April 14, 2012

Startup Success Step #9

Who will you steal from?

You can’t invent a new audience, or discover money not being spent elsewhere, as our wise friend/business guru Dave Baney often says. You must steal a customer away from somebody else. Understanding this reality puts into perspective the activities that you need to convince someone to buy from you.

Your revenues will not be created out of nothing. If and when your future customers spend money with you, it’s because they won’t be spending somewhere else on a product/service/vendor/brand they now apparently trust. Once you understand that, you can plan strategy to wrestle customers away from the entrenched brand(s). What can differentiate you strongly enough to motivate your market to switch?

All branding takes place in a three-dimensional competitive space. The perception of your brand is always a matter relative to the strength, relevance and differentiators of direct competitors, alternate ways to spend money, or the decision to do nothing. Putting perceptual distance between your brand and those alternatives requires you to think hard about all three dimensions: how can you be more visible, what can differentiate you strongly, and whether that factor really matters to your target segment.

It’s not enough to be good. You have to be better than.

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