Marketing your business can be a completely overwhelming task. What do you do? Where do you start? What’s the best use of your time?
To help you out, we’ve put together a complete guide to marketing your retail or hospitality business. We’ll be looking at:
- Market potential
- Marketing foundations
- Marketing strategy, and
- Marketing tactics
Assessing market potential can be a tricky task. Many entrepreneurs fear going into a market that’s already saturated, while others fail to predict market demand.
To simplify things, we’ll look at the two most important things:
- Competition: Although strong competition can often mean it’s unlikely your business will get off the ground, it can also be a validation of market demand, and proof that consumers want what those businesses are selling.
- Demand: On the flip side, a market without, or very few competitors could mean that there’s no market demand, which means a very small opportunity for your business to grow.
How you assess market potential depends on the type and size of business you want to have, but the key to understanding market potential lies in whether you can see a justified opportunity, AND be able to deliver on it where others can’t.
Can you serve customers in a way that no one else can? Is there a segment of the market being left out? Can you deliver your products in a new way that enhances the experience? Can you do this sustainably? And can you do it turning a profit?
A lot of business owners see huge market potential, but don’t consider the reasonable steps involved in being able to execute their strategy in order to achieve their objectives.
When assessing your market potential, make sure you do comprehensive research to understand how much demand there is, how many competitors there are, their strengths, weaknesses and how they’ve developed market share.
Set the targets you want to achieve for your business and work backwards to determine what needs to happen in order to achieve them. Doing this may seem overwhelming, but if you take it a step at a time, it’ll help you to think creatively about your business and predict problems it may have in the future.
Once you’ve determined there’s adequate demand, your next step is to ensure you have a competitive advantage over other businesses in the market.
I’ve asked a number of business owners about their competitive advantage over the years, and to my disappointment, a significant portion of them tell me “quality and service”.
The phrase makes me cringe because in most cases, the level of quality or service that these businesses offer is on par with (or worse than) their competitors, not significantly better. This means they have no real measurable advantage over their competitors and have no compelling reason for people to choose their business over someone else’s.
To elaborate on competitive advantage and really understand it, let’s take a simple example of supply and demand.
Let’s say you were looking to buy an orange. You go to the market and there’s a plethora of orange stalls, each with hundreds of oranges. On first glance, all the oranges appear to be the same. In this scenario, supply is high.
You might look at all the stalls and think, how do you choose which stall to buy the orange from?
If you know yourself well, you’ll understand that your decision is based on your model of the world, the values you hold, your previous behavior and decisions.
When you take some time to look at it, you notice that some stalls are cleaner than others, some oranges are fresher than others, some are cheaper, some are organic, and some are of a different variety.
Depending on what you value, you may choose to purchase the orange closest to you, the cheapest, the juciest, the freshest, the most healthy or the tastiest.
Simple, right? Your choice was determined by a differentiator, important to you.
What I’m trying to convey to you is that what happened in this scenario was that the differentiator (or competitive advantage) changed the way you saw the oranges and consequently the supply & demand.
If there are plenty of people who want fresh, clean and organic oranges and only one stall that sells them, that business has a strong competitive advantage.
In the same respect, if a business sells fresh, clean and organic oranges, but almost no-one wants them, then it’s either a weak competitive advantage or small market demand.
The point is, whether you’re a shopkeeper selling oranges, a retailer or in hospitality, you need to understand how your product or business is different to your competitors and what people are willing to buy.
I’ve seen too many business owners wonder why they struggle to achieve growth, when they haven’t adequately assessed either market demand or their ability to offer something customers want, that other businesses aren’t offering.
Your job as a business owner is to effectively communicate and deliver what customers want in a unique way, adding more value, becoming their preferred choice and ultimately profiting from it.
Ok, so we know you need to assess the market potential and the competition. How exactly do you build your competitive advantage? How do you know what customers actually want?
To do this, you need to have strong marketing foundations. That is, to fully understand who your audience is, what makes them buy, and how to present your products to them.
To keep it simple and specific to retail and hospitality, I’ll cover some of the main points:
Get clear on your audience
Getting clear on your audience is THE most important element to any business. After all, your business is built on selling things to people.
Obvious, I know, but fail to understand your audience and you’ll end up mismatching your product to the market; like trying to sell a punk leather jacket to a conservative grandma (not the best product fit).
When you take it to extremes, it’s easy to get clear on your audience. Conservative grandma is probably not going to buy a punk leather jacket. In many cases however, there is a finer line in what resonates with your audience.
This is one of the biggest reasons as to why so many businesses struggle to have clear messaging, have inconsistency in their brand and fail to catch on.
It might be difficult to do in the beginning, but it’s vital you adequately understand your prospective customer well enough to address their needs, wants, desires and the best approach to targeting them.
To get you started, here are some examples of considerations in getting to know your target market:
- What sort of person they want to be
- How they want to be seen
- Who they spend their time with
- Who they trust
- What their top values are
- What they spend their time doing
Many of these are surface level considerations, and they will help you to tailor your marketing or product. What’s also important however, is understanding their motivations, lifestyle and ambitions. Who they want to become, what sort of life they want to live and how they want to be perceived.
These are the deeper things that will help you to really connect with your audience.
Get clear on the experience you want them to have
Once you have a reasonable understanding of your target market (this will improve over time the more you think about it and get to know your market), the next step is to consider the experience they want to have.
If you’re trying to sell a punk leather jacket and your store is bright, filled with soft toys, rainbows and unicorns, there’s going to be brand inconsistency. On one hand you’re offering a punk leather jacket, and on the other your brand is displaying that your business values bright, ful, and perhaps a childish feel.
That’s not to say these things can’t be mixed. In some cases, elements of both can be introduced as a form of innovation. What the example demonstrates is that the experience you’re trying to give your customer makes a significant difference, and getting that experience right is key.
Keeping your experience consistent with your audience’s values and it builds trust, a connection with your prospective customer, and reflect an image that our audience want to see, hear, feel etc.
If you we’re a diamond merchant trying to sell high quality diamonds in the parking lot of a supermarket, chances are people will either think the diamonds are fake, or you’re a thief. This is because there’s inconsistency in your brand, or more specifically, the method of sale. The inconsistency isn’t within a reasonable frame of reference and leads people to distrust you.
Put the exact same jewellery in an extravagant, well designed store with a security guard out the front and suddenly it makes sense.
When you’re thinking about the experience you want your customers to have, consider the:
Whether you realise it or not, these all play a role in the decision making process of your customers, so it’s vital that they’re consistent with the brand (i.e. the values that the company holds and displays) and the target market’s desired experience.
Part of the experience in buying from your business is the packaging you place your products in, and the way the customer receives it.
To give you an example, imagine two scenarios where you just bought a diamond necklace worth $15,000.
Scenario 1: You purchase the necklace, the shop attendant puts gloves on, delicately removes the necklace from the cabinet and places it into a silk-lined, crafted case with a latch. They then take a designer pen and sign a certification of authentication document, stamp it, and slide it into the box. They carefully wrap the case, seal the wrapping with their logo, place it into a branded bag, smile and hand it to you with both hands. You’re politely escorted to the exit by the shop attendant and they thank you as you leave.
Scenario 2: You purchase the necklace, the shop attendant picks their nose, takes the necklace from the cabinet, dumps it loosely in a plastic shopping bag, stares at you and throws it onto the counter. No case, no certification of authentication and no thank you. Just a plastic shopping bag like you get at the supermarket.
Same product, different experience right? Some how, despite spending $15,000 (which you would expect to feel good about), in scenario 2, you would probably be left feeling disappointed, cheated or even angry.
If you’re in hospitality, this may be expressed in the way your food or drink is delivered, what tableware is used and how it’s presented.
Although none of us really like to admit it, most of the weight in our buying decision is emotional. We like to think it’s rational and logical, but when it comes to it, we buy on emotion and justify it with logic.
It’s extremely important not to underestimate the experience of the customer receiving their goods. This includes the packaging, the way it’s handed to them and the experience of opening or playing with the item when they get home or use it.
The better you understand your customers and the experience they want to have, the better you’ll be at being able to create a competitive advantage based on what’s missing from that experience in the marketplace and what your customers want.
Once you have the foundations in place in understanding your prospect and the experience you want them to have, the next step is looking at the strategy you need to implement.
That is, the way in which you’re going to reach your audience, build their trust and win them over, while considering the current marketplace conditions.
To do this, you need to think about:
- The location of your audience
- The hurdles they may have in purchasing your product (and how you’ll overcome them)
- How they currently purchase (this includes timing, access, payment, their expected process etc.)
- Who they trust and are influenced by (this can include, friends, family, celebrities, magazines, business leaders etc.)
- What competitors are offering
- What channels your audience are likely to be receptive to, and
- Whether those channels are cost effective to obtain customers
Some key metrics you should at least have a rough idea of are:
- Expected number of customers
- Expected average sale price
- Expected average sale volume
- Expected lifetime value of each customer.
From there, you can reverse engineer your marketing funnel to determine what areas can help your business grow, and what you need to do to increase your profitability.
The marketing tactics you use for your business should support your overall strategy. This means that unless the tactic is helping to to execute your strategy, you shouldn’t be using it.
As Sun Tzu put it:
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
It’s up to you as to what you decide is applicable for your business and how you execute each tactic, but if you’re looking for a few ideas to get you started, here are a few which may help:
Google my business
If you haven’t already, ensure you have a Google my business profile setup. This is useful in a couple of ways:
- It helps to improve your Google rankings
- It helps your customers find you in Google.
- It allows your customers to review your store, giving it social credibility (which prospects value significantly higher than anything you have to say).
- It makes it convenient for your customers to contact you. Instead of having to visit your website, then navigate to the contact page, the appropriate location and then call you up, Google automatically displays the most appropriate phone number directly in their search results.
Almost every retail and hospitality business should be on social media. If you run a B2B business there’s perhaps somewhat less reason to be, but even so, a well structured social media campaign can be a very effective way to generate business and social proof.
It has quickly become an adopted channel to discover and purchase products, and if you have an eCommerce store it can lead directly to a measured sale.
Some considerations are:
Tip: If you choose to use social media, create a compelling voice that resonates with your audience by sticking to the values of your brand and audience. Although it can be tempting to share what interests you on social media, remember it’s still a marketing channel, so keep your messaging and communication in line with your brand. Posting irrelevant content will dilute your messaging and devalue your brand.
Chances are you already know you need a website. The type of website you get however can vary considerably. Before dishing out thousands of dollars or hours to have one built, think about the outcome and purpose of your website.
Is it to simply create a presence for customers to find you and display your brand? Are you trying to generate leads? Do you want to generate sales? Each outcome will require different website design, structure and effort.
If you’re considering an eCommerce website, think about your target market, business strategy, competition and how you’ll implement it. For more info, you can check out ‘is it time you opened an eCommerce store’.
Some other things you’ll need on your website are:
- A Blog – A blog is not only a great way to keep your customers up to date with any new announcements, it’s also a way to build your brand and increase visitors to your website. Blogs (like this one) can be filled with useful content for your audience, which also gets crawled by Google. If you’ve got interesting content people will share and link to it, and it’ll rank well, helping you to get your website more visitors.
- Location & Contact info – It feels almost ridiculous to suggest that you need to have your location and contact info on your website. Of course you do. That being said, I come across retail websites ALL THE TIME that fail to include their location and contact details (just like restaurants that don’t include their menu – if you have a flexible menu, at least say so on your website). Why they neglect this information is beyond me. If you want your customers to trust you and buy from you, put some form of location and contact details on your site.
Having a blog with half a dozen posts isn’t going to deliver thousands of visits a month. Blogging needs to be promoted and done on a semi-regular basis to be of any real value.
If you’re having trouble seeing the value generated from your blog, it’s likely that either your blog posts are boring, or they’re not promoted (which is where SEO comes into play).
For some ideas on blogging think about:
- New products
- Store rearrangements
- Industry news
- Product use ideas
- New menu
- Experimental dishes
- Limited time food/drink
SEO (Search Engine Optimisation)
SEO can be a fantastic way to create a consistent stream of traffic at exceptional relative cost.
I won’t go into too much depth here, because it’s already been covered in detail elsewhere, but some basics are:
Keyword selection – Keywords or search phrases are an amazing way to advertise your business because they inherit intent. Typically, the more specific a search is, the greater the intent, or further down the decision making process someone is.
You can use tools such as Google’s keyword planner to get an idea of what people are searching for and how many searches there are on a monthly basis.
Targeting the right keywords can mean you not only rank for certain keywords and get traffic, but also generate sales.
There are a number of conflicting ideas when it comes to choosing SEO keywords.
- One frame of thought is to pick the low-hanging fruit. The long tail keywords that are easier to rank for.
- The second frame of thought is to pick harder-to-rank keywords that are ultimately more valuable.
Having spent many years in digital marketing, I find myself falling into both categories depending on the business, the market, the competition and outcomes.
Trying to compete on high value keywords with significantly bigger competitors who spend $10,000 – $30,000/month on SEO when you have a budget of $500/month, is crazy. In this case, you’ll need to look at valuable, yet long tail keywords or consider other channels in the short term.
Just be aware that if you decide to hire an agency to do your SEO for you, that they don’t select keywords that have no search volume (double check this! Some agencies are dodgy!). There’s no point in paying thousands to be #1 in Google for a keyword no one will ever search for.
On page optimisation
On page optimisation is essentially what and how you display information on your website. Search engines, like Google have specific algorithms to determine what they rank at the top of their search engines. Optimising your website makes it easier for Google to assess your website and where or what it should be ranked for.
On page optimisation includes things such as:
- Page title
- H1,H2, H3
- Images etc.
There’s plenty of information online to find out more, so I won’t cover it here.
Off page optimisation
Off page optimisation is the promotion of your website by other sites. This helps Google understand how valuable your website is, and whether to rank it above others.
Think of links as a referral. If a random person tells you about a cool product, you’re not going to take much notice. But if someone you trust, that’s credible tells you about a cool product, you’ll take more notice. Google’s view of off-page optimisation works in much the same way.
The more quality links you get from other sites, the more value Google will see in your website, and the greater it’ll be ranked.
Create a mailing list
One of the most effective ways you can communicate with your audience is through email. If you haven’t already, consider creating a compelling reason for customers or prospects to join your mailing list, by offering them something.
Whether it’s ideas, commentary, discounts, exclusive sales, as a general guide, your aim should be to add value 7/10 times you email them, and promote your business 3/10 times.
By doing this, you create what’s called enforced reciprocation, building a giving relationship with your audience.
Small things can often make a big difference. If you’ve been to a coffee shop a number of times, chances are you’ve been lured back in by the “buy 9, get 1 free” stamp card. Rewards cards can be a nice little bonus to make your customers feel special, and they can often increase your sales.
Partnerships are by far one of the most effective methods to generating business. The reason is because by using a partnership, you’re leveraging of your partner’s existing trust and relationship with their customers, overcoming one of the major hurdles for a new customer to buy from you.
A good way to approach partnerships is to think about who already serves your customers (but without competing with you). That may be companies that share the same brand/vision as yours, ones that have influence over your audience (this can typically be sponsorship), or ones that offer related or similar products.
Advertising can be a daunting task for any business. Unless you have prior experience, there’s usually quite a bit of uncertainty as to whether what you’re doing will generate a return for your business.
The benefit of online advertising is that you can start with a small amount, testing and measuring throughout the process in order to assess its performance.
To get you started, some online advertising suggestions are:
- Google shopping
- AdRoll (used for remarketing)
Events are a great way to get in touch with your audience and associate your brand with something your audience already loves or wants to find out more about.
If you do decide to participate in an event, make sure you have a reasonable idea of what sort of a return you’re expecting to get out of it. Done poorly, events can be a costly way to promote your business when compared with other channels, so it’s important you have adequate funds and execution that you believe will generate well in excess of the amount it costs to attend.
Some ideas for events are:
While online advertising has swallowed up more and more of the market share, print advertising is still an effective medium.
People still like to hold something in their hands, and on average, people spend more time on a print page then they do on an online page. The experience is typically more leisurely and stress free.
If you’re a startup, it’s probably not the best idea to risk precious funds on print advertising unless you have previous experience. That being said, with all the hype about digital, print is still an effective medium, whether it be in magazines, newspapers or the like.
Press Releases can be a great way to get your business into the community, especially if you’re doing something different or innovative.
As the old saying goes:
Either write something worth reading, or do something worth writing.
Put your focus on standing out, impressing and caring for your customers, then organise for it to be shared in the media.
Some ideas for press releases are:
- Remarkable/crazy/controversial stunts
While it’s easy to get wound up in your business chasing an endless todo list, it’s important to step back and assess what’s working, what’s not, and what changes you need to make in order for it to grow.
Having a solid understanding of your market potential, marketing foundations, your strategy and tactics will help you to push through the uncertainty or overwhelming list of priorities.
Of course, your understanding of your audience, experience, marketing strategy and tactics will all change, but having a base will help steer you in the right direction, saving you from spreading yourself too thin and wondering what you should do next.
Have something else to add? Let us know in the comments below!