself. Seth Godin illustrates this well in his book “Purple Cow,” in which he argues that simply applying purple paint to a cow will achieve the objective of helping it stand apart from the heard. Nothing else about the cow (the substance) has really changed, but by presenting it in a different way (the style) we can turn something that’s inherently unremarkable into something remarkable (as in the dictionary definition of remarkable: worth noticing or commenting on).
Differentiation by itself can sometimes create tremendous marketplace value. There are countless ways to create differentiation in your firm, including:
- How your firm is structured and organized
- Your strategic development approach
- How you select and manage your people
- The way you market your brand
- The policies and principles you apply in new business
- How you price your services
- Your offices and working environment
Opportunities for differentiation abound almost everywhere you look, right down to how your receptionist answers the phone. Given that agencies are in the business of differentiating their clients’ brands, it goes without saying that we should practice what we preach.
Of course, it's better still to complement differentiation with relevance. effective business strategies exist at the intersection of differentiation and relevance. Being different for the sake of it (a black website when everyone else is using white) has value, but the value is exponentially increased when lined up with what a prospect finds relevant, meaning important and meaningful.
Beyond Differentiation to Positioning
Identifying these areas of relevant differentiation provides a fertile environment for defining your firm’s positioning strategy. While an effective positioning strategy will ultimately be manifest in interesting words and visuals (the style), the place to start is with the substance.
The two essential areas involved in defining a positioning strategy are:
As Peter Drucker taught, the first question of any business is “Who is your customer?” No firm can reasonably serve every sort of industry, every kind of business, or every type of brand.
Here the task is not just defining a bullet-point list of services, but to up-level these offerings to solutions. Your clients buy solutions to business and marketing problems. The services you offer are only a means to that end. Effective positioning strategies sell the hole, not the drill.
As Ignition has written many times before, strategy making is mostly about subtraction, not addition. “A full-service integrated agency serving a wide variety of clients” is the antithesis of a positioning strategy, because it refuses to leave anything out — in effect, a non-positioning.
Positioning Produces the Benefits of Specialization
Specialization is the result of an effective positioning strategy. It’s an acknowledgment that the firm can’t excel in everything, but it can excel in something. Deciding what that something is — then aligning the energy and resources of the entire firm around it — is what specialization is about.
In the age of knowledge work, a focused business model becomes more and more valuable and important. Sophisticated marketers look for best-in-class capabilities in specific areas, knowing that no one company can be good at everything.
The biggest obstacle to developing an effective positioning strategy for your firm comes not from outside market forces, but rather from inside your head. Quoting again from Harry Beckwith’s perceptive book, Selling the Invisible:
“Quick quiz: Which terrifies service marketers most: A) The suggestion that they must position their service? B) The shower scene in Psycho? The correct answer is A. What all the fear? Because standing for one thing means you cannot expressly stand for other things. You must sacrifice.”