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The Positioning Pentagon

Service positioning is a component of effective demand generation. Over the past four years, I have had the opportunity to review the service positioning of many companies. Regardless of company size or target industry, technical professional services organizations position their services pretty consistently: “We have really smart people, that are a joy to work with, and, if you engage us, we will save you money.”

This “me-too”, generic positioning is extremely ineffective in motivating potential customers to engage your professional services organization over the host of others knocking on the door. When I point this deficiency out, managers agree their service positioning has always been an afterthought. However, they are not sure how to fix their approach. Positioning and differentiating services is a mushy, grey experience. This article introduces a clear framework a management team can use to create effective service positioning that motivates clients to purchase the company’s services.

Why You Win

The objective of service positioning is very simple: motivate potential customers to become actual customers. How does this happen?

Seasoned service professionals will tell you the following items ultimately determine if you win a service engagement:

1. Superior relationships;
2. Solid references;
3. Great consultants.

How many times has your company pitched a perfect potential customer—only to see that customer refuse to act? You know the potential customer would benefit from your service, but they do not bring you in. Why?

Pretium Partners ¹ is a firm that focuses on training product sales representatives to sell services. During training, Pretium emphasizes how critical it is to overcome three hurdles if you expect to close a service deal: risk, indifference, and price. Pretium instructs their trainees that if they do not address these areas, their potential service deal will die.

Risk
The most common reason a potential service customer does not become an actual service customer centers on risk. Why is a senior manager looking for relationship, references, and quality consultants before signing on the dotted line? Because all of these help minimize the risk of selecting your firm. If this is a new solution with a new customer, you must get creative. If you do not reduce the perceived risk to an acceptable level, the customer will remain indifferent.

Reward
The second most common reason a customer does not try a service centers on how tangible the potential rewards are. Yes, it seems so obvious to you how the customer would benefit from your services. If you cannot articulate and substantiate the potential value of your services, however, the customer will remain indifferent.

Figure 1: Proposal Strike Zone summarizes this concept of risk and reward overcoming indifference. When motivating a customer to engage your company, your service positioning must move the customer into the proposal strike zone. Positioning that minimizes perceived risks and maximizes perceived rewards helps accomplish this.

Figure 1: Proposal Strike Zone

Overview of the Positioning Pentagon^TM
Based on what we now understand about the service-selection process, I believe there are at least five elements that influence service positioning:

1. Service Attributes: Every product or service is positioned around something. That something could be anything from cost savings to how cool the customer will be if it uses your cutting-edge firm. The something you choose to position around is called the service attribute. I will define service attributes in more detail, but for now, let’s simply acknowledge that to effectively position your service offering, you must understand what you want to position around.
   
   
2. Competitor’s Positioning: To differentiate your positioning, you should understand how your competitor’s is positioned. If you do not understand what your competition is focusing on, it is very difficult to claim your positioning is differentiated.
   
   
3. Current Positioning: Very few of us are starting this positioning exercise with a brand new startup and a blank canvas. Your company and its products already stand for something. What is that something?
   
   
4. Benefits: What are the benefits of the service offering you want to position? Benefits can be much more than simply cost savings. Service benefits can include reduced risk, higher customer satisfaction, or reduced time to market.
   
   
5. Customer Validation: Even though you have defined a set of benefits your service can deliver, can you demonstrate that the benefits are actually delivered? Do your customers actually receive the benefits you promote?

Figure 2: The Positioning PentagonTM

Service Attributes
Before we use the positioning pentagon, I need to better define the concept of service attributes. In Marketing Professional Services, Philip Kotler inventories a list of items a service firm can choose to differentiate around. Example items include location, price, and industry knowledge. Each one of Kotler’s items is a potential attribute of your service positioning. Kotler emphasizes how subtle service attributes can be. Because services are a personal experience in which product delivered and the deliveree cannot be separated, simple items like the dress code of your consultants become potential service attributes. Table 1: Example Service Attributes provides a list of items that could be used to differentiate and position a service offering.

Table 1: Example Service Attributes

Attribute Categories
The challenge with service attributes is to choose which ones to focus on. To facilitate this selection process, I strongly recommend you group all of the potential service attributes into three main categories identified in Table 2: Main Attribute Categories.

Table 2: Main Attribute Categories

Table 3: Specific Attributes - Categorized

Qualifying Attributes
Even by simplifying potential service attributes into three main categories, there is still the challenge of determining what category (or categories) you should position around. This is not an easy decision. However, when reviewing potential service attributes you might focus on, consider the characteristics of a strong attribute as defined by Kotler:

• Important: The attribute that is important to your target customers. If your customers do not care that all of your project managers are PMI certified, then don’t make that a positioning point.
  
  
• Distinctive: The attribute that is unique to your company. For service organizations within product companies, this often centers on their unique access to internal technical information.
  
  
• Superior: The attribute that your company delivers better than your competitors.
  
  
• Tangible: The attribute that can be quantified in some way. How does this attribute of yours result in real dollar savings or faster delivery for the client?
  
  
• Affordable: Your target audience can afford your services.
  
  
• Profitable: This attribute is not cost prohibitive for the customer. In other words, the benefit to your customer of taking advantage of this differentiator does not exceed its cost to maintain it.
  
  
• Believable: The attribute is aligned with the product brand positioning. If your product is positioned as the low-cost choice, why would you try to build an elite and expensive consulting staff?

The Positioning Process

The Starting Point
The starting point of any positioning process is to have something to position around. This is where most service marketing managers hit the wall. You have a brand new service offering that the PS team wants to take out the door. At this point, you have the following items:

1. Service Name: A working title for the service. Not necessarily very sexy at this point, but you have to give it a name so people can refer to it without reaching for a descriptive title.
2. Service Description: A paragraph or two that describes what the service is.
3. Service Benefits: The benefits that a customer will get from the service. At this point these benefits can be located on a spectrum going from documented and validated across to hopeful speculation. It is likely that they are educated speculation at this point.

Important Service Attributes
The first step in effective service positioning is to understand what is important to your customers! This understanding comes from determining which service attributes are actually important to your potential customers.

Let’s work through an example. Say you want to offer a new service to consolidate computer storage infrastructure. Storage consolidation saves money—the obvious benefit of such a service. There are several ways you might position and differentiate your consolidation offering. Referring back to Table 3, you could chose to position around a multitude of attributes. Table 4 provides an example of all the ways you could position your storage consolidation service.

Table 4: Positioning Storage Consolidation

Here is the puzzle at hand: Which attributes should you position the storage consolidation service around? Expertise-based attributes? Experience? Expense? The answer should be driven by which attributes are important to potential service customers. If you sell high-end storage products to Fortune 500 companies with mission-critical data needs, expense might not be the overriding concern. Yes, these customers want to save money by consolidating their storage environment, but not at the expense of data availability. Perhaps “expertise” or “experience” are more critical attributes to these customers.

The point is simple: Find out which attributes matter to your potential customers. Once you understand this, you can continue the positioning process.

Shotgun Positioning
I must address the most common error I see in service positioning: shotgun positioning. This occurs when the service marketing manager really has no idea which service attributes are most important to target customers. To compensate for this lack of knowledge, the marketing manager “covers all the bases” by positioning around multiple attributes. There are a number of problems caused by this approach.

First of all, you confuse your customers. What are you really good at? Secondly, it is difficult to differentiate yourself from competitors if you are promising to provide everything they do—only more of it. Finally, and most important, every service attribute you add to your positioning adds effort. Why? Because it takes effort to convince customers that your claim to that attribute is warranted. Because you must validate your service attributes with customer testimonials, project data, etc., the more things you say you can do, the more things you have to prove you can do.

Mike Moser has a great picture of this reality. In his book, United We Brand ², he presents a “positioning bull’s-eye diagram.” Basically, Mr. Moser argues that the more a company drifts from its core positioning, the more marketing effort is required to make that positioning stick. In our terms, for every service attribute you add to your positioning, the further you move away from the positioning bull’s-eye. The further you move from the bull’s-eye, the more your message gets diluted. Think laser, not shotgun.

Not a Linear Process
The reason I created a model titled “the positioning pentagon” and not “the five steps of positioning” is to recognize that a linear positioning process—going step by step—is not always possible. You may go to market having only knowing two or three of the positioning variables. Perhaps you know what attributes customers care about and you have a list of theoretical service benefits. However, you need to complete some actual engagements to validate service benefits. That is why the picture is a pentagon. All five points influence the center. The more you know about the five points, the stronger the positioning will be. The less you know, the weaker. The objective of a service marketing manager should be to continue to mature the positioning pentagon for all key service offerings. It is a never-ending exercise in continuing improvement. If you thought you simply launched and were done, you were wrong.

Positioning, Branding and Marketing

When managers start talking marketing, the world quickly turns grey. Right before your eyes, concepts and issues that seemed crisp and clear fade and grow fuzzy.

• “We need to differentiate our positioning!”
• “How is our brand positioned?”
• “Brand is everything!”
• “What type of brand equity do we have?”
• “Our marketing has got to be on target.”
• “Is our brand differentiated in our target markets?”

Welcome to marketing speak—where a simple word like “positioning” can have multiple meanings based on context. To keep things simple, I want to clearly define the concepts of “positioning,” “branding,” and “marketing.”

Positioning describes how you differentiate your service offerings from the service offerings of providers your company is competing against. Positioning involves trying to answer these key questions:

1. Which service attributes are most important to our customers?
2. How are competitors perceived on those attributes?
3. How are we perceived on those attributes?
4. What specific attributes will we position on?

Branding supports and aligns with your company positioning. A brand is your company logo, your company tagline, and much more. I don’t want to define branding in great detail. However, your brand should become an icon that communicates your positioning.

Marketing comprises all the activities you pursue to communicate your positioning. Marketing includes partner training, advertising, customer presentations, etc. Marketing is effective if customers and partners understand and believe your positioning.

Perhaps one of the most strategic activities a services marketing team can engage in is a review of the company’s positioning, branding, and marketing. Does our branding align with the service attributes we are positioning around? Do our marketing messages align with our brand and target attributes?

Positioning Evaluation

To close this article on positioning, I want to give you a simple tool you can use to evaluate how mature your service positioning currently is. Go to your company’s Web site. Click on the button that says “Our Services” or “Professional Services.” Now, I want you to start reading the text. As you read, I want you to start filling in Table 5. Every time you recognize a service attribute, place it into one of the three rows of Expertise, Experience, or Expense in the Attribute column. Then complete the other columns in the table if you can.

Benefits: Does the copy on the Web site state any clear benefits for this attribute? For example, if your site states, “We have the most creative web designers in the world,” is there an explanation of why this is a good thing? Even if the Web site does not state the benefits, do you know them? If so, pencil them in.

Validation: Are proposed benefits validated on the Web site? Are real customer quotes provided that reinforce the proposed benefits? Are example dollar savings listed? Even if the Web site does not provide validation, do you know of supportive data? If so, pencil it in.

Brand Aligned: This is subjective. Do you feel the service attribute listed aligns with how your company brand is perceived in the marketplace? If yes, write yes. If no, write no.

Table 5: Positioning Evaluation Table

So, what are we looking for?

If your completed table lists multiple service attributes scattered throughout all three categories, or if you could not pencil in hard benefits or hard validation for positioned attributes, or if none of the attributes are aligned with your company brand, you have a service positioning problem.

Positioning Data

As with any management endeavor, relevant data is critical to success. This management law applies to positioning as well. Your service positioning will be more effective, on target, and motivating if it based on actual data. What type of data? Unfortunately, the type of data service companies often do not spend time or energy to collect:

Project Data: Formal project review summaries that identify what customers valued and did not value. Hard data that quantifies how much money you saved a client. Itemized inventories of specific customer deliverables.

Customer Value Surveys: Formal surveys to identify where customers feel you deliver value.

Prospect Surveys: Formal surveys into the marketplace to determine what service attributes are most important to the marketplace.

Competitive Analysis: Review of competitor’s web sites to understand how they are positioning themselves.

Closing Comments

This concludes our walk on the wild side of service positioning. This is an area begging for more discussion. Effective service positioning is rare in today’s services-based economy. Why is that? Service positioning, unlike product positioning, is in its infancy. My goal is that the positioning pentagon can be used to help quantify the current deficiencies in service positioning. I leave the rest of the positioning effort to the true marketing gurus.

¹ For more information on the work of Pretium Partners, please visit their website at www.pretiumpartners.com.

² United We Brand, Mike Moser, Page 59, Figure 3-2. Harvard Business Press, 2003.