4 Signs That Your Business Has A Problem With Positioning

A lot of the time, if a business isn’t succeeding, they focus on marketing or sales.

Not enough conversions through marketing? Increase the market budget or possibly change where the marketing budget is spent. Surely changing the marketing budget to Facebook Ads rather than Google Ads will improve conversions, won’t it?

Not enough sales? Increase the number of events to sell the product at. Increase the number of vendors to sell the products. Increase the number in the sales team.

However, if a business isn’t succeeding, what is more likely is that there is a problem with positioning.

I used to work in a large business and so I am painfully aware of how much money big businesses throw away by perceiving the source of weakness with marketing but actually, the positioning simply isn’t clear enough. No amount of marketing budget increase will help. April Dunford, a positioning expert likens this to simply repeating a message in English louder and louder to someone that doesn’t speak English. A non english speaking foreigner won’t understand you shouting English at them just like a prospect client won’t understand the product with weak positioning even when getting bombarded by ads.

As April Dunford notes, ‘Positioning is the act of deliberately defining how you are the best at something that a defined market cares about a lot.’

I have now read ‘Obviously Awesome,’ April’s book twice andI highly recommend it. She breaks down how clear positioning can change completely transform a business without increasing budgets, hiring or firing staff, or even changing the product/service at all.

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If we fail at positioning, we fail at marketing and sales.If we fail at marketing and sales, the entire business fails.

Here are 4 signs that your business has a problem with positioning:

1) New prospects can’t figure out what you’re selling

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You may have current customers that love you but new prospects struggle to understand what you offer and how it will benefit them.If prospects don’t understand what you do, they will likely categorise you in a certain way which may not highlight your key features and benefits to them. This will put you at a huge disadvantage when competing with other brands in your niche or trying to get investment.

TEST: Talk to friends/family/randomers in the street and explain what your product/service is and what it does. Then, ask them to describe what you do in their own words. Then, ask your current customers if you have any. If there is a disconnect with how your happy customers see your product/service, and potential prospects see it, you have a positioning problem.

2) Low Close Rates

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If customers take interest and evaluate your product or service only to drop out before actually purchasing, you probably have weak positioning. Businesses that have strong positioning make their value obvious and as a result, they attract suitable clients to sell quickly and efficiently to.

If you don’t have strong positioning, you will attract a hodgepodge of different clients who have different needs and waste time trying to sell something they likely don’t want.

3) High Customer Churn

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Customer churn is the percentage of customers that stopped using your company’s products or services during a certain time frame. Say 100 new customers a month are signing up to your subscription service and then 50% stop being your customers within 3 months, for example, you have high customer churn.

Unless your business is inefficient and shoddy (which I’m sure it isn’t), it is likely people are dropping off because they didn’t fully understand what they were signing up for. Perhaps the customer thought that your business could provide them with value but it wasn’t a good fit because they didn’t clearly understand what your service provided and who for.

Customer churn is one of the most important metrics for a growing business to evaluate. According to Reputation Refinery, 96%of unhappy customers won’t complain to the business owner but will tell 15friends on average. According to Hubspot, an increase in customer retention of just 5%can create at least a 25% increase in profit. This is because returning customers will likely spend 67% more on your company's products and services.

4) You’re under price pressure

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If customers complain your prices are too high, it’s likely that your positioning isn’t strong enough. Obviously, you can’t charge a premium for something that is exactly the same as the competitors in the marketUNLESS you clearly position yourself are the leader in your market segment by offering considerable value to your customer which your competitors don’t.

What I’m trying to say is you don’t necessarily need to spend more money on marketing and sales to grow your business. In fact, you probably just need to ensure your target audience truly understands what you do, how you do it and the value you are bringing to their lives.

How do you actually do positioning then? I’ll write a longer blog post about this for next week!

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