So you think you can build a small business? Have you asked yourself, why some businesses thrive while other similar businesses barely break-even or worse?
In many cases, it is not about price anymore. Most small businesses are competing against DIY or “free.” Digitization has put many skill sets once left to paid professionals, at the finger tips of every consumer and business. Photographers, live music, DJ’s, web designers, journalists, even lawyers to some extent face an onset of on-line tools that are free or close to free. Social media and its tangential services, now make advertising and marketing almost free. While a cottage industry of social media “experts” has cropped up, most people and companies can navigate the social media universe on their own.
On the product front, China and Asia push prices lower for most consumer products. India pushes down the cost of technical talent. Programmers there are available for rent at a fraction of their cost here in the USA.
So how do you sell your goods and services for a profit in this environment?
There are numerous books out about this phenomenon. One is called The Experience Economy.
You don’t have to read the book to “get it.” Just price and taste 7-11 coffee and then price and taste Starbucks coffee. Is there $2 to $3 in taste difference? Now ask yourself, does Starbucks really sell coffee? Or does it sell experience, surroundings and image? There are many different types of coffee consumers to be sure. Hence, there is a niche for each price point. But the gross margins multiply when coffee is sold with ambiance, warm sitting space and an overall daily “must have” experience. These experience differentiators are like the difference between listening to the radio or i-tunes almost for free at home, and going to a concert for $35-$45 a ticket.
Here is another example: I was in an ice-cream store the other day, and the servers were singing. I don’t remember if the ice-cream was any good, but I can’t get the songs those kids were singing out of my head.
Starting to get the point? Its all about niche and giving more to your clients, customers or patients, then they thought they would receive when they first came to see you. It used to be called “The mint on the pillow” touch. We believe, small businesses now have to be perceived as an indispensable part of routine. A “must have" for life’s journey.
We call it “interest based serving”. Not “selling” but serving! Think of it this way: You are in service to your clients, customers, or patients. Your mission is to make their life better; Better in a way that they won’t forget and can’t live without.