Positioning as a Driver of Bottom-Line Performance

This past year has seen a reckoning in the technology industry. Macroeconomic and financial market conditions have put pressure on a space where leadership teams have only ever known bull markets and low cost of capital.

As growth-at-all-costs is replaced with pressure for stronger unit economics, technology leaders and their financial backers are forced to rewrite their go-to-market playbooks and cost models.
As technology companies scramble to evolve, there is one mistake we continue to see – neglecting to use positioning to inform these decisions.

Positioning is not messaging. It’s much bigger, and more important. Positioning is about focus, and focus reduces waste.

The funds and portfolio companies that emerge profitably from this period will have successfully used positioning to hit tighter targets and right size their operations to win.

A Quick Guide to Positioning

Positioning is about succinctly defining how you’ll win, and it comes down to 4 things:

1. Defining a Target: Having a clear sense of the target market and ICP.
2. Articulating the Problem: The pain addressed be meaningful and immediate for buyers.
3. Highlighting Benefits: These should be bigger than features and be delivered all the way from the product through customer success.
4. Differentiating Against Competitors: There needs to be meaningful, credible differentiation.

Building a positioning is a C-suite exercise. Having [Product] Marketing facilitate the process is typical, but accountability for the decisions needs to be shared across all impacted functions and championed by the CEO. The operational and financial implications of these choices cascade across the entire organization and impact more than marketing collateral or sales enablement content.

Symptoms of a Positioning Issue

While every context is unique, there are common pain points that we see that indicate a positioning issue. These symptoms have issues throughout the P&L, and go beyond traditional lead-gen.

These pain points are common, and all of them impact the bottom-line. A properly developed positioning strategy, anchored in data, and collaboratively developed by functional leadership is a critical driver of profitability.

The Opportunity Going Forward

For most technology leaders and investors, 2024 will require a significant amount of change and effort to stabilize performance and find profitable growth paths.
In troubled times the temptation is to react quickly by cutting cost centers, slowing the cash burn, and restructuring the organization. While some of these moves may be the right decisions, many are irreversible and may impede recovery creating long-term growth challenges.

Level5’s methodology prioritizes starting with positioning as a lens for strategic decision-making. A solid positioning can avoid unnecessary costs in the first place, and when cuts are required, provide a filter for where and how deep.

We are firm believers that customer-led positioning is crucial for tech companies to succeed in the current landscape. Our diagnostic tool will deliver a personalized dashboard and report to help you benchmark against peers and identify areas of focus to elevate your positioning.

If you’re interested in learning more about our approach, please contact us at spavlidis@level5strategy.com