As an entrepreneur or small-business owner, you know there’s a lot of competition out there for products and ideas. It can be tough just to hold your own in the marketplace, let alone get ahead of the competition. How can you make your business, your product, your service stand out?
The answer lies in a concept called strategic positioning. Simply put, positioning is the process of differentiating yourself, your company, and your product or service—whatever it is that you do—from everyone and everything else out there. This is the key to not just surviving but thriving in a competitive marketplace.
In this interview we’re going to learn about the theory and practice of strategic positioning from the man who pioneered it: Jack Trout. Jack has spent much of his long career developing, implementing, and promoting his theory of positioning and has written numerous books on this and other marketing strategies. Today he’s going to help us understand it, and he’s going to give us some tools to actually leverage it.
Jack Trout is the founder and president of the international marketing strategy firm “Trout and Partners”. Jack Trout has written many books on strategic positioning. This interview uncovers the foundational principles from his 35+ years in marketing strategy.
Let’s start here: What are you best known for in your field?
Well, I’ve been at this a long time. I’m probably one of the most well-known marketing strategy people in the world, actually. That’s been driven by the many books that I’ve written on the subject.
What is Positioning, Anyway?
Let’s start with the basic definition of positioning. Positioning is how you differentiate yourself, your company, whatever you’re selling, in the mind of your customer and your prospect.
When I pioneered this idea in 1969, when the world was starting to get competitive, I recognized the fact that you win or lose in the minds of your prospects. What are the perceptions that they have of you and what you stand for? What makes you different? That’s the game.
I’ll give you a warning: it’s not as easy as it reads. You can read all my books and say, “Here, that’s easy.” It reads easy, but it’s not easy to implement. Primarily because people constantly want to grow, they want to get bigger, but they’re not willing to sacrifice. You’re not willing to give up something to get something. That’s the trick, and it’s very hard. It’s not easy work, but it’s critical if you want to separate yourself from your competitors.
Can you talk a little bit more about what you have to give up? That may not be intuitive for some folks.
A well-known business consultant—I’ve forgotten exactly who—said, “We don’t have an inordinate need to grow. We have an inordinate desire to grow.”
In other words, Wall Street is out there pitching various companies, and essentially all they want to see is, “How are you going to grow?” They cause people to do stupid things, to get into businesses they shouldn’t get into, instead of staying with exactly what they are and finding ways to constantly improve it.
That’s really what it comes down to. It’s a willingness to not be what you shouldn’t be. To sacrifice other ideas or businesses that you might want to pursue.
In terms of positioning, is this something that a company has to do? Or can they get away with being second? Can they get away with being good enough?
In Differentiate or Die, I wrote a lot about this as a strategy. It’s a question of where you are in the marketplace. If you’re the leader, you reinforce your leadership idea. You continue to tell people that you’re the leader. People tend to buy what other people buy. If you’re number two, you have to attack the leader at a weak point. You have to go where they’re not. I covered that in great detail in my book called Marketing Warfare.
If you’re starting something new, then you’re in a whole different game. Now you’re creating a totally different idea. If you’re a small player in a big category, you’ve got to become a guerilla and understand how guerillas operate. Find a small piece of the jungle that you can find happiness in. Marketing Warfare is your best guide to determining: are you defending, are you attacking, are you flanking, or are you a guerilla?
In your experience, is one of those positions better than the other?
Sure, leadership is. People buy what other people buy. If I could be number one, I want to stay number one. I want to continue to dominate, and I want to make people aware of the fact that they’re dealing with the leader.
If you choose the number one positioning ....
You don’t choose it. You can’t choose it. You’ve got to do it. You’ve got to start something. You have to pioneer something if it’s a new idea. Whatever it is, you don’t choose it. You earn it.
Let’s talk about how you earn it then. What are some of the attitudes you’ve got to take on? What are some of the brass-tacks things you’ve got to do in the marketplace?
Four Steps to Strategic Positioning
Step 1: What’s the competition?
Every program starts with your competition. You have to understand deeply what your competition is about, where they’re strong, where they’re weak, et cetera.
Now, if you’re inventing a new category there is no competition. That’s, of course, a terrific place to be, but again you’ll have to invent something, start something, whatever.
Step 2: What idea can I own?
You have to determine where they’re weak and strong and what position you can achieve. Very important. What idea can I take ownership of?
Step 3: What are my credentials for that idea?
In other words, you can’t just say, “I’m here and I’m great.” You have to have credentials. Is it research? Business you’ve done? Whatever it is.
Step 4: How do I communicate that idea?
Then finally you have to communicate that idea. You have to go out in the marketplace and tell your story. Good marketing is good storytelling. That’s the game.
Those are the 4 key steps:
- Who is my competition?
- What idea can I own?
- How do I back it up and prove it?
- How do I communicate it?
When it comes to communication, have you found certain strategies to work better? Have you found word-of-mouth to be better than digital marketing? Have you found print to be better than digital?
Word-of-mouth is obviously very powerful. That’s what’s happening in this brave new digital world when you see all this stuff on Facebook and all. You see a lot of word-of-mouth. Word-of-mouth used to be harder because it was one neighbor talking to another neighbor. Now you can do it electronically and digitally.
The trouble is, how do you sort out the good from the bad? That’s your problem. Obviously television, still today, reaches more people. That’s why there are Super Bowl commercials. Everybody wants to do one of those, because of the reach of your story.
The Importance of Differentiation
The problem is, if you look at today’s advertising, I say it’s ridiculous. With a lot of ads out there, you have to say, “What are they selling?” It’s all about entertainment, getting laughs. The advertising industry wants to make sure that people watch the commercial. They have fallen into the entertainment trap. They’re not selling much, but they’re doing a lot of entertaining.
That’s why with so many commercials on television today, you have no idea what they’re selling, or you have only a vague idea. The advertising industry is not good at this stuff. That’s been one of the ongoing problems. I find this all over the world. That’s the problem with advertising.
You have to be right on strategy. You’ve got to tell your story. Sure, you have to find a way to dramatize it, sure, make it interesting, but you’ve got to tell your story. You can’t fall into the—David Oglesbee, many years ago, said, “The trouble is that too many creative people like to play in their sandbox.” You see a lot of sandbox play going on right now.
What should a business leader do then? If you want to tell your story, you might say, “Well, I need some help, so I should go to an advertising agency to help me tell my story.” But I agree with you: a lot of advertising agencies don’t do this well.
Correct. That’s why when you go to an agency you have to have a clear idea as to what your position is, what your idea is. You say to them, “Don’t be creative. I want you to dramatize this idea, this concept. I want you to make it interesting. That’s what your job is. Don’t give me creativity. Give me dramativity. That’s what I want you to do.”
You have to maintain control. You just don’t throw it to these people and say, “What do you want to do?” That’s a mistake.
I like that idea: “Don’t be creative. You can be dramatic. Give me drama around what I’m giving you.”
Exactly. Dramatize my point. If I have a point of difference I want you to dramatize it.
What we’re saying here is that as the leader of the business, you’ve got to own your own message. You’ve got to be clear about that before you engage another firm. You’ve got to tell that firm what you’re trying to do. They should help you enable your idea versus giving you an idea to own.
Well, Jack, are there any big projects that your firm is working on that you want to share with us?
Most of my work, interestingly enough, has moved over to China. China is a large country which is, as you know, going from what I call a manufacturing-based economy—making stuff for everybody—to a market-based economy. They realize now that they have to begin to try to build brands domestically. They have to find a way to take this positioning stuff and use it to build brands in China as opposed to just making stuff for everybody.
That’s been a lot of my recent activity: doing various projects in China and trying to educate them about positioning. In China, because they now think positioning is their key to success, I’m a rock star there. It’s amazing. They see me as the answer to their problem of how to build brands. This is new to them.
They’ve read all my books. In fact, they took all 15 of my books, published them, and put them in a box. It’s called Trout in a Box. You can buy a box containing every book. That’s how hard they’re working at trying to learn how to build brands.
Are these companies, generally speaking, the larger manufacturers?
No, they’re the entrepreneurs in China. The smaller players. Remember the government runs the big stuff.
In China the government runs the big, big deals, but the deal they made for the entrepreneurs, the business class, is: “We’ll do the big stuff. You guys can do whatever you want and we’ll leave you alone on the smaller brands. Go ahead. Be an entrepreneur.” Because it’s such a big country, there’s a lot of business for even a smaller player to begin to build a brand. The numbers are so big.
Differentiate or Die
Very interesting. Well, are there any parting words for us or anything we should know about before we close out today’s interview?
I think the key things are:
- You’ve got to understand your competition. You’ve got to have a clear picture.
- You have to find some way to separate yourself from your competition. That’s super important.
Otherwise, guess what you’re stuck with? Price. How do I do it cheaper? That’s the road to wreck and ruin.
The winner of that game goes to zero, right?
That’s exactly right, and good luck.
Excellent. I appreciate your time today. I think we’ve nailed it. Thank you so much for offering your time today.
The late Jack Trout was the founder and president of Trout and Partners, an international marketing strategy firm. His many books include, among others, Positioning, Jack Trout on Strategy, A Genie’s Wisdom, Marketing Warfare, and Differentiate or Die. Learn more about his strategies and legacy at troutandpartners.com.