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