By Eamonn Percy
Habit #4 – Knowing the Market
“The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.” – John Russell
Successful business owners are exceptional problem solvers, especially when it comes to solving their customers’ problems. Over the years, I have seen many early stage and emerging companies fail as they “push” their offer into the market, while more seasoned company’s offers get “pulled” into the market. The difference is in the mindset of the leader, executive, entrepreneur or business owner who is responsible for the business. This attitude is not only limited to the world of tech startups, but many inexperienced business people can fall into the trap of believing they know what the customer wants better than the customer themselves! They are thinking of a solution, before solving the problem.
While the customer may not know the precise form of the solution and may not even be able to articulate the problem, they do know it hurts and that they are willing to pay for a solution. For instance, prior to purchasing the fledging Seattle coffee shops that eventually became Starbucks, Howard Shultz famously toured hundreds of coffee shops in Italy and found that the secret to great coffee shops was not the great coffee, but great meeting places. His solution was to create a great place that sold coffee, and the rest, as they say, is history!
Here are the four things you can do to develop the habit of other successful business owners in knowing your market:
Serve a Segment: Avoid boiling the ocean and identify one segment of the market you not only plan to serve, but dominate! It can be segmented by demographics, industry vertical, income levels, consumer behavior or buying patterns. Whatever it is, be very specific about what segment you are serving, and understand that segment intimately.
Feel the Pain: Focus on what pain or problem the customer is experiencing. If it’s B2C, it’s likely about service convenience or cost. If it’s B2B, the pain is usually too much risk, not enough time or too much money. Find it, understand it, define it and solve it!
Above Average Growth: Successful business owners focus on markets that are growing, preferably above the average for the industry or the economy. This drives higher margins and greater opportunities to dominate, particularly during the early stages of new markets.
Sell Globally: Often said, but not always done. While it is a great strategy to start small and regional in order to prove out the concept, the business strategy must be focused on global markets, no matter what business you are in. In the information age, even a small regional player can build a global following. Think global and act global!
Developing the habit of becoming clear, concise and deeply knowledgeable of the market you are selling into will help you become a better business leader and accelerate the growth of your business.
Selling innovative, well-priced and good value offers into this market, particularly those growing fast and with a global presence, will increase the probability that you can ultimately dominate the sector, and create an unassailable competitive advantage.
Thinking like your customer and focusing on how you can solve meaningful problems for them is the fastest way to build a great company!
Eamonn has a B. Eng. (Electrical) from Lakehead University, MBA (Finance) from University of Toronto, and has completed Executive Education at Stanford University Graduate School of Business. He lives in Vancouver, Canada. Follow him on twitter @EamonnPercy