Understanding the New Consumer To Grow Your Business. Entrepreneur MBA Podcast 3.36
Summary: In today’s Entrepreneur MBA podcast guest, Michael Solomon, author of the book Consumer Behavior: Buying, Having, and Being, speaks with Stephen Halasnik from Financing Solutions about understanding the new consumer to grow your business. They talk about topics such as how consumer behavior has changed rapidly within the last 60 years, how businesses aren’t paying enough attention to consumers, and how to have a bigger impact on customers as a small business.
Signs Businesses Aren’t Paying Attention to Consumers
You can tell when businesses are paying attention to their consumers by looking at their revenue. For example, if the revenue is high that might convey that there is great communication between the consumers and the company. The first sign that a business isn’t succeeding is when they don’t talk to customers. As a successful business, companies should be in touch with their consumers constantly. Even if you do talk to your customers, the customer also has to be passionate about your product. There needs to be a story behind your product for a customer to be passionate about it. The product being better isn’t going to help you grow your business, it also has to be more appealing to their life. Branding is definitely needed when you grow your business and you really need it to get the customers you want that really impacts the business.
An issue that comes up when working with clients is expecting a customer that you want to have rather than working with a customer you already have. Businesses try to market to ideal customers who are merely an image of themselves. An advantage small businesses have over big ones is the agility they have. With small businesses, you have the ability to grow your business while also changing alongside your customers. You can also be more personable with small businesses when compared to huge corporations. When you grow your business, you want to work with and keep the customers you already have instead of pursuing new customers.
Difference Between Theory and Execution in a Business
A good theory is really valuable because it gets to the underlying dynamics or reasons for the things you are observing. Things that you observe change over time. Consumer behavior has been changing very rapidly ever since the pandemic. A theory is useful because it gives you the ability to avoid coming up with ideas every time you want to make an important decision.
Execution is how you apply that theory in your business and so it is easier said than done. Having the luxury to look at the long term is what most businesses should have. Having a broader understanding of theory can help solve problems involving consumer behavior but it is one thing to know because it is difficult to execute when you grow your business.
A Mistake Businesses Make
A huge mistake you can make when you grow your business is that you think your success is correlated with the customers you have rather than the amount of work they do with each
customer. Any small business should focus on customers who are constantly spending their hard-earned money more than trying to pursue new random customers. When you grow your business you should incorporate how loyal customers are and reward those customers for that.
How Can Small Businesses Understand Their Customers?
They need to understand that customers today are really different from the customers in the past. When looking at the younger generation, you have to dive in and get a sense of what they’re thinking. They need to understand that different techniques used in the past become obsolete in the future. It all depends on the marketing of the product based on the audience they are trying to cater to.
In today’s society, we each identify with a lot of different groups so it is harder to cater to an audience today than it was 60 years ago. It has to do with genders, subcultures, music, food, and many other things that make everyone different. Small businesses can personalize their delivery for one type of a person if they want to really understand the customer. Small businesses can be much more interpersonal with people to really build a bond that lasts.
Suggestions on Staying Focused as an Entrepreneur
When you grow your business, you should try to do anything you can to be a part of the community, that is an advantage of being a small business. If you are part of the community, people tend to help you out more and see you as their friend if you are very interpersonal with them. It is important to be peoples’ friends in the community.
Communication in today’s society is different because consumers are much more proactive so the messages they find persuasive come from their peers instead of the business itself. You should take that small loyal base and turn them into your sales force because of how powerful they are. They can help bring in new customers by telling their other friends about the business or service.
When You Grow Your Business Today
Things such as the office’s physical layout can reflect on how the culture will be of the business. Anything that allows employees to share insights is a sign of what the culture will consist of. Now businesses are trying out a hybrid setting which consists of both online and in-person settings best suitable for what a person wants to do.
Both the online and in-person settings have to have the same motivation when it comes to customer experiences. They need to blend in together to form a force that reels in most customers. It all starts and stops with your customers, you need customers to be interested in your product. When it comes to marketing, you need to understand what people want and understand how to reel in customers for a business. You need to throw away assumptions about people and ask them what they are looking for.
About the Guest, Michael Solomon
Michael “wrote the book” on understanding consumers. Literally. Hundreds of thousands of business students have learned about Marketing from his books including Consumer Behavior: Buying, Having, and Being — the most widely used book on the subject in the world.
Michael’s mantra: We don’t buy products because of what they do. We buy them because of what they mean. He advises global clients in leading industries such as apparel and footwear (Calvin Klein, Levi Strauss, Under Armour, Timberland), financial services and e-commerce (eBay, Progressive), CPG (Procter & Gamble, Campbell’s), retailing (H&M), sports (Philadelphia Eagles), manufacturing (DuPont, PP&G) and transportation (BMW, United Airlines) on marketing strategies to make them more consumer-centric. He regularly appears on television shows including The Today Show, Good Morning America and CNN to comment on consumer issues, and he is frequently quoted in major media outlets such as The New York Times, USA Today, Adweek and Time.
As a Professor of Marketing (in the Haub School of Business at Saint Joseph’s University in Philadelphia) and an industry consultant, Michael combines cutting-edge academic theory with actionable real-world strategies. He helps managers get inside the heads of their customers so they can anticipate and satisfy their deepest and most pressing needs – today and tomorrow. An executive at Subaru said it best: “The man is a scholar who is current and street-wise.”
About Financing Solutions Small Business Line of Credit
Financing Solutions small business financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.
Please feel free to fill out the no-obligation, 2-minute business line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
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