Advantages of Horizontal Positioning for Your Agency

In the last blog, I covered the four advantages of vertical positioning. I want to finish that series by covering the four advantages of horizontal positioning. A horizontal positioning defines your target in another way by spanning most of the verticals. You could define your horizontal by a demographic segment, like millenials or Hispanics or women, or even around employee alignment. It could be as specific as helping B2B leaders at disruptive transitions. You could also define it by a practice area, like packaging or investor relations or marketing automation integration.

As before, you can derive more value from this exercise by flipping each advantage around. For example, a primary advantage of vertical positioning is being able to locate your prospective clients. Flipping that around, a primary disadvantage of horizontal positioning is that it's hard to find your prospective clients because you usually can't purchase a list of them.

Four Advantages of Horizontal Positioning

Very few agencies who are positioned horizontally are also successful, but there are nevertheless many advantages and it is worth your consideration.

First, horizontal positioning brings more variety. This is in fact why eighty-five percent of all marketing firms work hard at finding a horizontal positioning. The truth is that solving problems in the same industry strikes them as just one step away from death. But because only five percent of agencies find a way to identify (and then reach) their targets in a horizontal context in a compelling manner, the great majority default to a vertical positioning instead.

Second, horizontal positioning nearly eliminates conflicts of interest. Clients that are tied together horizontally do not compete against each other. If you have a unique expertise in annual reports, Coca Cola won't care if you help Georgia Pacific with theirs, too. But if your declared expertise is CPG beverage work, Coca Cola certainly won't be amused if you want to work for Pepsi, too.

Third, horizontal positioning is more likely to protect your firm from the economic impact of an industry downturn. If your horizontal expertise is in channel marketing, generally, and the home improvement category suffers a downturn, your other channel marketing clients will be in other categories and you aren't as likely to suffer a fatal blow from a downturn in one category.

Fourth, horizontal positioning means that you can work for much larger, much more sophisticated clients. Those clients will need an agency of record (AOR), but they won't expect that of you. Instead, your expertise of marketing to boomers, for example, will allow you to walk the halls of Coca Cola without threatening the larger agencies who have different, more comprehensive relationships with the same client.

Finally

The most powerful positioning combines both, in something like a crosshairs on a rifle sight, but you always lead with a horizontal or a vertical focus. So you might target credit unions but with a particular focus on social media. That would be a vertical positioning, primarily, but with a bold narrowing on top of it. Or you might be a public relations firm specializing in investor relations with a particular strength in tech. That would be a horizontal positioning, primarily. Most firms are either just vertical or just horizontal, though, and they don't declare a tighter positioning other than that primary choice. If there is a secondary element to their positioning, it's often just assumed and not stated outright. Or the firm markets to that secondary segment without revealing that practice.

In keeping with the percentages stated above, many of you understand the need to be positioned well but have very specific (usually personal) reasons for rejecting the advice. Of the hundreds of firms that I have led through this process, two have failed because of their positioning and another four have regretted it. But hundreds now look back and see that decision as the turning point to getting serious about marketing, getting smart about solving client problems, and getting rich while they do it.

Make a big positioning decision for your company one time, and then fine-tune it every five years. I changed mine, recently, but only after living comfortable with a bold decision twenty-one years ago.