Your Positioning Strategy and the Network Effect

Propulsion-Blog-masthead-blue copy.png
By Tim Williams

By Tim Williams

The effects on your business of committing to a focus that makes the most of your strengths can be not just incremental, but exponential. It’s actually very similar to the growth pattern often seen in the digital world, sometimes referred to as the “network effect.”

Slow at first, then rapid growth

This term originally was used to describe the rapid growth of telephones in the first half of the 20th century. In the 21st century online world, this phenomenon is seen in the initial slow growth, then rapid explosion, of brands like LinkedIn and Facebook. It took LinkedIn 16 months to reach its first million users. The second million came in 11 days. Facebook took five years to attract its first 150 million users. It then doubled that number in just eight months.

To be sure, there are many positive short-term effects of a new positioning strategy, including:

  • Well-defined criteria for identifying the types of clients who want your firm for what it does best.
  • A meaningful, unifying theme for the agency website, online marketing, promotional materials, and social media program.
  • Agency associates energized by a clear direction and focus.
  • Clear hiring standards for the kind of people you need to reinforce your agency brand.

But the long-term effects are even more significant:

  • A stronger win ratio when soliciting new business, because you are playing to your strengths.
  • A platform on which to build intellectual property based on your designated area of expertise that you can own, which is more economically sustainable than the traditional “work for hire” model.
  • More pricing leverage with clients, because you’ll be offering more differentiated services and expertise.
  • Ultimately, a clearer direction for how your firm should spend its limited time, money and resources.

Worth the wait

The short-term effects can be almost immediate.  In fact, a lot of agency leaders are surprised at the remarkable morale-building effect of taking a stand.

The long-term effects, on the other hand, may take 18 to 24 months to begin to manifest.  But when they do, the agency success rate changes from gradual to exponential.  The nature of exponential growth is that the initial period can feel “flat” as the seeds of change take root.  But as soon as these roots are established, growth happens rapidly.

American scholar Albert Bartlett pointed out difficulty people have understanding the nature of exponential growth, stating, “The greatest shortcoming of the human race is our inability to understand the exponential function.”  Alongside that misunderstanding is the impatience that accompanies the early stages of this kind of growth.

So have faith in the network effect.  Your firm can be not only twice as successfully, but much more than that.