Al Ries, as well as his partner Jack Trout, is one of the leading marketing minds in the country. He counsels Fortune 500 businesses on how to focus their companies and is the person who has helped major companies like Volvo, BMW and FedEx to own their product category in their customers’ minds.
According to Ries, the key factor in corporate competitiveness is focus. He explains that companies that try to be all things to all people often end up in big trouble. One of the examples he discusses is the mistake that IBM made when first marketing its personal computer. IBM is a company that’s been known for mainframe computers. When the company introduced the personal computer, to a certain extent it cheapened the currency of what previously was a premium brand. This approach contrasts with a company like Toyota, which understood the power of focusing on a particular marketplace. When Toyota decided to go after the luxury car market it created an entirely new brand and name, Lexus. Most luxury car owners don’t want to drive a Toyota, but they’re more than happy to drive a Lexus.
Another example of focus is Federal Express. This company was founded on the ability to send packages overnight. Although they now offer two-day delivery as well, they have not strayed far from what the public thinks about Federal Express.
Volvo found its marketing niche in the word ‘safety,’ continually reiterating this theme to drive home the point that its cars offer safe transportation.
This approach can easily be used by those of us who own small businesses simply by focusing specifically on what’s most important to our target customers. The ability to “own” a category in the mind of your target customer is a key element to differentiation and successful marketing.
It also helps to look at examples of companies that didn’t focus and suffered for it. For example, the discount department stores, Bradlees, Caldor and Ames were all pretty much interchangeable in the minds of the consumer and they all had a bout with Chapter 11 bankruptcy. Then, in steps Wal-Mart, with its focus on low prices and great selection and becomes the world’s largest retailer. True, focus wasn’t the only element in Wal-Mart’s success, but neither is we saying it will be the only element in your success. However, your ability to form a specific focus with your business, and to articulate it in one sentence, can make the difference between growth and stagnation.
The single biggest common denominator we see in small-business failures as we travel around the country talking to people who own their own companies, is that they don’t have a clear focus, they don’t know who their target market is and hasn’t defined what makes their business unique.
Here are three questions to ask yourself to determine if you are focused in your business:
1. What do we do better than anyone else?
2. If we could only do one thing to generate revenue, what would it be?
3. When people think of our company, what’s the first thing they say about it?
By answering these three simple questions, you can determine if you are using the power of focus in your business or if you need to go back to the drawing board and rethink for what you truly want to be known.
