Actually, this post isn’t about winning in sport – its about winning in business.
I got a great question on the blog the other day from a lady called Julie asking about the marketing for her male hairdressing and grooming business. She was trying loads of ‘things’ and was worried that her business wasn’t picking up.
I hear this a lot!
“I tried this idea, I tried that idea, I tried Radio, I tried Press, I did TV – none of it worked!”
Well, Im not sure how advertising and marketing ever got to be a multi billion pound industry in this country when it so clearly doesn’t work!
So whats going on?
For one thing, I think its easy to make this stuff complicated. And its not, its really simple.
Think of business, your business, what you sell as a piece in a pie.
Assuming you sell something and other people sell it too, depending on how developed and popular your product or service is, you’ll have a big pie or a small pie.
Then all thats important is whether you have a big slice of the pie or a small slice of the pie.
We are obviously talking about the size of your market and your specific market share.
I find it really helps to think of the business in this way.
So say you sell cars (or anything else) and in your specific area you sell 5 per week. And they guy down the road sells 10, and someone else sells 5 also. Then in your little market place, the market for cars is 20 cars per week.
And you have a 25% market share.
Still with me?
So this is how to win, when thinking of your business like this. First of all, do you know what size your market is? And your place in it?
I believe not knowing the answer this these sorts of questions leads to the confusion I spoke about.
Without measuring these things, and your relative place in the market, its very very difficult to understand whether your marketing and advertising is working or not.
If you don’t measure these things, how do you know if you are having a good week or a bad week even?
After a few years trading, you’ll know relative to yourself – but that doesn’t necessarily mean very much at all?
Fortunately there is an easy way to look at it, assuming you follow the ‘pie’ analogy.
three simple rules in fact!
- There is only ONE WAY to grow your business, and that is the grow your Market Share
- There is only ONE WAY to grow Market Share, and this is to take it off someone else
- There is only ONE WAY to take Market Share off someone, and thats to OUT PROMOTE your competition.
Business goes where it is invited.
And thats it. Its as simple as that.
Now incidentally, at this point, if you are “Mr. 10 cars per week” you may feel there is no way to grow the total market of 20 cars per week. Perhaps there is just not enough people in the market to buy any more than that.
At this point you may well think about selling something else, a smaller car, or a van (product development) or you may think think about building a premises somewhere else where there aren’t so many cars sold (market development)
Both are valuable strategies but are usually most useful for the market leaders.
Just keep that simple thought in your mind at all times. Assuming others sell what you sell, then you are part of a market place for your product or service. So you can always grwo that share at teh expense of someone esle.
But only if you out promote them.
Ways to out promote are to be cheaper, to be better, to be faster.
To be cheaper you need to be the cost leader, to be better or faster you’ll need investment in R and D and customer services, your premises, logistics etc.
An other, often easier way is to advertise.
Here is another rule for you in business
Share of Mind = Share of Market
The more people think of you and your business when they think of your product or service, the more business you’ll do.
Share of voice = Share of Mind
The more you advertise, and the greater the amount of advertising you can command (Share of Voice) the greater the share of Mind.
Share of voice = Share of Mind = Share of Business
The businesses that shout the loudest – the ones that invite more people to do business with them, are the ones that win.
And that really is it. Its as simple as that.
Obviously, I am using simple terms here, and general concepts. But try and apply it to your world and see that it makes sense for you too!
One final thing.
In a recession, what happens to the market? It shrinks thats what.
And in a shrinking market, standing still means you are shrinking too.
At this point its essential that you start to take market share off your competition, just to stand still.
In a recession, the last thing you need to do is to cut back on your marketing and advertising.
Which is why you’ll always see McDonald advertise at tough times like these.
As Ray Kroc the founder of McDonald’s once (apparently) said
“If your competitor is drowning, stick a hose in his mouth”
So what do you guys think? Let me know in the comments below!
(With thanks for the inspiration for this post to Dave ‘Giff’ Gifford)
Oh, heres some bonus Ray Kroc wisdom too 🙂