Mastering Market Positioning: A Guide to Stand Out in the Fintech Industry
Today's fiercely competitive fintech landscape requires businesses to have more than a stellar product. To truly thrive, brands must have a distinct and irreplaceable spot in customers' minds. That's where market positioning comes in!
Think of it as a brand's compass. It directs how customers perceive a brand compared to the competition, ensuring it stands out for all the right reasons.
This guide will help you with the insights and strategies needed to sharpen your market positioning skills. Whether you're a fintech startup carving a niche or an established player seeking to refine your edge, get ready to position your brand for success in this dynamic and innovative industry. Let’s dive in!
What is Market Positioning?
Market positioning refers to the strategic process of establishing a unique and favourable perception of a brand or product in consumers' minds compared to competitors.
A market positioning strategy makes a promise to customers, conveying the value a company offers compared to others and why it is the best choice.
For example, fintech giant Stripe positioned itself as the most accessible and developer-friendly payment platform, setting it apart from traditional financial institutions. It wasn't just about transactions but seamless integration and global reach.
When positioning a brand, businesses should go far beyond selling a product or service; they must understand customers' needs and preferences before entering the market.
Conducting extensive market research and analysing consumer behaviour can give a business valuable insights into the target market. The insights can then be used to position the offering effectively.
To go beyond, businesses should create distinct buyer personas to differentiate customers' needs, identify problems, and create unique solutions.
The Benefits of Market Positioning
The right market positioning strategy can help a brand create better marketing messages, shape services, and plan competitive pricing.
Gain a Strong Competitive Position
How a customer views a product or service about others is based on how a brand positions it.
If customers perceive a business positively, the company can enjoy an advantageous market position and stay ahead of the competition.
For instance, Revolut established itself as a fintech disruptor by focusing on international banking without hidden fees, appealing directly to frequent travellers and global citizens.
Improve Sales
A business's primary goal is to drive sales and increase revenue.
Businesses that offer a better product and communicate it more effectively may attract new customers and increase sales.
PayPal’s strategic positioning as a trusted and secure payment method helped it dominate the eCommerce space, directly driving user adoption.
Create a More Defined Target Audience
Market positioning strategies allow businesses to present themselves as experts in the industry. Positioning as a thought leader increases a brand's value amongst customers.
Make More Effective Decisions
With a core message in place, brands can more effectively make decisions.
A clear positioning strategy allows brands to communicate productively and build stronger customer relationships.
Connect with Consumers
Positioning helps businesses highlight the key benefits of their product or service. This allows the product to market and connect with the customer who needs it.
For example, fintech app Robinhood’s “investing for everyone” mantra connected with first-time investors looking for an easy and affordable way into the stock market.
Types of Market Positioning Strategies
What does market positioning look like in practice? There are several effective market positioning strategies to choose from.
Product Characteristics
A brand can create a favourable perception of itself or its product through its unique selling points and characteristics.
Think, what key components make it stand out?
For example, Plaid became synonymous with fintech connectivity, positioning itself as the bridge between apps and banks through its API innovation.
Product Price
A product or service can gain a competitive edge through distinctive or competitive pricing.
This technique typically works best when a brand offers low prices through promotional efforts. But it could also effectively fill and identify industry gaps at a particular price point.
Product Use
Brands can associate themselves with a particular need, application, or use.
For instance, Klarna successfully positioned itself as the go-to “Buy Now, Pay Later” solution for online shoppers, dominating its niche.
Product Quality
If a product or brand is of high quality, it could be successfully positioned as a more premium brand to potential customers.
Customers perceive quality and luxury as intrinsically linked, meaning positioning the offering as a luxury, the target audience is likely to believe it is of higher quality than competitors.
Competitive Positioning
Brands must make their product stand out by highlighting how it exceeds the competition.
Competitor positioning involves highlighting the two differences or pushing the product's unique features while directly comparing it to those of competitors.
Positioning vs Other Components of Marketing
Positioning often needs to be clarified with many other marketing activities. Let's explore a few to remove any common misconceptions.
Positioning vs Branding
Branding creates a unique brand identity by combining visual and linguistic elements such as logos, slogans, colour palettes, brand values, and other marketing strategies.
Positioning, however, focuses more on how a product or service is viewed in the consumer's mind than other brands.
Positioning vs. Messaging
Positioning refers to why an offering is unique compared to leading competitors' alternatives in the market.
Meanwhile, a brand's messaging communicates to its target audience what exactly it will do to follow through with the promises made in its positioning statement. Powerful positioning statement examples will manifest the experience a brand wants its customers to have and the specific attributes that will make it happen.
Positioning vs Value Proposition
A brand's value proposition differs from positioning as it focuses on what truly sets a brand apart from the competition.
The unique value proposition outlines a product or customer's inherent benefits and the value it will bring to the target customer.
Positioning vs Differentiation
Positioning is all about customer perceptions and acquiring space in the customers' minds.
On the other hand, differentiation refers to the competitive positioning of a brand and how they create a favourable perception of their offering amongst the target market.
How to Build a Good Market Positioning Strategy
Developing an effective market positioning strategy requires meticulous planning and consideration to create a strong market position and gain a competitive advantage.
There are five essential steps brands must take to create a good market positioning strategy:
- Conduct Market Research: Gain an in-depth understanding of the target audience and their needs. Conduct extensive market analysis to gain insights into customer perceptions, market trends, and competitive analysis.
- Define Target Market Segmentation: Clearly define the market segment the brand aims to target. Consider demographics, psychographics, and purchasing behaviour to create a detailed buyer persona. For example, Chime focused on millennial and Gen Z users who preferred mobile banking over traditional services.
- Identify Unique Selling Proposition: Determine what sets the product or brand apart. Identify the unique features that will resonate with the desired target audience.
- Define a Unique Value Proposition: Craft communicated positioning statements outlining the exclusive benefits and value of the product, setting it apart from the competition.
- Create a Consistent Brand Image: Ensure all product marketing efforts align with the outlined positioning strategy. Consistency is critical to high brand awareness, from messaging to visual identity.
Despite these steps being implemented, market positioning is an ongoing strategy requiring continuous monitoring and modification.
As consumer perceptions and market trends change, brands must stay vigilant and adjust their positioning accordingly. This may include evaluating the current target audience, refining the USP, or repositioning the brand entirely.
Market Positioning Best Practices
To cement a strong market position, businesses should consider implementing the following best practices:
- Understand the Target Audience: A clear understanding of the target market is essential for successful market positioning. Businesses should conduct thorough market research to identify target customers' needs, preferences, and behaviours.
- Analyse the Competition: To differentiate themselves from competitors, businesses should undergo a SWAT analysis, examining strengths, weaknesses, and unique selling points. This review helps companies identify any gaps in the market that they can fill.
- Develop a Unique Value Proposition: A well-crafted unique value proposition can help differentiate a brand's offering from competitors and create a strong market positioning.
- Effectively Communicate Messaging: Businesses should develop a clear and consistent message that resonates with the target customer. This message should be communicated through all marketing channels - including email marketing, social media marketing, and content marketing.
The Importance of a Brand Positioning Strategy
In addition to market positioning, businesses should consider incorporating a brand positioning strategy into their overall marketing strategy.
A brand positioning strategy defines how a brand is perceived in the mind of its target audience relative to other brands in the same market.
An effective positioning strategy involves communicating the brand's distinctive value and multiple benefits. The goal is that when a customer has a need or problem, the brand is the first to come to mind as the solution.
The strategy involves pinpointing the company's key differentiators and clearly articulating them in a brief description that will resonate with the target audience. This unique identity could include price, quality, customer service, and brand personality.
This should be consistent across all brand communications - from customer interactions to advertising - ensuring a cohesive and memorable brand identity.
What are the 3 Levels of Brand Positioning?
There are three distinct types of brand positioning, all with varying outcomes.
Segmentation Positioning
If an organisation is targeting more than one target market, segmentation can be an effective market positioning strategy that helps to address the needs of different customer preferences.
This positioning strategy divides a broader target audience into segments based on specific characteristics, needs, and behaviours. Based on prospective customers' needs, the brand can tailor its positioning to resonate with each segment.
Marketing experts recommend this approach as it ensures the brand message is relevant and appropriate to the targeted group, making the product or service more appealing.
Differentiation Positioning
Differentiation occurs when a company focuses on its core values and features that market rivals cannot replicate. This includes any features that distinguish it from closely related competitors.
This modern marketing tactic is extremely useful in cementing a brand's market position above its competitors.
Comparative Positioning
Comparative positioning involves comparing a company's product or brand with available alternatives to its target audience.
This type of product positioning enables brands to establish USPs while highlighting their value compared to other companies in the industry.
Conclusion
Navigating the world of market positioning in fintech is no small feat, but it’s a journey packed with opportunities to create lasting impressions and drive meaningful connections.
With the right strategies, brands can become a beacon of trust, innovation, and value in a crowded marketplace.
Remember, positioning isn’t just about being different - it’s about being the right fit for the audience.
Would you be ready to elevate your brand to its rightful place in the industry? Blue Train Marketing specialises in crafting positioning strategies that resonate and deliver results. Whether you’re defining a niche or refining messaging, our team has the expertise to propel fintech branding forward.
