Lesson 3: Defining your market and pinpointing your products
In today’s lesson, you’ll be examining key marketing and industry information.
You know what your business objectives are, and you know what products and services you’re offering. At this point, you’ve also figured out how your business solves your customer’s problem. Now’s the perfect time to focus on how to define your target market and pinpoint what sets you apart from the competitors in your industry.
Throughout this lesson, we’ll check in with Kelly and see how she gains her competitive edge.
By the end of this lesson, you’ll understand how to identify your competitors, what your unique selling proposition is and how to create your ideal customer avatars.
The first step in carving out your place in the market is knowing who your competitors are. Let’s face it, no matter what industry you’re in, or what you’re selling, there’s going to be other businesses offering the same thing. But instead of worrying about the competition, use this as a positive opportunity to up your game and work out your competitive advantages.
A useful question to ask yourself is, “Who are my top 3 competitors?”
Take some time to jot down their details, or better yet, put it into a SWOT worksheet for more detailed analysis and comparisons.
Try to be as objective as possible. What are they doing well? Where are they coming up short? Remember, competitors aren’t a ‘threat’ – there’s plenty of room for your business to shine.
Other useful questions to ask yourself are;
- What are the benchmarks for my industry?
- Who are the industry leaders? Do you want to enter the market as a competitor? And if so, what’s your competitive edge?
Remember in our last course, Developing Your Business Idea, Kelly found her competitive edge by testing our different niching ideas for her business.
If you haven’t done that lesson yet, stop where you are and hop to it!
If you have, you’ll recall she figured out there would be too much competition made of larger, more established companies if she was just looking at creating biscuits–without a competitive edge.
Kelly also knew that only doing baked boxes was too small a niche. But, supported with biscuit gifts, that was the sweet spot for her. She also kept in mind the size of the market compared to the size of her operation. Starting out as a side business with she knew she wasn’t competing with ‘Mrs. Fields’ so she narrowed her focus to small bakeries with a similar niche.
USP… easy as 1, 2, 3
It’s time to outline your business’s key unique elements and make it the core of your brand and marketing messages. This is called your Unique Selling Proposition (USP).
Have you figured out your USP? If you haven’t, go back to the first course and do some business soul searching. It’s so important to find something that sets your business apart from the other players in the game. A useful question to ask yourself is: Why would a customer purchase my product instead of another company’s?
Know your customer – and prove it!
When writing a business plan, investors are filled with confidence when you can prove you know exactly who your customers are, where they hang out and how you’ll reach them.
Now’s the time in your plan to include Customer Avatars and get specific about their details and habits, their current situation and their customer journey. A Customer Avatar is a fictional person who represents your company's ideal customer.
Avatars are often based on real customers and the purpose of using a Customer Avatar Worksheet is to get a clear understanding of who you are marketing to. Until you figure this out, you can’t be sure that your marketing messages are going to be successful.
Have you given thought to your customer’s age? Sex? Income? Status? Employment? Daily activities and hobbies?
If you’re not feeling solid with creating a Customer Avatar, push pause and download the Customer Avatar Template.
Market growth and trends
In this part of the business plan, you’ll want to include some stats and information around market growth, trends and forecasts for the future. This shows your reader that you understand your industry, market and where your business fits in.
While no-one can predict the future, offer up any possible insights into what your business may be like down the track and make sales projections based on that.
It’s also worthwhile to highlight the size of your industry and its growth over the past few years, as well as any important trends that may affect your market. This will be different for every business, but it’s important to think about the potential social, environmental or technological changes that could impact your market.
Toot your own horn
Of course, your product or service is outstanding… but can you prove it? Here’s where you go into detail about the products and service your business offers, explain the features and benefits and what problems they solve for your customers.
When talking about what you offer, put yourself in your customer’s shoes and try to answer why they would want it.
Activity 1: Develop your business idea
It’s tempting to jump ahead and polish off writing a business plan, but you may be missing some vital pieces of the puzzle. If you haven’t done our first course go back and develop your business idea, work out what your products and services are and spend some time highlighting their features and benefits.
Activity 2: Keep it short and sweet
If you’ve already worked out your products and services, spend 20 minutes laying them out in a digestible way for your reader. Keep them short and concise. A useful tip is to arrange the information with lots of bullet points (investors are busy people, so make it easy for them to read and say yes to you)
In the next lesson
We'll take you even further through your sales and marketing plan and dive into customer advertising. By the end of the next lesson, you’ll be able to effectively target your audience and learn how to get your products and services in front of them, at the right time.