In Part 1 we covered some of the positioning mistakes we made at Mashroom. If you missed it, you can read it here.
To pick up where we left off, web traffic that was hitting the Mashroom site was largely bouncing. Our conversion rates for our products were low. So we decided to go back to basics and interview customers to find out what their pain points were.
Fixing startup positioning step 1: Customer interviews
We held video calls with 10 different landlords who generously answered our questions in exchange for a gift voucher. This time we were methodical in asking basic questions about how interviewees ( the landlords) went about the business of letting, how they thought about it and how they felt about it. We asked some narrow questions (e.g. “How do you know when your fixed rate mortgage deal is finished?”) and some very vague ones (e.g. “How does ‘landlording’ make you feel?”).
Both types of questions gave some interesting interesting insights into current behaviours, emotions and motivations.
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Our startup positioning research findings
You can broadly split landlords into two segments. The self-managed property landlord and the landlord with agent-managed property. There are distinct difference between the two that we explored in the interviews.
Landlords who managed their property themselves seemed more comfortable taking risk but they also spent more time becoming familiar with regulations. Managing tradespeople is a consistent headache for them as they often struggle to find people who are available, deliver good work, are reliable and not too expensive.
We were also somewhat surprised that despite the fact that this eats up a lot of their spare time, they enjoy meeting prospective tenants. They deemed this activity as crucial in vetting them and saw it as a worthwhile investment to separate the wheat from the chaff.
We struggled to find more landlords who hire agents to manage their properties. Probably due to the fact that they are often not very involved in the process and didn’t hang around landlord Facebook groups (our fishing ground).
These landlords had a touch more anxiety and partly hired agents to manage that anxiety. The primary reason was that they didn’t want to have to deal with regulation and outsourced this job to their agents. Whilst good agents will keep them abreast of changes in regulation, landlords are ultimately responsible if their properties fall foul.
Apart from saving themselves time, another reason that these landlords hired agents was that they wanted to actively have a ‘middleman’ between them and the tenant. They wanted someone to break bad news such as a rent raising and an eviction notice.
What customer pain points did we uncover?
Ok, now on to the juicy bits. In our interviews we hunted for these pain points to find out how we could position Mashroom to best meet landlords’ needs.
Pain point #1: Having awkward conversations with tenants
We covered this one already in the previous section. This pain point is clearly one for landlords with agent-managed properties. But it’s not a big one for landlords who self-manage. Since we’re a quasi assisted self-manage platform, this one is a hard pain point to overcome in our current form.
Pain point #2: Confusing government regulation
Both types of landlords have problems with government regulation. And both landlords overcome this pain point by outsourcing it or spending a lot of time browsing through forums, Facebook groups and Whatsapp groups. This is a pain point we could better address by investing more in quality content such as email guides, courses and blog articles. We can attract both landlords who self-manage with better content that they find elsewhere. But we can also position our content as a much cheaper alternative for landlords who mainly use agents to overcome this pain point.
Pain point #3: Tradespeople reliability
This pain point primarily affects landlords who self-manage. Mashroom can easily fix this pain point because we provide access to a platform with over 7000 tradespeople. They can be booked with a few clicks/taps, showcase their availability and transparent pricing, and come with a 12-month guarantee for any work done. How’s that for a plug?
The problem is that we never really focused on highlighting this to landlords before.
Pain point #4: Managing property is a turn off
Some of the landlords who used agents wanted very little to do with the actual day to day managing of the property. Again, this one is a hard nut to crack given our value proposition. But perhaps with a bit more research into this particular point, we may be able to offer the most painful parts of the property management job as a pay-as-you-go service in the future.
It wasn’t just the paint points that we uncovered. There were some other ‘aha’ moments that were interesting to us, even though they aren’t actionable (yet).
There’s an ‘aha moment’ when landlords transition from agent-managed to self-managed
Many landlords told us how they started off using agents to manage their properties, then became more knowledgeable about the process and finally moved to managing the properties themselves after they had this aha moment. It seemed that they had any of these three discoveries to aid that transition:
- They discovered how little work the agent was doing for the amount they were being paid
- They had a bad experience where they agent was at fault and incompetent.
- They got ripped off by the agent tacking on a 50-100% mark-up on a repair.
These cases got us thinking how we could accelerate this aha moment in landlords who are still using agents.
What are we doing with these positioning research findings?
I’ve already mentioned a few points such as upgrading our content strategy. In addition, we are changing the messaging in our ads and the way we position ourselves in our copy on the website. The more we can engage with those pain points and show customers that Mashroom is the product to alleviate their pain, the higher our conversion rate is likely to be. We’ll also update all of our outbound communication too (incl. ads, emails and PR campaigns).
The customer interview exercise was also great in picking up vocabulary that landlords tend to use (e.g. they prefer using the term tradespeople vs contractors). We are updating our copy to reflect this new terminology.
However, for now this is all theory and we are in the middle of implementing these changes. We’ve only done 10 interviews so far and there are plenty of reasons why none of the above may be enough for us to overcome the issues. We’ll need to implement and test these changes, but also continue to do further interviews in the coming months and solidify our hypotheses.
In a few months or so, I’ll do a follow up to see whether the above was correct or not. Stay tuned!
A great positioning book
If you’re looking into positioning and are curious to find out more, I highly recommend April Dunford’s book “Obviously Awesome”. It’s a fun read and relatively short, but it comes with some great anecdotes from having gone through positioning errors and successes throughout her career. It should give you a good basis on how to think about positioning.
This post is Part 2 of our soon to be 3 part series. Part 3 is not ready yet as we’re in mid-flow of rolling Part 2 out, but I’ll update it here as soon as it is. If you want to re-read Part 1, click here.
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