23 Excellent Questions to Ask Your Customers

Want to know what your customers really think of you? Sometimes, the easiest way to find out is to just ask! In many cases, market research is really that simple, though it helps to go in with a list of questions to ask your customers.

Over the last two weeks, we’ve focused heavily on market research for small business. Our first article provides a crash course in market research and our second provides a list of ways for you to inexpensively get started.

In both articles, we extol the virtues of asking your customers for their opinions. For that reason, we’ve made a list of 23 questions that you can ask your customers. You can use these questions for one-on-one interviews and surveys alike!

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1. What are your most important goals?

Whether you’re selling a product or a service, you need to fill a need for your customer. For that reason, it helps to know what their goals are. There’s always at least one thing they need help with, otherwise they wouldn’t need your product or service at all.

If it helps, you can also break this question into two questions. You can ask about both short-term and long-term goals.

2. What are your desired outcomes?

Sometimes customers will freeze up when you ask them directly about their goals. That’s fine, since many customers don’t necessary think of meeting their needs and meeting their goals as being one and the same.

So how can you figure out what your customers are trying do in that case? Ask about outcomes instead! What do they want to happen when they buy your product or service (or one like it)?

3. How can we improve?

Often the most straightforward, open-ended questions will receive the most meaningful feedback. By asking this question, you open the door to all kinds of constructive criticism which you can use to make your business better.

This is the kind of question that often results in a lot of answers, so be sure to take notes. You will then want to review your notes later and see what the underlying themes are.

4. Was our staff friendly and helpful?

This is an especially important question if you’re selling a service. A bad customer service experience can turn customers away forever. If you are having problems with staff – poor training, a rude employee, etc. – this question will help you find the root of the problem so you can address it.

5. How satisfied are you with our products (or services?)

If you’re asking questions on a survey, I recommend that you ask customers to rate your products (or services) on a scale of 1 to 10 or 1 to 5. There is a benefit to asking this question in a way that requires a quantitative response. If you’re looking for positive feedback, you can filter surveys where the answer to this question is 8 of 10 (4 of 5) or better. Otherwise, if you’re looking for constructive criticism, you can filter reviews in the opposite way.

6. Did we meet your expectations?

Your customers’ experiences are inevitably filtered through their expectations. You can do phenomenal work and still fall short of expectations that are too high to be met. By asking your customers what they expect, you can do a few things:

  1. If customers routinely expect too much, you can find better ways to set expectations from the start.
  2. You can find unexpected ways to delight your customers by giving them things that exceed their expectations (but don’t cost much extra).
  3. You can modify your products or services to better meet their expectations in general.
On purpose or not, customers compare what they get to what they expect. Therefore, it’s very important to take their expectations into account!

7. How could we have exceeded your expectations?

This question is similar to the last but is worded in such a way where you are more likely to receive direct, actionable feedback.

8. Was it easy to purchase?

One of the most important lessons from the field of user experience sounds simple: don’t make me think!

If your website is complicated, your store has a confusing layout, or your pricing is unclear, you will lose business. It is really that simple.

By asking your existing customers if it was easy to purchase, you can identify any roadblocks that keep people from buying from you. Correcting them may help you turn otherwise lost leads into conversions.

9. How likely are you to purchase again?

Steady revenue is the lifeblood of a business. By asking your customers if they are likely to purchase again, you can better forecast revenues. Perhaps more importantly, if the answer is no, it gives you a chance to ask why and figure out what to improve.

10. What is the reason you purchased from us?

If you want to draw more customers to your business, sometimes it helps to ask your customers why they reached out to you in the first place. Your customers’ answers to this question may reveal a pattern and help you find (or refine) your niche!

11. What was the most memorable thing from your experience with us?

No matter how good or bad your customer’s experience was, the memory will eventually fade. The details will slip away and only a handful of things will remain. Asking your customers what the most memorable experience they had with your company will give you insight into how people will see you a year, two years, or five years down the road.

12. What are your biggest challenges?

This is very similar to the “goals” question above, but by focusing on challenges instead of goals or outcomes, you will find out what is annoying or worrying your customers. When you find that out, you’ve identified a need. If you can adequately address that need, then people will be more likely to work with your business in the future.

In essence, by asking about challenges, you can figure out their goals (i.e. “eliminating the challenge”).

What do your customers want to accomplish? Asking them about their challenges can help you figure out their goals (even when they don’t know what their goals are).
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13. What features could you not live without?

Whether you’re providing a product or a service, certain basic needs will have to be met. They might be what makes your company’s offerings unique, but they might not be. Sometimes they’re just basic qualities that you have to provide.

14. Which features could you live without?

This is the negative version of the above question. It can help you identify what is not worth spending money on. While it is tempting to make products or provide services with all the bells and whistles, it’s often expensive and distracts from what’s really important. Knowing what you can stop focusing on will make your life a lot easier!

15. Would you rather cut costs or increase productivity?

This is a variant of a question I found in a HubSpot article. This question doesn’t apply to every business, but it’s good for B2B businesses. By asking whether costs or productivity is more important, you can focus more on what matters most to your client. Plus, this question will give you a sense of how your company’s performance will be evaluated in a B2B relationship.

16. Why did you choose us over the competition?

In order to find your niche, you need to do at least one thing better than your competition for a given market. For those who choose to do business with you, asking them why they chose your business is very insightful. This allows you to identify your strengths so you can market them.

17. What would you say about your experience?

This open-ended question gives customers a chance to talk about their experiences – both positive and negative. Like asking “how can we improve,” this gives customers a chance to say what they really think without prompting.

18. What is your favorite thing about our (product or service)?

Asking your customers directly about what they like the most about your service gives you a sense of what your unique value proposition is. Much like “why did you choose us over the competition,” this is a question that can help you find your niche or tweak your messaging if you find your actual strengths are not what you’ve been advertising the most.

Finding out what your customers love about your business helps you find your unique value proposition!

19. What is your least favorite thing about our (product or service)?

On the flip side, asking customers what they do not like about your business gives you a chance to identify issues that are either stopping people from purchasing or causing them not to purchase again.

20. Where do you look for information about our industry?

If you want to promote your business more effectively, you need to figure out how to be seen by more people. One of the best ways to do this is to ask your current customers how they are doing their research. This lets you identify where people with intent to purchase are already looking. You can then direct your efforts toward being featured on those websites (or social media channels, trade publications, and so on).

21. How did you find us?

Similar to the previous question, asking customers how they found you (as opposed to where they do their research) will help you find specific places that people are using to find your business. This can help you figure out how to spend your marketing budget or which channels you need to be featured on.

22. What were you using before you found us?

There are basically two possible responses to this question. The first is “I wasn’t using anything” and the second is “I was using someone else’s product or service.” Knowing the answer to this question will help you identify whether you are pulling people into your market for the first time or whether you are pulling people away from your competition.

23. How likely would you be to recommend this business to a friend?

This is another question that goes great on a survey on a scale of 1 to 10 or 1 to 5. If customers rate your business 8 or higher (4 or higher), then they are very likely to recommend your business to a friend. By pleasing customers to this degree, you are likely to benefit from word-of-mouth – the cheapest, hardest-to-fake, and one of the most effective marketing types of all!

Final Thoughts on Questions to Ask Your Customers

Your customers have a wealth of information to share with you. By asking for their opinion, you can find opportunities to improve and issues to resolve. From then, you can rapidly improve, grow your business, and meet even more customers’ needs!

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14 Cheap Ways to Do Market Research for Your Small Business

Conducting quality market research is one of the best ways to ensure the long-term growth of your business. Just last week we talked about exactly what market research is and how it can help your business grow. From crafting perfect products to finding new audiences, the benefits are clear!

But let’s be real for a minute. Not everybody can just throw a bunch of money at market research and hope for the best. Spending time or money on anything that doesn’t directly lead to gaining revenues or cutting expenses is, at best, tough to justify.

So how can you reap the benefits of marketing research without wasting a bunch of money? Turns out, there are a lot of things you can do, and we’re going to name fourteen of them in this article!

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1. Gather info at industry events. 

Industry events, whether they’re trade shows, expos, social mixers usually are not free. In many cases, they cost a lot of money to attend, and even more when setting up a booth and arranging travel. Nevertheless, many businesses make a habit out of going to them already, even without any marketing intentions beyond the abstract notion of “networking.”

And you know what? This is actually good. Industry events are tremendous for getting your name out there and helping you meet people who care about what you do.

If you’ve already decided to go to an industry event, why not go in with a few marketing questions you want to answer? Through asking your industry peers or by simply observing others’ behavior, you can answer many of your most pressing marketing questions at no extra cost!

2. Check the news headlines.

News organizations and bloggers alike put an enormous amount of thought into headlines. Whether online, on TV, or in print, headlines serve one purpose: get the attention of interested people by telling them things that pique their interest.

Try checking out the headlines for your industry. Google your competitors’ names. Look up the name of your products and services. Without even clicking on the articles, go through 10 or 12 pages of headlines. This exercise alone can help you understand what market demand looks like.

3. Look for market data through resources such as the Bureau of Labor Statistics and the Small Business Administration.

The US government puts an enormous amount of money and effort into gathering useful information. This is a good thing since this data is publicly available and small business owners can use this information to their advantage.

Here are a few links to get you started:

4. Read trade journals.

Trade journals are a great place to look for industry-specific, detailed market research data. The data provided in trade journals has a few advantages over what we’ve mentioned before.

Industry events are often hectic, networking-focused events. You can perform market research at them, but not at your own pace as you can with trade journals. You just go there, experience what you experience, and takes notes as fast as possible. In many cases, this is good enough! But if you’re looking to do really nuanced, careful research, it might not be.

Similarly, searching for headlines will tell you a lot about your industry, but it only scratches the surface. Headlines will tell you what’s trending, but they won’t tell you why.

Government data does the same basic thing, but more empirically. It can tell you what is happening in your industry, often backing up their data with great detail. Yet it doesn’t answer why.

Trade journals allow you to research at your own pace, in great detail, with context provided by experts in your industry.

5. Perform text analysis on social media mentions or survey data.

Collecting data from industry events and trade journals is useful because you hear from people in your industry. Similarly, headlines and government data can give you a sense of larger trends in the market.

But what about your customers? What do they have to say? Sometimes you cannot ask customers directly, but you can read what they voluntarily say online. Social media is wonderful for that.

We won’t get into the specifics of how text mining works, but suffice it to say, there are tools that will help you see which words pop up in correlation with others. You can even gauge the sentiment of the data being mined.

6. Read competitors’ websites.

This almost seems like a no-brainer, but it’s such a valuable research technique. If you want to understand your industry or potential industry’s norms, look at your competition! What do their websites look like? What are they doing on social media?

By looking at your competitors’ websites, you can answer a few of the following questions:

7. Ask questions on social media.

One of my favorite methods of marketing research costs nothing. If you have a reasonably large following online, you can just…ask people questions. Seriously, it’s that easy. Just ask people what they like, what can be improved, where they shop, and so on.

Even if you don’t have a big following online, you can often do this in popular Facebook groups or on websites like Reddit. However, please take care when posting in other communities not to come across as a sleazy marketer. You either want to come across as genuinely curious or you want to be straightforward about what you’re doing. That is, say you’re running a business and want to make great products or services!

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8. Require customers to answer questions to receive a prize.

Running contests is not free. However, it’s often not as expensive as you might expect and I have personally had fantastic results with giving away $50 items.

If you’re already giving away items, that’s great! You’re ahead of the curve. Why not take it one step further and incentivize your users to answer questions to increase their odds of winning a prize? Popular contest software, such as Gleam.io, makes this a lot easier to do!

9. Perform A/B testing on your website, ads, or emails.

Subtle differences in the way you present your company can make a big difference. For example, a good email title has a much greater chance of being opened than a bad email title. Similarly, well-crafted advertisements often get 10 or 20 times the return of badly-crafted ones, at least in my experience.

Knowing the difference between good and bad choices, though? That’s tricky, particularly as the “good” and “bad” are entirely based on what your customers want in the first place!

In a future article, we will be sure to talk about how to perform A/B testing. In the meantime, here is a great article to help you get started!

10. Send out surveys by email.

A client of mine came to me one day saying, “how can we improve our service?” My immediate instinct was to tell them to ask their customers when they next see them and then write down their suggestions.

Then I realized we were sitting on a mailing list with hundreds of active clients!

I then spent the next 45 minutes crafting a simple survey on Google forms. Then I spent another 45 minutes putting together a very simple email on MailChimp. We sent it out and a surprising 15% of people took time out of their day to respond to the survey!

We were then able to use the survey results, implement many of the things customers wanted, and they’ve been thrilled with the improvements!

11. Save all feedback from customers.

On that same note, you don’t always have the luxury of sending a survey out to all your customers. However, you can always save your emails, case notes, phone call transcripts, and more. You can then review them later and see what suggestions you can run with from there.

12. Interview individual customers.

If you want really nuanced, human information, asking your customers is a great start! Many customers are happy to spend a few moments of their day answering questions, particularly if they believe it will help improve a product or service they use a lot.

Whether by phone or face-to-face, you can actively respond to what they say. You’re not forced to rely on responses from surveys. You can ask follow-up questions and seek clarifications when it’s useful.

13. Review the data in your CRM system.

CRM is short for customer relationship management. This includes software such as Salesforce or HubSpot. CRMs are great to have and commonly found in businesses because it makes it a lot easier to track your customers and their interests.

What many people fail to consider is that CRMs are wonderful for market research. Best of all, if you already have one implemented, it doesn’t cost you anything to query the data that is already there.

By asking smart questions and spending some time creating relevant reports, you can figure out what your customer base likes and dislikes about your products or services. You can then focus on giving them the improvements that they seek!

14. Talk to suppliers, distributors, and retailers.

Last but not least, often the people who have the greatest insight into your industry are not customers or even your peers. No, many times, the gatekeepers – distributors and retailers – are the ones who can tell you what really matters. Other times, it’s the people who provide the raw materials – suppliers – who can catch trends in their infancy.

In addition to the obvious benefits of good business relationships with suppliers, distributors, and retailers; there is a marketing rationale to listen to them. By merit of their jobs, they are exposed to a lot of information. Not to mention, they have a vested interest in seeing your business succeed. Suppliers want to sell more suppliers and distributors want to move more products!

Final Thoughts

Market research is not just for marketing agencies and Fortune 500 companies. Even if you run a business all by yourself, you have the tools at your disposal to figure out what customers want so you can give it to them. Many of the best techniques are cheap, or even free!

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A Crash Course in Market Research for Your Small Business

Building a small business for the first time is really difficult! You have to create a product or a service that’s perfect for your audience. Then you have to tell people you exist. These two tasks are the essence of marketing. While they sound simple, anyone who’s tried them knows how tricky and nuanced it can be.

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Enter market research. It’s a straightforward concept: you gather data about people and companies and figure out what people want and need. Do it well and you’re well on your way to crafting the perfect products and services.

In this article, we’ll talk about what market research is and what tools you have available. Then we’re going to give you 9 specific steps you can use right now to grow your business!

Market research – what is it and why does it matter?

What is market research, anyway?

My favorite definition of market research comes from Shopify.

Market research consists of systematically gathering data about people or companies – a market – and then analyzing it to better understand what that group of people needs. The results of market research…are then used to help business owners make more informed decisions about the company’s strategies, operations, and potential customer base.

In short, you use all the information available to you to figure out what people want and how (or if) they’re able to get it.

Why bother with market research?

There are a lot of reasons to spend time on market research. In fact, if your business is still just an idea, you should focus heavily on market research at the beginning.

This fantastic article by Oberlo contains some reasons to perform market research, the best of which I’ll list here for you:

  • Determine the feasibility of new businesses. In short, you can see if people even care about what you want to make before you spend time and money making it.
  • Identify and develop potential new markets. Sometimes, you can watch new trends being born before businesses are able to act. Market research helps you find demand for products or services that don’t exist yet.
  • Test the demand of new products of features. This can be a real life-saver. Market research lets you check for product-market fit before you make a whole bunch of a product that no one wants.
  • Boost the success of promotional campaigns. When you pay attention to what people are saying online, you can tweak your messaging. Even our own company is working on doing this!
What are your marketing objectives and how does market research help?

Before you start a big research project, stop and think about what you want to come out of it. There are a few different reasons why you would initiate a market research project:

  1. Starting a business and seeing if it’s viable.
  2. Looking at related products or services that you want to start selling soon.
  3. Testing products or services that aren’t ready to be released to the public.
  4. Improving the ROI of current marketing efforts such as ads.
  5. Getting in touch with customers and seeing if you’re really meeting their needs.
  6. Keeping an eye on competition.
  7. Gauging the size of your current market and other markets.

This is just scratching the surface, too. The point is: think about what you want to get out of market research first.

Primary research vs. secondary research

As you might imagine, there are different kinds of market research. You can broadly categorize them into two types, though: primary research and secondary research.

Primary research

Sometimes if you want to get good information, you need to go right to the source. By that, we mean the customers!

Marketers over the years have come up with all kinds of ingenious ways to get customers to talk about what they want. Sometimes it’s as simple as informally asking questions. Other times, you want something more rigorous such as a well-made survey.

In any case, a few examples of primary research include focus groups, surveys, and interviews. Note that most primary research methods can be done in-person, on the phone, or online. It really depends on what you and your customers are comfortable with!

There are two basic ways that primary research can be used: exploratory research and specific research.

Exploratory research is where you have open-ended interviews or surveys. You never know what you’re going to hear from your customers, and that’s the beauty of it! Exploratory research is great when you don’t have specific questions you need answered.

But let’s say you do have specific questions that need to be answered. That’s where specific research comes in. With specific research, you ask detailed questions intended to receive precise responses to narrowly-defined questions.

Both kinds of research have their place. Think back to your objectives and really consider whether exploratory or specific research is more useful for you.

Secondary research

The problem with primary research is that it’s subjective. It’s very, very human and that has its ups and downs. Secondary research is more focused on quantitative data. You know the sort – trend reports, statistics, industry data, and more.

Secondary research is better in two cases. The first is if you need hard, empirical data instead of the softer, more human data gathered in primary research. The second case is when you need to analyze your competition.

Where do you turn when gathering secondary research? There are several places you can go:

  • Government statistics relevant to your industry
  • U.S. Census data
  • Bureau of Labor & Statistics data
  • Commercial sources such as Pew or McKinsey
  • Your own internal data sources (Google Analytics, social media metrics, sales figures, etc.)
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How do I do marketing research? (9 Steps)

Everything we’ve said up until this point is useful for understanding why market research is valuable. But let’s say you’re ready to just dive in and do it. That’s great!

If this describes you, we’ve come up with 9 steps you can follow. These steps will carry you through just about any market research project you can come up with!

1. Understand the basic purposes for market research

We spent most of the first part of this article covering it, but it bears repeating. Market research is best done with specific objectives in mind. You must understand the purpose of the research prior to conducting it for the best results.

If you want another point of view on this, check out this article on The Balance.

2. Know the tools you have available

We touched on this earlier when talking about the difference between primary and secondary research tools. Let’s now get into more depth. You have a lot of research tools at your disposal. Here are just a few:

  1. Surveys. Whether you use open-ended questions to collect varying responses or specific questions to collect neat, easy-to-classify responses, surveys are an excellent tool for learning about your customers. You can do them online, in-person, and over the phone.
  2. Focus groups. Sometimes the best way to understand what your customers like is to get 10 of them in a room. Send one person in the room to ask questions and another to take notes.
  3. Observations. If you have a physical product, give some customers the product and see how they interact with it. The same principle can be applied online by watching how users interact with your website.
  4. Interviews. One-on-one interviews are also a great way to understand how your customers think. In doing them, you can ask specific questions and see how they responses.
  5. Industry associations and trade groups.
  6. Trade journals.
  7. Government data. As we mentioned before, the Census and BLS typically provide great high-level data for business owners to review.
  8. Industry experts.
  9. Websites in general. When in doubt, Google it!
  10. Competitor websites. Nothing can tell you what competitors are up to quite like reading their website and social media channels.
  11. Your own web analytics. By paying attention to the pages your customers are accessing and staying on, you can figure out what kind of products or services are likely to go over well in the future.
  12. Your own email and social media analytics. By looking at your email and social media data, you can see which messages you’re sending that customers are responding to. That can tell you a lot about what they are interested in.
3. Define your target audience

No amount of market research can save you if you don’t know who you are selling to. Think long and hard about the kind of people who are likely to buy products or services from your business. Ask yourself some key questions such as:

  • What are my customers interested in?
  • Where do they live?
  • What kind of media do they consume?
  • How much money do they have?

The more specific your answer those questions and others like it are, the better able you will be to create products that meet their needs. After all, customers only choose to buy when they determine that your business is meeting a need!

4. Find your niche

If you really want to succeed in business, you need to find a niche. People have a finite amount of attention and a seemingly endless amount of options available to them. That means you need to laser-focus on a super-specific target audience and create a product that fits them so well and so uniquely that no one else can compare.

If you don’t know your niche, market research – particularly exploratory research – can help you find it. If you do know your niche, you can narrow down your more specific questions to be extremely relevant to the people you’re talking to.

5. Imagine your buyer as a real person (because they are)

Nothing makes companies feel out of touch like speaking about people in groups. You know what I’m talking about.

“Generation Z likes that, but Millenials like this!”

Get out of here with that! You need to think about your buyers as real, breathing individuals – because they are. Some companies such as HubSpot even recommend creating buyer personas. That is, creating a character – like in a novel, movie, or D&D game – and imagining them with certain characteristics. Those includes:

  • Age
  • Gender
  • Location
  • Job title(s)
  • Family size
  • Income
  • Major challenges

You don’t necessarily have to go through a formal “buyer persona” process, but the message here is clear. When coming up with questions for market research to answer, think of individuals and not groups.

6. Reach out to participants

It’s kind of a no-brainer, but you need to get in touch with people if you want to do primary market research. Here are a few ways you can do that:

  • Reach out to people who recently bought your product.
  • Send an email to regular clients.
  • Cold contact people on social media.
  • Use incentives such as free items or even money. (We use this when running contests for which one of the entry conditions is “ask a marketing question”).
7. Prepare your questions

Before you send a survey, set up a focus group, or call somebody for an interview, take a moment to write down some questions. When in doubt, stick with open-ended ones. Tailor them based around your market research objectives.

Here are a few generic examples to get you started:

  • What are your personal job responsibilities?
  • Tell me about your goals.
  • What has been your biggest challenge in the past year?
  • How familiar are with different options on the market?
  • Where do you go to look for more information?
8. Analyze your competition

Once you gather enough information, you will start to have a clearer idea of what customers want. Take a moment at this time to review your own website and your competitors’ websites. How does your company compare to others? Is your competition adequately addressing the needs which you have observed today?

9. Review the results

At long last, after the arduous process of collecting data from different sources – primary and secondary – you have enough to proceed. Take your time and organize your thoughts. Perhaps put together a brief summary report of your findings.

You can do all the market research in the world, but if you never take the time to properly review it, you’ll see limited benefits from it.

If possible and appropriate, take your research and come up with goals for the near future. Perhaps you will launch a new product or start using a new social media channel! The right moves depend entirely on your research.

Final Thoughts

To spend time on market research is to spend time well. Properly conducted, market research lets you understand your customers more completely as human beings. Your business can then adapt. You can come up with new ways to address your customers’ needs or even simply find new ways to reach out to them.

Either way, the benefits are clear. Schedule some time in the next month to conduct some market research. You’ll be glad you did!

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Don’t Be Evil: Ethical Marketing for Small Businesses

Ethical marketing may seem like a paradox. The whole reason for marketing, after all, is to sell more products. It’s easy to cast aside the very real problems that marketing can create. Marketing deals with the intangible emotions of other people, pushing their buttons to make them take certain actions.

marketing ethics snake
“Thisssssssss used car is in great condition!”

Just because you can be evil, though, doesn’t mean you have to be. Let’s talk about how to market effectively without being a snake.

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Ethical Marketing for Small Businesses

  1. Is marketing evil?
  2. The Externality Problem
  3. Dirty Marketing Strategies
  4. Shady Marketing Research
  5. Going After (or Scaring Off) Vulnerable Audiences
  6. Sketchy Pricing: Fixing and Wars
  7. Lies and Sleaziness in Advertising
  8. Shilling and Astroturfing: Self-Promotion Gone Horribly Wrong
  9. Hacking the Human Brain with Neuromarketing
  10. Guidelines for Ethical Marketing

Ethical Marketing for Small Businesses

Is marketing evil?

First, let’s tackle the big question head-on. Is ethical marketing even possible? Some people believe that marketing is inherently evil. The argument is that marketing has to do at least one of the following:

  1. Damage personal autonomy.
  2. Harm competitors.
  3. Manipulate social values.

At Marketing is the Product, we believe this is flawed. This is obviously not going to come as a surprise to you, so let’s make the case.

Obviously, harming competitors is wrong. Competition that is fair and meritocratic is, broadly speaking, not a problem. Price fixing, lying to customers or regulators to get ahead, corporate espionage, and so on are obviously very morally wrong.

Manipulating social values can be bad, too. The world is entirely too consumerist. We waste perfectly good products and we burn too many fossil fuels. In a rush to buy cheap products, we passively accept many horrible things. This is also true and tragic. Yet you can also manipulate social values to encourage healthier behavior (anti-smoking) or make fuel-efficient cars look attractive (ameliorating climate change).

It’s that first argument that we really push back on, though. Does marketing truly damage personal autonomy? Perhaps, especially in cases, where marketers lie or intend to deceive. Yet we say over and over again that it’s necessary to create a product with good product-market fit. Yes, you can sell people garbage if you have the upper hand – that’s why I’m still with Verizon – but most businesses cannot. Very, very few people are capable of selling something completely unwanted by the audience. For all the evils of consumer capitalism, leaving people without the autonomy to make choices is not among them.

The Externality Problem

In economics, an externality happens when someone completed unrelated to your transaction gains a benefit or pays a price. Some externalities are nice, like when restaurants open near your home and the property value appreciates. Other externalities are terrible, like a coal plant filling the air you breathe with billowing, black plumes of smoke. In those cases, the party affected by the externality does have their autonomy harmed.

A lot of the ethical marketing issues you’ll see below either deal with externalities or outright disregard for the consumer. We posit that the root problem is not the discipline of marketing, but rather power differentials between the businesses and individual members of society. With this in mind, we propose three golden rules for ethical marketing:

  1. Avoid harmful externalities.
  2. Be aware of power differentials and the harm they can cause.
  3. Refrain from crass misbehavior such as lying or cheating.
Dirty Marketing Strategies

We’ve discussed the root cause of evils in marketing, so let’s talk about some marketing strategies that are fundamentally evil.

Anti-competitive business practices seek to reduce or eliminate competition entirely. At its core, capitalism – regardless of how you feel about the system at large – only really functions when companies compete. When a company accumulates too much power, it can toy with prices, tie products together, absorb competitors, lobby governments, and misuse intellectual property rights. As a small business, you’re not likely to be able to use anti-competitive practices, but perhaps certain other Amazons in the industry will.

Bait-and-switch involves advertising one thing and selling another. It’s simple, anyone can do it, and it’s ugly. It’s also illegal.

Planned obsolescence is by its very nature a dirty tactic. Everything breaks. Making things that break in order to sell more of them is wasteful and it costs both consumers and society at large.

Pyramid schemes and multi-level marketingIf your business model involves recruiting people, promising money to them, and never actually delivering a product; then congratulations – you’ve invented a pyramid scheme. Just like Bernie Madoff.

Subliminal marketingBy subtly exposing people to certain brands, such as through product placement, you can make people a little more likely to buy said brand. It’s not extremely effective, but it’s still dirty because it robs people of the chance to consciously make a choice.

Spam and SEO hijinks. In the early days of the internet, you could load web pages with all kinds of irrelevant information to boost your rank in Google. It doesn’t work so well anymore, but when it did, completely useless pages could outrank legitimately useful ones, wasting everybody’s time and potentially enabling more fraudulent practices.

Guns and Drugs – Marketing Ethics in Dicey Industries

Some industries are minefields for ethical marketing. In particular, the pharmaceutical and weapons industries come to mind. We certainly don’t want to live in a world without pharmaceuticals. A world without weapons – even just for self-defense – would not be considered desirable to most people. Yet to market a weapon requires glamorizing it or making it readily available, which could cause innocent people to be harmed. To market a pharmaceutical is to sway a doctor’s decision-making process, which can be evil as well.

Shady Marketing Research

At Marketing is the Product, we are big fans of marketing research. Performing marketing research, after all, can enable you to better understand the needs of your audience so that you may meet them to the best of your ability. Yet there are ways that marketing research can go horribly wrong.

As part of performing marketing research, you will likely come across very personal information. That includes age, gender, race, household income, browsing history, and much more. If you don’t come by that information honestly, ethical marketing becomes borderline impossible from the get-go.

Modern marketing, especially online, is particularly bad about invading consumers’ privacy. Facebook, for example, while being a great advertising system, has not historically been very open about how ads are being used. This can be used for grotesque purposes, such as when Russia bought ads on Facebook with the intention of sewing political turmoil in the US.

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Going After (or Scaring Off) Vulnerable Audiences

Of the many Bond villain behaviors that marketing professionals can display, there is nothing quite as sinister as marketing to vulnerable audiences. For example, fast food companies can market their products to children, who see delicious food, but not potential health problems. Similarly, robocalls tend to go after the elderly, who are more likely to fall for the scam.

“So I won’t market my products to children or the elderly. Problem solved.” It’s not quite that simple. Vulnerability isn’t just about the cognitive abilities of your audience. Let’s return to the idea of power differentials. Loan sharks can take advantage of otherwise highly intelligent people because of their economic status. Perfectly logical people can make awful decisions when provided with nothing but misinformation.

It is also possible to denigrate audiences and make them vulnerable for business purposes. Some clothing stores refuse to make plus-size clothes, excluding an entire audience to make their brand seem more prestigious. The same principle can apply to ethnic minorities to – just look at this Wikipedia page called “shopping while black.” In some health systems, people with high expenses can be discouraged (but not outright turned away).

Sketchy Pricing: Fixing and Wars

Price is crucial to marketing – it is, after all, one of the 4 Ps. In a functional market, price is supposed to indicate the costs associated with creating and maintaining a product or providing a service. The buyer gets a great deal and the seller pockets enough money to make the enterprise worthwhile. It’s the glorious double thank-you of capitalism at its finest.

Until it breaks. Price fixing is a great example of an ethical marketing dilemma. When a small group of sellers controls an entire market, they can work together to set a fixed price. As long as everybody agrees not to drop below a certain price, the sellers can make money hand over fist at the expense of the consumer.

What about when the sellers are not cooperating? Pricing can still be used as a weapon by sellers, but instead of using it against consumers, it can be used against other sellers. For example, if an extremely large company wanted to establish market dominance early, they could sell their product at a loss, push everybody out, then raise the price. Large companies can even engage in price wars against each other, like Amazon and Walmart.

Lies and Sleaziness in Advertising

Advertising is what most people think of when they think of marketing. That’s unfortunate because the number of ways that advertising can go horribly wrong is incredible. Famously, old cigarette advertisements recommend smoking for health benefits.

Outright lying and fraud occur, but often the sleaziness is more subtle. For one, we can unnecessarily shoehorn sex into ads. One good example is Carl’s Jr., whose ads for breakfast food have been so racy that we won’t even link one here. These sorts of ads can be so overt in their sex appeal that it becomes a form of sexual harassment.

There are some products which are difficult to advertise no matter what. Tampons and condoms are good examples. They are necessary products but the mere act of advertising them can come across as tasteless.

Sometimes the most effective way to advertise is to denigrate your opponents. This is especially popular in the political arena. In fact, here is a tremendous but deeply upsetting example from the 1964 presidential election.

Shilling and Astroturfing: Self-Promotion Gone Horribly Wrong

In the age of the Internet, there has been an alarming uptick in shills, astroturfing, and native advertising. Shills pretend to be independent supporters of the marketer while actually being paid to comply. Astroturfing involves faking a grassroots movement until it begins to take a life of its own.

A lot of times, shills and astroturfing will show up as simple fake reviews on Amazon or similar sites. The basic idea behind these approaches is that pretending to have massive support will make customers more likely to purchase in order to fit in. It is disingenuous.

Hacking the Human Brain with Neuromarketing

Neuromarketing is a new discipline in marketing. It relies on clinical information about how the brain works in a consumer behavioral context. In short, neuromarketing means studying the brain so you know exactly how to sell to it.

In and of itself, neuromarketing is not necessarily evil. However, because we are finally starting to gain empirical insight into people’s biological responses to marketing materials, it could add further complexity to already ethically fraught situations. At its worst, it can be used to further invade privacy and manipulate others. At best, it gives us a few more tools to continue what we were already doing in marketing. Instead of looking at open/click rates on emails, we start looking at MRI scan data.

Guidelines for Ethical Marketing

Higher up in the text, we proposed three golden rules for ethical marketing:

  1. Avoid harmful externalities.
  2. Be aware of power differentials and the harm they can cause.
  3. Refrain from crass misbehavior such as lying or cheating.

Now that we’ve covered the rest of the article, we’ll add seven more rules to make it a nice, even 10.

  1. Accept that marketing can be used for evil.
  2. Recognize evil marketing strategies when you see them.
  3. Conduct research with permission and good intent.
  4. Don’t go after vulnerable audiences.
  5. Set prices fairly.
  6. Don’t misrepresent your products or services.
  7. Don’t pretend to be more popular than you are.

Niccolo Machiavelli reportedly said, “I’d like to teach them the way to hell so they can steer clear of it.” Evil marketing exists, but so does ethical marketing. Small businesses can apply our simple principles to stay competitive without becoming monsters.

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How Small Businesses Can Craft Perfect Products and Services

Every small business wants to sell big. The desire to earn a lot of customers is deeply ingrained into business culture. However, to do so, you need to create products and services that people are really enthusiastic about. Dedicated readers of this blog know that we refer to this as product-market fit. What we have not yet talked about is exactly how you can do that.

The art of creating perfect products or perfect services is not merely a question of manufacturing or finding the right employees. It’s not even just about understanding your customers’ needs deeply, although that’s a very important part! Fundamentally, creating the perfect product requires following a rigorous, repeatable process to inch your way toward perfection using iteration and observation. In short, it’s a science.

With that in mind, here is a brief outline of the article you’re about to peruse:

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6 Steps to Crafting the Perfect Products and Services

  1. Identify Your Target Customer
  2. Know Your Customers Better Than They Know Themselves
  3. Assess Your Capabilities
  4. Make Imperfect Products to Make the Perfect Products (Minimum Viable Products)
  5. Test Your Prototype
  6. Collect Real Data & Analyze it With Clear Eyes

6 Steps to Crafting the Perfect Products and Services

Identify Your Target Customer

Deep down, all businesses must be built to address a need. To convince someone to spend their hard-earned money requires a sufficiently strong incentive, and only addressing needs can provide that. Even when money is no object, you still need to move people from a default state of “no action” to a state of “taking action.” This is not always easy to do, and it’s why we keep saying to focus on product-market fit!

As we had discussed in Consumer Behavior 101, needs are not always what you think they are. Needs are often emotional. They are very heavily dependent upon the nature of your audience. Some people have very basic needs at the moment you come into contact with them – food, water, sleep. Other times, people have far more abstract needs such as a chance to express their creativity or to find love and belonging.

This is where we circle back to finding the right audience. Once you identify an audience your business would like to serve, you can figure out their needs. Upon figuring out their needs, you can find a way to meet those needs. When you’re able to meet those needs, you can find a way to signal your ability to meet those needs in your marketing materials. This is what compels people to make the decision to go with your company. It must happen in that order!

Know Your Customers Better Than They Know Themselves

Great marketers are great listeners. Great listeners don’t just listen to what is said, though. They also listen to what is not said. Listeners pay attention to online behavior and body language. I would argue that in our strange century, great data analysts and researchers are among the greatest listeners of all.

Once you identify an unaddressed or under-addressed need that your target audience has, think deeply about the nature of the need. One way you can do this is to map the need to its place on Maslow’s Hierarchy of Needs. This hierarchy is an old psychological concept that has stuck around for a while because it allows us to understand complicated emotional experiences in a simpler way. This allows you to say things like “their need for more Twitter followers is actually a desire for self-esteem.” Alternatively, you may say “our friendly customer service fills a need for friendship, at least for a little while.”

Once you’ve thought about the nature of the need you’ve found in the market, consider another question. Can you meet this need in a way people have not yet described? Henry Ford supposedly (but probably never) said, “[i]f I had asked people what they wanted, they would have said faster horses.” Whether he said this sentence or not, the moral of the story is simple: people aren’t always best at describing ways to solve their problems. That’s where you come in.

At this point, you’ll want to determine whether it is better to innovate with a new process or continue along a well-established path. Neither answer is necessarily wrong in the abstract. Yet you must look at your business environment and make a determination for yourself. This is how you find your unique value proposition. Once you do that, you can think about how best to pitch your products or services to your intended audience.

Assess Your Capabilities

Naturally, before you promise customers certain products or services, you want to make sure that you are able to provide them. This is especially true when you’re aiming to create perfect products or services. Remember that your ability here is not gauged simply in operational competency. Your ability to meet customer needs is ultimately judged by the customers. Your customers’ perceptions are your reality.

Before you commit to meeting needs in any one way or another, consider performing a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. These analyses allow you to weigh both internal and external factors that could help or hinder your ability to please your customers.

Take off the rose-colored glasses and be very, very honest about what you can and can’t do. This is critical!

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Make Imperfect Products to Make the Perfect Products (Minimum Viable Products)

In the early 2000s, a new term arose from Silicon Valley: minimum viable product. No matter what industry you’re in, including service industries, this concept is immensely useful. The core concept couldn’t be simpler. You make the simplest, most straightforward, perhaps even stripped-down version of a product. The idea is to quickly, inexpensively create something that you can show to your target audience.

Removing the stress of focusing on perfection is immensely freeing. Feedback from early adopters is likely to send you off into all sorts of directions you could not have predicted. That’s not a bad thing, either. You should actively encourage people to correct your course!

There is an important caveat here, though. While it’s usually appropriate to create a minimum viable product, it’s not always appropriate to release one to the public. Sometimes, it’s very difficult to overcome bad first impressions that come with a slipshod product. If you’re in an industry where this rule applies, you should keep your minimum viable product within the confines of focus groups and other tight-knit communities. This will keep from sullying your name before you’re able to show people what you are truly capable of.

Test Your Prototype

Once you have created a minimum viable product, it’s time to test. You’re testing for functionality, yes, but for the purposes of this blog, let’s focus on marketing. Before you ever begin a test, you want to have a clear idea of which emotions you are trying to encourage in your audience. When it’s time to test your prototype, you want to see if your product truly works on that level.

A lot of techies know that when you’re testing software, you need test scripts. The purpose of these test scripts is to push you to use the system in ways with the intention of breaking it. You perform all the usual and unusual transactions in the hope that nothing goes wrong.

In marketing, you don’t hand test scripts to your potential customers. Nobody’s stopping you, but it’s certainly not expected behavior. What you do instead is let people use your product and service with the specific intention of watching how certain scenarios play out. Here is what that could look like:

  • Do customers have any trouble finding the place?
  • How do customers act when they walk in the door?
  • Are customers satisfied with the product?
  • Are customers bringing friends over to see the product?
  • Do any particular aspects of the product cause customers trouble?

The specific scenarios are heavily dependent upon the nature of your product or service. No matter what you plan to sell, though, you should have some questions in mind that you’d like answered before you start testing and before you start gathering real data. This is, after all, the scientific method.

Collect Real Data & Analyze it With Clear Eyes

One of the most important things to do during testing is to collect data. In the heat of the moment, you cannot possibly capture and analyze everything you see and hear. That’s why you record it for future use. But what should you record in the first place?

First, realize the limits of gathering data. Marketing deals with the complex and intangible thoughts and emotions of unpredictable human beings. For that reason, most of the data that you will gather as part of the market testing process will be qualitative. One way you can gather qualitative data through open-ended / essay questions on surveys. Another way you can gather qualitative data is through behavioral observations and simply listening to what people say.

It’s folly to focus purely on qualitative data, though. You need to make sure you’re gathering hard numbers, too. You can do this by surveys with numeric or categorical questions. Another way to gather qualitative data is through web traffic, email sign-ups, advertising performance, social media sentiment analysis, and more. Quantitative data gathering in marketing could be an entirely separate blog post!

You need qualitative and quantitative marketing data to tell you the whole truth. The ultimate goal should be to create products that serve people’s needs. A product can seem fantastic in person, but when put on an e-commerce site, that means nothing if sales consistently underperform. Similarly, everything can look great on paper, but if you see no smiles, no enthusiasm, no passion, you’re probably missing a key ingredient in your product or service. No calculator or computer yet devised is smart enough to catch that.

Final Thoughts

Creating perfect products and services is well within the grasp of any small business. It will take trial and error to achieve perfection, but this six-step method serves as a great guideline.

Once again, to summarize, the steps are:

  1. Identify Your Target Customer
  2. Know Your Customers Better Than They Know Themselves
  3. Assess Your Capabilities
  4. Make Imperfect Products to Make the Perfect Products (Minimum Viable Products)
  5. Test Your Prototype
  6. Collect Real Data & Analyze it With Clear Eyes

Are you pursuing perfection with your products or services? Let me know in the comments below, I’d love hear from you 🙂

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dartboard

Why Marketing to Businesses is So Different from Marketing to Consumers

On this blog, we’ve talked almost exclusively about business-to-consumer marketing so far, also known as B2C marketing. This doesn’t reflect the whole truth, though, because business-to-business (B2B) is a significantly bigger market than B2C.  As you’ll soon come to see over the course of this post, marketing to businesses is an entirely different animal than marketing to consumers.

dartboard

When marketing to consumers, you need to have a very good grasp of the basic concepts behind small business marketing. You also need to understand consumer behavior, decision-making processes, and decision-making styles. From these building blocks, you can determine what kind of products have good product-market fit. This allows you to find a profitable niche.

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But what happens when systematically designed business processes curtail the worst excesses of irrational consumer behavior? What happens when committees and requirement meetings thwart your attempts to make an emotional appeal to individual consumers? How do you find a niche then? We’ll be talking about all that and more below.

Here is an outline:

Business-to-Consumer (B2C) Marketing

  1. Marketing to Consumers – An Overview
  2. Consumer Behavior
  3. Decision-Making
  4. Niches

Business-to-Business (B2B) Marketing

  1. Marketing to Businesses – An Overview
  2. Consumer Behavior
  3. Decision-Making
  4. Niches

Business-to-Consumer (B2C) Marketing

Marketing to Consumers – An Overview

On a fundamental level, B2C transactions differ from B2B transactions. When you’re selling directly to consumers, the decision maker will almost always be either the consumer or someone close to the consumer. The decision-making process is not cold and clinical, but rather emotional. A rational need for a certain product is not what drives consumer behavior in B2C transactions.

shoppers with bags

This is not to imply that people are total fools when it comes to making purchasing decisions. Our minds can be thought of in terms of System 1 and System 2. To simplify greatly, System 2 makes slow, deliberate, careful decisions and System 1 makes quick decisions that are imperfect. A lot of times, people use System 1 to make shopping decisions so they can go about their normal lives and not agonize over every minute detail of a purchasing decision.

Consumer Behavior

The System 1 / System 2 dichotomy that we reference so often on this blog is what drives some of the strange and seemingly irrational consumer behavior that we see. Consumers, after all, take mental shortcuts simply so they can go about their lives. The purchase decision-making process is improvised and not choreographed most of the time.

sales all over the grocery store

Even if consumers were to engage in a systematic review of all their purchases before making them, there are two fundamental truths that make my needs different than yours. Value is subjective and often situational. The kind of car I need is different than the kind of car you need because we don’t drive the same commutes.

Because value is subjective, we have different needs for which different products or services must be created. A product only becomes attractive if it meets our needs. For us to make decisions, you have to have product-market fit.

Decision-Making

In B2C transactions, decisions are made based on subjective value, yes, but also on two other factors. These factors are: decision-making roles and the search for information.

The decision-making process in B2C transactions is often informal, but a careful observation shows that certain roles are apparent if you’re paying close attention.

  • Initiators suggest a brand or product.
  • Influencers recommend a brand or product.
  • Deciders choose to make the purchase.
  • Purchasers actually make the purchase.
  • Users use the purchase.

In B2C transactions, people are likely to embody one or more of these roles at once. In B2B transactions, there is usually a division of labor that breaks these roles apart. I choose to buy shampoo entirely out of my own volition – initiating, deciding, purchasing, and using the product. The buying process would be different for something such as, say, complicated software implementation.

Consumer decision journey
By Nick Nijhuis. CC BY-SA 4.0. Source.

Likewise, the information search process in B2C is often pretty simple. You or a small group of people think about brands and maybe do a little bit of light internet research. Unless you’re buying something really big, you won’t come across everything in the graph above.

The one way in which B2C purchases may be vastly more complicated than their B2B counterparts are the number of decision-making styles that people can take. With B2C purchases, image-consciousness, frugality, a desire for novelty, and impulse buying all play a much bigger role than they would in B2B.

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Niches

The upshot of all of this is that B2C products tend to focus on emotional needs. These emotional needs then, in turn, play a big factor in how information is sought out and how decisions are made. There are no complex processes or internal reviews. B2C sales are made by pleasing one person or a very small group of people. B2C products are deeply personal.

making clay pottery

Business-to-Business (B2B) Marketing

Marketing to Businesses – An Overview

Put simply, the difference between B2C marketing and B2B marketing is very simple: the former buy for themselves, the latter buy for companies. The difference in practice, though, is profound. B2B transactions tend to be bigger. They are often approved by meetings across different departments. A lot of personnel can be involved and the transaction can take a much longer time.

making decisions in a group

With such a profound difference in buying behavior, you might find it odd that we spent a good deal of time reviewing how B2C transactions work before talking about B2B transactions. However, it’s necessary to start there. All B2B buyers started out as B2C buyers. Every individual involved in the B2B purchasing process, which is a team effort, has modeled their understanding of buyer-seller relationships on B2C transactions.

I will even take this a step further and say there are only two factors that truly separate B2C purchases from B2B purchases. First is the number of people involved. Second is the amount of time it takes. The former discourages personal biases from entering into the decision-making process (unless you’re the one in charge). The latter tempers impulse purchases, which is one of the intended goals of well-designed bureaucracy.

Consumer Behavior

Value remains subjective even in B2B transactions, but it’s not as often based on emotional needs. More frequently, B2B transactions are based on performing a very specific service for the company. That could range from the hiring of an employee to manage social media to the implementation of CRM software to help with sales. It could be anything in between.

marketing to businesses is different - they require harder facts

Often value is so subjective in B2B transactions that it becomes difficult for people inside the company to describe why the purchase is valuable to anyone outside the company! Because value remains subjective, product-market fit remains essential. That often includes the ability to answer really industry-specific questions and appear professional.

Consumers may take mental shortcuts when acting alone in small groups via B2C transactions. This isn’t as prevalent in B2B transactions. Try to make an impulse purchase when you have to go through meetings to justify it!

This is not to say that businesses always act rationally, though. Anyone who has ever had a job in any kind of company knows this is not the case. Even the best-designed decision-making process can fall prey to groupthink. Sometimes a business buys the wrong product or service because no one wishes to speak up about its flaws. This could be because of reasons like fear or insecurity, but also the aggregate result of individual employees – very rationally – not wanting to make the boss mad.

Decision-Making

In a B2B transaction, the same decision-making roles are still relevant. Initiators suggest brands, products, or services. Influencers sway the decision one way or another. Deciders actually make the go-no go decision. Purchasers allocate financial resources to make it happen. Ultimately, users are the ones affected by the purchase.

making decisions based on data

In B2B transactions, the process moves a lot slower. As we said earlier, this has the effect of tempering the unconscious factors that motivate individual buying decisions, making them more carefully considered. Done well, B2B transactions are a lot more rational than their B2C counterparts. Done poorly, you may see a large disconnect between decision-makers and users.

Additionally, the information search is often more thorough than in B2C transactions, which leads to more informed decisions (in the ideal world). There are meetings to identify the problem. They often entail gathering requirements and estimating the scope of implementing a product. The process of seeking information can involve multiple decision-makers watching demos or research analysts working full-time to find data. There is a good deal of conversation around evaluating alternatives and lot of different parties get involved. Leaders make decisions, sometimes unilaterally and sometimes by committee. Then there is often a process in place to formally review how well the product or service has worked out. Even if there isn’t, people will disclose their opinion.

The steps in this process are complex and often spelled out to various degrees depending on the product. This nudges B2B transactions toward one of three decision-making styles:

  • The Perfectionist – “We considered all the options, and yours is the best.”
  • The Loyal – “We already go with you and it’s not worth it to switch.”
  • The Confused – “Just…keep it simple. We don’t have time for this.”

Compare that to B2C transactions and you can see a world of difference.

Niches

Because of the complexities of the B2B decision-making process, only a handful of decision-making styles ultimately prevail. It’s harder to make an organizational change than it is to make personal change. Therefore, successful niches tend to revolve around providing one of three things:

  1. Operational efficiency
  2. Return on investment
  3. Simplicity
business architect

Let’s focus on each of these three categories of niches:

Operational efficiency can involve a product or service that makes it easier to do day-to-day functions. It can also involve convincing a company to outsource part of their processes so they can focus on what they do well. Either one ultimately hinges on the idea of specialization and trade being good for companies – cornerstone beliefs of traditional economics.

Alternatively, you can appeal to return on investment. You may not be able to complete a task more efficiently, but you might be able to do it better. This is essentially a promise to make a business more money instead of saving them money.

Finally, businesses do not necessarily always make decisions based on expedient economic decisions. Sometimes, it’s better to have someone take care of you not to save money or to make more money, but to free up time and streamline processes. While not as tangible, the promise of simplifying business is often attractive to leaders who make B2B purchasing decisions.


Marketing to businesses is different than marketing to consumers. The reasons for this are myriad, but ultimately come down to two things: the number of decision-makers and the time spent making the decision. The impacts of this are profound. You must understand how these minor differences cause rippling effects in consumer behavior, decision-making processes, and viable niches. Once you do, selling B2B will be as natural as selling B2C 🙂

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credit card transaction

The 4 Cs of Marketing: Make Your Customers Comfortable

The 4 Cs of Marketing are a newer marketing model that helps us to understand the “set of marketing tools that a firm uses to pursue its marketing objectives in the target.” You may also hear this refer to as the “marketing mix.” This is not just some exercise for out-of-touch academics, though. Like the 7 Ps of Marketing, the 4 Cs of Marketing represent different ways you can make your small business customers feel comfortable.

The 4 Cs of Marketing

It’s one thing to understand marketing, but it’s another thing entirely to apply it well. Once you set your small business marketing strategy, you need a way to measure your performance. The 4 Cs of Marketing provide another model which we can use to do that.

First, let’s cover a little background. The 4 Cs of Marketing were proposed by Robert F. Lauterborn. His goal was to create a new model that was more relevant in the modern era of niche marketing, believing the original 4 Ps and 7 Ps models were too focused on mass marketing. I tend to agree that the 4 Cs of Marketing is better adapted to our modern business environment where it is quite literally you vs. the world.

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What are the 4 Cs of Marketing and Why Do They Matter?

  1. An Introduction to the 4 Cs of Marketing
  2. Customer (Wants and Needs)
  3. Cost
  4. Convenience
  5. Communication

What are the 4 Cs of Marketing and Why Do They Matter?

An Introduction to the 4 Cs of Marketing

The 4 Cs of Marketing were created as a direct response to the original 4 Ps of Marketing. The original 4 Ps were Product, Price, Promotion, and Place. The 4 Cs, by comparison, are Consumer wants and needs, Cost, Communication, and Convenience. You can imagine how this maps out…

Product turns into Consumer wants and needs. Instead of focusing on what the business can create – an outdated philosophy – the focus is on what the customer needs. In short, “Consumer wants and needs” pushes you toward the concept of product-market fit: making the perfect product for a specific person based on what they most desire.

Price turns into Cost. Instead of factoring in only the monetary cost, Cost factors in other lost opportunities. That includes the time taken to acquire a good or service, switching costs, and even the guilt of using a service.

Promotion turns into Communication. This includes advertising, public relations, personal selling, and more. The concepts of Promotion and Communication are very similar, but Communication focuses on having a back-and-forth conversation. Promotion is focused on push, push, push.

Place turns into Convenience. Though the 4 Cs were conceived in 1990, there were still ways to order goods remotely before the internet – catalogs, credit cards, phones, and more. Essentially, Lauterborn correctly predicted that people would no longer need to go to a physical location to buy a good. That makes Convenience far more important.

Customer (Wants and Needs)

In the modern world, there is seemingly a product or a service for every conceivable want or need. Finding the right niche can seem time-consuming and difficult, but it’s absolutely necessary if you want to be able to succeed in the long run. The best way to do this, of course, is to identify a want or a need that your customer has and find a way to satisfy it.

Customer at coffee shop

Understanding the nature of customers’ needs is not always intuitive. The way we use the word “need” in marketing is pretty different than the way it is used in everyday life. Needs in marketing refer to anything that can drive desired consumer behavior.

In the stock photo above, we see a man in a coffee shop. It’s possible that he just walked in and it’s also possible he frequents the place. Let’s imagine both scenarios and how they would play out.

If this man were to simply walk into the coffee shop for the first time at random, it’s likely because he just really needs a hot, caffeinated beverage. He needs the beverage, yes, but he also needs the convenience of simply walking into the shop, buying one, and either sitting down or going about his business. In short, he has multiple different needs which he is meeting simultaneously.

On the flip side, if he were a frequent customer, he may need the camaraderie of the people he knows there. He may need the comfort of a familiar-tasting beverage in a familiar environment. Alternatively, he may just need the simplicity of getting a good drink near his work where the coffee pot always produces scorched and stale Folgers.

No matter what, the lesson of this C is simple: “build it and they will come” is false. Something drives your customers to you. Figure out what it is and cater to it.

Cost

If you talk to an economist about “cost” they’ll approach the subject differently than most people. It’s not just about receipts and the exchange of dollars – it’s about the spending of any resource to acquire another. That could be money, yes, but also time, opportunities, and so on. This is how Cost is used within the context of the 4 Cs of Marketing.

credit card transaction

My fiancee and I recently started using a grocery delivery service. The monetary cost is around 15% more on average. However, we save – conservatively – 5 hours per month simply by doing this. They deliver to our door and we are able to spend our time on the weekends in the way that we wish to. It’s a really great arrangement.

I’m going to run with this example. Yes, the groceries are marked up slightly, there is an annual fee, a slight upcharge, and an expectation that you tip the driver. However, we don’t need to drive to the store, deal with all the terrible things that people do in stores, wait in line, burn gas, get stuck in traffic. It costs more money but is far more convenient and less emotionally taxing.

In addition to money, customers consider a variety of other factors. Customers weigh into their decision-making the annoyance of driving or walking to a restaurant. Some customers feel guilty when they eat meat or use a gas-guzzling vehicle. Think of the intangible factors and come up with ways to address them. By doing so, you don’t have to compete on price – an extremely vulnerable position for small businesses!

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Convenience

People can be lazy sometimes. Many people order the vast majority of their products through Amazon because the cost is acceptably low and they don’t have to get off the couch. Many people drop off of shopping sites if the interface is even slightly complex. Convenience, as you can likely see, has a lot of dimensions to it.

chair comfort computer

Focusing on convenience is not a sin as many make it out to be. Choosing convenient products is a natural consequence of your customers having busy lives! When creating your products or services, you want to have an empathetic mindset. Ask yourself if you would want to go through your purchasing process.

When creating a business, you need to focus on neat service design. Even if you’re selling products, there is at least a hint of service design in your work – if only by selling products online or in person! You want customers to know exactly where to go, what to click on, and what they’re getting themselves into. The whole process needs to feel clear and predictable.

At the same time, you don’t want to overwhelm customers with decisions. It is possible to give people decision fatigue. The mental calculations that go into making day-to-day purchasing decisions are very complex. Figure out what your customers like and make it very easy for them to pick commonly liked choices. Good package design or bundling can help with this.

Finally, you need to consider user experience for digital products. Your online communications must be clear, understandable, accessible, and pleasurable to use. Otherwise, you’ll lose potential customers!

Communication

Nothing can build or destroy trust like communication. There are two broad categories of communication that you will have with your customers. The first is what draws customers to your business in the first place. The second form of communication is what keeps them engaged, shows them what to do, and leaves them satisfied enough to come back to your business.

communication announcement business
Pulling Customers in with Communication

First, let’s talk about communication as it relates to pulling customers in. The classic approach to marketing is to push out various forms of promotion to manipulate customers into buying from you. Obviously, in an interconnected world where all your good qualities and bad qualities are on public display, old-school manipulative techniques don’t work anymore. You need to consider your customers’ real needs before you create an advertisement, start a sale, or do any other form of promotion.

Ideally, Communication as it is imagined in the 4 Cs of Marketing is a two-way street. You initiate contact with the customer, yes, but you use different methods to gauge their interest. This could be a simple as tracking metrics on your website traffic or advertisements. It could be as robust as directly asking questions on social media and taking that into account next time you start creating products. As a general rule of thumb, the more interactive your brand is, the more people will care about you.

Keeping Customers Engaged with Communication

Once somebody has decided to purchase a product or service from you, it’s up to you to keep their trust. You need to consider all the factors associated with Customer needs and wants, Cost, and Convenience before you determine the nature of your Communication. Once you get a good sense of what your customers value, be sure they always know where to go, what to click, which product is ideal for them, and how you plan to meet their needs. If customers need customer service, you need to be able to respond in a timely manner.

The ultimately goes back to trust. While the Internet didn’t introduce trust issues with business, it definitely accelerated them. When a company is physically far away from you and conversation is entirely digital, you need to feel like you have actual power to change things when they go wrong. This is so important. As an example, I left a bank that I was a fan of in about 10 minutes because they forced all customers to change their routing and checking numbers. I first found out by text message with two weeks to go before the change became effective.

The above, of course, is a horror story. Still, it goes to show how bad communication can sink a small business. Likewise, good communication can make a business feel extraordinary.

Final Thoughts

The 4 Cs of Marketing provide a new framework for small businesses to review their marketing strategies. By going over them here, you can ask yourself really poignant questions. Are you meeting customer needs? Have you considered everything they give up by shopping with you? Is the process you put people through convenient? Finally, are you being a good communicator?

With all this in mind, what’s the one C that you need to work on the most right now? Let me know in the comments below, I’d love to hear from you!

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price of pears

The 7 Ps of Marketing: Levers of Power for Your Small Business

The 7 Ps of Marketing is a classic marketing model that helps us understand the “set of marketing tools that a firm uses to pursue its marketing objectives in the target.” You may also hear this referred to as the “marketing mix.” This is no mere academic exercise, though. Each one of the 7 Ps of Marketing represents a lever of power which you can use in your small business.

7 Ps of Marketing

It’s one thing to understand marketing, but it’s another thing entirely to apply it well. Once you set your small business marketing strategy, you need a way to measure your performance. Luckily, the 7 Ps of Marketing gives us a great way to do that.

Before we get started, I’ll point out that we’re using the 7 Ps of Marketing as defined in this Entrepreneur Magazine article. The original Booms and Bitner model from the year 1981 used “Physical Evidence” and “Process.” Don’t worry, hardcore academic Booms and Bitner fans – I’ll be including those at the end as well!

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The 7 Ps of Marketing

  1. Product
  2. Price
  3. Promotion
  4. Place
  5. Packaging
  6. Positioning
  7. People
  8. The Forgotten Ps: Physical Evidence and Process

The 7 Ps of Marketing

Product

Imagine your company from the outside. Your product or service is likely what draws people in. Sometimes the branding or a well-crafted ad is what makes people take interest in you, but let’s be real – it really does come down the product. Of all the 7 Ps of Marketing, this is the most tempting one to spend your time on. To be fair, that instinct is fundamentally right.

Apple devices cell phones

Value is subjective. Ultimately, how your product will be perceived is entirely dependent on the people using it. You want to make sure you have a clearly defined target market and that your product perfectly fits that market’s desires. When you do this, you have achieved product-market fit.

Product-market fit is truly the foundation here. Your target market determines the needs you will be meeting. The product you create to meet those needs determines what product-market fit looks like. Once you’ve identified a way to achieve product-market fit, you can find your niche. From within that niche, you can craft messages that drive the consumer behavior which you’re seeking – which is most likely sales!

Your product must meet certain needs. It does not necessarily have to be the best in a perfectly rational sense. Objectivity is not often a part of consumer decision-making. You need to make a product which is adept at addressing the emotional needs of your target market.

Price

When setting prices for your products, it’s tempting to focus your attention in one of two places. The naive attempt to compete on price, making the lowest-cost products on the marketplace, whether or not that is the right action to take. Alternatively, the overly introspective may intuitively set the price based upon internal costs, but not outside factors. Both of these can be valid pricing strategies, you just need to make sure your reasoning is solid.

price of pears

Price is the most deceptively complicated of the 7 Ps of Marketing. Again, you’ll need to refer to your target market and their expectations. Pay attention to how they make decisions and how you can nudge them toward desired consumer behavior.

The price tag you see on a product conveys an enormous amount of information in a tiny number. Price can give you a rough idea of quality and it can give people expectations – warranted or not – of what the product experience will be like. There is an element of price snobbery in many industries wherein customers actually prefer higher prices!

Of course, you’ll also want to consider price elasticity. The concept of price elasticity helps us find the tipping point where it is no longer worth it to raise or lower the price. If profit is your goal, you want to set your price in such a way that you maximize profits. That doesn’t necessarily mean charging the highest price or having the most customers. Oftentimes, it’s somewhere in the middle.

When you set a price, you need to choose a pricing strategy that most neatly lines up with your customers’ emotional needs. While people do sometimes make rational purchasing decisions, emotions – at the very least – are what initiate the purchasing process in the first place. For that reason, you want to make sure you don’t leave your customers with sticker shock or, alternatively, look so cheap that they write you off entirely.

Promotion

Of all the 7 Ps of Marketing, Promotion is the one most focused on pulling people to your business. Promotion entails how you spread the word about your products or services. Included within that are the ways you gain attention, pique interest, stoke desire, and get people to take action.

limited time offer

To run an effective promotion, you need to understand consumer behavior and decision-making. People don’t necessarily make decisions based on pure reason. Again, as with price and even the product itself, people make decisions based on the promise of solving emotional needs. When running a promotion, you need to find ways to better signal that you can meet those emotional needs.

For example, running a sale can remove concerns about not getting a good deal. It can also create a sense of scarcity that pushes people to take action. Likewise, advertising with a well-crafted headline can get a higher conversion rate, because it’s better at capturing attention than a typical ad would be.

To truly master the art of Promotion, you always need to be experimenting. Play around with different sales and marketing techniques, as well as different products or marketing strategies. Always be gathering data so you can create a feedback loop. With that feedback, you can make changes to your business that will make it more effective at marketing over time.

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Place

Of the 7 Ps of Marketing, Place may seem the most out of place. You may be running an online business and physical presence may not be a factor. However, whether you’re running a business online or offline, Place still matters. It changes the way that customers perceive your products and your brand.

places

Place entails not just where a product is sold, but where communication takes place that informs customers of a product or convinces them to buy it. Again, this could be offline or online. People often make decisions and form opinions based on the experiences they have. The ambiance of your establishment or the user experience of your website can greatly change perceived quality.

Packaging

Just as Place can alter customers’ opinions of your products and your brand, so too can Packaging. Of the 7 Ps of Marketing, this is one that I believe plays an especially important role in the online world. Because the online world is so noisy and fractured, any image or headline, as well as any smartly bundled set of products or services, is necessary to stand out in the crowd.

packaging

Packaging involves visual packaging design, as well as the physical feeling of your product. It also involves art and graphic design. Both of these things can make a huge difference in how customers perceive value. If you don’t believe me, order some samples of wedding stationery and see how different types of material make you feel.

It’s not all surface sheen, though. Packaging also involves how you bundle products or services. Perhaps it would be better, in this respect, to think of Packaging as Presentation. Bundled products or services can provide a better economic value or perhaps simply a better user experience. Either way, it’s an important part of your marketing strategy and must be considered.

Believe it or not, this was not included in the original 1949 model – the 4 Ps of Marketing. At that time, people subscribed to different marketing philosophies than we do now. In the 1940s, the general approach to marketing was more grounded in economic rationality, which doesn’t hold up very well to our current understanding of behavioral economics. The point is: looks matter more than you think.

Positioning

It’s no secret that in order to remain competitive in our gigantic world, you need to have a niche that you occupy better than anyone else. Another way of saying this is that you need to be careful about your marketing Positioning. This is the sixth of the 7 Ps of Marketing.

balancing stones

No matter how you choose to position your small business, you need to make sure you have a clear-eyed idea of what your customers want. You need to create a product with good product-market fit that addresses real emotional needs. Once you do that, you need to position yourself in such a way where it is clear that you can provide tremendous value.

To determine your positioning, consider the following questions:

  1. What does your company represent?
  2. Which qualities set your company apart from the competition?
  3. If there were a single attribute that you would want people to think of when thinking of your company, what would it be?

Once you answer those questions, you will always want to look for ways to improve the clarity of your positioning. There is also the possibility that market needs will shift and you will have to reposition your company around existing market demands. No matter what you do, make sure your branding is always consistent with your positioning. Your logo, name, product offerings, and marketing materials need to be consistent with your desired market position.

People

The last of the 7 Ps of Marketing is People. It’s certainly not the least! No matter how wonderful your product is, no matter how effective your promotions are, and no matter how smart your positioning is, there is one simple truth you cannot escape. People are the ones actually executing your processes.

team brainstorming session

In the 7 Ps of Marketing, People refers not to your customers but rather your internal personnel. They need the skills and the abilities to execute your plans to a satisfactory degree. You need to be able to retain talent and grow your employees. Failure to do so will make it very difficult to make good on even the best plan.

As I see it, there are four landmines which you will need to avoid for People:

  1. Turnover – if this is too high for any reason, you will constantly be spending money onboarding new people and you will never have the most qualified people handling the work.
  2. Incompetence – if your staff are unable to perform their jobs well, you will be stuck receiving 60-70% of what you need, unable to lay them off because that’s slightly worse.
  3. Bad process design – oftentimes, incompetence is nothing more than the symptom of badly designed business processes. You have to make sure your business is designed in such a way where any reasonably competent individual can succeed.
  4. Bad work environment – we’ve all had terrible jobs before. You know that in bad work environments, you are neither productive nor likely to stick around for long.

Likewise, truly exceptional People can be a huge selling point that can set you apart for years to come.

The Forgotten Ps: Physical Evidence and Process

I purposefully chose Entrepreneur Magazine’s interpretation of the 7 Ps of Marketing instead of the 1981 model. The original 1981 model included Physical Evidence and Process, both of which are important and I’ll cover below.

process diagram

Physical evidence involves the physical environment in which a service occurs or a product is sold. It entails the furniture, spatial layout, signage, interior design, and a lot more. I omitted this because it’s between Place and Packaging in my opinion, making it a little bit redundant. What’s more, it’s not inclusive enough to new ways of doing business made possible by the Internet. For online businesses, physical evidence may include a website with a clean layout and glowing testimonials.

Similarly, the 1981 model also included Process. This entails procedures, mechanisms, and the general flow of activities within a business. That includes the choice between standardizing processes or leaning into customization. It also includes diagnosing failure, monitoring and tracking metrics, analysis of resource requirements and allocation. Process entails best practices and documentation.

While Process is very important to how your business performs, I personally see it as a layer underneath marketing. Lean process design is a necessity for small business success, but I wouldn’t go so far as to call it a marketing tool in its own right.


The 7 Ps of Marketing provides a useful framework for small businesses to analyze their marketing strategies. By neatly listing the 7 Ps here, we have an idea of which questions to ask ourselves to move forward.

With all this in mind, what’s the one P that worries you the most right now? Let me know in the comments below!

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chess is a handy stock photo metaphor for small business marketing strategy

How to Craft a Small Business Marketing Strategy That Works

Crafting a small business marketing strategy can seem awfully complicated. Many business owners have to be convinced that marketing is worthwhile in the first place. Among the converts, many more struggle to choose a coherent philosophy of marketing, find a lucrative niche, or even simply understand their customers. Today, we’re going to take much of the theory we’ve discussed from the last several blog posts and talk about how to apply it.

chess is a handy stock photo metaphor for small business marketing strategy

We’re going to split this post into two sections: Prerequisites and Steps. Before you can craft a small business marketing strategy that works, you have to understand your business’s purpose as well as your competition. This requires a mix of self-awareness, empathy, and an understanding of your market.

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Once you understand yourself and your competitors, you can determine how to reach customers and what you want them to do. With this in mind, let’s get right to it! Here is an outline:

5 Prerequisites to Crafting a Small Business Marketing Strategy

  1. Define Your Target Market
  2. Understand Your Niche
  3. Achieve Product-Market Fit
  4. Analyze Your Competition
  5. Set Yourself Apart

6 Steps to Bring Your Small Business Marketing Strategy to Life

  1. Observe Your Target Market in Their Natural Habitat
  2. Understand How Your Target Market Wishes to be Approached
  3. Figure Out What You Want People to Do
  4. There is No Magic Bullet for Lead Generation
  5. Test Different Promotion Strategies
  6. Create a Feedback Loop So You Can Improve Over Time

5 Prerequisites to Crafting a Small Business Marketing Strategy

Define Your Target Market

The world we live in is extremely large and competitive. To attempt to please everyone in this big world at the same time is a fool’s errand. When you’re running a small business, your resources are finite. You can only create products or services for so many people at once. To lose sight of this simple fact will cause you to lose focus and speed toward oblivion.

target

At the root of all business, there are people. Specifically, there are people who need to be served with products or services that make their lives materially better in some way – your potential customers. You don’t produce products and find customers later, but rather the other way around. Find a market and then look for a way to satisfy them. They are your target market.

How you choose a target market is deeply personal. This guide on Inc. does a pretty good job of describing the basics, though. You need to look at your current customers if you have any. Think about the products or services you provide and which emotional needs you’re meeting. Think about your competition and how you wish to set yourself apart from them.

Once you have a sense of what your customers will be like, get specific. Describe their demographic information – age, gender, income level – as well as their psychographic information – their personality, attitudes, values, and so on. Some people even go so far as to create user personas – made up people who stand in for their customers.

Understand Your Niche

Once you have a clear-eyed vision of what your customers are like, you need to determine what makes you different than anyone else on the market. That is your niche. I’ve written about this at length, but I’ll cover the basics below because it relates heavily to crafting a small business marketing strategy.

lemon citrus

The wide variety of media we have available to us – cable TV, the Internet, and so on – dramatically changed the advertising landscape. In order to hold someone’s attention, you could no longer share “good messages for most people.” You had to share “the perfect message for a specific subset of people.” This is the post-network era. It’s where we live now. We’re never going back.

Because we live in a world of fractured, multi-channel media, commanding attention depends upon delivering the perfect message to the right person. If you like, you can think of this as Person-Message Fit instead of Product-Market Fit. You’ve found your niche when you’re able to make very specific products for very specific people with a very specific message.

Sound like pigeonholing? It is, to some extent. However, if you succeed, you can always scale up from there. Starting small makes it easier to succeed from the get-go and you can grow at a natural pace after you achieve a minimum level of market success.

Achieve Product-Market Fit

On this blog, you’ll hear the phrase “product-market fit” a lot. It is used to describe when a business perfectly addresses the needs of its audience. Achieving product-market fit is absolutely essential to meeting the needs of your target market. It’s also essential because you need the goods to back up the messaging you will be using to justify the way you’ve positioned yourself in a particular niche.

puzzle pieces connecting

Once you identify your customers, map out their needs, and find a niche to work within, you can start creating products or providing services. You want to try to create a minimum-viable product. This is a product that’s just good enough to whet the appetites of a few early customers. Its main purpose is to help you understand how to improve. Keep refining your product until you have something which is pleasing the vast majority of people within your target market. When you’ve done that, then you have achieved product-market fit.

Analyze Your Competition

Last week, I wrote about competitive analysis. Performing a proper competitive analysis starts with you analyzing your own situation, then looking externally, then back at your own situation. It mostly involves asking a ton of questions and researching a lot on Google.

man looking through binoculars
“Looks like they’re trying some new inbound marketing over there.”

Here are eight questions you need to ask when doing a competitive analysis. Knowing the answers to these eight questions will dramatically improve the thoroughness of your small business marketing strategy.

  1. Who are your competitors?
  2. What do your competitors sell?
  3. How much market share does each competitor hold?
  4. What are your competitors’ past strategies?
  5. What are your competitors’ current strategies?
  6. Which media are they using for marketing?
  7. What are each competitor’s strengths and weaknesses?
  8. What are their niches?
Set Yourself Apart

Once you’ve analyzed your competition, it’s very important to make sure you stand out in the crowd. In a noisy world like the one we work and play in, being forgettable will lead to failure. It’s important to understand your target market and niche. Likewise, understanding your competitors is very important, too. Creating a great product or service that fits the existing market needs is essential.

candy standing out

There has to be something about your business that no one can imitate. Otherwise, the risk of being forgotten is very high, as is the risk of being copied for a slightly lower price. Whether your uniqueness comes from the way you craft your products or services, the community you build, or even your own personality, something has to stand out. This is what Seth Godin would refer to as a purple cow.

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6 Steps to Bring Your Small Business Marketing Strategy to Life

Observe Your Target Market in Their Natural Habitat

Let’s say you’ve done a fantastic job of identifying your target market. Identifying a target market, however, does not a small business marketing strategy make. You need to find out where your target market hangs out – whether it be online or offline. For online communities, use Google to help you get started, but try not to depend too heavily on their search results. Once you find a few major communities, use recommendations by actual members of your target market to find smaller communities. For offline communities, see what local Meetup groups might be relevant in your area.

cute koala

Once you’ve figured out where your target market hangs out, simply listen (or read). Get a feel for what they value and how they talk. Listen not only for words but also emotional needs. Be considerate of their worldview and identify their pain points. Figuring out what causes them frustration creates business opportunities for you. From here, you can either create a minimum viable product – if you haven’t already – or decide you’d like to share your existing product. For simplicity, let’s assume you’ve already followed the five Prerequisites and you have (or are creating) a product that has good product-market fit.

Understand How Your Target Market Wishes to be Approached

Nobody likes the marketer who comes across as a used car salesman. When you approach a community and begin to become a part of it, the easiest way to screw that up is to start pushing your product in the wrong place. For example, I have a background in board game production. If you go to the game store with an elaborately crafted prototype, you will get a bad reaction if you share it at the wrong time. It doesn’t matter how good the game is or how it looks. You approached them the wrong way. Similarly, if I just posted my company’s stuff on Reddit’s /r/boardgames, I’d get downvoted to oblivion for looking like a self-promoting hack.

adorable kitty cat

So how exactly do you approach your audience? Sometimes you can be up-front about your intention to sell products in online or offline communities. Other times, you need to focus on online sales, advertising, and other traditional outreach techniques. Still other times, you need to please a few gatekeepers to get your product on store shelves.

“How do I know which one, Marketing is the Product?” Well, the simple fact is there is no simple answer. A good rule of thumb, though, is you want to look for places where people are being advertised to already. Look for enthusiasm, or at the very least, engagement. If you see eye-rolls, downvotes, or nasty comments, steer clear. If you see kindness or even intelligently delivered negative feedback, you’ve found the right place.

Figure Out What You Want People to Do

Once you’ve figured out your target market, your niche, created the right product, identified the communities, and found a way to reach out to them, then congrats! You have found a way to generate leads. This is really valuable! Yet you don’t want to generate leads until you know what you want them to do.

abstract arrows

There is a famous marketing model called AIDA: Attention, Interest, Desire, and Action. Understanding who to reach out to, what to give them, and how to engage them covers Attention, Interest, and Desire. These are the hardest parts to get right. Yet Action is essential and you can’t overlook it! You need to make sure you have a store-front, mailing list, online community, or something – anything – to which you can send people.

Your Action, and the calls to action that convince people to take the Action, are most likely sales. If that’s the case, you need to have a clean, seamless place for people to make purchases. You may also want to consider bundling products if you think it will make for a better user experience.

There is No Magic Bullet for Lead Generation

This is less of a pragmatic step and more of a necessary statement of fact. No small business marketing strategy is complete without a good way to generate leads. Many claim lead generation is the hardest part of small business marketing strategy in general. Before you go any further, you need to understand that you will probably spend a disproportionate amount of time figuring out how to generate leads. This will likely send you back to Steps 1 and 2, if not the Prerequisites over and over again.

floating card magic trick
Test Different Promotion Strategies

Crafting a finely tuned small business marketing strategy will take a ton of experimentation. You may have heard of the concept of marketing mix – it’s shorthand for all the marketing tools that a small business will be using. You’ll constantly be tweaking your marketing mix, especially when it comes to promotion. Promotion is, after all, largely based upon generating leads.

test tubes and beakers

Every time you run a promotional discount, keep an eye on your sales. When you run an advertisement on Facebook, look for things like cost per click or relevance score. Monitor your web traffic to see if certain posts or pages perform exceptionally well. Google yourself every once in a while to see what people are saying about your latest changes.

You always want to be trying something different because you never know what’s going to work really well. This is especially important early on. Well-designed experiments, combined with a feedback loop so you can implement ideas based on your findings, will lead to a virtuous cycle. Your small business marketing strategy will become ever more adept in serving customer needs.

Create a Feedback Loop So You Can Improve Over Time

In order to make meaningful changes based on testing, you need a feedback loop in place. A feedback loop could be as simple as creating different iterations of a product or service and asking a sample of customers what they think. It could be as complex as a custom-built information technology system that gathers a variety of metrics.

floating light bulb

For the purposes of this article, how you go about creating a feedback loop doesn’t matter. There are good ways and bad ways, but the most important thing you need to do is just find a way to gather information after your experiments. So many businesses fail to experiment and many more fail to use experimental data to improve themselves. My advice to you is simply to start small: customer surveys, one-on-one conversations, perhaps an analysis of your web traffic. If you find great insights by using these methods, roll out more robust methods in the future.


Thankfully, crafting a small business marketing strategy is not terribly complicated. It is a lot of work, yes, but it ultimately comes down to knowing how to answer four questions. Who are you selling to? What are you selling? Why is it special? How do you spread the message? A good small business marketing strategy answers all these questions in the great deal of detail that they deserve.

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competitive analysis is like a game of chess

How to Use Competitive Analysis & Make Your Small Business Richer

No business is an island. Competitive analysis is vital to the success of your small business. If you’re not able to read the competition, a lot of doors start closing. How can you find a niche, craft a strategy, compete on a global scale, or even understand your customers without understanding your competition?

competitive analysis is like a game of chess
“Business is like a game of chess. You must think first before you move.”

The purpose of competitive analysis is to understand what makes your product or brand unique. Once you confirm that you’re meeting the needs of your target audience, competitive analysis will help you determine how to communicate with customers to get the message across. Achieving product-market fit is great and necessary, but you need to be able to say thing right things to get your customer to make a decision. That requires research.

In order to help you know yourself and know your competition, we’ll be covering both SWOT Analysis and Competitive Analysis. Today’s article was inspired partly by this one on Entrepreneur.com, which I used to help give this article shape and form.

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Here is an outline of the topics we’ll go over:

Know Yourself: SWOT Analysis

  1. What’s a SWOT Analysis?
  2. Strengths
  3. Weaknesses
  4. Opportunities
  5. Threats

Know Your Competition: Competitive Analysis

  1. Who are your competitors?
  2. What do your competitors sell?
  3. How much market share does each competitor hold?
  4. Don’t forget about substitutes!
  5. What are your competitors’ past strategies?
  6. What are your competitors’ current strategies?
  7. Which media are they using for marketing?
  8. What are each competitor’s strengths and weaknesses?
  9. What are their niches?
  10. Revisit your opportunities and threats.

Know Yourself: SWOT Analysis

What’s a SWOT Analysis?

Dating back to the 1960s, the SWOT Analysis technique has become a mainstay in strategic business planning. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s laid out in a two-by-two grid, shown below, and it helps you identify positive and negative considerations that lie both inside and outside your business.

Diagram by Xhienne. Licensed under CC BY-SA 2.5. Photo from Wikimedia Commons.

At first glance, it may seem strange to start a discussion about competitive analysis with SWOT Analysis, which is inwardly focused. The simple fact is that it is difficult to know which competitors are even worth analyzing until you know where your small business stands. A SWOT Analysis is another way to analyze your own niche and identify areas for further investigation.

Strengths

In the upper left quadrant, you list strengths. These are characteristics of your business that are uniquely beneficial. These are as diverse as businesses themselves, but let’s go over a few examples.

strengths

Your small business’s strengths could include uniquely competent staff, a great location, or efficient equipment. You could have financial resources such as grants or passive income. The processes your business uses may be uniquely cost-effective or productive. Die-hard fans could be backing you up no matter what. Your company may even have past experiences that provide unique institutional knowledge that no one else can replicate.

Weaknesses

In the upper right quadrant, you list weaknesses. These are qualities of your business that will leave you at a disadvantage if left unchecked. Oftentimes, these are the flipside of the strengths.

broken rusty chain

Weaknesses include poor hires or a bad location. You may be tight on money right now, and not have any to spare for capital investment. You may be working with inefficient processes. The company you’re running may even have a bad reputation, who knows?

Opportunities

The bottom left quadrant of every SWOT Analysis is for opportunities – elements in the environment that your business can take advantage of. Opportunities are external to your business, usually stemming from your community or society at large. Some opportunities are open to all who are in your line of business, and some are uniquely yours to capitalize on.

outstretched hand beach

Business opportunities are like buses, there’s always another one coming. Sometimes opportunities happen on a massive scale. The culture can change to where your entire industry becomes more popular. Alternatively, your niche itself might be more popular. The economy – local or national – may be booming and that gives people more disposable income. You may be able to access new funding sources.

Your target market may be growing larger because of changes in society’s age, race, and gender makeup. Likewise, your part of town could be in the middle of revitalization. You might stand to benefit from some loosened regulations around the products or services you provide. Indeed, you may even be able to pivot into creating another product entirely!

Threats

In the bottom right quadrant, write down threats. These are qualities of the environment that could create trouble for your business. Similarly to opportunities, threats are external to your business and come from your community or society at large. They may affect all who are in your industry, or you alone.

aggressive fist

Threats often look like opportunities in reverse. For example, the culture of our world is changing in such a way where I wouldn’t want to run an oil or coal company right now. If the economy is headed for a recession, you’re probably going to feel it. Funding sources may dry up. Your target market may be aging, forcing you to lose sales or attract young people.

If your business is located in a struggling part of the country or the town, your business will likely suffer. If you’re a farmer and the river runs dry, you won’t be selling many crops. Likewise, new regulations might make your job harder. Changes occurring with your suppliers or service providers can also threaten your business. For example, every time Facebook changes their rules, social media marketers have to adapt.

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Know Your Competition: Competitive Analysis

Who are your competitors?

At the beginning of any good competitive analysis, you need to list several competitors. Get out a piece of paper and start writing. Once you are no longer able to recall competitors, start looking them up on Google and Amazon and see who shows up at the top.

african-descent-american-casual-1446263

If you’re starting up a business for the first time, you don’t want to just focus on the biggest companies out there. If you’re making some kind of unique soft drink, then sure, you’re competing with Coca-Cola and Pepsi. However, your most pressing competition is probably indie soft drink companies that appeal to early adopters in that industry.

That’s why, when looking at competitors, I like to sort them into five categories:

  1. Giants – These are the big companies that run the industry. When people think of your industry, they think of these companies.
  2. Semi-Giants – There are many companies that are nowhere near the size of large organizations, but they nevertheless do very well among indie / early adopters in a certain niche. A good example of this would be Stonemaier Games. The biggest board game companies are ones like Hasbro and Wizards of the Coast, but this particular company has regularly been able to make millions of dollars in revenue with each release in an industry where many struggle to make $20,000 per product.
  3. Peers – This is exactly what it sounds like: organizations roughly the same size as yours.
  4. Hopefuls – These are companies that are trying to get started but haven’t released anything yet. Particularly, these are ones that look like they have a really good chance.
  5. Misfires – These are the companies that try, fail, and close. Pay attention to them, too. You won’t have to compete with a failed business, but you want to make sure you don’t repeat their mistakes.
What do your competitors sell?

When performing a competitive analysis, the next thing you will need to consider is your competitors’ products and services. Think about specifically what they sell. You’ll want to list out their products and services, and describe them while doing so. Make sure to make a note of which niche they are marketing to.

selling baked goods

Having a list of what your competitors sell is handy in its own right. However, if you want to really perform a thorough competitive analysis, you need to go one step deeper. What needs are they meeting and which emotions are they catering to? What specific consumer behavior are they trying to evoke and how are they hoping consumers arrive at decisions?

When you start thinking on that level, consider whether their methods work or not. Are they successful in meeting emotional needs and convincing customers to make decisions? Are they meeting the same needs you’re trying to meet? If so, what makes your business different?

How much market share does each competitor hold?

It’s never a bad idea to figure out who’s the top dog in your business. You’ll clearly want to know who the biggest power players are and write down their market share, even if it’s only an approximation. At this point, be sure to revisit the five category model I’d listed above. You don’t just want to think about the top dogs. You need to consider the people operating at, slightly above, and below your level too.

slices of blueberry pie
How big are their slices of the pie?

The purpose of analyzing market share, especially when you’re just starting a small business, is to find an angle in. If you’re not sure exactly how to do that, find a semi-giant company that you can imagine turning yours into within a few years. Analyze their processes and mix that with a niche that you believe is currently unserved.

Don’t forget about substitutes!

When performing competitive analysis, it’s easy to commit the fallacy of believing only people who sell products or services like yours are your competition. Substitutes can be a real threat, too. Competition is based on market needs for a given demographic. Customers don’t care about products, they care about meeting needs through whatever means is most convenient. You might sell the highest quality cassette tapes in the land, but they’re not going to make me cancel my Spotify subscription!

What are your competitors’ past strategies?

When researching your competitors, make sure you look into their old marketing strategies. Consider how they were pitching themselves ten years ago, five years ago, or even a year ago. Once you figure out what has worked in the past, that leaves you with three distinct advantages.

marketing strategy

First, once you know what used to work in your niche, you will have an increased understanding of the context and history of the business you’re in. That can tell you how some long-time customers formed their current beliefs. This can help you to understand schisms in the community you’re catering to.

Second, you have a chance to contrast what is currently working with what used to work. You can map out how needs have changed over time. By watching how strategies change to meet needs, you can potentially predict what customers will need in the future.

Last and most importantly, bigger companies change slowly. There are risks as well as organizational factors that prevent large companies from turning on a dime. Your small business is likely different. You have the opportunity to try a new marketing strategy while everyone else is sleeping!

What are your competitors’ current strategies?

Marketing is a fluid, dynamic discipline. It’s always changing. That’s why you want to pay attention to the marketing strategies your competition are currently using. This is one of the most important parts of competitive analysis. You can copy what works for others while dropping what doesn’t. Sometimes, there is no need to recreate the wheel.

current marketing strategy

When you see marketing strategies work for your competitors, ask yourself “why?” Which consumer needs are being addressed? How is this being communicated to customers? Analyze not only success and the degree to which your competitors achieve success. Analyze the reasons as well, and this will allow you to see which way the market is headed.

Which media are they using for marketing?

Naturally, marketers need to become adept in various forms of media. Consider online and offline media. Are your competitors using TV, billboards, and newspapers? Are they using Facebook, Twitter, Instagram, Snapchat, Periscope, and LinkedIn? Do some analysis to see where your competition has currently set up shop.

apps on phone

Once you figure out where your competition has established a presence, consider which media appear to be working. If your competitors have especially great engagement on Twitter, it’s worth asking why that may be the case. Which needs are each media channel addressing for customers? Which messages are resonating with your competitors’ audiences and why?

What are each competitor’s strengths and weaknesses?

Having completed your own SWOT Analysis, consider doing a partial one for your competitors too. All the research you have done so far by answering the questions above and thinking deeply about the underlying reasons should help a lot. How does your company compare to your competitors?

What are their niches?

Last but not least, it’s important to figure out exactly which niche your competitors are serving. The best way I know to do this is to become a customer yourself. This will allow you to see which specific needs they are meeting. You can analyze their strengths and weakness up close and look for opportunities for yourself.

dartboard

Scanning your competitors’ media is a good way to analyze them, but you should take one step deeper if you really want to understand their niche. Try the following:

  • Get on their mailing list.
  • Follow their blog and social media.
  • Browse their store – look for product recommendations.
  • Buy something from them.
  • Pay attention to the postpurchase experience.
Revisit your opportunities and threats.

Now that you’ve sized up your competition, revisit your own SWOT Analysis. You have likely uncovered new threats and opportunities that are worth listing.


Competitive analysis is an important part of seeing where your business fits in. By paying attention to what your competitors are doing, you can learn about your customers and find a unique way to serve their needs.

Who’s your biggest competitor? What are they doing right and wrong? Let me know in the comments below, I’d love to hear from you 🙂

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