Your Weak Positioning is Costing You Clients
If your client needs half an hour to understand what your service actually offers, you're facing a problem with weak positioning. This issue is critical because, as April Dunford points out in her book Obviously Awesome, weak positioning leaves potential clients comparing you on the most basic—and often least favorable—dimension: price.
Positioning is more than just a catchy slogan or a slick logo. It's about situating your service within a context so that its value becomes obvious. If you're simply calling yourself a 'marketing agency,' you're turning yourself into a commodity. This is a common trap that PMEs fall into, attracting clients who are looking to haggle and negotiate rather than pay for quality and value.
To solve this, consider reimagining your position in the market. Define your real competitors from the client's perspective, choose a favorable category that highlights your strengths, and name the best client and the specific problem you solve better than anyone else. But how exactly do you do this? Let's dive deeper.
Understanding Your Market Position
Begin by assessing where you currently stand in the market. Ask yourself: What are the core services you offer, and how are they perceived by clients? Are you a 'jack of all trades' or a focused expert? Weak positioning often starts with a misunderstanding of these basics, leading to a diluted market presence.
Take, for instance, a small accounting firm. Initially, they marketed themselves as a general accounting service, offering everything from bookkeeping to tax preparation. However, in a sea of similar firms, they struggled to stand out. By analyzing the market, they discovered a high demand for forensic accounting services in their region. Pivoting their positioning to specialize in this niche not only differentiated them but also allowed them to command higher fees.
The Pitfalls of Weak Positioning in PMEs
Let’s consider a real-world example: a digital marketing agency that was struggling to differentiate itself in a saturated market. Initially, they marketed themselves as an agency that 'does it all,' from SEO to social media management. This vague positioning made them indistinguishable from countless other agencies, forcing them into price wars.
After reassessing their positioning using Dunford’s framework, they shifted their focus to a niche market—healthcare providers looking to increase patient engagement through digital channels. By clearly defining their best client and the unique problem they solve, they were able to reposition themselves as specialists rather than generalists.
This change involved not just a new tagline but a comprehensive overhaul of their client acquisition strategy, marketing materials, and even their sales approach. They developed case studies showcasing successful client outcomes in healthcare, tailored their service offerings to meet the specific needs of healthcare providers, and trained their sales team to speak the language of their niche market.
As a result, they attracted clients willing to pay a premium for tailored solutions, effectively distancing themselves from the competition. This repositioning not only improved their client base but also increased profitability without having to constantly compete on price.
The Shift from Price to Value-Based Fees
Alan Weiss, in Value-Based Fees, emphasizes the importance of pricing your services based on the value you deliver rather than on deliverables or hourly rates. This approach is crucial for PMEs looking to break free from the cycle of price competition.
When you charge based on outcomes—like increased revenue or improved client retention—you anchor your fees in the economic impact you create for your clients. Weiss offers a formula that includes tangible results, emotional impact, and peripheral benefits, aiming for a ROI of 10:1 to 20:1 for the client.
For instance, a consultancy specializing in business process optimization repositioned their pricing model. Instead of billing by the hour, they began charging per project, pegging their fees to the expected efficiency gains and cost savings for their clients. This not only justified a higher price but attracted clients who understood the value of investing in results.
Consider a software development firm that shifted from hourly billing to value-based pricing. They started by calculating the client's potential revenue increase from a custom software solution. By focusing on the long-term benefits and cost savings, they positioned themselves as partners in growth rather than mere service providers.
Rewriting Your Communication Strategy
Repositioning your service requires a rewrite of your communication strategy, focusing on your unique value proposition rather than a laundry list of services. This involves a deep understanding of your ideal client and the specific problems you address.
A PME offering IT services, for example, can transform its positioning from 'general IT support' to 'cybersecurity for financial institutions.' This shift in focus requires a change in messaging, focusing on the risks of cyber threats and the peace of mind their service offers to financial entities.
By clearly articulating the unique benefits they provide, they not only attract clients willing to pay for specialized expertise but also improve their market perception as experts in a niche field. This involves crafting new marketing collateral, revising website content, and aligning sales presentations to consistently communicate the refined positioning.
Steps to Strengthen Your Positioning
- Identify Your Real Competitors: Understand who your clients see as alternatives—not just direct competitors. This helps refine your positioning to highlight your unique strengths. For example, a boutique consultancy might find that their real competition is not other consultancies but in-house teams.
- Choose a Favorable Market Category: Align your service with a category that showcases your strengths, making the value clear and compelling. If you're a digital agency, consider positioning yourself as a 'conversion rate optimization specialist' rather than just a 'digital marketer.'
- Define Your Ideal Client: Specify who benefits most from your service and tailor your offerings to meet their specific needs. This could mean focusing on a particular industry or business size, such as SMEs in the tech sector looking to scale.
- Rewrite Your Messaging: Focus on the unique problems you solve and the value you deliver, rather than listing services. Craft messages that resonate with your ideal clients' pain points and aspirations.
- Implement Value-Based Pricing: Shift your pricing strategy to reflect the results and transformation you offer, aligning it with the client's ROI. This might involve developing new pricing models that emphasize outcomes rather than inputs.
Closing Thoughts
Weak positioning can trap your business in endless price competition, but strong, clear positioning attracts clients who value your unique offerings. By integrating marketing and sales into one cohesive system, you can redefine your approach and focus on delivering value. At Growayone, we specialize in helping PMEs implement these strategies to achieve sustainable growth. Visit growayone.com to discover how we can assist your business in achieving a powerful, value-driven position in the market.
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