[Guest Post] 4 tips to get a feel for your target market

Posted on | August 25, 2010 | No Comments

Kindra Cotton owns SSS for Success (EASY Brand Marketing Specialists), a company that promotes small business survival through using the specially designed EASY Brand Marketing Program. She is also the creator of The MiniMarketing Survey, and she channels her energy into multiple activities that are geared towards helping small business grow.

About two years ago I officially announced “I was in business” and at that time, I literally had no idea what “business” I was in. Like the main character in Brewster’s Millions, I was “in the business of being in business”, and I wasn’t hitting my target market because quite frankly, I didn’t have a target.

I made the classic entrepreneur’s mistake of answering “everybody” whenever someone asked “Who is your target market?”. Sure, it would be great if everyone could become my customer, but its actually more economical (both in terms of time and money) for me to whittle my target market down to “25-54 year old business owners with less than $250,000 in sales that have been in business for 2 – 5 years”, because that audience is much easier to reach than “everyone”.

Having a target market in my sights actually helped me further define what were the “ideal characteristics” of my “best customer” who would find the most value in my services. From there, I realized that those in my target market needed to know that they needed help and be willing to accept it and not get stuck in their old ways of doing things.

With this “profile” of my ideal customer, finding out where they are and the best ways to connect to them are key. I continue to conduct ongoing market research to “fine tune” my product and service offerings, and since my brand is relatively new, it along with our web presence, is still evolving.

But what does this have to do with you? If you know everything there is to know about your target audience, and can’t benefit from increased sales and more effective operations, then probably nothing. If however, you have some questions about your customers, or could use their feedback, or you just want to know how well you’re fairing against your competitors, then I would suggest the following:

1. Conduct Informal Feedback: Ask your customers and clients how well you’re doing when you interact with them in-person, on the phone, or via email or any of the social media tools that you use to stay in touch with them. The benefit to informal feedback is that you learn what you need to know pretty quickly, but the disadvantage is that it can be time consuming, especially if you have a large customer base.
2. Try The MiniMarketing Survey: The MiniMarketing Survey was designed to be the bridge between informal word-of-mouth feedback and larger, more expensive market research projects. The benefit to using The MiniMarketing Survey is that it would provide more detailed feedback than your informal feedback initiative but your turn around time is longer (though 30 days or less isn’t too bad).
3. Consider a Larger Market Research Project: The greatest benefit from conducting a larger market research project is that you would get in-depth feedback about your market, your customers, and your performance, but the flip-side would be that it’s significantly more expensive than either of the aforementioned suggestions.
4. Review Customer Records & Feedback (if you have it) and Identify Trends and Themes: Some of the information you need to get informed about your customers is already in your possession. Reviewing customer data and feedback gives you the opportunity to highlight the characteristics of your customers, identify who may be “your best customers”, and find out more about what sells and what doesn’t, and hopefully you’ll be able to notice some trends that can help you improve your business processes or more effectively address the needs of your customer base.

Of course, the do-it-yourself methods suggested above are time consuming, but a general rule of thumb that I like to apply is this: Take your hourly rate and multiply it times the amount of time it will take you to complete the task. Then look at that number, and decide if you can pay someone else to do the work for you at that price.

For example, if you charge $100/hour as a consultant and you estimate it will take about 10 hours for you to review your customer records, could you find someone to effectively do the work for you for $1000? If so, then it’s definitely worth it to use them, since it will free up your time and you can continue running your business and servicing your customers.

It is essential to know what you do well, how well your customers think you’re doing, and how you can continually improve and grow your business with the information you need. The importance of market research cannot be overstated, especially when you’re operating in a market that has consumers and businesses tightening their belts and being more judicious with how they spend their dollars.

The best way to get the information you need on your market is to dive right into what you already know by taking a look at your previous customers, then branch out from there to enhance your knowledge and help you better address the needs of your target market.

[If you’re a small business owner, please help Kindra with her own market research efforts and fill out this brief survey.]

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New Jobs Numbers Hint At Shape of Recovery

Posted on | August 24, 2010 | No Comments

Last week, the Bureau of Labor Statistics released the latest installment of its business employment dynamic data, this time covering the fourth quarter of 2009.

The employment dynamics data is important because it provides a more complete picture of the labor market than you get from the monthly employment numbers we get from the Labor Department. The employment dynamic numbers show us job gains from business launches and expansions, job losses from business closures and contractions, and the net gain or loss in employment for the quarter.

It’s a good way to look at this, especially when there are any number of Chicken Littles running around proclaiming that the sky is falling. Even when the economy was at its worse, losing more than a million jobs in a single calendar quarter, there were still upwards of 7 million jobs created during that month.

These numbers cover a period that occurred after we had hit bottom and, in fact, there was at least one individual month during the quarter when we got to celebrate reports of job gains. Overall, however, we still came out of the quarter in the red.

During the fourth quarter of 2009, the U.S. economy generated about 6.6 million jobs and lost about 6.8 million of them, giving us a net loss of about 200,000 jobs. Sounds bad but nothing like the net 2.7 million jobs lost during the first quarter of that year.

When I was covering this data series for The MicroEnterprise Journal over the last year or so, I’ve been looking at the numbers in terms of job gains/job losses ratios. So, the closer to a 1:1 ratio any firm size class reached, the closer they were to break even point where the jobs lost equaled jobs gained.

That number, I figured, would be a good proxy for when any given firm size class was about ready to turn the corner into positive turf on the job creation numbers. And the entire point of this exercise was to be able to figure out which firm size classes were getting into positive jobs numbers early, to “lead us out of this recession” as the politicians like to put it.

Of all the firm size classes, microbusiness employers with fewer than five employees were doing better than everybody else at that time. In fact, there were very close to that 1:1 ratio, with 931,000 jobs gained and 934,000 jobs lost for a net loss of only 3,000 jobs.

That’s better than anybody else did for the quarter.

The folks who were still doing most of the struggling (relatively speaking) were firms with between 5 and 99 workers — the true non-micro small businesses. Firms in these size classes generated a combined total of 2.4 million or so jobs but lost a combined total of about 2.6 million jobs. That’s almost the entirety of the net job losses for the quarter right there among these firm size classes.

Another way to look at it is that these firm size classes accounted for 45% of total job gains for the quarter but they also accounted for 47% of total job losses.

Medium-sized businesses (those with between 100 and 499 workers), on the other hand, appeared to be in better shape — again, relatively speaking. They added 789,000 jobs that quarter and lost 821,000 jobs, for a net loss of only 32,000 jobs. Again, very close to that 1:1 ratio.

The two largest firm size classes, with over 500 employees, continued to shed notable numbers of jobs, too. They were responsible for 22% of job losses, which is noteworthy since they account for such a small fraction of the total number of U.S. firms. Among them, they generated 1.2 million jobs but lost 1.3 million of them.

From these numbers, it still is tough to predict where the jobs will be coming from once the net number turn positive, which will almost certainly be contained in the next release in this series.

It looks as if the microbusiness employers will be taking the lead here and that makes sense in light of those recent findings from Kauffman. Microbusiness employers include new business launches; as a general matter, this firm size class accounts for between 60% and 65% of jobs generated by firm openings per calendar quarter.

And, as rotten as these last few years have seemed, there have been new firms launching during the entire time.

The next set of BLS employment dynamic data will be released in November, covering the first quarter of 2010. We’ll see what the number tell us then.

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Partnerships: a conversation with Kare Anderson

Posted on | August 23, 2010 | No Comments

(Visit Microbusiness Conversations at Blog Talk Radio, today at 2 pm Eastern, to listen to this interview. You can also listen to the archived show at the Microbusiness Conversations web site.)

Kare Anderson is literate and eloquent, generous and compassionate and — just in case you can’t tell — I really enjoyed my conversation with her.

This is the first time I’d ever talked with her, too, by the way. I have bumped into her any number of times here and there online but this is an initial direct encounter that will, I hope, presage many more.

She chuckled when I told her that I wanted her to share her wisdom with us but she really is wise … and that’s something you don’t get to say about somebody every day.

A few of my favorite moments during the interview:

“You can’t make people wrong because [the way the economy is changing] is scary … “

“I think to look at opportunity is to say, ‘How do I stand out so I’m something that’s a small indulgence or the smart thing to do?’”

“Step outside of your shoes with a compassionate, clear view of what’s going on for people, where can what I do be of value … ?”

“If someone is only wanting to be a taker, that may just be a blind spot. Why make them wrong?”

“And when other people are just givers, that’s equally unbalanced because, at some level, they’ll resent that you don’t give as much as they do. But when people want to look for that sweet spot of mutual benefit, that common ground, then they’ve got boundaries that they can see more clearly so you can have a conversation, you can actually have fun, you can kid around, and that’s the way I want to live.”

“If you focus on the goal first, I think it reduces the differences and it enables us to get more in sync.”

There are more of these but you’ll have to listen to the interview to find them.

While you’re at it, visit Kare’s Moving From Me To We and