Don't Imitate, Instead Innovate and Cause Havoc
Peter Drucker, one of the most influential thinkers of the Western business world, once said that business can be broken down into just two main tasks: innovation and marketing. And without a doubt, innovation and marketing are best developed when you gain the knowledge, implement that knowledge, analyze the results (feedback), and then implement your improved knowledge (or innovation). In other words: you have to get out there and do it and see what works. It is a constant process that changes with your accumulating experiences and the technologies that will influence your industry.
Keep this in mind: the knowledge you gain isn’t always going to serve you well unless you keep your target audience in mind at all times. Think of marketing as an innovation in and of itself. Don’t try to imitate the big boys because you can’t win in their arena. Instead, think of Star Wars and the rebel uprising against the evil empire, think of the way in which Barack Obama rose to the presidency and think how the status quo is not really your friend in business—as a small business—because it’s based on the paradigms and rules of big, fat corporations. Small businesses win when they buck the system and come up with stuff that catches the status quo by surprise! This has been referred to as “Disruptive Innovation.”
Clayton Christensen, Harvard professor and author of several books and articles on disruptive innovation, called it “in simple applications at the bottom of a market and then relentlessly moves ‘up market,’ eventually displacing established competitors.” He goes on to say:
An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skills. (Mainframe computers vs. personal computers; record stores vs. iTunes downloads; Internet marketing versus print media; postal services vs. email) Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics.
Seth Godin, one of my favorite marketing gurus and a champion of disruptive innovation, had this interesting way of looking at how companies market themselves (November, 2009):
So if it’s true that to a person with a hammer, every problem looks like a nail, the really useful question is, “What sort of hammer do you have?”
At big TV networks, they have a TV hammer. At a surgeon’s office, they have the scalpel hammer. A drug counselor has the talk hammer, while a judge probably has the jail hammer.
Maybe, it’s time for a new hammer . . .
When the market changes, you may be seeing all the new opportunities and problems in the wrong way because of the solutions you’re used to. The reason so many organizations have trouble using social media is that they are using precisely the wrong hammer. And odds are, they will continue to do so until their organization fails. PR firms try to use the new tools to send press releases, because, you guessed it, that’s their hammer.
The best way to find the right tool for the job is to learn to be good at switching hammers.
So Think Different, Think Fresh, Think Social Media
Think of your knowledge as a critical ingredient for innovation because you know more than you think. But it’s necessary to keep learning to advance your company’s offering and make it resonate with your customers. It may not happen immediately, but with marketing content that addresses your customers’ needs and as their trust in you grows, your message will be heard.
And now, you’ve also got one other huge consideration that can be advantageous and possibly detrimental. It’s the power of the voices on the Internet—or social media. Even if your business isn’t on the Internet (which would be an absurd mistake), your customers are talking about you, writing reviews, and providing unsolicited opinions and insights to other potential customers. You can’t stop it, can’t control it, and it’s gaining in power and influence. It means that you may not be the biggest influence on how people see your company. It also means you can have many powerful allies singing your praises.
Your company’s image is now in the hands of those who have experienced a relationship with you or even just a glancing minute. Many companies who have either lagged behind in their technology or disregarded the Internet have come to hate these new avenues because it has changed the playing field. Internet commentaries are growing organically by users to help others navigate the treacherous world of shopping for products and services. But your company can take advantage of this phenomenon by maintaining its client-centric posture and making sure that you’re doing your best to satisfy each customer who comes through your door—even if they don’t buy anything.
Quite simply, marketing has two components: a compelling message to bring in your targeted client base and the mechanism to gauge and respond to customer input. When carried out successfully, you’ll have paying customers who will come back regularly.
Definitions of Marketing
To be sure, marketing is the representation of your company to the outside world. Marketing is the way you want the public to view your company. It is greater than advertising, greater than your public relations or your referral system, and far more than establishing your niche client base. It is, however, all these things working in a synergistic methodology. It is your job to find that happy medium where the quantity and quality of your marketing materials is in right proportion to attract your customer base. And in each and every one of these efforts, the message must be kept consistent and simple. Otherwise it will confuse your audience, and confused audiences will not buy from you. Simultaneously, it’s imperative that you are also building the internal system and culture for you and your workers in order to carry forth with your marketing message. If you don’t do what you say you’ll do, the consequences will be severe.
I’m assuming that you have a very limited budget, so what we are about to venture into doesn’t require a rich uncle or a third job flipping burgers on the graveyard shift. It does require some elbow grease, attention to detail, and devotion to follow-through. Also, let’s make one thing clear: marketing is not a one-night stand. It’s like an engine with eight pistons, each representing one component of the whole. Each of the pistons requires periodic fine tuning and sometimes an entire overhaul when the results begin to diminish. You might say that successful marketing is like a long happy marriage: after the honeymoon, it’s not always a bed of roses but if both of you are willing to work on it, give it a little pizzazz here and there, and you’re committed to sticking with it, then you’ll work on getting to the answers rather than making excuses and neglecting it to failure.
In this section, you’ll be faced with a bunch of questions; some of which are generic to your quest for marketing excellence, some to help focus your new business through information gathering, and some that are specific to your marketing strategy. Keep in mind that these questions, although not always direct to your business plan, are integral to the content of your marketing section. Reframe some of these questions in order to make them relevant to your business plan. Remember to be diligent with your research and answers because, one day, you might be making the next best thing since sliced bread.
The Legend of Sliced Bread
Did you know the guy who invented sliced bread originally couldn’t get anyone to buy his machine or his sliced bread? Seems he had a bit of bad luck, didn’t listen well enough to the feedback, or take the time to step into the shoes of his potential customers—the Platinum Rule again. Otto Rohwedder, a Midwestern jeweler, first came up with the idea in 1912. Otto invented the machine but couldn’t get anyone interested because housewives immediately saw the flaw: the bread dried up too quickly once sliced. But he knew his invention was a good one, and finally, after four years, he decided his invention needed some changes. So passionate was he about sliced bread that he sold his three jewelry stores so he could tinker with his invention. But in 1917, a fire burned down his factory and destroyed the machine and the blueprints. It took Otto another eight years before he could save enough money and convince enough investors to start up again. Talk about devotion and passion!
It wasn’t until 1926— a full 14 years since Otto first invented the machine—that he filed for a patent with an improved design that sliced and wrapped the bread in one motion to keep the moisture in. But even at that, Otto’s invention still hadn’t hit the big times because he was marketing the machine as a technical innovation, not a solution to better living, or easier food preparation. It took Continental Bakers, makers of Wonder Bread, in 1930 to parlay Otto’s technical prowess into a perspective that spoke to mothers, who were the real audience. The bread was wrapped in an appealing rainbow of balloons against a clean white background inspired by an international balloon race in Indianapolis
What’s the moral of this story? The greatest invention since sliced bread is only as good as what the consumer perceives as a value to them. Without a marketing plan that carefully captures your targeted customers in a compelling way, there is no market to start out with. A good way to think about your marketing strategies is to use the six Sticky Principles as your guide. (Made to Stick, Chip and Dan Heath, Random House, ©2007) In their book, the Heath brothers make a case for a systematic approach to getting your message across. While it can be applied to different disciplines, its application to your marketing contents is critical. The book is based on an on-going research told through stories to illustrate six points with a memorable acronym: SUCCESs. Below is an excerpt from the book in briefly describing the principles.
The Principles of Sticky Ideas
Principle #1: Simplicity – How do we find the central core of our ideas? A successful defense lawyer says, “If you argue ten points, even if each is a good point, when they get back to the jury room they won’t remember any.” To strip an idea down to its core, we must be masters of exclusion. (The concept of the Personal Mission Statement) We must relentlessly prioritize. We must create ideas that are both simple and profound. The Golden Rule is the ultimate model of simplicity: a one-sentence statement so profound that an individual could spend a lifetime learning how to follow it.
Principle #2: Unexpectedness – How do we get our audience to pay attention to our ideas and how do we maintain their interest when we need time to get the ideas across? We need to violate people’s expectations. We need to be counterintuitive. We can use surprise—an emotion whose function is to increase alertness and cause focus. But surprise doesn’t last. For our idea to endure, we must generate interest and curiosity. We can engage people’s curiosity over a long period by systematically “opening gaps” in their knowledge—and then filling the gap.
Principle #3: Concreteness – How do we make our ideas clear? We must explain our ideas in terms of human actions, in terms of sensory information. This is where so much business communications goes awry. Mission statements, synergies, strategies, visions—they are often ambiguous to the point of being meaningless. Naturally sticky ideas are full of concrete images because our brains are wired to remember concrete data. Speaking concretely is the only way to ensure that our idea will mean the same thing to everyone in our audience.
Principle #4: Credibility – How do we make people believe in our ideas? Sticky ideas have to carry their own credentials. We need ways to help people test our ideas for themselves—a “try before you buy” philosophy for the world of ideas. When we’re trying to build a case for something, most of us instinctively grasp for hard numbers. In many cases this is exactly the wrong approach. In the sole presidential debate between Ronald Reagan and Jimmy Carter, Reagan could have cited innumerable statistics demonstrating the sluggishness of the economy. Instead he made one simple statement: “Before you vote, ask yourself if you are better off today than you were four years ago.”
Principle #5: Emotions – How do we get people to care about our ideas? We make them feel something. Research shows that people are more likely to make a charitable gift to a single needy individual than to an entire impoverished region. We are wired to feel things for people, not for abstractions. Sometimes, the hard part is finding the right emotion to harness. For instance, it’s difficult to get teenagers to quit smoking by instilling in them a fear of the consequences, but it’s easier to get them to quit by tapping into their resentment of the duplicity of Big Tobacco.
Principle #6: Stories – How do we get people to act on our ideas? We tell stories. Firefighters naturally swap stories after every fire, and by doing so, they multiply their experience; after years of hearing stories, they have a richer, more complete mental catalog of critical situations they might confront during a fire and the appropriate response to those situations. Research shows that mentally rehearsing a situation helps us perform better when we encounter that situation in the physical environment. Similarly, hearing stories acts as a kind of mental flight simulator, preparing us to respond more quickly and effectively.
Marketing your business will be a new experience. So don’t freak out before you get started. Remember, in our entrepreneurial world, Rule #1 is always “Action Creates Knowledge.” This means you’ve got to get down and dirty with new ideas and instigate new experiences. A key point: think about those board games when you were young. You had to learn how to play, but once you got going, it was a blast! Marketing is an adult game. Remember, the more times you play the game, the better you’ll get and the more fun you’ll have (maybe even an addictive challenge—which happened to me all the time). Why it might even make you smarter and grow more brain cells! Actually, the latest scientific evidence says it will! So, know some ground rules:
- You’re the tortoise, not the hare, and if you don’t stop being so impatient, you won’t last.
- Life is truly short, so stick to your life plan, PMS, and stick to the core idea of your business
- Think cheap, think urban guerilla, think anti status quo, think your daily dose of innovation.
- Listen very closely to your customers; they’re actually in charge of your marketing arm.
- Don’t burn bridges, ever; instead build them constantly—friends will help you grow.
- Your marketing subtitle: “Truth in Unexpected Simplicity,” then make it so for your clients.
- In the end, it’s all about trust—your customers’ trust; trust in yourself to do the right thing.
It begins with a single step and it gets better only if you keep moving
The problem with newspaper advertising is that it’s too general especially for new businesses and small businesses. That’s why Internet advertising has taken off and grown into the biggest venue for ads. Small companies love how it can segment to a particular crowd, and its audience becomes so much larger! Besides, there are so many tools on the Internet that are cheap or free, why pay for lousy coverage? Newspapers—relying on ad dollars—will all die.
Trust, however, is the overriding factor in marketing; and that takes a while. An old-time entrepreneur I knew decided to take his work to Hawaii. For the first two years, all he did was visit his potential clients and provide information and assistance without making one sale. He even made family visits and brought cookies for the kids. I was astounded by his tenacity and level of service so I asked him about it.
“There’s simplicity here,” he said. “People in Hawaii
That’s the kind of longevity you’ll want to practice because long-term clients means happy clients who will stick by you, rave about you, and love to refer other customers to you. Be very conscious about this because it will prove to be your best source of business. Of course, you’re thinking, “Well, I need customers immediately to get started!” Two things: use the Internet for your marketing focus and start building a network of referrals now!
I’m talking about right now; in class, with your classmates because at this moment, there is no better referral possibility than those who are going through the same experience with you towards entrepreneurship. The relationships you build because of the closeness and like-minded bonding you’re doing in class is a great way to build your referral system.
The Internet As Your Marketing Buddy, But First . . .
In their bestselling book entitled Groundswell by Charlene Li and Josh Bernoff, (Harvard Business Press ©2008) of Forester Research, the authors make the argument that there is no way for companies to survive in today’s market without a comprehensive understanding of both the undercurrent culture and the burgeoning fundamental change in Internet behavior. They define groundswell as “a social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations.”
Wow! Now that's a statement that'll strike fear in traditional business owners. It means your influence can no longer be fluffy words alone; it must be a compelling message followed by world-class performance because the Internet is an open book that has a worldwide audience.
Moreover, they make the argument that even though the technologies are rapidly advancing, it is not the technologies that companies must focus on, but rather the people who make up the forces using these technologies. Their key principle for mastering the groundswell: “concentrate on the relationships, not the technologies.” (Ahh! Your ability to meet your client’s needs)
Like Swimming Against A Tidal Wave?
The groundswell has essentially democratized information so that anyone with Internet access can initiate and respond to whatever is on their minds including how they feel about your company. These are then compiled in user-interest sites as well as hundreds of other sites by any group of users who may believe the information to be relevant to their specific interest. In the case for business, it is one thing to market the virtues of your work but another thing altogether when one or more users write their reviews. In many cases, the glorification of your company dies quickly to the biting words of a nasty review.
While you can fight back with your own words in defense, the best defense is never to get yourself in a situation where your reviewers are trashing the crap out of you. More and more, every business, every product and every service has some sort of review on the Internet, and consumers are using these reviews more often than ever as part of their buying decision process.
But companies such as Amazon are setting up their own review portals to allow users to make comments about their experience with them. In February 2009, BusinessWeek ranked Amazon as the best customer experience on the web. So in this case, encouraging user reviews is a highly-effective marketing tool that required only a feedback portal. The rest was supplied by the surge of users. Check out your buying experience on Amazon and analyze how their website works for you. Their tools and their respect for their clients are unsurpassed.
In order for Amazon to build a loyal customer base who raves about their service, a number of internal functions had to be considered. First and foremost was to make sure the employees understood what was expected of them by communicating what was to lie ahead. Next, they established the operational procedures that would provide the resources necessary for their employees to produce excellent service. And lastly, Amazon had to build the technical system to streamline their operations. One important change was in allowing their customer service representatives to make most decisions without having to tell their clients: “I’ll have to ask my supervisor about that.”
According to Pew American Internet Study, a survey released in March 2009 showed that 91 percent of the users logging onto the Internet were there to search for something. Search was tied with email as the number one online activity.
The speed at which search engines can help you find what you need is superior to thumbing through the Yellow Pages or looking for ads in the paper. Advertisers are taking advantage of this electronic resource to the point that many newspapers, for instance, have an electronic version of their daily printouts. By so doing, they are creating their own hard copy demise.
The Internet Technologies That Influence
So in order to work with the people creating the groundswell, it’s also important for entrepreneurs to understand the various technologies being utilized and growing constantly. Among these are blogs, social networking sites (SNS), wikis, forums, tags, really simple syndication (RSS), widgets, and twitter.
Blogs: these are personal or group entries into an electronic journal. This can take the form of a written document, a video or an audio segment, or all three. Articles you write no longer require strict guidelines or extensive approval procedures from an editor; you just publish it yourself on one of the thousands of blog sites. Here are three sites that give you access to many of the blogs: http://www.blogcatalog.com/, www.googleblog.blogspot.com, www.blogtopsites.com.You can also go to Google’s own site for an explanation on how to use blogs: http://googlesitesblog.blogspot.com/. YouTube is an example of “user-generated” video site that reaches millions of viewers worldwide. There are thousands of blog sites geared for every possible niche and interest. Blogs encourage comments and feedback on their specific topics. According to Groundswell blogs are read and/or viewed by 25 percent of all American Internet users, making it one of the most popular online activities.
Blogs are inherent in their culture for feedback, citing each other’s work, in adding links to other blogs and building relationships. This environment of interaction is called a “blogosphere” in which any given topic is trailed by a stream of comments, feedbacks, and links.
Since blogs are unregulated and users follow no formal set of guides, some of the information may contain lies and rumors without conflict-of-interest disclosures. This would pertain to your new company as bloggers start to write their opinions about your new enterprise. It’s always a good idea to first read and listen to what’s being said about your company before reacting. Blog search engines such as Google Blog Search, BlogSearchEngine.com, and Technorati.com will make it easier for you to see what others are saying about you on their blogs.
You can start replying to the comments with your own comments or even start your own blog as many companies have done. In this way, you’re able not only to initiate contact with the public but also introduce new concepts and test out new ideas. YouTube has been an effective, cheap method for many companies to introduce or market their products and services using the ever popular video format giving credence to the old adage that a picture is worth a thousand words.
Social Networking: A social network is an online community of people who share interests and/or activities. Most social networks are web-based (accessible through a web address) and provide a variety of ways for users to interact with each other such as email and instant messaging. Social networking has created new ways to communicate and share information because most of them are open source—meaning they allow programmers to improve upon or add new features for communication. Social networks are used regularly by millions of people with the most popular being those connecting friends, former classmates, and recommender systems linked to trust. The most popular methods are those that incorporate various methods such as LinkedIn, Facebook, and MySpace.
According to Nielsen Online, an Internet research company, Facebook is the most popular social networking site with a 566 percent increase from December 2007 to December 2008. This translates to over 108 million visitors worldwide during December 2008. MySpace was second with 81 million.
Social networks are maintained by members of these sites who write up their own profiles, write comments and provide feedback. One of the most popular activities is “friend-ing” which allows people to acknowledge relationships and keep updated on their friends and acquaintances. According to Groundswell, one in four American adults visits these sites at least monthly. However, social networking has proven to be an addicting activity for some users who visit several times a day roaming about to see what new individuals, postings or activities have been added. Among teens, 22 percent stated they visited daily according to a Forrester Research study conducted in 2007. Social networking is also the top Internet activity for college-aged users.
For businesses, social networks can connect people at a low cost where these networks act as a customer relationship management tool. These are used to provide information on products and services as well as placing advertising in the form of banners and text ads which of course, are viewed globally—far superior to placing an ad in the Yellow Pages or your local newspaper. LinkedIn is a rapidly growing site for businesses where users connect with each other for a variety of business and personal reasons. Some 36 million contacts in 200 countries use LinkedIn.
Social networks are broken down into two categories: Internal Social Networking (ISN) and External Social Networking (ESN). An ISN is a closed or private community consisting of groups of people within a company, association, or social group. An ESN is open to the public and available to all web users. It can either be a niche site such as knitters, golfers, yoga enthusiasts or as broad and open as Facebook and MySpace.
Wikis: Wikis are information websites maintained by Internet users. Wiki is a Hawaiian word for “quick” and refers to the ease at which individuals are capable of making contributions, changes, and maintaining the contents of the website. The wiki is supported by multiple contributors with a shared responsibility for servicing the site usually containing word and graphics. The largest wiki site is Wikipedia, a nonprofit encyclopedia with over two million articles. It is considered the eighth most visited site on the Internet.
A wiki invites all users to edit any page or to create new pages using a simple web browser. The wiki also promotes associations between different pages by making page links to compatible subjects. The wiki is open to all but according to Groundswell, only six percent of the users make contributions while over 22 percent use it.
A critical characteristic of the wiki technology is the ease at which pages can be created and altered. Generally, there is no review whether you log in or not. However, as a legitimate contributor, it is always beneficial to sign in as the author. Surprisingly, even without its regulatory protocol, the great majority of information on the wikis comes from users with a sincere quest to providing accurate information. The beauty of the technology allows for near-real time changes meaning that alternations can be seen almost instantaneously. However there are private wikis that require users to sign in and wait for a review before the article is posted.
As a new company, you too can contribute your own wiki as a service to your clients. Check out: www.wikihow.com. For instance, eBay has a wiki for sellers and buyers to provide advice on selling and buying various articles. Reuters built a wiki to help its readers create a financial glossary (www.glossary.reuters.com).
Forums: Forums are the oldest forms of social technology—even predating the Internet. They are online discussion sites on just about any subject imaginable. Forums require you to sign up and log in to post your comments. The most popular forums are those that recommend, rate, review and discuss products and services. Forums are so prevalent that it’s a given that most sites will offer a forum as part of their presence. They do, however, have a set of rules for participation that must be adhered to.
Forums are started by a user on a particular subject. A thread begins where someone else will comment which then continues as advice, questions, and opinions are voiced by other readers and contributors. But the most popular forums are taking the form of reviews. Amazon.com was the first to use reviews as a way to get consumer involvement and leverage reviews as a sales and marketing tool. Now, many major retail sites have join the movement. They will even email you with a link to their review page. This not only helps the retailer to get feedback on what you’ve purchased, but it provides a way for the retailer to get you back to their site for another possible sale.
Online reviews have become an automatic part of the buying process for many consumers now with one in four Americans using review sites in order to make a decision. The impact of reviews has changed the playing field for most businesses. In the past, the business only had to convince a professional reviewer of the quality of his product who would then write a lone review. Now, consumers are weighing in with their own experiences and posting those to the appropriate websites. There are two types of review sites: the independent review site such as Yelp and the commercially-loaded sites that contain banner ads and links to “recommended” stores. The latter is really a retail portal and not a true review site.
Twitter: This is a short blogging service acting as a social network. It allows users to send and read other users updates known as “tweets.” Tweets are text-based postings containing a maximum of 140 characters. Updates are displayed on the user’s profile page and delivered to other users who have signed up to receive them. Users can send and receive updates via the Twitter website or on their cell phones using Short Message Service (SMS) or on their web browser through Really Simple Syndication (RSS) web feeds which can be added to your personalized opening web pages on Google and Yahoo.
One of the most famous Twitter users is President Barack Obama. According to Forester Research, Twitter is ranked only behind Facebook and MySpace with about 55 million visitors a month.
For your business, you can use Twitter to let your customers know of any updates to your services and products in this quick format which can direct them to a website providing more extensive information.
The More Things Change, The More They Stay the Same
There should be no question in your mind that the use of Internet marketing tools is a necessity for your business. First and foremost, they are easy to use and simple for your clients to access. They are primarily open forums that give control to the users and that’s exactly what you want. While technology and the Internet are providing a level of marketing unprecedented, through all the new wording, slogans and technical innovations, what you’ll discover is that a successful business comes down to your ability to listen to your clients and satisfy their needs. That’s it. The difference is that today, you either use the technology or you die because your clients are already using the technology.
Six Months Down the Road
Okay, now let’s look ahead—six months in business and you’ve established a small customer base. You’re starting to know your clients and you’ve made some logical adjustments to your business. At this point, I would recommend a formal sit-down with yourself and some of your colleagues to examine what’s happened so far. By doing so, you’ll begin to take inventory of reactions from clients and potential clients. This will provide a method of fine tuning your message. At this juncture, you‘ll want to reflect and begin to memorialize your experiences into a reformation of your marketing strategy. For instance; in my startups, a period of 6 months up to a year gave me much better insights through my interactions with my clients and, if I had any, with my employees. These will help in:
- Distinguishing yourself with niche advertising to your client base that educates; providing information that is useful to your customers. Of course, you’ll need to get a great assessment of what your clients are looking for! If you follow the Made to Stick principles, your ads and your messages would include examples of successful stories from clients. Testimonials add believability. But don’t expect your ads to get people to buy right away. First, they’ll need to warm up to you; get to know you. So at this point, they’re “prospects.” Once they’ve made contact with you or show an interest in your business, they now have given you permission to sell to them. (Don’t forget creativity and imagination in your headlines because that’s the first thing the reader will see—80 percent of your attraction will originate from the headline.)
- Fine tuning your niche market. If you started your business based on the concept that you cannot be all things to all people but you can be a welcome resource for a specific body of people, then your next step is to re-examine the niche you’ve selected. This may mean firing some clients and it may be broadening your niche to include a different audience. Also note that specialization allows you to provide value that’s worth more to your niche clients so that your distinct offerings do not have to compete on price. But make it a fair price—your clients know!
- Ask your best customers to speak on your behalf. There’s an interesting phenomenon that happens with happy customers: they want to see you succeed and they want to be a part of it especially if they see you working hard to make your new business a success. So don’t be afraid to ask for referrals. In fact, you can make that a part of your marketing program and to the point that doing business with you requires your clients to make referrals. When you train your clients to work as your champions, they’ll take that as part of their relationship to you!
- Concentrate on serving your existing clients. It is far easier to gain more business from your existing clients than constantly seeking new clients. Make it a point of your marketing strategy that referrals will be the bulk of your new business. In order to make this work, it means that your existing clients must be satisfied first and foremost. (In my companies, our goal was always 70 percent new business from referrals. Not only did this give us a format for doing business, it established a client-centric culture that dictated how everyone in the company was to treat our clients. In the end, it was a lot cheaper than having to constantly search for new business.)
Analyzing Where You Stand Within Your Industry
So in order to get to the future, we need to return to the beginning. First, see how you fit into your industry. Usually, your best search will be on Google. That is, if you haven’t researched the specific websites for your industry yet. Since you’ve come this far with your business concepts, you’re going into this section with a reasonable definition about your new company, about yourself and your future. These are all important because consistency of what you put forth in your marketing plan must remain constant in each of your marketing tactics. And it’s worth repeating: make sure whatever you put forth to the public, it jives with your code of ethics, your principles and the goals for your GPS. Otherwise, you’ll send a confusing message to your potential audience, you’ll be constantly questioning yourself and you’ll end up with zilch.
As you conduct your research within your industry, ask yourself:
- Is my industry a rising or falling star? What is the long-term forecast?
- What associations are available to me to seek information and/or join?
- What are the innovations going on that I must incorporate now or later when I can afford it?
- What are the trends that make the most sense to me? What are trends to avoid?
- What trends fit my company profile from which I can make immediate profits?
- With what my business is, how unique is my product/service in comparison to the rest?
- What companies can I emulate? And what could I learn to do better from them?
- Who are the local stars that I can look at and learn from?
- Are there mentorship programs or helpful programs for new businesses?
- Is there a website that can help me to estimate my startup costs, pricing strategy, etc.
- Are there similar industries that will provide additional information?
The idea is to get really well acquainted with your industry and understand it from the inside out. This way, you’ll be able to guide your business where it makes the most sense and the most profits. In the worst case scenario, you may find that it’s heading for the dumpster which of course, means “thank god!” you did the research.
Establishing Your First Target Market
Your target market guides you in your sales effort. This is the second phase of your marketing plan. Here you can get detailed, and I would recommend that you be as specific as possible without going into “analysis paralysis.” So how much is too much research? When you realize that the real reason you’re doing more research is because you’re scared shitless about launching. At that point, it’s time to launch. No, you probably won’t feel ready but no one ever does. What you’ll find as I said about the six-month review is that your best answers will come once you’ve launched. Real experiences in your new business will tell you which way to go. The following is a list of the areas to consider for researching your target market:
Audience Demographic Checklist
Age Group Gender Profession Education level
Household Income Marital status Geographic location
Corporate Customer Checklist
Number of Employees Physical Locations Products and Services They Provide
Annual Revenue Number, Size and Location of Branches Website
Year Founded Key Personnel If Publicly Traded, Annual Report
Psychographic Checklist
Conservative Liberal Conformist Environment-friendly Socially Conscious
Growth Oriented Fun Loving Cutting Edge Trend Follower Fashion Forward
Family Oriented
Corporate Clientele Psychographic Profile
(If your target market is made up of corporate customers, which of the following psychographic categories fit them?)
Market Leader Innovative or Cutting Edge Liberal Conservative
Environment Friendly Employee/Family Friendly Fast Growing/Adopt New Ideas
Stable/Set in Their Ways Growth Stage (Startup, Growth, Stable or Decline)
Type of Workforce Employed
Who in the business are you selling to?
What department do they represent, what management level?
Are there common characteristics of a certain department that you can identify?
What are the common characteristics of the management team?
What is the company culture?
What is the management style?
What trade associations do they belong to?
What publications do they subscribe to?
Behavioristic
(These are the factors that identify the motivation or reasons why someone wants to buy your product or service.)
What benefit is the customer looking for?
How often will they purchase?
What is the decision-making process?
What Factors Are Most Important to Your Customers?
Item Very Important Somewhat Important Not Important |
Price |
Quality |
Brand Names |
Specialization |
Customer Service |
Broad Array of Services |
Broad Array of Products |
Friendly Staff |
Internet Ease |
Informative Website |
Discounts and Sales |
Attractive Packaging |
Convenient Locations |
Store/Office Appearance |
Convenience of Product |
Convenience of Service |
Guarantees/Warranties |
Technical Assistance |
Flexible Payment Terms |
Once you’ve identified your target market, place all your emphasis on marketing to them. Believe in the 80-20 Rule. Eighty percent of your revenues will always come from the top 20 percent of your clients. The 20 percent represents your target market. The other 80 percent is essentially “lookie-loos” who will take up too much time and provide you with only 20 percent of your income.
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