First Steps Consulting – Startup Strategy  

An interesting article by Alan Armstrong titled “Positioning Beyond the Product – Think Relationship” highlights the fact that many products or services start off focused on customer needs and deteriorate into a bundle of features. Essentially the product becomes the focus rather than the consumer.

Fundamentally positioning is about segmenting the market based on demonstrated or latent needs and then targeting the most promising segment with the appropriate feature set. Product features are typically the result of positioning rather than a driver in positioning.

Once a product or service is successfully launched, companies find it hard to operate outside of an established technology or service set. Inertia takes over….new startups emerge and replace existing offerings.

To stay competitive, companies need to repeatedly segment their market based on customer needs, just as a startup would, and make adjustments to positioning. The segmentation completed at inception has a shelf life. The consumer needs and drivers of yesterday will not be the same drivers of today.

Here are key indicators that it may be time to consider a fresh look at you market positioning.

1. You see a variety of startups entering your base market. If other entrepreneurs are seeing opportunity in your market, the landscape is likely shifting

2. Your latest product update generates no meaningful bump in sales or user satisfaction. Just because you can improve on a feature set doesn’t mean your customers value it. If the existing need is satisfied with the current feature set, then adding more features generates no value and is likely distracting you from new emerging needs.

3. Significant environmental changes to the demographic or geographic market you are serving. For example, if you are in the luxury goods market, a prolonged recession should trigger a fresh look at your positioning in the market. While luxury consumers may have wanted their wealth to be on display in prosperous times, they may prefer more modesty during down economies. The environment can impact preference. A review of the rise and fall of the Hummer might also be appropriate here.

4. Your youngest or newest employees are dissatisfied. Disruptions are often seen last by upper management. If your newest and youngest employees are dissatisfied, it may be that they know the direction of the market but have no power to influence change.

Please comment and add others you think I may have missed!