I was recently reminded of a great entrepreneurial success story on how a change in your competitive and marketing mindset can open up doors you've never seen before. Unless whatever you do or whatever you sell is completely unique, there are always going to be other players out there that you would consider your competition. If you work for XYZ Dental, your competitors are all those other hundreds of dentists within 10 miles of you as well as those major dental companies. If you own Billy Bob's Oil Change-o-Rama, you're competing against every other grease monkey in town, probably offering a $15.95 oil change.

But consider who you're really up against in the mind of the customer. Sure at the most basic level, its all these other companies that do what you do ... but at a much higher level, before they even consider which dentist to go to, and before their car goes from 3000 miles to 4000 to 5000 or more (you know we've all let it go this long), its often a battle for time. Between work, kids, errands, and whatever else people have going on in their lives, most of your customers are pressed for time - and that is the reason they've been putting of going to the dentist or getting the oil change. Time - thats your real competition.

By realizing that time was their competition, Dr. Arnold Keiles, conceived of providing dental care right where his patients worked in a business now known nationally as Onsite Dental. The company manages the nation's largest fleet of Mobile Dental Practices that make regular visits to major corporate campuses like Cisco, Google, Genentech, Yahoo!, and Sprint. The premise was to make going to the dentist quick and convenient.

Similarly, Office Lube has used a similar business model, providing oil changes at company parking lots. Both are wildly successful companies built on the the premise of saving their customers' time.

Labels: Positioning

# posted by Ray Huang @ 8:07 AM
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Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

So previously we discussed market research, informal research techniques, and qualitative market research. Now we get to the meat of market research, quantitative market research – hard data that can be numerically calculated.

While you can ask the same questions in both qualitative and quantitative studies, quantitative research requires you to survey a larger number of people in order to obtain statistically reliable information. The larger your sample size, the greater your accuracy, but be sure to get at least 30 randomly selected respondents, preferably 100 or more.

A well designed study involves developing the right pool of respondents, asking proper and well-stated questions in the right order, utilizing the right communication vehicles. Of course a professional marketing or market research firm may be able to help you along with setting up and executing the research study, though you can still conduct quantitative studies on your own. Small budgets, small sample sizes, and non-random samples mean a less accurate, though still reliable set of results.

If you maintain a large mailing list, you can send surveys to customers’ homes or businesses. Direct mail campaigns typically have a low one to two percent response rate, though it may be higher depending on the relationship you have with your customers. To maximize your response rates, keep your surveys focused and simple, and offer your customers something in exchange for their participation, such as a valuable coupon for those that complete the survey. If you have a web-based business or a strong online presence, you can more inexpensively collect data from web-savvy customers. Many affordable web applications offer basic marketing research surveys that you can use at a relatively low cost.

In closing, understand that customer habits shift over time, making it important for you to continually be in touch with them. Don’t view your results as the end of the process; it should be an ongoing component of marketing strategy. By staying on top of what customers think of your product or service, you can fine tune your marketing strategy to keep up with your customers’ changing needs.

Labels: Market Research

# posted by Ray Huang @ 1:00 PM
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Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

To continue our conversation (this is part 2 of 3, read part 1 here), I previously wrote about the need for market research along with some informal information gathering, which is a start, but may not provide the insight you might need. Formal marketing research makes the process more orderly and more concrete. Marketing research falls into two categories: qualitative and quantitative.

Qualitative research is best when you want to get a subjective feel for something. It can help evaluate how key customers think about your product and what motivates them to make a purchase.

An easy way to conduct qualitative research on customers is through a feedback form. You can gain valuable insight by asking your customers how you are doing, asking for suggestions, and asking for their opinions. You can provide the form in your store, attached to the receipt, or on your website.

Another qualitative method is through conducting focus groups – essentially a moderated discussion with groups of target customers. If you are planning to start carrying a new product group in your store for example, your focus groups may be composed of local adults or computer enthusiasts, whatever your primary target is. Small business owners and manager have an advantage of being much closer to the customers than bigger companies that usually hire agencies to recruit and conduct the group. Offer your best customers special offers or free products or services in exchange for an hour or so of their time. For a small investment, the information you receive can be priceless.

Some limitations of qualitative research, is that you may gather some soft data on your customers, and give you a direction or trend to follow. However they are not statistically reliable, meaning that you can’t make quality inferences to a larger population.

Next time I’ll elaborate more on the quantitative side of market research.

Labels: Market Research

# posted by Ray Huang @ 11:32 AM
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Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

Regardless of the size of your company, successful business owners must know their industry, competitors, and customer needs in order to stay competitive. Marketing research can be one of the more important functions in getting key information about your potential customers’ preferences so as to market your products or services more effectively.

Do you know what U.S. company spends the most money on research and development? You’re probably thinking its Boeing, G.E., or one of the pharmaceutical companies. Well these guys certainly spend a lot. But the company that regularly spends the most on R&D is McDonalds.

I’m not saying its necessary to spend 13 billion dollars on market research, in fact, a separate marketing research department is usually beyond the budget of most small businesses, but you can still gather facts and opinions about your customers in an objective way. Knowledge is power, and having objective information can help focus your business on what people want to buy, not simply what you have to sell to them.

A good place to start your research is to look at the information you already have. Sales records can give you insight to buying trends or cycles if you’ve been in business for a few years. Receipts or other records that can show where customers live or work can give you insight where to focus your advertising and on what products. Employees also can be a good source of information about customer preferences and trends. Be sure to keep open lines of communications with your employees so they can report back to you on customer complaints and attitudes about the business, product, or service.

I’ll touch a bit more on qualitative and quantitative methods of market research next time.

Labels: Market Research

# posted by Ray Huang @ 11:07 AM
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Dear Wingman,

Is email marketing more effective than direct mail?

The real answer is... "It Depends."
It depends on who you're trying to reach.
It depends on your type of business.
It depends on what you're trying to achieve.
It depends on your budget.
It depends on how you measure effectiveness.

For local B2C companies, email marketing may not be very effective unless marketing to your existing client base. Purchasing personal email lists are hard to come by for very local markets, and consumers are very quick to write off unsolicited email as spam, no matter how brilliant you think your subject line is. Generally speaking, I'd recommend direct mail for B2C companies with a local or regional reach. But it can be expensive and require a lot of repetition.

B2B email lists are far easier to generate or purchase. Lists are available by industry, by geography, and by profession. Plus you can tap into industry sources and associations for some of these prospects. Its considerably less expensive and allows for better tracking and customization. But don't over do it. Its a trap that a lot of over zealous small businesses run into. An email every few weeks is already too much. I generally recommend no more than once per month. And like all branding, the message needs to look consistent, professional, fresh, and of course... make sure there is a call to action on all of your communications.

So there really is no clear answer that email marketing is more effective. The truth is, if you're in question, you probably should be doing both... and a lot more.

Labels: direct mail, email marketing

# posted by Ray Huang @ 1:13 PM
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Dear Wingman,

When I started my chiropractic office 4 years ago, I spent a lot of money on local advertising and mailers to get traffic. Now that I have a decent patient base, I want to encourage these patients to refer their friends and coworkers. What is the best way of going about asking, and getting, referrals?

-Dr. Bill

To start, we need to consider "Why" people refer services, people, or companies - primarily it is because it makes them feel good, an emotional decision. Despite todays shut-in culture, people by nature want to help others. So if Andy knows that Jared has a sore back, and Andy has been a happy patient of XYZ Chiropractic, he'll let Jared know. If and when Jared seeks out XYZ Chiropractic and finds it a valuable solution... then Andy has in effect helped his friend Jared by being bart of the value chain. So Jared feels better, Andy feels good, and XYZ Chiropractic got a new patient.

The referral process is a very emotional decision or response, that is backed by logic. Andy needed to consider if XYZ Chiro was the right treatment, the right quality, at a reasonable price. Andy's experience had to be very good in order for him to refer Jared.

In order for your business to be considered referral-worthy, you need to satisfy both the logical and emotional experiences. People need to believe you can help, have great service, and great pricing (logical); and they must also feel good about helping you, the service provider, and trust that their friend will be treated well, and also enjoy the experience of doing business with you (emotional).

That's why money offerings alone for referrals are not good motivators, and usually generate referrals that are not a right fit for you or the person being referred. It is a far better decision to work on making your business more likable at the emotional and logical levels to make your business more referable before you go out and start offering incentives for referrals.

Make your service experience remarkable, make a personal connection, and provide more value than your customers expect. And when they do refer someone, then reward them. This shows that you value their referral and that you truly appreciate their help.

Labels: referral, word-of-mouth

# posted by Ray Huang @ 9:39 PM
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