The Competitive Market for Industrial Goods And Services
The desperation is almost palpable in the market for industrial goods and services. The signs are apparent. Staple items sold in the B2B marketplace are continually coming under the assault of downward pricing pressure. New suppliers rise to take on larger established companies in specialized areas and then themselves disappear in a matter of years from increased competitive tension. Why does this pricing burden seem to intensify, as time moves forward?
Finding Relief In ‘New’
Some companies relieve this pricing pressure in the marketplace by ‘re-inventing’ themselves, their products and/or their staff. But keeping a flow of ‘new’ continuously, can be expensive. The development of new marketing materials, sales strategies and training take time and resources that should be devoted to effective marketing and promotion.
The start-up costs of a new line of business, if implemented too often eat into a company’s profitability. This should cause executives to ask whether a continuous emphasis on the ‘new’ as a business model is sustainable. If the industry’s niche doesn’t support that kind of investment for small businesses, then financing ‘new’ developments may be the incorrect solution to a correctly diagnosed problem.
Needing to Compete on the Basis of Price
Companies that have to respond to the competitive pricing demands of the industry, cannot afford to operate under the unrealistic expectation of creating new products, etc. to maintain leadership in an industry. When that kind of reaction is necessary, it is likely that the company’s prospects and customers were led to the company,not because they provided superior value, but because they were inexpensive in some way.
Can A Company Have the ‘Wrong’ Customers?
When a company is positioned this way, the only way to increase sales is to lower their prices. That strategy works when it done occasionally for a specific business purpose. But when it is a guiding operational principle, financial ruin is probably coming soon. Although marketing on the internet is competitive there are better ways to position a company, than to compete this way.
Clients that are price sensitive are likely to be indifferent to the improvements you make, the accessories you add and even the value added services you provide. If your goal is to increase profit by providing value that a customer cannot get elsewhere; customers that make their purchase from you on the basis of price are the wrong customers. Moreover, they are unlikely to make replacement purchases from you unless your prices are low or comparable.
So, if pricing attracts the ‘wrong’ kind of client, how can a company attract the right kind of client?
The Way The Internet WAS Used to Attract Customers
Successful internet marketing is driven by a proliferation of strategically designed and carefully placed content. For most of the 2000’s small businesses and marketing consultants focused on the placement aspect. As a result, what mattered most was how the content was situated on the internet because it drove search rankings.
The conventional wisdom for most of that time was that if a company could attain the most visibility, that that there would be a direct benefit to their profitability. The logic was more visibility, would lead to more prospects; more prospects would lead to more customers; more customers would lead to more income and profitability.
This formula depended on small businesses and consultants being able to mimic their understanding of search engine formulas for displaying relevant websites. Companies that invested time and resources into knowing how to get their content placed correctly were satisfied that the results that they were receiving were maximized. Although it was definitely important, it was of secondary nature to focus on what the content actually said during these years.
The Way The Internet IS Being Used To Attract Customers
In recent years marketing practitioners have had to take a more balanced approach as search engine algorithms have grown more difficult to mimic. In fact, according to Search engine software company SEOmoz, companies like Google adjust their search engine algorithm approximately 500 to 600 times every year. These adjustments have made it more important for businesses to focus on the nature of their content and not just its strategic placement.
However, it is not enough for content to be considered as good reading material. It has to be created with one goal in mind: move a prospect at least one step closer to becoming a client. What that does not mean is that every single article, video, press release or podcast needs to have a hard sales message. What it does mean is that it needs to leave an impact on the prospect’s mind as to whether or not they need to do business with a company.
Positioning A Company On the Internet To Find the Right Customers: USP
To accomplish this successfully with their content, a company needs to be skilled in utilizing their unique selling proposition (USP). The USP answers a basic question in the mind of the prospect: why should they do business a company?
It is a statement about what sets the company apart from its competitors in one of the following three areas: 1) price, 2) niche or market focus or 3) something done better than others. With a clear understanding of the USP, all of a company’s content will state both directly and indirectly to a potential client why they (the selling company) are the only logical choice from who to make future purchases.
As companies are creating their content, whether it is for a website, social media or public relations, it is critical for them to integrate the understanding of their unique selling proposition. In some cases, it may mean reinforcing the chief benefits of working with the firm. In other cases, it will mean discussing the void in the marketplace that is being fulfilled. Still in others it will mean demonstrating specific areas of quality, selection or service that the firm delivers in ways its competition does not do as well.
Practical Steps to Crafting The USP
- Answer the following two questions: a) why do people buy from you, and b) if they aren’t buying from you why should they? Survey and interview both current and former customers, staff and management to determine this answer. The most important data (if you don’t compete on price) will come from your customers.
- Once you have this information, determine how you are positioned in the customer’s mind or how you would like to be positioned: a) are you the price leader?, b) do you offer something totally different?, c) are you niche focused? or d) are you value focused (you provide results that matter to customers)?
- Analyze your top three competitors. Which of the four positioning categories do they fall in?
- Make a prioritized list of services or products most desired by your clients.
- Write the USP in less than 100 words; answer the question as to why people should do business with you, based on the void the competition is not filling.
- Test the USP In Ad Copy and Website Copy, and track the results.
- Once you have a USP that you would like to use to position yourself, begin to integrate it into all aspects of your promotion.
- Tweak the USP as necessary.
The most important aspect integrating the USP is that the context must always truly matter to the reader or prospect. It may be great reading to discuss an industry trend that the company is combating or even a new service it is offering. But if neither of them matter to those who are reading and listening, the content will not accomplish its purpose of moving a prospect closer to becoming a client. Executing on this purpose is vital for any company that wants to be effective in every aspect of their marketing process.
Does your marketing message matter to customers? If so, is it truly unique? Does it express WHY customers should come to you?
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