■ · Strategy & Growth
Where you compete: positioning and your real edge
Customers have choices. Positioning is the honest answer to one question: why should the right customer pick you over every other option, including doing nothing? If you can't answer it clearly, neither can they.
Positioning is a choice about who you're not for
In Positioning, Al Ries and Jack Trout argued that the battle for customers happens in the customer's mind, and that the clearest, simplest position usually wins. For a small business, that means narrowing down: a specific type of client, a specific problem, a specific way of solving it. "Bookkeeping for everyone" is invisible. "Monthly bookkeeping for small service businesses, with a report you can actually read" is memorable.
Narrowing feels risky because it seems to turn customers away. In practice, it makes you the obvious choice for the customers who matter most, and it makes your marketing, pricing and hiring easier.
Find the overlap
Jim Collins's Good to Great describes companies that focused on the overlap of three things. In small-business terms:
- What you can be among the best at in your market, not just good at.
- What people will pay well for, with a profit margin that works.
- What you and your team care about, because you'll be doing it for years.
Work that hits all three is your core. Work that hits only one or two is a distraction, however tempting the revenue.
■ Stand out on purpose
Change the comparison
W. Chan Kim and Renée Mauborgne's Blue Ocean Strategy suggests competing by changing what customers compare, instead of trying to beat rivals on the same features. They use four questions. Here they are applied to a small service business:
| Question | Ask yourself | Example: a bookkeeping firm |
|---|---|---|
| Eliminate | What does the industry offer that customers don't really value? | Long annual engagement letters and hourly billing |
| Reduce | What could be well below the industry standard? | In-person meetings, replaced by a 15-minute monthly video call |
| Raise | What should be well above the standard? | Speed: books closed by the 10th, every month |
| Create | What could you offer that nobody in your market does? | A one-page plain-English report with three things to act on |
Investigate your edge before you advertise it
Every owner believes they have an edge. Treat it as a claim, not a fact. What evidence do you have? Repeat clients, referrals, win rate, what clients say when you ask why they chose you.
Put each claimed advantage on the evidence board. "Clients love our service" is an assumption. "80% of clients renewed last year" is a fact.
Ask three clients and one lost prospect why they chose you, or didn't. Listen for the real reason, not the polite one. See No Yes Man.
An edge only counts if customers will pay for it. If your advantage doesn't show up in price, win rate or retention, it's a preference, not an edge.
Write your position statement
Use this simple form and keep rewriting it until it's true and clear:
Then test it. Use it on your website, in proposals and in conversations for a month. Watch whether the right clients respond, and whether the wrong ones stop showing up. That's the evidence.
Signs your positioning is too broad
- You compete on price in most deals.
- Clients can't explain what you do to a friend.
- Your clients are so different that every job feels new.
- Your marketing tries to speak to everyone and connects with no one.
Go deeperCase file, step-by-step how-to, common mistakes and questions to work through
Case file: The electrician who stopped saying "we do it all"
A fictional example
Derek runs an electrical contracting business with five electricians. His website says "Residential, commercial and industrial electrical services. No job too big or small." He competes on price for almost every job and wins about one in five bids.
He started by investigating his own edge. He looked at his last 50 jobs and asked which were most profitable, which clients came back, and which jobs his team did best. A pattern appeared: older homes. His crew was exceptionally good at updating wiring in houses built before 1970, work many competitors avoided because it's slow and unpredictable. Those jobs had higher margins, almost no price shopping, and clients who referred their neighbors.
He called three of those clients and asked why they chose him. All three said some version of the same thing: "You explained what was wrong with our old wiring without scaring us, and you were the only one who didn't want to rip out every wall."
He rewrote his position: "For owners of older homes who need their wiring made safe, we update electrical systems with the least disruption to your walls, unlike general contractors who treat every old house like new construction, because older homes are all we specialize in."
He used the four-question approach. Eliminate: bidding on large commercial jobs. Reduce: drywall damage, using careful fishing techniques. Raise: explanation, with a photo report of every problem found. Create: a free safety inspection for homes over 50 years old.
Within a year, his win rate on proposals had roughly doubled, his average job was larger, and he'd stopped competing on price for most work. He turned away more jobs than before and made more money.
How to find your position, step by step
- List your last 30 to 50 jobs or clients. Mark the most profitable, the most enjoyable and the ones who came back or referred others.
- Look for the overlap. What do the best ones have in common: type of client, type of problem, size, location?
- Ask five good clients why they chose you, using the wording below. Write down their exact words.
- Write the position statement using the template on this page.
- Run the four questions: eliminate, reduce, raise, create.
- Test it for 90 days on your website, in proposals and in conversation. Track win rate and the type of inquiries you get.
"I'm trying to understand what we do well, so I'd value your honest answer. When you were deciding who to hire, what made you choose us? And was there anything that almost made you choose someone else?"
Common mistakes and how to fix them
| Mistake | Fix |
|---|---|
| Claiming edges every competitor also claims, like "quality" and "service" | Find something specific and provable. Use your clients' words, not marketing words. |
| Being afraid to narrow down | You can still accept other work. Positioning is about what you lead with, not what you refuse. |
| Picking a niche you're not actually good at | Base it on evidence: profit, repeat clients and referrals. |
| Changing the position every month | Give it at least 90 days of consistent use before judging it. |
Questions to work through
- If your best client described you to a friend, what would they say in one sentence?
- What type of work do you do noticeably better than competitors?
- What do customers in your industry dislike that everyone accepts as normal?
- Which clients would you happily serve all day? What do they have in common?
- What would you need to stop doing to become the obvious choice for one group?