Positioning and why it’s relevant to Spotify and the next up and coming startup

Growth, change, and not knowing exactly what the future brings are topics companies of all sizes wrestle with on a regular basis. So, how do we ensure our products remain relevant? We believe a key element for growth and longevity is positioning. And equally so, recognizing when it’s time to update it.

What is positioning?

To us, positioning is about defining how you stand out in the market and deliver value to a distinct customer group. To better illustrate how positioning is relevant to all companies, let’s look at a few recent cases.

One great example of an established company that revisited its product positioning is Spotify. Their change was driven by COVID-19, even though at first glance you would think that a company which is digital and remote is well suited to such a situation.

However, during the pandemic companies lowered their advertising budgets on which Spotify relied heavily. They then pivoted their positioning to be more akin to Netflix: Originally created content in the form of podcasts, and curated recommendations to their users. The repositioning actually helped raise their advertising revenues by 9% in Q3 2020 from the previous year.

How does Spotify do product positioning?

What about smaller companies? Can they compete? Yes, in fact, they often inherently understand the importance of positioning. They are very explicit with what they are good at, and who they serve best. Introist is a technology platform that automates repetitive employee experience related tasks (such as onboarding), thus saving significant time for HR.

How do small companies do product positioning?

Somewhere between Introist and Spotify, we have Miro, which a lot of people probably started using during the COVID-19 pandemic. They offer a digital whiteboard platform for teams to collaborate. Once again, their positioning is clear and to the point.

In general, it’s good to keep in mind that many industries (like SaaS), are global by nature. For example, if you’re a Finnish MarTech company, your competitors are not only local peers, but essentially any company from around the world. In order to compete effectively, you need to strongly underline what it is that you do better than your competitors and who your ideal customer is.

Here’s a comparison of the Finnish MarTech landscape vs the global landscape. Yep, that's what you’re up against.

So, how do we approach positioning?

Segment data →

A key step in nailing your positioning is in gathering and evaluating the right data. You’ll want to segment your customers, for example based on cost incurred vs revenue brought in by each customer group. Regardless of how you segment, the main goal of this step is to understand who your best customers are.

Talk to your customers →

The next step is to reach out directly to these best customers. The goal of this exercise is to truly understand their context, their needs, and what they like about your product. Why did they choose you over other options? Based on the data gathered from these interviews, you should be able to see some patterns on what makes you different.

Review competitors →

Now, it’s time to look at the competition and analyze their positioning. How and what are they communicating to their audiences? How do you differentiate in your messaging and how can you better highlight your competitive edge? Try to also look beyond the obvious competition to those that are solving very similar problems, albeit perhaps in unexpected ways. 

Compare different options & make a choice →

The last step is to create different positioning scenarios based on the information you’ve gathered. Analyze each in a structured manner, and simulate how each would affect your business. Finally, make a clear decision. 

This process should bring clarity as to how to differentiate yourself from the competition. Remember: Revisit your positioning at regular intervals, and most of all, make bold decisions.


Userpilot - Product Positioning Examples

Starlight - What is product positioning

Marketveep - Examples of brand repositioning renewed company growth

April Dunford 

Markkinointi Kollektiivi - Finnish MarTech Landscape 2022

Chief Martec - Marketing Technology Landscape 2022

Kelton - Updating Your Brand Positioning Strategy