Repositioning Your Business
Make a strategic decision to build on and expand your core competencies.

 By Eric M. Morgenstern

In a soft economy, many business owners are desperate to increase sales and cut costs. Those who are seriously challenged to keep their businesses in the black often employ harmful knee-jerk tactics that irreversibly damage their market share. Before making a tough situation worse, consider repositioning your business.

Repositioning is a strategic decision that builds on and expands your core competencies. It is a long-term redirection of your business versus a short-term promotion designed to stimulate quick cash.

If you have been thinking about repositioning your company, the following will give you a better perspective of what’s involved.

Recognize the Symptoms
In some cases, businesses are literally forced to reposition, for example:

A new law creates a regulatory boundary: The FDA’s ban of Phen-Fen forced many weight loss clinics to reposition or close.

Products change and demand for services evolves: There’s not much business for typewriter repair shops anymore.

Customers change their habits: A health-conscious society needs more bagel shops than donut shops.

Overwhelmingly, most business owners reposition their companies for financial gain. Through a deliberate expansion of services or products based on defined customer needs, you can “own” a part of a market you never tapped before.

The most successful repositioning strategies start out as experiments on the fringes of a business’s core competencies. If you are in the newsletter business, for example, you wouldn’t switch to laying asphalt. But expanding into e-marketing could prove profitable.

Know Your Current Position
Before repositioning your company, you must fully understand your current brand position—why customers buy from you now, what they want more of, and what else they would buy if you offered it.

Finding the pulse of your company can be as scientific as developing a survey or conducting focus groups, or as simple as just calling your customers and asking. Barnett Helzberg, former chairman and CEO of Helzberg Diamonds, offers three excellent questions for gaining feedback:

What are we doing that you like?

What are we doing that you don’t like?

What do you wish we were doing that we currently are not?

Don’t stop there. Talk with former customers, prospects who chose competitors, and new and former employees. Very few business owners can make sound gut decisions alone about repositioning their companies, so solicit input from the people who matter most, your employees and customers.

Write a Business Plan
Repositioning a company is a lot like starting over. You must think through how it might succeed or fail.

You need a business plan to explain the concept to a banker, potential investors, advisors and attorneys—and to yourself. A repositioning business plan puts in black and white the feasibility of the new direction and anticipates the risks. Include a thorough analysis of the market and the competition, how you will compare on pricing, your operational
structure and financial projections.

Additionally, ask yourself the most fundamental question of all: Do you have what it takes—the drive, the energy and the dedication—to make a reposition work?

Allocate Resources
Repositioning has considerable costs. You may need new letterhead, business cards, forms and invoices. You may also want to increase the quantity and quality of your communications. In order to quickly establish your new brand, you will have to speak louder and more often. You might have to incorporate proactive marketing tactics that you may not have used in the past.

Additional costs could include:
Employee training
Revising your Web site
New sales material
Publicity
Signage
Advertising
Direct mail
Your business plan should identify all anticipated expenses, and whether or not the revenue stream will be strong enough after repositioning to cover those costs.

Tell Your Story
The secret to effectively communicating a brand reposition is to start internally. Develop key messages that explain the reasons behind the repositioning and discuss them with your staff. Provide “cue cards” so everyone from the COO to the new hire understands and can communicate your new brand to customers and prospects.
Once your new identity is established internally, it’s time to communicate externally.

Don’t try to “make do” with old marketing materials to save money. Everything from your Web site to your mailing label must reflect your new brand position. Immediate integration of all your marketing materials will create higher upfront expenses, but the impact always outweighs the costs.
Now tell your new story repeatedly and consistently based on your key messages.

Consider Outside Help
Repositioning your business is a decision you should make after considerable thought. You should discuss your plans with your banker, lawyer, accountant and marketing agency to determine if repositioning is warranted, and if the timing is right. Using an outside consultant provides a valuable third-party perspective—and peace of mind.

In today’s world, the only constant is change. If repositioning your business is a wise strategic move, you will be headed in a new, profitable direction.

Eric M. Morgenstern, APR, Fellow PRSA, is president of Morningstar Communications Company (www.morningstarcomm.com), a marketing communications agency based in Overland Park providing brand-building counsel to help leading companies grow.