To succeed, small businesses must attract and retain a growing base of satisfied customers. This activity is called marketing.
There are two overriding principles: Company policies should be directed toward satisfying customer needs. And profitable sales volume is more important than maximum sales volume.
To best use these principles, smallbusiness owners should:
Determine the needs of their customers through market research.
Analyze the company's competitive advantages to develop a market strategy.
Select specific markets to serve by targeted marketing.
Determine how to satisfy customer needs.
Successful marketing requires timely and relevant information. An inexpensive research program, based on questionnaires given to current or prospective customers, often can uncover dissatisfaction or possible new products or services.
Marketing research also will identify trends that affect sales and profitability: Population shifts, legal developments and the local economic situation should be monitored to quickly identify problems and opportunities. It's also important to keep up with competitors' marketing strategies.
Owners of small businesses usually have limited resources to spend on marketing. Concentrating their efforts on one or a few key market segments-targeted marketing-gets the most return from small investments.
Generally, there are two methods used to segment the market:
Geographic segmentation: Specializing in serving the needs of customers in a particular geographic area. For example, a neighborhood convenience store may send advertisements only to people living within one-half mile of the store.
Customer segmentation: Identifying those people, or businesses, most likely to buy the product or service and targeting those groups.
A marketing strategy identifies customer groups that a particular business can serve better than its target competitors, and tailors product offerings, prices, distribution, promotional efforts and services toward those customers. Ideally, the strategy should address unmet customer needs that offer adequate potential profitability. A good strategy helps a business focus on the target markets it can best serve.
Marketing programs, though widely varied, are all aimed at convincing people to buy particular products or services. Business owners should carefully plan their marketing strategies to keep their marketing presence strong.
After implementing a marketing program, performance should be evaluated at least quarterly. Key questions are:
1. Is the company doing all it can to be customer-oriented?
2. Are customers satisfied?
3. Is the program making the company money?
Knowing the answers to these questions-and adjusting if necessary-will help a business owner maintain a marketing program that significantly contributes to the success of the business.
Clifford is a retired telecommunications company general manager and SCORE small-business counselor. For more information, go to www.indyscore.org.