Boutique branding is appealing to the customers who are going to give you the best returns on services offered. The big question is how do you attract those customers? Create the club within the club because they love to be part of the status by being an insider.
Airlines have designations such as Platinum member, or Diamond status for their most frequent users. Specialty retailers have private shows for their best customers. Rental car services have preferred services for their insiders. Nothing creates status for the elite members like when you belong to the club within the club. This creates loyalty and attracts more people like them.
Brand your company for the type of customers you want to attract. If you are a restaurant that wants to attract young families, you have to appeal to their interests with reasonably-priced kids' menus, servers who cheerfully mop up and collect dropped toys, and an atmosphere that allows kids to make a little noise without driving the diners at the next table batty. Or for another example, a Pontiac is a piece of transportation. A Porsche is an experience of transportation. Both will get you from Point A to Point B. Which is a more profitable car to sell? How do the dealerships differ? How does the show room floor staff differ? Which vehicle owner feels more part of a special club? One sells to the masses and one sells to a boutique niche. One has status and one surely does not. What do your preferred customers drive? Are they getting the same level of attention at your place?
Setting a strategy to attract a special type of customer requires a focus, a niche approach and an atmosphere that has a "Wow" factor to it.
What "Wow" factors are you currently branded for? What services do you offer that would attract the elite customer who wants to be treated special? Strategically, companies need to embrace the proper branding to attract the customers they desire.
Measuring your success by the number of your customers and total sales is commodity thinking. No longer is a new customer something to rejoice over; in fact, some customers can actually cost more in staff time and energy than they contribute to the bottom line. It's more important to have better quality customers than to simply have lots of customers.
Long-term customer loyalty is no longer yours just because "I've always shopped here." Define the niche of the customer you want to serve, give them the feeling of being part of a special club, and hold onto them for generations.
Monday, February 23, 2009
Thursday, February 12, 2009
3 Critical Components of a Strategic Plan
For a while strategic planning sessions spent an inordinate amount of time on mission statements, vision statements and core values descriptions. It became an exercise in semantics and took the focus off the three most important areas of a strategic plan: operations, finance, and the market.
1. Operations -- how you take care of the company, your employees, and your customer experience -- is an area that must get total attention. Without solid operations you can lose good employees, inefficiently operate internal processes, and lose customers because your technology is old, your prices and fees are too high or you just aren’t fun to do business with anymore. What are the cutting edge ideas in this area you need to be incorporating? How are you planning on retaining your best talent? Who is trying to "steal" your customers? Those are just some of the questions to be researched and addressed under operations.
2. Finance is also a critical area for in-depth planning to ensure safe and sound business practices, to comply with federal or state regulations, and to have sound financial ledgers, which allows better services to customers. better benefits to employees, and better positioning for future growth opportunities. What would it take to have every customer consider you their supplier for life? Could you handle it if it happened?
3. The market is also a critical area for strategic planning for the simplest of reasons: you do not operate in a vacuum. A shift in the economy, a shift that impacts your particular market segment, and a new competitor in town can all have an impact on shaping your future strategic vision. The market is where you touch your customers through advertising, with a sales culture, and with the products and services you offer. The right mix can have you flush with sales growth; the wrong mix can have you in a dire situation.
The planning and decisions in these three areas should be the foundation to making any organization's visions a reality.
3 Important Questions to Answer in Preplanning
In many of my training classes with financial institutions I ask, "How many products and services do you offer?" Typically even the executives don't even know exactly. A few months later when I come back for another training installment they are quick to tell me how many they offer. I've heard from 30 to roughly 80 products and services. My next question is this: "If you offer 50 products and services, how will you ever have a good sales culture expecting your employees to know how to talk about all that you offer?"
Trying to be all things to all people usually ends up making you nothing for nobody. A strategic plan needs to be focused, not arbitrary. Ask three specific questions to guide your planning process.
1. What are you going to sell?
Just because you can offer a product doesn’t mean you should sell the product. It's better to effectively sell fewer products than to offer many products and services your staff is not equipped to properly inform prospects about their benefits and features.
Knowing what you can sell effectively, that meets the needs of your market, is the key to knowing how to structure your approach to maximizing those offerings. Your preplanning homework should involve product analysis to determine what are your most frequently used products, what are your best margin or moneymaking products, and what are the products you want to be known for as the best in the market.
2. Who are your target customers?
It's easy to fall into the trap of trying to serve everyone. The first determination you must make is whether you want to be a commodity or a specialty organization, best known for a specific couple of products that are the best in the marketplace.
No one has an unlimited budget for marketing and even if you did would people believe you are good at doing everything? McDonald's has a huge marketing budget and have been in food service for decades but that doesn’t mean I'm ready to order a NY Strip Steak at their drive thru if they offer it. Why? Because great steaks isn’t what they are known for in the marketplace, no matter how much they market it.
Target marketing provides you with a narrow niche to maximize your investment of your marketing dollars and products you offer. It also makes research easier to determine what their buying habits are and what the best way to reach them is.
3. How can you beat the competition?
This is the big question, isn't it?
It's time to explore ways to out-serve the competition in specific products and services, with locations or with marketing savvy and uniqueness.
To learn how to beat the competition you have to study the competition and the marketplace. Research into leverages, market gaps, under-performing products and find the weakness that presents the best opportunity to beat your competition.
These three basic questions will provide your executive team with clarity of the vision you have for the organization and the strategic plan you expect to implement with resounding success. The upfront work on these questions will make the entire following process simpler and more focused.
Trying to be all things to all people usually ends up making you nothing for nobody. A strategic plan needs to be focused, not arbitrary. Ask three specific questions to guide your planning process.
1. What are you going to sell?
Just because you can offer a product doesn’t mean you should sell the product. It's better to effectively sell fewer products than to offer many products and services your staff is not equipped to properly inform prospects about their benefits and features.
Knowing what you can sell effectively, that meets the needs of your market, is the key to knowing how to structure your approach to maximizing those offerings. Your preplanning homework should involve product analysis to determine what are your most frequently used products, what are your best margin or moneymaking products, and what are the products you want to be known for as the best in the market.
2. Who are your target customers?
It's easy to fall into the trap of trying to serve everyone. The first determination you must make is whether you want to be a commodity or a specialty organization, best known for a specific couple of products that are the best in the marketplace.
No one has an unlimited budget for marketing and even if you did would people believe you are good at doing everything? McDonald's has a huge marketing budget and have been in food service for decades but that doesn’t mean I'm ready to order a NY Strip Steak at their drive thru if they offer it. Why? Because great steaks isn’t what they are known for in the marketplace, no matter how much they market it.
Target marketing provides you with a narrow niche to maximize your investment of your marketing dollars and products you offer. It also makes research easier to determine what their buying habits are and what the best way to reach them is.
3. How can you beat the competition?
This is the big question, isn't it?
It's time to explore ways to out-serve the competition in specific products and services, with locations or with marketing savvy and uniqueness.
To learn how to beat the competition you have to study the competition and the marketplace. Research into leverages, market gaps, under-performing products and find the weakness that presents the best opportunity to beat your competition.
These three basic questions will provide your executive team with clarity of the vision you have for the organization and the strategic plan you expect to implement with resounding success. The upfront work on these questions will make the entire following process simpler and more focused.
Don't Just Define Your Market -- Dominate It!
One of the areas many executives misunderstand is market segmentation. You don’t just want to be a player in the market you want to dominate a segment of the market.
Important point: You don’t want to satisfy every customer and you don't want every member of the general public as a customer.
I'll bet you read that at least twice because you couldn't believe your eyes. You can't be all things to all people successfully. I've seen companies offer multitudes of different products and services, no doubt in an effort to try and satisfy every need of every possible customer. This is a wonderful idea in giving great customer service but it begs the question: How can you be great at all of those things? The real answer is you can't. It's best to decide which products and services you can excel at and hit the market hard in those areas.
Which is better, to be an adequate option on a wide range of products thus making you a commodity, or to be the best at a select number of options where everyone sees you as the best at those things?
If your customers shop for what you offer as a commodity, then they have little or no loyalty and will shop everyone else as well, which means you are only seen as an option.
When you dominate a market segment through proper positioning as the best in those products, people will seek you out as the best in this area. Loyalty is high when customers seek you out for specific services. This is how you get to be the only option for those people.
Good market segments are usually made up of people who think about and buy your products and services the same way.
Ask yourself the following questions:
What are they buying?
Who is buying?
Why are they buying?
How do they buy?
How will they use what they buy?
How you answer these questions will point you in the direction of market segments you may want to hone in on so you can be the dominant player in the market.
Important point: You don’t want to satisfy every customer and you don't want every member of the general public as a customer.
I'll bet you read that at least twice because you couldn't believe your eyes. You can't be all things to all people successfully. I've seen companies offer multitudes of different products and services, no doubt in an effort to try and satisfy every need of every possible customer. This is a wonderful idea in giving great customer service but it begs the question: How can you be great at all of those things? The real answer is you can't. It's best to decide which products and services you can excel at and hit the market hard in those areas.
Which is better, to be an adequate option on a wide range of products thus making you a commodity, or to be the best at a select number of options where everyone sees you as the best at those things?
If your customers shop for what you offer as a commodity, then they have little or no loyalty and will shop everyone else as well, which means you are only seen as an option.
When you dominate a market segment through proper positioning as the best in those products, people will seek you out as the best in this area. Loyalty is high when customers seek you out for specific services. This is how you get to be the only option for those people.
Good market segments are usually made up of people who think about and buy your products and services the same way.
Ask yourself the following questions:
What are they buying?
Who is buying?
Why are they buying?
How do they buy?
How will they use what they buy?
How you answer these questions will point you in the direction of market segments you may want to hone in on so you can be the dominant player in the market.
Proactive or reactive?
One executive I tried to work with had pretty much given up on his organization. How did I know he gave up? When something negative would happen such as bad quarterly financials or a new competitor came to town, he would always have the same response: "Whatcha gonna do?"
He went on to say he only needed to make a few more years to retirement, and besides, the world is just a different place than it once was. Then he would shake his head, tell me he had no need for my services because he wasn't sure he could afford them, and even if he could, it wouldn’t make any difference.
He was right about one thing: the world is a different place than it once was, and he had been CEO of that company for over 40 years. Times have sure changed.
Because of so much going on it's easy to fall into reactive mode or heaven forbid, "victim" mode as this gentleman had allowed himself to do. Waiting to see how things shake out and then reacting to that is waiting too late. Opportunity can be lost. Also, since you waited for everyone else to start going the same way, you are now just an option in a commodity market. Most industries find their environment has changed, and those getting ahead are those taking a proactive stance on planning for the future with a specific vision in mind. When you are proactive in your vision and plan, it rallies people behind your direction, it gets people excited to buy-in and you become more in control of your vision.
Not to mention, employees respond better to an executive who takes a proactive stance instead of waiting for the opportunity, then makes a reaction. Would you rather be in control and design your results or wait and hope for the best? You are in charge -- you call the play.
He went on to say he only needed to make a few more years to retirement, and besides, the world is just a different place than it once was. Then he would shake his head, tell me he had no need for my services because he wasn't sure he could afford them, and even if he could, it wouldn’t make any difference.
He was right about one thing: the world is a different place than it once was, and he had been CEO of that company for over 40 years. Times have sure changed.
Because of so much going on it's easy to fall into reactive mode or heaven forbid, "victim" mode as this gentleman had allowed himself to do. Waiting to see how things shake out and then reacting to that is waiting too late. Opportunity can be lost. Also, since you waited for everyone else to start going the same way, you are now just an option in a commodity market. Most industries find their environment has changed, and those getting ahead are those taking a proactive stance on planning for the future with a specific vision in mind. When you are proactive in your vision and plan, it rallies people behind your direction, it gets people excited to buy-in and you become more in control of your vision.
Not to mention, employees respond better to an executive who takes a proactive stance instead of waiting for the opportunity, then makes a reaction. Would you rather be in control and design your results or wait and hope for the best? You are in charge -- you call the play.
Strategic Planning: Document or Tool?
One company I worked with on strategic planning was so proud of the previous year's plan, it was bound, had a fancy cover and was a document they were eager to show everyone.
Once I started breaking it down, I soon realized how this fancy document was essentially hollow and with even further exploration found barely any of the goals and objectives had even been attempted. The executive team and board of directors were much more focused on creating a document than in creating a tool. We had plenty of work to do to really get a strategic focus that went beyond the creation of a fancy notebook.
A strategic plan as a tool is focused on taking a realistic vision and mapping out the steps to accomplishing that vision. Those steps should have a specific intent, an action or tactical plan complete with due dates, accountabilities, and a person (a champion) in charge to drive this plan toward completion. Each area should also have a form of measurement to ensure everything is on target, is progressing well and most importantly -- to identify when success is happening!
Simplified strategic planning is less about a fancy document, or a convoluted plan only someone with a doctorate in finance could understand. It's more about creating a simple, functional tool that everyone can understand, support, and dive into to make your vision a successful reality.
Once I started breaking it down, I soon realized how this fancy document was essentially hollow and with even further exploration found barely any of the goals and objectives had even been attempted. The executive team and board of directors were much more focused on creating a document than in creating a tool. We had plenty of work to do to really get a strategic focus that went beyond the creation of a fancy notebook.
A strategic plan as a tool is focused on taking a realistic vision and mapping out the steps to accomplishing that vision. Those steps should have a specific intent, an action or tactical plan complete with due dates, accountabilities, and a person (a champion) in charge to drive this plan toward completion. Each area should also have a form of measurement to ensure everything is on target, is progressing well and most importantly -- to identify when success is happening!
Simplified strategic planning is less about a fancy document, or a convoluted plan only someone with a doctorate in finance could understand. It's more about creating a simple, functional tool that everyone can understand, support, and dive into to make your vision a successful reality.
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