Starting a business requires time and money. And for Black Owned Businesses it’s no different. Before you waste either of them it’s a good idea to Test your business idea to make sure its’ sustainable. And what exactly does that mean? It means doing the market research and analysis to ensure your business idea can make a profit for the long haul.
In order to achieve sustainability, black owned businesses must repeatedly reexamine their sense of purpose and make sure they serve it well. An authentic and inspiring purpose allows for:
- A constant, consistent sense of focus
- Emotional engagement both within the business and with its customers
- Continuous, pragmatic innovation
What’s your “unique selling propositions,” or “USP? What makes your product or service different from your competitors? I’ve heard many people give the response “Me” which may very well be true but unless you are a celebrity with a name that carries weight this mindset won’t get you very far.
When a business has a clear vision, it’s easier to create products and services of value. What is it you’re really selling? A cosmetics company owner said he sold hope. Take some time to really think about what it is you’re offering and it’s value.
If you want to create a scalable black owned business, you have to understand how crucial it is to build brand equity and emotional connections with customers. It’s those attachments that link customers to your products and will keep them returning to you. Building a brand is about developing and sustaining those relationships over time. It’s about the experience you produce for your customer. It’s about the convenience you provide and the problem you solve.
Here are some basic rules to help connect potential customers with your products and brands:
Choose your target audience: The surest road to product failure is to try to be all things to all people.
Connect with your audience: Make your audience feel an emotional attachment to your brand that’s grounded in confidence in your products.
Inspire your customers: A simple, inspirational message is far more influential than one that tries to highlight too many product features, functions, or ideas.
No amount of marketing can rescue a brand identity that isn’t fully formed. I encourage black owned businesses to take the time and make the investment to establish a complete branding strategy. If you don’t have a marketing budget Social Media is a way to start generating awareness among target customer bases. It’s not easy but with coaching and practice you can surely establish an audience of followers who’ll convert to paying customers.
Customer Acquisition and Retention
Acquiring new customers can cost an organization around five times more than retaining current ones. I believe this number is a little higher for black owned businesses. In fact, a 2% increase in customer retention can have the same effect as decreasing a company’s costs by 10%. To put it another way, reducing customer defection rates by just 5% could increase your profitability by 25% to 130%, depending on the industry. So once you get a customer you better work damn hard to keep them. This reminds me of a song my grandmother used to listen to “It’s cheaper to keep Her”
Successful customer retention starts with the initial contact a business makes with a customer, and continues throughout the lifetime of the relationship. A 10% increase in customer retention is roughly equivalent to a 30% increase in a company’s value for some industries.
Developing a sustainable Black Owned Business is the key to long term success.
Carla Buggs, CEO
Bay Area Black Market