Transcript from the video
Today I’d like to talk about creating an effective positioning strategy.
Right now, when we find ourselves in times of great uncertainty, the most important thing to do is to really understand what your business does and what problems it solves. This might sound obvious but, as a business owner, you need to be crystal clear, and honest, about the current state of your business. It’s only then that you can make difficult decisions as to whether temporarily scaled-down your operations or, on the flip side, how to dramatically increase the speed at which you scale up your operations so you don’t miss the opportunity that presents itself through a massive increase in the demand for your product or service.
An effective positioning strategy considers the strengths and weaknesses of the organisation, the needs of the customers and the market and the position of competitors. The purpose of a positioning strategy is that it allows a company to spotlight specific areas where they can outshine and beat their competition.
In my experience, most people conduct their business in an instinctive way and may never have actually written down their strategy in a thought-through manner.
So, if you can document your strategic position in a useful way it will provide you with a foundation to analyse and access potential adaptations and, this process is not static so you can refine your plans as the market conditions change. The simple exercise of describing your strategic position will enable you to reflect on your business and will provide the first tool you can rely on to fully understand what you offer to your customers and why loyal customers ultimately come to you.
The strategy involves making tough choices on three key dimensions – What, Who and How. If we fail to make clear and explicit choices, we end up serving the wrong customers, losing a competitive advantage and having suboptimal operations. Now more than ever, it is important to capture what makes your business unique and over the coming months you might start to notice patterns in changing customer behaviour and disruptions to your own supply chain but documenting your current position will help you better identify how to adapt your business, it will also provide a stake in the ground to be able to measure and understand how substantial the changes are that you need to make.
By asking these questions – What, Who and How it will make you aware of what’s going on in our rapidly changing business environment. It might make you consciously think – there’s still demand my product but now I’m dealing with a different customer or it could be that my customers are still loyal but they’re demanding a different service. Businesses tend to fail when they can’t clearly articulate these changes and the knock-on effect is being too slow to implement decisions.
So my challenge to you is – I’d like you to document your business by answering the What/Who/How. I’ve attached a downloaded pdf for you to print and fill in, Ive also populated this with some questions to help:
- What are your products and services used for?
- What do you do for your customers?
- Who are your customers?
- What target markets and segments do you focus on?
- What are your key processes?
- Who are your external partners and suppliers?
- What is your revenue model ie who pays for what?
- What the cost drive is?
There is clearly many more questions that you can ask but these will hopefully get you started.
As I said before designing a successful strategy is a never-ending process because new positions continually arise. Many businesses are now thinking about what position they can attain during and after the pandemic; it may be questioning your viability post-pandemic or scaling up your business to meet the new demand so once you’ve established what you do, who you are and how you do it, then take a moment to test this by asking why. So using the table you have downloaded you can fill out the Why column.
- Why do customers buy from you?
- How do you define your value proposition?
Now you can use this analysis to help you identify any vulnerabilities in your position; so as we start coming out of lockdown, I’d like you to reflect on some of these questions;
Could you shut down your operations and reopen unchanged after pandemic?
Could you emerge from the pandemic as a market leader?
Could your business survive if the government extends a lockdown say for another three more months?
Can you continue to solve customer problems if they only shop online from now?
Hopefully, you will find this exercise useful, personally I find this easier to do with other team members as different people will bring different viewpoints and I often find solutions which I would never have got to on my own!
See you next week.