Strategy Work: $tork - Paid Parental Leave Assistance

For my Master's course, Mkt 601: Intro to Strategic Planning and Creating, we were split into groups for a major final project.

The focus of that project was taking a problem statement, which captured the feeling of a market, and using it to either create a new brand or an extension of an existing one. This post will document the result. 

I will organize this post similarly to the steps we walked through to complete the project.

1. The Team 
2. The Problem Statement
3. Planning Steps 
4. Solution 
5. Creative Brief

However, if you want the tl;dr version of this, also find the presentation here:

The Team

I would like to start by highlighting the team involved in the work. I will list them below and feature their LinkedIn profiles - they are fantastic people and strong planners, and this project would not have been anywhere close to as good without them.  

1. Noor Barghouti 
2. Chia Yun Yeh
3. Alex Vogel

The Problem Statement

As mentioned, each group in the class received a "problem statement" that was the foundation of the project. Our problem statement was: No clear sense of the future in terms of almost everything and unable to prepare for eventualities.

This is a surprisingly broad statement when you start to talk through it. Eventually, we agreed that the two core elements or emotions stemming from the problem statement were uncertainty about the future, and general anxiety (I feel unable to prepare for eventualities).

Then, the questions started flowing: but what does anxiety actually mean? Who feels it most? What’s the larger context here? Uncertain about what future? Theirs or the world’s? We were ready to dive into the planning process.

Planning Steps

In class, we explored the five stages of planning: wonder, building foundations and segmenting audiences, market solutions that drive communications, setting goals, and consuming communications.

I will explore each of these in detail. 

Wonder: Building context and identifying core needs

The "wonder" stage of planning means gathering broader market context at that point in time to try to start identify a core pain or need.

We started our research with a PEST (Political, economic, social, and technological) trends analysis, mainly focused on the United States. We also researched anxiety and fear of uncertainty more deeply to see if we could draw any connections to the broad context of the PEST and the specific mental health research. 

From our initial round of research, we thought we were going to focus on mental health in some capacity. However, we kept running into dead ends with this, because the mental health market landscape is incredibly saturated after COVID.

But there was one stat that really stuck out to us in our research. When we explored the point about women feeling anxiety more than men, we came across this stat: the US is one of seven countries without a mandated paid maternity leave. [1] There was something here, so we made the decision to go a bit deeper on this. We found the following: one in four women return to work after only 10 days [2]. The birth rate went down by 4% in 2020 to its lowest point ever. And millennials are having far fewer kids than previous generations because “kids are too expensive” [3].

We made the decision to centralize our project around this. We identified that a core pain in the United States is avoiding having kids because it’s too expensive. That was our moment of wonder. How can we offer a solution here?

Building Foundations and Segmenting the Audience 

Segmentation is the process of dividing consumers into different categories based on their shared locations, interests, lifestyles, etc. in order to better target and understand our consumer audience.

We knew we were going to focus on parents, but we had to pursue some additional research to understand what kind of segmentation was possible with this. Some we explored were teenage moms, parents returning to work, expecting parents, stay at home parents, single dads, single moms, and more.

Two insights gave us clarity here. First, many of the available solutions for the segments we researched focused on returning parents. There are consultancies that help returning parents polish up their resume to reenter the workforce, job boards for returning parents, and many companies actually offer returner programs [4]. So we were able to eliminate returning parents because strong solutions were available. Second, many solutions focused on the mom. Two examples are Hire My Mom and The Mom Project [5]. We were eager to think of a solution that included the father, if he was affected as well.

We could now define a couple of components of our segment: 

1. Age: 25-40. This is the age range in which folks are generally having children.
2. Gender inclusive: Our segment won’t be defined by gender. 
3. Geographic location: Anywhere in the US where there is less than 3 months of mandated paid parental leave. 

To build out this segmentation further, we needed to understand the foundation of our solution. Knowing that none of the current solutions on the market offered financial support that we could find, we decided to focus the foundation of the band on that. 

This is when the idea of $tork was born; a company that provides low-interest loans for families that aren’t offered paid parental leave, and may get denied by traditional loan providers because of credit score or lack thereof. $tork also offers financial consulting services to help these new families properly allocate the money from the loan - a main differentiating factor for this new brand.

Defining this direction helped us get a little more specific on the segment, because we knew we wanted to give out loans to folks who are considered “risky” 

1. Low-mid income (household income of 40-90k)
2. Tend to take urban public transit when possible, cars if more rural
3. Communication channels: Social media like Facebook and Instagram. THey consume local news channels or Fox / CNN. 

Our persona for our target user was almost set, but we needed to make a decision about the business model: specifically, whether or not we would act as a non-profit. This would affect our segmentation because if we act as a non-profit, we’d also have to target some of our communication to potential donors.

We referenced Wonderopolis and How Stuff Works to gain a better understanding of the structure of a non-profit organization, and listed out some factors of nonprofits vs for-profits (appendix fig 1). The idea of holding ourselves accountable for how we spent money, and reinvesting any additional money directly back into the organization fit the mission of the brand: help new parents gain stable financial footing. 

We recommended that $tork work as a non-profit organization. So, for our final segment, we now had to define what a potential Donor looks like: 

• Over 30 
• Highly educated. Likely have a Master’s Degree
• Might donate to organizations like planned parenthood
• Upper-middle / upper class income ($150k+ HHI)
• Belong to social clubs/country clubs/ support other foundations
• Likely do not take public transit - not a communication opportunity
• Consume media from The New York Times, Wall Street Journal, The New Yorker, Boston Globe, etc depending on political affiliation
• Use streaming services for their television

And finally, we recommended that $tork offers pro-bono loans to families that need it most, using a subset of donations or reinvesting the interest from our other loans.. This was our final segment, and the main difference between this segment and the standard loan users is that they are lower income, and potentially younger (teen / early 20s parents). 

In summary, our segments are: loan users, pro-bono loan recipients, and donors. And while our market solution started to emerge in this stage, we defined it further in the next stage of planning.

Market Solutions that Drive Communications 

The overall goal of $tork is to provide a financial foundation for new parents when their government or corporation won’t do it for them. This is so that new parents can spend real time with their child, and help raise the next generation of the company. 

To get a better understanding of the communication solutions $tork would need, we broke it down with the GSTIC framework. 

Our strategy stems from the five C’s. The company will have an HQ in Charlotte, NC - a growing city in the South where wealthy potential donors live, but it’s also surrounded by low-mid income rural / suburban areas who fit our target user profile. Charlotte is also a financial hub, so there would be access to top financial talent if needed. Eventually, $tork could and should open additional office locations that could act as a local center for events and education for the community. 

$tork’s customers are outlined in the previous section of the post, so I won’t go into it much here. 

The collaborators range from donors, to our employees (financial consultants and corporate employees), the payment processing vendor we partner with to distribute the loans, the legal team, and local folks in Charlotte helping with the office space or attending local events.

Our competition is traditional loan providers. Some companies that are popular in this space are SoFi, Upstart, Marcus by Goldman Sachs, and Payoff. They offer loans with an APR ranging from 4.74% to 35.99%, and range from selective to very selective based on credit score. $tork is also competing against banks, whether it’s a small personal loan bank like Live Oak, or a large one like Wells Fargo. $tork’s main competitive advantages are the specificity of who we provide loans for, the accessibility of them, and the financial guidance that comes along with them. 

The context was discussed in the Wonder section of this post, but as a summary: the paid parental leave situation in the United States is outdated, and leaves new parents vulnerable. It is affecting our country’s birth rate, so there is an opportunity for someone in the private sector to step up. 

$tork is the solution for a market not protected by their government when having a new child. And now that the solution materialized, we needed to recommend some initial goals.

Setting Goals and Measuring Results 

One of the more important aspects of a first year in business is defining a strong set of goals and benchmarks. We broke our goals into two categories: strategic and monetary. We will measure those goals with quantitative and qualitative benchmarks. 

On the monetary side, we estimated that our target audience will have an average household income of $80,000. If we provide 100 families a six month loan that is equivalent to 70% of their previous salary, we are giving each family around $28,000. This means we will need to raise a minimum of $2.8 million in donations. We expect to raise that amount within our first year of fundraising, putting us in position to start communicating the offer to the public. We can also anticipate that our marketing budget will sit at 10% of our total funds raised, which means it would be ideal to raise another $300,000 for marketing expenses. 

On the strategic side, we’d aim to build brand awareness among donors and applicants in the parental leave market. We can measure this through KPIs such as share of voice in our industry, social media reach, impressions, followers, and website traffic. Additionally, we’d like to set a goal to receive at least ten inbound donations by the end of the first year. Meaning donations that come through our site without us having to ask for them.

Additionally, we’d push to hire at least one full-time financial consultant for our initial cohort of loanees. Financial guidance is a large part of our competitive advantage and should be our first dedicated hire. 

Consuming Communication

Communication defines the ultimate relationship a brand may have with a market. It’s the main way a brand interacts with its collaborators. An important aspect of this communication is the state of the market relative to the communication sent or consumed. Because $tork is taking a social stance, we need to take extra caution in this context. For example, we need to approach our potential clients with the empathy they deserve for the situation they are in. They likely feel excited about parenthood, but because they are not feeling supported by the government or their employer, they likely feel scared. It’s important for our communication to resonate with this. 

Our potential donors have been fortunate in life. However, we know that many folks who reach monetary success are hoping to make an impact outside of that. We should tap into that emotion and also understand that they will want to trust the organization and people they are donating to. 

For that reason, our communication will always follow a specific voice. $tork is passionate and rebellious. We understand that the government is not serving these people, and want to do something about it. However, we will also strive to be educational and comforting so that our communication is more trustworthy. I will discuss communication medium and format more in the creative deliverables.

Creative Brief

Appendix