“Know and understand the customer so well the [brand] fits him and sells itself.”
In the good ole’ days, you could stumble out of your hamlet, grab a cow from the barn and tread a dusty path to the market. You were the only cow trader in town, so your competition was limited to other delicacies like hogs and chickens.
But the modern marketplace is noisy and crowded. There are thousands of vendors, from every part of the world, each bellowing from the top of their lungs.
It is impossible to sell something without either (1) slashing your price, (2) murdering the competition, or (3) positioning your brand as something uniquely useful.
Since you won’t make a dime on the first option and the second poses some legal hurdles, this book focusses on option three:
Make the market think your project is uniquely useful.
Now what is useful to one isn’t useful to others. In a market, some are looking for milk, others for meat. Consequently:
You need to find out which customers have which needs.
Step 1: Describe your customer segments
We start with a very basic question: who will think your project is useful?
Most likely you have a pretty good idea who that might be. You could be selling an exotic glue useful to a tiny group of stamp collectors. Or perhaps your new soda should be consumed by everyone, from Fifth Avenue to the Kalahari Bush.
Whatever it might be, it pays to be explicit and specific when you are identifying your potential audiences. Even if everyone needs your stuff, you can identify who will be most likely to be your best customers. It will help you focus.
So who needs your project? Can you identify them and put a line around them, grouping them in ‘customer segments’? What is their age, gender, interests? How do they spend money? What else is relevant?
Write it all down. At minimum, list:
A. List their needs, or even better, their pains.
These can be hard needs like price, quality, convenience, etc. Or soft needs: recognition, status, emotional, etc.
B. List their personalities, attitudes, and values.
Include demographics like age, sex, location, income, occupation, education, industry.
Then go one step further with psychographics. Write down interests, lifestyle, behavior, opinions, and values.
C. List the channels they use to reach competitors.
Do they shop online or offline in brick-and-mortar stores? Are they using intermediaries to buy similar stuff?
When you are done, you should have a list of segments. Here’s an oversimplified example:
D. Fill the top-left quadrant of the Brand Strategy (Optional)
Step 2: Describe your competitors
Next, find out what your competitors are offering these segments. Be sure to include your indirect competition. These are vendors who sell different products, but which fulfill the same need. The reason beer manufacturers lobbied against the legalization of weed is that they basically serve the same need: getting wasted.
A. What unique usefulness do your competitors claim?+
What is their reason for being – their unique selling point? What else is good about them? Can you find them everywhere? Do they have great service? Perhaps they’re very cheap.
B. What needs do they leave unaddressed?
Are there any things they don’t offer? Perhaps they are leaving money on the table by selling a dry product without a strong brand that offers extra status? Or perhaps the status is all they offer, and the product can be much improved? What are their shortcomings?
C. Which (sub)segments are they serving?
Who are they delivering to? And why them? Is there big volume or big margin to be captured there? Can you identify segment they don’t serve?
You now have analyzed the market by listing the relevant segments and competitive offerings. You already smell opportunity! In the next chapter, we will see if you got what it takes to conquer a segment.
D. Fill the bottom-left quadrant of the Brand Strategy (Optional)
Summary and steps for analyzing the market
The market is crowded. You can only make money by offering something that is uniquely useful to the right audience. You can discover what your brand should promise by analyzing the market.
Step 1: Describe your customer segments:
- List their needs, or even better, their pains.
- List their personalities, attitudes, and values.
- List the channels they use to reach competitors.
- Fill the top-left quadrant of the Brand Strategy Canvas.(Optional)
Step 2: Describe your (indirect) competitors:
- What do they promise?
- Where do they fall short?
- What segments do they serve and how?
- Fill the bottom-left quadrant of the Brand Strategy Canvas.(Optional)