Market Dominating Position – Part 3
In the last article you learned the 5 steps that you need to take to create your Market Dominating Position.
If you’d like to revise it, you may go to:
Since it’s been a few months, let me do a quick refresher of the last article.
The 5 step process to creating your Market Dominating Position are:
Step 1, determine your strategic position in the market.
Step 2, determine your primary market dominating position.
Step 3, determine your supporting business model.
Step 4, determine your secondary market dominating position.
Step 5, create your market dominating position statement or elevator pitch.
After reviewing them, select the one or ones that best fit your individual business.
Category number one involves the level of service you provide.
There are a total of six different areas where you can add value when it comes to service.
The first area is typically one of the most important to prospects convenience. In today’s hectic world, the one thing most people value more than money is more time. How else do you explain the dramatic increase in “convenience stores” that typically charge 40% or more for the “convenience” of shopping there?
Few of us have our oil changed at the dealership where we purchased our vehicle. Instead, we visit the local neighborhood oil change specialty shop because it’s more convenient. These shops have grown exponentially because we no longer feel we have the time or the energy to drop off our car at the dealership, secure a ride home while the service is performed and then arrange to pick the vehicle back up. The lure of the local oil change shop is based on convenience. Anything you can do in your business to increase your customer’s convenience will create a market dominating advantage.
Here are six areas to consider where you can provide more convenience.
First, your location.
Although this is probably the best way to provide convenience, for the vast majority of businesses, changing locations isn’t an option. However, a great location is certainly a secondary market dominating position. For a fitness center located near a major residential area, location is certainly their primary market dominating position.
Your customers want to do business on THEIR schedule, not yours. Ask yourself what you can do to make your business more available including extending the hours or the days you’re open for business.
For example, five years ago the majority of health clubs were open from 8am until 7pm Monday through Saturday. Today, the vast majority are now open 24 hours seven days per week. The ones that have resisted this schedule are struggling to survive in this extremely competitive market. Same thing with supermarkets and convenience stores. We want to shop when we have time, not when the store thinks it’s convenient for us to shop. Please remember these are just suggestions for you to consider. You need to evaluate your customer’s needs to see if this is a viable option that will produce a positive return for making your business more convenient.
You should also test different hours of operation to see what works best for your business from a financial standpoint. If you’re a financial planner, would changing your hours to include Saturday mornings or Tuesday evenings help your clients that work Monday through Friday? If your business involves your customers dropping something off to you, then consider offering something as simple as a drop box. How long would a customer patronize a video store that didn’t offer one?
Many businesses rely on drop boxes as an integral part of their business such as rental car companies, photo finishing, dry cleaners, container shipping, auto body shops that ask you to leave your keys after hours in a key box and so on.
The third area involves the ordering process.
Ordering should be easy. If ordering is typically a headache for your customers then solving this problem can help you to establish a powerful market dominating position.
Have you ever attempted to contact a business where it was all but impossible to speak with a real live human being? Instead, you’re routed through a maze of automated voice mail messages asking you to select an option that has nothing to do with the reason you’re calling. This is not only frustrating to the customer, but it immediately creates enough animosity emotionally to compel this customer to take their business to a competitor.
In contrast, the business that makes ordering convenient by providing easy access to menus with a live operator option, or the ability to conveniently order online becomes the logical choice for most customers.
A fourth area to look at involves delivery.
When providing your customers with a more convenient location isn’t an option, then the next best thing you can do is to bring your product or service to the customer. There are now businesses sprouting up that specialize in delivering local restaurant items directly to your home or office. All that’s required is for you to call an 800 number and place your order from one of 30 local area restaurants. The service then delivers the meal and charges a set fee that’s typically 50% to 100% higher than patronizing the restaurant in person. This further emphasizes the fact that people consider convenience to be more valuable to them than money. Dry cleaners are now using delivery to dramatically increase their revenue and profits. They now offer to come to your home on a specific day and time to pick up your dry cleaning and then deliver it back to your front door when they complete the job.
One area involving delivery that’s now growing by leaps and bounds is mobile services. This is where the business comes directly to your location to perform their services. Home decorators now offer “shop at home” service. The decorator comes to the customer’s home loaded with samples and swatches.
This is not only more convenient but it also enables the decorator to perform a consultative type sale by helping the customer select colors that match their home and their lifestyle. This type of personalized approach often leads to dramatic increases in conversion rates, but more important, it often takes price out of the equation.
You see ads on TV everyday for window replacement services for your car where the technician comes directly to your location and puts in your new window instead of you having to bring the vehicle to them. Commodity businesses like this one should attempt to use mobile services whenever possible. Adding convenience into your mix can easily position your business as the logical choice.
The fifth area to investigate involves payment terms.
If your competition doesn’t offer any type of financing options, you can differentiate your business by offering payment terms over 30, 60 or 90 days. Offer multiple payment options such as a “three easy payment plan.”
Did you know that the latest research shows that a product or service that typically sells for $39.95 can be sold for twice that price by offering the customer a two-payment option where they pay $39.95 at the time they place the order and then an additional $39.95 in 30 days?
Although this is a 100% increase in price, it only decreased the order rate by 17% versus offering the product at the original $39.95 price point.
Consider accepting credit cards if you don’t currently accept them. This alone can increase your sales by as much as 80%. How would you feel if you had to pay cash every time you filled your car up with gas, or had to make an emergency run to the store? The sixth and final area to consider involves miscellaneous services. What additional services do your customers consider to be important?
If your business attracts parents with small kids, consider offering child care services while the parents shop or take care of business.
How much more pleasant would it be for everyone if restaurants offered a separate and secluded child care area professionally supervised and loaded with games and toys? Do you really think that parents that show up with noisy kids really enjoy doing that? Do you think they would relish a quiet hour to have an enjoyable kid-free meal that evening? And do you think that ANY restaurant that offered this one-of-a-kind service would literally dominate their market, practically overnight?
What about the local bank? How often do busy parents have to drag little Sally or Johnny into the bank and spend their entire time trying to corral the kids instead of taking care of business? If your business requires parents to evaluate their purchase decision, such as buying furniture, a new computer or clothing, or requires a lengthy transaction time or office visit, such as the dentist, doctor or health club, then having a child’s play area can be a huge area of differentiation.
So consider these six areas when looking for ways your business can provide more convenience.
In the next article you will learn the 2nd to the 6th of the six areas where you can add value to your business.
Hope this read opened your eyes to opportunities that are missing in your business, don’t forget to apply what you learn to see the difference it will make in your business!
If you need help identifying your market dominating position, try my FREE test drive to gain access to our resources and tools.
Check it out at www.BestEntrepreneurSolutions.com/guidedtour
To Your Success,
Nancy Baki at Best Entrepreneur Solutions
How to Reactivate Past Clients – Part 2 – 8 Steps to Designing a Reactivation Campaign
As promised here are the 8 Steps to Designing a Reactivation Campaign
One of my clients just launched a fairly large reactivation campaign. While there are many ways to run a reactivation campaign, the following steps will set you on a straight path should you decide to launch one.
First, understand that a reactivation campaign is when you create a strategy around those sleepy subscribers. You want them to get back to opening your emails and engaging with them. This can help improve sales, click-throughs, website traffic, and more.
1- Who is your target?
Are these people who stopped buying from you six months ago? Three months? Twelve months? If you run a subscription service, are they people who canceled one month ago? Two weeks ago? Two years ago? Decide first who you want to try and reactivate. If someone bought from you four years ago and you’re just now getting around to sending them an e-mail, it’s probably too late. It’s OK to run a few different variations of the campaign if you want to target several different groups from above.
2- What’s your goal?
I’ll take a wild stab and say your goal is to either have these consumers buy from you again, re-subscribe to your services, or otherwise reengage with your company. But, are there more specific goals than that? Maybe you want to introduce a new product line, introduce a new account manager, or upsell them on something they already own (or a service they already use)?
3- Why did these consumers leave?
Unlike a normal marketing campaign, you need to understand why your consumers left. Did they not like your products? Were you too expensive? Did you not have enough content in their particular field to keep them interested? Knowing the reasons they probably left will enable you to craft a message that addresses those issues specifically.
4- What segmentation or persona data do you have?
If you can segment these consumers either by persona or by purchase habits, you can make your reactivation campaign that much more effective. The rules here are the same as for any direct marketing: don’t just send a mass “We want you back” e-mail. Instead, use whatever knowledge you have of the consumer in order to create a more relevant message.
5- Split test offers.
It’s fine to offer a reactivation discount code to these consumers. They were effectively “dead” anyhow, so you aren’t really losing a full-price purchase by offering them a discount. However, showing consumers that you understand them and have new offerings that meet their needs might just be enough. So, do a split test and create discounts for some percentage of the group, but not all of them. See how they do when compared to the group with no offer.
6- Focus on your content.
Instead of just saying, “We want you back, here’s 15% off,” make a real Show your consumers you understand them. If they used to buy video games, talk about all the new things that have happened in video games since they last checked your site out. If you run a content subscription-based site (like E-Learning), highlight the new content you’ve added to your site since they were last members. Put the relevant content first. Consumers can get a discount anywhere if they try. It’s your content and products (if they’re relevant) that will be more interesting to them.
7- Make it easy for them to come back.
If it has been a while, there’s a good chance your consumers don’t remember their usernames or passwords. Either send them this information (or at least their username) in the e-mail, or make it really easy for them to find it. If their account has “expired,” make it easy for them to renew without reentering all their information again. If you offered a discount code, make it very clear where they enter it.
8- Reach out via different channels.
Are these consumers on Twitter (and do they follow you)? If so, send them a direct message, not an e-mail. E-mail marketing is great, but try other channels if you have access to them.
Finally, realize the difference between a reactivation campaign and a regular campaign. While the above steps could be the recipe for any old marketing campaign, there is one important difference. Reactivation marketing needs to understand how long people have been gone, why they possibly left, what is different in your offerings now that would make them come back, and what (if any) incentive they might need to come back.
If you can’t answer, “What is different in our offerings that would make them come back,” then skip the reactivation campaign and focus on answering that question first!
You are more than welcome to take a FREE tour to see how I can help you grow your business:
Check it out at: www.BestEntrepreneurSolutions.com/guidedtour
To Your Success,
Nancy Baki at Best Entrepreneur Solutions
How to Reactivate Past Clients – Part 1
Reactivate stale or past Clients can bring you new customers…. Most businesses ignore them, successful businesses learn new ways to get them to recognize you as a market leader.
Remember that it’s 6-7 times more expensive to acquire a new customer than to keep an existing one
When trying to re-establish relationships with past customers, some customers will be comfortable and feel as if they just conducted business with you yesterday while others will wonder why you went to the trouble of contacting them.
Who is a reactivation candidate?
To reactivate customers, you need to be attentive to the process. First, to determine which previous customers to reactivate, define what reactivation specifically means for your organization. Most companies define reactivation candidates based on their lack of response to previous marketing efforts. The typical sequential marketing efforts that an organization may follow begin with acquisition, then proceed to resell / upsell / cross-sell / downsell, retention / competitive defense / selective attrition and then reactivation.
How do you differentiate between customers who require selling and retention efforts from those who require reactivation efforts? First, and most obviously, if you know that you’ve lost your customer’s business, then you’ve probably exhausted your sales and retention efforts and can assign the customer to your reactivation group.
If you don’t know whether you have lost your customer’s business, make inquiries. If you find that it’s too expensive to keep in touch with customers, then analyze their buying history (e.g., length of time since last purchase, number of prior purchases, length of time between purchases and average order size) or apply industry averages to determine who might be a reactivation candidate.
Whom do you select for reactivation?
Before designating customers as reactivation candidates, determine whether you have their correct contact information. Exclude past customers who have outdated information that cannot be updated through third-party sources.
Also, review any customer service or third-party data you have on reactivation candidates and categorize the reasons for lost business as “controllable” (e.g., shipped wrong product two weeks after promised delivery date) or “uncontrollable” (e.g., moved from retail area). If you’re to blame for the failed relationship, determine whether there is value in re-establishing it.
Once you select your reactivation candidates, segment this group and test offers before spending money to reach them all at once. If possible, use lifetime value to determine which segments may yield a higher return.
When do you conduct reactivation marketing?
Reactivation is not a one-time event for when times are tough. Reactivation should be an ongoing activity prioritized among other marketing efforts.
Once you have customers who meet your reactivation requirements, execute a reactivation campaign. (See “Reactivation Letters” in the Sales Letter Library). With response history, you can develop a reactivation response model to determine the optimal timing and frequency of your reactivation efforts. For example, a model developed for a health products cataloger might show that the company maximizes its marketing dollars when it tries to reactivate past customers with a buy-one-get-one-free offer after these customers fail to respond to three months of discount offers following their initial purchase.
When you accumulate significant response history from your reactivation marketing efforts, build a model based on RFM analysis (recency, frequency, monetary) or data attributes that predict purchase propensity. A life insurance company might build a model based on age, number of children, marital status, income and interest rates to determine the likelihood of a previous term insurance customer buying a variable life policy.
What do you say to customers you want to reactivate?
People change over time and so does your business, so when you’re thinking about marketing to past customers, consider that your customers’ needs and preferences, as well as your business focus, may have changed.
Profile customer’s to create more personalized communications for each segment. Use past data such as RFM information and, if possible, append reliable third-party information that will enhance your customer understanding. For example, you might use third-party information to determine each customer’s age, family situation and income. Then you could send targeted communications to various segments depending on these data attributes as well as results from an RFM analysis.
In conjunction with customer profiling, make an in-depth determination as to why the relationship ended in the first place. Was it something you did? If so, you might have a manager or high-level executive make a personal call to “high-value” customers.
When communicating with reactivation candidates, use the information you have about them in your marketing communications to show your desire to have them back as a customer. Also, if your communication is asking the reactivation candidate to call a person at your company, create a group of call specialists trained to handle reactivation customers.
Investing in acquisition vs. reactivation.
Acquisition and reactivation are both investments designed to yield profitable customer relationships. When deciding how much of your marketing budget should be allocated to each effort, calculate the ROI on reactivating old customers versus acquiring new customers.
Whether reactivation involves less of an investment than acquisition depends on the extent of your data analysis, data enhancement and list rental costs. It’s generally true that with customer data available for analysis as well as past customers’ familiarity with a company’s name and product or service quality, reactivation efforts yield higher response rates and higher profitability than acquisition efforts do.
Make the first move.
Most organizations focus on acquisition, sales to current customers and retention. They see little opportunity in marketing to people who failed to respond to their offers. These organizations, however, are typically not customer-focused.
Instead of trying to understand why a prior customer is no longer responding, they assume that the customer is the problem in the relationship. The dynamics are similar to that of a person who refuses to talk to another person unless the other person reaches out first. Start looking at your past customers and commit to reaching out and re-establishing a relationship that is valuable to both sides.
In my next blog I will show you the 8 Steps to Designing a Reactivation Campaign, stay tuned.
If you need help reactivating stale clients, try our FREE test drive to gain access to our resources and tools, or you can also contact me directly.
Check it out at www.BestEntrepreneurSolutions.com/guidedtour
To Your Success,
Nancy Baki at Best Entrepreneur Solutions