3 Questions you NEED to answer today to succeed in businesses and avoid failure.

Three questions that will give your business a competitive advantage

City Sidewalk Marketing Critical Shit, Planning, Small Business Leave a Comment

“The more you know, the more you know you don’t know.” ~Aristotle

Aristotle was a pretty bright guy according to most accounts and his quote above is a testament to that fact. For a business, the more information you have about your customers, the better you can take care of them. As you come to know more about your target audience(s), you’ll realize that you can always learn more.

Give your business a competitive advantage, and start by answering three simple questions.

Baby steps you need to grasp before going further.

If you don’t find ways for your business to stand-out, communicate, and persuade then you’re going to fail. That is a brutal, and honest truth.

A number of super smart people have said it a million different ways, a million different times, but it bears repeating, “If you aren’t growing, you’re dying.”

If you can’t grasp that simple concept then throw in the towel right now.

Pay attention to who’s winning.

There’s a huge amount of valuable intelligence available if you spend some time looking at those who have answered these questions and have a clearly defined competitive advantage in the marketplace. Companies like Apple and Starbucks built their organizations and cultures around their answers and invest thousands of hours, resources, and billions of dollars to maintain the advantage they hold. These companies’ answers have a lot to do with their business success, the market-share they command, and the mindshare they’ve earned. Apple competitive advantageOne company that can’t seem to quite get it right, but is still highly successful, is Google. We’ll deal with them in another article sometime soon.

Imagine how your company would benefit if you had a clear competitive advantage over your competitors. Imagine being seen as the leader in your industry or as one of the top contenders in your local market niche. For Apple and Starbucks, their competitive advantage allows them to charge a premium for their products and services, it earns them higher profits and allows them to enjoy insane levels of customer loyalty and never-ending industry attention.

While you might not want to be an Apple or a Starbucks, your business will benefit in similar ways if you take the time, and dedicate yourself to finding the answers to these questions; creating the competitive advantage you need to set yourself apart.

Complex is not better. Simple is not easy.

Many small business owners have been conditioned to value complexity; Complexity equals impressive; Complexity equals effective; Complexity equals accomplishment. At City Sidewalk, complexity equals bullshit.

Many of the problems businesses face are wrapped in unnecessary layers of complexity. Overthinking, or not thinking at all about the core of a business challenge happens because simple is undervalued, overlooked, or avoided, and therefore ignored. Don’t mistake complex for better, or simplicity for easy, they are rarely synonymous in life, or in business.

Otherwise smart people do stupid things like preferring complexity over simplicity. They think wrestling with complexity should be seen as some sort of honour badge. We’ve found that the best and most successful companies are those wanting to reduce complex business problem into manageable, simple pieces that can be easily understood, addressed, and dealt with.

As you weigh the simplicity of the questions don’t fall into the trap of ignoring the value of finding simple answers that address the core reasons your customers buy whatever it is that you sell.

The cost of not answering.

Various business organizations across the US have stated that 50% of businesses fail in under five years and 66% of all businesses fail in under ten. Unless you have your shit together, or regularly get a horseshoe enema, 2 out of 3 of you will fail. Answering these questions won’t guarantee success but you’ll at least know that you have a foundation in place that provides some measure of stability to build on.

If you aren’t growing, you’re dying.
If you need a visual refresher on how valuable fundamentals are, go and watch the original version of The Karate Kid and relive Daniel’s pain and frustration as he repeatedly waxes Mr. Miyagi’s collection of classic cars and paints endless miles of fence. “Wax Off!”

Enough yakking, here are the three most important questions you need to answer today.

Competitive Advantage - Who are your customers?
Question 1: Who are your customers?

Don’t fall into the trap of believing that everyone who builds a better mousetrap will have the world beating a path to their door. When you start to believe your own hype, and that of your friends and family, you start to imagine that everyone is a potential target. They aren’t.

The days of mass market are gone. Even if everyone with a pulse is a potential customer, your market needs to be broken down into manageable bite sized pieces. As some wise old man once said, “the best way to eat an elephant is one small piece at a time.”

Customers will often fit into big, all inclusive, marketing buckets but trying to target these broad categories is no longer effective or efficient. When you dissect the demographic and psychographic characteristics of your audience, you can tailor your message in a focused and effective way. ‘Spray and Pray’ marketing techniques are only effective for street preachers.

Don’t view your audience like they are identical drones. Every person you want to target as a customer can be defined by multiple, yet unique combinations of criteria. Those definitions might need to include broad demographic data like sex, age and marital status but, and more importantly, they need to include psychographic identifiers so you can target customers like a Navy Seal sniper taking aim on Osama Bin Laden.

If you run a bricks and mortar based business, like a hair salon, martial arts school, or a yoga studio, you are likely looking at more strict geographic boundaries so clients can conveniently find your location. If you offer consulting services, like we do at City Sidewalk, then geography isn’t as big a deal and you might want to expand your geographic reach. If you happen to be a fidget widget manufacturer then you may have a need to target the entire world.

Knowing as much as you can about your audience allows you to start slicing and dicing and grouping your audience into what is referred to as audience personas. These personas allow you to more easily visualize your audience and assign greater clarity to your business, sales and marketing strategy.

Question 2: What are they buying?

There is a damn good chance that whatever your customers take home in their shopping bags or that they search for online isn’t actually what they are looking to buy.

That may sound idiotic, but think about your own motivations and the emotional triggers that initiate your buying decisions and actions. What we often self-identify as a ‘need’ is actually a ‘want’. People tend to act from emotional centers and then justify their decisions and actions with a variety of rationalizations.

Acquiring your products and services fulfils some sort of emotional, and often irrational, desire within your customer. Figuring out what your audience is actually hoping to receive is a critical part of defining your strategy and messaging.

Let’s keep with the yoga and martial arts idea for clarity. People generally don’t wake up one morning and randomly think that they have to have yoga or martial arts in their life. The decision to participate in those activities are driven by deeper ideas and desires.

Maybe you spend 12 hours a day sitting at a desk like I do and are looking to become more flexible, and able to move more freely. Maybe those are your motivations for considering yoga? I know they were mine when I decided to torture myself at Bikram’s. Perhaps you have kids who are lacking self-confidence and you’d like them to be more assertive, or maybe you want to feel more secure about living on your own? If those are things that are of concern to you, then maybe martial arts is something that you’d consider joining?

Whatever your customers are buying, they aren’t buying yoga or martial arts services, they are buying something else.

Competitive Advantage - What are your customers buying?
Question 3: What are you selling?

Unless you’re brain dead, you’ve already figured out that what you need to be selling is whatever your audience has at the root of their purchasing decisions. The products and services that are paid for are not likely the same things as what your customers puts in their bag. The trick for long-term success is in learning what you need to sell them so that they will buy your product. Let’s explore a bit deeper with a couple of personal examples.

Starbucks and Apple; I’m a frequent shopper at both places and while they sell coffee and computer technology that is not the most valuable stuff that they offer me or my company.

City Sidewalk is a small business; just like yours perhaps? We leverage a distributed, flexible staffing model and need convenience, performance are reliability above all else if we are going to live up to our own promise and deliver what our clients are looking to buy — peace of mind.

Apple Computer
When I made the switch from Microsoft to Apple, a decade or so ago, the core reason for my purchase was not because I wanted or needed a new computer, it was because I was tired of banging my knee against an ugly beige box hidden beside my desk.

There was nothing Microsoft, Dell or Asus could have offered me. No speed improvement or jump in available productivity would have made me buy another Windows based computer. I bought from Apple because they had a sexy box that sat on top of my desk and wasn’t required to be hidden on the floor — a 100% purely emotional decision.

If Apple had tried to sell me on the performance of their technology they would have failed and I’d have gone back to my PC. I didn’t want an Apple computer, I wanted something that looked sexy and didn’t cause me pain.

The experience of buying that first 24” Apple iMac is still fresh in my mind. I’ve since bought another fifteen or so Apple computers and a dozen or more other Apple technology products. What sold me was the salesman’s first question, “It doesn’t look like a computer does it?”

Starbucks Coffee Company
My relationship with Starbucks again illustrates the difference between what their products are and what it is that I buy from Starbucks.

About twenty years ago, I was working downtown, a block away from the Starbucks at Thurlow and Robson.

I hated coffee, but since the office was too small and noisy for meetings, Starbucks served a valuable purpose. The location was convenient and the ambiance in most Starbucks is professional and inviting. This allowed for me to conduct business easily and with convenience.

City Sidewalk, like many businesses these days, is somewhat nomadic. We have a central, home based office, but client meetings are often done through video conferencing, at the client’s site, or off site at a convenient location for everyone. That generally happens at Starbucks which provides a convenient place to meet, work, or socialize wherever I am, in almost any city in North America. I drink coffee everyday now but still don’t like it. I buy convenience from Starbucks; the $300 or so that I pay them every month, I consider rent.

The Last Word

It doesn’t really matter what you are selling as long as you develop personas for your audience and then align those with what you are offering and what your customer are truly seeking. Find the connection and then sell accordingly.

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