Apr 22, 2007

To thine own self be true: a good Service Strategy

When entering a service market, positioning strategy takes on particular importance. The business solution, targeted potential clients, benefits, competitive advantages and business identity need to be firmly established. Seems reasonable, almost like Marketing 101. But as sales resistance is encountered, the biggest temptation is to tweak the positioning, since, unlike manufactured goods, services can be redefined and refocused pretty much at will. It is important to resist this temptation, at least according to John Bruce, EVP,Sales, Marketing, Business Development of Counterpane Internet Security.

"My most important lesson: stay fixed on long-term goals and vision, and avoid the temptation to be all things to all potential customers," says Bruce.

Counterpane's positioning statement is a great example of highly effective positioning of services (see box). In "service core" situations, companies typically follow 3 marketing strategies: service tiering, leveraging customer base, and brand extension through service packaging.

"We tier our service by offering more network sensor points," Bruce explained. "Much like you would alarm a home with 8, 18 or 38 different alarms." The trick in tiering is understanding what service elements are absolutely indispensable, and what are of variable value.

Happy customers equal a growing customer base. What is the best way to leverage those relationships? "As part of our trusted client relationships, we are asked to recommend complementary purchases and services that might improve the safety of their online environment, says Bruce. But since Counterpane is not in the hardware or ancillary service business, these fact-based recommendations provide an ideal partnering and brand extension opportunity.

"Our security experts devise, package and brand other ancillary services that some of our clients might find valuable. This intellectual property can then be licensed to our partners for delivery," says Bruce. By implementing a very narrow positioning, Counterpane can partner with others serving other complementary business niches, with each acting as a sales channel for each other to a positively impact their respective businesses. Most important, by selling Counterpane-branded services, each channel provides a separate sales and marketing engine.

Example of Effective Service Positioning Statement (excerpts)

* Counterpane's business is Managed Security Monitoring. In plain English, that means we watch over your network..(with).. real … expert security analysts who monitor your systems 24 hours a day. …

* And expert monitoring helps you manage the risks of being online…

* At Counterpane we believe that your firewalls, IDSs, routers, and servers are just the terrain you fight on.

* At the moment you're attacked, …what matters is the caliber of people defending you…

See full statement on Counterpane web site: www.counterpane.com Copyright - Counterpane Internet Security

5 Key Ideas when Service is "Core"

1. Stay the course: craft your service positioning statement and stick with it.

2. Focus on doing a few things well, or dominating one segment.

3. This creates barriers to entry for competitors and will spawn additional non-competitive channels for your service

4. Ask your satisfied customers how you can add value to the relationship. They will give you some great ideas!

5. Have more ideas for great services? Consider packaging them and licensing them to partners, rather than promoting them yourself and risk diluting your sales and marketing efforts.

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