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Knowing the intricate nuances of your target market plays a crucial role in the performance of any eCommerce business.
Because there are so many competitors out there selling a similar product as you, you need to make your products stand out and speak to your potential customers and current customers. That way, they buy from you over the guy down the street (web).
Failing to put the work in doing the research and doing the testing may mean pushing the wrong messaging and wrong visuals to your intended buyers. Which means a lot of wasted time and money.
Know Who You’re Marketing To
It is incredibly hard to succeed as a business if your target audience is not clearly defined.
A big mistake beginner business owners make is trying to market to everyone. That is, using the same messaging and visuals towards each demographic cluster.
The problem is that a universal marketing strategy does not exist in today’s age.
Why bother marketing to consumers who are unlikely to buy your product? You’ll end up spreading your budget too thin.
Aim for consumers who are most likely to connect with your brand. This is the best way to use your marketing dollars and your best chance of succeeding in such a vicious industry.
What is “Target Market”?
You can find several variations of the target market definition on the internet.
I find Shopify’s definition is one of the most accurate:
“A target market is a group of consumers or organizations most likely to buy a company’s products or services. Because those buyers are likely to want or need a company’s offerings, it makes the most sense for the company to focus its marketing efforts on reaching them. Marketing to these buyers is the most effective and efficient approach. The alternative – marketing to everyone – is inefficient and expensive.”
Why Do I Need To Know My Target Market?
How can you sell to consumers if you have no idea what they want or need?
Each person has different demographic qualities, interests, and pain points.
Selling without a target market is like traveling without a specific destination. You’ll likely get lost and never achieve the goals of your journey.
On the other hand, if you target the right audience, success will be well within reach.
If you find an untapped market, you can even disrupt the market.
Let’s take a look at this recent success story.
Do it like the Dollar Shave Club
The Dollar Shave Club took the shaving industry by storm. It completely disrupted the personal grooming market.
How did it do this?
First, it found an untapped market. And which market is that, you ask?
It’s the men who don’t like the hassles of going out to buy razors and grooming products.
During that time, all sellers of razors and male grooming products required their customers to come to their stores.
Disruption is the Key to Rapid Growth
The Dollar Shave Club’s business model changed the face of the male grooming industry forever.
The company sends its subscribers razors and grooming products delivered to their house. Subscribers only have to pay a small monthly fee in return.
The Dollar Shave Club then topped this off with its memorable and catchy tag line, “our blades are f***ing great!”
The Dollar Shave Club became a well-known brand in the US within a few months.
It owed half of its success to its business model. The other half was thanks to it choosing the right target market.
How Do I Find My Target Market For My eCommerce Business?
The process of identifying your target market can be broken down into the four steps listed below:
Step 1: Define Your Target Market
This first step is all about identifying the problem you solve or the desire you fulfill.
You need to know the pain points you want your marketing to aim for.
Consider these tools and areas during your research:
- Amazon Reviews – look at the negative review and positive reviews of a similar product a competitor is selling. See what works and what doesn’t.
- Quora – a Q&A board where you can see what people are struggling with or curious about in the topic your product is in.
- Answer the Public – displays all the questions people ask online about any term or topic.
- Facebook Insights – input a Facebook page of a global company that caters to a similar target audience and see the interests and demographic information about them.
Write down all the key information you find in these platforms, specifically:
- what are the biggest pain points people are having?
- what is the goal people are looking to achieve?
- how does the product make them feel?
- what brands, books, known individuals are mentioned?
- what demographic and psychographic patterns to do you see?
Let’s say your service delivers razors and other male grooming products to subscribers.
Who would be your ideal target audience?
You can target working adult males who are too busy to go to the department store only to buy a razor.
You can then use this to create your buyer persona. Buyer personas make it easier to make your marketing, product, and packaging have the same target.
Let’s say that our buyer persona is John, a 31-year-old working father of two.
Step 2: Refine Your Target Market
Now that you have a buyer persona, it’s time to refine it.
You need to factor in the demographics and psychographics of your potential customers so you can get into their heads.
Demographics can include gender, age, income level, education level, marital status, and the like.
Psychographics can include behaviors, attitudes, and the like.
Here are some examples of how to refine the buyer persona we’ve created above:
- John, a 31-year-old working father of two who is separated and takes care of the kids on his own
- John, a 31-year-old working father of two with a stay-at-home wife who does the shopping for him
- John, a 31-year-old working father of two who is rich and has a housekeeper who buys groceries for the family
Step 3: Validate Your Target Market
Now that you have refined your buyer persona, it’s time to check its validity.
How? You do some old-fashioned research.
Proper market research is needed to ensure that there are no major flaws in your chosen target market.
So far, you’ve built your buyer persona based on assumptions. It’s time to put those assumptions to the test.
Here are some of the questions you should answer to ensure the eligibility of your target audience:
- Are there enough people in your target market segment?
- Can they afford your price tag?
- Are there existing competitors?
- Can you deal with them?
Step 4: Evaluate Your Target Market
Let’s say the research supports the validity of your target market.
Don’t jump the gun just yet. Don’t forget to test the waters.
Create a test launch were you try to sell only a few products here and there.
Or you can test it by talking to individuals who fit your target market. This means actually going out there to find multiple “Johns”.
If the results are positive, then you’re good to go.
If they’re disappointing, use the findings to refine and adjust your strategies.
The bottom line is that you have products you want to sell, but you can’t market to everyone.
No business has the budget for that.
To spend your marketing budget efficiently, you need to find the right target audience.
You need to find the segment of consumers who need and/or want your product. This will allow you to maximize the conversion rate of your marketing efforts.
Don’t make the novice mistake of ignoring this crucial step. Put in the work and figure out your target audience. It will be well worth it down the road.
People love stories.
It’s why some stories originally told over a thousand years ago endure up to this day.
We’ve loved stories from an early age, back when we barely understood them.
Stories entertain. Stories inspire. Stories fuel the imagination.
Storytelling in Marketing
It’s no surprise that storytelling has become one of the most effective tools used in marketing.
Its ability to establish a deeper connection with consumers is unparalleled. Storytelling can humanize a brand and make it more relatable.
When done right, eCommerce storytelling can reach out of the computer screen and “touch” consumers.
It can also be the catalyst to mobilizing a legion of loyal fans.
What Is Storytelling For eCommerce?
Marketing is a necessity if you want to succeed in eCommerce.
There are countless competitors selling products identical to yours.
It becomes a race of who can capture their audience’s attention first. When it comes to engaging your audience, few can be as potent a tool as storytelling.
Capture the Imagination of Your Audience
Online stores can make consumers experience their stores physically.
So you need something else to reel them in. Engage them. Make them understand what your brand is about. Let them know what you stand for.
Tell a story that makes your audience imagine themselves enjoying your products.
Take Consumer on an Emotional Journey
A powerful story can do a variety of things for your brand.
It can compel your audience to trust you.
It can evoke an emotion that leads to a desire to buy your product.
A good story can make consumers feel like they’ve known your brand all their life.
Why do I need to care about storytelling?
Stories make your brand feel more authentic.
Stories can make your audience feel like they are talking to a trusted friend.
Stories allow you to converse with your audience on a more emotional level. Stories add depth.
They can make your brand seem more than just a product or service.
Stories can make your brand an entity that consumers want to be friends with.
Let’s face it. Consumers today find most conventional advertising methods boring.
You can’t expect a consumer to read a boring wall of text. We’re in the digital age.
Consumers are overloaded with information:
- Google receives over 63,000 searches per second
- The average consumer processes around 100,000 digital words each day
- A person encounters an average of 5,000 marketing messages per day
- 3 trillion online ads are sold each year
Most consumers don’t bother with marketing messages. Almost 80% of people scan content and only read the parts that interest them.
Ecommerce storytelling can compel your audience to read every word of your message.
Develop stronger relationships
Communication is a two-way street.
Consumers aren’t content with just listening to you.
They want you to listen to what they have to say too.
Tell a story your audience can relate to. This will make them feel that you understand them.
The more relatable stories you tell, the stronger your bond with them will be.
Make Your Audience Feel They’re a Part of Something Greater
Define your brand with a core set of beliefs. Make sure these core beliefs resonate with your audience.
This will build goodwill between you and your audience. It will add perceived value to your products and services.
This perceived value will allow you to charge higher than your competitors without losing your customers.
Consumers who feel strongly about your brand will also become your brand ambassadors.
For instance, Warby Parker has the mission to solve the problem with access to glasses. Their Buy A Pair, Give A Pair program encourages customers to be part of their initiative and help solve this crisis. This adds to the alure of buying a pair of glasses from Warby Parker.
Similarly, LUSH is an active participant in donating and discovering ways to help solve various environmental and animal crisis. Their strong activist brand attracts those who share similar values and adds to the “feel good” state of customers when they see that portions of sales goes to LUSH’s many ethical campaigns.
Stories are motivational
Stories can move people. A good story can motivate consumers to do what you want them to do. Build a story around these motivations. To do this, there are three factors you need to consider:
- What you want your audience to feel
- What action you want your audience to take
- What call-to-action (CTA) will be the most compelling
How Do I Start Telling A Story About My Business?
1.) Focus on emotions
Most consumers make buying decisions based on emotion instead of logic.
Paint a clear picture of how much they’ll love your product or service. Focus on positive emotions.
Make consumers see themselves being satisfied with what you offer.
2.) Talk about how your product makes the customer’s life better
Focus on the benefits instead of the product or service.
Emphasize why your product or service is superior. Highlight why it is unique.
Last, clearly define what consumers can achieve by getting it.
3.) Explain how your company solves customer problems
Attack the pain points of your target audience. Describe the problem in detail. Include its causes and its impact.
This will tell them you understand what they’re going through. Then describe how you’ve developed a solution for the problem.
4.) Make the story shareable
Build a story around the core values of your brand. Present the story in a way that makes readers want to share it.
Create a short hashtag that summarizes your core message or the story.
Encourage your audience to share their own stories using the hashtag.
5.) Be more transparent
Consumers tend to assume the worst when there’s something they don’t know. So say tell it to them right off the bat.
Tell them about your company culture and how it’s like for the people working for you.
Describe your manufacturing process.
Talk about where you came from and how you got to where you are today.
6.) Be socially conscious
Give back and pay it forward.
Get involved in local community events. Donate to charity. Sponsor a local project. Fund a few scholars.
Any good thing you do can be incorporated into the story of your brand.
Sharing this story will further endear you to your audience.
But make sure to be authentic with this. If you don’t believe in the event or charity, do not force yourself to be part of it. People can sense it.
7.) Highlight your brand’s origins
People love success stories. It inspires them.
Share a story about the evolution of your brand.
Highlight the challenges and setbacks you’ve had to overcome.
Talk about the mistakes you’ve made and the lessons you’ve learned.
8.) Humanize your brand
Don’t only talk about your company or your products.
Tell stories about your employees.
Highlight what they bring to the table.
Showcase the various ways they contribute to your company.
Talk about people who founded your company.
9.) Enhance product descriptions
Many Amazon FBA sellers have trouble finding ways to tell their stories on the Amazon.
Ecommerce storytelling is harder to do on online marketplaces. So what should you do?
Use what’s already there. Use visuals and stories to describe what your product is and what it’s like to use them.
10.) Use real-life stories from customers
Encourage your customers to share their stories involving your company. Offer them a prize to encourage their participation.
This will give you a chance to collect user-generated contact. It will also add authenticity to your storytelling.
Storytelling is vital to eCommerce success. It’s vital for a business’s longevity.
A good story will not only make someone want to read every word of it, but it will also connect with them on a much deeper level. It transcends what the product is about.
The beauty of a well-established brand is creating that connection where what you sell matters less than what you stand for.
And when you stand for something and mean something more than just a product to them, you build a tribe that will root for you in the long run.
There’s a surprising number of Amazon FBA sellers who don’t think that branding is important.
They believe that it’s okay to sell the same product as everybody else as long as they offer a better price.
This strategy can be viable in the short term but it is rarely sustainable for the long term.
You do not want to settle for being the cheapest in the market. You don’t want to compete with other Amazon sellers that also think the same.
It will become a competition of who can set their prices the lowest. This will hurt your profit margin.
What you want is to be able to compete with other sellers even if your prices are not the lowest. And you can do that through branding.
Reasons to Start Brand Building Today
You need to get started on your Amazon FBA brand development strategy as soon as possible.
And here is why:
Stand Out from the Sea of “Me Too” Products
95 million Americans have Amazon Prime memberships.
Consumers purchased over 100 million products on Prime Day 2018. These two Amazon 2018 stats are proof that Amazon is a lucrative marketplace.
Amazon gives its FBA sellers the chance to make it big quick.
The benefits being so great is also a disadvantage. Everyone wants in on the action. Thousands and thousands of new sellers join Amazon each month.
This creates a sea of “me too” products, where everyone is selling the same white-labelled products and using the same strategies. Many of the listings end up becoming indistinguishable.
Escape the Saturation Plague
A significant part of Amazon sellers offers generic products.
This causes the marketplace to suffer from a high level of saturation.
Market saturation is one of the most glaring Amazon issues. This makes it a lot harder for a new seller to enter his desired niche.
After all, it’s hard to stand out when a thousand other sellers offer the same product as you do.
You can change this with branding and actually stand out.
This doesn’t mean just slapping on a logo. It means taking the deliberate path of creating a brand that means something, that has values, that has a story, and goes beyond just the logo.
Charge a Premium Instead of Being a Commodity
Selling is all about perception.
Make consumers think that what you’re selling is different.
This will allow you to make them buy even if your prices are higher.
There can be no better example of this than Yeti’s $300 cooler. People were shell-shocked.
It was surprising that consumers were actually willing to shell out 300 bucks for a cooler.
It was so baffling that it became a popular meme.
But even if it became a meme and was considered outlandish by many…Yeti is getting the last laugh.
Because while other people sell coolers for $80, they are able to sell their’s for triple the price. And it works.
Build a Brand That Demands a Premium
So what gave Yeti the audacity to charge so much for a cooler?
Yeti believed in its brand.
While most Amazon sellers focus on being the cheapest, Yeti did a 180 and decided to be the most expensive.
This was possible because Yeti was able to establish itself as a premium brand.
When consumers buy a Yeti product, they don’t pay only for that product. They also have to pay for the brand.
Develop Customer Loyalty & Build a Loyal Fan Base
When was the last time you bought a generic product online and remembered the seller?
It’s hard to build customer loyalty when your customers can’t even remember your name.
And what can’t they remember your name? You’re selling the same unbranded product as everybody else so why would they bother?
In the minds of consumers, there’s no reason to remember you.
They believe that they can get the same product from another seller. It won’t matter if they can’t find you again so there is no point in remembering you.
But if you spend the time and effort to build a brand that focuses on them, they will remember you and think of you.
Build a Brand That Inspires Confidence
The first step to building a loyal fan base is creating a brand that commands trust and respect.
Let’s look back at Yeti. Imagine a lesser-known brand selling a $300 cooler. Consumers would most likely dismiss it as nonsense. Some will even outright laugh at the foolishness of it.
The $300 cooler only worked because Yeti did it.
What did Yeti’s loyal customers do after they heard about the $300 cooler?
They rationalized that the cooler must be far superior to other coolers. They didn’t feel skeptical. They believe that Yeti always gives them the right value for their money.
Build a Superior Customer Experience
By having your own brand, you can offer your customers a unique experience.
You can engage your fan base on social media. You can convince them that you care for them. Show them you respect their feedback.
Consumers love the feeling that the seller actually cares.
Publish useful and/or interesting content on a regular basis. This will make consumers want to follow you. Make them look forward to new products you are planning to sell.
Become a Trusted Resource of Your Niche
Build a thriving community around your brand.
Become that dependable friend.
Be the first thing consumers think of when they need to buy something.
Think of ways to offer a customer experience consumers can’t find anywhere else.
For example, you can offer to send articles on how someone can make the most out of a product they bought. All they have to do is provide you with their email. You can then use the collected email as leads for your next marketing strategy.
Enjoy Creative Freedom Through Brand Longevity
It’s easier for an Amazon FBA seller to be creative when they know that they have a fan base that will give them a shot.
Knowing your loyal customers are there for you will give you peace of mind.
You’ll have more confidence to launch a contest or event. All you need is one viral campaign to make your popularity explode.
And each surge in popularity helps ensure the longevity of your brand and your business.
Don’t be Afraid to Defy Conventional Marketing Wisdom
Remember KFC’s 11 Herbs and Spices Twitter campaign of 2017?
All KFC did was follow only 11 people on Twitter: the five original Spice Girls and six guys named herb. Then KFC waited for someone to notice.
Remember what happened when someone finally did and twitted about it?
That original tweet had been favorited more than 700,000 times. It also received more than 300,000 comments.
Why did KFC come up with that campaign? It knew it had enough Twitter followers to make it work.
Branding is essential if you want to be a successful Amazon FBA seller.
You will be another generic seller in a wide sea of generic sellers if you don’t.
Building your brand should be one of your top priorities. A strong brand will give you the competitive advantage you need.
Your brand will ensure your business will remain sustainable for the foreseeable future.
[box type=”download”] Download the FREE Guide: 3 Step Secrets To Building An Ecom Brand here[/box]
Are you making this costly mistake?
Amazon is one of the largest online marketplaces. They had an insane 49& share in the entire US e-commerce market in 2018. It’s no wonder why so many people started flocked to create businesses that focus solely on this platform.
But with so much attention and hopes of riches on Amazon FBA, there lie many opportunities for beginners to follow the wrong advice and come out of this journey at a big fat loss.
Today I’m going to share with you the #1 mistake I see novice and advanced Amazon FBA sellers make.
Let’s dive in!
Don’t Fall Into The Same Trap
Every aspiring online e-commerce entrepreneur dreams of a successful Amazon FBA Business and living those stories of reaching 7 or 8 figures. The number of FBA sellers is increasing and that, in itself, can be a problem.
As more and more people flood into the platform and listen to the same gurus, the growing competition makes it harder for everyone to gain a foothold.
But even with the influx of new sellers, time and time again, I see people continue to make one massive mistake that can completely kill their Amazon FBA business’ potential.
The Bane of Amazon FBA Sellers – Being A Commodity Business
Quantity! Quantity! Quantity!
This is the only thing most new FBA sellers only think about. You may think that selling more products is enough. But such a strategy is not viable for the long-term.
Don’t take shortcuts. Don’t skip branding. Otherwise, your Amazon FBA business won’t last long and only be a commodity business.
What’s a commodity business? One that focuses on selling and neglects building brand equity. This, in turn, puts them on a very dangerous position – where they could only compete on price to lure new customers.
Forgoing brand development is the biggest mistake an Amazon FBA seller can make. Here are the reasons why selling unbranded items (and poorly branded items) on Amazon won’t work as a long-term strategy.
Amazon’s Product Saturation Problem
Amazon FBA provides online sellers the opportunity to potentially earn massive profits. New sellers are flocking to this online marketplace every day with that goal in mind. But, most are content with selling a few generic items. This causes saturation of “me too” products.
When a consumer search for a product on Amazon, there’s a high chance that they’ll be given pages and pages of the same item but with just a different colour or logo slapped on. This makes it hard for sellers to stand out and establish a following of loyal customers.
1. Everyone is Following the Same Advice About Ranking
Many Amazon consumers only look at the first page of the results when they perform a product search (like Google search results).
So getting a top ranking can exponentially increase your sales volume and eyeballs on your product. But, doing so is easier said than done. Everybody seems to be using the same strategies to boost their Amazon ranking algorithm to improve the spot their listing shows up on.
- Having specific keywords in the product title, description, and feature bullets
- Running giveaways to increase sales signals
- Get as many reviews as possible
Having everybody use the same optimization techniques is troublesome. You need to do the best practices, but it also has the same effect as nobody performing optimization.
2. You have to Adhere to Amazon’s Rules
There are limits to what you can do to get your products ranked higher and stand out from the crowd. You have to follow the same rules imposed by Amazon (assuming you’re building an authentic business). Such factors make it hard to get creative.
It makes it all the more challenging to stand out from the rest of the Amazon FBA sellers. By spending time and creating a brand (not just slapping a logo on your product), you are no longer like everybody else. You have your own identity and message that you can incorporate in your marketing and build a community that could eventually become your raving fans.
3. It is a Race to the Bottom
Imagine having to lower your prices again and again just to stay competitive…
Not something I’d ever want to do. But that’s the reality if you are a commodity business.
It is the most damaging aspect of selling unbranded or generic items on Amazon. You sell exactly the same product as everybody else. You offer the same quality of packaging and shipping (since it’s handled by Amazon and not you).
The only way left to compete is with the price.
The only way you make your products more desirable by lowering your prices. But chances are high that your competitors will fight back. How? They’ll bring their prices lower than yours. You can then only react by lowering your prices again. It will inevitably become a vicious cycle. It will be a cycle that is great for consumers but devastating for sellers.
And the person with the deepest pockets win. In most cases, it’s not you.
[box type=”download”] Download the FREE Guide: 3 Step Secrets To Building An Ecom Brand here[/box]
Become A Premium Brand & Charge More
A big mistake I see business owners make is thinking that they need to spend the time and effort on branding AFTER they make revenue. But it’s backward. You need to be carving out the time from the beginning to create a solid brand and then let it build organically.
Never underestimate the importance of branding. Even though it is difficult to see its effect, it is an important factor in how we decide between one product from another. By building a recognizable e-commerce brand will let you get out of the abyss of selling generic products and the sea of “me too” items.
When people connect with what your brand is about and what it stands for, they’ll be willing to pay the premium for your product. It is why some brands are able to charge double the price of their products, while others need to go into a pricing war that continues to lower their margins.
Here are the 5 most powerful reasons why you need to be serious with building a brand on Amazon:
1. Cut the Need to Compete on Price
Establish your brand, then you won’t have to keep trying to undersell your competitors anymore.
You can even price your products higher. Why would you do this? To make yourself stand out while reaping more profits.
Yes, consumers generally go for products with a lower price. But that is only if you fail to make them perceive that your product offers a higher value.
For instance, if you search “water bottle” on Amazon, you’ll find these two very similar looking and described products beside each other:
Although Mossy Oak isn’t a brand that is recognizable for the majority of people outside of their niche, doing a Google search and you’ll find that it is actually an established outdoor equipment business in Mississipi. They create valuable content like How-To Guides and host various events that connect with their target market. They are able to charge a premium by aligning their brand name as an authority.
Whereas, Boz is just a standard “brand” you’ll find on Amazon that is doing all the ranking strategies well. Because they have not spent more time in creating an outstanding brand, they have to continue to compete on pricing.
2. It’s All About The Perceived Value
Have you ever wondered why some people are willing to spend thousands of dollars for Louis Vuitton or Gucci products?
Because of their perceived value.
People could find value in 2 ways:
- an increase in status (ie. the Gucci branded shoes makes them feel high class) or
- they believe they are getting more than what they pay for (it’s a damn good deal)
By increasing the perceived value of your product, people will be willing to pay a premium.
Although it takes concerted effort and time to align your brand name with an increase of status value, it can be the reason why you’ll have a legion of fans that keep coming back to purchase for you.
One popular way to have people believe they are getting a good deal is to include add-ons that look valuable but are actually quite cheap to produce. What’s the simplest way of knowing what accessories you should bundle with your products? Look at the “Frequently Bought Together” suggestions provided by Amazon.
3. Boast About Your Product
Another way to go about it is to highlight the advantages and benefits that your product provides.
Do it in a way that it strikes the strongest pain points of your target consumers. Explain in detail why and how your product is the perfect solution to their want or needs. The value of the presentation is massive. Is your brand the only thing that makes your product different? If yes, the presentation can do wonders.
Take a look the often-memed Yeti’s $400 cooler.
You heard it right, Yeti is selling a cooler for $300 and people are buying it.
Yes, it is better than most coolers. It has offers improvements and new features. But does that justify the hefty price tag? Maybe.
A strong brand can get away with a lot.
So how did Yeti do it?
It didn’t build its brand on being the cheapest. It branded itself as a premium product with the highest in quality, technology, and features.
And more importantly, they have a story that resonates with their intended customers:
And now, Yeti is selling as many products as the cheapest competitor, but at a massive price difference.
That shows the power of building a proper e-commerce brand.
4. Better SEO and Conversions on Both Amazon and Google
Branding gives you a significant edge when it comes to search engine optimization. And it isn’t limited to Amazon since you’ll also have an easier time getting your products ranked high on Google.
By having an established brand, you’ll have an easier time building brand loyalty. It will be easier to forge relationships with consumers when you’ve created a brand that has specific values it stands for and a personality that connects with a target audience. There’s a reason why so many people are loyal and diehard fans to Apple.
It’s also simpler for word-of-mouth to spread for a branded product than a generic one.
All these can lead to various benefits such as:
- higher reviews
- higher conversions
- higher search rankings on both Amazon and Google
- and more
5. Stabilize Your Sales with Repeat Business
It’s a lot easier to get repeat customers when you built a respected brand.
In fact, 48% of transactions are from repeat customers.
Satisfied customers will remember your brand and be more likely to buy the same product from you again and again. It’s the same as people who are shopping for a car, they often gravitate to the brand they enjoyed or known for a particular trait (like safety or fuel efficiency). They’ll also have a bias in favour of your other products whenever they recognize your brand over others.
Spending the time and effort to really build a brand is something every e-commerce entrepreneur should do. It isn’t entirely just for Amazon FBA sellers.
But brand building is often overlooked or done in a lazy manner. It only requires a little investment and consistency, but the payoff can be massive.
By having a proper brand, you can gain a significant competitive advantage that will transcend your current product line. You’ll be empowered in dominating the countless generic Amazon FBA sellers.
Are you building a brand for your e-commerce business?
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Today I’m going to introduce you to a very important concept: Product Differentiation.
Knowing how your product is unique and different from your competitors can be the thing that makes or breaks it for your business. Especially in today’s crowded market.
We’ll be going over why it’s crucial for your business and its 3 different types, as well as some common examples.
Let’s get started!
What is Product Differentiation?
Product differentiation is a marketing strategy to show a product’s distinctiveness. How is the product different or unique from others in the same category?
Hubspot defines it as:
the strategy used by businesses to highlight the unique features and benefits of its product or service to separate it from competitors. The marketing team communicates these unique qualities through their campaigns and promotions. And the sales team can use them to demonstrate the product’s competitive advantage.
There are many ways for a business to highlight their product’s unique features. For instance:
- It can showcase the brand symbol and quality
- It can boast on specific features and style or
- It can emphasize the unique aspects that make your product superior against specific competitors
For example, Casper, a mattress company, highlights a combination of their product’s features and benefits like comfort and manufacturing right on their homepage:
Why is Product Differentiation Important?
Think about the times you go to the grocery store. Each aisle is filled with products from different brands. There’s 5 selling the same type of yogurt.
If you’re not able to inform the consumer HOW you’re different from the rest, there’s no reason to buy your product over another. And in many cases – especially for more established brands – the differentiation comes from their name alone. This mainly comes from their reputation for consistently creating products that may be high quality (or low quality).
So in a world where we have so many choices, having a product differentiation strategy sets the foundation that defines your business and how other’s perceive your brand compared to your competitors.
But of course, saying you’re high quality doesn’t exactly mean much, since anyone can say the same. Finding the characteristics that are important to your target market is then crucial to showcase your differentiation.
This means spending the time to research the behaviors of your target market to uncover their specific pain points and what they truly desire. With that information, you can formulate the features and benefits that potential customers actually care about and perceive as value. This would provide the basis of your product differentiation strategy and direct all marketing and sales messaging.
What Are The Product Differentiation Types?
There are three types of product differentiation: simple, horizontal, and vertical differentiation.
- Simple Differentiation makes a certain product set apart from the rest. The difference can be easy for customers to determine because it is obvious. Think of a regular rice cooker versus rice cooker with a removable steamer lid.
- Horizontal Differentiation focus on a single feature. The price may be the same as the competing products and doesn’t focus on the superiority of quality. Yet, it offers a different feature or functions. For example, think of a digital camera and a film-based camera. Both can give you a good quality photo but has different features.
- Whereas, Vertical Differentiation shows a product’s single characteristics. Customers are aware of its unique quality. It stands out among the rest even though there is a great difference on the price. A Levi’s 101 jeans stand out from the rest even though the price varies between other jeans in the market.
Examples of Product Differentiation
Let us take a look at some product differentiation examples.
Apple Macbook Pro
Apple is a multinational technology company (you may have heard of them ;)) that produces super popular products like the iPhone and MacBook Pro laptops. Apple has been highly touted for its sleek ergonomic designs and simple Operating System (OS). That is their differentiation factor.
People know that buying an Apple MacBook Pro won’t get you the most ram or processing power for the price you chalk up, like you would from another brand. Nor will it have the most advanced technology built in or varying customization capabilities.
But certain students, video editors, businessman, and creatives choose to purchase the MacBook because of its form factor and an intuitive OS. And those who do require top of the line processing power or customization, they tend to be the ones who build their own computers.
And in recent years, Apple has attempted to increase the power of their laptops to cater to some of the professionals who do require the extra oomph. This makes it more attractive for potential customers who may be eyeing at the Microsoft Surface.
Razer is an award-winning gaming accessories brand that is well known for its keyboards and gaming mice. Their DeathAdder mice recently reached the 10 million milestone and has been one of the hottest gaming mouse for the last decade. Razer continues to release new iterations of the Deathadder and continues to boast the very qualities that made it so famous: its sleek design, comfort, and optimum performance.
These qualities define their differentiation strategy. They are the very characteristics that are heavily sought by their target market: casual and hardcore gamers.
As a cherry on top, Razer uplifts the credibility of the Deathadder by mentioning how League of Legends pro, Faker, uses their mouse and has won championships. This acts as social proof and truly cements the quality of their product and difficult for other gaming mouse brands like Logitech to compete.
Takeaway: Find the pain points of your customers. Then create your product features and marketing around how your product solves those frustrations.
In business, competition is hard. It is important to think on product differentiation strategy. It is a key element to market the product, create a longstanding brand, and capture a segment in the market. Otherwise, you’ll have difficulty in connecting with potential customers who are busy looking for a product that truly speaks to them and gets their attention.
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