Powerful Product Positioning · • Create effective positioning strategies • Develop compelling...

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BUSINESS TO BUSINESS SERIES

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trategic Market Planning for usiness growth and market leadership.

Powerful Product PositioningAlphaPlan 2

AlphaPlan 3

Second Edition March 2004 Copyright 2004, by AlphaBrand Strategies, Inc. All rights reserved. Printed in the United States of America. No part of this document may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. AlphaBrand Strategies, Inc., 7685 Safari Circle, Colorado Springs, Colorado 80920, USA alphabrand.com


Table of Contents

WELCOME TO ALPHAPLANS !..........................................................................................6

WORKSHOP OVERVIEW AND OBJECTIVES .................................................................7

HOW TO GET MAXIMUM BENEFIT .................................................................................8

LESSON 1: YOUR CUSTOMERS........................................................................................11

WHO DO YOU SERVE? .......................................................................................................12

WHAT CRITERIA IDENTIFIES THEM?..........................................................................13

WHAT CRITERIA IDENTIFIES YOUR CUSTOMERS? ................................................14

ESTABLISHING YOUR TARGET AUDIENCE................................................................15

WHO IS? WHO ISN’T?........................................................................................................16

CUSTOMER DECISION DRIVERS....................................................................................17

WHAT PROBLEM DO YOU SOLVE?................................................................................18

WHAT VALUE DO YOU PROVIDE?.................................................................................19

IDENTIFY KEY VALUE PROPOSITIONS........................................................................20

COMPARISON WITH KEY COMPETITORS ..................................................................21

RANKING CUSTOMER PRIORITIES...............................................................................22

CRITICAL MESSAGES........................................................................................................23

LESSON 2: FOCUS AND STRENGTH ...............................................................................24

FOCUS KEEPS YOU OUT OF THE DITCH......................................................................25

NARROW YOUR FOCUS.....................................................................................................26

WHERE ARE YOU FOCUSED? ..........................................................................................27

DO’S AND DON’TS ...............................................................................................................28

LESSON 3: MARKET POSITIONING................................................................................29

NOTHING BUT THE BEST! ................................................................................................30

WRITING YOUR EPITAPH.................................................................................................31

LEADERSHIP POSITION ....................................................................................................32

MAPPING STRENGTHS ON THE VALUE GRID............................................................33

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QUALITY LEADER ANALYSIS ......................................................................................... 34

PRICE LEADER ANALYSIS ............................................................................................... 35

TECHNOLOGY LEADERSHIP ANALYSIS...................................................................... 36

SERVICE LEADER POSITIONING ANALYSIS .............................................................. 37

SELECTION LEADER ANALYSIS .................................................................................... 38

MARKET SHARE LEADER ANALYSIS ........................................................................... 39

AFFILIATION LEADERSHIP ANALYSIS........................................................................ 40

CREATING YOUR MARKET MODEL ............................................................................. 41

LESSON 4: COMPELLING MESSAGES ........................................................................... 42

START WITH YOUR CUSTOMERS IN MIND................................................................. 43

SUPPORTING MESSAGES.................................................................................................. 44

DEVELOPING COMPELLING MESSAGES .................................................................... 45

HOW TO DEVELOP YOUR VISION STORY................................................................... 47

BUILDING YOUR VISION STORY.................................................................................... 49

LESSON 5: TAKE ACTION!................................................................................................ 53

TURN YOUR INSIGHT INTO ACTION! ........................................................................... 54

ALPHABRAND STRATEGIES BUILDS BUSINESSES ................................................... 56

EVALUATION: POWERFUL PRODUCT POSITIONING.............................................. 57


Welcome to AlphaPlans ! Welcome to AlphaPlans. If this is the first time you’ve used an AlphaPlan let me take a minute and provide an orientation for what you can expect. If you’re familiar with AlphaPlans—skip this page and go directly to Get Maximum Value in page 7 because we don’t believe in wasting time.

Save thousands and accelerate new ideas AlphaPlans give you the same tools and techniques consultants use. They are practical tools not theoretical reading. AlphaPlans create knowledge and solve problems … Do the work. Get the answers. Take action! Your results create powerful new strategies and insights to help grow your business into a market leader.

You can do the work independently to turbo-charge your marketing programs. Or, you can use the AlphaPlan in conjunction with a Marketing Consultant or Marketing Company to focus and streamline your efforts. In both cases, you can save thousands of dollars on consulting fees and accelerate the execution of new ideas and strategies.

Proven methodologies and tools AlphaPlans were developed to help small and medium-size businesses address the unique challenges of today’s environment. AlphaPlans provide insight, create knowledge and produce action on a specific, critical aspect of your business. They are highly focused and give you the ability to apply the same proven methodologies and tools used today by many leading experts. The process, perspectives and exercises give small and medium-sized businesses a guaranteed path to the right answers to the specific topic addressed.

The AlphaPlan begins with an overview of how you can achieve maximum benefit from the tool. Material and exercises are presented in individual sections. Each section begins with an introduction to the topic and provides insight and perspective to help you successfully complete the subsequent exercises. Careful completion of the exercises will enable you to create a specific set of tools to help you develop and execute actionable strategies. Finally, Each AlphaPlan concludes with advice, ideas, tips and instructions on how you can use what you have just completed to make changes and create performance improvements RIGHT NOW!

Continuous value You can use the AlphaPlan over and over again for multiple products and services, for this year and for years to come. The depth of your analysis will vary depending on the type of information available to you.

• Personal knowledge • Primary research • Professional advice • Team analysis • Published information • Individual instinct and intuition

The more you use it the more valuable the work becomes. In addition, you can use the AlphaPlan to continuously develop deeper understandings by revisiting the exercises as you obtain new knowledge and deeper insight into your market place.

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Workshop Overview and Objectives Effective positioning creates a distinct place for your company and its products in the minds of your target market. It presents your key value propositions (KVP) in terms that differentiate you from your competitors, and stakes your claim as the clear leader in a viable market segment.

Powerful Product Positioning gives you an effective new tool to successfully position your company’s products and services. When you successfully complete the process you will clearly understand what’s important to your customers and how you will articulate your unique ability to meet their needs. If you do the work (complete the exercises) you will get the answers and be able to take immediate action based on your new knowledge. We guarantee it.

What You Will Learn After you have completed the workshop, you will be able to use the AlphaBrand methodology for developing a successful brand identity and building effective branding programs and tools. You’ll master specific exercises you can use again and again as you learn to leverage your brand to grow your business. You’ll learn how to:

• Create a profile of you primary target customer • Identify and understand customer decision drivers • Identify and rank what matters most to your customers • Develop powerful value propositions • Focus business activity on the most promising products and services • Create effective positioning strategies • Develop compelling messages

The Creator of AlphaPlans Lon Hendrickson is the founder and president of AlphaBrand Strategies, Inc. AlphaBrand Strategies provides B2B clients with strategies and services for effective marketing, enabling them to establish a leadership position in an attractive market and leverage a position of strength to successfully grow their business. Lon is a veteran entrepreneur, and has founded or held executive positions in several successful start-ups and business consultancies.

Lon has been recognized for outstanding achievements throughout his 20-year career as a business leader and independent consultant. He is a featured columnist for the Colorado Springs Business Journal, has also authored numerous professional handbooks, industry articles, conference presentations, and white papers.


How to Get Maximum Benefit By reviewing the insights and perspectives and working through each of the exercises you’ll be able to create compelling messages to effectively promote your product(s). Completing this workshop gives you the ability to clearly and precisely articulate a compelling position and your unique value proposition vis-à-vis your core strengths, your competitors’ positions and the market’s needs. This workshop makes all of your programs and tools for marketing and sales more effective—right now!

That’s our promise. Now here’s your part--how to get maximum benefit from work:

1. Review the checklist below covering what you’ll need to have as you begin. 2. Complete each exercise as it’s presented. The material is best covered in the

chronological order it’s presented. Each exercise builds on the previous material. When you have completed a section, you will be directed to use what you have done in a subsequent section.

3. If you plan to complete your AlphaPlan in one session, give yourself a full day to make sure you don’t short-change the effort.

4. Include the perspective of others as you need to. Colleagues and other members of your sales/marketing team can provide additional information and insight.

5. Challenge yourself and other contributors before you commit your answers as the final word.

6. Don’t worry if there is one particular exercise you can’t adequately address at this time. The cumulative effort will direct you correctly and you can augment your work in a second session at a later time.

7. Review the results with your colleagues. 8. Revisit and refine the results of your AlphaPlan over time. Markets change and good

marketer monitor how it impacts current strategies and programs.

Pre-work checklist To get maximum benefit from the exercises you should have the following information and understandings available when you start your AlphaPlan.

a basic understanding of your primary target market a list of key competitors a basic understanding of competitors’ pricing a basic understanding of your product’s primary value and key differentiators examples of current ads, brochures and promotional materials access to your company web site

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Icons and Indicators

To help you progress through the workshop there are several AlphaIcons to identify specific sections of the material

The a/i icon indicates instructions and information that will help you get maximum value from this workshop.

The lightbulb icon indicates AlphaBrand insights and perspectives to provide greater understanding of the subsequent material and exercises in that section.

The pencil icon signals an exercise to be completed.

The arrow icons identify specific areas within the workshop where you will want to apply what you have done and learned in previous sections as you work through the material at hand.

AlphaPlans: Business-to-Business Series The AlphaPlans: Business-to-Business Series provides a powerful set of tools for creating business growth and market leadership.

Strategies for Market Leadership: Over time, leading business professionals have analyzed why some companies have been able to achieve a position as market leader while others with similar opportunities have not. AlphaBrand Strategies has synthesized the lessons for success and failure and developed a roadmap for increasing success by following The 10 Best Practice Principles of Market Leadership.

Effective Market Segmentation: Effective Market Segmentation shows you how to use the AlphaBrand methodology for determining industries and markets that can be effectively addressed and profitably exploited. You’ll understand how to segment your market, which segment offers the greatest opportunity for success, how to profile your ideal customer, and understand why they buy.

Powerful Product Positioning: Powerful Product Positioning gives you an effective new tool to successfully position your company’s products and services. When you successfully complete the workshop you’ll clearly understand what’s important to your customers and how to articulate your unique ability to meet their needs.

Successful Brand Development: Successful Brand Development gives you an effective new tool to create the foundation for a differentiated and compelling product or service. Through this AlphaPlan you’ll use the AlphaBrand methodology for developing a successful brand strategy and building effective branding programs and tools.

For a complete overview of B2B AlphaPlans visit alphabrand.com.

AlphaPlan 11

Lesson 1: Your Customers


Who Do You Serve? The disconnect in effective segmentation is often not understanding the difference between who can potentially use your products and services and who actually makes up your primary target market—those prospects most likely to purchase.

Think of segmentation in terms of budgets. If there were no spending limit, you could in theory chase everyone and every deal. But, because there’s a limit, you had better identify who is most likely to purchase and spend your money on them! Carefully choosing whom you will serve as your primary market lets you concentrate your resources.

So what’s the rule for effectively segmenting the market? Viable market segments are defined as groups of potential customers with fundamentally similar pain-points, who exhibit consistently similar patterns of behavior, are motivated by significantly similar forces. Use these four criteria to help understand who you serve:

• Identify similar pain-points. When a group has similar problems, they are likely to be receptive to similar solutions.

• Identify consistent patterns of behavior. When the buyer’s pattern of behavior matches your selling and distribution methods, you can serve this market.

• Identify similar motivational triggers. Buyers can also be grouped according to what they see as the most important attribute of your solution. They might be motivated by price, quality, convenience or selection. You are most likely to win business from the segment that places the highest value on an attribute where you clearly excel.

• Finally, remember current customers are a segment too! And even within this captured segment there are competitors to repel and battles to be won.

We all know the rule that says you can’t be all things to all people. Smart segmentation is the discipline of working this rule until you clearly identify whom you serve and whom you don’t. It help you understand how to evaluate all potential buyers and distill discrete aggregations of prospects that are most likely to respond to you. It enables you to concentrate your resources for greatest impact on those prospects most likely to buy your products and services, and that gives you a clear competitive advantage.

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What Criteria Identifies Them? In any macro-market, different market segments require different strategies for achieving

sustainable competitive advantage. The activity in this analysis helps you divide the macro-market place into specific groups of buyers. Consider the importance of each macro-segment attribute according to the impact it has on qualifying them as a potential customer:

• Industry type: (SIC code) • Business structure: public, private, nonprofit, government • Geographical distribution: local, regional, national, global • Size of operations: start-up, small, mid-size, large (can also be expressed as revenue) • Type of business: product, service, both • Financial condition: high growth, average growth, no growth, negative growth • Adoption patterns: early adopter, mainstream, late adopter • Buying patterns: volume buyer, frequent buyer • Demographics served: age-specific, sex-specific, race/ethnic background-specific,

religion-specific.

Here’s an example of how one company ranked and identified macro-market criteria for their business. 1=greatest impact. 8= least impact.

Rank Attributes Identifier

5 Industry type: (SIC code) Industry type not critical

6 Business structure: public, private, nonprofit, government

Business structure not critical

2 Geographical distribution: local, regional, national, global

… headquartered in the Southwestern region of the U.S. …

1 Size of operations: start-up, small, mid-size, large (can also be expressed as revenue)

Ideal customer is large enterprise ($1B annual revenue) …

3 Type of business: product, service, both … manufacturing a technology-based product …

7 Financial condition: high growth, slow/med growth, no growth, negative growth

Any growth level except “negative growth” is viable

8 Adoption patterns: early adopter, mainstream, late adopter

Not relevant

4 Buying patterns: volume buyer, frequent buyer

… we’re most competitive with volume buyers …

9 Demographics served: age-specific, sex-specific, race/ethnic background-specific, religion-specific.

Not relevant


What Criteria Identifies Your Customers? Use this exercise to identify the classification attributes that are most important to identifying buyers who find your value critical. Rank them in order of importance and identify the specific criteria you’re using. This is how you determine the most appropriate way to classify segments. Rank the importance of each attribute according to the impact it has on qualifying them as a potential customer: 1=greatest impact. 8= least impact. The attributes below provide a good starting point. If you feel they need to be modified, you may change them.

Rank Attributes Identifier

Size of operations: start-up, small, mid-size, large (can also be expressed as revenue)

Geographical distribution: local, regional, national, global

Type of business: product, service, both

Buying patterns: volume buyer, frequent buyer

Industry type: (SIC code)

Business structure: public, private, nonprofit, government

Financial condition: high growth, slow/med growth, no growth, negative growth

Demographics they serve: Age-specific, Sex-specific, Race/Ethnic background-specific, Religion-specific.

Adoption patterns: early adopter, mainstream, late adopter

Other:

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Establishing Your Target Audience

Look at the market attributues you have idendified as being most important. Now use your rankings to articulate a profile for your primary target audience. You may find that not all attributes are relevant for segmentation.

EXAMPLE: Based on the example from page 12, you can identify a primary target market segment as: 1) Large manufacturing facilities 2) located in your local metro-area 3) that produce computers or components.

Secondary market segments might also include:

• Large manufacturing facilities located anywhere in the Southwestern region producing computers or components, or

• Large manufacturing facilities located in your local metro-area that are producing a less technology-based product such as commercial building materials.

Use your work from page 13 to help you complete this exercise

EXERCISE: Now, complete this primary target market statement based on your work from page 13. The primary target market for our services is . . .

NOTES:


Who Is? Who Isn’t? Identify by company name three existing—or potential—customers representative of your primary target market … and three that do not meet the criteria.

Use your work from pages 19-21 to help you complete this exercise.

Current customers who are:

1.

2.

3.

Current customers who are NOT:

1.

2.

3.

Prospects in the pipeline who are:

1.

2.

3.

Prospects in the pipeline who are NOT:

1.

2.

3.

NOTES:

AlphaPlan 17

Customer Decision Drivers In order for a customer to recognize your products as solutions for his/her unmet needs, the

solutions must be in sync with the customer’s key motivations and goals.

Is it growth? Cost reduction? Customer loyalty? Quality? For small businesses it may be issues of cash flow, effective exit strategies, or continuing the family business. The more you know about the true underlying issues that drive business behavior for your customers the better you can position your products as compelling solutions.

What are the motivations and goals of your Primary Target Market?

1.

2.

3.

NOTES:


What Problem Do You Solve? Understanding the value you provide means understanding the problem you solve. Think about the category of need your offering satisfies, and which specific customer need(s) you solve. Consider these questions as you complete the exercise.

• Who is your target customer? • What value do you deliver them? • What problem does your product/service solve for them? • How much pain is that problem creating for them? • How does your product/service impact their pain?

Indicate the primary needs addressed through your product or service.

Category of Need

Leadership Categories

Strategic Your offering is in some way important to the enterprise mission, objectives and operational oversight.

Functional Your offering deals with a specific function within the enterprise such as data processing, human resources, plant maintenance, engineering design, or manufacturing

Operational Your offering affects the general operating policies and procedures.

Specific Examples

What critical problem do you solve for your customers? Be as specific as you can. Use the problems listed as examples.

Reduce costs

Reduce business risks

Increase sales

Expand customer base

Improve cash flow

Raise productivity

Respond to competition

Improve quality

Increase market share

Educate potential buyers and influencers

Improve employee retention

Other?

Other?

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What Value Do You Provide?

Your primary value can be expressed in terms of the leadership you either have or are pursuing. There are many opportunities to establish a leadership position. You can be the market leader evaluated in terms of sales volume, market share, or popularity. You can be the quality leader like Mercedes Benz. You can be positioned as the price leader by providing consistently lowest cost and greatest value, or the technology leader evaluated in terms of cutting edge technology or dependability. Where do you have a distinct competitive advantage?

Rank your level of strength in each based on H—High, M—Medium or L—Low. Rank where you are today and where you want to be in 12-24 months.

Accepted Forms of Leadership

Leadership Categories Today 12-24 months

Quality Leader Design / Beauty

Prestige

Craftsmanship

Price Leader Lowest unit cost

Lowest total cost

Greatest value

Technology Leader Functionality

Ease of use

Dependability

Service Leader Customer service excellence

Easy to do business with

Convenience

Selection Leader Depth of offerings

Breadth of offerings

Newest products available first

Market Share Leader Most popular choice

Most units sold

Largest customer base

Leader by affiliation Preferred provider status

Exclusive relationship


Identify Key Value Propositions A Key Value Proposition should present a compelling statement of your product’s specific ability to address a recognized business problem common to your target market.

EXAMPLE (Legal Learning is a provider of Continuing Legal Education courses for attorneys): Legal Learning is the easiest way for attorneys to get high-value CLE training. Legal Learning gives attorneys 24/7 access to information that matters—without travel costs or time away from the office.

There are several elements of importance, or questions to be answered in developing an effective value proposition. Consider these and refer to your work on page 14 to help you.

• Who is your target customer? • What value do you deliver them? • What problem does your product/service solve for them? • In what way is your product/service unique? • How do you help make them more competitive through what you do?

Use your work from pages 14-15 to help you complete this exercise

Key Value Propositions

1.

2.

3.

NOTES:

AlphaPlan 21

Comparison with Key Competitors If your KVP is truly unique then it will differentiate you from your competitors. Here’s how

you can evaluate it. List your top five competitors:

1.

2.

3.

4.

5.

Now rate their ability to present and promote the Key Value Proposition(s) you have identified in the previous exercise.

Key: Y—clearly they can accurately and honestly stake the same claim. N—clearly they cannot. X—you are unsure of their ability to make the same claim.

Use your work from page 16 to help you complete this exercise

Your Key Value Proposition 1 2 3 4 5

NOTES:


Ranking Customer Priorities When you have identified the primary market segments you serve, their motivations and goals, and the key value propositions provided by the services you offer, compare how the perceived value of your services matches to the key concerns of your target customers.

Using the “Motivations and Goals” from page 17, match your key value propositions to the things that matter most to your customers. Rank the strength of the match based on H—High, M—Medium or L—Low. This exercise provides guidelines for crafting messages to each target market.

Primary Target Market

Customer Motivation / Goal The Match

Your Key Value Proposition

Secondary Market

Customer Motivation / Goal The Match

Your Key Value Proposition

AlphaPlan 23

Critical Messages Great sales and marketing professionals are able to articulate what messages their customers

need to hear in order to make a buying decision. They know that whatever else is communicated these specific “information needs” must be met to move to the final phase of the buying decision. You must understand “what keeps your customers awake at night”, and what they need to hear to mitigate the risk associated with doing business with you.

What a customer needs to hear is not always a clear match for your Key Value Propositions, but it will clearly guide you on what you need to communicate about your product. Often a NO from your customer is simply a result of you not having addressed what they need to hear. Just as importantly, it will provide valuable information you should use to evaluate your ability to meet their needs and generate a purchase.

Use your work from pages 13-18 to help identify the specific messages your target customer needs to hear. Put yourself in their shoes and tell the vendor what your bottom line is.

Critical Messages (What do they need to hear?)

1.

2.

3.

4.

5.

NOTES:


Lesson 2: Focus and Strength

AlphaPlan 25

Focus Keeps You Out Of The Ditch There’s a great book titled, “The Rule of Three: Surviving and Thriving in Competitive Markets”. In it, the authors discuss natural market structures and strategies to help companies avoid sliding into “the ditch . . . where few customers want what they have to offer”. Read it when you can, but in the meantime let’s focus on how to stay out of the ditch—and the key word is focus! The essence of great marketing is narrowing the focus of your offering to where you are clearly the best choice. Focus is a commitment to extending your competitive advantage, avoiding unproductive distractions, and keeping your eyes on the road!

When you narrow the scope of your services you can concentrate your resources and improve your competitive advantage. It’s common, however, to see the reverse push many companies right into the ditch. Ask yourself if this scenario sounds familiar.

A Common Problem A good idea becomes a company, and with hard work and a little luck the company becomes a viable business. Shortly thereafter your initial business strategies are overwhelmed by new options, choices, and possibilities. You begin to reach beyond your core competitive advantage. You spread your limited resources to explore potential opportunities. Soon you find you’re involved in opportunistic selling outside of your primary target market, and the core strength of your products and services get diluted to address a more diverse set of customer needs.

As your focus dissipates, you begin to see buyers in your strongest market moving toward competitors who offer solutions more focused on their traditional needs. Market share in your primary market begins to erode and you find that while you’re serving more segments than ever before, you’re no longer operating from a position of strength in any of them. You have successfully obtained mediocrity in multiple markets, and are faced with stronger, more focused competitors on all fronts. Instead of dominating your market, you find yourself scrambling for a piece of what’s left.

What’s The Answer It’s not a pretty picture. The vast majority of new companies are out of business within two years. Those that make it and reach the level of market leadership do so because they have created strength through focus and successfully exploited their position by adhering to these rules for success:

• Know what your customers value. • Know what value you provide your customers today. • Commit to exploiting and extending your competitive advantage. • Know what value you will provide in the future. • Don’t over-reach and over-extend.

To be the leader, in a given market segment, you must find and commit to the unique value that you alone can deliver. Ultimately, the market rewards companies that commit to providing continuing value to a well-defined audience, and possess the corporate agility to deliver the goods. Playing by these rules will keep you out of the ditch and on the road to success.


Narrow Your Focus Effective marketing strategies require a company to narrow the focus of its market offering until it has a clear competitive advantage. This applies to both products and services. You become stronger when you reduce the scope of your activity and concentrate your resources. It continues to be true that you can’t stand for something if you chase after everything. To achieve and sustain a position of leadership you must identify the unique value that you alone can deliver, then you must commit to delivering extraordinary levels of this distinctive value to your market.

Several key questions help define an appropriate scope of services:

• What does your customer need today? How will it change? • What is the unique value that you can deliver? • How will that value manifest itself in products and services that your customer will

find compelling? • Is your offering viewed as a “critical need”? • Is it an independent “point” solution or part of a solution set? • How will you insure that you will be able to continue to serve this market in this way

(and do you want to)?

By relentlessly driving themselves to deliver extraordinary levels of distinctive value to carefully selected customer groups, market leaders make it impossible for other companies to compete on the old terms. Remember your ability to dominate a market decreases as the size of the market increases!

NOTES:

AlphaPlan 27

Where Are You Focused?

One key to success is a clear understanding of the solution (set) required to meet the need of your target market. What percentage of the solution can be provided by your product/service through your company, and which additional vendors are necessary to provide the customer with a compelling, total solution? When you provide a greater percentage of the solution, you control a greater percentage of the sales process. The more components required for a total solution and the more of them you attempt to deliver, the less focus you can apply to any single area.

Mark each box where you address a primary component of the value chain.

NOTES:


Do’s And Don’ts Jim Collins, business guru and co-author of “Built to Last” recently released another must-read titled, “Good to Great”. Collins advocates that great companies focus on things they do in which they can be the best. It’s true that good is the absolute enemy of great. Great companies are not easily distracted from this quest, acting with single-minded determination and not being quick to chase the NEXT BIG THING. They use a stop doing list, to support their to-do list.

Getting the right things on your To Do List will help you identify what should be on your Stop Doing List.

What activity will keep you focused on the path to “Great?”

Use your work from page 18 to help you complete this exercise.

Critical Things To Do:

1.

2.

3.

4.

5.

What activity will distract and dilute your focus?

Critical Things To Stop Doing:

1.

2.

3.

4.

5.

NOTES:

AlphaPlan 29

Lesson 3: Market Positioning


Nothing But The Best! Let me share with you two simple truths that took me a long time to really understand. The first truth is consumers are committed to selecting the BEST offering. And, the second truth is that BEST is relative—it’s a relative concept unique for everyone and every situation. When was the last time you set out to buy the least desirable option? The mediocre option? Or, even the pretty good option. Never. As consumers we think in terms of best. Best quality. Best price. Best value. Best service.

So what’s the connection between purchase decisions and market leadership? As marketing guru Al Reis says: “at its root, marketing is a battle of perceptions”. Winning the battle shortens the purchase cycle and maximizes profit margins because we rely on our perceptions to put things in categories and simplify the purchase decision. And one of the most influential perceptions is that of market leadership. We associate being the leader with being the best. If Company A is the leader—so the rationale goes—they must be the best!

As buyers, we often have neither the time nor the ability to research which product actually provides the best solution. So, we short cut the process and select the company or product we perceive as the market leader based on an often-inaccurate correlation that the leading product must be the best product. This behavior results in market leaders being afforded significant benefits the market does not extend to other competitors. The market leader is able to focus on strategies that extend its lead and expand its market, while competitors must expend a greater percentage of resources to combat the leader’s position as the default choice.

As a result, companies and products that are perceived as market leaders have a unique opportunity to use their position to gain competitive advantage:

• Better profit margins. • Easier entry into new markets. • Stronger barriers to competition. • Attractive partnering opportunities.

In every market there is an opportunity for one brand to rise to the top and become the leader, the dominant choice . . . the alpha brand. Market leaders follow the rules that stake their claim to leadership and now you too know the rules of the game.

Who Is Positioning You? Analysis of buying behavior has identified that consumers are conditioned to put things in categories in order to simplify the purchase decision. They use this as a screening process and apply it to products, services, and vendors.

Many vendors make the mistake of not identifying which category they operate in because they are reluctant to narrow the potential markets that they could in theory serve. By refusing to identify “where they play”, they have unknowingly handed over that responsibility to the market place. They then find themselves in the unfortunate position of having to play the game by the rules associated with their “default” position regardless of their strengths or strategies.

AlphaPlan 31

Writing Your Epitaph Articulating a position in the market is a lot like the old exercise of writing your own epitaph

How will they remember you? What will be your legacy? What should they think when they hear your name? It forces you to think about who you are, and who you want to be.

• “Here lies the All-Business software program. All-Business always provided the easiest, full-featured Accounting and Payroll system under $1,000 for small and medium-sized CPA firms in the United States.”

• “Here lies Brown Realty, their customer service for new home buyers in the Denver metro area was the best in the industry.”

There are three key components to an effective positioning strategy. Let’s use the All-Business example.

• Who are your customers? Small and medium-sized CPA firms in the United States. • What do you provide them? Accounting and Payroll software. • What specific value does it deliver? Easy-to-use, full-featured system under $1,000.

Use your work from sections 1 and 2 to direct you on this exercise. How do you want your customers to remember your products and services? Complete this exercise and tell us what your legacy will be.

Who are the customers?

What do you provide them?

What specific value does it deliver?

What do you want on the tombstone?

When you have completed the rest of the exercises in Section 3, identifying potentially viable leadership positions and the optimum Market Model for your product, you can return to this exercise to see how your initial epitaph matches up.


Leadership Position There are many opportunities to establish a leadership position. You can be the market leader evaluated in terms of sales volume, market share, or popularity. You can be the quality leader like Mercedes Benz. You can be positioned as the price leader by providing consistently lowest cost and greatest value, or the technology leader evaluated in terms of cutting edge technology or dependability. Which of the following forms of leadership are you well positioned to pursue and exploit?

Rank your level of strength in each based on H—High, M—Medium or L—Low. Rank where you are today and where you want to be in 12-24 months.

Accepted Forms of Leadership

Leadership Categories Today 12-24 months

Quality Leader Design / Beauty

Prestige

Craftsmanship

Price Leader Lowest unit cost

Lowest total cost

Greatest value

Technology Leader Functionality

Ease of use

Dependability

Service Leader Customer service excellence

Easy to do business with

Convenience

Selection Leader Depth of offerings

Breadth of offerings

Newest products available first

Market Share Leader Most popular choice

Most units sold

Largest customer base

Leader by affiliation Preferred provider status

Exclusive relationship

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Mapping Strengths On The Value Grid Using a Value Grid you can position the product offering(s) of your organization relative to the

offerings of your competitors in two-dimensional space. This will help you create an effective market model later in the workshop and will help you establish the rules by which everyone in your product/service category must play. Complete the following set of exercises by mapping your current position of strength (or lack of strength) in each of the Value Grids provided. Then map your understanding of the market’s perception of your competitors’ strength.

The vertical axis will reflect the level of importance customers in your target market assign to each of the evaluation criteria. The horizontal axis will reflect how well your product or service addresses the need. Obviously there is greater value in excelling at what your market feels is important. The best results will come from thoughtful and honest plotting.

NOTES:


Quality Leader Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess your product’s strength in this area—and the strength of your primary competition. The co-ordinates will give you a linear view of customer value and leadership position. You will use this analysis in developing the attributes and plotting for your final Market Map.


Rating scale for customer importance: 5—Critical, 4—Clearly important, 3—Average importance, 2—Of little importance, 1—Not important at all

Rating scale for each product: 5—Exceeds expectations, 4—Meets expectations well, 3—Meets expectations adequately, 2—Does not meet expectations very well, 1—Does not meet expectations at all

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Price Leader Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess

your product’s strength in this area—and the strength of your primary competition. The co-ordinates will give you a linear view of customer value and leadership position. You will use this analysis in developing the attributes and plotting for your final Market Map.





Technology Leadership Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess your product’s strength in this area—and the strength of your primary competition. The co-ordinates will give you a linear view of customer value and leadership position. You will use this analysis in developing the attributes and plotting for your final Market Map.




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Service Leader Positioning Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess






Selection Leader Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess your product’s strength in this area—and the strength of your primary competition. The co-ordinates will give you a linear view of customer value and leadership position. You will use this analysis in developing the attributes and plotting for your final Market Map.




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Market Share Leader Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess


Use your work from page 28 to help you complete this exercise. Rating scale for customer importance: 5—Critical, 4—Clearly important, 3—Average importance, 2—Of little importance, 1—Not important at all



Affiliation Leadership Analysis Plot the level of importance your customers place on this criteria for leadership. Then assess your product’s strength in this area—and the strength of your primary competition. The co-ordinates will give you a linear view of customer value and leadership position. You will use this analysis in developing the attributes and plotting for your final Market Map.

Use your work from page 28 to help you complete this exercise. Rating scale for customer importance: 5—Critical, 4—Clearly important, 3—Average importance, 2—Of little importance, 1—Not important at all


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Creating Your Market Model When you’ve completed each of the value grids identify the two grids you feel represent what

is most important to your primary target market. You will have a clear view of how your strengths match your market’s decision drivers. Use this perspective to create a final Market Model where you can articulate a clear leadership position. The best position is one that already exists in the mind of your target market. Remember the “customer motivations and goals” you identified earlier as most important to your primary target market. If your strengths don’t match up, consider how you might alter your current product strategies to be more successful.

Use your work from the preceding value grids to help you determine the most advantageous criteria for your Market Model.


Lesson 4: Compelling Messages

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Start With Your Customers In Mind What’s the secret to creating compelling messages? Know whom you're writing for (your target audience) and craft your messages with them in mind. The ability to present your value proposition in a compelling manner is a good barometer of an organization’s business focus and customer knowledge. If you can tell a compelling story then you have effectively articulated:

• who your company serves • what they value • where they have “pain” • what particular need you address • the impact they experience when that need is unmet • how your company is uniquely able to satisfy this need better than your competitors.

And you’ll find as your message evolves through more detail and greater insight into the customer’s pain and motivations you’ll be able to provide more clarity to new product development, pricing structures, distribution channels and customer service strategies. Good marketing is both compelling and memorable.

The vision story is the framework for clear, compelling, and consistent messages explaining the value your organization provides to the market place. It’s centered on people and focused on the human experience. It’s very specific, and tightly focused on the real needs of a typical customer.

You can think of the vision story and the elevator speech being related tools. The primary difference is the elevator speech lacks the drama of the human experience. The elevator speech is designed to be concise clear—the vision story is developed to be memorable. When you have completed the exercises in this section and have your vision story you’ll be able to use it to create the elevator speech, brochures, sales tools, web content and more.


Supporting Messages Developing compelling messages that present your Key Value Propositions to your target market requires you first identify how the market quantifies your claims. For your messages to be credible, they must be quantifiable. This becomes the foundation of powerful marketing messages for sales scripts, company collateral, web-site content, and presentations.

The following chart offers some accepted forms of quantifying your market messages and product claims. Use them as a starting point to help you determine how your messages will be quantified. What other criteria can you think of that will be accepted by your primary target market?

Circle all those that apply to your product or service. Add any additional criteria you think of. Cross out all that clearly do not apply at this time.

PRODUCT DATA COMPANY DATA

Awards and patents Revenues and profits

Benchmarks Strategic partners

Product reviews Top tier customers

Design wins Full product line

Initial sales volumes Business press coverage

Visionary endorsements Financial analyst endorsements

TECHNOLOGY DATA MARKET DATA

Architecture Market Share

Schematics Third-party Support

Demos Customer recommendations

Trials Standards certification

Technology press coverage Application proliferation

Guru endorsements Vertical press coverage

Industry analyst endorsements

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Developing Compelling Messages How will you quantify your Key Value Propositions identified on page 16? What specific

messages can you deliver to support your Key Value Propositions in a compelling way? Review the example below and then complete this exercise for your three of your Key Value Propositions.

Value Proposition:

• Deep Subject Matter Expertise Quantifiable Supporting Messages:

• Customer testimonials and recommendations • Awards and patents • Published author on the topic

Compelling Value Statement:

• 95 percent of the customers using our patented leads-qualification service renew or expand their contracts each year.

Use your work from pages 16, 17 and 40 to help you complete this exercise.

Key Value Proposition #1:

• Quantifiable Supporting Messages:

•

•

• Compelling Value Statement:

•


Compelling Messages continued … Key Value Proposition #2:

•

Quantifiable Supporting Messages:

•

•


•

Key Value Proposition #3:

• Quantifiable Supporting Messages:

•

•


•

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How To Develop Your Vision Story. The power of a good story well told is unquestionably one of the most compelling forms of communication. The vision story is a foundational marketing document that translates your knowledge of your customers and your key value propositions, and your market positioning into a clear and compelling natural-language narrative. Just as a good foundation makes the subsequent effort quicker, stronger and less expensive, your vision story has the same impact on sales, marketing and business development activity.

Think of your business proposition as a story with characters and plots, villains and heroes, beginnings and ends. The vision story is the framework for clear, compelling, and consistent messages explaining the value your organization provides to the market place. It’s centered on people and focused on the human experience. It’s very specific, and tightly focused on the real needs of a typical customer. The vision story puts a face on your reason for being. It becomes the basis for effective messages in ads, sales scripts, brochures, public relations, trade shows, web site, Internet marketing, and sale tools.

Establish the context The first step is to give your audience context for the story. Instead of “Once upon a time,” this story often starts with “In today’s business environment,” Paint a picture of your typical customer highlighting their responsibilities and goals. To have empathy for the character in this story, your listener needs to understand and identify with the main character you’re discussing.

Describe the challenge Now let’s get to the plot. Part one of the plot is: Around what specific challenge does the story revolve? It could be holding the line on costs, scrambling to improve margins, extending a business model to the Internet, or reducing staff turnover.

Present the problem Part two of the plot involves presenting the obstacles your typical customer must overcome. Budget cutbacks, staff reductions, inexperienced sales teams, insufficient training and similar problems hamper your customer’s ability to meet the challenge and achieve her goals.

Identify the impact of the problem (the pain) Is there a little pain or a lot? Is it isolated to your point of contact or does it cascade throughout the organization? When you truly understand their pain and can articulate it, you establish credibility as a vendor and a partner in solving their problem. When you describe the pain be specific in detail and broad in scope. In most cases you’ll find there is a domino effect when it comes to pain, and it quickly spreads across departments and functional responsibilities.

Describe an ultimate solution: Now that we have accurately articulated this hopeless mess, we can turn the story toward the happy ending. Some storytellers start this section with, “Wouldn’t it be great if there were a solution that did this …” Every business needs to finish this part of the story based on their primary value proposition to their primary target customer. In your eyes the ultimate solution might be faster service or cheaper products, highest quality or broadest selection.


Establish how you provide the ultimate solution Conclude this story with exactly how your company provides the ultimate solution. This section should come together in a clear and compelling way using your mission statement supported by your key value propositions and leading to the theme line (tag line) in your current promotions.

Every organization ought to have a vision story, and everyone in the organization ought to be able to relate it to prospects, press or partners. The vision story can be developed for a company, a product, or even one department serving another. Good marketing is both compelling and memorable and as a rule, nothing is as compelling and memorable as a good story.

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Building Your Vision Story The vision story translates brand messages and your unique value proposition into a clear and

compelling natural-language narrative format that can be used as the basis for effective sales and marketing messages. Create an outline of your vision story using short bulleted statements, then expand your bulleted points into a narrative. Work on each section in sequence so your story progresses naturally. Don’t worry about perfect wording initially—just get your thoughts down. You can review it with other stakeholders (internal or external) and refine it in subsequent drafts.

BULLETED OUTLINE:

Establish the context: Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the challenge: Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the problem: Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the impact of the problem (the pain): Refer to pages 43-44 for guidance and use your work from Section 2.


Establish an ultimate solution: Refer to pages 43-44 for guidance and use your work from Sections 3 and 4.

Establish how you provide an ultimate solution: Refer to pages 43-44 for guidance and use your work from Section s 3 and 4.

NOTES:

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FIRSTDRAFT NARRATIVE:

Establish the context:

Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the challenge: Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the problem: Refer to pages 43-44 for guidance and use your work from Section 1.

Establish the impact of the problem (the pain): Refer to pages 43-44 for guidance and use your work from Section 2.


Establish an ultimate solution: Refer to pages 43-44 for guidance and use your work from Sections 3 and 4.

Establish how you provide an ultimate solution: Refer to pages 43-44 for guidance and use your work from Section s 3 and 4.

NOTES:

AlphaPlan 53

Lesson 5: Take Action!


Turn Your Insight Into Action! The final and most important step in any AlphaPlan is putting your new insight into action. To jump-start the process and give you specific actionable strategies to implement what you have just developed we have outlined recommendations for what you can do right now!

If you have completed all the exercises in this AlphaPlan, take a moment to give yourself a pat on the back. This is important work that all too often goes undone. Okay—now let’s put your work into action.

Let’s go over briefly what you now know and where you can reference the work:

• Your target customers’ key decision drivers—page 13 • Your unique value propositions—page 14 • Your competitors’ positioning—pages 29-35 • Your optimum leadership positioning—pages 36 • Your compelling messages—pages 39-40 • Your vision story—page 45

Five things to do immediately

1. Review all of your marketing collateral to evaluate the key value propositions and messages you’re currently presenting to the market place. This includes: brochures, slide presentations, business cards, signage, and other market-facing tools.

2. Review the same about your web site. 3. Develop a plan and a timetable for communicating your new insights to internal

stakeholders, including: management team, staff, board members, and investors. 4. Review all pending media buys to determine if they are on target with your new

positioning strategy and your more selective target-customer profile. 5. Review all online marketing programs. You may be able to make changes to these

quickly.

Six things to do within 30 days

1. Develop a plan and a timetable for communicating your new insights to your business partners.

2. Once your internal team has been educated on the new positioning insights, begin refining your sales scripts to incorporate new messages.

3. If you perform customer demonstrations of your products or services, begin work on changing them to reflect your new insights and understandings. When your team is proficient in the new presentation, roll it out.

4. Implement your new positioning and compelling messages into customer newsletters or similar customer communication programs. Reinforce your leadership positioning!

5. Review your press release schedule to evaluate its alignment with your market leadership positioning. You may decide to change the focus and/or sequence of the releases.

6. Update the messages on your phone system to correspond with the introduction of new messages in your Marketing Communications materials.

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Four long-term, high-value considerations

1. Review your new business pipeline to see who fits your target segment profile. Get a clear understanding of the type of business projected and make adjustments on future sales activity to support your new insights into where you can dominate near-term.

2. Use the structure of your Vision Story to understand how you have impacted your best customers. Create several of this type of Client Stories to make your Vision Story come to life and provide specific examples (stories) your sales and marketing resources can use to clearly illustrate your key value propositions to potential customers.

3. Determine the criteria you will use to determine when you have achieved dominance in your current target market segment. These metrics will help you determine when you have outgrown your current segment and new to expand and extend.

4. If your desired product positioning is not in alignment with your organization’s goals and structures it will be a challenge to be successful. You must reconcile this misalignment through restructuring (very difficult), pursuing a new positioning strategy (potentially risky), or perhaps there is an opportunity to address multiple markets through separate distribution channel strategies. Evaluate all the options.

Summary

Remember that markets evolve, customer preferences change and new competitors will come and go over time. The work you have done gives you a strong platform for addressing today’s challenges. To paraphrase marketing guru Phil Kotler, if you nail the targeting and positioning, everything else falls into place. Commit to revisiting the exercises in Powerful Product Positioning at least once a year to keep your analysis current and your positioning relevant and compelling. And as you introduce new products or services you can use the AlphaPlan to evaluate positioning options and establish the foundation for leadership from the earliest stages of the product lifecycle.


AlphaBrand Strategies Builds Businesses In each market segment—in every market—there is a prized opportunity for one brand to rise to the top and become the leader, the dominant choice . . . the alpha brand.

Over time, leading business professionals have analyzed why some companies have been able to achieve a position as market leader while others with similar opportunities have not. AlphaBrand Strategies has synthesized the lessons for success and failure and developed a roadmap for increasing success by following The 10 Best Practice Principles of Market Leadership.

• Segment the market • Narrow your focus • Align business activity • Claim the alpha position • Integrate communications • Leverage on-line • Lock-in strategic partners • Expand the segment • Drive market share • Attack synergistic markets

By applying these best practice principles to your business you will eliminate costly trial and error, and enable dramatic increases in performance by replacing gradual improvement with rapid results. AlphaBrand Strategies helps you develop clarity and focus, and show you how to attain a level of sustainable excellence.

AlphaBrand Strategies is devoted to helping businesses learn how to become the dominant player in their market segment. For more information on how they can be adapted to your environment and your challenges, call us for a no cost initial consultation: 719-487-7345.

AlphaPlan 57

Evaluation: Powerful Product Positioning Please fax the completed evaluation to: 1-419-791-1748, or mail to AlphaBrand Strategies, 7685 Safari Circle, Colorado Springs, Colorado 80920

Please circle your overall reaction to this self-directed workshop: Poor

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Course Rating 1. Please mark the appropriate response to each statement. Please place any additional comments or information about the workshop at the end of the questionnaire.

Points of Evaluation Strongly Disagree

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Agree Strongly Agree

The content is what I expected.

The content is well presented.

The material is clearly written.

The exercises are easy to understand.

The exercises are valuable.

I learned valuable new concepts.

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I plan to use what I learned in the next 30 days.

I would recommend this AlphaPlan to others.

2. Which (if any) of the topics would you have liked to see addressed in greater detail?

3. How much time did you spend completing the workshop? ___ hours ___ days

4. Did you complete the workshop in: [ ] Single block of time [ ] Multiple sessions ?

5. How many people participated in completing the workshop _____?

6. How would you change or improve this workshop?


Additional Information

7. Which of the additional topics would you like to see developed next?

Future AlphaPlan Workshop Topics No interest

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interest

How to create integrated marketing programs and strategies.

How to create additional revenue from effective sales lead management.

How to create effective business partnerships.

How to create and maintain effective brand management strategies and programs.

How to create effective permission-based marketing strategies and programs.

Other topics you would like to see:

User Profile

8. Is your business model primarily: [ ] Business-to-Business [ ] Business-to-Consumer [ ] Other?

9. What is your primary responsibility?

[ ] Marketing [ ] Sales [ ] Business Development [ ] Other: ______________________

10. How many people are employed in your organization?

[ ] 1-10 [ ] 11-50 [ ] 51-100 [ ] 101-250 [ ] 250 +

11. Please indicate which category best describes your position in your organization.

[ ] Chief Exec. [ ] Exec. Team [ ] Mgmt. [ ] Staff

12. Your overall comments and feedback are welcomed: Thank you for taking the time to answer this questionnaire.

AlphaPlan 59


AlphaBrand Strategies, Inc., 7685 Safari Circle, Colorado Springs, Colorado, USA 80920, P: 719-487-7345, F: 419-791-1748, alphabrand.com

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