How to Start a Business After 50 (Part 6): Finding Customers
Whether you’re starting a services business or building a physical product, finding customers is critical to your success. Right about now, you’re probably thinking that this is the most obvious statement in the world. Before you stop reading, consider the fact that most entrepreneurs put very little thought into this part of the process. Instead, they charge ahead with building their perfect product, assuming that their customers will come to them. This rarely happens.
This doesn’t mean that you need to have a structured “marketing plan,” or that you need to spend a lot of money. It simply means that you should take the time to think through who your target customers are and how you are going to tell them about your product.
Why is Marketing So Complicated?
If you search for “marketing,” or “how to build a marketing plan,” in Google, you will get thousands of results. The problem with most of these resources is that they take an overly systematized and analytical approach to marketing. As a result, they tend to scare new business owners away.
To be clear, in the long-term, you will almost certainly need a sophisticated marketing plan. But, in the short-term, when you are just getting started, it’s enough to ask a few simple questions. Returning to these questions on a weekly basis and adding your own categories and details will almost certainly be more effective than trying to write a 50-page marketing plan before your product is even ready.
The questions that every new small business owner should ask themselves are:
- Who are my potential customers?
- Who are my competitors?
- What problems does my offering solve?
- How much can I charge?
- How can I get the word out?
Let’s take a look at each of these questions one at a time.
Who Are My Potential Customers?
You would be amazed how many first-time entrepreneurs miss this step. Most of the time, they assume that they know who their target customer is, even if they haven’t done any research.
This question forms the foundation for all of the other questions that you will need to ask to build your marketing plan. For example, how will you know where to promote your product until you have an understanding of the steps that your customers go through to evaluate similar offerings? How will you know how much you can charge until you understand their purchasing habits? How will you know how to describe your product until you know how your customers talk about the challenges that they are facing?
Getting to know your potential customers doesn’t have to be a painful process. As I mentioned in an earlier article, simply joining the conversation in forums and blogs is a great place to start. You can also use content marketing to ignite a discussion around the topics that you are interested in.
One trick that professional marketers use is creating marketing personas. Basically, this involves creating imaginary “people” that represent certain types of customers.
I find that it helps to write these personas in story form. For example, you can give them a name, describe where they are from, talk about why they need your product, discuss their thought process when making a purchasing decision, etc. You may even want to attach photos to your personas and print them out so that you can keep your customers at the heart of everything you do. For more information about marketing personas, check out this article.
The bottom line is that you shouldn’t jump into marketing tactics (setting up Facebook or Google ads, sending emails or buying magazine ads) until you have a solid understanding of who your customers are.
Who Are My Competitors?
There is a tendency, when you are starting a business, to assume that the problems that you are facing are somehow “different” from those that the rest of the world is facing. They aren’t. Whether you are starting out as a freelance writer, opening a Subway franchise, or building a physical product, you can learn a lot from your competitors. Here are a few of the questions that I would ask as I researched my competition:
- How do my competitors make money?
- Where do they sell their products and why?
- What kind of marketing activities do they do?
- How do they talk to their customers?
- How do my potential customers describe my competitors?
- What are their biggest strengths? Why?
- What are their biggest weaknesses? Why?
To be clear, you never want to blindly copy your competitors. Sometimes, the only way to stand out from the crowd is to deviate from what is already being done. At the same time, there is absolutely nothing wrong with paying attention to and leveraging what is working for others.
Most of your competitors are likely to have much more money than you do, especially at the beginning. This means that they will be able to run marketing tests that you simply can’t afford to use. You can learn a lot from what your competitors consider to be winning strategies.
What Problems Does My Offering Solve
So, you’ve built your shiny new product. Or, maybe you’re ready to start your consulting business. Your first tendency will be to talk about all of the cool “features” that you offer. This is almost never a winning strategy. Why? Because people don’t care what your product or service does. They care what your product or service can do for them.
This is one of the reasons that it is so important to listen to your customers before you build your marketing strategy. By building your marketing plan around your customers’ needs, you have the best possible chance of getting them to want what you are selling.
Listen to the way that your customers describe their challenges and use their words in your marketing. Instead of using complicated jargon and impressive sounding words, make your marketing language simple.
As a starting point, write down all of the top challenges that your customers have related to your product offering. Now rank these in terms of the ones that cause them the most pain. Next to each of these, write down, in simple language, the ways in which your product of service addresses these challenges. These pain-point / solution pairs should form the basis of how you talk about your product.
How Much Can I Charge?
Whether you are selling a physical product or providing a service, there are several ways to decide how much to charge. The first way is to compare your offering to your competitors. Are you providing a low-cost alternative, with fewer features? How much less would you need to charge to make it worth your customer’s time to switch? The second way is to start with your costs and add a reasonable mark-up. Finally, you could run pricing tests to see how much demand changes with your price.
In reality, if you have time, considering all three approaches makes sense. For example, you could use your competitor’s pricing to establish what customers are willing to spend (assuming that you’re in a competitive market). Then, you could use your cost-structure to make sure that you can even afford to compete. Finally, you could refine and test your pricing on an ongoing basis.
A word of warning for service business owners. When you start a services business, you may feel tempted to compete purely on price. The challenge is that there are so many services like Elance.com that you will rarely win with this strategy. In addition, if you do win the “race to the bottom,” the kind of customers that you will end up with will probably cause you endless headaches.
A better approach for consultants, writers, accountants and other professionals is to focus on a niche, where you can charge a premium. For example, if you are a writer, you might focus on a particular category of articles. Or, you might specialize in ghost writing biographies. If you are a marketing consultant, you might specialize in helping your customers to develop marketing personas. Or you might become an expert in Google CPC ads.
How Can I Get the Word Out?
This is the question that most people think about when they hear the word “marketing.” They want to know the marketing tactics that they can use to get people to buy their product right now. Should they use CPC (cost per click) advertising? What about radio ads? Should they hire someone to stand outside their coffee shop with a sign? Offer discounts? Use affiliate sites?
The truth is that there is no single answer to these questions. Your marketing strategy will depend entirely on the business that you are in and your relative strengths and weaknesses.
For example, as a marketing consultant with decades of experience at global companies, I don’t do any advertising. I also don’t rely on websites like Elance.com to bring me customers. Instead, I maintain and build relationships with the people that I have worked with over the years. These contacts, plus the referrals that I receive from my happy customers, are enough to keep me busy. For me, business development is my marketing strategy.
If I was starting out as a consultant with very few contacts, I would have to take a different approach. For example, I could use content marketing to establish myself as an expert in a niche. I would use my growing reputation to get invited to speak at events, where I could meet potential clients.
If I was selling a consumer product, content marketing would probably not be enough to pay the bills. I would have to turn to more traditional marketing tactics to succeed. For example, after learning about my potential customers, and evaluating different channels, I might choose to set up highly targeted Facebook ads, based on their interests and demographics.
My advice is to focus on your customer and not the latest marketing tactic. When you know where your customers are and have a good idea for how they evaluate product offerings like yours, the marketing tactics will come naturally. The good news is that there are plenty of free resources to help you learn any marketing channel. The crucial part is deciding which ones to use.
A Few Closing Thoughts
Marketing seems complicated on the outside. When you hear people throwing around terms like “the 4 P’s of marketing” or “marketing personas,” it’s natural to be a bit intimidated. The truth is that marketing isn’t complicated. Oh, sure, some of the marketing tactics can require a bit of effort, but, the strategy is easier than you think. All you need to do is follow your customer through their decision making process. Then, at each step, you should find ways to guide them in your direction.
Trust me, there are plenty of marketing “experts” out there that don’t even do this. Instead of focusing on the basics, they build complicated plans that look great on PowerPoint slides. If you follow the steps in this article, you will be well on your way to building your profitable business.
Have you started a business in your 50s or 60s? What marketing techniques have you found to be especially useful for your product or service? What advice would you give to someone who is just starting a business and doesn’t know how to approach their marketing plan? Please join the conversation.