In our first Let’s Talk Business guest blog we talk with Samuel Junghenn about narrowing your focus when selling online.
Samuel is a serial entrepreneur with a burning passion for online marketing.
Samuel is the Founder and Head Strategist of Think Big Online, Sydney’s fast-growing Digital Marketing Agency which provides strategies and end-to-end solutions for modern businesses seeking measurable results in a competitive digital marketing landscape. He’s also one of Soda’s international business mentors and is currently working with startup FilmQuest in a Soda programme.
Why shouldn’t you be selling everything to everyone?
Ten years ago, it used to be relatively easy to sell anything online to anyone because there was very little competition. But these days, there is a lot more competition online and the cost of media has gone up.
You have to be laser focused with where you are spending your resources, whether that be time, whether that be money on advertising, otherwise you are not going to cut-through and be seen. At the end of the day nothing else matters except return on investment with your marketing, otherwise you shouldn’t be doing it.
Unless you are a giant brand, there is no point doing advertising just for the sake of being seen. If you start with the focus of making every dollar count and try and get that dollar back in the bank account in the shortest time possible, you’re going to get brand exposure.
A lot of companies will try to undercut competitors’ prices, but is it better to be focusing on price or value?
If you’re cutting your prices to be competitive, you’re just racing your competitors to the bottom. It’s like competing to see who will go bankrupt first.
If you have a gigantic store like Amazon or Walmart then a small price difference can work because you have such a wide product range. But the majority of business owners reading this post will not have that boarder spectrum of products to offer.
What I learned a long time ago is if you are selling a pizza for $10 and the cost of making that pizza is $7, you’re making $3 profit on it. If you then increase the cost of the pizza from $10 to $11, you haven’t just made $1 more profit on it, you’ve actually increased your profit by 33 percent. But, the customer is only paying 10 percent more and most customers will digest a 10 percent markup.
So, I suggest most people should be putting their prices up a bit, because they’ll make more profit with slightly less customers and a slightly higher price.
It’s then figuring out how you can add more value to the customer without incurring any more hard costs. So, if you’re online it could be adding more value to the customer by adding a free podcast. They are going to have so much value from listening to your podcast or YouTube channel, that they are happy to pay a slightly higher price for whatever else you might end up doing because you’ve already added so much value.
It’s like you’ve deposited into their “value bank account” and then you make a withdrawal when they buy something.
How big of an audience should startup companies be targeting online?
The answer is not a number amount. The answer is, you should only be targeting an audience as big as you can target while being unique. What I mean by that is, if you are selling scissors, there are so many options for people to buy scissors online, but for people to buy blue scissors, there is a smaller audience. And if there’s less competitors selling blue scissors then you’re going to have a more specific market that you can capture.
If you are selling left handed blue scissors and no one else in the market is selling left-handed blue scissors, that’s where you should stop. You should target everyone who’s left-handed and wants blue scissors. You are now own completely unique in the market.
The biggest challenge with most entrepreneurs that I’ve worked with is they think that by narrowing their audience they are limiting their business. They get scared they won’t have enough people buying, so they won’t be able to reach their goals. But you can have many different target markets for the same product and you can position a product many different ways to the same audience.
For example, take the blue scissors and make a smaller version and you could say, “now we have blue left-handed scissors for children”. Now you’ve got a different market again and they can sit in parallel to each other. The marketing has to be slightly different, but all you’ve done is just repackage it slightly and now you’ve got a whole other market.
How do you tap into the right channels and how do you know which are the right ones for your business?
The easiest way to get in front of and find your tribes of people is by starting on Google, doing the research and looking for what people are talking about in relations to the product or service you offer.
When doing research around if there is a market for blue left-handed scissors for children you could type it into Google and if there are no results coming up, start doing searches around scissors for children, safe scissors for children, a different market again. So, you might have a particular part of the market and the colour might not be of interest, but they might want to make sure they’re safe.
When doing research on Google also look for forums and groups on LinkedIn and Facebook. For the children’s scissors you might look for parenting forums and search through them to find the right conversations. Forums are a great place to find what the burning desire is of your customers; the tip is to look for the forum threads that have the most engagement. You can then go back to that same forum thread and eloquently market your product as well, when you have a solution.
It might be a Facebook group, or a thread on LinkedIn or a hashtag on Instagram. Once you’ve noted down what’s most important to them, you now know where your audience is and why they will buy, so you can tailor your targeting and message precisely.
What are your tips for encouraging community interaction with your audience?
Start with research once again. Find where your competitors are, the similar products in the market, and see what the hot trends are. You don’t want to guess. Look for the emotional topics that people are engaging with and then replicate that content on a group or a fan page or a blog using the same idea.
Once you’ve identified the platform, you’ve identified the means in which you will use to reach your audience, the next step is testing and seeing if you will actually get engagement, are you actually getting cut-through and achieving the outcome of the leads/sales that you want to acquire? If it’s not working you have to consistently adapt. Cut off the things that are not working.
It’s amazing to see how many people keep doing the same thing, even though it’s not working. I see someone I know consistently making the same type of posts with quotes on them and no one is engaging with them. You have to change tactic when you aren’t getting engagement.
It’s about doing more of the right things, and doing less things well. What I mean is, I’ve never seen anyone who can do Facebook, Instagram, Twitter, YouTube, LinkedIn, Snapchat, and everything else all at once and do it very well.
You are better to have one YouTube channel that’s got a million subscribers, than you are to have every account set up where you’re doing a post once a month to each platform. You want to always be a big fish in a small pond.