Episode 34

Sei-Wook Kim (00:04.609) On today's episode, we're talking about positioning. Most agencies can describe what they do, but very few can explain why someone should pick them over the next agency in two sentences. We're breaking down the four components of positioning and getting into what separates agencies that are easy to buy from agencies that are easy to forget. Peter Kang (00:26.836) All right, so positioning, big topic. And the first thing that agencies need to do positioning well is conviction — essentially it's about making a bet on who they are and who they're not. And before we dive in, one of the things to mention is why do agencies find positioning so hard and challenging? A lot of that has to do with the way agencies get into the business. A lot of times, and this is common across our industry, it's somebody who's really good at doing something — they might've been a creative director type or maybe a marketer — and they decide to strike it on their own, maybe as a freelancer at first. Those initial first few deals and projects are often just organic, through their network, people who trust them and are giving them these opportunities. Over time, it's organic in that they're being a bit reactive — the opportunities come to them. After six months or a year, they realize they've done projects for varied types of clients, the work might not be super focused. At that point it almost feels like, okay, we do marketing for whoever needs the help, we do websites for whoever needs help. To then narrow and think about becoming more specific and doing the positioning work is very difficult. This is why agencies hesitate to do a lot of the positioning work that's required. One of the things we really encourage our agencies, as well as anybody that we're giving this framing to, is to think of positioning as something that's future-looking. It's about the agency you want to become. You don't have to abandon the clients or the warm leads that you're getting right now, but it's about putting a stake in the ground of who you want to be, how you're going to go to market, and how aggressively you're going to go after specific types of opportunities. Hopefully that makes it easier for people to invest in the positioning side. And just a couple of resources to throw out there: David C. Baker — his blog posts are great in terms of giving the lay of the land on positioning, and his book *The Business of Expertise* is highly recommended. And then Tim Williams has another good book, a classic — I read it probably 10, 15 years ago now — *Positioning for Professional Services*. Those are really good resources for people to check out. Sei-Wook Kim (03:26.228) Sounds good. So let's dive into the four components. The four are: category, wedge, provable differentiators, and why now. A lot of this came out of the work with our Barrel Holdings portfolio and also talking to dozens of different agency operators and then really pressure testing this. We'll go through each one and then go through some examples to tie it all together. All right, so the first is category. Think of category as the shorthand way that buyers use to remember you — what kind of agency are you to them? The important thing is to think about whether the category is specific enough to signal your expertise, but also familiar enough that people can understand it immediately when you say it. Some examples familiar to us: "Shopify commerce agency for CPG brands" — that would be a category — versus "full service digital agency." One tells you exactly who this is for, the other doesn't really tell you much. Peter Kang (04:50.45) A good test here is if a prospect's boss comes around and goes, "Hey, what's that agency again?" — the champion you're working with to sell into a brand needs to be able to answer in one line. Having this category really well defined is super helpful. Sei-Wook Kim (05:12.469) Yeah, and category also means making sure the category you choose isn't so broad that you're compared with the whole industry and a lot of people, or so niche that no one recognizes what that category is and can't place themselves within it. And it's not just for small agencies. We've worked with large multinational agencies — 500-plus people across the world — and even they can benefit from going through this exercise. One agency we talked to said they were competing so broadly and ending up losing a lot more than they should have for their expertise and experience. But once they really went through the exercise of defining their categories around the industries they work with, versus leading broadly with "we do design and development," the conversations really changed with those prospects. Peter Kang (06:19.89) Yeah, that's a great point to underscore — positioning isn't just for the small guys. At the end of the day, what are you trying to do? Be more memorable. And positioning is one of those things that helps you take that step. Sei-Wook Kim (06:42.27) Cool. Let's move on to the second, which is the wedge. Think about the wedge as the edge that gets you in the door. The wedge isn't your full service list of everything you do — it's really thinking about what is that specific problem that gets someone to talk to you specifically. A good wedge is something that is specific, but it's a painful moment or something that's easy to recognize when you're talking to clients in a sales conversation. Peter Kang (07:20.347) Yeah, the wedge leads to more work, right? You could think of it as the entry point. It doesn't have to define the entire relationship you have with a client as an agency. Think about the wedge — just visualize it — it's that sharp point of something that helps you enter. Sei-Wook Kim (07:44.606) Yeah. So let's think about some specific examples of wedges. One is helping a CPG brand launch a new Shopify experience — that's the entry point of the conversation. Or turning a messy paid social program into a measurement-ready growth system — thinking about that painful, specific point in someone's experience. Peter Kang (08:13.808) Yeah, and it is important to have a go-to wedge for the agency, but oftentimes you're going to have multiple wedges and that's okay. One agency we were speaking with talked about a couple of different wedges that get them in. One was aging infrastructure requiring re-platforming for a website, for example. Another wedge they use for a slightly different stakeholder was marketing teams that can't move fast because their systems are broken. Depending on who they're talking to, this same agency can use these wedges where appropriate. Sei-Wook Kim (09:07.015) Yeah, and along those lines, you don't have to have one wedge forever. You're really thinking about, for those specific conversations you're having, what is the sharpest angle you could use to get in for that particular deal. Another important thing: the wedge should map to your entry offer — we've talked about this in the past. But if your wedge is "how do you fix a broken growth funnel?" and your entry offer is "we do six-month website redesigns," something is off. You should either have an entry offer that maps to that specific wedge, or just make sure they align closely. Peter Kang (09:48.399) Yeah, and if you're curious about the entry offer or the overall shape of an engagement, we talked a lot about this on episode 31 on the service offering. Please check that out. Sei-Wook Kim (10:01.256) All right, so let's move to number three, which is the provable differentiators. This is what a client would say about you without you prompting. One important thing about differentiators is they only matter if you can observe and verify them. Some weak differentiators we've seen: if a client says the team is strategic, or they have a really senior team, or they really care — these are adjectives that a lot of agencies use. Peter Kang (10:42.041) Yeah, clients might say they want those things, but because every agency typically uses the same adjectives, it just doesn't land the same. When we talk about what's a strong differentiator, it's specific and very tangible. Some examples: "We deliver a working prototype within one week of kickoff" — that's a differentiator. "We've helped six B2B SaaS companies improve lead volume by 15 to 30% in the first quarter" — it's observed, it's verified. Or even something like "We only support B2B e-commerce sites on Shopify" — Shopify is typically a direct-to-consumer experience, but you do it just for B2B? That's an interesting differentiator. It's all about picking something that will stick. If category is the mental bucket, and the wedge is the pain and the sharp edge, then the differentiator continues to reinforce that. Sei-Wook Kim (12:02.737) Yeah. If you think about another angle for differentiators — saying what you don't do is often more powerful than saying what you do do. If you say you only work in one platform, or you only work with clients over a certain revenue threshold, all of these help build up your conviction and signal that you have focus and specificity in what you do. Peter Kang (12:34.882) Yeah, definitely. We've seen this in verticals like FinTech, where an agency might describe their differentiator as "we translate complexity into clarity." That's directionally right, but it's still a bit abstract. We'd love to see something more specific — maybe "we rebuilt the neobank's fee disclosure flow," or "we helped drive support tickets down by X percent." Something like that would actually stick in the minds of whoever you're talking to and be truly impactful. Sei-Wook Kim (13:15.621) Yeah, and this overlaps with the idea of costly signals or commitments that are really hard to fake — publishing your pricing publicly, sharing real tangible metrics and case studies, publicly sharing constraints around who you work for or don't work for. All of that is what helps build trust because these aspects are really hard to fake and come from your experience. Peter Kang (13:44.237) Exactly. Words are cheap, but if you can back it up, it's a lot stronger. Sei-Wook Kim (13:45.767) Yep. All right. Number four is why now. What is the urgency trigger? It's really thinking about why this matters right now for the buyer. This could come in a lot of different forms — the market could be shifting, a client could be going through a platform change, the buyer could be moving into a new role in the organization or joining a new company, there could be regulatory changes forcing something to happen, or just general economic pressures that they're feeling. Peter Kang (14:27.991) Yeah, a couple of examples. Let's say a B2B content agency — stuff's happening in the AI space, right? So you could say, these days AI-generated content is flooding every channel. There's some stuff happening with Google and there's buyer fatigue with generic thought leadership, and that becomes a real liability. The agency can really talk about the urgency of needing to have a differentiated POV because this is the only way to cut through. Another one: if you're a healthcare marketing agency, you can say FTC and HIPAA enforcement around tracking pixels means that if you have marketing stacks that are non-compliant, you could be in trouble. Brands really need to rebuild measurement with tools that are more compliant. That's another time-sensitive why-now trigger. Sei-Wook Kim (15:32.516) Yeah, so the why-now aspect gives your wedge the urgency. Without it, if you think about the prospect, they might think you're interesting, they might think you have a lot of expertise, you may be in the perfect category — but they don't have a reason to act. The why now is important for driving that action. One thing we're seeing a lot these days are trendy why-now triggers like AI. That definitely feels like something that has urgency. If you have real expertise around it, that makes sense and it can be a trigger you use. But if you're just jumping on it, and everyone else is jumping on it and you don't really have any experience or anything to prove and show — buyers will see through that. So it's not just the urgency you have to jump on; you really need everything to back it up. Peter Kang (16:34.336) Yeah, a little aside there. One thing we've tried, and I think our agency leaders across Barrel Holdings have been good about, is just not AI-washing the positioning. There's a rush to be like, "Yeah, we're AI-native now," or "We're AI-first X, Y, Z," and you see homepages embracing that across the landscape of agencies. Yes, AI is important — it's not that our agencies aren't embracing AI — but you really have to have real expertise that takes time, and you really have to come up with a real wedge and real proven differentiators. We're letting a lot of this stuff play out before slapping AI all over the homepage. I feel pretty good that we've not fallen into that trap. And if you've gone that path, there's something for you to think about. Sei-Wook Kim (17:38.155) To wrap up the why-now section: think about your ICP's buying triggers. It could be funding rounds, new executive hires who make the decisions, or a platform migration — really, that's the moment. Think about what those moments are for your specific industries that make your positioning feel urgent to the customer. All right, so let's pull this together into a fictional example. Pete, if you want to run through this fictional agency called Signal Path. Peter Kang (18:21.363) Yeah, okay. So let's imagine this fictional agency called Signal Path. Let's start with the category — the first of the four. We're going to define this as a lifecycle marketing agency for B2B SaaS companies that have done fundraising post Series A. That's the category: lifecycle marketing agency for B2B SaaS post Series A. What does that say? It's not demand gen, it's not brand, it's not performance — it's specifically lifecycle: onboarding, activation, retention, expansion. And then "post Series A" means they've explicitly ruled out pre-revenue startups or more mature enterprise-tier SaaS. They're working with companies that have product-market fit but are trying to scale usage without running into issues. So the next one, working down — wedge. The wedge is fixing broken growth funnels where traffic comes in but users don't activate or stick. The specific pain: acquisition spend is healthy, the top of the funnel looks fine, but trial-to-paid conversion is below 15% and logo churn is creeping up. The CEO knows something is broken between sign-up and value realization, but nobody on the team is owning the lifecycle. Marketing owns acquisition, product owns the map, customer success owns renewals, but something is breaking in the handoffs. Signal Path positions themselves as: we can own that, and we can rebuild those broken gaps. Sei-Wook Kim (20:10.147) Their differentiators: they do a new user activation diagnostic that they complete in two weeks, not two months. They have a repeatable framework — not a blank-slate approach to every engagement. Because they've done this so much, they have benchmarks from 30-plus B2B SaaS funnels segmented by ARR stage. So when they tell you what your activation rate is and whether it's underperforming, they have the data to show where you sit in that spectrum. And they can improve activation rates by 15 to 35% within 90 days and tie that to revenue metrics, not just vanity numbers. The why now for this agency: post-2023 funding tightening, board members are scrutinizing efficiency over growth, and companies need to show tangible unit economics. Their target market — companies that may have raised in '21 or '22 — are many years in and need to show real unit economics, not just top-line growth. From their prospect's point of view, activation improvement flows straight to the LTV and payback math that investors are looking to see. Peter Kang (21:51.698) Yeah, that's pretty comprehensive. We went pretty deep on this one and, reading through it and talking about it — this is an agency we'd be interested in buying because it's pretty tight. This is an example of when all four positioning components click, it sells itself. As a buyer, you're hearing the category and you can self-select in or out — "I am a B2B SaaS company post Series A and I have these issues." The wedge makes sure the pain is salient. The differentiators show these guys have done this and have real, verifiable proof. And then the why now further enforces that pain with a sense of urgency. This is a clear example of good positioning making it so much easier to buy. Sei-Wook Kim (22:56.641) Let's touch on some common positioning mistakes. The first is positioning by capabilities, not problem solved. When you say "we do branding, we do web, we do content, paid media," you're describing your capabilities list, not positioning — not what you're actually solving for your clients. Another one is positioning that only lives on your website. You may go through this work and put it on your site, but then your team doesn't know it, can't repeat it on a sales call or in a conversation, and no one's really talking about it. The test: can any leader on your team explain what you do, for whom, and why you win? Peter Kang (23:49.752) Can I stop? This is so painful because I'm thinking about all the times in the past where I would do a lot of positioning work in my mind or in my notes and then forget to tell people about it or share it. I might use it in my conversations with prospects, but then later on I hear someone else talking about it and — I think it's even happened between the two of us — I hear you talk about it and think, "That's not our positioning." I just forgot to tell folks about it. It's so important to — God. Exactly. Sei-Wook Kim (24:23.433) Yeah, everyone has a different positioning in their minds. All right. So the next one is positioning that's aspirational, not earned. If you claim "we do digital transformation" but all the proof and work you do is very executional, positioning has to match what you do, what you've done, and where you sit on that value ladder to clients. Peter Kang (24:52.859) One allowance I'll make here, because we did talk about how positioning is future-looking, forward-looking: in some cases there might be something where you have the makings of the expertise and feel fairly confident you could build up to it, you're going to take that leap and put a stake in the ground. That's okay. Sei-Wook Kim (25:10.302) Yeah, you need some kind of differentiator that you can prove. Even if it's a stretch, you need to be able to prove somehow that you can do and deliver it. Peter Kang (25:22.054) Exactly. So there's gradation. So much of positioning is aspirational, but there's a spectrum. Have some realistic way to close that gap. Don't do the — let's say you've never touched AI before and now all of a sudden you're "AI transformation XYZ" — that's a stretch. But if you're on the path, okay, that's all right. Sei-Wook Kim (25:47.571) Yeah. And then the last positioning mistake is just refusing to commit. We talked about this at the start — falling into the trap of saying "we serve everyone and we do everything." A lot of times, as you mentioned, it comes from a scarcity mindset where you just feel like you need to grab every piece of business you can. Peter Kang (26:10.599) Yep. Just to close out the mistakes: the most common gap is agencies might have a good enough category but they're missing the wedge. A lot can be accomplished by really defining that specific problem that gets you through the door, because that has real commercial implications. Sei-Wook Kim (26:36.671) Cool. So we've talked about a bunch of this in prior episodes, and if you think about how positioning connects outward — how do you communicate it? First is to your ecosystem. In episode 28, we went deep into ecosystem. Positioning really helps define what world you exist in and where you matter. If you're a Shopify agency for CPG, then the Shopify partner community and CPG industry events are the worlds you exist in. If your positioning is vague, you end up showing up everywhere and you'll never get deep anywhere. The next is your ICP. In episode 33, we go deep on ICP. Positioning and ICP really work together to sharpen each other — a tight ICP reveals more wedge opportunities, and the wedge helps narrow who your ICP really is. Peter Kang (27:48.037) Yeah, and we mentioned service offering as well — this is how you can connect your positioning. As I said, it's talked about at length in episode 31, but really connecting the wedge to that entry offer. And the differentiators we talked about need to show up in your delivery, because that's a promise you want to make sure is true. If there's any gap between what you claim and what your clients experience, the positioning will erode. Make sure you back up what you say with actual delivery. And then the last part is the proof aspect — we'll talk about this in the future as well — your proof inventory. These are things like case studies, references, testimonials — all of these back up every part of your positioning. If you have a wedge you keep talking about but no case studies for it, that's going to be another gap in your positioning. Make sure you take care of that. Okay. So we covered a lot on this episode — the four components, and, as we said, positioning is a very fundamental thing you can do for the agency and is a big part of the foundation we keep talking about. This is a wrap on positioning. But as we mentioned, even if it's the early days for your agency, it's still worthwhile to invest and just be proactive in that way. Go to foundation.agencyhabits.com — we have a free diagnostic tool there to help with positioning. Check it out. Until next time, thank you for joining. Sei-Wook Kim (29:41.214) Thanks.