Get Positioned For Revenue

In 2003, every successful small to medium-sized IT company we surveyed said that company positioning is one of their biggest priorities as they prepare for tech sector recovery. How do small to medium-sized IT leaders prioritize their marketing efforts as new, often confusing marketing investment options continue to emerge?

We recently interviewed Rob Gelphman, a principal with Gelphman Associates of San Jose, CA and an adjunct Marketing instructor at Golden Gate University to seek some answers. According to Gelphman, “Too many technology executives over-invest in a branding campaign when it is positioning that is required. To make things worse, many folks don't know the difference between the two.”

Plato suggests we pave the path to (marketing) wisdom by first establishing some common definitions.

The primary goal of branding is to generate an emotional response from the intended audience where logical product comparisons are difficult. Branding is the distinctive name or trademark for the service or product. In crowded tech segments such as offshore outsourcing, business process outsourcing (BPO), and network support services, branding becomes even more challenging because clients have multiple vendors from which to choose and have trouble seeing uniqueness between them.

Over the long term, a popular brand (e.g. Kleenex) provides recognition and awareness. The bad news is that branding takes time and money.

We can point to some successful branding stories. Intel is the undisputed leader in microprocessors. Cisco makes networking equipment used in the development of the Internet. These companies do have brand strength in their respective markets, and a dominant, well-understood position in their market. (Geoffrey Moore coined the phrase “gorilla” to describe this venerable role). Conversely, Sun Microsystems’s brand is eroding and in serious need of an “extreme makeover.”

Positioning, on the other hand, helps customers recite the attributes of a company’s offerings that help the customer solve a problem. Positioning can be done in a much shorter time frame (months, not years), and is much less expensive than branding.

In spite of these distinctions, all of the poorly performing IT services companies we interviewed viewed positioning as a lower priority than product training and IT infrastructure. See a pattern here? Let’s face it-- A sales channel (e.g. a website with a “robust” shopping cart feature) is NOT a positioning strategy.

For those poor performers in our study who saw a 10%-15% decline in average billing rates last year, we found a direct correlation between their commitment level to positioning and the degree to which they were treated by the clients as low-priced vendors. Vendors are often forced to only interact with web-based, impersonal purchasing “agents” who buy solely on price and vendor responsiveness. This is often referred to as Vendor Managed Services (VMS).

Will Gateway’s re-positioning effort as a digital TV vendor pay off? They have transitioned from a computer company into a consumer electronics retailer. This re-positioning took courage. Lots of private, one on one meetings with analysts, customers, and Board members. Yet the company lowered fourth quarter 2003 revenue expectations to about $880 million, down from its previous forecast of $925 million to $975 million.

If you lead a slightly smaller company than these billion dollar behemoths, consider these positioning strategies for 2004:

1. Scrutinize the current market segments you serve. Please delete the words “everyone” and “all” from your marketing literature quickly. If your tech company generates under $50M in revenues and are serving more than 5 market segments, you have most likely spread yourself—and your resources—too thin.

2. Find new, under served segments that your large competitive brethren are ignoring. Customers in these niches are not as tied to a brand as one might think, and would provide willing and enthusiastic testimonials to a small but nimble company who becomes a subject matter expert in their segment. Within 60 days, test a small number of segments (for as little money as possible), and pursue the winners with unique positioning statements for the ones you select.

3. Invest in ROI analysis tools that you can use for positioning your services during and after your sales campaigns. Start by surveying how customers hold you accountable. The results will help shape your positioning strategy and ROI variables. Consider hiring an outside industry analyst firm (such as Aberdeen, IDC, or Forrester Research) to help you objectively design this tool. One of my clients did this and won a $400K sale with Dell Computer. Clear ROI statements fuel strong positioning statements and collateral.

4. Measure your sales and marketing teams on the time it takes your new salespeople to make unassisted sales calls using these positioning strategies. You’re listening for the level of consistency of the positioning statements they’re using. Spot-check their emails and direct mail pieces. You may learn a lot and choose to make mid-course corrections on positioning.

Once you experience customer traction, forge ahead towards flawless user adoption of your services, methodology, or technology. According to Nick Wreden, Author of FusionBranding: How To Forge Your Brand for the Future, shares a long term perspective on this topic: “Adoption is even more critical in our current economy than positioning. Adoption means multiple client constituencies incorporate a brand into their plans, activities or standards.” Adoption also needs your company’s financial and emotional commitment well before your first sale.

Using these guidelines, positioning will lead you to your brand. Proper positioning leads to sales. Adoption will foster brand awareness. In today’s volatile economic tech recovery climate, who cares about anything else?

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