Sometimes it’s really hard to know where to start or what to work on when you don’t have a good idea of how a business functions and how customers interact with it. This isn’t just about SEO or whether your photo background is white or gray or picking the right logo… it’s a much bigger picture of business strategy.
I see a lot of small business owners worrying about small details too soon.
This is going to be one of my longer blog posts. There’s a lot that goes into business success. I use an over concept that I call “the Business Bridge.”
Like a normal bridge, the business bridge has two elements:
- The structure holding it up
- the roadway that carries all the traffic
The support structure of the business bridge is made up of:
- Product-to-Market Fit – the basics of whose like you are trying to improve and how you’re trying to do it. Problems here result in a hard time getting consistent sales, no matter how many people you show it to.
- Market Communications – connecting the dots, so your target market sees and understands how your product benefits them. Problems here usually show themselves when people love your product, but you don’t get much web traffic or social media interaction.
- Business Operations – all the behind-the-scenes tasks that let you deliver value to your customers while making a profit. Problems show up here when you struggle to fulfill orders, are making sales but not making a profit, or struggle with to deliver product on-time and at a high level of quality.
The bigger and more robust each of these piers are, the bigger “roadway” you can put on them. The roadway is your Customer Journey, which has five stages:
- Awareness – how customers find you
- Consideration – how customers compare and decide
- Conversion – the process a customer goes though wile making a purchase
- Loyalty – how often the customer comes back to buy again in the near future
- Advocacy – when your customers love your business so much, they promote your business for you
I’ll dig into all of these in more detail later.
You’ll find building these to be a cyclical process… you “build” the piers, get some customers, find out there are some “potholes”, smooth out the roadway for them, then make the piers bigger to allow for more customers, and then start over.
Any time your business gets stuck, it’s usually a problem found in Customer Journey which is caused by a problem in the supporting structure.
Most tasks you perform in your business fall into more than one category. For example, pricing is mostly about business operations (accounting and profit), but it also has to consider Product-to-Market Fit (will my customers pay this much?).
Let’s dig into all the components I’ve listed a little bit.
Support Structure: Product-to-Market Fit
This is where it all begins.
Somewhere out there, there are a bunch of customers looking to buy stuff for some reason. Your goal as a business owner is to provide a product that fits what they are looking for.
Too many new business owners offer things they like and don’t ever think about the person who is making the decisions about what to buy. Instead, they would do much better if they focused on someone else, offering products that person would like enough to buy. The product selection and and your market communications are intended for that person, who is called your target customer.
If you are selling business-to-business, then it’s a little more complicated. Then there are two people involved: an executive who actually makes the purchase, the target buyer, and the person using the product on a daily basis, the target user. You need to market to and satisfy both people for the product to succeed.
There are other companies already selling to those customers. What makes your products a better choice than theirs? They are all high quality, small businesses, have great design/variety, and offer great service…. and they are going to fight to keep those customers. That’s your competition.
The customers, the conditions in their lives, the competitors, and the places where they buy, all together make up a market.
The market to which you choose to market and sell your products is called your target market.
If you try to offer products when you don’t know who they are for, why someone would buy them, or what the competition looks like, you will have a much harder time than if you start with that information and then design or select products to meet them.
When a product fits so well into the target customer’s life in a way that others in the target market don’t and then the product sells like crazy, that’s called Product-to-Market Fit. It’s a primary goal of every business.
Support Structure: Market Communications
In order to build a strong relationship, businesses need to communicate with customers.
It’s difficult to make it feel like a two-way conversation, not just a business talking at people. Usually it requires listening to the customers, both in person and what they say publicly on social media. The latter is called social listening. Just like in other relationships, the more you listen, the more you understand.
There needs to be a consistent, overall look and feel to everything a company publishes. This includes tag lines, logos, mottoes, graphics, the general tone of voice of the company on social media, the packaging… anything and everything the customer sees. This is called the company’s brand.
There is an overall theme that a company uses to appeal to its customer. It’s usually a short sentence or paragraph that causes a really deep, emotional reaction in their target customer. It explains how the benefits of your product make their life a better, easier, or happier. This is called the company’s marketing message.
There are other companies out there selling products that meet your customers’ needs to some extent already. Your product is trying to stand out from them and be better in some way. The description of how your products compare is called your company’s positioning.
The brand and the marketing message need to find their way to the customer. You could have the best marketing message in the world, but if it’s only on your laptop and no one knows, it doesn’t help you any. There are all kinds of ways that you can get the message out, like social media feeds, podcasts, blogs, magazines, and flyers. These are called marketing channels.
Lastly, there needs to be a place where a customer can buy from you. It could be your own website, an online marketplace, a local farmers’ market, or a physical store. It’s still a form of communication, where you tell them the price and delivery conditions and they tell you their payment information. These are called sales channels.
There are all kinds of crazy tasks involved in getting found and, to make matters worse, they are different depending on the platform you are using. Things that get you found on Amazon could get you blocked on Google or get you nowhere on YouTube, so you need to make sure you are optimizing for each site. That’s why it’s called search engine optimization.
For your company to reach its target customer effectively, you need a really strong strategy for your Market Communications.
Support Structure: Business Operations
There are lots of tasks that companies need to do in order to function.
The list can be pretty long.
- Accounting – tracks all of the money coming in and out of the company
- Finance – decides how and when to spend the company’s money based on the data from Accounting
- Information technology – keeps the computers and websites up and running smoothly
- Operations – the core function of the company (making products or providing services)
- Human resources – recruits and trains staff, as well as handling any issues that arise with them (including terminating them if things don’t work out). In some companies, they handle benefits and payroll as well.
- Marketing – attracts new potential customers
- Sales – converts potential customers into paying customers
- Shipping – the product is packaged and sent to customers
- Customer service – takes care of customers with questions before the sale or issues afterwards
In a small company, these might all be the same person. In a large company, there could be a “chief officer” (Chief Marketing Officer, Chief Financial Officer, Chief Information Officer, etc.) who runs each department and they all answer to a “Chief Executive Officer” (in case you ever wondered what that title actually meant).
Most of these are areas that cost your company money. It’s a huge challenge not only to keep the costs under control, but also to make them run smoothly and efficiently.
These are usually great areas for small businesses to hire contractors and consultants to help with instead of learning how to do them all yourself. Still, as business owner, you need to know enough to manage them.
It’s a lot to manage, but your company needs strong Business Operations to fulfill customer orders and provide great service while keeping your business running.
Road Surface: The Customer Journey
As you improve your three “piers” of Product-to-Market Fit, Business Communications, and Business Operations, you will see your business is able to bring in customers more effectively.
Better Market Communications brings in more prospects. Better Product-to-Market Fit gets more sales. Better Business Operations let you fulfill the orders and provide great service.
But that’s all from the perspective of the business owner. The Customer Journey is what happens from the customer’s viewpoint. These piers hold up the “road surface” the customers need to make their journey.
The customer journey is the process of a person who is a complete stranger and has never heard of you becoming a strong advocate for your company, giving you strong referrals to others because of their repeated positive experiences with your company. It’s a story of the person becoming a highly profitable customer, who is almost marketing and selling for you.
The Customer Journey has five stages:
- Awareness – the customer first realizes they need something and goes looking for possible solutions
- Consideration – the customer compares all the options they have available
- Conversion – the customer picks a product and goes to make the purchase
- Loyalty – the customer loves the product and comes back to buy from you again
- Advocacy – the loyal customer tells their friends, who then join the “awareness” stage of their own
At each stage, potential customers will drop out. That’s normal. Sometimes you just aren’t what they are looking for today but they still liked you. Sometimes they just get distracted before they made purchase. In any case, if you passed every test to that point, they should come back in the future. If not, they won’t.
If they never find your products or your product blends in with the crowd and they don’t notice you, they won’t ever make it to the last three stages, which are where you actually make money. Stage 3 is when they actually buy. Getting customers to Stages 4 and 5 will let your company grow much more rapidly.
You need excellent Market Communications for potential customers to find you. You need both Product-to-Market Fit and appealing Market Communications to make it past the consideration stage. You need good Business Operations to deliver their order on-time and meet their service expectations. You need Product-to-Market Fit, Market Communications, and Business Operations that all work well together to help that customer love your business and keep them coming back. You need to be absolutely market-leading for those customers to tell everyone who will listen how great your company is (and, have those people believe them).
You can read more about the Customer Journey in this detailed article (which I should warn you now, has links to even more detailed posts on each stage).
Wow… So there it is. My theory of a successful business. This gives you a better idea of the moving pieces of a business that all need to fit together to make your business successful. I’m here to help you make that happen.
This is what I plan to teach in a series of upcoming online courses and workshops (and of course, help with through my coaching services).
If you want to keep the discussion going and get several tips on running your business every week, join my Facebook Group! (and be sure to answer the questions… I only accept new members who answer them)