Reverse Your Fortune With Sound Marketing
Which comes first, the market or the product? No, this isn't some strange twist on the old which comes first the chicken or the egg question. You see, when you put finding your market first, you can completely alter your sales outlook, whether you've run your business for years or the recession has you striking out on your own.
Too many entrepreneurs get wrapped up in what they plan to sell before discovering what their customers want to buy. In this recession economy, that can mean the difference between losing a fortune and making one. Time and again, I get requests for marketing guidance from business owners who've invested years perfecting a product or service without knowing the answers to three critical questions:
- Exactly who will want to buy this product and why?
- How much are they willing to pay?
- What will it take to convince prospects to buy from you instead of anyone else?
Pinpoint the Ideal Customer
Imagine you're starting out with a clean slate. Set aside any preconceived notions of what your current product or service offering must be. In this economy, consumers are emphasizing needs over wants. So ask yourself: What is truly needed in your product or service category? It might be anything, from a machine with fewer moving parts to longer customer service hours. The ideal customer knows what she needs--or at least she knows it when she sees it--so you must craft your product or service accordingly
Next, decide which prospect group has demonstrated a willingness to pay to fill this need. Don't spin your wheels developing a product or service before you know there's a target market that wants to buy it. Better to discover a market searching for a product than to have a product groping to find its niche.
Get Pricing in Line
Suppose you've spent the last year developing this awesome widget that fills a strong need within an established widget-buying target market. You're ready to bring your new widget to market, but it will cost $6 while all other similar widgets sell for $2. Assume your widget does something that the others don't and your prospects know they need this new, advanced product. What should you do?
A few years ago you might have thrown a major advertising campaign behind this advanced product and captured sales from deep-pocketed customers who were willing to pay significantly more for added features. But today your smartest move would be to find a way to introduce your superior widget at close to parity pricing with the old-fashioned widgets. Then, after the market had embraced your new product, you could gradually increase your prices, although probably not as high as three times more than the competing products.
Bottom line, never enter a market unless you know you can produce and sell your product or service for what your targeted prospects are willing to pay.
Factor in Credibility
This is where reality hits. The hard truth is that the merits of the product or service you offer are probably not enough on their own to close sales. When money's tight, prospects scrutinize every purchase more carefully. Part of bringing a product or service to even the most willing audience is factoring in the time, energy and money it will take to build the credibility required to convince prospects to purchase from you instead of your competition. That means developing an advertising plan, a content-rich website and online marketing that includes PR and social networking. You should market aggressively to sustain sales through the life of the product or service offer, including prior to and during rollout.
Marketing exists to support sales. Once you've identified a target market with a clear need and decided how you will fill it, a great marketing campaign will convince these qualified prospects to buy from you.