Competitors

Most small business owners start by focusing on their product. This usually results in products which are of excellent quality but which are over-priced and have all kinds of features which customers don't really want. When this approach doesn't work, the owner decides he needs marketing and, as a result, focuses on his customers. This is a big improvement in that he now will offer products with features, and at a price level, that reflects the needs of his customers. Still, most small businesses don't take this approach far enough. Most of the information in your market is not found with your customers but rather with the customers of your competitors.

This is obvious when you consider that, as a small business, you are usually not dominant in your market. Most of your potential customers are actually buying from somewhere else. What you need to look at is why they are buying there. What you want to do is identify groups of customers which you could attract and then go after those which would be the most profitable for you. In five easy steps, you have to:

• identify your competitors. You need to find out where people who are your potential customers are buying products similar to yours;
• identify the competitors' marketing strategies. Look at their ads and their brochures. How are they presenting themselves. Who are they trying to sell to? Try to determine who typically buys their product;
• find out why people buy there. Try to identify some of their customers and ask them. Talk to your own customers and ask whether they know the competitors, what they think of them and why they bought from you;
• identify groups of customers for whom you could match their reasons for buying better than your competitors. There are certain things which you do better than anyone - find groups of customers who value these things;
• target the groups you have identified with promotional material. Is there a local newspaper? Do the people belong to some kind of professional organization? What characteristics do they share that could be used to reach them. Or, just run ads in a general interest publication but target the ads to a particular group.

The easiest way to grow your small business is to capture new market share in a rapidly growing market. Many small businesses are not in this kind of environment. If your market is growing slowly or is stagnant, the best way to grow is to take clearly identified groups of customers away from your competitors by giving them more of whatever they value. You can do this viably if you target groups which you can satisfy at a lower cost than your competitor.

FIRST PUBLISHED AT SUITE101.COM