Repositioning for Profit: 2 Major mistakes when attracting High-Value Customers

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6 months ago

[…] most importantly, nobody told you you are substituting profits for growth. The tests, the hacks, the campaigns, all of that costs money. With growth, you are substituting […]

Skip to the repositioning framework.

Let’s start with a truth bomb. Early growth muddles a startup’s focus, especially now that new technology and markets emerge rapidly. Juggling different customer segments can blur your positioning and make it challenging to identify your best-fit customers. But it’s essential to know who these customers are because they are your path to sustainable growth. 

So how do we do this? The answer lies in your existing customer data. When you grow, you get clients. When you get clients, you get data. Who they are, how much do they pay, what’s their lifetime value.

user profile for repositioning

Dive deep into it. Understand the story it tells. Who brings in the lion’s share of revenue? What use cases are common among your high-value customers? Who are the customers you should avoid? This knowledge shapes your marketing, sales, and product development strategies, allowing you to differentiate your product or service effectively.

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In today’s article, let’s tackle two of the common problems I find when working with clients on repositioning strategy:

Number 1 problem of repositioning and focusing on one best-fit customer is “The fear of niching down”

Most believe focusing on a single customer segment means leaving money on the table. But the truth is, the riches lie in the niches. By focusing on one segment, you can tailor solutions specifically for them, stand out from competitors, and position yourself as an incredibly valuable tool for them. People buy stuff that’s valuable for them. People will pay a premium for things that are valuable to them. So by niching down, you get fewer clients, paying you more. Fewer clients mean less work, less support, less spending on acquisition, less cost for the cloud servers, and whatnot. Add more money to that, and you will have better profitability. So, the brave and strategic choice? Reposition your brand or your product and niche down.

Brand repositioning strategy vs product repositioning

There is a distinct different between a new position for the brand and the a new product positioning. I wanted to make that clear.

A brand repositioning is when you have a brand that needs to take a different stance in the market. Think the change of your vision. It might have to do that due to new businesses opening up or entering new markets and engaging with new audiences. 

Let’s say you are working on a complex CRM, similar to Hubspot. Hubspot repositioning involves taking a look at the global market and figuring out where they can compete best. Then taking a look at all the products and making sure the products satisfy that criteria. It’s a complete rebranding. If Hubspot says “We offer tools that are the easiest to use for any team”, that means their every product needs to be simple to use or customers won’t get value from your promise. 

Now, product repositioning is where you only take one of the products and reposition it so you can attract more users. It’s like Hubspot would keep their position intact, but would change how they promote their landing page builder.

Obviously, if you only have one product, then product positioning = brand positioning.

The second problem I usually find when I get client documents is “A lack of quality customer data”.

This is where the importance of a comprehensive repositioning process comes into play. When we start our projects, I have one rule. I need to see all the data you have. The data on your product, customers, and what worked and didn’t work in marketing. I have also found that many companies are swimming in the dark because they do not have quality data. My solution is always the same. We need to get the missing pieces of data if we want to make a strategy that will make sense. We need to conduct customer interviews, do market research, and test different messages. Obviously, it’s usually the data on customers that’s missing. We all have personas or avatars that are just plain useless. A PDF sitting on a Google Drive.

giphy

And the solution isn’t sexy. The solution is to gather the data you need to identify the customer’s pain points, wants, and needs. Discover your best-fit customer. With just 8-10 well-prepared calls, you could gain significant insights that will make more for your marketing than any test you conduct. 

We didn’t want to do interviews at my last startup. We weren’t in touch with our customers. And the results showed. Too high user acquisition cost. Low conversion rates. Obviously, we couldn’t monetize users.

Even when we tried to do the occasional interview, no one responded, and we couldn’t get them on a 15-minute call. No wonder. Why would they? We didn’t give them anything they were interested in.

Eventually, we turned things around. We figured out what users wanted and gave them that in exchange for the interviews.

In our case, since the startup was a mobile app that helps dyslexic children learn to read, our solution was to give kids free lessons. While the project leader did that, I interviewed moms. And we got some data. Data that finally allowed us to reposition and focus our efforts on a single customer with a single message.

That lowered our cost of user acquisition by 52% and doubled our user base. We started growing and growing fast. That startup now got an investment.

This is the power of a well-executed repositioning campaign, which can significantly impact your brand’s presence in the marketplace.

When is the time for a repositioning strategy?

Remember, poor marketing and sales outcomes are usually symptoms, not the root cause of the problem. The true issue often lies in a loss of Product-Market Fit. The actual solution? Repositioning your product. It starts by identifying your best-fit customer, understanding their pain points, and illustrating how your solution uniquely eases these struggles.

This process calls for an in-depth examination of every facet of your positioning:

  • your users,
  • their pain points,
  • your problem-solution fit,
  • your competition,
  • your differentiation,
  • and your market presence.

When you thread these elements together, the result is a laser-focused approach targeting a specific

  • customer segment, resulting in:
  • lower user acquisition costs,
  • improved conversion rates,
  • and a path to sustainable growth.

So, let’s recap. if you’re struggling with scaling up, it might be high time to stop blaming marketing and sales and focus on repositioning your product. The secret to sustainable, targeted growth is a relentless focus on your best-fit customer. You don’t need to work harder; you need to position smarter.

If all this resonates with you and you’re ready to take your startup to the next level, I have a battle-tested repositioning framework that I’ve refined over years of trial and error that I’m sharing with you.

And if you are interested in talking about your positioning strategy let’s grab a strategy call.

Share this article with fellow startup founders who might find this advice beneficial.

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1 Comment
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6 months ago

[…] most importantly, nobody told you you are substituting profits for growth. The tests, the hacks, the campaigns, all of that costs money. With growth, you are substituting […]

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