Know Your Market and Position Your Company
More than likely, your 10 best customers belong to a common market. A market is a group of people with one or more qualities in common. Neighbourhoods, people with similar interests, industries, nonprofit organizations, and government agencies are all examples of markets. In fact, everyone in our society is part of many different markets.
In order for a market to be viable for business purposes, however, certain conditions must exist.
1. It must have unsatisfied wants or needs – For example, a new neighbourhood may have a need for a supermarket.
2. It must have resources/money to spend – You won’t sell too many $2,000 watches, for example, to a market that earns an average of $20,000 per year.
3. It must have the willingness and the ability to spend it – Even if someone can afford a $50,000 crocodile skin umbrella, for example, he may think it is a ridiculous amount of money to pay for something that just keeps him dry.
4. It must be big enough to absorb your growth – If a market exists but is too small to sustain a growing company, it will not be a viable endeavour. Your job as an entrepreneur is to find a way to satisfy one or more of those wants or needs for a price your market is willing to pay, while retaining a reasonable profit.
It's a simple formula, but as we all know, simple doesn't necessarily mean easy. A lot of businesses struggle in this area. Why? Most often it's because they approach marketing from the wrong direction. They start with a product or service and then focus their efforts on convincing the market to buy it. The problem is, no matter how hard you try, if there isn't a large enough demand from your market for what you have, it won't sell. You won’t convince very many people to buy what they don’t see a need for.
So instead of trying to sell your products focus on solving your customer's problems. People won't buy something just because you spend a fortune on advertising. They need to see that the benefits outweigh the cost.
If your current market is unable to see how your product or service can satisfy their needs or wants, you've got three options.
1. You're selling the right product (or service) to the wrong people. You need to change your market.
2. You're selling the wrong product to the right people. You need to change your product.
3. You're selling the right product to the right people, but they don't know it. You need to change your marketing strategy.
The most common scenario is number three. You're selling the right product to the right people, but they don't know it… yet.
The solution is to align your business with the needs of your customers. Your business must become synonymous with the fulfillment of your customers' needs. You must become the solution to their problems.
No matter what your situation, the process is always the same.
1. Determine who you are selling to.
2. Identify their needs (or wants).
3. Create solutions for those needs.
4. Let them know about it.
Read more in Part 2.