You need to market your small business like a drug dealer. Sounds crazy right? It does until you take a closer look at their marketing and sales strategy. Small business owners can learn a lot from analyzing what drug dealers do in terms of defining their target market, performing marketing activities, and building relationships.
Disclaimer: I do not encourage or condone the selling of drugs or anything associated with it. This is meant for educational and training purposes because of the clear examples and useful insights that can easily be understood by analyzing what they do. However, the drug business can be very lucrative, especially the ones that are legal.
Working with over 250 small business owners in many different industries, I have found that being able to market effectively is a significant challenge. Not necessarily because they don’t want to, but because they may not understand how to do it. As part of my coaching, I tell my clients that they need to market their business like a drug dealer. Skepticism is not uncommon, but people always find this exercise valuable because it is a simple way to learn the three most important factors in marketing their small business more effectively.
1. Drug dealers do not try to sell to everyone.
Have you ever been pressured to buy drugs from a drug dealer? No one I know that wasn’t interested in drugs has ever been. Generally, drug dealers offer drugs rather than sell them because drugs sell themselves. The reason they sell themselves is because the dealers are talking directly to their target market and avoid wasting time with people who are not. The same principle works for small business owners.
Finding the right target market is one of the most important factors that contribute to the success of a business. Most small business owners have one of the following marketing challenges:
They don’t know that they need to have a target market.
They don’t really understand what a target market means.
Their target market is too large for them to adequately service.
Many small businesses think the target market is anyone who might or is currently purchasing their product. However, they should really be focusing on the people who are most likely to buy their product or services. It must be an active strategy where the size is based on the amount of time, money, and resources that can be invested for marketing to prospects. This is generally a much smaller segment than they are considering. The goal is to be the big fish in a small pond, rather than a little fish in the big pond–because little fish get eaten.
For example, one of my clients, Tina Tang, owner of Iron Strong Jewelry has a business that creates jewelry to celebrate the fitness achievements of women. Tina originally targeted female buyers between 18 and 65 years old. That represents 91 million people in the United States, according to the 2010 US Census. As a small business, how could she ever expect to market to that many people effectively? After analyzing her customers and doing additional market research, she found the best market for her product is actually men who are seeking to purchase a special gift for their significant other. Who knew? That’s approximately 60 million people–still a lot.
She further refined her target market to be married men between 30 and 50 years of age with an income of more than $100,000, living in the New York City metropolitan area (MSA – NY/NJ/CT/PA) which reduces it to 283,986 people, according to the 2010 US Census. Further reducing by targeting only men with wives who are mothers that work out and who search for their gifts online using Google® brings the target market to fewer than 14,199 people. That’s a much more reasonably sized target market. By doing this, Tina not only reduces the scope of her marketing effort, she is also able to reach her prospects more effectively. It allows her to create focused content that clearly demonstrates her unique value proposition and deliver it through the most appropriate channels. This approach is much more effective in converting prospects into customers.
2. Drug dealers don’t pay for marketing
Although drug dealers generally don’t spend a lot of money on marketing and advertising, they are still able to run a very profitable business. They are extremely proficient at guerilla marketing, an advertising strategy that focuses on low-cost unconventional marketing tactics that yield maximum results. You can learn more about it in the book by the same title, authored by Jay Conrad Levinson. Given that small business owners often have very limited marketing budgets, their focus needs to be on free or low-cost marketing activities and maximizing every dollar they spend. To do this, they must know their customers extremely well and be able to identify with their needs.
Small business owners can be very successful without having an expensive website or being a master at social media. Many small business owners overly focus their efforts on cutting-edge websites and crazy social media strategies that they cannot afford, and which may not be consistent with reaching their target market.
3. Drug dealers make friends.
Drug dealers are laser focused on getting recurring business by building relationships with their clients, charging full price and getting high margins – even though it’s a commodity business. They know their customers, and more importantly, their customers know them, which results in repeat business and referrals. Drug dealers know the real reason clients buy from them – and that is “because they like them.” But without knowing you, how can they like you? What do your prospective clients know about you and your business?
Many entrepreneurs started their business because they were good at something or liked something, rather than to sell and to market, which is really their job. They can come across as insecure when they talk about their business. This detracts from their ability to connect with customers. Have you ever seen a drug dealer who was not confident about what he or she does? You too can become a master relationship builder by reading the book “How to Win Friends and Influence People” by Dale Carnegie and putting his simple, yet powerful principles to work.
A business can run without doing a lot of things, but marketing and selling is not one of them. First, you need to define the right target market; second, you need to minimize your marketing and sales expenses and third, you need to be good at building relationships. Your business will thrive if you incorporate these strategies effectively.
Andrew Frazier, MAB, CFA, SBP is the President of A&J Mgmt and Business Pro at Small Business Like A Pro in New Jersey. He helps small businesses owners grow revenue, increase profitability, and obtain financing through coaching, consulting, and training services. He is also the author of the forthcoming book entitled “Running Your Small Business Like a Pro.”
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