At last week’s MINDBODY University, I had the opportunity to teach business leaders how to increase their competitive advantage. Although the seminar was attended by business owners in the health, fitness, and wellness industries, the principles we covered are instructive to most all businesspeople and so I thought I’d share them here.
The core of the session focused on competitive brand positioning – what is it, why is it important, how do you develop one.
What is a competitive brand positioning?
It’s a strategy that defines how your business will establish and maintain competitive advantage. It’s one half of your brand platform – the other is your brand identity, or what your brand stands for. Your competitive brand positioning references who you are selling to, what your business scope is, and what you do to create value for your customers. It drives your business strategy and operating plan.
Why is competitive brand positioning important?
I can’t think of any business that doesn’t compete with something (another company, a changing market, emerging technology, etc.) And in order to effectively compete, you must understand what you’re competing against for whom, and how best to position your brand to leverage your strengths and take advantage of market opportunities.
Without a competitive brand positioning, your brand might only remain a conceptual vision or a set of cultural values which sound great but don’t really make a difference in the marketplace. A meaningful, powerful, valuable brand is based a clear, crisp articulation of your competitive strategy.
How do you develop a competitive brand positioning?
In-depth knowledge of your target, your competitors, and your own business enables you to define a strong positioning. Use rigorous market research and competitive intelligence to uncover new insights and develop a proprietary point of view about the market opportunities and competitive landscape (see my research and competitive landscape map tools). You also need a fresh and objective assessment and analysis of your own company’s capabilities, resources, and assets (a brand diagnostic can help.)
Armed with these insights, you can use the following competitive brand positioning statement template to articulate your positioning:
we are the A who does B
- X = target audience
Who are you trying to persuade? What distinguishes them? What’s important to them?
- A = competitive frame of reference
What is your aspirational competitive set? What is the mental file folder your target should put you in?
- B = differentiating value you deliver
What do you do that no else does as well and that your target cares about? Why should your target value you?
- C = reasons to believe
What evidence proves that you deliver that value?
A few years ago, a national smoothie QSR chain articulated their competitive brand positioning as follows:
For (X) everyone who chooses to do something good for themselves, we are (A) the convenient place for great tasting, healthy products that (B) energizes the way you live and feel — because we (C)
• are considerate of what you put in your body
• make it enjoyable to be healthy
• help create healthier communities
A running shoe and athletic gear company used the following statement to describe their competitive position:
Only we design (B) performance solutions that (A) fit (X) athletes and fitness enthusiasts who are confident in themselves and are driven to achieve. (C) Reasons to believe:
- we offer the largest breadth of shoe widths
- our company started as an arch support business
- we continue to innovate insole designs to optimize fit
(As the above example indicates, your competitive brand positioning can take on a different sentence structure — you don’t have to use the exact template, as long at the components are included.)
You might have an intuitive understanding of your competitive strategy, but it’s important to take the time to document your competitive brand positioning. Doing so will ensure you’ve applied a rigorous analysis and covered the most salient points of your strategy – and the statement is a powerful tool to unify and align all of your stakeholders.
A few final notes:
- target – Some businesses try to reach everyone because don’t want to limit their appeal – but history shows, if you try to be everything to everyone, you end up being nothing to no one. If you target a particular type of person or group, your relevance to them is stronger as is their identification with your brand.
Also your strategy will be stronger is you define your target audience with more than demographics. People groups are growing in diversity, so an 18 year old young lady in California is probably looking for very different things from a similarly-aged person in the South — and actually might have more in common with a 30-something guy who embraces an active lifestyle. So use mindset, needs, attitudes, or values to profile a more precise target.
- competitive set – The opposite tact is necessary here – you want to think broadly about who you’re competing with. The more narrowly you define your competition, the more easily it is to identify your competitive advantage – but also the more likely you’re overlooking viable options your target is considering.
A fitness boot camp isn’t simply competing with other boot camps – it’s also competing with other types of specialized workouts, full-service fitness clubs, non-group workouts like running, and even inertia. The couch may be its biggest competition! So define your competitive set from your target’s point of view, not your category’s.
- differentiating value — Unless you’re the 99 cent store, price is not a sustainable differentiator. If the only thing that differentiates your offering is price, it’s fairly easy for a competitor to undercut you or bait you into a price war.
That’s not to say price promotions shouldn’t be used as introductory offers or other limited time only deals, but they should not be the thing you count on to maintain competitive advantage. Instead, your differentiating value should be based on a claim that you are “the best,” “the first,” or “the only” brand to do what you do.
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