Archive for August, 2009

Migrating Your Products and Services Beyond Being a Commodity.

Tuesday, August 18th, 2009

No matter how hard we try, it seems overcoming the stereotype of being the “t shirt guy” is an impossible objective. The perception of being a t shirt company or vendor in the marketplace is huge. Just trying to get your customers to understand what you really do is a challenge. As I was thinking about this, some things began to occur to me.

My first thought was that the perception is reality. No matter how we see ourselves, customer perception of what we do is the real reality. They’re branding or labeling us with this perception. It’s up to us to fulfill that label, or somehow overcome it. Part of this labeling process is the commoditization of what we do. “You’re just another t shirt guy” is tough to overcome as it puts all t shirt printers into a giant group where everyone and every product looks the same. As I’ve said in the past, if you get caught in this trap, the only differentiator is price. That’s a losing game.

Your avenue out of this perception is to provide a logical path. Start with your position the same as everyone else. You can make or beat the lowest price in the market as the starting point. It really does not matter because our intention is to use this as a starting point for the conversation, that’s it. We have no intention for selling shirts for the lowest price in the market.

The key is to have a series of upgrades, steps, or levels. If you’re starting off with a cheap 5.4 oz cotton shirt, the next step up is a 6.0z with better graphics and special effects inks (high density, reflective, gel, etc.) Still not expensive, but something to compare with. Follow this with a more fashionable style like an American Apparel body or a 100% Certified Organic body with waterbase printing. Now you have much more margin and a clear choice that does not fit the stereotype. You’ve navigated away from a commodity to something beyond.

In order to make this transition it’s also important to give the reason why behind the upgrade. The reason why for the point of entry garment is all about being the cheapest, that’s it. It’s where it is because it fits the profile of the commodity. The fashion body is “hip” or cool, and the organic T is good for the environment. The more compelling you can make the story that leads up to the next level, the better chance you have of making the migration.

What you’re after is comparison. If you don’t have higher priced alternatives, you have nothing to compare against and the low end price gets pegged. Offering alternatives with a reason why behind them breaks the link to a commodity and frees you to move up to a higher sales price and higher margin.

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Connecting with Your Niche

Friday, August 14th, 2009

A niche is nothing more than an area of special interest. One of the very first things you can do to improve your business is to move away from being a generalist that does anything for anybody. When you target your efforts to a specific specialty, you move away from a commodity product or service to one of uniqueness. This specialization is the mechanism for increasing your profits. Today I thought I would share some of the elements necessary to make a niche effort successful.

When selecting a niche it really helps that it be something you are personally interested in. The higher your interest, the easier it is for you to become excited and engaged. This is one of the keys. Enthusiasm sells. It’s contagious. I’ve seen mediocre product sold very successfully in specialty niches simply because the company or site was enthusiastic about what they were offering.

Your role here is to connect. The more authentic and genuine you are, the more believable
you’ll be. Printed apparel in a niche area should reflect the look and feel of that market. The automotive racing and motorcycle niches have their own typical look. Likewise for major sports events. Fun runs, triathalons, and marathons (half and full) have their own look as well. You don’t have to try and reinvent the wheel for your niche. Look at closely related areas and see if you can identify a specific signature style.

Specialization usually means you know more about that area than the average supplier. The more you can incorporate the style of your market, the more you will sell. For instance, if you are selling to outdoor festivals, make it a standard practice to fold and bag all retail product. This keeps the inventory clean and protected and is a definite added value.

Talk to many different people in your area. These can be customers, other vendors, or participants and spectators. Find out from them what’s important, what they’re looking for. Ask them what’s missing or what would make for a better experience. You may be surprised at the answers. Be on the lookout for opportunities for you to partner with others selling into the niche. You can often piggyback onto their efforts to increase your credibility and reach.

Success in niche marketing comes down to three things: Market knowledge, passion or enthusiasm, and connection to the market. When you combine these three elements, you have a recipe for success and profit.

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The Value of Mastermind Groups

Thursday, August 6th, 2009

The first Thursday of every month is reserved for my Mastermind Group. This is a collective of 10 different CEOs from10 different industries. Each of us has a company ranging in size from about $3 Million USD to $50 Million USD in annual sales. None of us compete with each other and there are no conflicts of interest. We gather to discuss business in general and problems and challenges within our companies as a whole. I joined the group over 5 years ago and rarely miss a meeting.

What would cause a person to give up one business day a month to a group of guys that sit around and talk business? The answer to this question lies in the value each of us derives from the group.

Someone once told me your annual income can be loosely calculated to equal the average incomes of the five most influential people you associate with. If this is true, we can also look at the annual income of our companies in the same way. If you do business with a lot of small, local businesses, your business volume will reflect this. If you work with larger corporations, the size of your orders and your annual volume will reflect that as well.

The point here is, if you want to grow, you have to associate with those who are where you want to be. They’ve overcome the challenges you have and achieved a higher level. We can learn from their mistakes and experiences along the way. They can help us with insights on hiring, sales, production, administration, finance, and so forth.

Why would a bunch of larger companies want to hang out with a bunch of small guys? This is a very good question, and the answer lies in “agility.” Small companies tend to be very innovative and responsive. The larger a company gets, the more out of touch it becomes with its workers and the markets. This isn’t always the case, but for the most part the generalization holds true. These big companies are envious of the smaller companies innovative capabilities and their ability to capitalize and implement quickly. So their motivation is to see if they can gleen any wisdom or tricks that will speed up their own innovation cycle.

Napoleon Hill, in his landmark classic business book that everyone should be required to read Think and Grow Rich, proposed the concept of a Mastermind Group. He correctly theorized when you surround yourself with smart, successful, wealthy, experienced, knowledgeable individuals, their skills and influence would rub off on you. As a result, your overall skill set and capabilities rise as well.

It is a brilliant concept I fully endorse. Without outside perspective, we tend to become mired in our own thoughts and circumstances. We can’t seem to make out the difference of the forest for the trees. We become confused and lost in circular thinking. Solutions to problems evade us. What we need is fresh perspective. A Mastermind Group fulfills this purpose beautifully. Every business (or individual for that matter,) should be a part of such a group. The benefits are amazing as are the “AH HAH” moments or realization.

Finally, the Mastermind Group provides another valuable asset. It is accountabilitiy. This group of effective leaders holds each other accountable for things they’ve said and committed to. This need for accountability is crucial for entrepreneurs and business owners who do not report to anyone but themselves. They can’t run and hide behind anything to escape the scruntiny of the other group members. It can be uncomfortable at times, but it is a huge advantage to have this forced accountability. It speeds things up and makes it easier to get things done within the time frame you have budgeted.

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