Last year we met with hundreds of brand managers and market researchers to discuss brand positioning and one of the most common questions was “what do you think of repositioning?” A lot of electronic and traditional ink has been spent on this topic, but since the question keeps coming up we thought it would be best to spend more time putting some perspective around it to clarify things a bit.
The first part of this discussion is defining the circumstance that surrounds the question. Sounds obvious, but it is a crucial part of deciding the course of action and how we can define success. Most marketers’ default view of repositioning is built from the circumstance of a product that has succumbed to competitive or market changes and is no longer performing well. Often, these products are losing market share and/or sales volume and are generally in a state of decline; repositioning is seen as offering the potential to breathe life back into the brand and resurrect its good fortune. While this is a circumstance in which repositioning can be undertaken, the likelihood of returning a brand in this state to growth is extremely difficult and may be equally likely to have occurred as a result of great luck as great marketing. Once a brand has entered a period of decline, regaining growth is a far more difficult task. Reaccelerating the brand at the initial stages of slowing growth is often far more successful and profitable to an organization; this defines the other circumstance for repositioning.
Repositioning can be a very useful strategic tool when employed the right way at the right time. We’ve defined the wrong time above, but when is it the right time and what is repositioning really? Ideally, the right time to consider repositioning is just before the brand’s growth curve begins to flatten. In reality, anticipating the inflection point of a brand’s growth curve isn’t easy to anticipate, but being sensitive to changes in the growth curve will allow you to take action at the earliest signs of change. If the growth curve has been flat for some time or turned negative you have waited too long and affecting positive change will be difficult. If, however, market attitudes, or competitive pressure begins to slow the brand’s growth you have the opportunity to initiate positioning migration that is true to the brand while reengaging customers.
Let’s consider an example. Several years ago, Esurance entered the insurance market with a value-based positioning that defined Esurance as offering high quality insurance at much lower prices afforded by the lack of overhead only available from an internet-based operation. This position took advantage of an opportunity in the insurance market, and since consumers had already been made very comfortable purchasing online, success followed quickly. In fact, the success of Esurance caught the attention of traditional insurance companies and before long was purchased by the Allstate Insurance Company. Fast-forward to today and several major insurance companies offer internet-based service. Most of these are positioned under the value umbrella and compete directly with Esurance. Bringing this example back to the matter at hand, Esurance could have continued to compete on the positioning that made them successful and would likely have struggled to maintain growth and market share. Instead, Esurance recognized that the changing landscape would cut into their growth and sought a way to reaccelerate it.
By reevaluating the online insurance market and the new competition, Esurance understood the need to migrate their positioning from one that was being coopted by competitors to one that again differentiated them in the market. The result of this positioning migration is seen in their current creative campaign where they have defined discount insurance as cheap, but Esurance as a smart-choice. By claiming the mantle of innovator they have gained a sense of authenticity that the new entrants cannot and have successfully began the shift of their positioning from low priced insurance to insurance pioneer. By proactively addressing the competitive market, Esurance increased the value of the brand and ensured the continued relevance and differentiation of the brand’s positioning.
Check out an example of Esurance’s positioning migration by viewing one of their current commercials. Click here.