Resource · Framework
Positioning framework: four questions, one decision.
The approach we use in client work to define a market position, reduced to four questions, with steps and the tests weak statements fail.
How to work with it
Allow half a day for preparing the data and half a day for the evaluation with the leadership team. The order matters: the data from questions 01 and 02 is on the table before questions 03 and 04 are discussed. Starting with the discussion leads to a compromise.
The framework
Two questions for the data, two for leadership.
Question 01
Which customers are actually profitable?
Not: which generate the most revenue. But: for which is there something left after sales effort, special requests, rework and payment terms.
Steps
- Sort orders from the last 24 months by contribution margin
- Group by industry, company size and application
- Check the top 20% for common features. Technical conditions are often more telling than the industry
- Note: what does this group have in common that the bottom half does not?
Question 02
Which enquiries do we regularly lose, and why?
Lost tenders are the most honest market research available. They cost nothing and are almost never analysed.
Steps
- List the last 30 to 50 lost enquiries
- Assign a reason: price, professional fit, perception, existing relationship, clarity
- Follow up on cases lost due to perception. A call to the buyer brings more than any analysis
- Note: which reason for losing can be influenced most often?
Question 03
What could a competitor not claim about itself?
The fastest test for any positioning statement: put the name of your strongest competitor in front of your sentence. If it is still true, it is not a position.
Steps
- Write down your current positioning statement
- Put the names of your three strongest competitors in front of it
- Check: is the sentence still true? Then delete it and start again
- Note: which statement would pass this test?
Question 04
Which enquiries will we no longer actively pursue?
The real decision, and the one most often avoided. It is about where marketing budget and sales time are spent. Orders are not turned down because of it.
Steps
- List all services currently promoted
- Compare each item with the answer to question 01
- Delete what does not serve the profitable group
- Note: which services stay in the shop window, and which only in proposals?
Evaluation
How four answers become one sentence.
The positioning statement is created by inserting the results. Use the following structure and fill it with the answers to the four questions.
Sentence structure
For [customer type from question 01] with [condition from question 01], we are the best choice because [proof from question 03], unlike [alternative from question 02]. We no longer actively pursue [result from question 04].
| Test | Method | Passed if |
|---|---|---|
| Competitor test | Put your strongest competitor's name in front | The sentence becomes false |
| Exclusion test | Check who is excluded by the sentence | Someone can be named |
| Sales test | Have three salespeople say the sentence | Nobody spontaneously adds qualifications |
| Data test | Compare with the margin data from question 01 | The most profitable group is covered |
| Size test | Compare target group size with the capacity you need to fill | The target group is at least ten times larger than needed |
A sentence that passes all five tests is rarely elegant. It is usable, and that is the point.
Limits
What this framework does not do.
Two limitations we state openly:
- It does not replace an outside view. The most common reason internal positioning rounds go in circles is a lack of distance. Anyone who has been with the company for fifteen years takes certain assumptions for laws of nature.
- It does not replace customer interviews. Two to three conversations with existing customers about their actual selection process correct internal assumptions more reliably than any data analysis. These conversations should be conducted by someone who is not in sales.
If you have worked through the framework and the sentence holds, you do not need us for this. If the group still ends up with a compromise after the second attempt, that is a good time for a conversation.
Further reading
Related pages.
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