Brand Strategy
5 Financial Benefits of Having a Strong Brand Positioning
Many people might hear the term brand positioning and assume that we’re talking about having a cool logo and a nice-looking website. However, it actually goes much deeper than that. Effective brand positioning is about influencing your audience’s perceptions. It’s not just about the “pretty packaging.”
Let’s say you’re looking through a dating app (no judgment here, we’ve all been there). You’re scoping out potential love matches and come across quite a few attractive people. The problem is, their bios are lacking. Most sound pretty much the same. No one stands out.
Suddenly, fate decides to be kind to you. There on your screen is an attractive person with a personality. They sound funny, smart, interesting. The way this person expresses themselves makes you want to know more about them. It’s almost like they’re speaking directly to you.
Hoping for a match and a real connection, you swipe right. It’s a match. You’re convinced you can hear church bells off in the distance.
What made the difference in this person swiping right? It was all about how the potential match presented themselves. Being able to connect to your desired audience is key when it comes to effective brand positioning.
Let’s get things straight about Brand Positioning
Being able to shape how people perceive your business is the basic idea behind brand positioning. It's about bringing a business and an audience closer together.
“Your brand is not what YOU say it is, it’s what THEY say it is.” - Marty Neumeier
Positioning is how a brand distinguishes itself from its competitors. It helps to define how your business is different and why your audience should care. It makes your business relevant to them. It’s crucial to know your audience to help shape how they perceive and connect to you.
Brand positioning will help you figure out how to speak to your audience and get your message across clearly. Giving a consistent and clear message helps your business connect with existing and future customers.
Research Your Audience
A key part of effective brand positioning is really getting into the mind of your audience. Here is when mind reading can come in handy. Ok, fine, you don’t actually need to become a mind reader to understand your audience (Professor X would come in pretty handy, to be honest). However, taking the time and resources to research what drives your target audience will definitely pay off.
To understand your audience, you need to know what part of their journey they’re on and what expectations they have. This will help you figure out how to speak to them and influence their perception of your business.
“Products are built in the factory, brands are created in the mind.” - Walter Landor
Your focus should be on what you will offer your audience that is different from competitors. Ask yourself these questions:
- Are you going to be faster, more convenient, cheaper, more effective?
- What are your audience’s pain points?
- What do you want your audience to remember about you?
Help your audience understand the value of that difference you’re offering. Start by making a perceptual map to help you figure out how your business differs from the competition is really helpful.
Use the 4 C’s of Brand Positioning
Once you’ve defined who your target audience is, you can work on your business identity in the consumer's mind.
According to Tristan Edwards from Ludu, a successful brand positioning tactic is usually based on the 4 C's:
- Clarity: You must have a clear vision of the product and your target audience.
- Consistency: Your message must be consistent through all aspects of the product. This includes your website and social media posts.
- Credibility: The image that your business/product projects must be credible.
- Competitiveness: You must offer something unique that your competitors can't. This highlights what makes you stand out from the rest of the competition.
Above all, you have to make sure all the amazing things your business has to offer are crystal clear to your audience. Even if you know how much you have to offer and how great you are, it will be pointless if you can’t correctly express it.
The Financial Benefits of Effective Positioning
Positioning not only creates a stronger connection between your audience and your brand but also helps your business to thrive financially. Olive & Co talk about the financial benefits of brand positioning:
1. Increases Company Value:
Brand value is directly tied to company value. The company Slack had a valuation of $2.8 billion four years ago. With their attention to branding, they are now approaching $10 billion.
2. Commands Premium Prices:
When it comes to premium pricing, you’re now selling the brand experience and creating equity in the brand itself. Consider the bottled water market. Nestle charges 1 cent/oz for their basic Pure Life water, while Fiji charges 6 cents/oz for their Natural Artesian water. A key part of Fiji’s success is its carefully curated brand story.
3. Minimizes Sales and Marketing Costs:
A solid brand will work harder for you by ultimately reducing your long-term sales and marketing costs.
4. Amplifies Your Ad Spend:
A solid brand helps you develop relationships with your customers. Word-of-mouth is one of the most effective ways to convince new customers to try your products.
5. Reduces Employee Turnover:
A great brand foundation makes it easier for everyone in your organization to do their job. It can also create loyal employees and save you money as a result.
Positioning Done Right
A company that has implemented a very successful brand positioning tactic is the Dollar Shave Club. The brand took the time to listen to its audience's pain points and came into the market as a cheaper and more convenient option than the competition. They also spoke to their audience with humor and a light-hearted tone that created a connection with them.
As a result, the Dollar Shave Club became a very popular brand even when going up against the company giant, Gilette. I think even the grumpy gentleman in their ad will eventually come to appreciate their products.
Another company that differentiated itself from the competition using smart brand positioning is Chipotle. It’s no secret that Taco Bell dominated the fast-food Mexican restaurant market for years. They were the definite go-to option for cheap Tex-Mex food. This was until Chipotle invested time and resources to understand their target audience’s needs.
Chipotle was successful against Taco Bell, focusing on quality and clever jokes to connect to their audience. Fresh ingredients served with humor is definitely something I can get on board with. Especially after an unpleasant experience I had with Taco Bell food (we do not speak of it).
Positioning Gone Bad
They say the number one mistake some companies make is having no brand positioning. While this is true, there also cases of brand positioning gone quite wrong. This can happen when you don’t understand your audience’s needs, wants and behaviors.
In 1982, the toothpaste brand Colgate launched Kitchen Entrées. They were looking to capture the market in frozen ready-to-eat meals. This ended up hurting sales of Colgate toothpaste. Shocking, I know.
Another case of unsuccessful brand positioning was for Coca-Cola back in the 1980s. They came up with a clothing line designed by an unknown Tommy Hilfiger. Only 5 of the 650 planned stores ever opened. Please enjoy this picture of this totally bitchin’ apparel:
Start Connecting
The foundation of everything is your relationship with your audience and how they perceive you. Listen to them, get to know them, and most importantly, connect with them. Having a strong brand positioning tactic will help you to connect to your audience and solidify your business.
Let’s talk.
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