Finalize your strategy

This is the fourth and final post out of four, in this Christmas Challenge. We are building a small-scale strategy toolbox for small companies.

Last week we developed the statement, objectives, and generic parts of your strategi. Next step for bigger corporations will typically be decisions around vertical or horizontal integration, diversification, mergers/acquisitions, or maybe strategical alliances.

For smaller companies, strategical alliances may also be a great way forward into new markets or product categories, but most smaller businesses focus on their own product/service development, marketing and sales.

Especially selling is something that a lot of smaller companies struggle with. The business idea, the product and/or service is in place and social platforms are build and supporting the idea. But reaching out to customers, grabbing the phone, and asking for a meeting, all seems very intimidating to a lot of small business owners.

Nobody becomes a top salesperson by reading a blog post like this one, or working with a tool, but I promise you this; with the proper preparation in the form of positioning and value proposition, you will know exactly what to do and just need to find the courage to do it! I am cheering for you.

Like I promised you last week, we will be a bit more tactical this week in order to prepare you for the sales situations. After this week you need only to start planning when to do what, as you will know exactly what to do.

You will receive two tools this week, one for positioning (which comes out of marketing theory) and one for value propositioning, which is one of the best sales tools there is, if you ask me.

Your FOURTH tool

The fourth tool in your toolbox is called the STP model. STP is an acronym for Segmentation, Targeting and Positioning. The idea behind the model is to target your sales and marketing communication towards the most beneficial customer segment. As you already know, the key in any communication effort is to tailor the message to the recipient.

We will continue building on your efforts from previous weeks and a lot of the work you did in the SOS framework last week will help you this week. But please stay on track! Revisit all your work in SWOT, Opt-in & Out-out and SOS. Read it again to refresh your ideas and points. If you are new to this blog, you are very welcome, but please begin with vol. 1 of this toolbox.

“the key in any communication effort is to tailor the message to the recipient”

Like the three preceding weeks, Santa Claus has given permission for us to use his input as an example:

The STP process is effective because it focuses on breaking your customer base into smaller groups (=segments), from which you will select one group as your target segment and make all the right sales and marketing choices to ensure a truly customer focused concept (=positioning) towards this particular group.

Let’s start working on the three elements of the STP model. Please download the PowerPoint file and follow the instructions. Get it here:

Strategy for Christmas toolbox_vol 4
Download PPTX • 1.56MB


Go to page 13. The first step of the STP model is the segmentation stage. The main goal here is to create various customer segments based on specific criteria and traits that you choose. The four main types of customer segmentation include:

  • Geographic segmentation: Country, region, state, province, etc.

  • Demographic segmentation: Age, gender, education level, occupation, etc.

  • Behavioral segmentation: What they buy, how often they buy, what they browse, etc.

  • Psychographic segmentation: Lifestyle, hobbies, activities, opinions, etc.


Step two of the STP model is targeting. Your main goal here is to look at the segments you have created before and determine which of those segments are most likely to generate the desired outcome of your strategy. If your main goal of creating this strategy was to increase sales, you might want to look at the potential quantity of sales (segment size) in each segment and the expected/possible order size in that segment. If you are looking to make more money by increasing your margin, you probably need to select the target segment which you predict having both the possibility to buy more expensive products/services, but also the willingness. The last part very often comes from thorough positioning and differentiation.

Your ideal segment is one that is actively growing, has high profitability, and has a low cost of acquisition:

  • Size: Consider how large your segment is as well as its future growth potential.

  • Profitability: Consider which of your segments are willing to spend the most money on your product or service. Determine the lifetime value of customers in each segment and compare.

  • Reachability: Consider how easy or difficult it will be for you to reach each segment with your sales and marketing efforts. Consider customer acquisition costs (CACs) for each segment. Higher CAC means lower profitability.


The final step in this framework is positioning, which allows you to set your product or services apart from the competition in the minds of your target segment. There are a lot of businesses that do something similar to you, so you need to find what it is that makes you stand out.

All the different factors that you considered in the first two steps should have made it easy for you to identify your niche.

But here comes some possible directions commonly used for position:

  • Attribute: your product is some way different from competitors

  • Benefit: your customer gets more out of your product or service

  • User: your product or service is tailored to another customer segment

  • Product category

  • Quality vs. Price: your price and quality ratios are significantly higher or lower

Furthermore, it is sometimes helpful to have a recipe or formula to work on, so here comes the positioning statement formula:

For [your target segment], [your brand name] provides [main benefit that differentiates your offering from competitors] because [reason why target market should believe your differentiation statement.]

The goal of your positioning statement is to make all the “right” choices when building your sales and marketing efforts in your action plan.

Like mentioned above, one really helpful sales tool is the Value Proposition tool.

Your FIFTH tool

Picture this: You are on your way into a sales situation. You did all the work necessary with your product/service, you put countless hours and days into developing your concept, designing your web page, setting up your social media platforms. Everything is ready. But in one hour the reality hits… you need to face your customer in a meeting, either a physical meeting, or by Teams/Zoom or phone. You know that this is “the moment of truth”. You are aware that you have only the first five minutes to catch the attention of your customer. With all the preparations you did, how on earth do you select your words?

This tool is designed to help you with that:

As you can see, it has four phases. You are defining a problem, designing the solution, attaching a value to your solution and finally preparing the words around the value story.

Here comes the guidelines to each of the four phases:

  1. Defining the problem We are now reconnecting with the work you did in the previous tool, so please take a look at your target segment. Who are they? How is the typical situation where they might need your product or service? Think carefully around every aspect of that situation and find the most urgent problem that you want to solve. Write it down. If you are able to attach any financial cost to the problem, your Value Proposition becomes even more powerful.

  2. Design the solution to the most urgent problem Which features of your product, or skills/expertise of your service, do you think solves the problem you just defined and how? What are the benefits of this for your customer? Remember again, that in the differentiation strategy, value and margin increases as your differentiation factors increases in number and scope.

  3. Attaching a value to your product or service This is the difficult part! Value drivers do not necessarily need to be monetary value. They can also be soft value drivers like safety, comfort, trust etc. But to be honest with you, the monetary ones are more efficient in a majority of sales situations. Therefore, if you are able to put ROI (Return on Investment) value into your solution value, then you are much better off in terms of getting the customer to listen carefully to you in that defining moment for your business. Monetary value often comes in the form of “increasing the revenue for the customer with x”, “reduce the current cost of handling the problem with x”, or helping the customer expand the market share.

  4. Telling the story As illustrated in the model, the fourth phase boils down all the outcome of problem definition, the solution design and the value to a “value selling story”. In this phase I merged some other tools for you, to help you prepare for your meeting with your customer. Besides the phase three comment on ROI, another really efficient thing to do in a customer meeting, is to tell the story about a similar customer having sort of the same problem and using the solution to propose to get that ROI you calculated and/or the soft value you attached. But please remember to be loyal to your customers and your own business! Don’t ever mention any name, specific figures or anything else which goes under the category of sensitive information. Make sure to have a written consent from your customer, if you want to use any information and make sure that it states exactly which information you can use and how (in which context and media).


First of all, thank you very much for following this Strategy for Christmas challenge. I truly hope that you got what you came for and that your business will benefit greatly from this work.

Your next step is to develop your action plan showing which weeks you want to do what and making sure that all your activities are aligned and prioritized.

The positioning tool STP will help you keep all your communication ducks in a row and avoid falling into the trap of trying to do everything for everybody.

Positioning affects all actions like social media communication, website design and text, e-mail communication and wording. But speaking about smaller business, it should also affect your personal branding, the way you present yourself and your business (style, atmosphere, wording etc.).

With all the positioning work in place, you just need to prepare for the “moment of truth” using the Value Proposition model, then you are all set and ready to go.

I wish you all the best of luck with your business! If you struggle with any of the models presented in this blog, feel free to use the contact fields below the blog.

Next week on the blog, on Wednesday the 22nd to be exact, I will be announcing a time-limited Christmas gift for you! As I wrote in my intro "After all, Christmas is coming up, right?"