Many Australian SMEs understand positioning is important – it’s about owning a clear, valuable, and defendable space in the minds of your customers. But translating that understanding into a budget justification, or proving the return on positioning work, can be tricky. We often hear business owners ask: how do we actually quantify the revenue impact of strong positioning?
It’s not about simply tracking sales before and after. Too many other factors influence revenue. Instead, we focus on measuring changes in key customer behaviours that directly correlate with revenue. Here’s how we approach it:
- Price Premium: Strong positioning allows you to charge more. Track your average selling price. If your positioning clearly communicates superior value, you should see an increase. Even a small percentage lift in price, across your entire customer base, adds up quickly.
- Conversion Rate Improvement: A well-defined position makes your marketing messages more resonant. Monitor your website conversion rates, lead-to-customer ratios, and sales close rates. Improvements here demonstrate your positioning is attracting the *right* customers and making it easier to win their business.
- Customer Acquisition Cost Reduction: When your positioning is sharp, you attract customers who are already predisposed to your offering. This means less wasted marketing spend. Track your cost per acquisition (CPA) – a decrease indicates you’re reaching a more receptive audience.
- Increased Customer Lifetime Value (CLTV): Positioning isn’t just about getting customers; it’s about keeping them. Strong positioning fosters loyalty. Monitor repeat purchase rates, average order value over time, and customer retention rates. A higher CLTV demonstrates your positioning is building lasting relationships.
To get a clear picture, establish baseline measurements *before* you implement positioning changes. Then, track these metrics consistently for at least six to twelve months afterwards. Don’t forget to isolate the impact of positioning from other marketing activities – run controlled tests where possible. For example, A/B test website copy reflecting your new positioning against the old.
Ultimately, quantifying the revenue impact of positioning isn’t about pinpointing an exact number, but about demonstrating a clear, positive trend in the metrics that drive revenue growth. By focusing on these key indicators, we can build a compelling case for investing in, and refining, your market position. If you’re unsure where to start, a positioning workshop can help you define your ideal position and establish a measurement framework.
