Tag Archives: competitiveness

The top action to take right now to get more customers immediately

By Aaron Hoos on January 24, 2013 in Business

Do you want more customers? Every business does. Here’s the very best thing you can do right now to start getting more customers immediately:

Narrow your target market.

That’s it. It seems simplistic and even counter-intuitive. After all, why would you narrow your available customer-base if you want to get more customers?

Here’s the answer: The bigger your potential market, the harder it is to speak clearly and compellingly to their problem. Conversely, the smaller your potential market, the easier it is to truly connect with their problem and demonstrate how effective your solution is.

Here’s an example: If you have a friend who has a problem, you can give them advice, assurance, and a little helpful guidance to fix their problem. You’re laser-targeting your solution to your friend’s very specific needs. But what if you have several friends who each have the same problem? You might not have enough time to help each one individually so instead you help them generally or as a group. Your recommendations will still be targeted to their problem but it will be slightly more generalized. But to extend the analogy further, most businesses tell all of their friends about the solution, whether or not their friends have a problem.

That’s how it works in business. In a perfect world, you have one customer with a problem and you work with them until the problem is solved. Your message to them, as well as your advice and recommendations, are laser-targeted. However, that is not very profitable. So you need to back up just a bit and find a bunch of people who each share a similar problem and you can communicate to all them a little more generally. Unfortunately, many businesses (the struggling ones, at least), share their solution with anyone and everyone, regardless of whether or not they want to hear it. One is not enough, “everyone” is too many. The best thing to do is find the group in the middle — those who all share the same problem.

If your business is struggling a bit, or even if it’s humming along nicely but you’d like to get more customers, the very first thing you need to do right now is to identify your target market… and be as clear and specific as possible while describing a fairly large potential base.

If you’ve been in business for a while then you have some examples of previous customers to draw from. Find the ones who are the most profitable, the most positive, the ones who tell others about you the most enthusiastically… and figure out what is similar about them.

Then, look at the people who didn’t become customers, as well as your least profitable and highest-maintenance customers. What characteristics do your best customers share that these “worse” customers and almost-customers do not share? Try to identify the characteristics that DON’T describe your customer-base.

Once you’ve done that, you have a pretty good idea of who IS and ISN’T your ideal customer. Then hone your marketing to meet those specific people.

And if you haven’t sold anything yet, then give it your best guess but be prepared to refine it further — perhaps even dramatically — if you need to.

Let me give you an example from when I was doing a lot of a freelance writing.

I started by writing for anyone I could find. Over time, I found that I was being asked to write a lot of business (specifically B2B), financial, and real estate content. Later, I realized that my best customers were from the financial and real estate field, particularly in the US. And even later, I learned that my very favorite and most profitable customers included real estate investors, debt collectors and credit experts, and lenders. With each “step” toward a more specific customer base, my marketing was refined, I closed more deals, and my prices went up (because I was more specialized and there was less competition)!

So if you’re sitting at your desk and wondering what you can do right now to improve your business, drop everything else and refine your customer-base. Get very specific and narrow them further than they have been. Trust me, it’s the best thing you can do for your business right now.

The most important advice about starting and growing a profitable business

By Aaron Hoos on January 2, 2013 in Business

When I was a kid, I desperately wanted to start a business. I thought a lot about what I wanted to do and what I would call my business but one thing I struggled with was to figure out what exactly to sell.

It wasn’t until much later that I was told the one truth that changed everything:

Find a market and solve a problem they have with the skills and knowledge you have.

This transformed my thinking and put me on a course that fulfilled those early dreams of entrepreneurship.

And you know what happened? As soon as I adjusted my thinking, the opportunities exploded. The possibilities seemed to be everywhere. The challenge was no longer what should I do? but which option should I act on first?. What a difference!

I talk to a lot of aspiring entrepreneurs who are thinking about starting a business but are asking similar things. They’re unsure about what to do and whether or not they should do it now or wait until a better time. They’re scared to quit their jobs and take a chance on something. I get that. I’ve been there. But the opportunities are out there if you first find a market and solve a problem they have with the skills and knowledge you have.

I also talk to a lot of struggling entrepreneurs who are looking to push forward in their business. They’re not sure if they should enter this market or sell that product or how to make more money. The opportunities are out there if you first find a market and solve a problem they have with the skills and knowledge you have.

This principle holds true for successful businesses that want to grow. If you are already making money and want to make more money (with new products or in new markets) then go back to this one fundamental: First find a market and solve a problem they have with the skills and knowledge you have.

My business is in a very cool spot right now where I have the time to start new brands that extend and support the work that I’m doing now. And this is exactly where I’m starting: I’m finding a market and then identifying a problem they have, then I’m seeing how my skills and knowledge can solve that problem.

The opportunities are endless because there are no end to problems. You’ll never struggle to find clients or earn money from them if you follow this simple, fundamental advice:

Find a market and solve a problem they have with the skills and knowledge you have.

The one time that you SHOULD make your prospects feel stupid

By Aaron Hoos on December 20, 2012 in Business

I remember one time trying to sell insurance to a prospective client and I fell into the terrible industry insider habit of using an acronym instead of the actual name of the insurance product. That client called me out on it (rather harshly, but for good reason) and reminded me that I was the expert and she didn’t know what the acronym meant. It put me in my place and I’ve never forgotten the lesson.

In general, it’s a bad idea to make your prospects feel stupid. Salespeople lose sales because they (unintentionally) belittle their potential customer by speaking down to them or by acting in a condescending manner. It can be easy to do, especially if your profession requires a lot of education or qualifications, or if there are a lot of difficult-to-understand intricacies (like with the insurance I was selling).

But there is one time when it’s okay to make your prospects feel stupid.

Okay, I don’t mean that you should actually TELL someone that that they are stupid. You should always sell positively and professionally! But it’s okay to construct your sales presentation in a way that your client draws their own stupidity inference:

Without explicitly stating it, it’s completely acceptable to make your prospect think: “I would be stupid if I didn’t buy this right now.”

Apple does this brilliantly. By setting up their products as brilliant innovations of genius (and by setting up “the other guys” as a foil) it makes it very clear who the hip buyers should emulate. They do this pretty consistently in their various marketing efforts and particularly in this series of videos…

They’ve done it so brilliantly that Blackberry embarrassment has become a thing. (Note: I’m a Blackberry user. Don’t judge me.)

Apple isn’t the only one but I have to say that they are probably one of the most effective I’ve ever seen. Their marketing not only promotes their products but it tells users that they’d be STUPID to buy something else. (Again, they never do this explicitly… and that’s the beauty of this method).

As business owners, many of us approach a potential sale (i.e. when we make a sales presentation or when we write a sales letter) and we try to sell with the minimum amount of selling. We try to close the deal with as little sales effort as possible. So rather than building deep sales tactics into everything we do, we simply slap a thin coat of selling on everything and then wonder why no one is buying. But if you want to tip the Scales of Purchase in your favor, one of the ways you can do this is to make your prospect feel stupid about not purchasing your product and about even considering purchasing anything else.

The way to do this is to consider all of the possible sales outcomes and to overwhelmingly point them in the direction of buying now while setting up a disdain for any other option.

The usual sales outcomes are…

  1. Buying now (awesome!)
  2. Delaying the purchase
  3. Buying from someone else
  4. Buying an alternate solution (i.e. a substitute solution from an indirect competitor).
  5. Putting up with the problem

To help increase the likelihood of closing the sale, your sales efforts should make the potential buyer think “I’d be stupid for not buying now!” by establishing the buy now option as the best option and every other option as a terrible choice.

Here are some ways to “make your prospects feel stupid”…

  • Overwhelm them with value. (By the way, have you read my primer on value? It’s a must-read if you want to sell more.)
  • Sell with the Chain of Agreement.
  • Learn to think that objections are awesome and masterfully handle every objection a potential customer offers up.
  • Stir up a sense of urgency.
  • Highlight the cost of not acting right now and put that cost in terms that your clients can understand.
  • Increase the scarcity of the your solution. (This one is tricky because a lot of businesses use a false sense of scarcity).
  • Make it INSANELY easy to buy — as few hoops as possible.
  • Overwhelm them with testimonials of other people who are completely happy.
  • Set up all other choices as a foolish foil against buying now.

Note: I want to be absolutely clear here! I would never advise that you belittle your prospect or actually make them feel stupid. However, you can sell more by selling so effectively that your prospect thinks “I would be stupid not to buy this right now!”

What the mob can teach you about running a local business

By Aaron Hoos on November 28, 2012 in Business

I love mobster movies (and TV shows). The Godfather, Goodfellas, Boardwalk Empire… Mob movies give a glimpse into a world that many of us do not encounter.

I think one of the things that we like about mob movies is that the backstory is often the same, and it’s something that resonates with us: Someone who started out with nothing (impoverished, recently immigrated, etc.) rises to new heights to become a kingpin.

Of course, I definitely do not endorse how they got there — like scheduling assassinations while their child is being baptized…

But there is a lesson we can learn about mobsters… usually from the period in their life just before they really hit the bigtime.

Many mobster movies show the soon-to-be-godfather visiting various local establishments, shaking hands, kissing babies, getting to know the locals. They get their hair cut at the barber shop; they buy pasta at the local restaurant.

Before he traded favors on his daughter’s wedding day, we know that Don Corleone “walked a beat” and made friends with people who would later help him.
Before he built an empire, we know that Nucky Thompson walked up and down the Boardwalk and made friends with people.

These local kingpins built relationships and reputations with the people around them. They didn’t just pop in and ask to put a business card on the person’s bulletin board. They went in and bought from the shopkeeper, asked them how business was, offered to help in any way they could, and then delivered more than was expected.

If you run a local business — a restaurant or coffee shop, a barber shop or salon, an accounting firm or chiropractic office, or whatever — if you serve a local market then this lesson is for you. Get out of your office and become the godfather of your local area. Meet other shop owners and don’t just promote your business… promote THEIR business. Ask them about their business. Learn about who they serve. Find out what problems they have (and do what you can solve their problems… without killing people, of course). Make your face known in the community. Become the go-to guy (or girl) who solves problems (even if it’s slightly outside of the expertise you get paid for). Make connections. Build bridges between other people (we call these referrals in the business world but everyone else just considers them to be friendly introductions). Show up at local sporting events. Support local schools. Advertise in the local papers.

… Saturate the neighborhood with YOU (not your business). That’s what Don Corleone and Nucky Thompson did to climb the ladder.

I promise you: The competition is NOT doing this. They are spending money on advertising beyond the borders of the community and they are forced to discount their prices to try and attract people.

The result will surprise you.

People will buy from you… not because you are necessarily the greatest at what you do or because you had the cleverest advertising but because they know you and trust you and believe that you have their best interests at heart.

Small business strategy question: Who are your indirect competitors?

By Aaron Hoos on November 23, 2012 in Business

Businesses face stiff competition and entrepreneurs must bring to bear all of the tools and strategies and resources they possibly can in order to compete. One activity worth spending time on is to go through my list of 100 small business strategy questions to analyze what your business is like, where the opportunities are, and how you can compete more effectively.

In today’s blog post, I want to go a little deeper into one of the questions: Who are your indirect competitors?

When you think of competition, you probably think of your direct competitors — the companies that sell the same product or service that you do. It’s well worth thinking about them… and it’s worth your time to consider why someone would buy from you instead of your competition.

But one area where a lot of entrepreneurs get blindsided is by not thinking about their indirect competitors — the products and services that aren’t similar to yours but which your potential customers buy instead of yours.

Here’s a simple example: A pencil manufacturer’s direct competitors are other pencil manufacturers. But that’s not the only competitor. A pencil manufacturer also has indirect competitors…

  • Pen manufacturers
  • Among artists: Other drawing media like charcoal, pastel, watercolor, oil paints, etc.
  • Mobile phones and sound recorders (and other electronic devices used to jot notes
  • Remembering! (Okay, that’s not a product or service but it’s an alternate choice that the potential buy can take instead of using a pencil to write down their shopping list or whatever

Here’s a well-known example: Coca-Cola holds a pretty significant marketshare among its soft drink rivals (its direct competitors) but its “share of throat” — an industry term used by the beverage industry to describe overall beverage competition against direct and indirect competitors — is much smaller.

Coca-Cola’s direct competitors are soft drink manufacturers. Coca-Cola’s indirect competitors are alcoholic beverage manufacturers, water bottlers, coffee and tea makers… and even the utility company that sends water to your tap.

As a business owner, you need to not only know who else in town is selling the same stuff as you; you ALSO need to know who else in town is selling something that your potential buyers might use an an alternate or substitute.

This is a tricky challenge because it’s easy for insiders to develop blinders to the way the outside world views your solution. One way to overcome this is to spend time talking to your customers — in person; on social media; wherever! — and try to find out the following two things…

  • Who would you buy from if my business wasn’t around?
  • What problem does my product or service solve/what need does my product/service fulfill?

The answer to these two questions SHOULD hint at who your direct and indirect competitors are.

And once you know, it can completely transform how you market your business and how you package your products and services… and it can even reveal new ways to position yourself in the industry.

Sales case study of my recent camera purchase at Best Buy

By Aaron Hoos on October 16, 2012 in Business

I recently decided to buy a video camera. I haven’t owned one before so I decided to shop around a bit online but ultimately I wanted to take a look at some models in a store too.

I shopped around online, narrowed my list down to about a dozen, then further narrowed my list down to two… and then one. (I sorted by a price window, plus I wanted an external microphone plug-in, decent battery life, and easy transfer/upload capabilities). I found a nearby Best Buy that carried the model.

So I paid the Best Buy a visit. I found the display model of the camera, checked out all of the other models they had, and confirmed that I had chosen the one that was best for me. I was ready to buy.

That’s the scenario. Now here are some snippets from that visit and my evaluation of how it went:

  • Good: A salesperson wandered over to me in the right amount of time (not too early, not too late!) and asked for help. I was very happy with that. If he had shown up earlier, I would have brushed him off because I wasn’t ready. If he had shown up later, I wouldn’t have liked it. Frankly, this is a difficult thing for businesses to get right (and there good arguments for connecting with potential customers early or late in a visit)… but for me, this guy was right on time.
  • Weak: I had a question about memory cards and instead of telling me about the different kinds, the salesperson went off on a prolonged tangent about innovations in memory cards. After telling me all about memory cards, I asked him if the ones we were looking at were the kind he was describing. They weren’t. So I said, “Here’s a 16B card. Will that work for my camera?” He said yes. Then it felt awkward. What the salesguy should have done is ask me about what I was shooting and how long I was planning to record each time — he had the opportunity to sell me on why I should have one size of memory card over another but he didn’t take it.
  • Okay: After looking at memory cards, we returned to the cameras and I told him the one model I was looking at. On the way, he pointed to a different model and said “this one has a projector in it”. I’m not sure if he was telling me that because it was a cool feature or if he was trying to upsell me. If he was just sharing a cool feature then that’s okay. But it felt like a lame attempt at an upsell… which didn’t come with any qualifying questions. If he was trying to upsell me, he should have waiting until we were standing in front of the camera I wanted and we were talking about the features that I was looking for. Keep reading…
  • Weak: I pointed to the camera that I wanted and this is where the salesguy could have really turned on the awesome. He should have asked me about where I was planning to use the camera and what features I was looking for. Instead he said: “Most cameras come with a 1-year manufacturer’s warranty. We have a 3-year extended warranty or a 4-year extended warranty. Do you want one of those?” Ummmm… There are two problems with this: First, he had an opportunity to demonstrate his knowledge about cameras and establish some expertise in terms of which camera I should use. If I told him what I wanted the camera for, I would have considered his advice for other cameras. Instead, he tried to pre-sell me the warranty. (I hate warranty upsells but I understand why they have them. I think he should have waited until the camera was in my hand before selling me the warranty).
  • Weak: Next he looked at the camera model, looked under the counter, and discovered that there were none there. So he excused himself and went to the back to see if they had any there. When he came back, he told me they didn’t have any. “Do you want a different camera?” he asked. And it was easy for me to answer no… because I DIDN’T want another camera. However, if he had asked me earlier about what I was planning to use the camera for, he could have then transformed his weak “do you want a different camera?” into a much stronger “for your needs, this camera has similar features for a similar price”.
  • Weak: I told him I didn’t want a different camera. Then I went home and bought the camera online. It turns out, I bought it at the Best Buy website (so yeah, Best Buy still got paid on the product). But the salesguy should have checked online and offered to bring on into the store. Or, walked me over to a dedicated terminal and walked me through the online order. And upsold me along the way.

Scorecard: Overall, my experience at the Best Buy store was pretty weak. They missed a lot of very basic selling opportunities and I had more success by buying on their website — I got the model I want for the same price as in the store, plus I received a free memory card and a free carrying case (which apparently wasn’t offered in the store).

That salesperson should have done the following:

  • Asked more questions to learn about what I was going to use the camera for
  • Made some recommendations based on my anticipated usage of the camera
  • Timed his upselling pitches more effectively
  • Helped me buy something (or at least order something online)

Small business strategy question: Why would someone want to buy from you instead of your competition?

By Aaron Hoos on October 13, 2012 in Business

This post is part of an ongoing series exploring 100 small business strategy questions.

Businesses used to be hard to start. But now, thanks to the web, they are insanely easy to start. This leveling of the field was good in some ways (you can read more about why it’s good by visiting ScrappyCapitalist.com).

But this leveling of the playing field was also bad in some ways, too. The web made it easy for everyone to start a business… which means that just about everyone has started a business! It’s very competitive out there now, as aspiring entrepreneurs pile onto the web to make money.

All of this competition means that customers have choice — an overwhelming number of competitors to choose from. So this leads us to our small business strategy question: Why would someone want to buy from you instead of your competition?

Think about who your competition is. Not just other businesses in your industry but the very businesses that serve the exact same target market as you. What makes you different? What makes you special?

Many businesses default to a general unique selling proposition (USP) like “we give great customer service” or “we deliver excellence products”. But every other competitor serving the same target market likely says the same thing. (Yes, I’m sure it’s only true for you and not for them… but the customer hears it from everyone).

So imagine this: Your customer has invited you to sit down at a table and spend 30 seconds (yes, just 30 seconds!) explaining why they should buy from you. They have also asked each of your competitors to do the same. The customer asks this specific question: What is the one thing you do that no one else at the table can do?

What do you say in that short amount of time to capture your prospective customer’s attention and convince them to buy from you? In this scenario, saying “we give great service” won’t work because everyone else is saying the same thing. “Our products are second to none” is also off the list because most of your competitors are saying the same thing.

This exercise might seem silly because we can’t imagine a situation where our customers would have us and our competitors in a room and give us only 30 seconds to state our case… but that is exactly what the marketplace is like.

When a potential customer wants to buy something and they quickly check out you and your competitors, they’re looking for the unique points to help them decide who to buy from. If everyone is the same, the customer concludes that it doesn’t matter who they buy from; there’s no loyalty and the purchase becomes only measured on price.

But if you can answer the question “Why would someone want to buy from you instead of your competition?” then you change the conversation. You give the potential buyer a reason to buy from you and not from anyone else; you make the customer more loyal because you are the only one who does whatever it is you promise; and you can charge more money because the conversation is no longer about you-versus-your-competitors.

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