Innovation has been a buzzword in business circles for some time now. When most people write or talk about innovation, they are focused on the process of developing new and improved products or services to better satisfy the needs of customers. This, no doubt, is a good thing. But, creating new things takes time, effort, and money. So, no matter how well you understand customer needs, there is still a risk that the investment will not pay off. However, another kind of innovation is possible that can dramatically improve growth, but requires a much lower up-front outlay. I call this type of innovation "positioning innovation."
The basic approach to positioning innovation is not to create something new, but to change what is already in the mind of the customer. That is, take what is existent and manipulate the perceptions and beliefs customers have about it. The way to do this is through communication and messaging, as any brand strategist knows. However, to be effective, it must resonate with the customer, not your ad agency, your marketing chief, or your boss. In other words, it's all about how the customer receives your message and not what others believe about the sending of the message.
Dan Ariely, a professor of behavioral economics at Duke University, wrote in his book Predictably Irrational that "we not only tend to compare things with one another, but also tend to focus on comparing things that are easily comparable--and avoid comparing things that cannot be compared easily." The implications of this for marketers trying to position their offerings in the market can be quite interesting.
Instead of simply looking at the competition and then deciding to demonstrate how your product is different or choosing to simply act as if the competitor's position did not exist, marketers must study how their product stacks up against the competition (especially market leaders) from the customers' perspective. Then, they must determine against which products and along which dimensions to position their offering. Choose incorrectly and you risk confusing the customer or not creating a distinct positioning for your company's brand. In either of these cases, customers most likely will not choose to purchase what you have to offer.
On the flip side, if you position your company's offering against the competition along dimensions that are important to the customer and allow them to easily get how your product is unique, then the likelihood customers choose what you have to offer goes up dramatically. All without making any changes to the product.
There is a "what" and a "how" of positioning. What you've said makes sense if there is confusion or uncertainty about "what" to change in a product's or brand's position. "How" the positioning is executed is an important question as well - I hope you'll come to in a future post.
ReplyDeleteControlling for the "how" for the moment, are there examples of well-executed positioning that was along dimensions that are important to and easily comparable by the customer but have not resulted in dramatically improved growth? How about examples of well-executed positioning that was along dimensions that are unimportant to and poorly comparable by the customer but have resulted in dramatically improved growth? These outliers, if they exist, might provide further insight into better answers to the "what" of positioning.
Great post. Keep it up.