“I want to be better than all my competitors.” This is a declaration I hear a lot from companies I advise on marketing and business strategy. It sounds like a valid and legitimate goal, but deciding to be No. 1 in your marketplace without a clear strategic market position can leave you spinning your wheels — and your cash — without great results.
Do you really want or need to be No. 1 overall, or would being No. 1 specifically at what you do best better serve your bottom line? Just as important, do you really understand who your true competitors are, and why? These are important questions when you are deciding where to invest and drive business. Trying to be all things to everybody can be expensive and does not guarantee you a good ROI. A narrower focus on capturing maximum market share of the things you want to be best known for could be much more profitable. Realizing you might just be your only worthy competitor is equally valuable.
Let’s steer back to that strategic market position (SMP) for a moment. Knowing your true SMP is dependent on deciding which pieces of the market — and their scale — generate the most profits and overall value. If selling large heavy pottery is a constant drag on your GMROI and your staff, then it is probably not a growth or SMP category for you. If you aren’t delivering on quality compared to local design and build companies on landscape installation services, you might hurt your brand. You might not be able to compete on price for annual color with the volume-vendor down the street, but your high-margin custom mixed color containers may draw customers from far and wide. I always feel that working to make the most money at what you think you do best — and feel good about doing it — is the best strategy.
Typically, your SMP and ideal customer go hand in hand. Knowing who your ideal customer is and what they value about your business will help you better analyze and segment the market at the product level. Low-price vendors attract low-price customers. Is that the market segment in which you want to be the best? Or would you rather command bigger margins based on a different value proposition?
Perhaps an easier way to think about your SMP is simply how many eggs you want to put in each market segment or category basket. A more clearly strategized SMP usually results in more eggs placed in fewer well-chosen baskets.
Too often companies start out trying to be “the best” by looking only outward for opportunities and solutions. More paid advertising and marketing can certainly help you build or retain market share, but your service and customer experiences need to back it up. It is really hard to be the best at what you do if your house isn’t in order. By that I mean if your internal company culture, infrastructure, protocols and products are a mess, then it’s going to be tough to ever be “the best” no matter how you try to market and grow.
When it comes to your SMP, it may also be time to clean house of products or services that are dead weight against your P&L. Too often, garden centers hang on to departments, categories, services or individual SKUs that just don’t turn enough or generate adequate margin. Why? Well, it can be scary to stop selling items you think your customers expect you to sell. Chances are that those poor sales reports are telling you it may be time to dump the bad apples and focus on the good ones. Getting rid of market segments or products that are not serving your brand can be incredibly liberating — and profitable.
Don’t cut corners
Growing smartly always requires that you take care with your cash and control costs, whilst simultaneously forecasting for future opportunities. Unfortunately, I too often see garden centers try to cut costs by excessively understaffing or underpaying staff. Rarely does this help a garden center dominate its chosen SMP. There are many smart ways to control costs via good buying and negotiating practices. But in a customer-facing retail environment, a poor investment in your staff will hurt you more than just about any other decision you make.
A rising tide really lifts all boats — as long as your boat does not have any unplugged holes. Trying to compete directly with all surrounding garden centers or big-box retailers on all things can leave you with more holes than you have fingers to plug them. Ultimately, when all the local garden centers in your area are thriving by “doing their thing,” it creates an engaged and energized consumer community that benefits everyone. If you have not exactly figured out what “your thing” is yet, there is no better time than now to get cracking.