Startup Positioning: Why Does Share of Wallet Matter?
Who is your competition? For many tech startups, you may not have direct, heads-up competition. If you're a diet soda, you have lots of direct competitors.
In established categories, like soft drinks, laundry detergents, deodorants, and pretty much any other CPG, each brand works hard to find some opportunity to exploit.
"We're the diet soda with Splenda."
"We're the diet soda with no caffeine."
"We're caffeine-free diet cherry soda!"
This arms race of product augmentation warrants its own post, but for now, it's important to note that startups often face a less crowded competitive landscape. In the soda examples above, each description assumes a baseline descriptor, e.g. Diet Soda, then differentiates with some sort of addition, e.g. Cherry Flavored.
But what if you're creating a market where there wasn't one? How do you describe your widget if there are no other widgets for people to buy?
If you use the Brand Strategy Canvas, the Description of your brand is one of the 5 elements of you're positioning statement, along with Audience, Benefit, Proof, and Payoff.
There are two ways to think about your description. The first is to put forth a simple, straightforward explanation of what you do. This typically ladders-up to one of the features you described earlier on the canvas.
The other approach is to describe your brand within a broader frame of reference. This approach will allow you to imply the competitive situation by either rising above the noise in a crowded category, or by positioning yourself against competitors who may not be direct competition.
In Memphis, there's a wonderful AAA baseball team called the Redbirds. The stadium is legitimately the best in the minors, and its the only ballpark in America where hotdogs are not the best-selling food item (it's actually BQQ nachos, and they're as amazing as they sound).
Were the Redbirds to consider their positioning statement, describing themselves as "the top AAA baseball team in Memphis" would not be useful. Indeed, there are no other pro baseball teams in the market. They're the best by default. A straightforward description, then, is irrelevant, and provides no opportunity for further brand development. For that reason, a broader description is more ideal.
In the case of the Redbirds, a more strategic brand description might look something like "The Memphis Redbirds are the family entertainment destination..."
In this way, we've reframed the Redbirds as a purveyor of family-friendly entertainment, which is much more compelling than describing them simply as a baseball team.
Elevate your product description beyond the obvious category to craft a more powerful positioning statement.
With this kind of description, it becomes clear how the strategy will be developed in the context of all the options a family has at its disposal. It should also be clear how the straightforward “best AAA team in town” approach severely limits the development of a compelling brand.
Go after the largest share-of-wallet
When working through your positioning, it's helpful to consider your brand description in light of how your audience views your offering in the context of how they allocate their budget. This is known as Share of Wallet. In this case, the Redbirds aren't competing against other baseball teams, but other family entertainment options, like the Memphis Zoo, the Children's Museum, various parks, and other compelling opportunities.
The question, then, is how can we grab more share-of-wallet from those in our target audience? If given the choice between, say, the zoo and a day at the ballpark, how can our brand strategy work to increase the likelihood of our audience choosing the latter?
There are lots of answers to that question, but at least one way to move the needle is to consider how your self definition influences your positioning statement, which drives the direction of the entire brand strategy.
As you write the description in your positioning statement, does a straightforward definition make sense for your brand? Or would a more strategic frame of reference enable you to better define your competitive set and build a strategy more relevant to your audience?