by Bert Shlensky | Jan 30, 2018 | Marketing
When someone asks you who your customers are, how do you answer? Do you answer based on your perception of them and who’s already purchasing your products or based on actual information? Chances are, you haven’t delved into your demographics as much as you need to.
What Are Demographics?
Demographics are, by definition, the study of a population based on factors such as age, race, sex, economic status, level of education, income level, and employment. It should always be the first step in estimating your potential, limitations, and focus. They are among the most critical and relatively easy factors to consider in your marketing, planning, and strategic decision making.
Uncovering key demographics can be a bit like taking a look in your professional closet. You probably have an impeccable wardrobe, but it’s tough to see all that potential when there’s a giant elephant standing in your way. It’s time to deal with the elephant.
Where to Start
I regularly see business plans that begin with defining their market as the 320 million people who live in the United States and eat, dress, or consume something. No matter what industry you’re in, that is the wrong place to start. You have to dive deeper from the very beginning.
Even if you’re not at the very beginning stages of building your business, you should be studying demographics often and delve deeply into the information at hand. It’s crucial to the success of your marketing efforts.
Here are some staggering statistics that will make you question the audience you’re marketing to, according to the US Census Report. Out of that 320 million people who live in the United States:
- Between 2015 and 2025, the U.S population is projected to grow from 321 million to 347 million.
- 18 million or about 70% of the growth will be over 65 years old between 2015 and 2025
- As a comparison, between 1970 and 1980 the 15-35 population grew 19 million showing the start of the baby boomers as the bubble in the population.
- In contrast the under 65 population will only grow about 8 million people or less than 3%.
- Similarly, the Hispanic population has grown from 3% to 10% of the population.
- Since 1980 States like Florida, Texas and California are dramatically growing while rust belt cities like Cleveland and Detroit are rapidly losing population.
- 50% are one gender, which frequently reduces the market size
- 30-50% of are frequently too poor to buy many products or services.
- Approximately 40% of the U.S. population is between the prime purchasing ages of 25-54.
What’s the point here? The beginning number you should be starting with is actually more like 30-40 million people versus 320 million people before you analyze factors like geography, lifestyles, and ethnicity. This increased diversity demands that you differentiate the totals from your market.
You can start to gather valuable demographic information about your market for free. There is a great tool available from the U.S. Census Bureau that lets you quickly understand the demographics in your locality. It doesn’t take long to gather information and you may be surprised by what you discover.
Understand Your Audience
Studying demographics is an ongoing process. Once you’re at the base line of understanding your potential customers, you must have your ear to the ground and start to identify trends.
For example, If you live on places like Orlando or hurricane regions, this can have a profound effect on your business. It is estimated over 100,000 people moved from Puerto Rico in the last few months. You will not see that number reflected in U.S. Census data.
You can’t just look at the numbers. You have to understand the people that the numbers represent and try to look at the factors that they deal with that you may not dealing with.
Here are some key things to consider when you’re studying demographics for marketing purposes:
- Income: The reality is that the top 1% of the population accounts for about 80% of income and continues to increase while the lower 20-40% continues to struggle. Marketing to struggling service workers requires far different strategies than marketing to Silicon Valley millennials.
- Social Changes: Women and minorities have not always been treated with dignity as consumers. My wife still remembers going to buy a car and being ignored by dealers and being called “honey.” Today, women and minorities comprise a significant portion of both car buyers and dealership employees. This demands respect.
- The Internet of Things: The internet and its usage especially among younger people will continue to explode. Nearly every consumer-based market is dominated by businesses that are capitalizing on the internet of things like Amazon and Google. Recently, UPS increased its Christmas delivery time from 1-2 days because it could not handle the increased demand, which was highly predictable. Similarly, services like Uber, Air B&B, Amazon, and thousands of other businesses are disrupting their individual markets.
- Analytics: Chances are that your competitors are already taking advantage of a myriad of advanced analytical tools. CRM systems are completely changing the game and giving businesses new opportunities to understand their customer base.
Ignoring demographics and demographic trends, whether on a small scale or large scale will be done at a business’ peril. You must make certain to constantly evaluate relevant demographics and demographic trends as they relate to your business both in the now and in the future. This includes both local and national trends. Demographics can be one of the keys to your business’ success or failure.
Contact me to learn more about how you can research demographics in order to help you market your business more effectively and remove that old elephant from your closet.
Dr. Bert Shlensky, president of Startup Connection (www.startupconection.net) is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start up and small businesses.
by Bert Shlensky | Nov 3, 2017 | Marketing
How do you get your message across to the right target with all the different forms of communication at work today?
There are hundreds of emails, hours of television, podcasts, streaming video, texting, messaging… there is no end to it.
The result is that we all shut out the communication we don’t want to hear. So, the small business has to give its communications a powerful boost in order to break through the clutter noise. On the other hand, effective communications make sales, so you can’t keep quiet.
Here’s how to get your message across :
- Know your target: Before you think about what you’re going to say, think about to whom you are going to say it. Good communication starts at the receiving end, that is, you please the consumer just as you do with your products. Think about the what it is in your product or service that most interests your customers, and make that the main topic of your communication. That way, they’ll listen.
- Tell a short but meaningful story: You have a real message to get across, so tell the story as simply and clearly as possible, putting in only the parts that the target will care about. Don’t add a lot of extraneous detail, and don’t put in a lot of info about your history or your life. Keep it simple and relevant to the reader.
- 90% of most impressions are made in the first 30 seconds of contact: Find a simple idea that you know will appeal to your customers and get them started with it. The first impression is not based on the substance of the communication. One way to make sure you get the starting part right is to write your story, then cut it in half, then cut it in half again. Now take the main idea, and start with that. And don’t make your first communication too long…
- Don’t try too hard to sell: Your customer will evaluate your message on its merits. Sure, if you are offering discounts or freemium than let them know right away. But, give them the full sense of what makes your product great. If you just say “Buy, buy, buy,” you’ll lose their attention.
- Give them solutions, not problems: Your customer knows what the problems are. Show how you can solve them. Give them a “WIN-WIN,” with an emphasis on the benefits of a relationship. Be sure to respect your targets’ expertise, experience, and opinions, and then show them that your message is right up their alley.
- Give them a call to action: As part of what you offer, give them a chance to learn more, or to watch a video, or to get more details. Always end your communication with a call to action. This means the communication can move up to another level without asking for money from your targets. If they’re interested, they will take the opportunity, and that will give you a chance for a real sales pitch.
- Move to informal communication: After telling your basic story, offer a move to texting, messaging, or a call. Many viewers, especially younger ones, prefer interactive texting or messaging to reading or watching videos. The plus is, once you’ve got your prospect listening and replying, you can zero in on what they really want and try to sell them on your offer.
- On a personal note: if you are over thirty, call your mother. She probably prefers the telephone. If you have teenage kids, take a look at their cellphones; not to spy, but to learn all the great internet advances they are using. Different generations prefer different types of communication – if you are targeting seniors, plan on making old-fashioned calls, but for Millennials, plan on getting on twitter or Facebook or Instagram, etc.
These tips give you a sense of how to manage effective communications and get your message across . Give it a try, and see how much more response you get when you follow my advice. Then, if you want to learn more about effective communication, please contact me here.
Dr. Bert Shlensky, president of StartupConnection.net, is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start up and small businesses.
by Bert Shlensky | Oct 26, 2017 | Marketing
How small businesses can get pricing right
Did you know that being dead cheap could be dead wrong for your business? Many small businesses try to be the cheapest, thinking that it’s a certain way to make more sales – but pricing does not work that way.
If your pricing strategy doesn’t go beyond being cheap, you’re at risk!
Consider how Uber prices its rides. Uber originally tried out just being the cheapest all the time. It didn’t work – drivers didn’t want to work for so little money at inconvenient times like late nights, Saturday nights, or holidays. Guess when demand for Uber cars is the greatest (you can read all about this on an Uber blog)? So, Uber created a dynamic pricing strategy linked to demand, as well as a lot of other factors, and it worked brilliantly.
Learn Dynamic Pricing!
Today, most companies use a dynamic pricing model. These can range from the ”early bird special” to sophisticated algorithms, like Amazon. Try being cheaper than them, and they’ll find a way to reduce their prices further than you can, at just the right times.
Because, it’s not all about price. Consumers look at price as one factor among many. The consumer thinks about quality, usability, overall value, look, and feel, along with a number of other aspects – each product has a different combination of consumer-appeal factors.
For many products, price isn’t at all the main aspect involved in consumer choice in evaluating the total value of a purchase. Here’s an example from the Harvard Business Review: “Some products have a much more immediate and dramatic response to price changes, usually because they’re considered nice-to-have, or non-essential, or because there are many substitutes available. Take, for example, beef. When the price dramatically increases, demand may go way down because people can easily substitute chicken or pork.”
More complicated products have more factors to consider; keep in mind that “price elasticity” – the technical term — isn’t just a factor of how well you’re marketing. It is also affected by the type of product you’re selling, the income of your target consumers, the health of the economy, and what your competitors are doing. “You can’t look at it in isolation; you have to look at it in context of the industry and its competitive structure and in the context of consumers’ lives,” as the HBR article explains.
Getting the Price Right
To get pricing right, it must be a part of integrated marketing programs that also consider product, service, quality, competition, price elasticity, and internet channels – each product calls for a selective strategy.
As part of your overall analysis, there are some pricing tactics you might consider:
- FREEMIUM is one of the most powerful pricing strategies today. Promotions are incredibly effective and, contrary to popular belief, they don’t hurt your image or make you seem cheap. Google, Facebook, the cloud, public organizations, and open source programming all give things away to build their long-term success. What makes freemium so effective is that it builds trust with customers. You give away something of genuine worth, and then the customer believes that you deal in products with inherent value. Gaining customer trust is the most powerful form of marketing.
- Drop High Maintenance Goods: You need to get customer reaction to your products, so that you can learn which ones the consumers say have high customer service and maintenance attached. Get rid of products that customers have had bad experiences with – this enables you to concentrate on popular ones for which you may be able to earn higher margins. Drop the unprofitable lines and find out what customers don’t want – this will help you to put together a clear pricing strategy.
- Selling exclusive products and services is another tactic to keep prices and margins higher. You can’t be beaten down by the competition if they don’t really have the product you can offer. Exclusivity is not necessarily just the simple product. It can be quality, service, or just a simple understanding of your needs. Psychological Pricing: Base your prices on factors such as perception of product quality, popular price points, and what the consumer perceives to be a fair value. This pricing relies on a positive psychological impact on the customer.
The key factor in all of this is the value you offer your customers, and this is why building trust combined with pricing psychology are powerful tools. Your customers perceive a value in what you offer in terms of its intrinsic value, and the effects of the product on their lives – i.e. buying a takeaway meal provides good food, but also saves the consumer time in preparation.
Taking all of the pricing factors into account isn’t easy. That’s why we, at StartupConnection, can help you understand how to go about it.
Why don’t you contact us and let us help you to have an effective pricing strategy?
Dr. Bert Shlensky, president of StartupConnection ( www.startupconection.net ) is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start up and small businesses.
by Bert Shlensky | Oct 10, 2017 | Operations
Technology vs. Human Instinct
Technological advances provide efficiency and analytics. The web, AI, cloud, CRM systems, etc. are taking over. Great improvements are being accomplished and organizations are making better decisions. Yet, how do we ensure that creativity and the human instinct continue to be cultivated without us getting too comfortable with our technological supports? How do we beat the nerds ?
The purpose of this article is not to reduce these efforts, but rather ensure that creativity, innovation, and excellence are also preserved. Specifically, there are several indications that the analytical approach may have some unintended consequences:
- The stock market is a great indicator of world’s dynamics, and innovative companies like Amazon, Apple, and Alphabet are thriving, while traditional companies like IBM and GE are struggling.
- Authors, like Adam Grant in the “Originals,” and many others, point out that progress is dependent upon nonconformists and people who go against the grain.
- Organizations preach objectivity, yet they follow the HiPPO decision process (Highest Paid Person’s Opinions).
How Do Creative and Innovative Individuals Thrive in the Growing Trend of Reliance of Analytics? Beat the System!!!
This may sound impossible, but here are some easy tips:
- Challenge Assumptions. Many analytical models contain numerous assumptions that are seldom challenged. In particular. the data can be highly biased, because it can ignore critical factors or be based on preordained goals. If factors are not appropriate, this can result in incomplete or wrongly determined data. Find the parameters the system has missed and provide appropriate information to complete, or redirect, the research data assessment process.
- Ensure The Analysis Is Dynamic. Our lifestyles have increased in complexity with continual changes; many analytical models avoid difficult issues and, thus, can create incomplete data. Find the issues that have been avoided in your analytical model(s) and advocate for their inclusion and how it affects the outcome.
- Consider Alternatives and the What-Ifs? Most analytical solutions involve a single outcome. The reality of life and business is the need for varied solutions and backup plans. Review the alternatives, and the different outcomes, which could affect the results and probabilities. For example, bringing diverse resources into a situation can greatly alter the excellence in execution.
- Understand Risk. In general, we avoid taking risks. It is more comfortable to stay in the status quo than to uproot and change direction. But, we all know those that don’t risk, also don’t succeed. Taking healthy risks is important for growth of self and companies. We are more afraid of losses than the probability of gains. People are more likely to say “I could get fired,” than “I could get promoted,” regardless of the probabilities or impact. There is a balance between risk and caution.
- Set Multiple Goals. Most analysis focuses on singular goals, like short-term profit. A company needs to consider measuring multiple parameters, such as developmental, personal, staff, and branding.
Analytics and current technological advances provide us tools to make better decisions. The key to success is to not solely rely on them, but to integrate them. Our natural human intuitive forces continue to lead with the support of the new technologies. Freeing yourself from restrictive thought processes, especially in bigger corporations, like “We have always done it this way,” is dead. New paradigms: speed, expertise, flexibility, innovation, and collaboration, produce more dramatic change for organizations. Incorporating new technologies, while cultivating innovation and creativity in the business, will allow new approaches to problem resolution.
Creativity Is Allowing Yourself to Make Mistakes. Art Is Knowing Which Ones To Keep.
Dr. Bert Shlensky, President of StartupConnection.net, is a graduate of the Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business, and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select startup and small businesses.
by Bert Shlensky | Oct 3, 2017 | Driving Profit - Main, Finance Articles
If you want to be successful in your new venture, you should pay attention to the modern examples of achievement like Apple, Google, and Amazon and their business structure .
What are these companies doing differently? They have broken down the traditional norms of operation and flattened their business structure into a streamlined, distributed model. This type of system allows them to be faster, more flexible, and to evolve elegantly with changes to the market and their customer base.
Too Many Layers of Business Structure
What is stagnating many of the large, older, organizations is their tunnel vision. Within these companies, there still exists a lot of red tape, which kills innovation and expediency. This inefficient organization model creates a bottleneck for making decisions, requiring too many layers of sign-off before anything can happen.
In contrast, these modern, successful companies have done away with the hierarchy of too many levels of management, and have instead adopted a system of collaboration between departments, and even other organizations. The use of open-systems benefits everyone without the hassle of having to go through so many layers, just to get a quick answer or approval.
Such collaboration breeds diversity and allows for truly innovative options and solutions, which can make or break your success.
The Dinosaurs Have to Go
The big corporations like G.E., General Motors, IBM, and Procter & Gamble, are ancient dinosaurs, with outdated and inefficient decision-making business structure s that will most likely lead to their demise.
Whereas Apple, Google, and Amazon are thriving, due to their trust and reliance on open-systems, and a rejection of bureaucracy, authority, hierarchy, and closed decision-making processes of the past.
These young, vibrant companies are embracing new models of decision-making, and encouraging participation, diversity, new rules, and, to some extent, chaos.
Sometimes, Smaller is Better
Another way these companies are successful is that they operate much like a small business, instead of a large corporation. Real people handle customer service interactions, so that the customer walks away feeling valued and appreciated.
Small companies have to be more flexible, and, sometimes, staff wears multiple hats and are cross-trained for a variety of different tasks. This versatility benefits the entire organization, because there is less delineation between departments and management groups. No more waiting to move forward, because only one person or department can handle the issue; it can easily be re-routed and quickly solved by someone else.
Stop Talking & Listen
Large, outdated companies rarely pursue or put to use constructive criticism. The sad part is, being plugged into channels for feedback allows a company to respond much more quickly to adversity, media fuss, product support, delays or other operational issues. A direct connection to your customer base is key to staying on top of things and managing your brand reputation.
Apple, Google, and Amazon all actively encourage customer feedback, and they immediately put it to good use. Many of their ongoing upgrades, changes, and improvements come directly from customers.
They are using their customers as a huge pool of barnstormers and innovators. Just by listening, instead of dictating, they are benefiting in droves.
The Bottom Line
The bottom line is old, outdated organizational structures and hierarchies are past their expiration date. If you want to be successful and make the most of your new company, model your organization after these high-tech firms that have figured out the formula for big-time success.
By operating as a small company, you allow yourself to be flexible, more innovative, speedy, and collaborative, and this will result in a very positive bottom line for you!
Bert Shlensky Ph.D. is the President of StartupConnection.net. Bert has over 30 years of experience as a results-driven executive leader. A graduate of Sloan School of Management at M.I.T. He served as the President of West Point-Pepperell’s apparel fabrics for 10 years & President and CEO of Sure Fit Products for 14 years. Having provided counseling to over 2,0000 startup clients- he now focuses on working with select start up and small businesses.
