Costco Connection - April 2009

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PAUL AND SARAH EDWARDS: LIFESTYLES FOR THE MILLENNIUM

Paul & Sarah Edwards (www. middleclasslife boat.com) are the authors of Middle Class Lifeboat and 16 other small-business books.

ness in the next 20 years, but they propose nine strategies small and midsize businesses can use to survive by winning in niches.

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Here are several suggestions for pursuing the 30 percent of the market that hasn’t been gobbled up by major corporations.

Don’t get lost in phone-tree jungle

Narrow in on particular customers.

Scratching

EVERYONE KNOWS the frustration of calling a large company and getting stuck in phone-tree limbo, listening to the choices and trying to find the right department. Fonolo.com “automatically maps out these menus and keeps them current,” according to CEO Shai Berger, a Costco member in Toronto.

that niche

Even in today’s economy, some occupations are expected to do well—e.g., registered nurses, dental hygienists, computer software engineers, computer application engineers, veterinarians, medical assistants, network and system administrators, and others in health and technical fields. Targeting your services or products to their needs can be a path to a steady customer base.

“We like to consider ourselves the Google of phone space,” claims Berger.

WITH THE ECONOMY sliding, should you try to be a jack-of-all-trades serving any kind of customer you can get, or should you find a special niche? Is a phrase we coined, “Find your niche and scratch it,” still relevant?

Focus on local markets. These markets offer customers whose tastes and preferences vary from the standardized offerings of franchises and national chains. By customizing what you do, and when you do it, you can reach those with special needs and preferences.

Users register all their phone numbers on the Fonolo site and go to the site for a fully laid out menu when they need to make a call. Once a user makes a selection by clicking a button for a particular department, Fonolo calls the phone number, then calls the consumer’s phone and bridges the calls, saving time and effort.

A recent book, Beating the Global Consolidation Endgame: Nine Strategies for Winning in Niches (McGraw Hill, 2008), by consultants Fritz Kroeger, Andrej Vizjak and Mike Moriarty, all with the global management consulting company A. T. Kearney, provides a clear answer. Analyzing more than 600,000 companies—nine out of 10 of today’s businesses from 3,000 recognized industry sectors—they found that only three or four companies in each industry are cornering the markets, capturing as much as 70 percent of market share.

Cooperate with other businesses.

The free service also allows users to log notes about the interaction and even offers the option of recording calls, which comes in handy in case of a dispute.

Consider a “business consortium”—a group of companies or independent individuals who join together to collectively do such things as marketing and purchasing. Such consortiums can be small or even international, such as Ace Hardware, where small hardware stores pool their purchasing power. This model can work for the creative and technical fields as well as for those producing products and services.

Fonolo currently lists more than 300 companies in its index and is developing an iPhone application.

Berger says, “We’re a consumer service aimed at evening the balance of power between consumers and business.” C

They predict as many as 90 percent of today’s companies will be forced out of busi-

So, yes, it seems it’s still possible to find your niche and scratch it. C

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To market or not to market

I NADISTRESSEDeconomy, economy, businessown-e rs wisely search for ways to cut expenses. But according to Boca Raton, Florida, Costco member MaryEllen Tribby, publisher and chief executive officer of the online newsletter Early to Rise (www.earlytorise.com), “Many business owners have a knee jerk reaction to cut marketing budgets without evaluating the harm that will cause their business.”

Tribby advises, “You should be marketing more, but finding lower-cost and more effective ways.” She offers these suggestions.

• E-mail marketing. Direct e-mail is cheaper than direct mail.

• Pay-per-click (PPC). PPC is an online advertising payment model in which the advertiser pays a predetermined price every time an ad is clicked. Accounts can be set up in five minutes, with immediate results. If the ad fails, it can be replaced just as quickly. Start with the minimum amount and see how the search

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engine performs in terms of the traffic it delivers and how well the traffic converts into paying customers. PPC advertising is entirely trackable, so you can see your return on investment.

• Remnant space. Try to purchase remnant space—space in a magazine or newspaper (as well as time slots on radio and TV) that has not been sold in time and is left over. If space is available and time is tight, the publication will most likely negotiate.

• Social media. Social media take many
forms: online forums; message boards; blogs;
video-, photo- and music-sharing sites; social
networks and comment sections on Web sites.

• Teleseminars. Teleseminars are inexpensive to produce, and a teleconferencing channel for your business can be established in a matter of weeks.

• Public relations. Of the many channels of marketing, public relations is one no business should ignore. It’s nearly free, and it can go from local to regional to national—and even international—audiences faster than it takes to write up a marketing plan for a conventional advertising campaign.

Tribby cautions, “Regardless of which you use, you should always strive to create strong customer relationships. Never promise anything you aren’t going to be able to deliver, and deliver more than you promise. Integrity is the key.” C