Tell me if this sounds familiar. “My team has poured blood, sweat, and tears into building the product. It’s finally in the hands of users, and we’re seeing traction. We’re ready to pour fuel on the fire — we’re ready for more marketing! What do we do?” This is a common refrain I hear from startup leaders from seed to growth stage. And my response is “Well, that depends. What is your positioning strategy?”
This question is commonly met with blank stares, confusion, and disappointment. And I understand why. Positioning is not a concept that’s well explained nor commonly understood. Plus, when your product is in the wild, you’re itching to take action, not work on “fluffy nebulous strategy.” But my experiences as an early marketing leader at Dropbox and the former VP of Marketing at Wealthfront have taught me that in order to unlock strong growth loops, you must first have a well-defined positioning strategy.
Fuel for your marketing engine
You can earn some early wins by experimenting with marketing channels, but if you rely solely on disparate tactics without clear positioning, you’ll quickly hit a ceiling in impact. And a good growth marketer will tell you the same. Think of your marketing channels as your car’s engine — it can be the most powerful and sophisticated piece of machinery but without gas, your car cannot go far. A Facebook ad is only as good as the messaging on the landing page. Effective content requires clarity in who you’re writing for. It’s futile to tinker endlessly on your engine when what your car really needs is fuel. And positioning is the fuel that powers your marketing engine.
So what exactly is positioning? Think of it as the crystallization of why your product is superior at solving a specific problem for a specific set of customers. There are various templates available on how to structure your positioning statement but I find that as long as you answer these questions in a few succinct sentences, you are in good shape:
- Who is our target customer?
- What do we do?
- What are our key benefits?
- Who are our competitors?
- What makes us different?
“Our total addressable market is the entire world” may be a great slide for an investor pitch deck, but it’s useless from a go-to-market perspective. After all, if you appeal to everyone, you appeal to no one. Positioning forces you to apply constraints to keep your marketing strategy focused. It enables you to identify the right channels to find your target customers and the most compelling messages to convert them.
Positioning in the wild
I’ve seen firsthand the power that positioning can have on a startup’s trajectory. When I was at Wealthfront in 2017, our investing business was growing rapidly, but our space was quickly becoming saturated with competitors selling similar offerings. Our messaging had grown stale and we struggled to sound differentiated. By leading a repositioning effort, we completely overhauled our messaging strategy and kickstarted our marketing engine into a new era of growth.
Our key insight from the positioning process was that our target customer had expanded. When Wealthfront first launched, the early adopters were tech employees in their 20s, who geeked out on financial concepts and loved technical features like Tax-Loss Harvesting. While these customers remained relevant, our recent growth had primarily been driven by a new customer segment. They were high-earning knowledge workers (law, finance, medicine) in their 20s to 40s, who had accumulated a decent amount of savings. They had significant life-events on the horizon (homeownership, marriage, kids) that made them feel compelled to do more with their money. They were no experts in finance, and had no interest in becoming experts. They just wanted peace of mind that they were doing the right things with their money.
Our new positioning statement focused on these new customers: “Responsible delegators want to feel confident about their finances but don’t have the time or interest to do it themselves. Wealthfront’s financial planning and investing platform is the reliable way to grow your savings to meet future needs. Unlike financial advisors, Wealthfront’s software-only solution is delightfully easy and low-cost.”
In these three sentences, we’ve answered the five key questions:
- Who is our target customer? Responsible delegators want to feel confident about their finances but don’t have the time or interest to do it themselves.
- What do we do? Wealthfront’s financial planning and investing platform is the reliable way to grow your savings to meet future needs.
- What’s our key benefit? Reliable, delightfully easy, low-cost.
- Who are our competitors? DIY or financial advisors.
- What makes us different? Software-only solution.
Armed with this updated positioning strategy, we embarked on an entire refresh of our messaging on all key marketing channels, including a complete redesign of our website (see the before and after). In addition, it gave us the clarity to make investments in specific channels and tactics that would have strong appeal with our updated target customer segment.
A process for positioning
“Okay, I’m convinced — I need positioning! Now what?” you ask. While marketing can seem like a blackbox, my decade in tech marketing have taught me there can be a method to the madness. I’ve come to rely on a disciplined and analytical process to create positioning strategies that work. Here are my six steps:
- Identify your stakeholders: Marketing may be responsible for positioning, but it impacts the entire company and requires broad buy-in. Before you start, identify key stakeholders (eg. members of leadership, sales, product, design, etc).
- Gather customer insights: Since positioning pinpoints who your product has traction with and why, spending time with customers is fundamental. Identify early adopters and power users and interview them. What are their shared qualities/attributes? What’s their job to be done? What are their pain points? What do they value in a solution? What are the alternatives? Why did they choose you? How do they explain your product to family and friends?
- Map out your competitors: Identify primary competitors that your customers consider. Go through their marketing, product flows, and app reviews. If possible, chat with their customers. Who are they trying to target? What are their key benefits/features?
- Bringing it all together: Combine customer and competitor insights with your company’s own longer-term vision and product roadmap, and then answer the five positioning questions.
- Review with stakeholders and iterate: Like most important business decisions, positioning requires judgement. There’s unlikely to be one right answer and your stakeholders may disagree. If there are strong, divergent viewpoints, create homepage mocks based on the potential positioning directions and get feedback from your target customers.
- Document and rollout: Formally codifying your positioning is crucial in ensuring your teams actually rally behind the strategy in their everyday work. Train key functions and new hires on its purpose and components.
Lastly, your positioning strategy is not set in stone. You should expect to update it every 12–18 months, and potentially even more often if you have important new learnings or significant product releases.