The Three Most Important Relationships in Business
If you own a business, or are in a position to decide on or contribute to its’ strategy, there are three key relationships to keep in mind in all that you do. Before we dive into what those relationships are, let’s shed some light on a cardinal error many businesses make.
Shouting from the mountaintop with a megaphone
Many entrepreneurs (when they start their business), and many executives or marketers (when they launch a new product), take to social media & their email campaigns with the good news. Of course, this makes sense, however the passion and excitement of the leader can often miss the mark with their market.
The reason is because value, like beauty, is in the eye of the beholder. Perhaps you created your own version of the Mona Lisa, only to realize that your target market appreciates abstract art more than realism. Maybe you built an amazing race car, however your ideal client would rather have a boat.
In short, rather than build (create, market, sell, or anything else) what we think is quality, we should be deferring to the preference of those we eventually hope to sell to. Rather than approach their ideal market with their offering (product or service) and brand defined, hoping to resonate with them, savvy entrepreneurs learn the marketplace first. This brings us to the first key relationship.
Your Ideal Customer Avatar
Market research is neither new, nor is it mind-blowing. Companies have been studying demographics and population statistics for decades. Where there is opportunity for further analysis, and more importantly – better understanding, is in their psychographics. More important than percentage split by gender, average age, and postal or zip code – is what matters to customers and how they make their purchase decisions.
- What do your ideal customers value?
- How do they get their information? What websites? What print media sources? What television shows or channels?
- What are their pain points? What do they hate most about your industry (or their own)?
The last point above is a huge one. Imagine you are a realtor who’s just starting out. Because you can’t compete with decades of experience, you take a different approach.
You interview 50 people who you’d love as clients, and you find out the worst parts for most of them when selling their house were the actual move (packing, lifting, making several trips, unpacking, etc), and having to leave the house every time there was a showing.
You might decide to innovate your approach to differentiate yourself by paying for movers for clients who are relocating within the same city, and offering restaurant or movie gift cards to the clients you represent who are selling.
If you know your customers’ (or clients’) pain points, and you can solve them through your approach, you can dramatically enhance your value proposition. As you may have guessed, that is the second key relationship.
Your Value Proposition
For many professionals seeking a job, or many solopreneurs who own service-based businesses, their value proposition starts out as more of a resume. “I’m an accountant with 25 years of experience” for instance. While that has massive potential value, it also is a massive assumption (that your clients want experience). What if you are trying to sell accounting services to a start-up? The founder wants good advice, but she wants it at a bargain!
The key relationship when it comes to value proposition is value. That is, who is determining what ‘value’ means. Put another way, customers don’t buy what you do (accounting), they buy what it can do for them (balance their books, help them make better business decisions, or keep the IRS off their backs).
This is why it’s so important to know your customer (relationship number one) – so that you know why they might be interested in, even desperate for, your solution. We’ll only ever know why we’re valuable unless we nail the first relationship, who your ideal customer is, and what problem(s) they have. The crux of the second relationship then, is how your offering solves your customers’ problems.
Who You Are
Remember at the start of this article we discussed how many entrepreneurs start from their own lens. Who am I, what do I do, what do I make, and then – who might want this? This is why their megaphone from the mountaintop approach (mass marketing) often fails.
When every company does this, customers experience a sea of noise. Instead of asking themselves if they’re interested in your product or service, they block it out so they can focus on what they want or need to do.
When companies start with their market, however, the differences can be profound. Instead of creating something and hoping the market will want it, savvy entrepreneurs are starting with focus groups and customer interviews to ascertain directly from their ideal market exactly what they want – and then creating it.
Whether your company makes or product or provides a service, it still needs a brand – a corporate identity that sets you apart from your competition. A brand is much more than a logo or color scheme; it is how your customers feel after doing business with you.
In this sense, who you are as an entrepreneur or corporate entity is relative. It does not make you a chameleon, rather the sum of the parts of your skills, talents, and difference makers that add vale and meaning to your target market.
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Put another way, your ‘elevator pitch’ could be “I’m an accountant with 25 years of experience” or it could be “I’ve helped over 200 entrepreneurs make better business decisions and build better businesses over the last 25 years.”
Which accountant would you hire?
In closing, in selling to our customers, we often forget we are customers too. How do you like to buy? Do we act one way as a consumer, and then when we put our work hat on, act in the same way that frustrates us as consumers?
By thinking like your customer you just might become a much better entrepreneur.