1 – Industry Selection
Part of the allure of starting a business is location independence and potential time freedom (if you set it up right), yet I find there’s often not that much forethought given about the industry that someone jumps into. If you’re starting a business, it’s likely because you have enthusiasm in a particular domain. When I started my eCommerce business in the martial arts space, I had to learn the hard way that this niche is small. After being in the space for about a year, I realized it was hard to get beyond $50K month in that small niche, and much of what I thought would be interesting was not enough in demand to be profitable. In short, I failed to assess the industry properly. Fortunately, there are steps to hedge against my mistakes. Validate market size/scale Is your business niche a hobby that 100,000 people have in common, or is it a domain where 9- or 10-figure businesses exist? If the latter, you’re likely to be in good space. For example, if you’re working on digital products around technology selection for C-level executives looking to pick right the CRM software, you’ll run into billion-dollar companies like Gartner feeding this space. You may not be in it to make billions, but if your business idea revolves around a personal hobby or interest, check to see if there are any businesses making revenue in the space. If there are very few to no businesses in the industry, it’s not always a good sign; this can also be a sign of lack of respect or interest in the market. Assess needs/opportunities Much of the time, entrepreneurs start off with an interest or passion and think that they can contribute with a new product that meets an existing or unmet need. I launched my martial arts eCommerce business with the thought that I would market to competitors, but I quickly realized that there really aren’t that many competitors in the space and that most are too young to have much of a disposable income to spend on DVDs or digital courses; turns out, this wasn’t our buyer demographic in the first place. In other words, I started with a skewed version of the needs of our market. The next sections outlines steps that will put you on a more direct path to cultivating a dialed-in understanding of your market.
2 – Customer Development Research/Positioning
Overview research Look at forums, popular blogs, and fan pages in your space. Get a sense for what people are interested and excited about in this domain. This is valuable material to help shape an idea of the market audience and what they like/dislike, want/don’t want, etc. Hands-on research Once you have an idea of range of the market’s interests, zero in on hands-on research and dial-in for a unique fit. There are multiple strategies for handling this phase. You can pay Facebook pages for a poll that links to whatever email marketing platform you use (Email Monkey and InfusionSoft are two examples), where people can fill out a survey and select those topics in which they’re interested. Another option is to secure a guest writing gig and have a link to your poll from a guest article. A third option is to directly call people in the industry who sell a similar product/service and pick their brain to find out what their audience’s needs and wants. You’ll need to do the dirty work to determine your “positioning” – Google this as a marketing term and get a deeper understanding of the concept i.e. what is your unique value in the market place?. Fast Company published a nice article on how to determine positioning and pull together all your branded assets. I built Science of Skill in the self reliance space, but ended up finding a fit in the self defense niche. With CLVboost, we specialize in marketing automation, a niche in the world of email marketing. Regardless of your ultimate niche, you want it to have the potential to yield a big audience to drive revenue.
3 – Digital Asset Creation (Products/Pages)
URL selection, style, blog Before you create that unique URL, blog, and product line – hold up and check your progress on the first two strategies in this lineup. To avoid tangential paths and other learn-the-hard-way roads, you don’t want to create any of these facets without taking the time to exhaust (as much as possible) the first two steps. You may pick a URL that you think sounds relevant, but you may be anchoring away from your true positioning. All of these – your URL, blog, and products and services – should reflect the values of successful businesses in space (at least to start). I usually suggest to my clients that a good first strategy is tentatively modeling the copy and style of successful players in the industry. Again, this doesn’t mean you copy and paste or create a duplicate, but it does mean learning best practice structures and strategies from those who have come before and done well, and applying those to your own business model in a unique way. Products and price points As you’re researching, check in with your internal dialogue every so often and ask yourself:
- What are people willing to spend?
- What products and services are popular in the space?
- What evidence do you have that the products and services you want to offer are a want/need?
Ideally, your first products and blog content (and ideally your URL) should reflect your unique positioning in the market. I did this backwards with Science of Skill; if I had covered steps 1 through 3 in the beginning, I likely would have called it something different. It’s certainly not a name that’s completely off track, but thorough market research would have undoubtedly yielded a name that better reflects our products and audience values.
4 – Sales and Marketing Channel Experimentation
Black lambo test I go into this concept in more detail in this CLVboost video tutorial on how to use competitor research to boost your email campaigns, but in a hot second: the “black lambo” test is a thought (and action) experiment for seeking out the most successful people in your chosen market. By successful, we mean who in the industry makes enough to be able to go out and buy that black Lamborghini today…with cash? Once you find these masters of the craft, discern what their channels and methods are for driving sales. Figure out what they’re offering – not just the concrete product, but the value and message behind the product, the whole picture. Figure out how they’re presenting themselves as an expert, through their branding, content, marketing, etc., and glean lessons from their efforts. Test 2 channels at once (MAX) When you first start out, limit your experimentation to 2 different marking channels at one time. If you try to master SEO, and Google advertising, and Twitter advertising, and affiliate marketing – even if you’re able to work 100 hours a week – you’ll likely squander early efforts in mastering any one of these channels, finding it hard to track your progress. In this case, less and more ardent focus is more. Try to get really good at and find success with a couple of proven channels, based on success of other players in the industry i.e. find which marketing tactics are working well for the most successful companies in the industry and try those out first. Again, this doesn’t mean you should always model other companies, but it’s a good place to start, especially if you’re a novice entrepreneur.
5 – Determine Marketing/Operating Regimens
Dialing in to the following two regimens is key to success and to growing your revenue consistently over time. Key actions Before you launch your marketing efforts, determine your key actions on a day-to-day and week-to-week basis. Example could include:
- How many blog posts are you going to write?
- How often and on what days will you schedule your social media posts
- On what days are you going to look at your success rate on paid per click advertising?
Key actions will vary based on your product or service and marketing strategy. I prefer setting up a weekly approach when scheduling social media, emails, affiliate marketing reach outs, content marketing – basically, all marketing channel and operations factors. Then, drill down one level further. If your key actions include communicating with affiliate or content producers, what are the weekly musts that will always be same? If you’re posting social media on a weekly basis, what types of content will you post and how will you tag? Determine and track your key action details weekly – I use Google spreadsheets, which is simple and works well – and check in with yourself and any employees or contractors weekly to ensure that actions are being performed as planned and to discuss any potential hiccups in the process Key metrics Tracking key metrics is a similar idea to tracking key actions. Metrics could include list size, email open rates, revenue – whatever you feel is important to track routinely. Let me just say that if you’re not tracking actions and metrics on a weekly basis, and doing so with regimentation, then you’re not really running a business – not really. If you don’t have a solid idea of what’s going on beneath the surface of your actions, you’ll find it much more difficult to delegate effectively or to scale your actions in order to increase your return on investment (ROI).
If I could time travel, I would have advised these lessons to myself in the order listed. While I eventually figured out how to take the reins and get my eCommerce business to a $4M annual run rate, the path was longer and than it needs to be for new entrepreneurs. Have questions or an idea for how to implement these or similar strategies? Leave a comment here or on the CLVboost YouTube channel and start a conversation. -Daniel Faggella CLVboost Founder]]>
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