What does your company do? Yes, there is the Government’s Standard Industrial Classification (SIC) code system. Typical groupings include Manufacturing, Engineering, Finance, then sub-groups and niches within them. However the very idea and spirit of innovation is to create new solutions. So even if a new solution is within an existing category, this may not be the same as another business or it would hope to be different. That doesn’t mean it should be impossible to understand! You probably spend money and time trying to advertise, market, sell and appeal to customers, but do they understand what you do? Are you jumping a few steps ahead before you highlight the problem. Explain your solution – why is it better, different or cheaper. And who uses and needs this – perhaps help people understand by adding case studies. This is a problem with new companies but also with all companies. First with companies when trying to get money to fund the business, they can fail to get investor interest quite often because investors simply are confused. At Dorset Business Angels (DBA) I have the job, very often, of telling presenters how many people want to invest, after they have presented . When it is nobody of very few, the reason is sometimes due to people not knowing or “getting”, what the company does. Or not being convinced there really is a problem the entrepreneur claims that needs solving. I’ve seen investors proved wrong, but I would blame entrepreneurs for not getting their story over. What can you do? Not just as a new business but what can we all do to tell our business stories better?
The Product or Service
I have conversations most days with people calling me about their new business ideas, products and services they need to fund. Are you sure you have a product or service that someone out there really needs? Needs more than another business can satisfy? Or is cheaper or better than is out there on the market already? Great! How do you know? Well, as long as you have tested this, somehow…because you have sales, or very solid research. You know your customer(s), problems and what you can do that they will pay for. I wrote about this in: So What? Is there a Problem?
Can you delivery this solution profitably? Your vehicle to do this is a company. A team. Investors love ideas and IP (intellectual property), but what they really invest in is people. And the organisation the people create to deliver the service. A service to make a profit, and a return on investment over a specific period of time. I’m no longer surprised at pitch events for funding how, an engaging entrepreneur on the phone, can completely fail in front of an audience. You never know. A relatively dull but knowledgeable engaging, trustworthy guy (I use the term gender neutrally here), can easily win an audience with their ease at handling challenging questions on competition, finances, market issues and so on.
Communications across all media
Pitches, that is presentations at angel investor, private investor groups, require entrepreneurs to look at most of the communications elements and one specifically: audience presentation. But I’m not really overly concerned with the latter here. I think that can be over-emphasised. It’s far more important to focus on a sound business plan and marketing plan which demands using a raft of media and integrated marketing communications. In other words in the 21st century, people buy in all kinds of ways. So you need to use communicate with customers in their buying journey, from initial interest to the final purchase, all the touch points – I wrote about this recently.
Segmentation – target your customers
One of my colleagues at Dorset Business Angels suggested it was dangerous for another colleague to promote his accountancy business as being “one hundred years in business” because it would not appeal to young people. My view? Segmentation is the issue here. A more senior audience would probably value this, a younger audience probably not. Equally, The BBC is promoting it’s BBC SOUNDS service to replace the online radio service, without the care to target older audiences and budget to promote to them. All the money is biased to attract younger audiences. It is a one message fits all approach and little clumsy. Branding products such as Mars bars and other retail products enabled the retail market for decades to target specific audiences. Segmentation and good branding separate and target audiences for products and services.
Making Words Work
John Drewry, a top copywriter writes: “The writer sees it fine, but has failed to understand that the reader is a completely different animal.” I would go further, many businesses give us the same challenge when presenting themselves to the market place. And not just new ones, pitching for funds. Think for a minute. Or just take a random look on Google. How many companies sell stuff, that your read about, that just does not make sense? You may think, you do not understand that sector. I used to keep quiet and think, “I must be stupid. It’s technical or something for a niche market.” Well, I know there are always cleverer people out there! Now I have learnt, by asking others, that I am not the only one who doesn’t understand. It’s like the old fairy-tale of The King’s New Clothes – if you don’t believe or understand what you are being told, just say so. Just ask “What does your company do?”
Peter Eales BA Hons Chartered Marketer FCIM FIDM
Founder Director Dorset Business Angels
MD o i solutions limited