As a small-business owner, strategy may be something you leave for the academics and business writers. However, it's not that simple. A lack of strategy may lead to never saying no, having no priorities and trying to please everybody—which is often a recipe for failure.
Lately, however, I've started to think about business strategy as a story. As it turns out, it's a quick and powerful way to be intuitively strategic.
Business Strategy as a Story
Imagine somebody who has a problem or wants something, finds your business and buys from you. Pretend for a moment that you're writing a story or talking to a friend about your company. Don't sweat writing or editing, just make it a simple story you can tell.
For example, a story for one business might be how Ralph buys organic ketchup off the shelf of a grocery store that carries organic products. Another business, such as a restaurant, might imagine the story of how Mary and Ralph choose a restaurant for date night. A company that creates apps might imagine the story of how Mary downloads an app that tracks business expenses.
Each of these stories includes several foundations of business strategy:
- Target market. Who has the problem your business solves? Who wants what you sell? How well do you define these people and distinguish them from the rest of the world? How well do you know them? How are Mary and Ralph ideally suited as customers?
- Product-market fit. Your business offering may be likely to do well when it matches the needs and wants of your target market. The more a business sets itself apart by focusing on specific factors, matching its offering to the market, likely the better. In the organic ketchup company's story, their customer Ralph doesn't want generic ketchup. The date night couple, Mary and Ralph, wants to avoid fast or cheap food when they go out for dinner. For the app company, Mary needs their app to track expenses easily, manage the information and export to an expense report.
- Getting the word out.These kinds of stories include noting the path these customers took to purchase. The ketchup may depend on the bottle packaging to make its pitch and the channel of distribution to get that package in the right place, in an organic grocery store where Ralph sees it. The restaurant probably depends on word of mouth, review sites and related mobile apps to get Mary and Ralph there for a meal. The expense tracking app probably depends on placement in the app stores, reviews and links to expense report software. The restaurant and the app may be both seeing a steady increase of the importance of amplified word of mouth in social media, where tweets and Facebook likes and customer sharing are extremely important, as well as a few key blogs, where reviews and comments are common.
Your business might have more than one story, but more than two or three may lead to losing focus and may get you diminishing returns.
Turn Your Story Into a Business Advantage
Use your strategic story to drive specific business decisions on pricing, product configuration and marketing messages and media. For example:
- The ketchup company might redesign packaging to make its healthy organic claims stand out better on the store shelf. Higher pricing may reinforce positioning on quality. It can look for new cold-press technology to appeal to more high-end buyers.
- The restaurant owner might use the story of a date night to revise its listings on Yelp and Google to highlight quality, calm ambiance and service. It can use the story of how Ralph and Mary search for a restaurant to beef up the website, making sure it's responsive to mobile devices and has a menu accessible and optimized for mobile use. It can resist the temptation to lower prices or offer 2-for-1 specials.
- The app company might focus development on easier export to spreadsheets or accounting applications. It could develop specific promotions in app stores and co-promotions with vendors of bookkeeping and accounting and related software.
Why and How These Stories Work
Strategy is focus. Strategy is often about who isn't in your target market, and what your business doesn't offer. It's a lot like sculpture, in which doing everything for everybody is the original block of marble and a focused and effective strategy is the finished statue.
For many business owners, focus can be hard because it means saying no. We want to do everything and please everybody. But trying to please everybody may become a key to failure, not success.
This article was originally published on February 5, 2015.