Podcast Transcript: How Positioning Can Increase Market Share And Focus Your Efforts
This is a transcript of the latest episode of the Enrollment Management Round Table podcast exploring a strategy called Positioning. It has been edited for clarity.
We’re out helping schools everywhere, helping folks improve their Enrollment revenues by doing more with what they’ve got.
Today we’re going to talk about a very important topic that we don’t hear ad agencies talking about that often. That is the strategy around what’s known as Positioning. This Consumer Psych concept was made popular by two gentlemen; Trout and Ries out of New York in the 1970s. They wrote a book called Positioning: The Battle for Your Mind.
Tom, having a school carry a prominent spot in the mind of a prospective student is more crucial than ever given that people are inundated with information; vomiting of information everywhere. Holding that connection inside somebody’s mind is tougher than ever. You care to expand on that?
Yes, I think holding a piece of that mental real estate in their mind, and having that top of mind awareness is crucial in this age of “over information.” Having a niche that you can fit in that really separates you from everybody else and all the noise out there is so important. People are getting hit thousands of times daily, from so many areas: social media, TV, radio, streaming radio, and streaming internet, just to name a few.
In my previous career, I led a successful vocational college. We didn’t want to be the “Be everything to everyone” or the “Do everything for everyone” school. Similar to exactly what we do at Enrollment Resources; we don’t want to be all things to all people. We have a niche that we want to practice in, and hopefully we’ve positioned ourselves to achieve that.
We have an itch to create a niche. Let me do a positioning 101 for those listening that may not fully grasp the concept yet. This topic is not talked about a lot. This usually leads to conversion rates. Positioning is the key, though. Using a basic analogy, the first person and the best-dressed person has the most chances to get the most dances at the town hall dance. That is how it works in marketing. The first company that solves the problem will get about a third of the market share.
The second company that comes in to solve a problem gets 20% of the market share. The third gets 12% and the rest are battling for scraps. That’s interesting to me. When you analyze it, it’s not like somebody is throwing their money around to four or five different spots, they go to school at one place at a time.
Here is a Soft Drink example: Coca-Cola was the Cola innovator and they came in first and they had 100% of a small market. Then the new guy on the block came in next, that was Pepsi and then RC Cola and then a bunch of the other Cola drinks… 7UP and this and that. They were battling for scraps. Pepsi came in second into the market, the new guys on the block. You care to guess when Pepsi was started?
You tell me. I’m not sure.
1882. Six years after Coca-Cola. All the advertising, fresh, new, innovative Pepsi, the younger generation, the Michael Jackson TV ads. It was established six years after Coca-Cola. Back in the late 1800s. Go figure, Pepsi has had almost 140 years to somehow take out Coke, and they couldn’t do it.
The broad rule of thumb is if you think of it like… visualize a ladder. The person at the top of the ladder will typically have about 10 X in terms of revenue and/or profit over the people below them in the positioning ladder. Staying with soft drinks for a moment: in the seventies, 7UP had 4% of the soft drink market. They were fighting for scraps, and they were having a heck of a time ’cause they were battling Coke, Pepsi, RC Cola, etc.
What they decided to do was what we call “fracturing the market” here they went and created a new positioning ladder, a little tiny ladder that puts 7UP on the top. Now, what they did there is they said, “Well, there’s a cult counter-culture, there’s Vietnam, the Vietnam war, the free love, the real deep schisms in terms of generational divides.” They did nothing except had an ad campaign, this large attractive Jamaican man with a white suit and a pimp hat and everything that a 60-year-old Midwestern white guy would despise. Then he just did this fantastic campaign, “the un-cola.” Just on that campaign alone, by differentiating 7UP as the un-cola, their market share increased 400% in one year. It didn’t change packaging, they just ran an ad campaign. Quadrupled the revenue in one year. Isn’t that crazy?
Absolutely. It’s interesting how that whole thing works. If you can fracture the market and grab that position, it makes a huge difference in your ability to move forward.
Are you up for another example?
All right, so the Aspirin market. It was dominated by Bayer, Aspirin, etc.. Tylenol had, again, around 3 or 4% market share. Then they had a hard look at and they said, “How are we different? Unlike the rest of the pain relievers, how are we better? Well, Tylenol does not make your stomach bleed.”
Now, when you take an Aspirin and your stomach bleeds, it’s not a big deal. But what the Tylenol folks did was they played on it and they basically went back and said, “People did you know when you take an Aspirin, your stomach bleeds one tablespoon of blood every time you take a tablet? With Tylenol, your stomach does not bleed.” Well, people’s minds got the better of them.
The actual result from the pain relief was similar except with Tylenol, the stomach did not bleed. And that market share went up eventually to 33% overall. What they did was they grouped all the Aspirin products and instead of being one of 40 brands competing for shelf space, they were one of two: the company where the stomach doesn’t bleed and the 39 others where the stomach does bleed. They created a battle of one competitor. They created a new positioning ladder, and they put themselves at the very top. Then, of course, what spins out is that that ladder develops and companies like Aleve and Motrin and other similar products go in under that ladder. What they’ve managed to do was create almost 100% of the non-bleed pain reliever ladder, which they owned and dominated, but it represented 36% overall.
Tom, let’s look at EDU – University of Phoenix. Back in the 70s, when you came out of high school, you went to work for 50 years and got your gold watch, or you went to University. There was a whole raft of people that dropped out of school. There were women who were honors students in high school that set out to have kids and raise a family. Dr. John Sperling saw an opportunity, and he created a new positioning ladder, which was “earn while you learn.”
That’s basically self-explanatory: You can get your degree online. And because of this “earn while you learn” concept, Arizona State University, University of Arizona, Northern Arizona State University said, yeah, no problem. We’re not marketing to 40-year-old housewives or guys who are moonlighting to get a degree. That’s not our market. Go ahead. So U of P got regionally accredited very early on in their process.
To make a long story short, University of Phoenix is, I believe, the third largest University in the world with 430-odd-thousand students. The only bigger university systems are the California system and the University of London system in the U K. Then University of Phoenix is third in terms of regionally accredited degrees. What Sperling did was he created a new position. He was aiming – he didn’t want 18-year-olds – he wanted 40-year-old housewives with a year of college to finish off their degree. Smash through the glass ceiling, earn while you learn. Crazy, don’t you think Tom?
Yes. It’s amazing how you can create a unique position for yourself and your company or school.
Yes! At Enrollment Resources, we took off a few years ago when we dedicated to conversion rate optimization. Doing more with what you’ve got, versus trying to sell training and getting people to hire more Admissions Reps or buy more leads. We said, no, no, no, no. You can, in fact, reduce your media buy and do more with what you’ve got. Our conversion rates are much higher than the typical ad agency. That’s just because we focus on CRO.
We don’t buy media. So, that’s an example: we created our own positioning ladder. And when we did that, our business took right off. Out of that, we created software that supported it. What happens is when you decide to create a position, you start to realign your internal conversations and resources. Tom, when you ran that vocational school, you have a story where you decided to focus your efforts and created a differentiation point against some of these monster vocational schools. You want to tell the story?
Sure. For the school I ran for many years, we had some big players in the industry that were publicly traded companies as competitors. In terms of marketing, they would outspend us 90 to one. We couldn’t compete from a head to head standpoint given their enormous marketing budgets. They were simply significantly larger, multi-campus schools that we were competing against. We really had to create and carve out a niche for ourselves that separated us and allowed us to really differentiate in the minds of not only our prospects and our students that we were looking after, but also the high school instructors and guidance counselors and other people in regard to the perceptions that they had of the industry. We wanted to be, and I think a lot of people say this, “the Harvard of technical schools.”
That was really our goal. We wanted to be an elite school, and we worked hard to find industry partners, big-name industry partners, that would allow us to create specialized programs that nobody else was offering. Something that gave us additional value over someone who was teaching something similar. We could offer these little certifications, even a digital badge-type of a thing. Just something that would allow students to come out with more value and have relationships with some of these big-name industry companies that allowed us to specialize.
That specialization gave us a legitimate reason to be more expensive. We created a niche that was a little higher-end than everybody else because we could offer a lot more value. I think we really started that trend in the industry, and then you started to see some of these big corporate schools going after similar partners, trying to plaster as many logos on their website.
We were really there first, where we created tremendous value for our students, which allowed us to position ourselves as more of an elite institution. It also really separated us from many of the community colleges in the area out there. Yeah, positioning works, but it doesn’t work overnight. It takes years to develop that niche. It doesn’t happen in a couple of months. You have to stick to it, decide where you want to go, and mold your focus.
You’ll know whether it works within a year or so if you’re starting to move that direction. You’ve got to stay on it and stay true to what you want to be. You can’t be flip-flopping every three to four months. (Okay, now we want to be the lowest price, now we want to be this, now we want to be the nursing school, now we want to do cosmetology and automotive). You can’t be everything to everyone.
Yeah, that’s exactly right. You have to be first. You must be first into a playground when playing King of the Hill, and then you have to be relentless at staying first. Here might be an example. There’s a big, big, giant pile of sand and at the top of the sand is gold and riches. The first company to identify the gold and riches at the top of the pile set about to start climbing up that pile of sand. Of course, the sand is tough to grip, and you’re having to work to get up there and be persistent.
Then a second company says, “I see what’s going on here. I’m going to go after that pile of sand.” Stupidly, they start on the same trek. So, here’s what has to happen for them to get to those riches: they have to actually go faster and crawl ‘overtop’ of the leader climbing the hill. The sand from the leader’s effort is pushing down on the second person, making it even harder for them to go and reach the goal. Of course, it’s even worse for the third company making that attempt because now there are TWO people pushing sand down on them, and they now have to go overtop two people to become first. Then it is subsequently worse for the fourth, fifth, sixth, seventh, etc.
When there are eight or nine medical assisting offerings being offered in a given market and you’re the eighth or the ninth into the market, you’ve got a daunting task ahead of you. I’d advise exploring how to find a new hill of sand to go after. You might be amazed at what’s sitting there waiting for you when you differentiate. Allow me to give you yet another example. There is a market here in Canada, which is a relatively small town that supports a big resource industry, forestry, mining, and fishing.
Several career schools were offering administrative programs. These schools are training office workers, people working in law offices, real estate offices, what have you. One school did a clever thing: they realized employers all around the region are these heavy industry types, mines, logging operations, fisheries, etc. Let’s create an administrative program for people who are happy working in jeans and a hard hat out of an Atco trailer at a huge truck log sorting area, etc.”
They created a new ladder, and they said, “We offer an administrative training program for those that want to work in heavy industry.”
They didn’t have to change much of the programming. In fact, what they did is, out of the career services department, they created a digital badge, teaching folks the jargon and the special language needed to succeed in heavy industry. The outcome? When grads applied for a job at a big mining or forestry company, they had one line item in their resume. And that one line item separated them from all the vanilla applications, and they would get these amazing jobs. They would get paid premiums because they found that administrators, most of them didn’t want to wear jeans and a hard hat and boots in a muddy sorting yard and out of an Atco trailer.
That’s a cool story.
Yes, absolutely. There are so many of these great stories out there. In fact, if I could share just a quick one as well. One of my favorite positioning examples is Southwest Airlines. Southwest Airlines, and again, to figure out your position, A: you have to know where you are. B: you have to know where you want to be and put a plan together to get there. Within the plan, you need to understand where you are positioned.
Southwest knew where they wanted to be. They wanted to own the low-cost airline category. They didn’t want to be United or American or Delta – the big carriers. They wanted to own low-cost. They put a plan together to get there, and in order to be low-cost, one of the cool strategies that they did was only buy one type of plane; the 737. It’s the only airplane they fly. So where many different airlines have all different sizes. 737s, 747s, or express jets, all of those different sizes. Southwest only has 737s and the reason for that…
Why is that? Cheaper?
Yes! The reason for that is, it’s easy to get parts. They always have the parts available because they only have one type of plane that they have to service. They don’t have to stock parts for all kinds of different planes. They keep less parts on-hand at each airport. Their inventory is half or less of what all the other airlines are. They save a ton of money because they only fly Boeing 737s. They started to build that proverbial moat.
Also, their turnaround time to load people is 30 minutes, like a bus terminal, where most fancy competitors, 45 to 60 minutes. They’re able to get people on and off with their unique way: you can’t reserve your seats and all that. They get people on and off the plane quicker, so they fly quicker. There are turnaround times, so they need fewer planes and fewer worker-hours because they can fly quicker and they keep their hours down as opposed to taking longer each day and having to pay people for more hours.
It’s a really unique story. It’s one of the, I think, great positioning stories. If you ever had a chance to read about Southwest airlines there, it’s pretty neat. They use a lot of secondary terminals, instead of going to O’Hare, they go to Midway, which is cheaper, easier to stay out of the congestion. It’s no-frills, but the seats are comfortable. They have probably one of the most comfortable seats. They’re not those plastic ones anyway. It’s a really unique positioning story. They knew where they wanted to be, and they put all of the different strategies in place that would never violate their code of being a low-cost airline. They wanted to dominate low-cost airlines. They would not do anything that would jeopardize that.
Cool. Yeah, exactly. There’s another excellent example. IBM, they had all kinds of people nipping at them with innovation. They realized their advantage was that their systems were rock solid and the hardware they used was just bedrock tested. They went to their weakness and they created a position around people who are afraid of getting swept-up in really cool but flimsy, flaky technology. Their salespeople – their campaigns – were always, “no one gets fired for using IBM.” The number of deals these guys won was amazing based on them pivoting back to what the innovators in the tech industry perceived to be a weakness. There’s another odd little idea.
Here’s another example of a company that repositioned. 20 years ago, I worked for a company called Accent Refrigeration. They made hockey rinks. They were typically about 50% more than these huge competitors. I had a heart to heart with the owner, and he said, “It’s time to reposition.” I pressed and asked, “Why? Why do you do this? Why do you spend all the extra money on these extra expensive components that make up your mechanical skids?” Typically half a million bucks. Then he got into it and said, “Well, I want this thing to work really well. I want a good experience for users, and I want rink managers to respect us.”
We dug and dug and dug and did the ‘five layers of why’ that Simon Sineck made most recently famous again. What we landed on was that he really was excited about Perfect Ice. He was excited that a hockey player wouldn’t break his ankle by hitting a rut or that the ice would be sloppy in corners and detract from any sport, or a figure skater could work at her epitome, ’cause she could trust the ice was perfect.
What happened was, Shane and I actually reframed the company and the whole slogan was “Perfect Ice.” Then we started to recruit other vendors like Zamboni, the International Skating Federation, who are all interested in promoting the idea of perfect ice – about 40 companies – and created a user group around excellence of which Accent was the servant leader. And these other 40 companies who shared their values started bringing all of these developers and managers and city people to Accent’s scrawny, pathetic little booth at the hockey shows because Accent had articulated their core values around Perfect Ice. If somebody didn’t really care about perfect ice, then, “go see the other guys.” They would qualify them out the door really hard. Two years later after the tough repositioning conversation, they were doing all the ice sheets for the Salt Lake City Olympics, and they’ve been involved in every single Olympics ever since.
Plus, ice rinks for Sheikhs in Abu Dhabi, and all sorts of crazy stuff. Anyway, that’s a positioning story. They repositioned to what was perceived as a weakness. They went to a strength, and that was the user experience.
You can have an IT school in LA with a specialty in music and movies. All music and movie companies use IT guys all the time. If you can say, “Hey, I have a vanilla IT certificate plus I understand your industry.” That gives them an automatic advantage when a job comes out for posting. You’re shortlisted automatically by the nature that they’ve married up to the vanilla program with the big hiring piece in a given community. You could have medical assistants who specialize in eldercare. And there’s a way to carve out and create a niche for our graduates.
Then the school can create a program and become famous for eldercare. There are opportunities in education for schools to explore this.
I think a lot of schools go down the “Well, what’s an easy program to start” route. What program can we add that’s easy and it doesn’t cost us a lot, or we can make a lot of money. Well, maybe everybody wants to do medical assisting or dental assisting, or maybe “we can do computers or IT.” It really doesn’t matter where you are, but you really need to have a strategy. What is it? Where do you want to be? How do you want to position yourself in your market? Maybe you’re in a market where you don’t have to worry about it as much because there’s really not much competition. Although there’s always competition somewhere, maybe it’s the labor market or something. How do you set yourself apart? What makes your school unique?
Where do you want to position yourself? Are you a higher-cost specialty school? Are you a lower-cost school that serves a certain market but has a great placement rate directly in? Do you have associate degree programs, or do you want to just do small certificate programs? I know schools that do heavy equipment training where they train people how to run bulldozers, backhoes, etc… Those programs can take three to four weeks maximum. They are not cheap but, they get people in and out, and they turn them quickly into well-paid grads.
They don’t really even need a pretty campus or much of a building. They rent space, they rent a dirt lot or something like that. They put up a little mobile home, and they train right there. It’s really a matter of where do you want to be? You can be successful in any of those areas, but you’ve got to have a plan and put something together. And this is a great time of the year to rethink that stuff.
Why not pivot and create a position around lifelong learning? Not many schools do that, and it’s very simple. You have a really robust alumni program, and the alumni program is not about shaking people up for money. The alumni program is about putting in place graduate services for five years after graduation. So: somebody cycles through a job, they can go back and get help to get the second job or the third job. The school does a webinar on a program for graduates to come in and get updated on just new learning.
New Scissors, cosmetology school, new high hairstyles from Paris, or what have you. Every quarter for three years, you could have a continuing education program. Then what that does is you bundle that into the offering when the student comes in, and you say, “You’re not only going to have a ten-month intensive with us, cosmetology student, but you’re going to have three years of continuing ed and you’re going to have five years of graduate services support.” Wow. That is a better value proposition for somebody. If you’re the first in offering that, you will create a dominant – for those that care about, that – care about the postgraduate love and support – you will get all those students.
Yep. You’ve got it. You said it earlier: being first in, or at least being best at that, and understanding your position in the market and having a focused plan on how to capitalize on that.
The only thing is, the law of sacrifice can be tough. When you focus on something, you’re sacrificing something else. My lifelong learning example, there’ll be people that don’t care about that, and so there’s no real advantage to pursue those people.
Well, Tom, that’s an interesting conversation today talking about marketing positioning. Not many people talk about it, but it can set a school up for some really big results. Anything you want to add before we part ways on this topic, Tom?
Sure, my key three points are: number one, know where you want to go or from where you are, know where you want to go, and have a strategic plan to get there and having a plan about positioning and discuss that and then put a short term and long-range plan together and really try to carve out a niche. It’s a great exercise to be doing on an annual basis.
Yeah. It’s a multiplier, it’s a force multiplier if you land on the right niche. That’s it for now. Folks, if you want to learn more about positioning or want Tom or me to help you build out a positioning map, just drop us a line. We’d be pleased to help you out. Tom, have a good day, and we’ll talk to you soon, no doubt.