When two businesses offer the same product or service, what distinguishes the two? Why would a customer pay double the price (or sometimes more) for the same service?
Today I want to discuss branding and positioning.
In my last episode with Ross Johnson, the conversation centered around positioning, and the psychology around how people think about brands.
There are a lot of implications with the branding and positioning of a company including the valuation of it. There are also a lot of financial ways to improve your business, as well as your brand.
Businesses have something that can be described as the intangible. Just think about Coca Cola, Louis Vuitton, or Gucci. They all have an intangible asset: their brand name, which carries clout.
Applying the Intangible Asset to Your Business
When you are thinking about the positioning of your business it’s important to ask yourself: “What does my brand or company stand for?” What do you want your brand and company to be known for? Ultimately you can have a very similar company that’s known for something very different than a comparable company.
Who are you marketing to?
Think about who you are marketing to. You can have a very similar product as another brand, but the person who the other brand is marketing to is very different and may make your solution seem totally different. This is because the solution and the positioning are not the same.
An example is applesauce. There are many variations in applesauce product lines: squeeze packs, cups, brands that are mixed with other fruits and vegetables. Some squeeze packs are marketed as baby food on the go which are targeting parents, but others market to older children as a snack.
“You can have a product that is very similar to another product but is servicing a different market and a different need.“
How do you want to be known?
Think about what you want to be known for and who you want to provide a solution to.
People will associate the branding and positioning based on how you persuade them to think about it, and this will change what you can charge for the product.
For example: Let’s say you’re an executive, and you are tasked by the board of directors to hire an investment banking firm to find a buyer for your company. You find one, but the deal is disastrous for your company. If you hired Goldamn Sachs, the board would be upset about the disaster deal, but they wouldn’t be upset with you.
Because you wouldn’t get fired for hiring the brand name. If you hired what people associate as the best, you wouldn’t get blamed, even if the company didn’t deliver.
However, if you hired a lesser known firm and the process didn’t go well, you would absolutely be scrutinized… because you didn’t hire the best.
So, how do you position yourself as the gold standard? It’s all about perception; which includes quality, the experience, and the feelings that surround it. The question is, how can you use this in your business?
If you have a spill on the counter, the first thing that comes to mind is Bounty paper towels. Bounty is superior to most brands in terms of quality. It may be more expensive but people will ultimately buy it because they know it is a quality product.
Think about the customer experience around the packaging of products, or even the experience you get with a service company.
A great example of this is Apple products. When you open their products out of that air-tight box, you have a high quality experience, and you know the product you are getting is high quality. Designer brands make unboxing an experience because it will drive customer retention.
You want to consider positioning yourself so that someone thinks of your business as the solution to their problem.
An example of this is the reMarkable electronic notepad, which is a writing tablet that has no additional features. It connects to the cloud and will save your notes. The packaging indicates high quality, and it positions itself as “just” an electronic notepad designed to help you focus. The reMarkable is solving a very specific problem with a very good solution.
Next, think about a bookkeeping service that charges $100/month vs. another that charges $500/month. You’re going to assume there is a difference in quality between the two, and you want to understand that premium. The difference may be who you are positioning yourself to serve. If you charge $500/month, you might position yourself as a company that markets to the bigger companies because they can afford you. Or maybe you are working on more complicated companies, have better trained people or are a high touch provider. All of these things allow you different positioning for the same solution.
Hopefully you’ve found some value in this episode and are able to extract a few good ideas you can use in your business.
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