9 Out of 10 Small Businesses Do Not Say What They Actually Do

December 4th, 2008 by
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Biznocchio - Small Businesses Not Saying What They DoOver the years, I have met with hundreds of small business owners and marketing directors. When asked what they do, nearly all respond with a carefully crafted marketing driven value message that they spent hours agonizing over or paid a branding consultant to create. They tell me that they provide industry leading, best of breed solutions that helps customers leverage technology (blah, blah, blah) for maximum profitablity (yadda, yadda, yadda). Yawn…

Thanks to traditional sales and marketing methodologies many good businesses have created these false all encompassing message and then they try to buy into them. They think they are delivering their company to prospects in a positive light, but are they?

How do you know you are best of breed and what does that actually mean? If you are best of breed, what other companies are in your breed and how do you measure that you are better than they are? How can you say you are industry leading, if you are not actually the industry leader? If you are, who is the #2 company you are beating the pants off? If you cannot answer these questions in a quantitative way, then it is likely your customers cannot either. You are probably delivering a false message.

I say probably, because one of you may actually be an industry leader. My buddy tells people his company is one of the nation’s leading providers of a certain hr software. In reality, his is the leading provider, so he can make claims like that because they are true. He can list for you names of all the companies in the top ten and tell your their approximate annual sales for FY 2008 relative to his.

The way these descriptive phrases are thrown around, “industry leading” means that the company delivers services that are considered to be at the forefront of the industry, not that the company itself is leading that industry. Under this methodology, anyone who offers something that other companies also offer and if that type of solution is considered pretty good, that company is doing something that is “best of breed.” The overuse of this “by association marketing speak” has diluted these messages making them completely worthless. They offer little value to anyone qualifying your organization.

The products or services every business provides has a certain level of assumed competence in the actual offering, so the discussion around “best of breed” and “industry leading” usually has little bearing on the decision making process of the buyer. People can learn a great deal on the Interwebs about your industry and the types of solutions available.

When dealing with an informed market, offer them more information about why you may be a good choice. Give them the honest information they will value as a decision maker. The good customer, the one you will want to build a strong relationship with, really cares about what you can do for them and how much you will value your relationship with them. They are often seeking a long term, reliable partner for the product or service.

When you stop selling assumed competence and begin being honest about what you do, you can deliver a meaningful message to your customers and prospects that they will want to hear. Nobody cares what you do, they only care about what you can do for them. The fact that you think you are best of breed has little effect on your customers, your relationship with them or the solutions you hope to deliver.

Posted in Business Strategy

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  • http://www.synergistic-us.com Richard D. Cushing

    The sadder part is that many small (or even large) businesses don’t ACTUALLY KNOW what they do. Sincerely!

    My wife, who cared for and homeschooled our nine children got a bit bored at home when number nine reached the age of five, so she took a part-time job at Sears. I used to laugh at some of the stories she brought home about what management was doing there. It was abundantly clear that Sears had lost its bearings.

    I’m old enough to remember in the early 1970′s when national retail numbers were reported, Sears was always in the number one position and their total revenues were not equaled (usually) by the next three national retailers combined.

    In those days, Sears knew exactly what it was: It was a store that carried quality merchandise at reasonable prices and it was a nationwide catalog store that could deliver almost anything a family might need to the most remote parts of North Dakota or Montana. It also had a few of time-honored brands (e.g., Kenmore appliances, Craftsman tools).

    However, when Sears began to lose business to WalMart, its executive management team also (apparently) lost sight of all the things that had made Sears great. The problem is: When a company doesn’t know who it is or what it does, the consumer certainly cannot know.

    Sears’ marketing was all over the place. They didn’t know whether they wanted to be a brand leader, a quality leader, or a price leader. So, they wandered aimlessly back and forth between the three and alienated a good share of their existing customer base while attracting very few new customers.

    Many VARs are in the same boat today. They don’t know if they are a software reseller that offers services or a services organization that offers software. Worse, when they would like to be (or become) a services organization that offers software, they are still rewarding people — in sales and elsewhere — on a model that says they are a software reseller that offers services.

    Success is only an unexpected (but pleasant) occurrence in schizophrenic organizations. You must know who you are before you can clearly communicate to the market who you are.

  • http://www.hallme.com/ Fred

    Richard,

    Great comment, thanks! Yeah, there’s a growing “bread line” of big companies that seem to have lost themselves somewhere between the economy of the 80s and 90s and that of today. I recently heard an NPR story about how Wonder Bread was suffering from this same sort of identity crisis as well.

    Not only is it schizophrenia, but a lack of being able to change business models that hurts. E.g. you think that because you make Widget X and everyone loves Widget X, Widget X is your company. But if Widget X is no longer desired in the marketplace, and you’re not doing anything to create Widget Y, you’re headed the way of the dodo bird.

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  • http://www.kitchenaidsmallappliances.net/ kitchenaid food processors

    gr8 resrch – is it all from the same source?

About the Author

Tom

Tom

Tom founded Hall in 1999 and is currently the President and CEO. Tom's responsibilities include business strategy, SaaS product development and customer care. As chief strategist, it is his job to make sure that Hall delivers the best possible service offering, meets the needs of the market, meets or exceeds best practices within the industry, prices competitively and ethically and markets service offerings effectively. Tom has discussed business strategy with over 300 business owners and marketing managers over the years. Some became clients and some did not. Tom offers his insight on those conversations in this blog.

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