It might be the difference between one effective marketing campaign and a waste of advertising money. But here’s the funny thing: many small businesses don’t even think about it.

It’s called positioning.

This single marketing concept can be responsible not only for the way you build your brand, but the strategies you use to link up with potential customers. And it’s as essential for small businesses as it is for giant corporations.

But before we start, let’s settle on exactly what I mean when I use the word “positioning.”

A Definition for Positioning that Doesn’t Involve a Game of Twister

Don’t think of positioning as a catch-all term for branding. Think of it in terms of specifics: positioning is the context in which you place your marketing.

This gets tricky, because “context” can refer to a few things:

Effective positioning is finding where the hot and thirsty people are and then setting up the lemonade stand. It’s the difference between a fundamental understanding of your marketing… and simply hoping for the best.

Step 1: Define Your Target Audience

Even if you think you have a product or service that everyone on planet Earth deserves to enjoy, there are simply going to be some people who will enjoy it more than others. This is your target audience: the customer who’s most likely to come across what you’ve got on offer and make a buying decision.

You can’t very well position your small business for success if you don’t know where your target audience is.

Think of it in terms of what Kevin Kelly calls 1,000 True Fans. “To be a successful creator,” Kelly argues, “you don’t need millions… you only need a thousand true fans.”

Notice that word true. This isn’t about throwing all your marketing efforts at the wall and seeing what sticks. Seeking out your target audience is first identifying the stickiest wall: the true fans looking for a business like yours.

Your true fans are the thirstiest people on the block, the ones already looking for great lemonade.

If that sounds too vague, let’s get down to specifics:

Step 2: Position Yourself Where the Customers Are

Just as you wouldn’t set up your lemonade stand at the North Pole, your market positioning only works if you go where the customers are.

If you’ve ever noticed how one TV channel focuses on arthritis medicine and retirement benefits while another attracts anti-smoking ads, you’ve already seen this in action.

First, you should identify the proper medium to reach your target audience. Launching an app-based game? Then go where the downloaders are: buy in-app advertisements or craft YouTube videos specifically for the type of person browsing the web for tips on all the games they’ve already downloaded. In contrast, spending 75% of your ad budget on radio ads for this market might be a little off-base.

Next, remember that you’re not just trying to win hearts and minds. You’re filling a need. That means that you have to spend a moment in your customer’s shoes to understand where they might try to go to meet this need.

This is where your customer profile comes in. Try putting out a few feelers to local advertising outlets and ask for brochures. They’ll likely tell you all about their demographics — age, incomes, etc. Having defined your target audience, you’ll know right away if these outlets can suit your needs or not.

You can also turn to the web: Google AdWords, Facebook ads, even sponsored Tweets. Online marketing has the advantage of targeting specific keywords so you capture only those who are looking for your business — or another one like it.

Step 3: Follow Through and Fulfill the Need

Your positioning strategy up until now might be very effective. But it will only turn into business growth if you can successfully position your company to capture a large percentage of the incoming traffic.

In some cases, this will be easy: you can set up a simple landing page that delivers on your promise with a “Download Now!” link. In other cases, you might set up a more advanced sales page that invites customers to have a closer look at your services.

What strategy is right for you? It depends on your target audience and the level of commitment you’re asking for. Even if you’re hunting for potential mortgage clients, for example, very few customers are going to trust you enough to decide on the spot. Invite them for a phone call or a consultation — the proverbial “foot in the door.”

Making Your Positioning Work

If you do it right, a proper positioning strategy will immediately improve the yield of your marketing efforts. But like all strategies, positioning sometimes needs to be adjusted when you’ve made a mistake along the way. Don’t assume that one page of notes about your target market is enough. Keep researching by sending out surveys to old customers, asking leads to sign up to a newsletter, and continually improving your web presence.

It doesn’t have to be complicated: just think of it as moving the lemonade stand down a few blocks every once in a while.