Category Archives: Customer-focused market research

Your business is meaningless without marketing and sales

Marketing and sales go hand-in-hand and are the foundations of revenue for your business. Do not put off marketing because other activities are more important. They aren’t. If you’re not marketing and selling, you’re not:

1. Bringing in revenue
2. Getting on the radar of revenue-producing clients
3. Showing investors you’re serious about selling your services or products

And for 4 other tips check out this post from A Billion Entrepreneurs:

http://www.abillionentrepreneurs.com/what-are-the-5-things-every-entrepreneur-should-have-to-be-successful/?utm_source=Vocus&utm_medium=email&utm_campaign=info%40abillionentrepreneurs.com&utm_content=ABE+Monthly+Newsletter

Lifestyle companies… we are the 99%?!

Lifestyle companies are, as partially defined by Wikipedia, businesses that are established and run by their founders with the primary aim of sustaining the founder and, secondarily, those who work for the founder. Wikipedia says that the lifestyle owner wants to sustain a specific level of income that will give the owner a basis on which to live a particular lifestyle. I think the definition is broader than that though. A New York Times article offers other definitions: http://boss.blogs.nytimes.com/2011/01/24/is-the-term-lifestyle-business-an-insult/?_php=true&_type=blogs&_r=0. And here’s another question: at what point is a lifestyle company called a privately held company (one that does not have shareholders, or does an IPO)? Mary Sullivan, a blogger, offers still another point of view on the subject: http://www.allbusiness.com/business-planning-structures/starting-a-business/3878259-1.html

I also believe that lifestyle companies make up a large percentage of the tax base…after all, lifestyle companies don’t have lobbyists or have the kind of money it takes to wield enough power to get tax breaks for themselves.

As I’ve written about Natori, lifestyle, or privately held, companies have the advantage of being able to dictate exactly what the owners want to do with it. This includes sustaining a high level of quality, ethics, etc. This is important because it’s directly related to the owner’s vision. I’ve seen lifestyle owners customize their products for clients – still another advantage. Lifestyle companies also offer the owner the potential for a lot of individual freedom and flexibility in their lives. Most companies who I come in contact with at the entrepreneur and other courses I’m involved with (Fast Trac at Levin Institute, Licensing and Design Entrepreneurs NYC Mini-MBA program at FIT) mentoring (Lang School of Entrepreneurship at Columbia University and Philadelphia Fashion Incubator), and Silver Lining are lifestyle companies.

So while lifestyle companies are portrayed as “unglamourous” (meaning no IPO, no high visibility in raising funds, etc.) in the press and in certain communities, like Silicon Valley, Silicon Alley and the Route 128 corridor, they can often be a wise business decision and a road to success for the entrepreneur. Here are some other opinions along the same lines.
http://www.forbes.com/sites/theyec/2012/09/21/7-reasons-most-people-should-build-lifestyle-businesses-not-startups/
http://www.washingtonpost.com/national/on-innovations/dont-get-tangled-in-the-ipo-yarn/2012/06/11/gJQARtb4UV_story.html#.T_nk1C5E5Ag.twitter

What’s your opinion?
#lifestylecompany #startups #entrepreneurs #lifestylebusiness

Natori: A Continuation of an Appealing Apparel Story

Natori: A Continuation of an Appealing Apparel Story

Continuing from the last entry on Ken Natori’s visit to my licensing class (CEO 035)
, here are more traits that distinguish Natori.

One is customer service. I emphasize this in all my entrepreneur classes and to my clients. Customer service is the most cost-effective, and probably least expensive way to differentiate your company from your competition. It is so important, and like marketing, often an afterthought to everything else a busy entrepreneur or business is focused on. But here’s the big secret: Customers remember customer-service! Often customer service tips the scales in favor of the company providing it. Whether it’s a sole proprietor or a Fortune 500 company.

Natori has multiple licensees but when a customer calls customer service, they do not know which product has been licensed – nor should they. This is due to keeping a unified brand within the fashion house. Customer service at Natori is trained to answer all questions about all products, irrelevant of the source (licensed or in-house). This makes for a seamless experience for the customer – how it should be.

Another distinguishing characteristic at Natori, is that Josie, the founder, has a Wall Street background, as does Ken. The result is that they understand first and foremost that fashion is a business. And they treat the company as a business. Ken emphasized this point when he spoke to my licensing class, in order to separate Natori from typical fashion houses which are often known for high drama. The culture at Natori, while still high fashion, is much more sedate and drama-free. Sounds like a nice place to work.

Which leads me to my closing point: Natori is currently looking for a junior person to work in their licensing department. Know anyone? Are you that person? If so, Ken wants to hear from you: ken.natori@natori.com

Natori: An Appealing Apparel Story

On Monday, May 5, Ken Natori guest spoke at my FIT Licensing class (by the way, you don’t have to be a fashion designer to take this class). He generously spent an hour and a half talking about his company, founded by his mother, Josie Natori, and answering questions on all aspects of licensing posed by the class.

First – what is the Natori brand:

Natori uses its brand equity to build East-meets-West lifestyle brands including ready-to-wear, accessories, bedding, towels, fragrance, home fragrance, swim, eyewear, and more

Their three-pronged brand strategy includes:
• Josie Natori / Natori http://www.natori.com/ (luxury, heritage)
• Josie http://www.natori.com/JosieByNatori (contemporary)
• N Natori http://www.natori.com/NByNatori (accessible to all women)

In a world of mergers, buyouts, etc., Natori is one of the few companies that has retained private ownership. This has allowed them, among other things, to maintain their own vision and control over their products and licensing procedures.

There were two things Ken brought up that really left a strong impression on me and the class. The first was related to his business ethics. When asked about who his licensees are and how he selects them, Ken brought up a simple, but powerful, equation: Partner over Product. This means the people he does business with are the most important element of licensing. By choosing the right partner, Natori is establishing a long term relationship with each licensee. This philosophy is similar to putting together a management team: licensing is like a marriage. You are in it for the long-term. Licensing is an ongoing dynamic relationship that, if done well, and Natori does it well, goes on for years. Translation: a win-win relationship that grows business (for both the licensee and licensor) while maintaining the brand.

Because of Natori’s relationship with their licensees (win-win and long term), the licensees have an in-depth understanding of both the company and the brand. This fosters on-target contributions for new product ideas as well as new vertical opportunities.

The other thing Ken brought up that left an equally strong impression was also related to business ethics. Natori built and owns its own manufacturing plant overseas. Not only does this make business sense and allow the company to keep control over the quality of the manufacture of many of their products, but equally, and some would say more importantly, Natori controls the circumstances and pay of their overseas employees. This methodology completely sidesteps the human rights issues (aka sweatshops) commonly found in overseas garment manufacturing. As a result, Natori’s stance makes them a green company by virtue of their humane treatment of their employees.

My next post will cover more elements that distinguish Natori from its competitors

Are you a successful business?

Three of the most important things startups need to focus on / demonstrate if they are raising money, want to grow or just plain want to be successful:

1. Gaining customers (or if no proof of concept then a list of qualified customers)
2. Showing they know how to grow their business
3. Demonstrating profitability and ROI

These points may sound easy to achieve and you may be saying to yourself, ho hum, I don’t need to read further.

Point number 3 – Demonstrating profitability and ROI. A lot of startups get lost here. They don’t realize that you have to invest/spend money in order to make money – Lie #4 – I have to show a profit before I can market. Investors (and actually the company owners should feel this way too) are looking to see if you’re profitable or when you are predicting profitability (break even and beyond). And tossing some money out willy-nilly at marketing efforts will never bring ROI into your company…marketing is a strategic exercise that requires thought and planning and, well, strategy.

Here’s some definitions and formulas for calculating ROI and profitability:
http://www.dbmarketing.com/articles/Art129.htm

Are you a successful business? Part 2

Three of the most important things startups need to focus on / demonstrate if they are raising money, want to grow or just plain want to be successful:

1. Gaining customers (or if no proof of concept then a list of qualified customers)
2. Showing they know how to grow their business
3. Demonstrating profitability and ROI

These points may sound easy to achieve and you may be saying to yourself, ho hum, I don’t need to read further.

Point number 2 – showing you know how to grow your business is key to not only getting funding but to keeping your business healthy. This is something that many startups and small businesses don’t focus on. They say cash is king and “they” are right. Sometimes companies become very successful very quickly and can’t handle it. Prepare for growth. By managing your cash flow you can set goals to grow your business, manage cash on a monthly basis and get a clear picture of what’s going on in your business. Make sure you understand all the financing options available to you – traditional as well as alternative and invoice factoring.
Don’t put your entire business at risk because of something that’s easy to plan for and track.

Here’s some interesting related points:
http://www.alleywatch.com/2014/02/5-red-flags-of-startups/?utm_source=AlleyWatch+Daily+Pulse&utm_campaign=c1ae92d926-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_e01c347085-c1ae92d926-62886025

Are you a successful business?

Three of the most important things startups need to focus on / demonstrate if they are raising money, want to grow or just plain want to be successful:
1. Gaining customers (or if no proof of concept then a list of qualified customers)
2. Showing they know how to grow their business
3. Demonstrating profitability and ROI

These points may sound easy to achieve and you may be saying to yourself, ho hum, I need read no further.

Point number 1 – gaining customers is something that many startups and small businesses don’t focus on. They fall into my Lie #1 – If I build it, they will come. Investors (and actually the company owners should feel this way too) are looking to see where your market is – are you marketing? And startups, even marketing startups, often get lost in this space. Ask yourself: Would I invest in a company that can’t show me their market? The customers lined up to buy the product as soon as it’s available? A list of beta-testers? ANY INTEREST AT ALL?

More and more I’m seeing startups and small businesses flounder in this area. Forget for the moment Michael Moore’s crossing the chasm…these businesses aren’t even getting the early adopters. Take heed and show the market interest.

Here’s some interesting related points:
http://www.alleywatch.com/2014/02/5-red-flags-of-startups/?utm_source=AlleyWatch+Daily+Pulse&utm_campaign=c1ae92d926-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_e01c347085-c1ae92d926-62886025

Is big data* changing the need for focus groups?

Recent articles suggest that there is so much information being gathered about customers and spending and everything else you can think of, that the need to do traditional market research is starting to fall by the wayside. Data will give you all the information you need to predict consumer actions.

As I noted in my recent post about consumers using Amazon and other sources to comparative shop for price and quality, features and benefits, big data still reports historically on what consumers have done, therefore, you are looking backwards to predict the future. Yes, I know, history repeats itself but when you’re selling next seasons’ clothing line, you might want to reconsider consulting the past. And I agree that focus groups and other agency/consultant and client pre-conceived ideas put in front of customers should fall by the wayside (after all, a focus group asks the customer to react to YOUR ideas, they don’t ask what the customer wants).

I’m sure if you are a huge corporation, having access to all this data must be comforting. But it’s still all seen from the perspective of the market and not the customer. I believe that nothing is better than asking your customers what they want and how they want it. That’s a predictive, not historical, approach. I’ve done it for big corporations (one had a return-on-investment of 1,000%) and I’ve don’t it for solopreneurs (one had a return-on-investment of 60%). I suggest you do it for yourself. Get out there and poll your customers directly. Mimoona, which is a new crowdfunding tool (http://www.mimoona.com/?reffID=4299), allows your customers to have a vote on your next seasons line – and it’s not an idle vote – they vote with their credit cards (hopefully Mimoona is still in business as of this post).

*Big data is a term coined for the collection of data that comes in such large volume and in groupings, that it can’t be handled by traditional methods. The value of mining big data, is that enables one to see connections on a larger scale than ever before, as well as see connections between things that were never before available.

Are you still the sucker you used to be?

New research was just released that demonstrates a big shift in how consumers buy and what influences their purchase. Traditional ads no longer have the same power to shape consumer opinions as they once did. Amazon (the ultimate cost and quality comparison, along with others) influence consumers more than ever. The studies were based on the “compromise” effect – (see NYT article below for the full story) are probably now saying to yourself, ho hum… and why is this news? Well, it took a while for the establishment to document what most of us already know and practice organically. However, some of the results of the study suggest that digital feedback in the digital world allows marketers to see what works and what doesn’t – what messages are influencing customers and which ones aren’t. And they can make adjustments accordingly…and very quickly. This is all very well and good, and excellent support (although the writers and researchers don’t see it from the customers’ point-of-view, so they are still missing the point) for my position that customer-focused information and insight right from the beginning…pre- advertising/marketing/PR efforts and spending, is more valuable than measuring what works after you’ve spent all that time, money and effort and then correcting it.
http://www.nytimes.com/2013/12/08/business/theres-power-in-all-those-user-reviews.html?smid=pl-share

Sandra Holtzman teaches Licensing at FIT, is a Kauffman Institute certified Fast Trac facilitator at the Levin Institute, and teaches MA level Marketing at NYU.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

What’s the connection between marketing and intellectual property?

Here’s an important one:
Marketing, and branding are essential foundations for creating a successful business. That’s why it’s crucial to protect your intellectual property. Not just patents, but your name and your company’s name as well. That’s what goes into creating your company or your personal brand. It’s what tells your customers that everything that comes from your company can be counted on to deliver the same quality over and over, even if it’s a different product. You come to expect the same quality, service, and experience at every Starbucks you walk into no matter what city, state, or country. Can you imagine what Starbucks would have had to do to re-name, re-brand and essentially re-create itself if, say two years into the company, another company came along and said, “hey, we have that name. And we have it registered as a trademark three years ago.” That’s exactly what happened to a client of mine. After we created a beautiful logo, corporate ID package, website, sales sheets, a brochure, and convention panels, (all of which takes time, costs the client money, and wound up getting serious recognition for their brand) another company came along and sent them a cease and desist letter claiming their trademark rights. It turned out that my client, fortunately, had filed for their trademark before the challenger. Thus, it was the challenger that had to go through that whole long process of rebranding.

It’s a lot more time, energy, and money consuming to have to stop using a name or title, etc. than to do a trademark search to begin with.

Here are some other points of connection between marketing and intellectual property offered by Sharon Toerek:
http://blog.traklight.com/why-marketers-should-care-about-intellectual-property

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing http://www.amazon.com/gp/product/159079107X?ie=UTF8&tag=holtzmacommun-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=159079107X