When asked why he robbed banks, Willie Sutton famously replied “because that’s where the money is.” Many e-commerce businesses adopt Willie’s strategy by focusing their marketing efforts where all the people are.
That may work for robbery, but it’s a poor strategy for e-commerce. Instead, adopt an inside-out strategy by focusing where the fewest people are. Here’s why, and how.
The Inside-Out Approach
A simple way to think of growing your business is to divide the universe into a few market segments and use the right approach for each segment. Most e-commerce businesses don’t have the resources or bandwidth for an all out assault on the entire marketplace. Therefore, it is necessary to win where it matters.
You can think of the universe of your potential audience in three concentric circles.
Once you conceptualize the potential audience this way, follow this “Inside Out” program:
Your network: This is your sweet spot, so focus here. First, use the many free, easy tools to reach your network (email, social media, in person, etc.). Second, say something interesting to them. Third, give them something worth saying to others about your business. Your objective is to set a viral chain in motion.
Remember, major brands spend millions of dollars to simulate an authentic relationship with consumers. With your own networks, you already have that. In addition, because they know you, people in this group will at least listen to your message — they’ll open your email, read your post, take your call. In this age of dizzying amounts of information and advertising, cutting through the clutter is a big part of the battle. So focus here first.
Their networks: Your objective here is to do nothing — except, that is, to equip your network appropriately to reach this audience. You do that by giving them something unique and interesting to talk about (more on this later).
Everyone else: You ignore them. If you have set the process in motion properly with the first two groups — and you have something authentic and unique that they can share — the dynamics of the social marketplace will take care of reaching this group. You don’t need to dilute your efforts by fishing in the ocean.
This approach is based upon focusing your efforts on people that know and care about you and what you have to say, then empowering them to spread the word through their networks. Since everyone spreading your message, starting with you, has an authentic relationship with their networks, your message has a distinct advantage over the undifferentiated messages we’re all bombarded with every day. So use that advantage.
Of course, you can open your business and hope that people find you. That’s what most people do, and that’s the problem — you’ll be lost in the great mass of options available. Try searching for your products in Google — you’ll likely find millions of search results competing with you.
You should have an affirmative market strategy, where you’re reaching out to a core group of people who know you, and trying to set a viral chain in motion. If you make those people happy, they’ll spread the word to their networks and you’ll be on your way.
What to Say To Your Network
What do you say to your network? The short answer is: something different, easy and memorable. Remember, one of the major changes to society in the past 10 years is that everyone now has easy, cheap methods of reaching everyone else. Therefore, the message itself is the basis of differentiation — the message determines what spreads and what doesn’t.
That’s a recent phenomenon — not long ago, it was complicated and expensive to reach a mass audience. A channel to a large audience was itself a major differentiator. If you controlled record distribution, access to retail shelves or could afford lots of advertising, you had a lock on the market. That’s no longer true — any product, service, band, comedian, etc., can spread through many electronic and social media channels just as easily as GM. So having something unique, simple and memorable is what matters most now.
Two ideas to that end:
- Offer a unique experience, not just a great product. Don’t just focus on your service or product — that’s what everyone does. Focus on a differentiated experience. Make doing business with you so unique and fun that people want to talk about it. A great example can be found in the shoe space. Lots of companies sell high-fashion shoes. However, some take the experience to a new level — delivering shoes in elaborate gift boxes with white bows and satin shoe bags. It is a special, premium experience you don’t get everywhere else, so people notice, and talk about it, and then their friends talk about it. The innovation is in focusing not just on the product, but on the buyer’s total experience. The objective is not only to make it great, but make it different enough that people will talk about it. That will set the chain in motion.
- Have something new to say. It is said that in retail, if the audience always changes, then the product can stay the same. Think of a brick-and-mortar store with new foot traffic going by every day — the core products stay the same. However, if the audience stays the same then the product must change. That’s you reaching out to your social network, a relatively constant audience. So you’ll need to continually change the product. That can be an actual change of the product — let’s say you grew your inventory by adding new products or added some products that complement your services business (an IT service company that is now selling electronics, for examploe). Alternatively, perhaps there is something new to say about existing products — an upcoming holiday or change of seasons makes an existing product relevant in new ways. The message can change. The important thing is that when you’re tapping a constant audience over time that you say something new and of value and interest to that audience.
Your goal is to build awareness first from people who know you, trust you, and have an interest in your success and to give them something fun and interesting to both notice and talk about. Then, to make that a continuous process.
Sure, the banks are where the money is, but your own network is the key to that bank. So approach the market with an inside-out strategy — focusing on the smallest group first — to leverage your best asset in growing your business.
Rudy, I totally agree with you on focusing away from the bulk. The competition is just way too high. From an online marketing perspective, you can work and work to outrank amazon, walmart, and overstock for a SKU, and you can do it – but good luck for more SKUs. So much easier to find a niche that they don’t dominate.
"Segmenting and focusing" is the nice way to say "divide and conquer"–but it works all the same. The trick is disseminating the data to your retail counterparts when you start getting in data on the various segments. In my experience, the straw that we trip on while reaching for the straws is actually using the data we gather.
DeFelice makes excellent points in his article. The business intelligence (BI) aspect can be horrible, though. (I like Domo [www.domo.com], but I’m interested in hearing what others have to say!)
Interesting article. what about businesses that don’t have big marketing budgets in terms of money or time?