Building Your Business Identity: The Five Ws of Customer Perception

As you formulate your new enterprise, you should be concerned about creating the right identity for the business. Here’s a handy cheat sheet: use the old reporter’s rule of the 5 W’s: 

Who?  What does the market see when it see you or your business?

What? Do you explain well what your enterprise offers? Do you have a clear and unique identity for your offerings?

Where?  What is your market position relative to the competition?

When?  How do want your potential customers to view your products/services in terms of presence in the market? Do you want to tout that your offering are new and unique, or do you wish to play down the fact that you’re a new player?

Why? Have you isolated the reasons why your prospective customers should buy your products or services?

The Balance of Customer Needs With Customer Wants

The concept of building a business identity is inextricably tied to the practice of addressing both the needs and wants of the marketplace. We wear a particular brand of pants because they fit in with our image of ourselves, and our lifestyle. The same can be said for the cars we drive, the homes we live in, the foods we eat, the beverages we drink. In all these cases, it is the wants side of the marketing formula that drives the initial purchase. However, many a product or service has successfully enticed a customer to make an initial purchase, but failed in its attempt to obtain a repeat buyer, or to maintain an ongoing practice relationship. Why?  Because the product or service successfully addressed the wants of the customer, but failed to deliver on the needs.

Give the customer what they want and they’ll let you sell them what they need…. So goes the old adage.

Every successful enterpriser needs to understand the balance between these integral elements. Consider these points:

If NEED alone prompted purchases, then people would just buy basic automobiles. No luxury brand. No high performance cars. Just basic transportation to go from point A to point B.  Similarly, clothing would simply be utilitarian in nature. Function would definitely trump fashion in goods and services, if the WANT side of the buying formula was left out.

It is the WANT that makes the economy go, and that creates wealth and establishes brands and customer loyalty.

Consider This Example…

Not so long ago, a beverage brand spent millions to establish itself in the marketplace. The product was not particularly flavorful, but what it lacked in taste, it made up for in advertising alchemy. The company launched one of the most successful brand building campaigns in advertising history and, within two years, you could find this beverage in clubs and restaurants everywhere. Clever advertising made it a popular choice at parties and picnics, as well as other venues. It seemed that, overnight, the brand had penetrated the market to nearly incredible levels. Yet, within three years, the brand was on the downslide, and within five years, you were hard pressed to find a bottle of this product anywhere. So, what went wrong?  Nothing, really. The market just corrected itself. The product was not particularly good to begin with, and so it failed to address the basic needs of the customer for a good-tasting, satisfying beverage. 

The preceding story illustrates how the wants/needs equation plays into the building of a successful brand. The brands that endure are those that blend savvy marketing with solid value. 

Doing your marketing homework up front will save substantial amounts of money and effort in the long run. Find a need and fill it is still the mantra of good marketing, but creating a strong brand for this need-filler will lead to success. Two things you should do include:

Develop a Customer Profile or Avatar – This is a person or persons who typify the type if client/customer/buyer of your business offerings. If you’re selling consumer products, find out where your customers work, where they live, their typical income and what they buy. If you selling to other businesses, you’ll want to identify the correct  person/job title in your target market and then find out what these prospects look for in the products/services you provide.

Assess Your Market Position – This process is typically defined as being an effort to influence customer perception of a product/service brand relative to the perception of competing products or services. The goal of positioning is to situate your enterprise offerings (or brand) in a clear, unique and advantageous position in the perception of your prospective buyers. 

To accomplish this you should do the following:

A) look at the competition, see how they are perceived relative to their market.

B) analyze the factors that affect positioning: quality, price, experience, reliability, etc. 

C) Looking at the competition in your target market,  where does your enterprise fit (or could fit, when launched)? Do your offerings/pricing put you in the premium category, a value brand or middle tier?

 I understand that market position is relative and their are many factors that define it. However, it’s important early on in your enterprise to try and position your enterprise where others will see

Focus on Niche Marketing. 

Once you have defined your market(s), it’s essential that you find a niche for your enterprise. Put simply, niche marketing is all about value and uniqueness. You want to offer products/services that no one else is offering, or to offer established products/services in a new and better way. In addition, take this a step further by developing a secondary or tertiary niche, which will provide you with an even better chance of ongoing success. Here is a hypothetical example:

An accounting practice with five CPAs is looking to specialize, so it launches a niche marketing program, including:

  • Niche 1 – specializing in smaller enterprises 
  • Niche 2 – further specializing in smaller commercial enterprises
  • Niche 3 – specializing even further by offering services tailored to the accounting needs of smaller insurance brokerages and real estate brokerage

If you perform your due diligence when developing an identity for your new enterprise, you will be adding an important component to your blueprint for success

Tips: The Four O’s In A Successful Start Up

Many of us like to have our business advice compacted into easily remembered information nuggets. You know, things like The Five Rules of …. , Ten Ways To Improve Profits… etc. So, here is one more to add to your list: THE FOUR Os.

When contemplating a start up, or in making market plans for an existing enterprise, there are four essential ingredients in structuring the marketing of products or services. These elements are common to most successful marketing strategies.

And they are neatly packaged into memorable nuggets as they all begin with the letter O.

Observation

Business ideas often begin with an observation. Some might also call it inspiration. In fact, it’s the simple act of noticing a need that is being filled or not being filled. Once you observe this need, it’s important to look around, investigate, speak with those in the same area to determine the specifics of the need.

Example: In the early 1950s, the McDonald brothers of San Bernardino CA observed a need for a no frills, high quality/low cost source for hamburgers and were inspired to create a highly efficient system to deliver such product quickly, thus pioneering the fast food concept.

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Opportunity

Once you have identified a market need via observation, you must then assess the scope of the opportunity. This means that you need to perform your due diligence on the potential of your observed need to be sufficiently successful to support operations and produce a profit. You must research the potential size of the opportunity to make sure that it’s success is sustainable into the future.

Example: Entrepreneurial salesman Ray Kroc observed the McDonald Brothers’ marketing phenomenon and recognized the enormous opportunity inherent in franchising this idea. We all know the rest of the story.

Example: Or perhaps I should call this Examples, as I’m talking about the numerous .com enterprises launched in the 1990s and early 2000s. Many of these were inspired ideas that attracted investors aplenty. Many also crashed and burned. A famous example is that of an online grocery store (I’ll omit the name of this venture) with enormous selection, high quality products and low prices–– plus your order was delivered to your doorstep! Sounds great now, right, and there are numerous versions of this idea floating around today, not even including Amazon, which is similar in basic concept.

The lesson of these two OPPORTUNITY examples is in the old adage: Pioneers get slaughtered, settlers flourish.

Open Mindedness

This is another way of saying “eyes wide open” when venturing into a start up. The lessons of being a pioneer in your niche needs to considered. True, some pioneers make millions: Jobs, Gates, Musk, Edison, Ford, Kroc, but there are hordes of truly inspired enterprisers who had great ideas that either didn’t come to fruition or failed to thrive.

We enterprisers tend to fall in love with our business visions–– starry-eyed, we sometimes only see the positive and overlook or minimize the negatives.

To be successful, you must perform a a truly objective risk analysis and understand that all business is risk. You must be ready to walk away or consider a new configuration if the facts point to increased risk of failure.

Example: There are too many to single out any one example here. I suggest you search the topic: business startups that failed and why.

Obtainability

The last “O” in this list, obtainability, refers to the potential of your enterprising idea to be brought to life. If you’ve made it through the first three Os and you’re still optimistic about the viability of your start up, the next question is focused more on you, now that you think the business idea sound and sustainable.

Here are some of the questions you need to ask yourself:

  • Do I have the skills to make this enterprise work?
  • Do I have sufficient capital to launch and if I don’t, can I raise it?
  • Do I have the temperament, attitude and personality to take risks?
  • Will my current life situation and status support an entrepreneurial venture?

Example: Ted (last name removed for privacy) came to me for consultation about two years ago. He had a been a strategic analyst but couldn’t stand the big corporation culture. He had an idea to start a strategic marketing consulting firm for smaller businesses. He failed miserably and here’s why:

  • His OBSERVATION of smaller businesses using such a service was faulty and his due diligence inadequate. 
  • Ted failed to research the scope of OPPORTUNITY for this service. Many small businesses practice “grass roots” marketing and don’t utilize tools such as strategic and/or market analytics. Ted’s lack of OPEN MINDEDNESS let him mistakenly see a “market niche” for these services. He was blinded to the fact that there was an “opening” in this market because very few businesses in this segment were buying such services.
  • Lastly, Ted also failed to honestly asses whether he had the means to OBTAIN this business. He did not. He had little experience with smaller businesses, lacked tenacity and life experience to wade into this market, and then make adjustments.

If you’re out there getting ready to launch a startup, or you’re in the early days of your first enterprise, remember it’s not about U. Remember your Os.

Converting Business Dreams Into Reality: Three Case Studies

Creating an enterprise takes more than dreaming, it requires a marriage of vision with opportunity.

Starting a self-employed enterprise is an exciting prospect for many people. For those who have longed to leave the 9-to-5 world, or for someone who wants out from an intolerable job, it’s a dream come true. For some, it embodies the American Dream mythology.  This is where you need to be careful. The roots of the American dream are embedded in the opportunities that America offered to immigrants and the indigenous poor, for a chance at a better life. In other words, American dreaming is about opportunity and capitalizing on this opportunity to improve one’s station in life.

“Build it and they will come.”                                                                 Well, sometimes.

Must of us are familiar with this oft-stated line from the movie FIELD OF DREAMS. Very often, people follow their dreams or passions into business and sadly, these enterprises sometimes fail–– despite the presence of a good idea and a willingness to work hard. Why? In my experience, it’s often a case of failing to shape the vision of a business enterprise by assessing how and where the opportunity exists. The successful establishment of a business enterprise–– whether it be a solo free lancing gig or a startup product manufacturing business–– begins well before the launch date. Success starts not necessarily with a dream, but with a vision that incorporates market opportunity.

Find a Need and Fill It. 

It’s okay to want an enterprise of your own creation: something you love.  But, to truly succeed, an opportunity (or multiple opportunities) must exist in your field of business. In fact, the most successful enterprises start with an existing need. It’s natural to want to take your passion and find a way to sell it. However, you increase the chances of success when you observe a need and then find a way to marry that need to your skills, interests and expertise/experience.

Here are a few case examples:

Amber’s Story: For some American Dreamers, the dream lies in just being self-employed. Being the boss is reward in itself. They are seeking opportunity first and figuring out what they can do to fill it.  

Take the case of Amber. She was working as a field auditor for a major accounting firms and hated the travel. With a toddler, and a new baby on the way, Amber recognized that she wanted to be home with her kids. She began looking for opportunities and matching these to any skills or products she could offer. In the end, she chose the obvious: working as a CPA with small businesses in her community, building a strong network of clients. Working solo— and, working from home–– Amber kept her expenses down and her rates lower which attracted small business clients.

Convert Your Passion Into a Paying Enterprise.

As stated earlier, it’s okay to want to spend your working life doing something you love. The problem with this is that there may not be a market for what you love. Still, for some, opportunity and passion merge to form a happy marriage. 

Charlie’s Story:  A passionate golfer, Charles loved to say that when he wasn’t at work, he wanted to play golf, and when he wasn’t playing golf, he wanted to talk golf. Charles was more fortunate than most in that he was a salesperson for a large manufacturer that produced control panels for utilities. Often, he would go on golf outings with prospects or clients but there was all the other time he spent in meetings, or in the home office, where he dreamed of the greens. One day, opportunity literally showed up at his door when the regional VP of his company asked him to organize a day-long golf outing for a large party of clients. “I don’t want the club to do it, Charlie, they always screw things up. This is a job that I know you can do better than anyone.” And Charlie did do it better, because he knew and loved the entire golf experience. When it was over, one of the company’s clients said to Charlie, “This was one of the best golf outings I’ve ever attended, Charlie,” and then jokingly added, “You should do this for a living!”  Those words resonated with Charlie and in less than a year, he was doing just that—selling event management services for large corporate and non-profit golf outings.

Necessity is the Mother of Opportunity. 

Donny’s Story: Donny was an executive vice president at one of the nation’s largest banking conglomerates. He was living a life that he loved, and had worked hard to achieve, when the Great Recession hit in 2009. Within six months, he was laid off. He received a decent severance payment and some layoff benefits, but it was hardly a golden parachute. Donny began job hunting furiously, but his age – over 55 – and a slow economic recovery were working against him. Three years later, his savings were drying up and he was getting fewer job interviews. He decided to go into business for himself, although he hated the very idea. He began looking for opportunities. He did have a law degree but hadn’t practiced since his mid-twenties. He thought of his experience in banking when he was young, handling mortgages and title transfers. This was something he knew that he could do, so he began looking for a place to set up shop. He decided that since the nearest town was a county seat, it was a good place to start. Donny is now in his fifth year and growing, despite his reservations about self-employment.

You Need a Flexible Business Development Plan. 

The examples above offer a very clear message:  let opportunity define your enterprise. LISTENING is one of the most important qualities any enterpriser can have. This is not limited to hearing what people say, but also includes being sensitive to trends in your marketplace, reactions to your business, and feedback from customers/clients. You must also be ready to change your offering(s) based on the reactions of the marketplace. If you start out with a rigid plan for your enterprise, then you are likely to be less open to listening to the marketplace.

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