Differentiation and Positioning for Small Businesses
In this episode we discuss positioning and differentiation with Johnny Molson a marketing consultant and strategist with Wizard of Ads who helps small businesses to build custom marketing strategies.
We consider the difference between niching, positioning, differentiation and distinctiveness, including the challenge of becoming known. Trying to become known for one thing rather than three things makes it more possible to be remembered in the marketplace.
The episode touches on:
- The need to test the market to decide how to position your brand.
- Difference between differentiation and positioning with examples
- How to get your desired perception into the consumer's mind
- Social media – is it worth doing in terms of building a brand?
Shireen Smith: My guest today is Johnny Molson a marketing consultant, and strategist with Wizard of Ads. He's also the author of the book Campaign-O-Matic. Hello, Johnny, welcome to the Brand Tuned podcast is you think listeners might like to know about you before we get started?
Johnny Molson: No, gosh, I think I think you've covered it. I work with mostly locally owned owner-operated businesses and help them build their brand, hopefully, for long term success.
Shireen Smith: Yeah, that's really interesting, because I often see people talking about segmentation or sort of positioning differentiation in the context of big brands. So looking at it for small business is really useful, I think. And your book covered that quite well.
Johnny Molson: Thank you. Thank you. Yeah, I think that is important. I think small businesses, gosh, they are trying so hard to do everything themselves. You know, the owner and the operator are running the place and being a bookkeeper and being a manager and changing lightbulbs and, and trying to do their marketing and advertising and it gets really, really difficult.
Shireen Smith: Yeah, there are a number of words that are used, like differentiation, positioning niching, which I'd like to explore with you a bit during this podcast. So what is positioning? How would you describe it?
Johnny Molson: You know, positioning, I think I look to you know, how Jack trout looked at it as having a place in the brain for that category. So if I'm thinking Mexican, fast food, Taco Bell is what's coming to mind. You know, if I'm thinking mattresses, it might be, you know, the Purple Mattress or, or certain mattresses or something like that, so that when you have a category, it's where that category lives in the mind? And how many, how many brands come to mind when you think of them? And I think, you know, conventional wisdom then is if you can't own a ladder can own a category, then can you make a subcategory? Can you make a niche category? Below that?
Shireen Smith: Right, so what do you have to do in order to work out what perception you can have in people's minds?
Johnny Molson: Well, I think you have to work at it from the opposite direction, I think you have to look at it first, where the customer is starting? What is it that they're looking for and meeting? And can you position yourself to fit in there? You know, many businesses might have a lot of offerings, you know, a place that I guess maybe like Red Lobster might be an example of a restaurant that has salads, and steaks and spaghetti and things like that. But they're known for this one thing. They're known for seafood. And I think that I think that's kind of the thing that businesses sometimes miss is they offer a lot of things, and they try to be a lot of things. But I think you can really only afford to be one thing. To the to the to the customer.
Shireen Smith: So is this about niching?
Johnny Molson: I think in a way it is I think it's about niching, and how you present yourself to the marketplace. So in other words, you don't necessarily, you know, a furniture store maybe sells a lot of things, but they're known as the place to get great couches, maybe, for example. So even though they have many products, categories, what are you known for in the marketplace? And hopefully, the other stuff will come along with it. But I think you can only afford to be known for one main thing with some sub things below it.
Shireen Smith: Right. So when you start in business, I know from when I began in business in 2004. It's very difficult to know not to try and sell too many things that essentially even though you may want to offer that you have to start by going really narrow because you just haven't got the resources to offer more things like in my case, I do intellectual property, but that could cover patents, designs, trademarks, copyrights, all sorts of things. So it's very difficult when you start to actually decide, okay, I'm just going to be known for this one thing is that what you would be doing going really narrow in you even though you're already niched by doing something like, you know, intellectual property, which is a small area of the law.
Johnny Molson: Yeah, I think the using your cases and example, I think, yeah, you can offer and do a lot of different things. The marketplace will probably tell you what it is that they want from you, or what they need from you. So yeah, here's, here's the plate of things that I offer. And if what you start to see is that people are saying, you know, what, I need more help with intellectual property, I need more help with intellectual property, you kind of, by default, become the intellectual property person, don't you? And so I think when a company goes into business, you know, if you're a car mechanic, you might do brakes and radiators and transmissions and new tires, if the marketplace knows you as the transmission place, then that kind of starts to dictate where your focus probably should be, and let the other things come along with it.
Shireen Smith: So is that about finding out what's the most popular service that people are looking for? I mean, I'd say an IP is either patents or trademarks, for example, is it about actually seeing what's most popular, and then positioning yourself as somebody who can offer that.
Johnny Molson: I think you can look at it two ways you can look at it as what's the most popular, you can also look at it as what's the most profitable, sometimes the thing that that's the most popular may or may not be the thing that's most profitable. So you have to take that into consideration as well. But a lot of times, yeah, for businesses that offer an array of things, one of them usually starts to bubble to the surface. So you can approach that in one of two ways is there a, you know, I have a number of clients who are in the heating and air industry, for example. And it's hard to sell an entire air conditioner or a furnace, those that's a big purchase that only happens once every 12 to 15 years. But I do know that maybe maintenance has to happen once a year. So if I can get you to at least come do business with me for maintenance, hopefully, the bigger purchase will come later. So again, you know, banks will often try to get you just to at least open a checking account knowing that you'll buy a house someday. So if I can get you in for that small thing, sometimes the big thing comes later, you can approach it that way, you can also turn it completely around and say, gosh, we are going to sell you the most gold plated, amazing air conditioners that have ever existed and we're the premium provider of that. So you can do it. But it's really is about committing to something and not confusing the marketplace of who actually is this person who is this company.
Shireen Smith: Okay, so is that the same as differentiation? Or is differentiation? Something different? Would you say?
Johnny Molson: I think it's different from that I think differentiation is what is that thing that your product does that maybe another product doesn't do or can't do. The person who really came up with differentiation was Rosser Reeves when he came up with melting your mouth, not in your hands for M&M’s. So there was something about that product itself that was unique and different. And that's a lofty goal. It's hard to do that. That's asking, that's asking a lot because, gosh, in the case of law, you're pretty much handcuffed by the law. I mean, there's not a lot of opportunity there to you can't offer better law, you have to work within the confines of the way the law is written.
So differentiation becomes difficult, what I think become then I think the opportunity there is how can you be distinctive? How can you stand apart from the others so that I can say, it's, it's Shireen this is who we're talking to, and who we're talking about. And her company looks like this and sounds like this and feels like this? And that gets missed a lot sometimes in the quest for differentiation, which you should always try to get to, I mean, you should always be able to tell people what is different and special about your company. But to the marketplace, it gets kind of blurry and kind of fuzzy. But what you can do is be distinct. And my colours are this and my words are it's this phrase, and you can start to add elements of distinction so that I can tell you apart from I can tell that's a Coke bottle not a Pepsi bottle, that kind of thing.
Shireen Smith: Yeah, sure. I understand distinctiveness from a visual and auditory sort of point to via but distinguishing distinctiveness from differentiation when it comes to messaging is quite difficult. Because really what is the difference between them? You know, in terms of your unique messages are probably unlikely to be unique that you're trying to be a bit different to other people. So I've thought I've often had trouble with distinctiveness except in terms of how you look and sound like rather than.
Johnny Molson: Yeah, I mean, it can be your look in your sound and an attitude and a jingle or a phrase or words you've invented, or, I mean, there's a lot of ways that you can get to distinctiveness. And I think the insurance companies, companies are particularly good at distinguishing themselves from each other when they're ultimately selling the same product. The product itself isn't particularly different, but they are distinct, but the companies are distinct from each other.
Shireen Smith: Can you give an example of that, how they are distinct from each other.
Johnny Molson: Yeah, I think I think you're in here in the US, you know, good examples would be if you look at GEICO and Allstate and Farmers Insurance and progressive, they all have a very distinct look and feel about them in the way they present themselves to the marketplace. And they spent a lot of time I think really saying okay, this you know, Allstate looks like this with you know, the mayhem character or GEICO looks like this with their little gecko. person and their approach of hey, we're going to be the low cost folks and in Farmers Insurance is the old knowledgeable guard that says, hey, we've been around a long time we've, we know a thing or two because we've seen a thing or two is, is their approach. And so they're saying, We're the ones who have been here the longest, and we can help you out more. So there's areas of distinction in how they present themselves to the marketplace. Ultimately, what they're selling isn't all that different. The product that they're selling doesn't have much differentiation, beyond perhaps its price, but it's, it's ultimately it's, you know, it's shades of gray in there.
Shireen Smith: Yeah, so the branding is very important, and things like taglines, and having mascots and things.
Johnny Molson: It really is important, because, you know, with brand building, you know, what the word branding and brand building gets tossed around a lot. But I mean, really, you're just trying to create some sort of a memory pathway. So that when this product category comes to mind, that brand name is associated with it, and that takes a long time. That frustrates a lot of businesses.
Shireen Smith: Yes. So a business like dominos, which said, What was the message that it would be there in half an hour? Or else you would get your money back or something like that?
Johnny Molson: Yeah, that was a big deal. That was a big promotion, gosh, a couple of decades ago where they were they were distinguishing themselves on speed.
So dominoes. Dominoes? Yeah, you know, their promotion was that we would get to you in 30 minutes, or it's free, ultimately solving a customer problem of I don't want to have to wait for my pizza. And that's and that's a very good thing, you know. So what do you do then when the next competitor comes up and says, Well, we'll get to you in 19 minutes, or it's free. And then suddenly, you get to, you know, that that's where differentiation becomes difficult, because it can theoretically be duplicated, or improved upon. So if Domino's is going to be the fast delivery place, then what? You know, what does Papa John's have to offer? Well, we're going to be the place that has better ingredients, we're going to use fresher. We're going to use fresher ingredients and make a better pizza. So yeah, you'll pay a little more, but you'll get a better pizza. You can pay a little less and get it faster. You know if you're a little caesars, yeah, you pay $5. And you get two pizzas. I mean, and you know, so there are ways
Shireen Smith: But these are differentiation tactics that these would be him. I think they would be not positioning. So what would positioning actually be for these different pizza places? If it's not the differentiation?
Johnny Molson: Yeah, I think and I guess in my mind, the way that I look at it, they overlap a little bit there. Because yeah, they're Domino's differentiation would be in that case, we can get to you faster.
Shireen Smith: So the perception is, yeah, yeah.
Johnny Molson: Yeah, that's, that's kind of where you belong. Gosh, I need a cheap pizza fast. I'm gonna go to the counter at Little Caesars and there's good It'll be one ready and it's gonna be five bucks for pizza or whatever their, whatever their thing is. And so that's the position they hold in my brain as I can get a quick pizza fast.
Shireen Smith: Yeah.
Johnny Molson: Whereas on the opposite end of the scale, a place like Papa John's or even even a sit down restaurant would say, Okay, now I want to, I'm not interested in saving time, I'm interested in spending the money to get a better pizza. And that's the position they hold.
Shireen Smith: Sure. So if you come along and want to deliver food, and you're doing Not just pizza, but pizza is one of the things you're selling. Maybe you do kebabs as well, various other deliveries? How do you then decide what to position yourself on? Do you think?
Johnny Molson: If you're a restaurant that has a wide range of things?
Shireen Smith: Yeah. And you're offering a delivery service, and you want to be known? How would you, you know, if you talk about pizza, because you want to get people in on pizza, and then they find you've got other things that presumably wouldn't work? I'm just.
Johnny Molson: Yeah, I mean, I think for delivery out outfit, gosh, just off the top of my head, I think, yeah, you can speak to the savings of time, can I get to you quicker or more efficiently? You can speak to, you know, is there a price differentiation you can make? Is it a free delivery? Is there a guarantee, a guarantee associated with delivery? Those are some opportunities that might be there for a delivery place to at least differentiate itself from the 14 others that are out there?
Shireen Smith: Sure. So how would they go about it? Would you suggest they test the market before they get started properly? I mean, how do you go out of the gate, when you start knowing how to position yourself and differentiate your offering?
Johnny Molson: I do think researching the marketplace is often overlooked. And sometimes we're just guessing and going on our gut feel. And that can only get you so far. Sometimes, yeah, you do you not sometimes I think you really do need to spend some time figuring out where the opportunities are in the market. And really what the marketplace is looking for. Is that what they want from you? Or is that what they want from anybody? That is going to be a key thing to find out and it doesn't have to be a, an overly involved belaboured research project. But you certainly should spend some time doing that. Otherwise, we're just guessing. And that's, that's a longer way up the hill?
Shireen Smith: Sure, what are some ways you would go about doing that sort of research to understand the market and what the opportunity is, in order to then position a business correctly differentiated?
Johnny Molson: You know, there are many opportunities out there. I want to save maybe you gov.com is one that can do customer surveying, there's a number of them out there that exist, it's really about building a series of questions to say, you know.
Shireen Smith: Yeah, that's quite expensive those doing YouGov surveys
Johnny Molson: It was the first one that came to mind. I know there are other MailChimp and some other ones that are out there that exist, that can do that kind of thing as well. But it's but yeah, absent that, you're just kind of guessing and using your gut. And that has its place. But it's a harder way to do it, I think.
Shireen Smith: Okay, so you look at what other businesses are doing. And imagine if you were a customer what you'd want. And just maybe guess, well, yeah
Johnny Molson: You start to build some people who are better people who are better at building surveys than I could guide you on that. But I think you know, you start to ask the marketplace of if something like this came to town, is this something that you would use? Is this something that you're looking for? And again, these aren't the exact questions that you use, but that's the idea that you're trying to find is what exactly is the marketplace looking for? And can you build it backward from there?
Shireen Smith: I think people are very bad at predicting what they're going to do in future. So you just want to find out what problems they've got Ron now with the offerings that are out there. So once you've decided what you're going to position yourself on how you're going to differentiate, how would you go about it so that the perceptions you want people to have about your brand actually are likely to land? I mean, what are some common ways that you might?
Johnny Molson: Well, and this is really where I spend a great deal of my time is on the messaging of that company, you know, how are we going to save this in a way that is interesting, motivating, compelling, maybe surprising. You know, we are inundated with so many ads, and so much marketing, that you've got to figure out a way to even just to get someone's attention. And I think, you know, when you look at, gosh, some of the important work that maybe Orlando Wood has been doing and his books, look out in lemon and all of the system one work they've been doing of, you know, how do you get into someone's, the emotional side of their decision making, because primarily, we make our decisions emotionally, and we justify them logically. And so my, my time really is spent on building a message that is specific to that business, that that said, that tells their story, in their way. And, and hopefully in a way that's emotional, and will stick with people so that you have a shot at being remembered. Because if you're not, if you're not, if you're not already in someone's brain, then you're just fighting a price fight. And that's a tough fight to fight.
Shireen Smith: Sure. So how would you communicate that message to me? Would it be a video on YouTube or social media? How do you go about?
Johnny Molson: Yeah, okay. Sure. Yeah. So how you actually deliver the message that once it's,
Shireen Smith: No one is crafting the message. But small businesses often can't afford that sort of big advertising budgets of big businesses. So how would they go about sort of dealing with that message?
Johnny Molson: With a lot of the clients that I work with, I will first look at one of the first things I'll look at is radio and television are those are two really good mass media options that are still strong and still working in per person, I can get to a lot of people repetitively, again, I'm playing a memory game here. So how do I get to a group of people? And how do I get to them over and over and over and over again, so that they don't leave their brains? And that usually then gets followed up with? Okay, so then what are the short term tactics we can use? Whether it's through Facebook or through Google? And how do we speak to people once they are in the marketplace? And move them along in that purchase? That's, that's the that's really the tough thing that I think a lot of people forget, you know, there's so much talk about marketing funnels of going from awareness to conviction to, to the actual purchase. We forget about unawareness. And most businesses live in the unawareness, black hole, and how to so the first thing you got to do is just be known, you know, how do I get my brain? How do I get your name associated in someone's brain, that product or service, that's the first really big hurdle that has to happen. And that's why I tend to like, the mass media options where I can get to a group of people relentlessly. And so I'm not trying, I'm not trying necessarily to get to everybody, because I can't afford to get to everybody. But if I can, if I can get to, you know, this group of people and, and start to move them along the way, then I can start to build a brand from there.
Shireen Smith: Okay, so something like sponsoring a particular program or something, I've seen programs on TV, where the same advertiser has shown all the time because they've sponsored it's not even an ad, it's just a short little snippet that comes up. Is that the sort of idea so they've decided that that audience is right for them? You know, the type of people who would watch that?
Johnny Molson: Yeah, and I look at sponsorships and that little add on those little things as kind of add ons of just extra impressions of my name. But really, what I'm trying to figure out is can I get that 30 or 62nd ad to play in front of a group of people multiple times? And so you're right when you say it's, it's that one show that people are committed to watching? And how many times can I show up there so that at least I can own that group of people? And you know, you can really you can over engineer this way in such a way that you almost over target and you start to miss people I mean I from for a lot of the businesses I work for, I'm just looking for people who are mostly 18 and up and trying to talk to as many of them that I can afford to talk to multiple times, I'm, I'm preferring frequency, how many times can I talk to you and preferring that over how many people I can reach. So if I can talk to you more often, I'm more likely to move you down the road. Because I guess you know, this is it's a relationship, we're trying to build a relationship, and it's not going to happen on the first date. And so you have to talk to people over and over again and continue to tell your story. And when they are ready to buy from you, then hopefully, you're first in line, or at least one of two or three options.
Shireen Smith: Okay, well, it's pretty difficult to be able to afford advertising on radio and television. Short of that, what would somebody be able to do to get their name out there as much as possible? Do you think?
Johnny Molson: You know, I think a lot of people do perceive radio and TV and as being expensive it honestly, when we look at it, when, when our media buyers are looking at it, I'm trying to figure out almost a per person cost. And, you know, it's it suddenly gets down to, it's a lot more reasonable to talk to that group of people multiple times, as opposed to spending two or $3 per person on, say, a Facebook or Google. So yeah, I mean, look, there's a lot of ways you can do this. And all advertising, media channels work and can work, they just work a little differently. And, and just understanding that things like maybe direct mail or digital advertising is particularly good when you're trying to get an immediate sale. So it's great for offers, it's great for things that move quickly. It's difficult for brand building, that would kind of be the distinction there. So what you know what, what is it you're trying to accomplish? Are you trying to build something for the long term, then you're gonna have to use one of the things that tends to work better in the long term. They all have. They all have good attributes. And I use all of them. I use billboards, I use digital, I use OTT and everything else where it's appropriate. So there are many options. Really, the energy, though, the kerosene that makes this thing work is the messaging that you put behind it. And can that message be again, motivating different standout from the rest? That's the that's really kind of where the artistry meets the science?
Shireen Smith: Yeah, I guess podcasts would be something that smaller businesses could try to featuring because.
Johnny Molson: Yeah.
Shireen Smith: I mean, in my experience, most people wouldn't have anywhere near that sort of budget to go to television until they're more established. So when they're starting out and really small, unless they're funded and have a big budget, it's usually, you know, a small business trying to get off the ground. So, I mean, do you yourself advertise on television? And how do
Johnny Molson: How do people find us, you know, very fortunate to be with a group of folks that have been doing this for many decades, and have established a really nice foundation. You know, the founder of our company, Roy Williams wrote three best selling books in the late 90s, early 2000s, and really built a great organization, and I'm just I'm privileged to be a partner with him in that. And so our reputation I think, helps with that. Reputation is another word for brand building. Really, is, it really is that that long game? And so you know, we have partners who have podcasts and partners who teach classes and do seminars and those kinds of things and work directly with organizations and affinity groups and things like that. So yeah, there's there's a lot of ways to approach it, it's hard to it's hard for me to suggest a one size fits all for all businesses. You know, it kind of have to look at how much money do you have to spend? And where can you spend it most efficiently? I think the thing that a lot of businesses, the mistake a lot of businesses make is they try to be in too many places. So find something that you can own and dominate. And if it's podcasts on the podcast, if you're going to do Facebook advertising, do Facebook advertising, but don't try to do Facebook and billboards and bus signs and cinema. Just do the thing that you can afford to do and do it relentlessly.
Shireen Smith: That's really, do you think social media is worth doing? I mean, in terms of building brand and getting known for the perceptions you want people to associate with you?
Johnny Molson: But I think the operative word in social media is social and can a business you know Can a business interact with people in a social manner? And so the opportunity there is, is speaking to people in social media how they are accustomed to be spoken to. And, and sometimes that's, hey, look at my dog. It's and that's the kind of thing that we tend to look for on social media. And hey, look at my dog is actually going to get you more interactions, then we have a sale on pizzas this afternoon for $10. That's, that's the difference with social media.
Shireen Smith: Well that’s not branding really because if you want to be known for, say, delivery within 10 minutes, or whatever it is, then you wouldn't be offering a sale necessarily, if you want to get it out there that this is how you are distinctive, how you're unique.
Johnny Molson: If you were to do it through social media, I mean, yeah, yeah. You know, I think the I, again, that's a really hard to, it's hard to sell on social media, because people aren't, that's not what they're going to social media necessarily for you. So you can do that a little bit. But you can't do it a lot. Otherwise, then you're just another add another person with your handout trying to get me to buy something. Can you be more social on social media is really the trick. And it's a missed opportunity. I think for a lot of businesses who do nothing but post about, don't forget to call us when your sink is stopped up, hey, we're having a great sale on tires today. Things that we tend to scroll by pretty quickly because it's not. It's not a social thing. And it's but it is about that is about building a relationship. And you do have an opportunity, I think on social media to build a unique relationship with people. It's why influencers tend to do pretty well because they've already built a relationship. And they've now not they've attested to this and said, Yeah, this product is really cool. And I've used it. And so it that's it's a kind of a different animal than just traditional advertising.
Shireen Smith: Yeah. So going back to this idea of positioning and differentiation and all business, I get, I guess the message I'm getting from this discussion is that maybe you focus initially as a small business on getting your business off the ground through niching, through having something that people come in through the front door, and then you sell other things, potentially, and not worry too much about your positioning, because how are you going to be known for those perceptions. So you decide you're going to be perceived as x, y, and z how you're going to get out?
Johnny Molson: By your by deciding that you're just going to be known for X and not, not all three, that's the tricky thing is that's what you kind of bring to the marketplace is, you know, this is who we you know, to us guy goes insurance example. I mean, they decided they want to be known as the low price insurance company. That's the thing they've decided that they are. And there's, you know, there's some they've got the money to do some other things on the side, but their primary focus is, how can we let people remember that when you're looking for a good deal on insurance, were the ones to come to. Whereas Allstate is saying, hey, when you're when you want to make sure that you're fully covered, and nothing gets missed, where are the ones you come to, you know, and that's those distinctions. And just understanding that different people have different motivations for why they make their purchases.
Shireen Smith: Yeah. So you're not going to appeal to everyone. Yeah, I think that's a good point, focusing on just one thing.
Johnny Molson: Yeah. And in on that personal trait, that some people do want the lowest price, some people do want the best value. And those are different people. And you can't try to talk to both of them with the same message because it just won't connect with them. Yeah. And there are products for which we are, you know, that we just want a good deal. And, you know, if it's just going to the gas station, and whatever the lowest price is, that's fine. But if it's a product that we that we rely on for quality and for value, and often we're willing to pay a little more for that. And then that plays out pretty consistently across all product categories.
Shireen Smith: So just to finish, Johnny, is there a brand you particularly admire? And if so, why?
Johnny Molson: Oh, gosh, that's a wonderful question. A brand that I particularly admire. Let me Think about that for just a quick second. Because there are so many who are really doing such a good job. And I, you know, I do use the insurance examples often because I have been impressed at how they can take a product that is basically the same across the board and, and present it in unique ways that they do stand out, you know, we you can, you can name four or five insurance companies. But there's probably a couple 100 out there. And that's really the test is in this sea of sameness. How do you stand apart? If I asked you to think about toothpaste, a couple of three brands come to mind. And then beyond that, it gets really blurry and really fuzzy. And so the one is the ones that have figured out how to own a category or at least be dominant in a category. Those are the ones that impressed me. That's a tough thing to do.
Shireen Smith: Good. Well, thank you very much indeed. Johnny, good to have spoken to you.
Johnny Molson: Thank you. I hope this was helpful. Yeah,
Shireen Smith: I'm sure yeah.