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Guiding Principles to Anchor Your Retail Business Decisions

by | Aug 5, 2022 | Blog | 0 comments

The main retail principle to guide your decisions is the value proposition you provide your customers. The customer is the focal point of your retail operation, and everything you do must revolve around serving them. When in doubt, remember the customer came to your store to solve a problem, and it is your job to solve it. Here are five principles to help reinforce your business’s purpose:

    1. What problem(s) do our products solve?
    2. Who is the product intended for? (Target Market)
    3. What valuable benefits do our products and services offer? (versus alternatives)
    4. How do the benefits of our products and services solve the customer’s problem?
    5. How is our solution different from the competitor’s?

Guiding Principle: these five questions create the value proposition you provide to your customers and use to lead your employees.

I) What problem(s) do our products solve?

A product or service exists to uniquely solve a problem, either literally or figuratively. If it doesn’t, then you shouldn’t be selling it. A successful retail business must sell products that solve a problem.

II) Who is the product intended for? (Target Market)

For your business to thrive, it is vital to know who your customer is. Knowing your customers will help you target customers willing to buy your products or services. Targeting consumers is a much more effective and affordable way to reach your customers and attract business.

A customer survey conducted by AboutAds asked shoppers if they like to see online ads for random products or products targeted to their interests:

  • 40.5% of respondents preferred ads that targeted their interests (AboutAds)
  • 27.6 % of users said that they were content with seeing either. (AboutAds)

When you don’t define who your customers are or don’t know how to identify them, your marketing efforts are doomed to fail. Without a target audience, marketing campaigns can’t address pain points, let alone talk about all of the value-added benefits your solutions can provide.

“You don’t want a product that attempts to solve 50 different problems, or else it probably won’t do any of them very well.” (Bear Fox Marketing)

In sum, businesses don’t have the time or resources to reach a generic audience with a product message. Moreover, the effectiveness of a targeted advertising campaign depends on the relevance of the audience. Behavioral data show how consumers are receptive to relevant product promotions.

Guiding Principle: identifying the target market is essential for any retail company to execute a successful marketing plan.

III) What valuable benefits do our products and services offer?

A product benefit is a value that customers realize from the solution your product or service provides. They are what a consumer hopes to experience or achieve when they use the product. Benefits are actual or perceived.

  • Actual benefits: include the functional performance of the product, innovative design or cost-effectiveness
  • Perceived benefits: can include more vain constituents such as a product’s trendiness, the image it engenders, or brand reputation.

Benefits are the outcomes, or results users experience using your product or service. In marketing, it is an accepted reality that customers are generally more interested in the functional benefits of a product over the specs, details, or features.

IV) How do the benefits of our products solve the customer’s problem?

 “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.” – Theodore Levitt

Imagine each customer you encounter as having a problem that needs solving and that each solution requires a USP (unique selling point). In addition, think of each product as a “solution” to a customer’s problem.

This is the reason why customers choose your company over rivals. Defining your business’s USP effectively differentiates your products and services from competitors and allows your company to stand out.

A USP can be any benefit, feature, or component that solves a customer’s problem and influences their decision-making:

  • Improves communication
  • Reduces time to completion
  • Enhances the gathering and managing of information
  • Eliminates mistakes
  • It adds fun to the experience
  • Saves time and money
  • Increases capacity, efficiency, and productivity
  • Healthier and safer than the alternatives
  • Highest Quality, quality work

Guiding Principle: remember that the “solution” is the benefit, and the benefit is what the customer will ultimately decide to buy. Hence, rather than making the product the object of a sale, focus on how the “solution.” When a customer has a problem, selling them a solution makes more sense than selling a product.

V) How is our solution different from the competitor’s?

Differentiation is what makes your retail business operation stand out to your target audience. It’s how you distinguish what you sell from what your competitors do, and it increases customer loyalty, sales, and growth. Focusing on your customers is an excellent start to successful product differentiation.

There are many ways to differentiate your business operations from your competitors; each strategy provides advantages depending on the aims and core values you intend to project. The top five differentiation strategies are as follows:

  • Price differentiation: is a pricing strategy that charges different segments of customers altered prices for the same products or services.
  • Product differentiation: a strategy that allows the retailers to contrast their product with competing products in the market and emphasize the unique aspects that make theirs more appealing.
  • Distribution differentiation: allows retailers to expand sales potential by getting products in front of more potential clients. Or, Modifying practices to increase efficiency and reduce cost.
  • Image differentiation: a differentiate strategy where a retailer creates a unique image or brand personality; examples include: using symbols, semantics, atmospherics, moral values, etc.
  • Service differentiation: A strategy wherein the retail outlet has an innovative way in which a company provides certain services to its customers via employee training programs. (diverse backgrounds)

Guiding principles: differentiation your business from competitors appeals to consumers and has competitive advantages that help increase market share.

The customer should always be the focal point of your retail operation, and everything you do should revolve around enhancing their experience. When in doubt, remember the customer came to your store to solve a problem, and it is your job to solve it. These five guiding principles will help reinforce your business’s value proposition and keep you on track when making business decisions that affect your customers.

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