Several years ago, the owner of a prominent business services company hired me as their business coach. The owner and the company were well known and well regarded. Yet, the company’s growth had stalled. The business owner was a fixture in the community. The name of the company was noticeably placed everywhere. They were considered a leader in their industry. Client retention was unusually high – but growth was not occurring. This is a story I hear time and again, and its roots lie in a lack of understanding of how to leverage brand promise in their strategy tool kit.
After careful consideration, it became apparent that my client was well-known for their product and service, but did not know why that mattered to their clients. More intriguing was the fact that while my client was considered by many a strong salesperson and the company prided itself as superior in marketing and sales, its actual sales results proved the opposite! The industry had grown, and while other competitors had grown faster, they had not. They were excellent at serving their existing clients – reflected by high customer retention, but lack of sales growth proved they clearly were not getting the job done in sales and marketing. Further analysis led to our conclusion that my client did not know what was important to potential customers. While they kept customers, they did not know why.
We have found that there are two factors that need to be clarified by any company in order to achieve consistent sales growth, and are always present in those that have massive growth. These two factors were hindering growth for my client. The first factor required for massive growth is to focus on a particular market segment, not aiming to be all things to all segments. Targeting every source of revenue can leave you spread thin, the proverbial jack-of-all-trades and master of none.
When businesses mistakenly chase revenue anywhere it leads them, they wind up with less of it. Great companies quickly learn that by segmenting the marketplace, they can perfect their business model around owning their segment. A common mistake is to view a segment as a demographic, such as company size or industry group. Instead, view segments as a group of people that should be separated based on common needs, behaviors, and other attributes so they can be better served.
Once you have selected your segment, the second critical factor in achieving massive growth is to identify your client’s “job to be done.” This is where brand promise comes in. You need to build company reputation around being excellent on the few critical attributes (I recommend no more than 3) that are most important to the customer. Too often, business leaders fail to spend enough time understanding which attributes of their product or service the market is underserving, and that makes the most difference in the end benefit or results to the target segment.
This is important because each segment has a specific “job” they want done that differs from other segments. If you address anything other than this “job” in your marketing and sales efforts, they will not hire you. Too often companies provide what they believe to be exceptional quality or service only and are surprised when their clients leave for what they believe to be something inferior. What clients are really telling you is that you are getting the wrong “job” done! Often companies believe they have lost customers for other reasons such as a change in relationship, price, or external force they could not control. The reality is that if you are getting the “job” done in an exceptional way, you can withstand most external forces. You are just clinging to excuses.
Failing to specifically identify the few attributes of excellence lead to too much complexity and brand confusion. Leaders must make choices and position the company in a way that will maximize growth and profits. It is best to narrow your strategy down further so that you capture a larger share of the market while simultaneously maximizing your profit. More complexity leads to:
It is critical for a company to understand the two or three most discerning factors as to why a client in your most desired segment hires or fires your product. You need to distill that down to a narrow set of measurable brand promises that you can build your company around. If you carefully align your sales, marketing, and operations around these brand promises, your customers will have a clear picture of why they should do business with you.
Ikea is a clear example of a company that has a strong brand promise. The company was laser-focused on a key underserved segment, and their execution of this strategy has allowed them to become a very large and profitable player in the industry in a relatively short period of time. Without doing a lot of research here, it is easy for an outsider to describe how they are different. Their target segment are “cash constrained and budget conscious people, needing furnishing for their home or apartment, thinking they will probably replace that furniture in a few years and are willing to do what it takes to save money.” Their brand promises “do everything on our side so that you can buy our furniture at the cheapest price, but then you have to do your part, and then together we will change the price point for furnishings forever.” What did this mean?