demand

9 Business Lessons from the Roadside Stand

Julie Rains — Sun, 17 Jul 2011 20:03:03 +0000

Link:

http://www.openforum.com/articles/9-business-lessons-from-the-roadside-stand

Roadside stands pop up during spring and summer in my town, as I imagine they do in many communities. On a regular basis, I buy and enjoy fresh produce and fruit from gardeners, farmers, and third-party sellers who set up temporary stands in their driveways and alongside busy roads. On occasion, I patronize permanent stands that operate seasonally along highways with plenty of traffic.

These roadside enterprises may not become business empires that will one day be purchased by Google for billions of dollars. But they do provide insights into important marketing and operational truths.

Limited time offers of in-season products drive demand.

Fresh fruit, in particular strawberries, blueberries, and cherries where I live, sell quickly because of a limited window for ripeness and goodness. Sure you can buy frozen or shipped-in versions year-round, but the flavor and texture is never the same as recently picked fruit. Customers know that they have to make quick purchase decisions, not because of a company-manufactured deadline but because of a natural one.

Customers crave convenience.

The inherent nature of the roadside stand is that customers drive (or walk or cycle) by on a regular basis. It’s much simpler to stop by a stand while commuting to work or running errands than to plan a trip to the grocery store, supercenter, or warehouse club, or spend your Saturday morning at the farmer’s market. Being so accessible and top-of-mind, without being intrusive, is a marketer’s dream.

Customers appreciate quality over mediocrity.

People prefer high quality food available at roadside stands, instead of mediocre stuff at the grocery store (with all due respect to my local chain, where I get good – but rarely amazing – produce and fruit).

Tourists tend to pay higher prices.

Stands on busy highways command higher-than-usual prices compared to their driveway or regular side-of-the-road counterparts. The highway stands attract travelers, who are generally willing to pay more for convenience than local customers are.

Increasingly, customers enjoy buying directly from the original source.

Buyers love to have a relationship with those who are truly connected to their work; that is, they long to know the artist, the farmer, gardener, grower, craftsperson, inventor, etc. Having been shunned by businesses that seem to be so out of touch with their customers, hiding behind voice-response systems and impersonal contact forms, buyers take pleasure in meeting owners in charge of a business and who take pride in their work.

An intriguing back story sells.

Customers want to hear the story of how the product came to life, whether cultivated in a family garden or inspired by a global event. They want to learn about techniques for growing, nurturing, producing, and bringing to market an idea or product. Such details elevate the perception of quality, influence future buying decisions, and increase word-of-mouth referrals.

Lower overhead means higher profits.

Typically, the roadside stand has very low overhead as expenses for sales floor space are minimal, compared to a traditional retail environment. Paying more for space that can generate higher traffic makes sense only if merchants have excess inventory (or, unlimited inventory in the case of digital content), and sellers have the operational capacity to support higher volume of sales (e.g., retail staff or server capacity to complete sales transactions efficiently).

A well-located roadside stand typically draws a large enough crowd to sell through its available inventory. An even better location with higher traffic will not generate more profits if there is a limited amount of product to sell. Finding the right level of exposure to attract the right number of prospects (no more, no less) is an art, but whatever cash you save in overhead, you can pocket in profits.

Attention to inventory management benefits profitability.

While it’s true that some roadside sellers are simply profiting from extra yield (and feeding their families on most of the bounty), many actively manage inventory and determine the appropriate mix of pricing/distribution to yield the greatest profitability.

Sales direct to consumers at roadside stands may command premium prices but not sell through all inventory. Sales to third parties, such as grocery chains or independent markets, may garner lower prices but move a higher volume of product. Allocating inventory effectively to various distribution channels, then, reaps the highest possible profits.

Profits are more important than market share.

In my corner of the world, the availability of locally-grown food has skyrocketed over the past few years. The numbers of roadside stands, farmers’ markets, and businesses specializing in locally produced vegetables, fruit, eggs, meat, and even packaged foods (prepared in small batches in licensed home kitchens) have increased. The roadside stand operators – focused on selling and expense control rather than dominating a constantly-changing market – are thriving.

Sure, market share is a key metric for many businesses and critical to strategic planning, long-term growth, and valuation. But profits matter most.

If a business can marry quality with convenience along with a compelling back story for a limited-supply item that people love, then customers will stop … and buy.

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Don't Sell the Product; Meet the Demand

Annie Mueller — Fri, 17 Jun 2011 20:28:15 +0000

Link:

http://www.openforum.com/articles/dont-sell-the-productmeet-the-demand

In economic terms, demand is "the amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price…Demand for a good or service is determined by many different factors other than price." Product is simply that economic good or service that you want to sell. You supply the product for which there is a consumer demand and we all get along beautifully.

This isn't a discussion about the relationship between supply and demand; rather, it's a reminder that selling is a lot easier when you don't try to sell.

Stop Pushing Product

Think about it. When was the last time you got a sales call or spammy email and received it with utter delight, or, really, with anything short of contempt? No one wants to be sold to, or sold at, but that's how many of us operate. We focus on moving the product, whether or not the product is really a good match for the potential buyer.

Social media, and its growing popularity as a marketing tool, has changed the approach a little bit but not completely. We take time to research the target market (usually) so we know we're targeting the right kind of people. And then we focus, at least for a while, on connecting, communicating, content marketing, providing value, being a resource, being an expert: all the buzz words of social media marketing. At some point, however, the need to sell becomes more important, and we make a shift from building relationships to selling products.

It's disruptive. We need to shift our whole approach, not just for the initial "relationship-building" part of the marketing process, but for the entire process.

Keep Pushing Demand

We need to speak the language of demand, not the language of sales. We need to focus on meeting the demand that's already there, not on selling the product that we happen to have. This is a basic tenet of copywriting, as explained by Robert W. Bly in his classic book on the subject, The Copywriter's Handbook. You don't just talk about what you want to sell, and how great it is. Instead, you

Get attention;
Show a need/demand;
Satisfy the need/demand and position product as the solution;
Prove your product can do what you say it can do;
Ask for action.

This method of selling focuses more on the demand as it exists in the mind of your potential consumers than on the product. That's key.

Language Matters

If you use the wrong language, you can talk all day long about the demand these consumers have, and how your product satisfies it, but you'll get nowhere. You have to understand how they talk about the demand, what they discuss about it. What are their keywords and phrases? Use the wrong language and they won't get it, because you don't get it.

From the beginning, base your relationship-building on how you can meet the demand. Doing so means that you don't have to suddenly shift into selling mode. From the first interaction, you're able to build a transparent relationship: "Hey, I'm here to provide what you need. I'm here to meet the demand."

If the demand is real (i.e., you've successfully identified both the demand and the people who have the demand), and your product does provide the solution, then the selling and buying will be a simple and natural part of this demand-driven relationship.

You don't have to start selling. All you have to do is keep providing the answer to the question, the solution to the problem, the supply for the demand.

This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Things Your Business Needs More Than Cash

Annie Mueller — Sat, 16 Apr 2011 15:57:20 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/6-things-your-business-ne...

Cash-strapped business owners can tell you their biggest, greatest, most-pressing need: cash. Right? Cash is essential. You've got to pay vendors, purchase inventory, handle the costs of overhead, invest in marketing, pay employees, maybe even pay yourself. Without cash, those are tough things to do.

But is cash the answer for a business that is struggling, either to make it (in general) or to make it to the next level, to make a profit, to increase the bottom line, to thrive rather than merely survive?

Seems like a simple answer.

But cash alone will not save a business, nor cause it to succeed. Small business owners need to possess not only a decent product, but the qualities required to take a product from embryonic brain state to action, production, and ongoing sales. That's never an easy process. Before you go in search of more cash, take a look at the other keys to business success

1. Product

We'll assume you already have one — or many — and it's the premise behind your business. You're selling widgets or making doodads or providing some sort of doodad consultation or widget-fixing service to other businesses or consumers. You've got a product. Is it the right product?

No enterprise can exist for itself alone. It ministers to some great need, it performs some great service, not for itself, but for others... or failing therein, it ceases to be profitable and ceases to exist. – Calvin Coolidge

2. Market

Your business without a market is merely a hobby. And the market "in general" won't do. You need a well-defined, understood, identifiable segment of the market at large. You need people who are not just interested in what you sell but who need it, who would have a very difficult time getting by without it, who depend on your product or service to make their own lives and businesses run. If you don't know who those people are, or if you can't find them, or if they simply don't exist, then your problem is much deeper than cash flow.

The absolute fundamental aim is to make money out of satisfying customers. – John Egan

3. Demand

If your target market truly wants and/or needs what you sell, then you have your demand. Be aware of latent demand, as well; in many cases, it can be more powerful than its obvious counterpart. If you have the shrewdness to find, identify, and pull out that latent demand, then you can proceed to show your target market how your business meets that demand.

The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. – Henry Ford

4. Action

You can talk great ideas, new products, new service levels, new formulas, what-have-you, all day long. There's a need for research, for brainstorming, for talking, and for generating ideas. But at some point, sooner rather than later, you have to settle on one idea (at a time) and go with it. Act on it. Make it happen.

But good decisions must be followed through with action. Without action, a good decision becomes meaningless. – William Clement Stone

5. Continuity of Purpose

It would be easier to simply say "purpose" here, but that doesn't quite capture the point. It's easy enough to have a purpose; in fact, it's too easy to develop multiple purposes which muddle your business priorities and leave you chasing one thing after another, giving none of them time, energy, or effort enough to fully develop.

...spasmodic, disconnected attempts, without concentration, uncontrolled by any fixed idea, will never bring success. – Orison Swett Marden

6. Completion

An idea half-done is no better than an idea undone. Your execution of ideas doesn't have to be perfect, but it does need to go all the way from beginning to end in order to profit your business. Profit. Catch that? That word, as you know, is related to cash. How much better to take your business ideas from Point A to the point of completion, where they can generate profit for your business, than to spend your energy on scraping in more cash from other sources?

Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion. – Thomas Hardy

In many cases, another influx of cash would simply enable you to keep leading your business haphazardly, rather than dealing with the real problems and plugging in the real keys to business success. If you find your business in constant need of another cash infusion from outside sources, stop and look at your business — and your leadership — and figure out what else your business needs first.

This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: