2017 was a record year for business startups in the UK with over 660,000 (source ft.com). This is a rise of nearly 40% from 2012 when the figure was 482,000. In 2017, 76% of businesses were sole traders.
There is no question that many, if not most, business start-ups have ideas of making it big but statistically, very few do. On the flip side, 60% of business startups make it to 5 years (source: small business.co.uk). Consequently, the majority of startups survive but few make it big. This means that we are seeing a steady rise in the number of SME businesses out there
So what doe this have to do with marketing? Bottom line: increasing competition.
You might think that rising market competition will naturally trigger a spike in marketing activity as businesses try to ‘spread the word’ in an ever-noisier marketplace but interestingly, this isn’t always the case. I have been talking with a number of business owners recently who have gone the other way.
Rather than pushing out ever more marketing messages, they have decided to focus on building a strong brand amongst a small and select group of customers.
The key to this approach requires 2 things:
- The power of referral
Despite what I say above, I strongly believe that no business can succeed without marketing. However, the form that marketing takes can vary widely. It is often said that Word of Mouth is the best marketing, and for small companies, (particularly those with a strong service element to what they deliver) being referred by a satisfied customer to a new potential customer is a great way to get new business. The rise of Social Media networks also makes it ever-easier for people to ask for referrals too.
If you are only ever going to make one sale to a customer you will always be looking for new customers. Furthermore, it is difficult for any customer to get to know and trust you for what you do to the point that they will be happy to refer you to someone they know. This isn’t to say that you must be selling to the same customers every week but you do need to be able to make a positive impression!
Don’t try to sell to everyone!
Talking to business owners, I will ask them who they see as their ideal target customer? ‘We can sell to anyone…’ is often the reply.
While strictly this may be true, aligning your business with a niche market can make things a whole lot easier. If you focus on selling to anyone, you are likely to end up with customers all over the place and no real connection hence limited potential for referrals. If you aim to develop your business within a niche market, there is a great deal more opportunity for word of mouth to spread. A niche can, for example, mean a geographical niche within your local community or perhaps a niche within a particular interest group.
Careful engagement with appropriate social media groups can be very powerful. However, be careful to focus on the group interests first and your own interests second!
One thing when targeting a niche market is to focus on the niche. Self-interest means that people are primarily interested in themselves and what is around them. Position your business so that, as far as your target niche is concerned, they are the only people who matter to you!
You could, of course, repeat the process with a second niche market – but the same rules apply. Make sure you don’t spread yourself too thin.
Promoting your business within a niche can be very effective – but there is an Achilles heel. You must ensure you really deliver and match or exceed your customers’ expectations. Under-promise and over-deliver is the mantra. Just as a good impression can spread quickly within a niche market, so can a bad reputation. A bad reputation can be difficult, if not impossible, to recover from in a market where people know one another.
Working with 2 or 3 niche markets can be some insurance against these risks but your best bet is to make sure you do a really good job, every time!
Don’t forget your marketing!
Although this article is promoting the idea that maybe you don’t need as much marketing as some may suggest, don’t forget marketing completely.
As I have said many times before, a website you are proud of is a valuable tool. Even when people refer you one to another, the first thing your prospect is likely to do is to check you out online. Managing your internet profile not only means you know what they will find when they look but also gives you the chance to show people examples of your work, case studies, testimonials and to give advice, further demonstrating your capabilities.