Have you ever gone on a vacation without a destination?
Unless you’re an adventure-seeker living on the edge – which is perfectly fine, by the way – I’m sure you took time to plan. You choose the destination, a path, a budget, and some specific stops along the way.
It’s the same when you’re building a business. You need a plan. You need a strategy.
This week I invited Michael Nelson, small business coach and strategic digital marketing consultant, to ” Get on Track, Stay on Track” to help us simplify this process of online strategy development.
A little bit about Michael Nelson
He is the founder and CEO of The Cogent Group and helps organizations set their goals, create plans to reach those goals, and design systems to measure success. His clients are all over the world and range from music labels to internet start-ups to financial firms to fitness studios. Here is a fun tidbit: he’s served as a strategic consultant to the White House!
He’s the obvious expert for this weeks topic.
So where do we start? Define Business Objective.
Michael described a business objective as the big theme or notion that answers questions like: Why are you in this business? Where do you want your business to be in 3 to 5 years? What is your vision? What are your high-level aspirations as a business owner?
To quote him, “it is that big goal that you will not get today or tomorrow, but one that you will strive towards attaining”
These big themes can then be broken down into smaller pieces or goals, which are monitored, measured and modified periodically.
Why is it so Important to Define a Business Strategy
Strategy is the basic foundation for business. It allows you to obtain clarity and focus, vision and purpose. It’s how you define and measure success.
It provides you with a peace of mind. You can work in the present without stressing about the past or the future.
Most importantly, having a business strategy prevents you from falling into the trap of the ‘shiny object syndrome’ – these are fad techniques and tools that end up distracting you from your overall goals.
How important is it to Understand Your Target Market
Once you’ve defined yourself, next you need to define your target market.
Who will be interested in your product? Who will benefit most from your service?
Just like strategy is the foundation of business, your target market is the foundation of your marketing.
Here’s some key points to help you determine your target market:
- Why are you in business?
- What benefit do you deliver?
- What pain points or problems does your company solve?
- Who is it that suffers from these unresolved problems?
- What circumstances will your potential customers find themselves in when they need your solution?
Determining your strategy and target market is a dynamic process of testing, adjusting, transforming, being willing to move where the market takes you. You can’t be rigid and hope to transform the market; you need to be pliable.
In Michael’s words, “you never know what is going to happen until you encounter the market”.
What’s the Business Canvas Model
You’ve defined yourself, you’ve defined your market. Now it’s time to build the model.
- Start with the high-level themes or long-term aspirations, both for your business and yourself as an owner
- Deconstruct these themes or objectives into goals – some examples include: How much annual revenue are you aiming for? How do you plan to price your product? How many products do you have to sell to achieve your revenue target?
- Assess your goals using the ‘Back of the Napkin Technique’. Basically this is a way of asking if your plan is financially viable.
- How much do you want to earn?
- How much does your service cost?
- How many units do you need to deliver to meet your projected earning?
- How much time does it take to deliver one project?
- What is the operating costs?
- Is there enough time to deliver enough products to meet your goals?
- Be SMART, which is an acronym for Specific, Measurable, Attainable, Relevant, Time-bound
- Begin your planning process. Create a list of actions to be completed, along with the corresponding deadlines and required resources
- Implement your plans and measure results to understand the impact of your actions
Now, while this is a simplified version of planning and implementing a business strategy, it gives you an overall sense of direction and a great place to start.
What’s an Elevator Pitch
Once you have your strategy defined, now you need to condense it so you can convey it easily and succinctly.
This is commonly referred to as your ‘elevator pitch’. It’s how you communicate your objectives to someone in the briefest of encounters. This is a fantastic way to ‘know right off the bat’ if you want to work with each other. It saves a lot of time and awkward sales talk.
Your elevator pitch will determine if there’s a need for a followup discussion. It will either end with the other person saying, “I’ll call you” or “Here’s my card, please call me”. Which would you prefer?
What Are Some Important Tenets of Marketing
a. Benefits > Features
Michael stressed that one of the most important credos of marketing is that “people don’t buy features, people buy benefits”
You might be an expert on all the features provided by your products and/or services, but your expertise will count for nothing if you can’t effectively communicate the benefits.
For instance, you might design the ritziest phone on the market, but if it doesn’t emotionally resonate with your audience and/or doesn’t solve some pain point, they’re not going to buy it, despite the number of fancy features.
Note: Having a poorly designed product will definitely fail. But having a wonderful product that fails to communicate the benefits will likely also fail.
So how do you figure out the benefits of your offerings? Michael suggested a simple method. Create two columns. On one column, write down every feature that describes your product. On the second column, tell us what that features do. Now connect the two columns with the phrase “so that”.
Here, he used the example of a Ferrari. Why would anyone buy a Ferrari?
The Ferrari consumer will subconsciously create these two columns. “I want a car that looks amazing and is super fast so that people will see that I am successful in business”
The ‘so that’ instantly gets you thinking about HOW a particular offering will benefit the user.
b. When marketing, avoid the ‘Fighter Pilot’ Syndrome
The hardest part of building a business strategy is the planning stage.
How do I start? Should I start with a web site? Should I start with social media ? What’s it all going to cost? Can I do it myself?
The hard fact is that when you’re just getting started, you don’t know where to begin. More often than not, people dive in and try. They unwittingly set unrealistic expectations of success, which lead to crushing disappointments. And only then, in frustration and desperation they expand their budgets and begin to look for professional help.
Here’s where we run into the fighter pilot.
You call the first listing on Google for the business nearest you, and all too often consumers are met with industry jargon and intimidating acronyms like SEO, SMO, and CPC’s! Now you’re really confused.
Michael explained that any consulting service that focuses solely on search engine – without focusing on the human connection – is suffering from the ‘ME’ or ‘fighter pilot’ syndrome. i.e. if a fighter pilot is in the room, he will tell you!
I hear it all the time. People that say, “I asked them what it would cost to build my website. And immediately they said ‘about $5000’. How do they know so quickly? They never even bothered to ask me what my goals are.”
As a service provider, once you’ve opened communication with a potential lead, you need to take the time to understand their vision and their business. You can’t just jump right into the planning phase before taking care of all the other foundation pieces first.
Michael suggests ‘break down the process into bite-sized chunks’ and keep it simple. Follow the steps outlined in the Business Canvas Model (above): define your long-term objectives, create SMART goals and list the action items by including deadlines and required resources.
Most importantly, monitor, measure and modify your goals and strategy. He suggested measuring your goals once a month and reviewing your overall strategy on a quarterly basis.
Implementing this easy and effective model will allow you to take into account your financial, resource and time constraints, while still orienting your mind and giving your business a focus.
A Real-World Example to Demonstrate These Principles
I put Michael on the spot by asking him to demonstrate the above principles by using a real-life example and asked him to walk us through these steps.
Situation: My friend Jim is a designer of fine custom-made guitars. He has very little funds and almost no knowledge about social media. How should Jim start creating an online business strategy?
Part I: Start by asking the following questions:
- Where does Jim want to go with his business or his vision
- Who is his target market
- What are his goals based on revenue or units
- How many hours does Jim want to work per week
- How many guitars can he build in less than ten hours than the amount of time he expects to work per week, taking into consideration other administrative duties ?
Part II: Marketing Issues
- Figure out where and how such custom-made guitars are sold historically: person to person, music store? In other words, find the channel of marketing
- If Jim can sell guitars without using social media, he should ignore digital marketing. The last thing he should do is waste time on some platform just because everyone is doing it too.
- If however, he is overproducing and underselling without social media, it is time to take advantage of social media, such as Twitter or Google Plus communities
- Focus on first building a following
- I suggested Twitter to Jim because it has a great search engine to find his target audience. Musicians who are looking for quality and can afford $2500 per custom guitar .
- Look for influencers, get to know them personally, and let them be your advocate.
- Never lead with sales, always lead with engagement.
- Use tools like Google Hangouts to demonstrate the sound quality of the guitar, and find someone with influence to demonstrate the instrument live.
- Create a no-frills website that is simple, clean, and cost effective. You do not need to start with a $5000 website to sell guitars.
- Decide on a Content Creation Strategy or Blog Format
Any Parting Thoughts
Both Michael and I suggested hiring an experienced, positively-rated business coach who can help put a strategy together. But make sure to find someone who can guide you from Point A to Point B after taking into consideration YOUR needs and constraints.
Anyone who simply TELLS you what to do without asking what you WANT to do can not be trusted.
Finally, always be honest, transparent, over-deliver and share knowledge to create a community of brand loyalists and forge a mutually beneficial relationship based on trust and value.