You must keep up with trends of getting and maintaining clients
Rigidity in the face of dynamic consumer needs can be tragic to your entrepreneurial endeavours.
A business has nine parts, but they have to be well-oiled. I mentioned that the first part of any business, is the customer segment and that a business exists to solve a specific problem for each customer segment. There is usually more than one customer segment being served by a business by the same organic product with very minor differentiation.
Take for example bread; some prefer brown to white and vice versa. Both are sold at the same location to cater to the unique preferences of the customer. The distinction of a market into market segments is the first activity any person wanting to engage in entrepreneurship must get right first because it defines the second part of the business – the suite of products and services, the delivery channels and the customer relationship management approaches which make the third and the fourth parts respectively. It defines the customer-specific needs which enables feasibility assessment in terms of sustainable demand for the product or its variations at the ensuing cost for that segment.
In (the latest article) we looked at channels, the mode by which the product is moved through key activities of the business -- the choice segment. The old business model was built around huge buildings usually located in specific centres where the customer segment was present and largely depended on the client going into the business premises.
In response to the Covid-19 pandemic, people have changed their approach to shopping and travel. During the pandemic, restaurant chains had to make deliveries to purchases of hot meals or close altogether. Post Covid-19 pandemic, more people have not only chosen to work from home, but have also gotten used to the idea of home delivery.
While the home delivery approach was building traction in sections of the market for certain products like pizza before the pandemic, it picked traction even for products like fresh meat which was largely bought at a physical location in person. An incubatee of The Entrepreneurship Center had a very difficult three months introducing home delivery only meet butchery in an estate then patronized by mainly generation X and retirees along Ngong road. The trends have since changed even among this older generation even though it is not a clean sweep.
Profiling customer segments along key features like age, gender, income (purchasing power), education, and other special or unique social behaviours that drive their consumption is essential also for identifying how to reach them with both the messages and the product. Business is no longer just the basic acquisition of space and capital to start in a physical location. It demands a deliberate awareness of the need to continue defining the customer segment consumption approaches to social environment changes and develop new features in the product, channels and customer relationship management.
The mode of delivery of the product has become a key component and also how to acquire and retain customers. You must have noticed the Menus shared by restaurants during the pandemic on social media and on their websites. Hitherto, these were considered proprietary information availed only in person and the products were supposedly customised. For the market segment eating pizza for lunch or dinner at home, delivery is usually by riders while the product information and payment options are online – otherwise called ICT-enabled distribution. For this reason, restaurants making pizza, will soon not require many seating spaces which was hitherto a key source of competitive advantage. Success will not measure by the number of times a seat is used but by the number of drops offs a rider makes in a defined route.
Defining, developing, and delivering value in the form of a suite of products to a market segment through client-responsive channels and acquiring and maintaining clients is changing rapidly. It is a new industry on its own requiring distinct competencies. As a young banker, I was an Account Relationship Manager in a blue-chip bank. We prided our methodology as top-notch, but just under twenty years later it is absurdly irrelevant. Therefore, as a business owner, keep abreast of business trends and build your strategies around the changing time to keep your ventures thriving.
Patrick Wameyo is a financial literacy coach at Financial Academy and Technologies, and an entrepreneurship coach at The Entrepreneurship Center EA.
Email [email protected].
