Growing and scaling a business is a hard thing. It takes money to grow a business. To get more money means you need more customers. Which begs the question, “How to win new customers?”
The pursuit of new customers could actually be hurting your business and your brand. Not helping it.
There is an old rule in business called the 80-20 rule. It states that 80% of your revenue comes from 20% of your customers. This means quite a few things for your business.
1. There is a segment of your target market that is more likely to buy from you.
2. This segment of your market is easier to sell to.
3. Attracting more of this group of people means more money in your business.
Attracting just one person in the 20% bucket is, mathematically speaking, the same as attracting 10 people in the 80% bucket. These are objectively your most valuable customers. These are YOUR people. YOUR tribe. They are the people that are going to buy from you again, and again and again, AND they are going to tell their friends about you. They will be brand advocates.
So how do you get more of these incredibly valuable customers? The answer is by developing a powerful brand. Marketing gets you noticed by customers, and sales convinces them to buy from you, but branding ATTRACTS your ideal customers.
A great brand is like the flame to your ideal customers moth.
Just how like a great band is like the flame to their customers moth.
Yes i said band, not brand in the last sentence. Let me explain…
The path to success in the music industry is actually fairly formulaic. All breakthrough acts in the music business are the result of blind luck (and a little talent). A band (brand?) captures the interest of a small group of fans who tell their friends, and suddenly they’ve got a hit.
That’s pretty hard to do. It’s harder still to consistently attract new fans. It’s harder to get bigger and bigger, it requires new music, different music and increased exposure.
Rather than accepting this path, a few smart acts have zigged when the industry zags. Take Pearl Jam for example. Instead of insisting that they could continually churn out hits again and again and again, they rallied their core audience and built a very different system.
If you’re a Pearl Jam fan you know that the band released 72 live albums between 2001-2002, all available on their website. They are not trying to win more fans, they are already selling to the converted. Conversion costs you money. Selling to the converted makes you money. They know that selling to their core audience is cheap, whereas gaining a new fan is not. Every single one of their 72 live albums turned a profit. Furthermore, they delighted their core audience, who in turn spread the word and indoctrinated more fans for them.
Pearl Jam hasn’t put out a true hit in 15+ years, yet still remains one of the largest bands and most expensive concert tickets on the planet.
THAT is what a great brand and great brand strategy will do for you. It will allow you to attract the right customers and delight them again, and again and again. More importantly, it’s how you carve out a profitable niche as a small business owner.