Tell me if this sounds familiar:
Customers are getting stuck in your funnel. Your marketing hasn’t taken off… yet. Your sales calls aren’t leading to deals, and you’re starting to get maybe just a little worried about your runway.
When your graphs are all flat it’s hard to figure out what’s going on or what to do next.
Before you go and blame the economy or algorithm updates you should consider your positioning.
Sometimes the product is right but the presentation is what’s wrong.
I recently caught up with Enzo Avigo, the founder of YC-backed June.so to share ideas about positioning and we ended up collaborating on this piece.
This week you’ll learn:
How to know whether your positioning is the problem
What metrics to focus on
How to fix a positioning problem
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Your Positioning is More than Your Messaging
Most founders think positioning = the copy on your landing page.
But your messaging is just the implementation of positioning.
A more complete definition of positioning is “the strategy that communicates your startup’s value.”
Positioning that’s inconsistent, misaligned to user needs, and incoherent is surprisingly common. Here’s how to break it down:
Is It Your Positioning?
If your positioning is unclear you’re going to have customers coming in who look like leads because they think you do something that you don’t.
And then they come in and learn more about your product, maybe by getting a pitch from sales, and they’re like… wait, what? This isn’t what I thought it was.
And then they drop out of the funnel.
Diagnosing positioning problems is different for sales-driven and self-service startups, so let’s consider both:
Sales-Driven Companies
If you have lots of calls booked but a low close rate, you may have a positioning problem.
Listen carefully when you’re on sales calls (or listen to your team’s calls). If leads are confused, or if simple questions reveal they don’t match your ICP, then it implies your positioning is attracting the wrong leads.
A good way to identify this is by paying attention to the demeanor of the lead while they’re on the call.
If they’re impatient while you’re explaining the product, and trying to get you to tell them how to get started, then they’re more likely to be in your target market.
If they’re asking you to back up and explain how things work or why parts of the product matter, then they’re more likely to not be.
Another indicator is high churn immediately after activation, once they get to use the product, they realize it’s not for them.
Self-Service Companies
If customers go through signup and onboarding themselves then you won’t have sales calls to rely on.
Instead, here are a few ideas:
If you have free trials, look at the percentage of users who create an account but then don’t actually start a trial. That’s weird! Why would someone go through the effort of making an account but then not try the product?
If you send reactivation emails to churned users, how are those performing? Does offering a discount in those emails successfully bring stale leads back? If not, why? Ask a few, they may say they realized the product isn’t a fit for them. Then look up where they first found you and improve your messaging through that channel.
Audit your copy across all of your marketing channels and on your landing page. Is it consistent? I’m always surprised at how this is never the case, even when I think it is. Startups evolve so quickly that it’s easy to forget about this.
Conduct user interviews with both engaged and churned customers. Comparing who “gets it” and who doesn’t among the people who’ve signed up will tell you a lot about how to position your product and who it’s really for.
Another example: Enzo recently talked with an EdTech company that had a successful blog but it wasn’t driving conversions. When they dug in, they realized the audience the blog was attracting was different than the market their actual product was useful for.
Moving the Numbers
Sure, positioning improvements sound good, so how will you know your improvements are working? What number(s) will get moved?
Visit to Signup
Landing page conversion isn’t just about the copywriting and layout of your page. It can also speak to whether the traffic being sent to it is well qualified and within your ICP.
Signup to Account Created
You may not even be tracking this (but you should). There’s often a surprising amount of drop-off.
That drop-off can mean many things, but a common one is unqualified leads. If there’s a high bounce rate after just one or two post-signup clicks, it might point to this (or inconsistent messaging between your signup and onboarding flows relative to your marketing materials or landing page).
Trial Conversion Rate
Maybe those unqualified leads do create accounts. But are they converting through a trial?
This could also be a product issue, where your key features are buried and the product is hard to use for new users, but positioning is an equally possible cause.
Activation Rate
Common advice is that you should always address a leaky bucket but if you have a positioning problem you should instead focus on the customers who aren’t dropping off or churning. Spend time with them, learn about them.
What insights can you extract and what patterns can you find? Use them to adjust your positioning to fix the issue.
More generally, when your metrics are suffering you’ll be tempted to bring in conversion experts and growth hackers or build new features, but sometimes it’s just about aligning what your product value is and how it’s communicated in your marketing efforts.
How to Fix a Positioning Problem
In April Dunford’s book “Obviously Awesome” she shared the five key components of positioning. If you realize you have a positioning issue her framework is a helpful way to rethink your positioning:
Competitive Alternatives
If your startup didn’t exist, what would your customers be doing and spending money on?
If you know which of your competitors your users would choose, you can hone in on what matters to them.
You can dig into this by noting who your product gets compared to on sales calls, or who users turn to after they churn.
Differentiated Capabilities
No two products are exactly the same, not even Uber and Lyft.
Do deep dives on your competitors are really map out where the differences in the products are. What can a user do with your solution but not theirs, and vice versa?
Value
It’s not just about the features that only your product has, though. Consider your product from the user’s perspective. What does it deliver to them (or their business) and how is that different from what else is out there?
Your goal is to be able to say you’re the only company in the world that can deliver [whatever it is you deliver].
Target Customer
You’re not trying to sell to everyone. Ideally you’ve determined this before you’ve built your product in the first place and, instead, your product is built to solve their problems.
A common mistake founders make it going after big companies as customers too early. Marc Andreessen calls it his Moby Dick theory.
Make sure your positioning lines up with the customers you can realistically acquire today.
Market Position
Lastly consider where that target customer sits in the market. What alternatives are they considering? How do you stack up?
More importantly, what are the unique capabilities that will make you stand out? You can think about this like your “natural positioning” and is what you should lean into.
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