Is Xerox Wasting Their Money?

The Wall Street Journal announced last week that Xerox Corp. is launching its most expensive advertising campaign in two decades with the hope of repositioning the company away from being just a copier maker and expanding into business services.  In fact, Xerox has already purchased outsourcer Affiliated Computer Services to help it do just that.  It now faces the tough task of changing the perception customers hold of Xerox.

This announcement begs a question to be asked.  Why do some companies, such as Apple and IBM, have such great success reinvigorating growth through market repositioning while others like Xerox, Polaroid, and Kodak struggle?

All of these companies have a few things in common.  They have all had success selling their products and, as a result, are known for something.  Once their growth rate slowed, each of them invested in launching new products and services.  Some, like Kodak, have even won awards for them.  However, the market has not rewarded all of their efforts equally. 

We all know how Apple has transformed from a computer company to a mobile device and entertainment company with their slick iPod, iPhone, iPad, and iTunes products.  As a result, they are now the most valued technology concern on the planet.  Similarly, IBM moved from being predominantly a hardware/mainframe business in the 1990s to being one of the largest IT integrators/outsourcers.  Their reputation for being technology experts has given them the right to do this in the minds of their customers.  In contrast, Xerox has tried for years to move from being a manufacturer of photocopiers to a document management services company.  They have had marginal success.

I believe the answer lies within how these companies repositioned themselves.  Both Apple and IBM found an important problem the customer was struggling to get done, developed a superior and sustainable solution, and then provided clear and credible points of distinction to help build their “story” in the minds of their customers.  They connected who they are to how they can help customers get other jobs done.

On the other hand, Polaroid and Kodak, both known for early innovations in photography, have failed to carve out a valued position in the digital world.  They have struggled to develop new products AND tell the world why their products are superior to other solutions already on the market.  To customers, there was no clear link between what they were known for and the new solutions they had launched.

Now, Xerox is planning to launch a very expensive ad campaigns to do just that – tell the world why they should consider Xerox for help with mundane business processes.  Will they be successful?  Have they “earned the right” to do this from the customer’s perspective?  This depends on whether or not they help customers see how a copier manufacturer can be much more than that.  If they don’t, then they are just wasting their money.

Why Apple's iPad is a Success

A few months ago, I predicted that Apple’s iPad would not be a success.  To summarize the reason I made this prediction, it appeared at launch that Apple was simply going to position the iPad as a device that sits between the mobile smart phone and the laptop.  As I stated at the time, I did not believe that consumers would want to purchase yet another hand-held device.

In hindsight, I was wrong.  The iPad has been a runaway success and has compelled others to create new tablet devices.  However, even though I was wrong in my prediction, Apple was also wrong in how they saw the iPad being positioned in the minds of customers.  The iPad is not perceived by consumers simply as a device in the middle-of-the-size continuum.



Despite it’s form factor, consumers judge products based on the jobs it helps them get done.  As a result, the iPad is being grouped in the minds of consumers with other portable electronic reading devices like the Amazon Kindle and the Sony Reader.  What all these devices have in common is that they enable people to read books and keep up with information while on the go.

My theory about why the iPad is selling so well has to do with this grouping.  When we begin to seek out a solution to a job we are trying to get done, it is because we want to get that job done.  However, when we make decisions about what product or service to purchase, we do so by comparing one option against alternative options.  We then base our purchase decision based on how well we believe the solution will allow us to get the job done.  This includes everything from making the purchase to learning how to use it to maintaining it and, ultimately, disposing of it. 

As a result of the iPad being grouped with these other devices, consumers are choosing to purchase the iPad because of it’s perceived superiority in how it gets the job of reading books and keeping up with information done.  It’s intuitive user interface, numerous apps that seamlessly sync desired content, and high resolution color screen are all often given as examples of why it is a desirable solution over the Kindle and Reader.

From Apple’s advertising and marketing campaigns, I do not believe they intended to have consumers pair their new device with these other e-readers.  Rather, consumers have done this on their own based on the job they are hiring these solutions to get done.  As a result, Apple has a product consumers are choosing to buy more often than not.  The only question that remains in my mind is whether or not Apple could have even more success with the iPad if they purposely positioned it in this way.

Repositioning Financial Services?

An interesting article in the WSJ today talked about whether financial services are headed to a new venue.  That is, the supermarket.  The article speculates what might be a sign of things to come based on a recent deal by Sam’s Club to offer small-business loans up to $25k in stores through a partner lender.

What’s interesting is that this idea is not new.  Sears bought Dean Witter back in the 1980s to combine retailing and financial services.  Also, banks have had branches and ATMs in supermarkets for years and H&R Block has offices in strip malls throughout the country.

The idea goes something like this.  Consumers shop in retail stores.  Consumers need financial products like checking accounts, mutual funds, and loans.  So, put these together and we have an “innovative” approach to selling financial services.

The question that needs to be asked is, “Are these really related in the mind of the consumer?”  In other words, do consumers really see financial services as part of their weekly grocery shopping experience?  It is understood that having them physically located in the same place makes sense from a convenience perspective.  That’s not really what I am talking about.  Rather, in the mind of the consumer, does Sam’s Club “have the right” to offer financial products.  Is the Sam’s Club brand connected to financial services?

Many companies try to make this leap by extending their brand to other product categories.  Some are quite successful, like Virgin Group extending from record labels to transportation (airline, trains) and video/game stores, while others fail miserably diluting their brand value by confusing their customers.



In financial services, the WSJ article reasons that it makes sense to combine products that have largely become commodities (like mutual funds) with either trusted retailers or financial information-providers, such as Microsoft and Yahoo, who have built up goodwill and a brand name with their financial websites.  However, if I were an executive in one of these companies, I would really want to know how the brands are connected in the minds of the target customer before I spent billions acquiring companies hoping to extend into financial services.  What do you think?

What makes a great market position?

The short answer is a position that is important to the customer, can be satisfied in a superior and sustainable way, and provides a clear and credible point of distinction.

There are several paths available from which companies can choose to reach this preferential destination.  One is to both innovate around the core job your customers are trying to get done and around the “consumption” of the products or services your company provides.  Some examples of this include Apple (their products are clearly innovative, but their stores, web site, and App store are remarkable for their ease of purchasing) and Google (they are innovative in both helping people search for information and consume the ads/information as a result of a search).

Another approach companies like Progressive and Enterprise Rent-A-Car have used is to innovate around the delivery of products/services and to stake a position on that.  These two examples have not fundamentally changed the solution required to address the core job of protecting yourself from financial loss as a result of an accident or hiring a car to get from point A to point B, respectively.  They just make it much easier to consume auto insurance (through Progressive’s rate comparison process, on-site claims, and concierge service) or to rent a car (through Enterprise’s ubiquity and pick-up service) once a consumer decides that is the solution they need.



As a result of their efforts and market positioning, Progressive has become the fourth largest auto insurance carrier and doubled the number of new policies it has written in the last 3 years and Enterprise, with its iconic wrapped car, is the largest car rental company in North America with over 91% of “local” car rentals going through them.

As a consumer of auto insurance and rental cars, can you see how these companies positioning passes the test of “great” (important to you, superior to other solutions, sustainable in their delivery, clear positioning, and credible marketing claims)?  What other companies can you think of that have also taken this path towards growth?  What do you think is stopping many others from pursuing this?

Communicate the Position

Armed with a clear idea of how the company’s product or service is positioned in the market and a compelling customer value proposition, you are now ready to begin promoting your offering. The ideal messaging will help your customer understand how your company’s brand delivers on its promises at all levels in the brand-promise hierarchy as follows (starting from the bottom):

• Product or service features are tied to specific under-served functional jobs and outcomes that they address


• A link between what the customer is trying to get done and how they want to feel or be perceived as a result of getting a job done is effectively made


• The customers’ values, personality, and lifestyle are taken into account to understand their frame of reference when selecting solutions and executing the job

A great example of this type of communication comes from PNC.  Their Virtual Wallet product was created to address unmet customer needs when managing money.  They are targeting younger savers who do not think managing money is fun and have better things to do with their time.  To compensate, they created messaging that is upbeat and straightforward, connects with their target audience’s lifestyle, and explains what jobs and outcomes they are helping customers satisfy.


To achieve your desired market position, your marcom team needs to formulate a communication plan by connecting the functional and emotional needs of the target audience.  This includes making a number of decisions:

• What are the objectives of the planned campaign? What do you want to happen as a result of your marcom activities?


• What message are you trying to convey? What do you want your target audience to know?


• Which communication medium(s) best convey your message?


• At what points in the customer buying process do you want the message to be released?

	Customer Buying Process
	Figure out needs	Identify options	Evaluate options	Choose an option	Purchase	Modify the choice	Re-new
Objectives
Message
Medium

As a result, a detailed communication plan can be prepared that allows you to develop a winning winning market position that resonates with customers, align internal and external stakeholders on the value of a brand so that messaging is clear and consistent, and own a repeatable and sustainable process for developing focused and effective marketing campaigns.

Achieve a New Market Position

Once you understand how your company’s brand and competitor brands are perceived by your customers, you are ready to begin to stimulate your company’s growth through more effective positioning.  If you need to review this prior step, please refer to my previous post.

The primary mechanism used to position your offering is a customer value proposition (CVP).  A CVP is a statement that is intended to be shared with internal stakeholders (e.g., sales force, support staff, etc.) and external partners (e.g., distributors, ad agency, etc.) to provide a common understanding of the unique value a product or service strives to provide to the market.  It explains why a customer should buy your offering.  Too many companies fail to truly consider what unique value they offer to customers and this leads to a poor or no position in the mind of the customer (see my post on the iPad for an example).

Many people at this point either say, “We already have a customer value proposition” or, “Why do I need one of these?”  To answer the latter, it is estimated that the average American is exposed to hundreds of advertisements a day and this number is only growing. The only way to stand out from the competition is to establish a clear and credible point of distinction in the mind of the customer.  A CVP helps you do this by forcing your company to rigorously focus on what your offering is really worth to your customers (please see this HBR article for more on why you need one of these).

With regards to the former statement, I say, “Congratulations!”  However, I’d ask you if your CVP was developed using the customer’s measures of success so that it resonates with what the customer is trying to get done rather than simply providing a list of all the benefits a customer receives from your offering or a few favorable points of difference you provide versus the competition.  The reason this approach is preferred is that it acknowledges that the customer is already overwhelmed with marketing messages by seeking to deliver only the one or two key points of difference (and perhaps a point of parity) that will deliver the greatest value to the customer.

To be able to do this successfully, you must understand the jobs and desired outcomes customers seek to satisfy when they use your or your competitors’ offering.  Once you have collected these and know the importance and level of satisfaction customers attribute to each measure, you can select which ones to work with to form the basis of your CVP.

A well-written CVP answers who the target customers are, what they are trying to accomplish, when the product or service should be considered and why, and what the key discriminating features of the product or service are.  An example of the output from this process is provided below:



After developing the CVP, your next step is to reposition your offering by communicating and delivering on the brand promise to your customers.  This is the topic of my next post.

How to Reach an Achievable Market Position for Your Brand

In this blog, we have defined positioning innovation and provided examples of how some products are currently positioned in the market.  So, for this post, I’d like to touch a bit on how marketers can successfully reach an “achievable market position” for their brand.

There are several steps involved with successful market positioning:

1. Determine how your brand is currently perceived in the mind of your customer


2. Achieve a new market position


3. Communicate and deliver on the brand promise to your customer

Determining how your brand is currently perceived in the mind of your customer

When positioning a brand, marketers must understand not just the functional and emotional needs of customers, but also the context or situation in which the needs occur.  The combination of the context in which customers are trying to get a job done and personal/social factors shapes the customer’s “frame of reference.”  Research shows that not only do customers’ frames of reference influence perceptions of how well they get a job done, but also helps determine the parameters for the consideration set of brands from which a customer will select a solution.

For example, when shopping for a new vehicle, consumers who live in a place where they need to drive in snow and bad weather, do not want to worry that their car will not make it, and want to be perceived as “outdoorsy,” look for tough, dependable, all-wheel-drive types of vehicles.  This means, vehicles that are perceived as luxurious or up-scale (such as BMWs or Cadillacs) will likely not be considered.  On the other hand, brands such as Subaru or GMC have positioned themselves as optimal choices for customers with this frame of reference.  As such, visit any mountain town in the U.S. and you will likely find many more Subaru cars and GMC trucks than BMWs or Cadillacs.  That was exactly my observation when visiting Park City, UT, last month.

Most likely your customers already have a very specific perception of your company’s brand and what it can be relative to their frame of reference.  As a marketer, your job is to determine what this is, including the situation/context in which they are trying to get a job done, how satisfied they are in getting it done, and their feelings/perceptions as a result of doing the job.

To do this, you need to first gather and prioritize all the desired outcomes folks have when getting the job done for which your product has been hired and the emotional jobs they want to satisfy as a result.  By collecting the situation/context in which they execute the job, which solution they use, and their level of satisfaction, you will be able to ascertain along which dimensions and when your product is perceived to deliver superior vs. inferior results as compared to the competition.

After segmenting and profiling the market, you are now ready to begin positioning.  However, if you skip this step and try to position your brand too far from your customers’ frames of reference, you likely will confuse them and be unsuccessful in your positioning efforts.  In my next post, I will talk about achieving a new market position.  Stay tuned.