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Market
leadership hinges on knowing customers.... |
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Entrepreneurs often see themselves as market leaders, but in
reality, many of them don't make the grade. To achieve this status, they need a
clear understanding of who their customers are and a marketing strategy to
satisfy their clients' needs. |
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The must also be prepared to continuously review their
marketing targets. |
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A lot of companies figure they "know their customers" but
they really don't. They fail to understand that these are individuals who are
prepared to pay them for their goods or services. While clients may technically
be corporations, entrepreneurs are still dealing with real people - the
employees. |
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To gain a deeper understanding of their businesses,
owner-managers should analyze all current clients to determine some common
patterns. One owner of an executive search firm reviewed his customer base
expecting to find that all his work consisted of senior-level executive search
assignments from a wide variety of industries. |
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He was amazed to discover that the majority of his search
activity was for middle managers, and primarily for financial companies in
three principal markets. The recruiter was occasionally handed senior search
assignments, but these were the exception. He quickly altered the structure of
his business to make these jobs more cost effective, and he changed his
advertising to focus on this area. |
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His revenue increased significantly the following year. |
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This entrepreneur was successful because he looked at the
facts of his situation and acted on them. He avoided the common mistake made by
many companies, which dismiss any new data as a onetime aberration. In these
cases, they fail to use valuable information to enhance market share or develop
a winning strategy. |
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One entrepreneur had an idea for an Internet-based service,
so he spoke to a number of prospective users. They all liked the concept, but
they pointed out the service should be free. |
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Still, he plunged ahead with a business plan that included
charging fees. When he was about to launch the product, he went back to the
potential users he had spoken to earlier |
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His innovative idea never made it to market because no one
he approached was willing to pay for it. The businessman wasted a year of his
time trying unsuccessfully to make the concept work because he didn't listen to
his own research. |
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But this information is only part of the key to market
leadership. Only after entrepreneurs are clear on who their customers are can
they begin to develop a marketing strategy. In essence, this is a plan that
enables them to capture more customers. It will allow their businesses to be
recognized as the place for existing or potential buyers to call. |
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Any strategy should include an understanding of current
clients and target customers, the channels of distribution for your goods or
services, how customers receive information and how they make purchasing
decisions. |
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One entrepreneur wanted to sell her product to the automotive
industry. She tried the normal process of meeting with purchasing agents, all
of whom were very excited about the product. But after a number of positive
meetings, there were still no orders and she did not understand why. |
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After many frustrating months, she asked a friend in the
industry why she could not close a sale. The friend pointed out that all
automotive suppliers must be certified under ISO9000 quality standards in order
to be accepted. |
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The entrepreneur confirmed this with the purchasing agents.
She became certified a number of months later received her first order a day
after the certification came through. Failing to understand how companies made
their purchasing decisions cost her many months of lost sales. |
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Marketing strategies are constantly evolving to satisfy an
ever-changing customer base. The only certainty is client needs are in flux. It
is critical to continuously update knowledge of who customers are and to revise
the marketing strategy accordingly. |
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If you're devising a plan, try to position yourself as a
strategic partner with your customers. Invest the time to understand who they
think their customers are and how they intend to market to them. Tailoring your
marketing strategy to help your clients win customers will guarantee a long and
mutually profitable relationship. |
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Published June 1, 1998 |
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