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5 Steps to Create Effective Positioning For Your Startup

A positioning statement is a short description of your target customers and a clear picture of how you want those customers to perceive you. Though it may sound like a promotional statement, this is actually an internal tool. Every decision you make related to your startup development has to be aligned and integrated with your positioning statement. An effective positioning statement is a very powerful guideline for your whole marketing activity and helps to maintain focus on the essence of who your customers are and why they should buy from you. Follow these 5 simple steps and you’ll come up to your effective positioning statement.

1. Define your target customers and main competitors

It is impossible to be the best choice for everybody. If you try to do this, in the best case you will end up being a mediocre, average provider of average products or services. Instead, you should choose a targeted group of customers to whom you can be the best provider. If this group is large enough and you are able to create a value the customers will pay for, your business will have a strong foundation for success.

Start by identifying your main target customer group and focus on them. Later on, you can develop additional positioning statements for your secondary targets. Simply divide the whole market into smaller segments in order to identify the group of target customers you want to attract the most. If you clearly define and choose to serve a particular segment of target customers, you will be able to:

• make more effective marketing decisions,
• create more appealing and more effective marketing materials,
• choose more effective communication and advertising channels, thus saving money.

Defining target segment is one of core aspects of creating a marketing strategy and positioning statement. If you can’t identify the segment you are targeting, all of your other marketing decisions and tactics might not make sense. If you see that the size of the target segment is too small and there is not much money to be earned, revise your target segment or redefine your business model.

2. Find your point of differentiation that is important for your customers

You can develop your positioning strategy in a variety of ways, but the main thing is to find the point of differentiation that is meaningful for your target customers. The point of differentiation usually describes how your brand delivers benefits to customers in ways that set you apart from your competitors. A positioning statement can be built on one or more of the following elements:

• Customer benefits. I always recommend placing the customer benefits aspect in the beginning of the positioning statement because customers are looking first to see what’s in it for them. If you can tell customers about the unique and valuable benefit they can get only from you that would be a very appealing point of differentiation. Furthermore, startups focus their business on solving customer problems and creating gain for them. As for example: CliClap – “Add your Call to Action to any Content, even third party!”
• Product characteristics. This strategy basically focuses on the product characteristics, and in most cases, it is not as effective as focusing on benefits. For most startups, it seems like it would be relatively easy to create, but in fact, it is difficult to differentiate your product unless it has such innovative and unique characteristics that can’t be copied by competitors. As for example: Brushee – “A Disposable Toothbrush with 3 in 1 Convenience.” It explains that Brushee has toothpaste in the bristles, a toothpick, and floss.
• Pricing. This is a common (but not always effective) positioning approach that compares different aspects of quality and price.
• Use, application, or packaging. Basically, this type of positioning is used for the second or third level position for the brand in order to expand the brand’s market. As an example, a gift packaging service can transform any product or service into a gift, therefore you might sometimes be selling your product as gift solution.
• Product class. Often, especially in the innovative startup business, the competition for a particular product comes from outside the product class. Thus you can choose to compare your product or service with a totally different category, but one that is well known as a main current solution or has such attributes which can help explain your positioning message instantly. As for example: UNLOQ Systems – “Passwordless security” offers organizations the ability to increase their cybersecurity by using multifactor authentication and eliminating passwords as the weakest link.
• Cultural symbols. In this case the essential task is to identify something that is very meaningful to your target customers that your competitors are not yet using and associate this symbol with your brand. As for example: AirView – “Uber for drones” started with this positioning slogan which instantly explained the main value proposition, which is the option to request drones on demand.
• Customers. Positioning could be built associating the product with a particular user or group of users. Usually, this is a simple and easy-to-understand statement: if you are a similar person, the product is right for you. But this type of positioning lacks reasoning as to why the customer actually should choose the product. Therefore, this type of positioning is often strengthened by combining it with additional aspects of positioning to add more weight to the purchase decision. As for example: TheNextOffer – “for freshers to become professional” is a startup related to the employment industry and targets graduates who are searching for their first job.
• Competitors. This type of positioning strategy refers to the relationship of your product or service with one or more of your competitors. In some cases, the competitor can be the dominant aspect of the positioning strategy of the startup, especially if your startup solves the same problem or satisfies the same need which has been abandoned by the well-known market leader (your competitor). As for example: Apple Computer – “Everything is easier on a Mac” is targeting IBM style computers, highlighting that the Mac is much simpler and easier to use.

Now it’s time for you to answer what makes your startup brand stand apart from all other alternatives (including indirect competitors). Think about the services your company offers of which you are most proud and confident. If it provides a meaningful value for your target customers, that might be a good start for developing your point of differentiation.

3. Provide proof as to why customers should trust you

It’s not enough to find your point of differentiation, you must prove it! How can you back up your positioning statement with proof? What is the main reason the customer should believe you? This could mean anything from showing your process and sharing data statements to providing a risk-free guarantee to prove that your statement and proposition is genuine.
Make a list of at least three strong reasons to believe in you. Which of those reasons are:

• Shortest and easiest to understand?
• Strongest and prove your credibility best?
• Most sustainable and hardest to copy by competitors?
• Simplest to integrate into your positioning statement?

4. Craft your positioning statement in one sentence

Here is the formula for writing an effective positioning statement:

For [insert target customer], the [insert your startup Brand] is the [insert point of differentiation] among all [insert frame of reference or competitors] because [insert reason to believe].

The wording of your positioning statement doesn’t have to match this template exactly. But if you want your positioning to be effective, it must contain all five of the components in brackets. Your positioning statement should be written for the average reader. Pretend that you are going to meet a potential customer in the elevator and he asks what business you are in. Your positioning statement should be short, easy to understand, and memorable.

Write down at least few different versions of your positioning statement and find the one which resonates with your target customers the most. To create an effective positioning statement might be a tough challenge, but don’t give up. Visit www.evolutioncurve.com/templates and download a worksheet to help you.

Let’s take CliClap positioning statement for example:

CliClap is a content engagement platform providing B2B SMEs with the most advanced and cost effective solution for growing their business through content marketing. CliClap empowers businesses to seamlessly track, engage, and convert leads from ANY content they share, even when sharing third party content.

As we see, CliClap’s positioning statement has all the components. Yes, we could argue about how to make the point of differentiation and the reason to believe simpler, shorter and more direct, but generally, this positioning statement serves as a great guidance for internal use and the whole marketing strategy.

5. Create your positioning slogan

A positioning slogan is the very essence of your brand promise stated in few words and reinforcing your brand logo. It might not explain the whole positioning idea at once, but should help potential customers to understand what your product is about, what value they could get, and why should they buy from you.

The easiest test to evaluate your positioning slogan is to substitute another brand name in your slogan. If you can do this without losing or gaining much, the slogan is worth absolutely nothing. And, you don’t need a worthless slogan, that’s for sure! If, for example, CliClap would have chosen ”the most cost-effective way to drive traffic to your site,” that would be a worthless slogan, because the same could be used by anybody else who drives traffic at low or no cost at all. It wouldn’t matter if it was an online advertising agency, a PR agency, a link exchange system, or whatever.

Try to come up with few possible slogans and show them to potential customers or at least your friends and listen to their opinion. The main validation rule here is to check if other people quickly grasp the right impression about how your startup is different and why or in what circumstances they should choose you.

As for example, I’ve found three statements on CliClap website that could claim to be positioning slogans and put them under evaluation by 10 key criteria. The good thing is that the CliClap guys think from a customer perspective and try to communicate what benefits their customers will receive. But the problem is that there is not one strong and consistent positioning statement.

Evaluating each of those potential positioning slogans and putting a score by each criterion, it becomes obvious how good each of those statements is. The maximum evaluation total score is 100%. In reality, anything above 80% is quite good and can be implemented, if no better options are found. You can download this Excel worksheet at www.evolutioncurve.com/templates and use to evaluate your own positioning slogan.

More findings and practical step by step advice is published in the book Startup Evolution Curve: From Idea to Profitable and Scalable Business. 

Dr. Donatas Jonikas is a Startup Marketing Expert and Author of Startup Evolution Curve. Donatas holds a doctoral degree in economics and has more than 10 years of experience in strategic marketing. He has developed and helped to implement marketing strategies for more than 50 companies in different countries: Baltic States, Ukraine, Germany, Great Britain, Switzerland, China, Mauritania and etc. He is an author of 3 practical marketing course books for university students, public speaker and mentor in various startup events.

Read Donatas’ previous guestblogs on Slovak STARTUP:

10 Most Dangerous Mistakes in Startup Marketing

9 Actions Steps to Attract the Interest of Investors

Or the interview with him at: Startup Evolution Curve: A Practical Guidebook Based on Real-life Startup Struggles

Feature Photo by Slava Bowman on Unsplash