Assessing Your Current Product/Service Offering Series: Question 2
Do you review the positioning of your product/service on a regular basis to determine if it is still valid?
Positioning a product or service that it appeals to your customer base sounds easy but in actuality it is harder than it looks. The biggest mistake entrepreneurs make is that they frequently use their own values as the basis for how they position their products and services. They should be using their customers perceptions to position the products and services. These perceptions are rarely static and are often skewed by economic, culture, or many other rationales. A wise businessperson is constantly reviewing the business environment and trying to anticipate the likely changes in their clients needs. Consider some of the basic positioning strategies and how these might have to be adapted.
1. You can position your product as the brand to buy. An example of this would be Coca Cola or Pepsi. Their customers tend to be very loyal and it is difficult to get them to switch. This is very hard to do for a small company but not impossible if you have some very unique selling feature, such as a patented technology or a unique way of doing something. Lululemon is a good example of a small company that built a brand name for itself. Started in Vancouver as Yoga Studio that set out to make comfortable athletic wear for its students. The clothing quickly attracted a following which grew exponentially and now has a loyal following throughout North America.
2. You may have chosen to focus on the client who shops on price. In normal times this means that you need a source of low cost products or services. This strategy is particularly prevalent when we are seeing lower levels of employment like we are at present. But let’s put a caveat here. There is a limit to how low you can cut your cost and survive. Many people are still employed and it is their priorities that have changed. Many are spending their discretionary dollars in different ways. The trick is to change with them and to offer them something that will encourage them to part with some of this discretionary income.
3. You can sell on quality. For example, an Alberta manufacturer of specialty trucks had chosen to use higher quality, higher cost parts in its trucks. Despite their trucks being more expensive, several customers prefer to buy from them, as the overall operating costs of the truck was less and the truck was more reliable. Customers will pay more money if it is perceived that they are receiving value for their dollar.
Even when times are tight, people review their priorities. However, surprisingly many people do not abandon quality products. They want to feel that they are getting value for their hard earned money and are willing to spend extra if they feel that they are improving their quality of life.
4. You can position your product or service on the basis of the quality of service that you offer. E-commerce has risen the expectations of buyers, as to the speed of service that they expect. If you can provide a fast turnaround of orders then this can give you a competitive advantage. A good example of this is Amazon Prime. As well, if you can offer quality after sales service, this may offer many opportunities to gain competitive advantage, since this is an area that many businesses either don’t offer or pay attention to.
It is important to keep in mind that even within the various groups of clients, there will be niche opportunities where others will value something different to the rest. These niches can offer opportunities for small companies, as many major businesses do not see these niches as profitable.
The more points of contact you have with your customers, the more you learn about them. With all the information you gather about your customers, you will identify many needs that your customers didn’t really realise that they had. An example of this, is more tire companies are offering storage on their premises for the off-seasons tires so customers don’t need to find a place for them at their homes.
If you would like more information, please contact The Joyce Group Inc. at email@example.com
Keep an eye out for next weeks question 3 of this series.