Ponder this (th)INKing Canvas for a moment…
Which path does your business take?
Hint, You can’t do both if you want to be successful.
“Stop Being All Things to All People!”
That’s the comment shared at a past business conference. As reported, small businesses battle with being competitive with larger providers, a battle that they can rarely win. The issues of limited funding, time management and even market penetration can be overwhelming for most, unless you change directions in your focus. Stop competing at their game. Stop trying to be all things to all people, because larger companies can out price you, offer more and have the funding to marketed deeper.
What’s the answer then if small businesses are to become successful?
Become a specific thing to specific people. Find a niche market with a need or want that can be customized for them specifically This act of customization per customer offers greater value than competing at being the lowest price or having the widest selection.
It appears that the idea of quantity serving a mass market over quality serving a niche market has been the mainstay of business operators for a long time, but that time is passing quickly. Too many providers with massive offerings overlap their competition and resulting in a price war where the smaller provider can’t compete. To increase your success, driving quality to a smaller market can actually bring higher returns in the long run. This allows the niche provider to be nimble and cut the funding from being tied up in quantity products and apply it to marketing.
Today’s start-up and entrepreneurs must be smarter and play in areas the large providers cannot. Make this your mantra: “Be Specific for Someone Specific.”
In a past post I wrote about setting the stage for your business offering. I would like to step a bit further back into the customer journey, back to the front door shall we say.
A few years ago I was challenged by two authors to consider my business differently. They asked each of us to consider how we do business with our customers currently. Study the process throughout the complete selling cycle. Then a bomb was dropped into the heart of the discussion.
“What would you do differently if your customers had to pay admission to do business with you?”
What would I do differently if people had to pay before doing business? This was an incredible thought and one that will need a little clarification. If we consider an up front fee to do business, how would we change our business approach? How could you make it so people wanted inside? Theatres, sporting events, rides, etc… do this every day. You must buy your ticket before you enter the event. Even Sam’s Club, Costco or Deep Discount Groups charge a fee for admission, A.K.A. the club cards. At one time Sam’s Club wouldn’t even let you look unless you were with a guest. This created enchantment to prospective customers, so much so that you would buy a one day pass that was almost half the price of the yearly membership.
What would your business look like if you could charge for admission? Could you create special passes or tickets to get in on certain days? Would you change how you perform to ensure return business and drive word of mouth marketing? Would your deliverable be well branded and your collateral materials more like invitations and playbills? How would you act and what would be your stage?
Creating interest and excitement for your customers is about creating theatre and performing a part. If you want to know more about the evolution in business delivery, my suggestion is to read a wonderful book by Joseph Pine and James Gilmore called “The Experience Economy; Work is Theatre and Every Business a Stage.” You will never look at your business the same again.
They say customers develop a relationship with providers on two initial criteria, ‘I am like you’ and ‘I like you.’ If this is the case then finding more customers can be performed strategically by profiling your existing best customers and reaching out to similar prospects. Below is a map created by five break-out groups during a small business and self-employed meet-up session.
The exercise and conversations facilitated by Sharon Reus and were focused upon five fictitious businesses each with unique characteristics to challenge the groups’ thinking. This method also allow attendees to identify conditions similar to their own.
Have you ever wondered what is “Change” and how to see change in your business? To answer this question we must first understand how change is defined and then see how that manifests itself in a business model.
Change, as defined by Webster’s dictionary, is to make the form, nature, content, future course, etc., of (something) different from what it is or from what it would be if left alone; to transform or convert; to substitute another or others for; exchange for something else, usually of the same kind. To change is to alter the current state.
When brought down to the fundamental level of change, three states exist working in combination with another; maintain or extend further the current offering, add other products or services and finally, remove products and services. The outcome is clear, the effect from change produces one of three conditions to a business offering, at least from the customer stand point; you can either refine, revalue (re-engineer the value) or reinvent the offering.
Enter the Change Triad. The illustration above demonstrates the process. By selecting two of the three options available, a business owner can decide the course of change. Pick two for change. Sounds like a campaign slogan, but it is true. Take a look at the process. To make something different you must do something other than stay static, you must add or remove something from the current state.
Take your offering and extend it forward, now add something new to the mix and you effectively revalue your offering for the customer. This is usually the common path of growing businesses. Let’s repeat the same sequence, except this time, rather than add new offerings, we remove some old items. Maybe these items are outdated, unused or just didn’t match you customer’s needs. Now the business offering has been refined, eliminating unneeded content or streamlining the business. Sounds all too familiar in these economic times.
The last combination is a more dramatic and harder option to attempt. This is a complete reinvention of your business. By eliminating everything current and replacing it with a completely new offering, you , in essence, have a completely new model. At this point, you might as well change the name too, because you are no longer who you were.
That’s the Change Triad and how change is seen in a business environment.
Okay, by now you may have realized, as the person sitting behind me reading over my shoulder so proudly stated loudly, there is still one more combination. The “All In” option. Yes, opting to do it all to some degree is the fourth and last option. Keep a bit, remove some and add some. By following this option, you have enacted a change that touches all three aspects at some level; refine, reinvent and re-engineer the value. This type of change, when done correctly, is evolution and should be done with the customer in mind to ensure success.
So when you state you are going to change your business offering, decide if it is for refinement, adjusting the value proposition, reinventing the offering, or, as my new-found vocal editor states, going all in to evolve the offering. Decide first which is the best option and plan your change in every detail. Be proactive and guide your change and never let change guide you.
That’s how I see it and now I hope I’ve helped.
How does one know if their communications is too cluttered or confusing and hindering business opportunities?
I was asked to view a website and share my thoughts about the effectiveness and overall design of the site. This drove my thinking to a very powerful thINKing Canvas visual analogy and then the creation of a physical activity I call “The Marble Jars” to explain what I was seeing and to help the inquirer see from a potential customers point of view.
I don’t wish to explain this visual in great detail as it is very clear already. Imagine every piece of information, subject or offering in your communications (especially websites) as a marble; colors and types for various topics. Place each marble into a glass jar. Step back and look. This is how a potential customer may interpret your communications. How easily can you find all of one color or type of marble? Business communications should be designed as a call for action and not an encyclopedia of information.
Visual thinking and a thINKing Canvas are great tools in looking at business communications to get a clearer picture of its purpose and value. I helped one group, maybe I can help you visualize your communications.
Everyone in business wants more customers. This is a basic fact of life. Too many times though, we spend much of the time searching and not selecting. Many small business owners and service providers choose to follow the “shoot gun” process of generating business. Broadcasting into populations in hopes of having someone hear your message. This process is time-consuming, unfocused and requires high levels of failure. Yes, advertising has its place and purpose, but it may not be the best use of your funds if you’re in a small business. Take example of the best direct mailing campaigns. Traditional 1.5 to 3 percentage of readers may, may, respond. How much did each new customer actually cost you and did they generate enough revenue to cover both your product/service and the advertising? Television advertising, radio spots, newspaper ads and even webpages are all shotgun approaches.
It’s time to refine your skills at customer/client acquisition.
First, study the animal world for a moment. Predators, either solo or pack hunters, are successful because of a basic fundamental rule, be strategic and only focus on that which you can catch. Skilled hunters don’t spend their time chasing between one target then another or running head long into the herd in hopes of tackling a meal. They find the best candidate with in the herd and begin the hunting process. Working all their energies on weeding out and driving their target out into the open to ensure success. Gruesome analogy? Maybe, but this method and the analogy are visual and work well.
Sure, business owners may not be predatory hunters, but the thinning or funneling process will decide the survivors from those who are destined to perish. A similar idea can be used for business in very much the same way only with less physicality and more psychology. Weeding out targets is more about understanding your customer than trying to be heard as a single voice in the noise of a crowd.
Before you begin, head out the door, order those flyers or even set up your website, ask yourself some basic questions about customers, your business and your capabilities so that you clearly know what you’re going to need and understand to survive and then eventually be successful.
1. What is your operating cost per week? (B)
2. How many client/customers can you truly handle in a week?
3. How much does each client/customer need to provide in revenue dollars each week that you can handle? (R)
That was the easy part. It’s doing the basic math of business (R*W<B).
Now let’s tackle the filtering process. Imagine a herd of customers; many different types locations and even size. (For reference, I am using color dots in the diagram above to express this.) Not all these dots are people will be your clients or customers for many various reasons. What you want to do is thin the herd. You want to only speak or direct your communication to those who would be willing to respond. Use the language common to them about their need and your offering.
At this point is best to have a clear understanding of who your best customers are and why they acquire your product or services. Be critical with yourself. Fine tune the reason. It will help create conversation, elevator pitches and marketing materials. Know who you serve! There are various methods to create customer profiling, use what works for you and keep these profiles close. *See previous posting “Lessons from the mantel” as an example.
Once you have identified your potential clients or customers, avoid being drawn back to the herd. Review your potentials and evaluate which of them is your best opportunity for doing business first. Prioritize your targets. For those who follow the shot-gun approach, this method will feel unorthodox, but as you learn to understand your customers and know where they are in the marketplace, the process will be easier to follow, especially after you have some success under your belt. Always record where, when, and even why your prospects respond. This will help refine your process even more.
Here is an interesting bit of observation, the process works the same way for the customer seeking a provider. So who’s the hunter now?
Have great success growing your business and we’ll talk soon.