Positioning: A Company’s Pivot Point

A basketball player can move around freely in a complete circle, as long as he keeps one foot firmly planted in place, a company can move in a number of new directions, as long as it stays true, and don’t move, from their pivot point

“In the world, there’s trust. I think as humans we fundamentally parse the world through the people and relationships we have around us. So at its core, what we’re trying to do is map out all of those trust relationships, which you can call, colloquially, most of the time, friendships” Mark Zuckenberg. These words by Facebook founder are similar thoughts shared by leading companies anywhere in the world. They have always built their companies from a different point of view; and not necessarily a better point of view (POV). Leaders of well-known businesses take positioning seriously. They make a choice to be different, purposely positioning their companies to create or disrupt a very big market category. They know the real power of marketing is to catapult the company into a dominant, defendable position in a hot category. That’s how they achieve higher growth rates, margins and market caps (valuations) than their competitors.

To determine your positioning, you must know your pivot point. You cannot build a dominant, defendable market position by playing the same game as your large incumbent competitors. You have to change the agenda in the market to give yourself a fighting chance.

Market your Pivot, not your Company or Product

A company’s (not product) pivot point is the defining attribute, the central theme, around which everything revolves. Just like a basketball player can move around freely in a complete circle, as long as he keeps one foot firmly planted in place, a company can move in a number of new directions, as long as it stays true, and don’t move, from their pivot point.  By aligning with position vs a product, you can expand and grow your company in new directions.Nike’s affirmative “Just Do It,” captured the essence of their brand message, and created a committed fan base that buys everything from sunglasses and shorts to watches and golf balls. Not bad for a running shoe company.

 Volvo could easily market a child car seat with their reputation for safety. 

Only when they believe in the what, will they buy your how. Said a different way, if you want people to buy Bibles, first they have to be Christians.

Be Different, not Better

Many business leaders fall into the “better” trap. They truly believe winning is about having a better product and sales channel. To win big, you must be different. Different works because it is intriguing and believable. Customers understand it. Choosing between different offerings is easier than choosing between similar offerings. “Should we have juice or ice cream?” is an easier decision than choosing between two similar ice cream brands. Different also protects your price. When two companies say their products are better than the others, customers conduct proofs of concept and often break the tie with price.

To make being different work, you also have to be clear about how your difference is clear, tangible and valuable to customers, partners, employees and shareholders. Any frequent flyer can feel the difference between Virgin Airlines and other airlines instantly. One is a company run from a pivot of delivering a unique travel experience and the others are run by bean counters who view the market through a spreadsheet. You can buy it, taste it and feel it.

To win, your product has to be governed by the pivot. If not, you’ll end up competing on price and features

Your Pivot Sets your Market Valuation

The value of your company is driven by the facts about your business and the way people feel about it. Powerful stories create powerful emotions. People relate to and remember stories, even people who make living analyzing facts. A powerful point of view sets the context for interpreting your quarterly financials. This reality makes the story about your business more important than the facts about your business. Sound outrageous? Maybe, but it’s true. Your story to investors must communicate the size and growth rate of your category and how you are positioned to win in the category, not just your numbers.

In conclusion, legendary companies have one thing in common. They achieve dominant, defendable positions in market categories that matter. That’s why they have higher growth rates, margins, and market valuations than their competitors. Your pivot sets the strategic context for your business. It’s how you communicate your strategy and value. It defines what category you’re in, what makes you different, and why people should care. Ultimately companies that have a powerful pivot stand a much better chance of creating significant, long-term value than companies that don’t.

@jatelospensir