HOW CAN YOU DOMINATE YOUR MARKET?
By Jeffrey J. Mayer
Today I would like you to think about the quality of your business. Here are three questions for you to ponder:
Who are your best customers?
What is your target market?
Why should people do business with you?
A perfect example of a company that has answered those questions - and more - is NBC.
NBC is #1 in practically every marketing segment in terms of viewers, including the most important, the coveted adult-under-50 audience. This includes
Prime Time, and
How has NBC done this? By focusing on creating products - i.e. television programs - that it's audiences want to watch. It has shunned high-priced sports programming having given up the rights to NFL football, Major League Baseball, and NBA basketball, because it realized that televised sports is a money-losing proposition.
ABC and Fox, on the other hand, are struggling with their very expensive sports and football deals. ABC is bleeding red ink. Its highest rated show is Monday Night Football, isn't even in the top 10 programs.
Fox has written down almost $1 million on its big-sports deals.
Because NBC isn't overspending on sports, and is ruthlessly cutting costs, it is able to spend money on the right programs and TV talent, thus providing the quality shows that it's affluent audience wants.
Here are two recent examples of very good business decisions:
Renewing Katie Couric's contract as host of "The Today Show" for $15 million.
Renewing the contracts for "ER" and "Friends" at a cost of $10 million
and $7 million per episode respectively.
These two shows provide the foundation for all of NBC's programming.
For the past year a lot of people have said there's a recession in advertising, but there's no recession at NBC. By being focused, NBC is making a lot of money. NBC is the most profitable network, with $6.3 billion in revenues, and an expected operating profit of $1.42 billion. CBS is in 2nd place and is expected to make about $150 million. Both ABC and Fox are losing money.
Here's an example of how NBC leverages it's #1 position. A 30 second spot on "Fraser" sells for $265,000. CBS sells a 30 second spot on "Becker" for $192,000. That's 40 percent more revenue... FOR A 30 SECOND COMMERCIAL.
NBC is a wonderful example of how a company can dominate its marketplace by:
Identifying its target customer,
Delivering the products its customers want to buy, and
Ruthlessly cutting costs.
Here are three questions you should be asking yourself so you can apply the techniques NBC uses to your business:
WHO IS YOUR TARGET MARKET?
What is the profile of your 'ideal' customer?
Pull out a piece of paper and write down all of the qualities and characteristics of what your 'ideal' customer looks like. Make a long list.
Now look at the list and rewrite it so that the most important qualities and characteristics are at the top. When you're done, compare the list to your present customer and prospect base.
What percentage of the people that you're calling on match the most important qualities and characteristics of your 'ideal' customer? If it's not a real close match, you should reevaluate your target market.
WHAT PRODUCTS ARE YOUR CUSTOMERS BUYING?
Every company has a long list of products to sell to their customers, but which ones are your customers buying?
Are the products that are being purchased the ones that generate the highest profits?
What is the size of your average order? What can be done to make it larger?
How much time is being spent promoting products that your customers aren't buying, or that don't have high profit margins?
Take the time to analyze what you're selling and the profit you're making from each sale. Look for ways to maximize your effort.
WHY DO YOUR CUSTOMERS BUY FROM YOU?
What sets you - and your company - apart from the competition?
What are the compelling reasons that a customer should buy something from you instead of your competition?
When asked the question "Why should I buy from you?" you should be able to respond with a long bullet-list of reasons why. Like a David Letterman "Top-10 List"...but longer.
If you're mumbling something about lower prices, better service, years of experience, that you're a family-owned business, you're not offering a compelling reason why they should do business with you.
Instead you should be focusing on the benefits that your products have to offer and how you can save them time, reduce costs, improve performance, make their life easier, and so on.
Take a long - and hard look - at how you're doing business. Search for ways you can dominate your little niche in the marketplace. Find ways to differentiate yourself from your competition.
You'll close more sales, make more money, and have more fun.
Reprinted with permission from "Jeffrey Mayer's Succeeding In Business Newsletter. (Copyright, 2002, Jeffrey J. Mayer, Succeeding In Business, Inc.) To subscribe to Jeff's free newsletter, visit SucceedingInBusiness.com