One costly mistake when choosing a winning positioning strategy for 2023

We spend insane amounts of time doing our products. Perfecting them. Yet we often fail at the last step. We see this time and time again.

We write an article, but fail to spend any time on making the headline more attractive. Even if the article itself is perfect, it doesn’t generate any attention. Same goes for YouTube videos, emails and subject lines, lead magnets, and on and on and on.

In this newsletter, you will learn about 1 expensive mistake we do after creating our strategy + at the end you will find an exercise that will help you avoid that mistake.

Imagine spending ten years on a project. Designing it, making your product the best-looking thing it can be. Developing it so it delivers the result every time. And not just delivers, overdelivers. The user experience is smooth, your team thought about every use case, every situation, the product is fun. Not fun, it’s exhilarating to use. You spend ten years working on the project, making it as perfect as it can be. The ultimate product.

Only for the product to fail in the real world.

That’s what’s happened to Lexus. The Japanese manufacturer spent 10 years researching & developing the LFA project. Making sure the design isn’t just pleasant to look at, but that it actually helps performance – decreasing drag, making the car go faster because of its shape. Developing the parts, the engine, which – when reviewed by Top Gear – was lauded as the smoothest drive you can ever have. No drop in performance, no turbo holes, a car that’s perfect to drive. Lexus even tweaked the sound that the exhaust makes, so the experience would be better for the driver. The perfect car.

That nobody bought.

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Nobody would spend $475,000 on a Lexus when you can have a Ferrari that looks almost as good for $275,000.

Nobody would spend $475,000 on a Lexus when you can have a Nissan GT-R that drives almost as well for $75,000.

Nobody would spend $475,000 on a Lexus when you can have a Lamborghini, that is almost as crazy for $250,000.

Imagine spending all that energy choosing just the right bolts so you save 0.02% of the chassis weight, just the right gear knob so the driver’s hand is always in a comfortable position, just the right speed dials that could actually follow the engine’s acceleration without breaking into little pieces.

And then wasting it all, because you forgot to ask one question.

Will this work in the real world?

Apparently, at this price, it won’t.

Obviously, I am not here to talk about the Lexus LFA. Although a brilliant car, it has nothing to do with brand positioning. But the analogy has its purpose. Because there is one mistake I see companies making time and time again.

We are quick to talk about strategies. LinkedIn is full of advice on how you should spend your winter creating next year’s strategy and how you should optimize it in the summer. We are quick to create strategies or even pay somebody to create them for us. We spend all that time and effort creating and following them. Yet we almost always forget to test them if they work in the real world before implementing them.

In the last year, I saw startups, companies, and even branding agencies come up with positioning strategies that worked perfectly on paper. And failed in the real world.

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I dedicated this newsletter to positioning strategies and how to test them before you waste 6 months and tons of money following a wrong strategy leading you nowhere.

Yes, I know, testing isn’t a sexy topic like growth or scaling, but bear with me and you just might end up saving a ton of money. + There is a checklist at the end.

What is a positioning strategy?

A positioning strategy is a way to stand out in your market. A way to differentiate your product. It involves giving people just the right context that exposes your strengths, hides your weaknesses and all-in-all sets you apart from other businesses in the same industry.

Think: Fast food. What brand comes to mind when thinking about eating a quick meal while on the move in the city? It might be McDonald’s, or Subway, or another company that tied that habit that you have (grabbing a quick bit to eat) with their product and brand.

There are different ways of building your position in the market. I do it in three parts (9 steps in total), which guarantees we cover everything from market research and target audience, to target market, differentiation and writing a product positioning statement.

You can read more about my workshop in my 4-page one-pager.

Like with everything in marketing, if you skip steps, you are going to pay the price at some point. And there is no step that is passed over by the companies more when positioning their brand or a product than the last step – testing.

Most branding agencies don’t even have testing in their frameworks. Testing feels cumbersome and it’s difficult to sell. But I like my things tangible and proven, because testing a positioning statement on your target customer saves money. A shitload of money.

What is the purpose of a positioning strategy?

The issue with strategies is that we think of them as finite.

We create a brand strategy -> we execute it -> we grow.

In reality, the actual result of a strategy is a hypothesis. Take the Lexus LFA example. The strategy was “If we build a perfect car, people will want to buy it.” That’s not a statement. That’s not a fact. You don’t know that. So it’s your theory. An assumption and nothing else. So what you can do now is:

Option a) Spend millions designing, developing, & building that car

Option b) Test if the hypothesis is true.

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We all know option b is the smart choice here, but testing isn’t sexy, so Lexus decided on option a.

In reality, the strategy loop should go something like this:

We create a strategy -> we test the strategy -> we adapt it if necessary -> we execute -> we keep adapting the strategy based on new data.

Our first issue is that we think of positioning, we think of strategies as finite. They are not. They are an ongoing process. The more we learn, the more data we have, the better our strategies will be and obviously, growth, scaling and all the sexy stuff will follow. The purpose of a positioning strategy is to move away from premature growth, which causes problems in the long run, and moving towards having firm foundations that can actually sustain your rapid growth. In the long run, that helps you manage all sorts of growth-related problems and produces much more predictable and consistent results.

The advantages vs. the problems with testing

Before we move on to the more practical part of the newsletter, let’s look at some benefits and some pitfalls of testing.

The benefits are pretty obvious. Even if you rethink and adapt your strategies every 6 months (which, let’s be honest, companies rarely do), testing saves you 6 months of working in the wrong direction, following the wrong path. That means 6 months’ worth of paychecks, 6 months’ worth of development, 6 months’ worth of energy, effort, 6 months’ worth of missed business opportunities… Imagine spending the next 6 months in a coma. Because you didn’t have a week to test your strategy.

You can see the number quickly rising into millions of $ even in smaller companies. Testing a strategy before committing gives us reassurance that we are following the path that doesn’t just make sense on paper. The tests provide empirical proof that it will work in the real world as well.

Now, there are problems with testing as well. One of them is that we might use testing as an excuse to not execute the strategy. We keep testing to get better and better results, but never actually execute on the strategy. Testing should have a limit to it. At my positioning workshops, we usually come up with 2-3 hypothesis. We then prepare tests and a timeframe. At the end of the testing period, the best of the 3 strategies gets executed and we move to creating a marketing strategy, content strategy, marketing messages, depending on the needs.

The second issue is that the tests need to give us reliable and meaningful results. Let’s look at how we can achieve meaningful results we can trust.

How to design proper tests for your positioning strategy before choosing your market position

Testing a positioning strategy isn’t a one-way process. We always test the strategy internally, before moving to real world testing.

Testing a positioning strategy with a checklist

Testing internally means we ask ourselves a series of questions that a successful positioning strategy needs to pass before it’s ready for real-world testing. I use the following questions:

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These questions work as a failsafe. They make sure we have missed nothing important in the thinking process. When crafting the strategy, we might get lost in the details, forgetting about the big picture. The questions are designed so they help us zoom out and see that big picture again. If you noticed you can’t answer a question with a positive yes, you can go back to that part of the strategy creation and give it a rethink. If you answer yes to every question, you can move on to testing the strategy in the real world.

Testing in the real world

When testing in the real world, I learned it’s best to test your new positioning statement in 3 stages.

1) Choosing a channel and the audience

Choosing a channel is pretty straight-forward. You should use a channel that’s already working for you, although perhaps not as well as you’d like. So if Facebook ads work well for you, test on Facebook. If you are a B2B company that uses cold outreach through email and LinkedIn, you will test through email or LinkedIn messages.

Don’t test your new strategic positioning on a new channel. You need a baseline. You need to know how the channel worked for you before the new strategy and how it works with the new messaging. With a new channel, you have nothing to compare the results to.

Most companies fail at choosing the audience. Remember, you need to test your new product position on your target customer. If you are testing with Facebook ads, choose the audience carefully. If you are testing with cold outreach, only send emails to people you are trying to reach. Not their bosses, not their assistants.

2) Creating the medium

Creating the medium means you now have to produce viable copy (messages) for the test. If you test with a Facebook ad, you need to write that Facebook ad, as well as create a landing page specific for that message. If you are testing with cold emails, you need to write the emails.

Make sure the messaging ties together and makes sense. The subject in the email, the body, all need to reflect your new values you found during the positioning workshop. Same goes for the Facebook or Google ad. If you really thought about every positioning component (Customer, competition, your differentiation, market you are in, the value you provide,…) you should have all you need to write the perfect ad already at your hand. Make your life simpler. Use it.

3) Setting the limits

The final step it’s about defining the test rules. What results we expect, what’s the timeframe for testing, where will we move from testing to executing the strategy?

The step depends on your circumstances. You might have time to do lengthy tests and commit once your results are very accurate, but you also might be running out of runway and don’t have a month to test the new positioning, so you’ll be happy with a sign of what worked best.

I prefer to keep the tests short so we can move to execution (redo the website, the marketing materials, the development plan,…) but keep working on improving the positioning, the messaging, constantly in the next months, bringing better and better results to the company.

Expected results for your market positioning strategy

Now, what kind of results should you look for?

During the positioning workshop with my clients, we look at three key parts.

1) The product fundamentals – what is the problem are you solving and who is prepared to pay for that problem to go away?

2) Eliminating the competition – who are we competing with and how can we beat them with the benefits our product provides?

3) Choosing a winning strategy – we take the knowledge from the two steps, tie it together, craft a positioning strategy and test it in the real world.

And if you do all three parts well, just watch people respond to your messages better. More people will click on your Facebook ads, visit your landing pages so your click-through rate will improve, your cost per click will be lower. More people will open your emails, schedule a call, or reply to your emails, depending what your call to action is.

Once you have these results, once you see that one message, one hypothesis worked best, there is no stopping you. You now have a winning positioning strategy that will carry you forward. It’s time to execute.

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