Start up Business Series: Who will you sell to and how?
Date: 20/05/19 | Author: Sean Toomer
So, we’ve got an idea, we’ve done some Market Research and we’ve looked at the right Business Models. But who are we going to sell to and how? First, we need to establish who we are selling to, as that is likely to at least give a pointer on how we sell to them. That’s what we’ll be looking at in this post.
Who will you sell to?
Look back at your idea. What is it? Who are your customers? It’s much better to at least be as specific as possible, if not, totally niche. Why? Because being niche allows you to stand out from the crowd more easily, and attract the right type of customers.
For example, let’s say you design websites. You could say you are selling to anyone who has a website. That puts your total number of customers at 1.3 billion. There are also 70,000 web designers (in the UK). That is a massive market, but also a lot of competition to stand out from. If let’s say, you specialise in only designing websites for hair salons, that reduces the total size to 35,000. You’ve then got only a handful of competitors solely designing sites for just hair salons. It’s much easier to stand out from a handful rather than a huge crowd.
There will also be some customers you specifically don’t want to sell to. Not only the penny pinching, expect-everything-for-nothing and damn right difficult, but on a higher level too.
Look at your model again. If you’re hoping to serve for the premium market, your marketing should be aligned with this. If you’re marketing is attracting the cheap customers and you’re after the premium customers; you’re doing it wrong.
We tailor our service for our customers needs
Yeah, how many times have you heard that? It’s total crap. A small business should most certainly NOT be tailoring their service for their individual customers. Unless they are, in fact, a tailor. A small business should produce an offering, get really, really good at it, and then only do that. Any customers who does not fit that mould, you’re not interested and they can be someone else’s problem. You just need to make sure your mould is big enough.
Think of it this way, imagine you sell paint online, and only online, delivered direct to customers. You’ve spent months, perhaps years fine tuning a system which allows you to automate the selling process and deliver it straight to a customer through another great system. A new customer comes along, and asks for a big order, but doesn’t want it delivered and will collect and therefore wants a discount because of it. Fine, you say, as it’s such a big order, it’s easy to agree.
That customer then places further orders. Great, more profit. Then, the customer places another order, but doesn’t want to collect it and wants you to deliver, for no extra charge (hey, there used to paying that much by now). OK, fine, you’re still making a decent margin, so you deliver, but you do this yourself as you can’t afford to pay your usual courier for this and still turn a profit.
This customer then places more orders, in the same way. This time they also want a trade discount because they order so much. They also send a couple more customers your way, because you’ve been so helpful in the past and because you offer free delivery (hey! No you don’t!).
Do you see the problems you can get into? Not only that, but it’ll interfere with your systems too and therefore your other customers will feel it. If you compromise on this, you compromise your levels of service, and your reputation.
Routes to Market
This means exactly how you’re going to sell. Be it by word of mouth, Google Ads, Radio, Direct Mail etc. It’ll more than likely be more than one.
Identifying which one is not easy and you can and probably will get it ‘wrong’. However the idea here is to test, test and test again until you reach a winning formula.
I always recommend the best way to identify a business's routes to market is to brainstorm as many possibilities you can think of. From the ordinary (Google Ads, Direct Mail etc.) to extraordinary (awesome referral schemes, Free/Trial periods etc). You can then evaluate these based on cost and feasibility (how likely they are to work) and test each in turn. This will likely always be a work in progress as you will always generate new ideas.
As an example, at Diverso, we have a fair few routes to market. We use Direct Mail, which we know will generate us 0.8 new clients per month, every month. We have referrals from other clients, which we know will generate 5.2 new clients per month. Our website will give us 1.1 new clients per month. We introduce new ones all the time.
Keep building the list, until you hit as many new clients per month (or week or year) as you want.
A hint I like to give small businesses is that it is always easier to sell something for free, or indirectly, rather than try the hard sell. If you jump straight in with a ‘Buy me! Buy me!’ you tend to turn potential customers off.
What I mean is, for example, hold a workshop, or a training seminar/talk on something related to your business or what it does. Then hold that for free, or very cheap and then invite potential customers to that. Part of the workshop/talk will be indirectly selling your product or service. It’s always easier to sell something for free (and then they'll be desperate to buy from you later) than it is to actually sell it.
Marketing should be easy
It should be easy to identify your USP’s, that is, what makes you different, and therefore use these as the basis of your Routes to market. If it’s not easy to market, if it’s not easy to stand out and show your customers why they should use your service or buy your product, it may well be because it’s not.
Think of a firm of Solicitors. They state on their website that they are different to other firms as they offer:
- A personalized service
- They have a friendly team
- They have over 20 years experience
- They are qualified
These are very good reasons why you should buy their service, and they are more than likely pretty good if they are qualified and have been in business for over 20 years.
However, there is a firm next door and they say they are different because:
- They offer a personalized service
- They have a very friendly team
- They have over 25 years experience
- They are qualified
That’s right, it’s exactly the same. As is 99% of all over firms out there. They all say the same things for what makes them different. These aren’t UNIQUE selling points at all. They are selling points.
It’s very easy to fall into this trap when thinking of your USP’s. Which is why you may need to look at your service/product offering or model again in order to make it different. Then your marketing would be easy.
For example, now imagine a firm of solicitors who offer a monthly fee, always fixed (everyone hates Solicitor's hourly charge out rates, right?), or even a Solicitor who works for free (imagine legal insurance or something). That would certainly be enough to stand out and therefore, make marketing easy. The product/service will sell itself. You just need to shout about it.
What to do now?
Establish your niche and start to work on some ideas for routes to market. If it’s not easy, consider relooking at your product/service or business model.
Don’t forget, look out for our next blog in the series: Competitors
If you missed our previous blog in the series, When to start, take a look here.
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