Selecting a position on paper is easy – implementing it is hard.
Positioning traps appear once you have some wins under your belt. Your customer base is growing, and they start wanting more. Requirements are flooding in from all sides.
- Senior management want to launch more products. More products = more profits.
- Marketing reports our competitors have a new offering that we need to copy to stay relevant
- Sales team talk about new customer friction and that one thing that will help sign more deals
- Customer support want better user experience and to fix all your bugs
- Existing customers know your product and they know about the gaps – they are the power users and want improvements
- New prospects like the system they have; so you’ll have to do things like they do before they could switch
Any combination of the above could spell doom for your trade-offs, and thus your competitive position. All these requests can be categorised into the four positioning traps.
We’ve all seen this before. Someone shares the latest website or email campaign of a competitor. They are announcing a feature you don’t have.
Soon your sales & marketing people are asking for it. New prospects get word of it, and senior management are saying it’s now a table stakes feature that we just have to get on with and build.
2. Your wish is our command
This happens when a customer is deemed more important than your product. Either you have very few customers, and feel the need to pander to them to keep afloat. Or you’ve landed a whale customer, and being the biggest account, they throw their weight around and demand you build what they want ‘or else’.
The land to consulting-ware is paved with this kind of wish-granting. The roadmap is always rushing towards the latest shiny object for your shiniest customer. In a few years, you have a bloated, confusing product that is ripe for a focused disruptor to capitalise on.
The customer in question may have your best interests at heart. However, they are certainly going to be biased in their thinking. They do not have to pay the costs for you – from the opportunity costs, the coding time, ongoing maintenance and support, technical debt and more.
3. Straddling Two Positions
When you take a position, you simplify everything. Both internally and externally, people understand your brand, where you sit and who you are for. When I mention “Tiffany’s”, you know to expect high end jewelry, service, product quality and experience and that light blue carry bag.
When you fly SouthWest airlines, customers know to expect no frills and little legroom, in exchange for the lowest price. They can offer this low price because they are making trade-offs; like not offering any food.
Straddling weakens your brand and confuses customer and staff expectations.
Continental Lite tried to straddle and it cost them millions.
They were a premium, full service airline tried to offer a ‘budget’ option at the same time.
The problem is customers associated the Continental brand with good service, and despite the “Lite” moniker and cheaper price, customers were disappointed in what they received.
Continental Lite didn’t enjoy the operational efficiency of SouthWest, because they hadn’t made the same trade-offs in plane type, food service, and hub-and-spoke model. So their cost base was higher.
Ultimately Continental Lite was a disaster born out of the lack of courage to make trade-offs.
4. Growth Trap
Often the pressure to grow causes companies to get desperate. They want to offer more products, a bigger menu, more features, more integrations, go into other verticals and more.
All of this dilutes you from being the absolute best at what you do.
Broadening your position
MailChimp is synonymous with simple email campaigns. For a long time they were specialists in this area; being the only thing they offered. However the growth trap is powerful. How could they continue to increase revenue and market share? They’ve chose to broaden their position, moving from a specialist of sending email, to a one-stop-shop, where you can now send email, text messages and snail mail.
I wonder what they gave up by adding these services?
Certainly there was an opportunity cost to improving their email services. From new features, integrations, bugs and more – they diverted resources from defending their position as the go-to email service to build new products.
They also introduced competition to themselves. There are already other “fuller service” marketing products out there, from Salesforce and Hubspot to others, which include stronger CRM elements that MailChimp would. So MailChimp is also moving from being having a dominant offering (best at email + best price), to a disruptive offering (less overall features at a lower price). This increased consideration set could harm them overall.
Was this choice justified versus doubling-down on their email features and using the funds to expand / grow market share globally? I don’t have that data however it would be interesting.
Deepening your position
Rather than broaden your position, it is stronger to deepen it.
Boost Juice is a great example of a company that stuck to its core offering. It offers smoothies that are positioned as tasty and healthy. They are a classic ‘variety-based’ position (a specialist). Once they had conquered Australia, they had two options to grow:
- Transition into a ‘needs-based’ position (a one-stop shop)
- Deepen their current position (expand geographically
The growth trap is powerful; it would have been pulling Boost to expand their product lines. They could have offered fresh sandwiches, wraps, salads, and more. However imagine the complexity that adds to their supply chain, training, marketing, service experience, and more.
Instead, they avoided the growth trap and chose to deepen their position; they had the same position and product offerings, and expanded globally. They already had the recipe for success; they just rolled it out to a larger area. Their brand remained as the specialist in that category, and they became an even bigger success.
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Ulwick, A. (2016). Jobs to be done. [s.l.]: Idea Bite Press