Risk & Compliance

How to Develop a Positioning Statement

A leading expert shows CFOs the three elements that must be present in those "boiler-plate" messages crucial to pitching a firm to investors.
Ed ZwirnJuly 2, 2001

Almost every press release or other corporate communication has one: A “boiler-plate,” canned statement describing what a company does, differentiating the firm in terms of its markets or competitors, and establishing the company’s prospects going forward.

And while the casual reader may tend to skip over or minimize the significance of such messages, they are a critical component of an investor relations program, according to one corporate communications expert, with the CFO often being the executive best positioned to put them together.

“You must deliberately build your own identity and image or the marketplace will build it for you,” Paul G. Henning, a group account director for Amex IR Alliance, a program sponsored by the American Stock Exchange, last week told a group of CFOs assembled for an Amex/National Investor Relations Institute educational program at the exchange’s headquarters in lower Manhattan.

“You could have your marketing or your R&D people perform this task, but it’s like dealing with lyrics and music,” he adds. “As CFOs you have the music, the results, and you have to fill it in and give it more context.” Vive La Difference

Let’s look at a hypothetical example.

“Vandelay Industries is a leading global consumer products company, focused on the personal care markets. Vandelay markets approximately 10 brands to nearly one billion consumers around the world under such internationally recognized brand names as Vandelay Spa, Lush Soap and Moisture Rich Hand Cream.”

“The Company is seeking to accelerate growth by diversifying its product line to include hair care products and establishing a meaningful presence in new markets throughout the world.”

Using the above hypothetical description of a fictional company to illustrate his points, Henning says, answers to the following three questions are crucial to the successful construction of such a statement, which should be included at the bottom of every company press release and at the top of other key communications, such as web sites:

  • What the company does, where and for whom.
  • What is the company’s niche? What makes it different?
  • What is ahead for the company?

Of these, the second is often both the most important and difficult to nail down.

“A positioning statement isn’t a definition of what you do, it’s what makes you different,” Henning says.

In addition, it is necessary, especially for more lengthy corporate descriptions such as annual reports, to follow up this statement with a “message set” consisting of three or four “distinct facts or concepts that support or ‘prove’ the positioning statement,” he adds.

Make Them Drink

“Ten short years ago, I put out a press release and I would sit and wait because the only people that would read it would be myself and the Dow guy and the Reuters guy who would write a story about it, giving what they considered the important points,” he says.

“Now, with the explosion of communications, particularly on the Internet, this press release may appear all over the place it its raw firm, on places such as Yahoo!Finance and other web sites,” he adds. “These days, you have to bring [investors] to water and get them to drink it.”