Dear Tig,

I just started work at a "little fish" company that is gearing up to be more competitive with the "big fish" of the industry. We pretty much have the technology and service to go toe to toe with the big boys.

My question is this: How do I do that? Not meaning to be too open ended of a question, how do I overcome the "we are the biggest, we are the best, we are nation-wide, we have a bazillion clients and eons more experience than the company you are talking to?"

Given limited resources, where would you focus your efforts?

Thanks in advance, Mini

Mini,

The deck is stacked against smaller companies. Not only do they lack the scale that gives lower average costs, but they also have to fight an uphill battle for distribution, market awareness and credibility in the sales process. But there is also a long, and sometimes successful, tradition of using the giant's own weight against him.

It worked for Jack on the beanstalk, and it worked for long-shot political candidates like Jimmy Carter. In the marketing field, it worked most famously for the Avis car rental company. They made a huge success of bragging about their number-two status with the “We try harder” campaign.

Running against the establishment has an appeal to certain types of consumers. Niche markets have played to this dynamic, such as the organic food industry and many types of luxury goods.

But the technology sector is another matter altogether. While open standards have allowed more smaller firms to compete for IT business--as customers are less worried about being saddled with obscure technologies--IT buyers still retain a strong congenital desire to do what everyone else in the world is doing. This comes from several factors:

• It doesn't do any good to the buyer's resume to have an obscure technology skill or experience.
• The internal corporate approval process is much easier for established brands.
• Advocating for smaller firms leaves the buyer personally responsible for the future performance, whereas advocating for established brands is seen merely as being conservative.

The best approach for small firms I've seen in the technology market is to take the big guys head-on, focusing on the disadvantages of their size.

I remember one small firm in San Francisco that was initially having difficulty selling intranet services versus IBM's Lotus Notes. This changed when they developed some proprietary tools that could remove Notes from a company's servers. The very idea that there was a commercial utility for the removal of the bloated IBM product struck a chord among IT decision makers. While the small company didn't make much money off the utility itself, the message its presence sent was very effective in selling the intranet services.

It's best not to ignore the size, scale and experience of the larger competing firms. Rather, develop a positioning that emphasizes the disadvantages of all of them.

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Dear Tig,

What is above-the-line advertising and what is below-the-line advertising?

- Beragi

Beragi,

Roughly speaking, above-the-line advertising refers to the use of traditional media and advertisements, such as your typical adverts seen on TV, radio, print, outdoor and possibly even the Internet. Below-the-line advertising refers to more promotional efforts, such as direct mail, in-store promotions and the giving away of free, branded gear.

The real meaning of above-the-line advertising depends upon which side of the line you live. Ad agency folk tend to associate above-the-line with all that is good and wholesome in the world. They tend to define the difference in terms of above the line making a long-term profit, whereas the more promotional efforts bring in short-term cash but long-term losses.

It shouldn't surprise you to learn that the promotions agencies believe that below-the-line efforts tend to create more of an interaction between the customer and a company, creating a more powerful, long-term loyalty and profit. They think the ad agencies recommend above-the-line tactics because A) it's all they know how to do, B) it's a lot more profitable for an agency to do broadcast ads, and C) it's harder to brag to your creative department friends about the new matchbook cover you designed than it is to brag about a radio spot.

As in most things, there's a little bit of truth in both perspectives, and advertisers will do well not to entirely swallow the arguments of one side or the other.

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Dear Tig,

My product line's marketing department is having a raging debate about the differences between a value proposition and a positioning statement. Is there a difference, and if so, what is it?

- Noman

Noman,

The fact that your company has a "raging debate" on this issue is exactly why Scott Adams got so rich off of the Dilbert series. Our marketing lexicon is just confusing enough to allow people to read whatever they please into many of our terms--sort of like Marxist philosophers throwing around “dialectics” and such. They can make for long academic monographs, but can prove truly frustrating when you're trying to apply them to a real world situation.

The value proposition refers to a benefit a product gives to the consumer--generally the greatest or key benefit. The positioning statement is the way a company chooses to present the product to potential consumers. While they may seem so in a great many cases, they are not equivalent. In the simplest of marketing, these are often the same. Product X has Y benefit (value proposition). The messaging then takes on the form "Product X has Y benefit."

Most generally, the difference between them is that the value proposition focuses on the product, and the positioning statement focuses on the market.

If you were selling bottled water, for instance, you might say that your product's value proposition is that it can quench your thirst with a purity unavailable at home. But since this is exactly the value proposition of most other water sellers, you might choose to position your brand differently. You may choose to raise the price to one hundred times what others charge and create a positioning statement that looks more like this: “Only the very rich buy our water.”

Now one could argue (and I'm betting you have some of these folks in your marketing department) that in this instance, your company would be using the richness of the customers as the value proposition. These people are, indeed, using the two terms interchangeably. They should be sent into a corner and pilloried.