March 8, 2023
    Reding_icon 5 MINUTE READ

    Brand Positioning 101

    The Ultimate Guide Part 1

    How to Differentiate Your Brand for Long Term Sales Growth, Customer Loyalty, and Market Domination

    (Note: this is part 1 of a 3 part series on how to develop a positioning strategy to stand out and thrive, even during times of market downturns, hypercompetition, and over communication. See parts 2 and 3 here and here.)

    You're up against a lot of noise in the marketplace. The landscape of online advertising is shifting. It's getting harder to stand out, attract, and keep customers. 
    Over the last couple of decades, marketers have gotten used to easily-accessible consumer data online, where lead times for testing and running campaigns has shrunk to weeks, if not days. Thanks to this, performance marketing (driven by direct action, such as clicks, signups, calls, and purchases) has consumed the lion's share of ad budgets. 

    But as consumer behavior evolves and the tactics we've grown used to using to get attention online get more competitive and less effective, it's important to revisit the fundamentals - in this case, determining and leveraging your brand position. 

    Positioning Defined
    The theory of positioning was made popular by authors and speakers Jack Trout and Al Ries in the 1970s. At its core, it's a competitive strategy grounded in fundamental principles of human psychology - namely, how consumers cope with communication overload. Much like the laws of physics that govern the physical universe, positioning seeks to understand the underlying rules that shape how people make buying decisions. In other words, whether or not you go about intentionally building your brand position, it already exists in the minds of your customers. 

    So what is a brand position? 

    It's a single word or idea that you own in the mind of your customer. It's how your customer perceives you and what they associate with your brand and value proposition.

    Some examples:
    Fedex - overnight delivery 
    Google - search engine 
    Kleenex - facial tissue
    Band-aid - bandages
    Dominos - pizza delivery  
    Burger King - flame-grilled 
    (Note: not all of these are current; over time, many companies shift their messaging away from their original positioning, which costs them the advantage of that positioning.)
    Positioning is the act of identifying what's already in people's minds and creating brand experiences and messaging that shapes, directs, builds on, and reinforces it. 

    Benefits of Positioning
    Positioning is not just a marketing strategy. It's an entire methodology to doing business. Why? Because your decision to take or hold a given position will shape every other decision you make. 

    Consider the pizza wars. 

    Domino's is the pizza delivery company. This has driven a business model built around delivering pizza, meaning that when other pizza chains during the pandemic started leaning on third-party delivery drivers, Domino's refused to follow suit. Instead, they dug in and countered the surprise fees of delivery companies with their own "Surprise Frees" - free extras for randomly-selected customers who order through their own app/website. 

    Making decisions based on their positioning has rewarded them over the past few years: in 2021, they passed $8 billion in US retail sales for the first time. In the past 5 years, they've opened some 1,200 locations while only closing 80. And, as of Q4 2020, passed the 39th consecutive quarter of domestic gains and the 108th internationally.  

    Meanwhile, competitor Pizza Hut - long associated with dine-in pizzarias - has started closing dine-in locations to focus on take-out, quick-serve restaurants. The problem? Their competitors are already associated with this model. As a consequence, out of the 4 major national pizza chains (Papa John's, Domino's, Little Caesars, and Pizza Hut), Pizza Hut is the only one who faced a major decline in sales across 2020-2021. 

    Letting your brand position in the market drive business decisions, marketing strategy, and messaging ultimately works because it makes your business the #1 option for your ideal customers.

    These are just some of the impacts you can expect: 

    • Increased recall (people remember you longer, increasing the chance they choose you in the future)
    • Command premium prices (people will pay more for a brand with perceived leadership status)
    • Higher brand loyalty + lower customer churn (increasing the time a customer stays with your business grows your average Customer Lifetime Value and the word-of-mouth that will bring new customers)
    • Cheaper new customer acquisition (your advertising goes further, because it has less work to do to persuade someone to buy from you)
    • A growth in both market and mindshare (a measure of where your brand shows up in the list of rankings each consumer has for a given category of products)

    Ultimately, brand positioning allows for sustainable growth built on a solid foundation. It's the most sure way to sidestep the panic and scrambling that marketers go through at the first signs of an economic downturn or as the online advertising world shifts away from easy third-party data. 

    In a survey by Semrush, the search engine marketing platform, SMBs were asked about their biggest marketing challenges. Out of the top 10 recorded answers, a solid positioning strategy directly helps resolve at least 6 (ranked in order of importance to business owners/marketers):

    1. Having enough time & resources to focus on marketing (as your positioning efforts start to work, they will have a compound effect, giving the rest of your marketing more leverage; plus, consistency of messaging means less time and effort put into each campaign)
    2. Lack of clear marketing strategy and objectives (your brand position determines this for you)
    3. Lead generation (while it may not directly land you new leads immediately, it does lower lead generation costs over time while improving lead quality)
    4. Severe competition from dominant brands in the niche (positioning is at its core a competitive strategy of differentiation that will help you stand out in the market)
    5. Constant algorithm changes from Google and social media (positioning "anchors" your brand in your customers' minds, meaning they don't have to rely on Google and social media to tell them to choose you)
    6. Building a visible brand online  

    Clearly, positioning matters to your business' future growth. But how do you develop a positioning idea and promote it to your market? 

    In part 2 of this series, we'll cover the principles behind crafting your brand's position and examples of positions you can aim for.