Stop going for 100% of your target markets
Biederman’s is a legacy Plymouth, New Hampshire restaurant that has served college students, locals, and tourists for 47 years. It is a favorite hangout with the best sandwiches in town, and the lines are always long.
I took my father there after graduating from the university. After waiting over 20 minutes in a short line, we walked to the nearby Subway and quickly ordered two average sandwiches. Biederman’s has a great location, craft beer, and plenty of tables for homework and friends, but we wanted sandwiches to go.
While some small businesses might have regretted losing our business, Biederman’s knew that its niche markets are people doing homework and hanging out with friends. Two guys wanting a quick bite can go to Subway.
You don’t need everyone
According to a Summer 2020 poll of 34,000 consumers, Facebook and Walmart are among America’s least-trusted corporations. Clorox, Hershey, and Amazon have the most trust, with grocery stores, home-movie technology companies, and delivery companies not far behind. But from Clorox to Walmart, the companies have one thing in common: at least 51 percent of Americans trust them.
Walmart may not be “trusted,” but it is the world’s 19th-largest company. Its stock is up by 25 percent since December and it hired 400,000 temporary workers between March and June. Likewise, Facebook stock is up by about 35 percent from a year ago, 2.7 billion people use the platform, and the company employs more than 52,000 people.
Facebook and Walmart are succeeding despite the critics. Like Biederman’s, they seek specific types of customers who see their brand value – and they’re happy to let everyone else go somewhere else.
Who are your customers?
There are over 330 million Americans. All of them eat food, drink water, and wear clothes. Most have computers or cell phones. But Walmart lets Trader Joe’s and Whole Foods have the wealthy grocery shoppers. Facebook lets LinkedIn have the white-collar worker market. And Biederman’s let Subway take a couple of customers.
Small business owners should emulate these companies by focusing tightly on core target markets and asking the right questions:
- What does your target market care most about? Are buyers price-conscious, service-focused, or results-oriented?
- What is your core brand differentiator? Walmart has practically everything for cheap while Facebook has built itself as the must-have for people to connect, businesses to sell, and political campaigns to get votes. Biederman’s appeal is hyper-local hangouts.
- How are you attracting buyers? Facebook has 2.7 billion users that organizations want to reach. Walmart’s ads and stores with the best prices are omnipresent. Biederman’s is on Plymouth’s Main Street, just yards from the university campus.
Grow faster with niche focus
Your brand won’t appeal to everyone. Focusing on core markets breeds a number of excellent outcomes for small businesses:
- Your marketing and branding campaigns will reach your target markets better. Instead of diffusing your message to reach too many disparate people, you will reach the buyers who are most likely to respond favorably to your message.
- Your staff will be better-trained. Biederman’s isn’t trying for speed – its focus is quality, and that’s what it delivers. Your staff should be great at a few things to keep clients coming back rather than driving customers away by being mediocre or bad at many things.
- Accomplishing Point 2 means that your staff will stay longer. People who are both skilled at their work and feel accomplished through taking care of clients are happier employees. Happy employees stay longer, which reduces the amount of money and other resources spent on finding, hiring, and training new staff.
- You will have higher profits. Repeat customers require less effort to service, buy more stuff, and provide great word-of-mouth marketing.
- Accomplish Numbers 1-4 above means your company will grow faster.
Core principle: Go after 51% (or less)
Diffusion is the death knell of many small businesses. Unlike Walmart, they try to impress all income demographics – and reach none. They try to reach everyone online instead of following Facebook’s example of letting LinkedIn have the white-collar social media market. And unlike Biederman’s, they try to reach people wanting a table for four and people just driving through town instead of picking one or the other.
Walmart and Facebook make billions each year by acknowledging that not everyone is going to want what they’re selling. Biederman’s has been around for nearly five decades by following the same principles — it lets people in a rush go to Subway. Small business owners should follow this core principle of success by going after only the right people, not all the people.
