Three years ago I was approached by a startup in Metrowest that had just purchased and renovated a building to develop private office suites. Their goal was to attract business people looking to move out of their home office, expand their business or set up a satellite office. They were interested in developing and launching a marketing program to drive clients to their door. I was impressed with their concept and presented the idea of first conducting a needs-based analysis of the market to clearly define who their potential clients were and how they could best fulfill those needs. I also recommended a competitive assessment to determine how they should position their “suites” and create a powerful value proposition that would resonate with these new clients. The goal was to do the research before they opened their doors to ensure their message was on target and they were spending their limited dollars on marketing activities that would have the greatest impact in the shortest amount of time.
However, they were anxious to launch, believed they understood their clients’ needs and simply wanted to get out there and promote themselves. They thanked me for my proposal and let me know that they would contact me when they were ready for a more research-oriented approach to developing a marketing strategy.
This was not the first time a company has believed they were ready to open their doors before assessing the needs of the market. But just because you build it…doesn’t mean they’re going to be beating down your doors to get in. Market research is not a ‘sexy’ nor interesting project that small businesses want to hear about…most prefer to discuss website launches, designing brochures and creating promotional pieces. Ironically, on a tight budget those are the items that cost the most and are the most risky because if they’re not properly targeted, they cause the fastest drain to scarce financial resources.
Roll the clock forward to a few weeks ago and guess who called? Finding themselves at 40% capacity and never having reached the success they had anticipated, they paid a heavy price for a nicely designed (but ineffective) website and a pretty brochure (that they stopped mailing after the first attempts failed to attract clients). Without first doing their ‘homework’ to understand the value and services their prospects needed, their effort was untargeted and misdirected…and so was their money. Almost 6 out of 10 new businesses fail before their fifth year. With failure rates this high it’s critical to use limited resources (people, money and time) to target customers as precisely as possible. That doesn’t mean simply getting them in the door but making sure you’re attracting the right people so they’re not exiting as quickly as they came because you failed to offer them services worth sticking around for.
Like an airline seat that goes unoccupied….each office suite that remains vacant cost this business money. If they had held off on their web design and advertising they could have allocated their budget toward a solid assessment of the market and identified organizations and individuals who need their services, leading to a steady stream of revenue-generating clients.
What can they do now? Here are a few quick ideas (pending confirmation from research):
- Explore All Target Markets: They need to look beyond small business owners as the only market. They’re located close to one of the largest employers in Metrowest. Therefore, there might be an opportunity to help visiting vendors who need office space when they’re in town.
- Study Their Competition: They don’t have a sense of what their competition is offering so it’s impossible to position their value juxtaposed to what else is available or needed.
- Network: They must identify groups where a constant flow of small business owners congregate and get the word out about their services. Networking is the least expensive drain on a marketing budget and often times the most effective way of driving attention to a business.
Have a sales or marketing challenge that you’d like some advice on? Send Beth an email at bethg@m-edge.com. Beth Goldstein is President of Marketing Edge Consulting Group (www.m-edge.com). She has over 22 years experience in sales and marketing and is the author of The Ultimate Small Business Marketing Toolkit (Mc-Graw-Hill). Beth runs Boston University’s Online Certificate in Entrepreneurship, teaches entrepreneurial marketing at The BU School of Management and is the Instructor for the InnerCity Entrepreneurs business growth program in Worcester.
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