Part three of So you built a better mousetrap? Who Cares?
In part one Small Business Building the Better Marketing Mousetrap we examined the need to answer to really basic questions:
In our previous post Creating Real Strategies for Small and Medium Sized Businesses we saw the need to answer two really basic questions:
- So what ? Which is core to how your product is different or unique in the market.
- Who cares? Which helps you identify your real consumer groups
These are basically the only two questions you need to answer before you start creating a marketing strategy, but they need to be answered truthfully.
In part 2 Creating Real Strategies for Small and Medium Sized Businesses we looked at the strategy of your product v.s the competition.
Let’s take a closewr look at who cares.
We looked at a basic, simple grid:
Unfortunately, this grid will NOT apply to 90% of all small and medium sized businesses. However, the principle of a grid like this is valid for understanding your buyers vs. non buyers.
So, how should you go about forming a target group grid?
The first step:
Understand your business needs. Several years ago, I invented a process called TOE (for Theory of Everything) which began forming a strategy based on a business’ needs.
So, let’s say you are a CPA with a business currently generating about $2 million in sales and want to increase it, say, to $2.6 million in sales by the end of next year.
Step 1 – What is your current situation.
Remember this is not a business profitability analysis or a P&L.
- Most of your business comes from businesses (medium-sized and small)
- Affluent clients represent a quarter of your business though, probably, these rich clients are either the owners of the businesses or referred by them, so they are an important part of your business.
- Non-rich clients are a miniscule part of your income (8%) but represent 59% of all your clients.
So, in charting your growth towards the $2.6mm you’d have to balance the difficulty in getting new medium-sized companies vs. their profitability. Perhaps you will wind up with something like this:
So, basically, you would need:
- 3 additional medium-sized businesses
- 9 additional small businesses
- 30 additional rich clients
Note that this is one of many possibilities, you could, for instance, decide to switch your entire practice to servicing businesses and try to get 50 small businesses, but then again, one has to be realistic as to the timing involved. It is not easy for companies to switch CPA’s.
Or you could also decide to do a mix, where you can get some high-revenue clients AND increase the revenues per client.
Next- Before setting up on any strategic direction