Compass Points: Positioning - Managing Your Market Identity

Positioning - Managing Your Market Identity

by Charles L. Bradford

What It Is and Why Must You Do It
When we speak of market positioning, we are talking about how your company is positioned in the minds of your customers and potential customers. That is to say, the sum total of their perceptions of your company in every regard. Now this is not going to be a discussion about advertising or public relations. Advertising and public relations have an important part to play in managing your market identity. But they are not the major players. They are merely two of the possible tools of communicating to the market. And communicating to the market is only a part of managing your market identity.

You will recall that strategic planning is the planning of the overall course and direction of the company and that overall course and direction consists of what it is we sell, to whom we sell it, and how we position ourselves to beat or avoid the competition. The latter is market positioning.

Let’s get back to perceptions: that’s the heart of the matter. More often than not perceptions are highly superficial - just think of your own perceptions of companies you buy from or might buy from. What do you think of Cadillac, Ford, Chrysler, Honda, 3M, IBM, Microsoft, Nike, Exxon? Chances are your perception of them is superficial and perhaps inaccurate unless you have a close working relationship with them. So our first positioning axiom is that potential customers (who probably do not have a close working relationship with you) are likely to have a superficial and perhaps inaccurate perception of you - if they are even aware of your existence. Unless they are active prospects, they have probably had little or no contact with you. They have perhaps heard or read something about you. Perhaps not. They have needs that you could probably fulfill, but they have little or no awareness that you could fulfill these needs to their satisfaction. In some cases, they may not even be aware of the needs. In short, they really don’t know much about you. Furthermore, because they don’t know, they probably don’t care.

potential customers are likely to have a superficial and perhaps inaccurate perception of you

Unquestionably, these perceptions are critically important to your success in the marketplace. Companies that do well in the marketplace are well thought of by both their customers and potential customers. Those that do poorly are poorly thought of or not thought of at all. Our second axiom is that the degree to which you are successful in the marketplace is heavily dependent on how you are perceived in the marketplace.

Our third axiom is that the most important group in the marketplace is your customers. Their perceptions are obviously of direct critical importance to your success. Furthermore, their perceptions as reflected in what they say about you are of indirect critical importance - your reputation.

Do you monitor your reputation? If so, good for you. If not, why not? Certainly not because it isn’t critically important. Is it because you don’t have time? Make time. Is it because you don’t know how? Learn how. (It is no big deal to put together a simple little questionnaire to find out what your customers value and how they rate your ability to satisfy those values.) Is it because you are afraid to find out? (If your customers think badly of you, you need know it.)

The fourth axiom is that your reputation with your customers (whether it is good, bad or indifferent) is probably well deserved. They, and only they, are in a position to judge whether or not you do a good job of satisfying their needs and preferences. Let me tell you about one of our major suppliers, with whom we spend hundreds of thousands of dollars each year. They do an absolutely abysmal job of satisfying our needs and preferences. Their order reject rate exceeds 100%. How is that possible? Over 75 percent of the orders were rejected, and over 50% of the replacement orders were rejected. My mental image of them is summed up in one word - “incompetence”. I have a passionate dislike for doing business with them, yet I still buy from them. Why? Because they are at present the only game in town. The point is, do not make the mistake of presuming that customers are well satisfied with you just because they keep buying from you. That is called “taking your customers for granted”.

You probably have lots of potential customers out there who don’t know much about you and don’t really care. Your task is to change that. In order to accomplish this, you must precisely determine how you wish to be positioned in their minds. This deals with the attributes that you want to come to mind when customers and potential customers think about you - mental images. Conversely, and even more importantly, you want your company to come to mind when they think in terms of these attributes.

your reputation with your customers is probably well deserved

The Survey
The starting point is to identify what your customers value and find out what they think about you. You will do this through a survey, using a simple little questionnaire.

The first step is to have your management team ponder your own perceptions of your customers’ values regarding the products or services you provide. These identified values will be listed on the questionnaire for rating. Questionnaire respondents cannot be relied upon to offer new information, even though we will give them the chance. You will have to supply them with the areas to rate. (Your management team has been getting feedback from the marketplace for years. You probably have a fairly good ballpark feel for what the marketplace values. It won’t be perfect, but it will be an adequate starting point.) Take the time to carefully think this through. Be sure to consider values regarding utility, reliability, time and place, advisory, convenience and personal treatment.

The second step is to draft the questionnaire. It should be one page, have a place for other values you have not identified and additional comments. It should also include a return date deadline and respondent identification. (Click to see and/or download our sample survey).

The third step is to identify your top 200 customers to whom you will send the survey questionnaire. It will likely be necessary for you to survey different groups of customers separately. Crafting market identity from all undifferentiated customers’ responses is a common strategic error. For example, if you fail to distinguish between specialty and commodity customers in your survey, the average answer to survey questions might lead you to a half specialty, half commodity positioning, which is usually disastrous. If you are surveying different groups, take the top 200 in each group.

The fourth step is to identify the appropriate respondents within your customer organization. (Obviously this is an unnecessary step when your customer is an individual rather than an organization.) These will be the people whose satisfaction is critical to your success with that customer. This is not necessarily the final decision-maker. It may well be people who give performance feedback to the final decision-maker. You may need to identify more than one person within an organization.

The fifth step is the mechanics of sending out the questionnaire. To promote a high response rate, you should send a brief memo a week before you send the questionnaire with an explanation of what you are doing and why it is important to the customer to participate. Tell them it will only take about five minutes, and ask them to complete it immediately upon receipt.

The sixth step is to follow up with a phone call to anyone who has not responded by the deadline. Tell them that their response is critically important, and ask them to PLEASE respond right away.

The seventh step is tabulation. The most meaningful parameters are the mode and the mean. (Mode is the rating at the exact center of the data. Half the ratings will be higher and half will be lower. Mean is the arithmetic “average” found by adding all the ratings and dividing by the number of ratings.)

The final step is to review the survey results. The survey will identify the customers’ values in the “importance” column of the survey questionnaire. What important customers tell you they highly value is precisely what you should give them. This will be the basis for crafting your market identity. Address all items with an importance rating of 6 or stronger. Take the time to really understand what they are telling you. If it is unclear, personally go out into the field and get clarification.

Establishing Desired Identity and Developing Alignment
After tabulation, draft a precise (but simple) statement of how you would like to be perceived with respect to each of the attributes to be addressed. Before you can expect the market to perceive you as you would like to be perceived, you must first BE as you would like to be perceived. So you must obtain a clear commitment to that identity in your own hearts and minds and those of your own people. This does not mean merely understanding what it is the customers value on an intellectual basis, but rather a heartfelt passion to fulfilling those values. This will require motivation through continual and powerful persuasion and example setting at all levels of the organization. It will require management support and the commitment of significant resources.

The first step is to submit your market identity list (the statements regarding each attribute) to all employees along with a brief explanation as to how it was developed. Express the view that, although our customers rate us very well, much remains to be done. (Don’t point out weaknesses at this time.) Include an assurance of top management’s total commitment and support to achieving this identity.

The second step is to conduct your customer satisfaction survey annually and to adopt a GOAL of “continual improvement in customer satisfaction as measured by the annual survey”. (The questionnaire will very likely require revision based upon the results of the previous survey. For example, if they told you that technical competence is not at all important, remove it from the questionnaire. Or if they told you that ease of use is important, add it to the questionnaire.)

The third step is to set a good example by clearly, tangibly and consistently demonstrating top management’s commitment and support through what you say and what you do. DO NOT profess a total commitment to something and then back off on that commitment when you see that there is a cost. (If you are not willing to pay the price, you should not make the commitment in the first place.)

The fourth step is to make an issue of rewarding behavior that supports this commitment and not tolerating behavior that undermines it.

The final step is to reinforce the commitment through discussion of (1) the customers’ stated values, (2) how each department and individual relates to satisfying those values and (3) how the company’s success or failure to do so is directly important to each individual. This should be done in small chunks at all levels - frequently.

Correcting Deficiencies
The first step in correcting deficiencies, is to appoint ad hoc teams to address and improve upon any important values (i.e. importance rating of 6 or stronger) with deficient performance ratings (i.e. less than neutral). As you make progress in deficiency correction, raise the performance ratings hurdle. Be sure that you do not bite off more than you can chew. Drawing attention to deficiencies without obtaining progress in correcting them is a morale deflator. In the event you have generally good ratings, ad hoc teams should still be assigned to the two or three important values having the lowest performance ratings. It is good practice to use the ACTION PLAN format (template WM07x03.doc -- click to download from the CSSP web site) in addressing the deficiencies.

The second step, which is crucial, is to provide these teams with the necessary time and money to successfully get the job done.

The third and final step is to identify and address any specific customer indications of dissatisfaction.

When dealing with market perceptions you must concern yourself with both form and substance. So far these comments have been directed at substance, and that is as it should be. Before we can expect the market to perceive us as we would like to be perceived, we must first BE as we would like to be perceived. But substance alone is not enough. It is not enough, for example, to truly be the leader in your field, if you are perceived as being a follower. Appearance, exposure, image, perception. These things are important. This is where communicating to the market comes in.

Communicating to the Market
First, review every communication you have with the marketplace (publication advertising, sales support materials, stationery, packaging materials, press releases, even letters and speeches) to see to it that they support and reinforce the perceptions you desire. Every public and private communication to anybody must be consistent with the image you seek.

Finally, proclaim your demonstrable successes to the marketplace. However, care must be taken to assure that your company only makes claims that are demonstrably and clearly true. To do otherwise raises questions about your credibility. Did you know that the QUALITY IS JOB ONE program was in place at Ford Motor Company three and one half years before they went public with it? When the program was set in place, Ford had serious quality problems. Until they had some concrete results, the slogan would have drawn derisive laughter.

Conclusion
If you will 1) take the time to establish a desired market identity based upon customers values, 2) develop true alignment with that identity, and 3) communicate your commitment and successes to the market - you will be well thought of by customers and potential customers and reap the rewards thereof.

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