Your Market Story

Telling your market story isn't about doing formal market research, or gathering the supporting information you'll need to include in a plan for investors, or professors, or in some cases for the bank, your boss, partners, or any other third-party plan judge or reader. No. This is about knowing your market for yourself, so that you understand the decisions you make, understand the strategy, understand the heart of your plan.

You might get it from some kinds of market research, but in most cases we're talking about understanding the market. Understand what people want, or need, and why they buy from you. Understand what they think about when they think about your business.

For example, let's say you're in the restaurant business. Position yourself. Is your restaurant about fine food and fine dining? White tablecloths and wait people dressed up in black and white, a vase of flowers on each table? Or is it about driving through with half a kids soccer team in the van, getting a bunch of hamburgers and drinks and french fries fast?

What needs are you solving? Why do people buy from you?

Now imagine you're a business plan consultant. Can you do detailed market research for high-budget situations, like major companies looking for information about entering new markets? Or are you aiming at the people next door trying to start a business? Do you want buyers who expect to pay tens of thousands of dollars, and can you give them what they expect to get? Or are you aiming at those people who are borderline between having somebody do it and doing it themselves, who would pay $500 to get a plan done, but not $1,000? These are huge differences.

Now pretend you're a blog. How and why will people find your blog, and what will make them return?

Imagine a conversation between your favorite customer and a friend or acquaintance, about your business. What do they say? "It's pricey, but the food is fabulous so it's worth it," or "It's a price performer. Not bad if you're in the neighborhood"?

One of the sadder elements of this exercise is the many businesses who really don't know how their market sees them. The bed-and-breakfast places who are getting customers because the hotels are full, whose customers wish the organizer woman would leave them alone. The bed-and-breakfast who is aiming for quaint and historic and full of character and is getting business because of location and low price. How sad when people change their formula without even realizing what, in their customers' minds, their formula was.

One of the best exercises is thinking through who isn't in your market. Who aren't you trying to reach? How does ruling that person out help you understand who you are looking for?

For example, Starbucks has to know that it isn't trying to get the drive-through customer in a hurry. The Sushi restaurant has to know that a minivan carrying one parent and six 12-year-old kids in soccer uniforms isn't its market. The personal shopper has to know she isn't looking for cost-conscious bargain basement buyers.

Profile Your Ideal Customer

John Jantsch, in Duct Tape Marketing, recommends that you start by profiling your ideal customer. Focus for a while on one person, whether he or she is your customer directly or the decision-maker for a business customer. Give that person age, gender, income level, likes, dislikes, favorite movies, songs, magazines, restaurants. Know that person.

If you've been in business, you can think of that customer fairly easily. Maybe it's a composite of several real customers.

What you want at this point is to be able to tell a story about this customer and his or her needs and wants and how your business addresses them.

Understand Needs and Wants

Clean your mind for a few minutes. Forget how great what you're selling is. Forget the features you've focused on, and your marketing literature. Think about what your customer wants. Why does he or she buy from you.

Think about Starbucks for a minute; a brand most people know. Starbucks doesn't think it's selling coffee drinks. Starbucks sells affordable luxury. Starbucks sells atmosphere, a place to meet.

Then consider the two different options for selling food. One of them is selling convenience, reliability, consistency; it's a great solution for a parent driving a van full of kids in soccer uniforms, kids that the parent needs to feed between games. The other is selling luxury, atmosphere, fine food and peace and quiet, a fancy meal for a date -- in short, something completely different from the first "product."

Now go back to your target customer, and think about that story. Who is this, what situation is she in, why does she pay you money. What are you really selling? What business are you really in?