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7 Signs You Have A Positioning Problem [And Why Familiarity Kills Businesses]

There is a new status quo emerging in the business world and it can all be summed up with one word: “Familiar”.

Matt Brown

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familiarity

There is a new status quo emerging in the business world and it can all be summed up with one word: “Familiar”.

Competitive rivalry tends to force business owners to slavishly copy what has worked in the past, casting their services ever wider with the hope of catching new clients in the process.

From a market perspective, the familiar is invisible – a category which is typically is dominated by incumbents who compete on price, essentially then re-enforcing the feeling of familiarity in the eyes of consumer and this is especially true in markets where there is intense competition.

why-position-matters-in-business

Related: Why Flame-Grilled Chicken Franchise Galito’s Opened Up Shop Right Next To The Competition

How Customers Choose

Customers are always hiring a business, product or service to solve a problem for them, but the challenge for them is to articulate their problem and understand the costs of switching from one business, product or service to another.

It’s about risk. Often, it can be less risky for a customer to maintain the status-quo than to change it and that can be said for choosing a new type of yoghurt, switching banks and especially choosing between your own business and one of your competitors.

From a customer’s perspective, there are always quantifiable and unquantifiable switching costs. Quantifiable switching costs are things like price and taste but then there are the unquantifiable switching costs like your child crying because he/she doesn’t have his usual yoghurt in his lunch box.

This same dichotomy can be applied to literally every single type of product and service that business offers. 

Why Positioning Matters

For business owners who do not have a compelling positioning and message in the market, your business will not grow. In today’s cluttered brand and communications landscape, there are three things that determine whether your brand will have any notoriety in the market: Distinctiveness, credibility and salience.

If your brand is not doing anything unique it will lack distinctiveness. If it lacks credibility your prospects will not believe you and if it lacks future salience it will lose relevance and without relevance you do not have a business.

Positioning your business is about helping your market make sense of what you do but most importantly, it’s about positioning your business in the mind of your target customer in such a way that your business becomes distinctive and ridiculously attractive.

7 Signs You Have a Positioning Problem

1Your prospects cannot tell you what you do

There is a simple litmus test for this. Phone three prospects and ask them what they think you do as a business? If you fail to get three of the same answers you have a positioning problem.

2You are losing business to your competitors

Let’s say you have two competitors trying to sell similar things to the same market. If there is any parity whatsoever in terms of the competitor’s value propositions and their price, then the prospect will invariably revert to the competitor with a more unique positioning in the market.

In my experience, many business owners lose out to a competitor who simply tells a better story in the marketplace and the competitor with a more compelling story that talks to a differentiated positioning will always win out. So, if you are losing business to your competitors and are feeling the pinch, then you probably have a positioning problem.

3Your brand is underperforming against objectives

When your positioning is not suited to the market you are serving it will typically have a negative impact on the brand and sales power of your business.

Brand power refers to the notoriety or salience of your brand in the market that you operate in. There is a difference between awareness and notoriety – your market may know who you are but is your brand noteworthy? Sales power refers to the ability of your business to make a sale. If your business is underperforming against its brand and sales objectives, then you probably have a positioning problem.

If your business does not occupy a unique position in the mindset of your prospects it will significantly hinder your ability to make a sale, and ultimately grow your business.

Related: How to Create a Winning Mindset, to Crush the Competition

4Your positioning doesn’t reflect what you do

In today’s rapidly changing business world, the needs of your customers are constantly changing. To address these changing needs, business owners must change what they do to continue to serve the changing needs of their customers. Enter the pivot.

In most cases, this means a shift in strategy, but what you have then is a situation where your positioning no longer reflects what you do as a business, so if you haven’t addressed your positioning in the market in the last two years, then you probably have a positioning problem.

5You are competing on price

The importance of positioning is directly proportionate to the degree of competition in the market. As a market matures, more competitors enter the market which puts pressure on incumbents to maintain their market share. This manifest into things like declining volume sales and an ever-increasing margin squeeze.

To counteract this effect, the knee-jerk response is to react by competing on price and when that happens, it almost always ends in failure. But why compete on price when you can compete on value? A reworked positioning of your business in the marketplace is the conduit to the re-enforcement of value that you represent in the market and can change the perception of the market about your business.

Perception goes a long way to ensuring that you can continue to charge a premium for your products and services and remain ahead of a price hungry competitor. So, if you are competing on price and not value, then you probably have a positioning problem.

6Your communications do not support your positioning

There is nothing worse than a confused customer. If your messages from a sales and marketing perspective are not congruent across all channels it confuses the hell out of them because they are not on message; all your communications need to support the story that supports your positioning.

If your communications are fragmented, then you probably have a positioning problem.

7Your employees are not inspired by what you do

A business is simply a group a people working towards a common goal. Your positioning must act as a north star towards achieving that goal and should be easily understood, relatable and transferrable. If your employees are not inspired by what you do, then you probably have a positioning problem.

How Digital Kungfu Can Help

As a business owner, when you are working in your business you often cannot read the label from inside the bottle.

An objective view of your businesses needs to be painted using a combination of research, specialisation and differentiation methods to develop a highly effective positioning for your business that will make it distinctive and ridiculously attractive in the eyes of your prospects.


Digital Kungfu specialises in the helping business owners achieve just that. Our strategies combine research, strategy and implementation to deliver a market positioning that you can hang your hat with certainty.

Leading

What A Grade 1 Sticker Business Taught Me About Business

It’s the very fundamentals that are frequently overlooked amid ambition and “blue sky thinking” – yet, these remain the most crucial element of any business.

Grant Field

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When I was a kid, my father believed that instead of getting pocket money, my brothers and I should learn how to make money. Stickers were the school craze when I was in Grade 1, and we wanted a collection for ourselves, so Dad said if we wanted to buy the stickers, we needed to make the money. So, logically, we started a sticker trading business. Dad gave us the start-up money and took us through the basics of business.

We had a cash float for purchases, and learnt about cost price, mark-up and selling price – very basic accounting. We kept recycling that money, making extra and using it to buy more stickers. Then we worked out that if we increased the mark-up, we’d make a bigger profit – so why not make the mark-up as big as possible? The obvious happened. Our prices were too high, and we lost customers.

Valuable business lesson learnt, we came back down to a mark-up that other kids were willing to pay for.

More lessons to learn

Then people came to us and asked if they could take a sticker today and pay us tomorrow. We saw no reason not to trust them. Guess what? They didn’t pay us back. We had bad debt on our hands. When we sold out of stickers, we had cash-flow issues and couldn’t buy more stock. Dad was there to help us out, though, so we received another capital injection to get back off the ground. And this time, if we did extend credit, we loaded it for the privilege of “buy now, pay later” – another lesson learnt.

We ran a proper ledger for the business, tracking our inventory, sales and profit. Even if our “bank” account was a piggy bank, we had a clear record of what was going on. When I look back on it, none of what I learnt was irrelevant.

Today, I run a leading financial services company with billions of rand running through our bank accounts. Even though the finances of the business are run on a much larger scale, the principles of business – those basic principles that we learnt trading stickers – still power our company. And when I see entrepreneurial ventures failing, or when friends come to me for advice because their business is struggling, it’s almost always because they haven’t got these basics right.

Related: Successful SA Entreps Share Their Most Valuable Business Advice Ever Received

Clarity

One of the most important lessons I’ve learnt is that if you don’t fully understand how the money is being made, walk away. Whether you are dealing with stickers or financial services, the business principles should be straightforward: money coming in, money going out, and profitability.

Every day, I look at an Excel statement of my company’s forty bank accounts. Every day, I look at the cashflow, and unusual big-ticket items get a note so I know what’s going on. It’s just like that Grade 1 business, only on a bigger scale.

Entrepreneur, thwarted

Once the other kids saw the success of our sticker business, they started to want to get in on the action, so they came to market with their own competing products. At first, we were able to innovate as the competition squeezed our margins and started to impact on our profits. Eventually, the whole situation got completely out of hand and the school banned sticker trading for profit.

While I didn’t become a sticker magnate, the lessons I learnt in Grade 1 remain central to every business I am involved with – get the basics right.

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Leading

How To Handle A Director Who Always Says No

Diverse opinions on a board is a good thing — but is it boosting your business, or hindering growth and decisions?

Carl Bates

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director-refused

Do you have that director on your board who always says ‘no’? Regardless of what the issue is, regardless of the context, who raises it or whether or not it is indeed a good idea, their response is either a simple ‘no’ or an elongated perspective on why they disagree? It can even feel at times that they are actively working against the company and against the board. Although they obviously do not see it that way.

Experienced directors will have multiple war stories related to this subject. Aspiring directors should be aware of how to approach these situations when they arise and how to avoid becoming the subject of such stories.

Develop a culture of trust, candour and professionalism

A board’s conduct must be characterised by trust, respect, candour, professionalism, accountability, diligence and commitment. It is the board’s collective responsibility to build this culture and to engage with one another in a productive and effective way.

Dissent should be welcomed when it is constructive and engaging. The idea of being the ‘devil’s advocate’ for the sake of it however, is not the best way to approach this. Dissent should be based on a real belief that the issue has not been fully debated or creates a real challenge for the company going forward.

If you have a director who genuinely believes a different path is right for the company, hear them out and engage in the discussion. In my experience, this often opens up an issue or changes a detail that when taken as part of the whole, improves the decision-making outcome for the board and the company.

Related: Contributing In The Boardroom

Remove the politics from the boardroom

At the heart of this issue is often politics. Politics between directors, who are also shareholders or executives. Politics between the ‘new guard’ and the ‘old.’ Regardless of the genesis, politics really do not have a place in the boardroom and directors who engage in it should be called out by the chairman or another senior director.

In local government I have heard stories of councillors who always vote ‘no,’ so that whenever something goes wrong, they can say “I told you so,” and show the public why they should be re-elected. But that is indeed politics. The boardroom is a very different space. It is private and discussions should be confidential.

Board rotation, a simple solution

While the removal of an errant director should never just be left to resolve itself, there is a simple solution that can support the easy removal of the most difficult directors. The challenge is that it requires forward planning prior to the appointment of any new director.

Directors should only ever be appointed for a predefined term, with automatic rotation at the end of that term. This does not stop you from reappointing a director for a further period. It is, however, always easier to ask someone to consider a further term than it is to tell them that their time has come and they should resign from the board.

Having a predefined term for a director essentially ensures an automatic resignation period. A simple rotation policy for directors is not just good governance, it is a practical step you can take to provide a way out of a sticky relationship.

Ultimately the board as a whole must address issues that detract from the board fulfilling its function as and when they arise. A rotation policy might provide an effective backstop. A high-performance board is one that will tackle the issue head-on.

Read next: How Diversity Drives Board Performance

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Leading

The Power Pose: Using Body Language To Lead

Use the way you move and stand and interact with others to become a better entrepreneur and leader.

Howard Feldman

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In 2012, the power pose became a global sensation. A Ted Talk by Amy Cuddy hit a staggering 46 million views and became the second most popular Ted Talk in history. The premise was simple – hold a powerful pose and it will not only affect the way you behave but it will even change your body chemistry. Since the talk, the power pose has met with heavy criticism and been labelled as nothing more than pseudoscience. Fortunately for believers, they were proven right. Amy Cuddy released further research this year and it fundamentally proves that this bold stance works exactly how she said it did back in 2012.

The power pose isn’t something that you’d adopt in a meeting or around the office but the science behind it shows how important it is to pay attention to your body language as it can fundamentally change how you are perceived.

Notice how you are noticed

People spend a lot of time reading one another’s body language and the way a person stands or holds their hands or moves can influence how others see them. It’s very natural to judge someone else’s posture, but what about the way they are judging yours? Few people look at how their body language is affecting the way people engage with them.

Related: [Quiz] How Good Are You At Reading Others In Business?

So, what are you supposed to do?

Fake it until you make it

Want to know how can you adapt to become a better leader? You can fake it.

The power pose isn’t the only way to change your mood. Research has shown that whether you laugh naturally or put on a smile and make yourself laugh, your body still releases the same levels of serotonin.

Whether you are really laughing or just pretending to laugh doesn’t matter – they both have the same impact on your demeanour.

Change how others see you

Think about the pose that every athlete adopts when they win a race or achieve something that’s been physically taxing. They hold their hands outstretched in the air. Even blind athletes hold the same pose. It’s big, it’s bold and it’s a physical manifestation of success.

Now consider the defensive pose. The tight hunched shoulders or inward curve of the spine. These poses immediately make a person look nervous, afraid and lacking in confidence. Like the porcupine curling in on itself for protection.

The same ideas apply to daily business life. While the power pose and the athlete pose are not necessarily a team activity, ensuring that you hold your body upright and with confidence means that you’re conveying an attitude of strength. You come across as confident and capable and positive. You are ready to take on anything and overcome the odds.

By contrast, if you are hunched and withdrawn, you come across as nervous and lacking in confidence and these are not the qualities you want associated with you as an entrepreneur and a leader.

Related: (Slideshow) 5 TED Talks That May Change Your Perspective on Life

Body language for entrepreneurs

  • Shake hands like a hero. The way you shake hands with someone is very significant in terms of establishing equality. Be even, be firm but don’t pull people towards you or turn their hands under your own. This makes them feel like you are trying to establish dominance.
  • Create an atmosphere of openness. Maintain eye contact, say hello to people with warmth while holding a strong posture. A warm and open greeting is essential to establishing trust.
  • Do the power pose for two minutes before any meeting or interview. This will get those chemicals stirring and make you feel confident and in charge.

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