This is the third article in a series dealing with building the right image for your business.
Ask yourself “Who is my customer?” over and over again. Make certain that each employee can answer this critical question in the same way. Discuss and describe the profile of your customer often. When this is accomplished, think about your market targeting:
1.Geographic considerations: Where do your customers come from? Is your customer base limited to a tightly defined geographical area, or is it widespread?
2. Sales cycles: Is the bulk of your business driven by certain holiday periods or special promotions? Or does your sales history show a gentle curve with seasonal peaks and valleys, but also a steady business throughout the year?
3. Behavioral variables: Are the purchase patterns of your clients proactive (they come to you because of the quality or distinctiveness of your merchandise or services) or reactive (they are drawn in by special considerations, prices or promotions)? Are your customers benefit seekers (buying because of the unusual quality of services offered)? What is the loyalty factor (look at the longevity and number of repeat customers)?
4. Market Positioning: This is the distinct image or personality you choose and develop for your business based on a realistic assessment of the competition versus your unique strengths, and customer and prospect analyses.
Determine Your Competitive Strategy
Marketers of any product or service have two basic competitive strategies to choose from. They are:
1. Broad: Pursue a broad market strategy, competing on the basis of wide selection of many product categories and depth in the categories.
2. Narrow-Differentiated: Pursue a narrow or niche market strategy, competing on the basis of differentiating factors.
In choosing a competitive strategy, no one approach is necessarily better than another from a profitability standpoint. What is critical is the extent to which your business can dominate the means by which you choose to compete.
Determine what “position” your business wants to own. Your position is “who you are” and “what you stand for” in the minds of your existing and prospective customers. This concept is very important because you will successfully attract customers and increase your profits only to the extent that your position is meaningful and relevant in the minds of your customers.
It’s not hard to determine how your competitors see themselves. Often they voice their position loud and clear in their advertising. Some may offer diamonds at low prices. Others may try to convince customers they can provide quality and low prices because of their size or the volume of business they do.
Still others may be small and exclusive. Where do you fit in? Finding the answer to this question requires you to view your business honestly and realistically. What position can you realistically carve out in the market place? Your answer will be based on an evaluation of your location, size, customer base, competition and similar factors. Here’s a hint: Unless you are in a position to do an enormous amount of volume and have the advertising dollars to spend appealing to a broad segment of the market, don’t try to compete on the basis of price. Instead, look for ways to position and differentiate yourself in terms of service, quality or distinctive benefits that professional marketers call “adding value.”
Part of determining your position involves deciding which of the two competitive strategies discussed earlier best suits the way you do business and the market segment(s) you have chosen to pursue. But whatever position you choose, it must pass four tests.
A position is like a singular premise—one that no one else has or can make:
1. The position you choose must be available. In other words, it can’t be “owned” in the minds of your customers by another business.
2. The position must be meaningful to your existing and prospective clients. If it’s not, all of your communications efforts will be marginal at best.
3. The position must be credible. Customers must believe that you can stand behind your products and services.
4. Finally, your position has to be deliverable. This means that your commitment to your customer/client must be real. You must be able to perform and keep your promise. Every aspect of your operations must be geared to fulfilling your stated position, every day.
Why is your choice of position so important? Because it is the foundation upon which your store’s entire image is built. Before you embark on a new positioning strategy, you must consider one other factor. How are you positioned now? Consciously or unconsciously, your business has communicated a position to the public. Determine what it is and then modify it to conform to your new strategy. How do you determine your position? Ask your customers, your staff, your business neighbors, and your friends and family.
In the final article in this series, we will discuss the topic of differentiation and ways to meaningfully differentiate your business.