A strong marketing campaign conveys to potential customers the value of a company’s offerings and is designed to elevate those products or services in the minds of consumers as they determine where their money will best be spent.
It ideally involves a comprehensive strategy that encompasses effective market research, market segmentation, pricing decisions, promotional activities and advertising. The idea is to craft a winning strategy that engages the right customer, with the right message, at the right time and place.
New businesses generally have limited marketing and advertising budgets, so it’s even more vital that they make good decisions early and truly understand their target market in order to gain a competitive advantage. This often centers around a “customer-discovery” process that seeks out honest feedback from impartial consumers and is then evaluated to determine the size of the potential market, whether that market is changing in some significant way, what attracts people to a certain type of product or service, and what the future demand might be.
The process also helps determine what people are willing to pay for a company’s offerings in a given market.
Potential entrepreneurs should “get out of the building” and discover who their customers are before they start or change their existing businesses. Many small-business owners skip this important step and often suffer as a consequence.
There are four key steps to the customer-discovery process.
• Formulate a hypothesis: My product or service solves (a problem) by providing this (solution). People will use my product or service over the competition because of these (reasons). People will love my product or service because it offers these (benefits).
• Develop a list of questions for your potential customers. Ask open-ended questions that encourage the person to share openly. Remember, you want honest feedback, and be prepared to possibly hear things you didn’t anticipate or might not want to hear.
A great session-ending question is: “What should I have asked you that I didn’t?”
• Develop a sample size of at least 10 people who have no vested interest in your business and conduct a personal interview. Avoid focus groups.
• Look at the information you have gathered and try to identify patterns: Which of your hypotheses were correct? Which were incorrect? Do you need to make any changes to your business model, your product or service, or the assumptions you made?
Stay open to suggestions, and don’t fall in love with your first idea.
Some other great questions to ask yourself include:
• Who are my ideal customers?
• How many potential customers are out there and where are they?
• How do they purchase?
• What other companies offer products or services similar to mine? What are they charging?
• Is my price point realistic relative to my competition?
• How are my competitors reaching their customers? Have they been successful?
It’s been said that “you can’t be smarter than the collective intelligence of your customers.” Keep this in mind as you work through this important process for your small business.
(Brad Crowson is the regional manager for WESST, a nonprofit small-business development and training organization dedicated to supporting entrepreneurs in Rio Rancho and throughout New Mexico. For more information, visit wesst.org or call 892-1238.)