Category: Sales and Marketing

Identifying a niche market is a more profitable strategy for small businesses, rather than trying to sell products and services to all “potential” customers. As we have noted before, “the most successful enterprises work hard to target specific groups of customers to whom their offerings are most attractive.” Those specific groups comprise a niche market where focused branding and marketing messages often have the greatest impact – because those groups are made up of prospective customers most likely to be drawn to what a business has to offer.

Finding a niche also serves as an excellent way to stand out from the crowd. Broadly speaking, a niche business “is a specialized or focused area of a broader market that businesses can serve to differentiate themselves from the competition,” according to Business News Daily.

Anything that differentiates your business from a crowd of competitors has the potential to trigger fast and large-scale growth – the goal of many small business. Key benefits include:

• A bank of loyal customers who belong to this niche market and gratefully purchase the products or services delivered by an enterprising small business
• Reduced competition because this niche market has been largely overlooked

That’s why: It makes sense to pursue a specialized group of customers, rather than attempting to sell to everyone.

Identify your target audience

How does a business go about identifying the right niche market?

Start the process by “closely analyzing the current state of the market and determining if a significant enough portion of that customer base is receiving the special attention it wants and demands.” If that customer segment isn’t receiving special attention, it’s a golden opportunity for your business to gain a valuable foothold.

Other strategies include:

• Checking out Google Trends to determine the level of potential interest in a product or service aimed at an underserved audience.
• Seeing what’s going on on social media. Are consumers looking for a product or service close to what you offer?
• Researching the range of products offered by the big online sellers, such as Amazon.

Is your proposed niche product or service already offered by other small businesses? That might not be a bad thing, notes Constant Contact, since “finding a large amount of products that already exist for your niche … indicates a strong market,” particularly if you focus your efforts on creating a product “that’s unique and stands out.”

Conducting research takes time and resources. But if you land upon an underserved niche market, it’s well worth the effort.

Assess the level of your own commitment

Taking on the challenge of locating and profiting from a niche market requires a certain mindset. It starts with having the necessary passion and energy to go after this market. Without that energy, you can easily lose interest in doing the hard work involved.

Consult friends and colleagues in your professional networks. Use these individuals as sounding boards to evaluate the potential of your niche product or service. Does it strike others as a great idea and worth pursuing, or do you encounter mostly lukewarm levels of interest?

Don’t think you have to reinvent the wheel. To appeal to a niche audience, you may only need to tweak an existing product or service. Maybe a minor upgrade will do the trick, as opposed to creating an entirely new offering.

Focusing your energy on this specialized market can be hugely profitable, as long as you have the right level of commitment.

Gauge the degree of interest in your product

Appealing to a niche market doesn’t have to depend upon guesswork. Once you have a viable product to share with prospective customers, it’s time to test it out.

One effective means of assessing interest among consumers is: offering them the chance to “test-drive” your niche product. Offer samples with sufficient features that provide a reasonable way for people to try out the product. This can be in your bricks-and-mortar store, through free online deliveries, at trade shows and other industry-related venues.

The feedback you get can give you a fairly clear idea about how well the offering is regarded by potential buyers.

Another option is distributing surveys among those who try out your new product. Create brief surveys focusing on whether or not this product genuinely addresses an overlooked consumer need, if it’s easy to use, what other benefits might be gained, etc. Surveys can occur via email, through on-the-spot questionnaires at tradeshows, or in small focus groups.

Again, this will help you determine whether or not to move forward to larger-scale production and distribution.

Identifying and reaching out to a niche customer market requires time, resources and focus. The potential for growth, is huge.

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Which aspect of business growth is more important–customer acquisition or retention? It’s an age-old question for small business owners. They must constantly decide where to put their precious funds and resources.

Focusing on retention means paying close attention to the needs and pain points of an existing customer base. On the other hand, customer acquisition involves the constant effort to boost brand awareness. It requires you to entice new customers to “take a chance” on your business. You have to find innovative ways to connect with prospects. This is the case, even if the business doesn’t know exactly who they are, or what specifically they want.

Here’s an in-depth look at both of these essential components of business growth.

Customer Retention

Any business that builds a reliable pool of repeat customers is doing something right. Whether their focus is on providing outstanding customer service, continuously testing the quality of their products or services, or simply making it easy for customers to purchase what they sell, their strategy to retain these loyal customers is often a successful one.

As the marketing platform Fivestars puts it, retention “is usually cheaper and it’s the lower hanging fruit.” Generally speaking, these marketing efforts are less costly and more successful. This is because “customers who are already familiar with your business, and presumably have a positive impression of you are easier to convert.” This is compared to a customer who knows little or nothing about your business.

Repeat customers are more open to a company’s marketing and sales efforts; they did business with that company in the past and, presumably, value their products or services. As Constant Contact notes, the following benefits might accrue:

• It’s considerably less expensive to keep the customers you have than to acquire new customers.
• Loyal customers require less time and resources to sell to, as opposed to new customers who–despite a costly marketing outreach program–may end up choosing not to purchase anything at all.
• Focusing on repeat business means you “create a group of loyal customers that will happily … promote your business” and “refer 50 percent more people than one-time buyers.”

Maintaining ties with an established target base makes all the difference in the world between struggling to survive and anticipating a bright future.

Customer Acquisition

Acknowledging the virtues of emphasizing retention shouldn’t obscure an equally compelling fact of business life: without acquiring new customers, you don’t have a base of current customers to retain. Growth requires acquiring new customers, and even more so if a company is executing an aggressive expansion plan.

Of course, a lot of work goes into the acquisition process. A company determines who potential new customers are, evaluates different marketing and messaging strategies, decides the best approach that’ll resonate with the target audience the most, conducts a successful sales process, and participates in related activities.

Therefore, the costs associated with customer acquisition are significantly higher than that around retention. According to Agile CRM, “As your customer base grows and you increase your brand awareness,” the acquiring of new customers “becomes exponentially easier.” The key is leveraging the acquisition of new customers “to solidify their trust in your ability to support them and make them successful.”

How to Boost Customer Retention

Unfortunately, businesses don’t always work as hard to retain customers as they do in attempting to gain new ones. But, successful retention efforts cost less and demand less time and effort than the acquisition process. Consider the following action steps to keep a focus on loyal customers:

• Always make certain new customers get the support and guidance they need from the moment of the sale and beyond.
• Generate “how-to” and other related content addressing the constant needs of the new customers.
• Check in with customers to determine their satisfaction level(s) with the products or services they purchased. Provide answers to any and all questions ASAP.
• Let these customers know of product upgrades, repairs to computer glitches and other changes in the business that might affect them.
• Establish a state-of-the-art customer response and support system. Keep in mind: One negative experience with your business can turn a trusted customer into someone who never buys from you again. Do everything you can to provide support and guidance for any problem a customer encounters.

These action steps require additional funds and resources. But if they aid in boosting retention, they are worth every penny.

The Key to Acquiring New Customers

For “new customer acquisition in 2020, business owners should balance past tactics with new strategies.” A focus on specific strategies can help businesses achieve this vital objective. These include:

Refocus efforts on target customers.

Clearly identify specific groups of customers to whom your product or service is most attractive. Avoid wasting time and resources where the chances of generating new customers are slim.

Embark on social media campaigns.

Leverage social media to attract new business. This can result in higher brand awareness through the distribution of free, value-added content. Paid social media efforts can be equally effective in increasing brand visibility within your target audience.

Try a focused product or service giveaway initiative.

Giving prospects a chance to experience your offering on their own terms (and at no charge) can result in a favorable experience that leads to the next step of the purchasing journey. Free product trials and/or no-cost software downloads can go a long way towards demonstrating the benefits of your offering.

In the end, every business has to find its own balance between acquisition or retention. A lot depends on the stage of growth a business is in, and the particular growth strategy to which it commits. Without new customers, a business can’t grow. Without a base of loyal customers, growth is equally problematic. Find the right balance and you have the potential for unprecedented expansion in 2020 and beyond.

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Are you looking for a way to give your business revenue a boost? Your inventory may hold the answer. If your excess inventory is collecting dust on shelves or in a warehouse, moving it around can inject new life into your revenue numbers. Here are four ways to help reinvent your excess inventory.

1. Bundle it

One option is to bundle your inventory and sell multiple items together at a singular price. This can get products that have been gathering dust off the shelf and out the door–all while generating a profit. There are several ways to approach bundling, including:

• Combining older or slower-selling products with newer or faster-moving ones
• Bundling multiple units of the same items
• Grouping items that are commonly used together

Here’s an example: If you run a salon, and have a hot-selling brand of styling gel, you could package it with the overstock of shampoo and conditioner you’re struggling to get rid of.

To make a bundle enticing–generally speaking, the total price of the bundle needs to be lower than the cost to buy each item individually. Just remember: Keep profit margins in mind so you’re not unnecessarily sacrificing revenue.

2. Offer it as an incentive

Upselling can be a simple and effective way to increase revenue. The idea of an upsell incentive is to use one item to convince your customers to buy a second, more expensive item. In an upsell, you can use the extra inventory to offer products as a bonus–or as a “gift with purchase” when a customer meets a certain requirement. For instance, the customer(s) may need to spend $50 or $100 to get the freebie. This way, you get the revenue benefit from the sale–and you get to move more inventory in the process.

Upselling with incentive works best when customers feel like they’re getting a high-value freebie or bonus. When you create an incentive campaign, remember to weigh the value of what you’re giving against what you’re asking customers to spend.

3. Create a timeline

Marking items down can attract bargain-hunting customers. But, it helps to have a plan if you want to run a sale with maximum impact. Just sticking items on a clearance shelf may not cut it–especially if you have a lot of inventory to move. A better option might be to hold a “flash sale” online or door-buster sale in-store. These kinds of events can create a sense of urgency among customers who don’t want to miss out.

Remember: Timing matters for sales. Have them too often and they might lose their impact.

4. Change up your marketing

Sometimes, sprucing up how you promote excess inventory can boost sales. Simple techniques to vary how you market your inventory may include but aren’t limited to:

• Relocating items to a different part of your store
• Redesigning product displays
• Updating product photos in your online store
• Adding new keywords or descriptions for products sold online
• Placing them somewhere new on your site
• Writing a post about it on your business blog

These are all ways to showcase excess inventory in a new light. The payoff can be a healthy revenue boost if repositioning inventory results in a sales comeback.

What is a customer persona? And, why does your business need one?

It’s important to challenge a view held by some business owners that everyone out there is–or, should be–a potential customer. It’s understandable. You strongly believe your product or service offers great value and benefits. So, why shouldn’t it be marketed to every possible target audience?

The simple answer is, this isn’t an effective way to do business. The people you want to serve are bombarded every day by marketing messages in every conceivable form. There’s a lot of “noise” out there. If your brand message doesn’t address a particular market with particular needs, it won’t be heard. There’s no such thing as “everyone.” Consumers have a very wide range of likes, dislikes, buying patterns, pain points, and so on.

By identifying and reaching out to a more targeted group of customers, you can save a vast amount of time and resources. Plus, your chances of connecting with these individuals or businesses are much better. This means that could not just close a sale, but you could make customers for life.

Crafting a profile of your ideal buyer

A customer persona (also called a “buyer persona”) is a fictional characterization of what your ideal customer looks like. This persona will give you “a deep understanding of your buyer persona(s),” notes Hubspot–an approach that’s critical “to driving content creation, product development, sales follow up, and really anything that relates to customer acquisition and retention.”

Elements that make up a comprehensive customer persona include:

• Behavior and preferences
• Demographics
• Attitudes and values
• Challenges and pain points
• How your product or service meets their needs
• Channels and platforms used for media consumption and buying patterns

Going deeper, look at these factors with your team when assembling a customer profile:

• Age and marital status
• Level of education and professional background
• Where customers go for news and product research
• The factors influencing their decision to purchase a product or service
• The challenges they want to overcome
• Their personal and professional goals

This information helps you put together a strong working model of what your ideal buyer looks like. As a result, notes Business.com, your marketing message targets a specific audience, “ensuring that it speaks to their needs, their goals and their preferred channels for content consumption.”

How to gather the right data

Surprisingly, gathering and analyzing this information isn’t difficult. Thanks to the digital resources at your disposal, the information is already out there.

First, consider starting the process through one of these steps:

• Talk to customers. Go over a list of your most loyal customers and approach them about having an in-depth conversation about their needs, desires, and buying preferences.
• Ask your sales team. It’s likely members of your sales team already possess a strong working knowledge of your customers, from which certain persona-building data can be assembled.
• Survey by email. Put together a handful of key questions and do an email survey with customers. (Note: Offering an incentive like a discount on their next purchase can help boost response rates.)

Second, as noted, look to online sources for key data. Google Analytics is a no-fee service provided by Google. It offers rich insights into how people locate your business online. In addition, it shows you what they do after the fact.

Facebook and LinkedIn have a wealth of data on the individuals and businesses that follow your posts and related content. Look closely at who these people and businesses are (by checking out their social media profiles). You’ll have access to their professional backgrounds, affiliations, job functions, etc. All of this data can be mined to help build your ideal buyer profile.

The customer persona on the page

Now , it’s time to create your “ideal” persona. Generally speaking, the most effective approach involves giving a name to the fictional customer. Ideally, this is followed by a description of their age, gender, personal and professional backgrounds, and so on.

The objective is to humanize the customer. Pick them from a mountain of statistics. Give them an identity you and your employees can relate to.

Regardless of your business and industry, certain types of customers are the best audience for your product or service. Attempting to sell to “everyone out there” won’t help a business survive and grow.

Know who your customers are. Know what they like. And definitely know don’t like. Know what they hope to gain from purchasing your offering. Your knowledge of your customer base makes all the difference for 2020 and beyond.

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