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Have you ever seen the game show ‘Wipeout’?
Contestants have to complete assault courses over large pools of water – and the quickest person wins.
Indeed, if contestants are too slow, the obstacle might tilt, shift or even shove the contestant into the pool below. If you snooze, you lose – but if you’re quick, you might just win.
The post-recessionary business world is just as harsh on the slow movers
The recent recession (or Global Financial Crisis – or GFC if you’re into your biz-buzzwords) shook up the business world as we know it.
Many businesses failed due to mis-management (financial and otherwise).
A large number of small business owners decided that running a business was too hard, and went back to paid employment.
At the same time, China was booming. Here in New Zealand, we saw an influx of Chinese immigrants* and consequently Chinese-owned businesses. These businesses are able to undercut New Zealand-made products with cheap imports – the downside of a very small country doing a free-trade deal with a very large country.
*In 2001, 3% of the New Zealand population was Chinese; in 2013, that number increased to 4%. In terms of numbers of people, that represents a 63% from 105,057 to 174,411. Source: Statistics New Zealand.
New business models emerged during the recessionary period too: for example, the one-day coupon industry boomed. However, that turned out to be a double-edged sword as these one-day deals commoditised many industries: customers were trained to shop around on price, and customer loyalty dwindled. The coupons might have generated cash flow, but to the detriment of businesses’ medium term viability.
So yeah, the post-recessionary business world is a bit of a mess
Most industries have been shaken, stirred and rattled around, so it’s worth doing a bit of a reality check.
Specifically, be sure to check where your target market is at. There’s a very good chance that the target has moved, and therefore your aim may be off target.
Questions to ask yourself when checking market viability
In my eBook, The Leaky Bathtub – Marketing 101, (which you should check out, by the way, if you’re not clear on marketing stuff, such as target markets), I suggest that business owners ask themselves the following questions periodically:
- Is your target market big enough to be profitable?
- Can you reach your target market with your marketing?
- And can you reach your target market profitably with your marketing?
- Is your target market suitably stable?
With the assault course of changes that have taken place during and after the recession, I’d now add the following questions into the mix too:
- Is your target market willing to spend money on your industry?
- Does your target market value what you do? Or has it become commoditised?
- How does your target market treat your industry? Is it with warmth? Suspicion? As a partnership? As a last resort? With trust?
- Is your target market engaged with you all year round? Or do they lose interest over holidays or other periods? Or do they treat business as a hobby?
- How has the competitive landscape changed?
- How have your competitors altered the marketplace?
How can you answer these questions on market viability?
Chances are, you already know some of the answers in your heart of hearts (even if you don’t want to admit it to yourself).
Also, have a chat with some of your customers; ask them for feedback. You can do this face to face when you see them, or you could consider running a survey. (But face to face will allow you to naturally progress the conversation.) They key is to find a customer that’ll be totally open and honest with you, rather than say what they think you want to hear.
Analyse the questions new prospects are asking you: that’ll give you an idea of what’s going through their minds. You’ll get an insight into their concerns and challenges, and how they view your industry as a whole.
And as for seasonality, look at your website statistics, for example. Do you get a lot more traffic for some months, while other months are very low? Or do you get lots more phone and email enquiries at certain times of the year?
What about your marketing campaigns: are previously successfully marketing tactics falling flat?
All these things indicate a shift in the market.
Shifting markets can mean opportunities – or wipeouts
Many of the businesses I’m speaking with at the moment have faced some major changes in their competitive environment and target market(s). And many businesses are struggling to adapt, because they’re not sure of where the new opportunities lie.
The key here is to be nimble and quick. It’s a bit like the ‘Wipeout’ assault course: if you’re too slow, you might go under. But if you’re quick, you’ll win the prize.
So I’d urge you do seriously evaluate these market viability questions; weigh up your options; crunch the numbers; and go for the prize.
Summary
The business world has changed dramatically in the last few years. Answer these questions (honestly) to check on your target market’s viability:
- Is your target market big enough to be profitable?
- Can you reach your target market with your marketing?
- And can you reach your target market profitably with your marketing?
- Is your target market suitably stable?
- Is your target market willing to spend money on your industry?
- Does your target market value what you do? Or has it become commoditised?
- How does your target market treat your industry? Is it with warmth? Suspicion? As a partnership? As a last resort? With trust?
- Is your target market engaged with you all year round? Or do they lose interest over holidays or other periods? Or do they treat business as a hobby?
- How has the competitive landscape changed?
- How have your competitors altered the marketplace?
Keep your eye on the target; move nimbly; and the prize can be yours. 🙂
