To attract the right customers, you need to learn to see trade-offs and their strategic implications.
Strategy is about making choices about what to do and what not to do.
And, those choices should go beyond mere survival or optimizing the status quo – they should help your business thrive.
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WHAT’S A TRADE-OFF?
A trade-off is an opportunity cost – it’s when you give up one thing to gain something else.
In strategy, when you choose to go down one path, you leave another behind.
That might sound like a bad thing – like you’re missing out on something. But, it’s actually a good thing. It’s clearing away the clutter, so you can focus on what – and who – really matters.
You might, for example, choose to focus on a particular type of customer, designing products and services around their needs. In doing so, you give up the opportunity to go after other customers with different needs.
Again, that’s good.
From there, you can more intentionally do things that resonate with your customer, aiming your marketing, pricing, and more to meet them where they’re at.
In other words, you can solve a more specific problem for them, deepen your relationship with them, and attract more of them.
So, how can you take your business there?
By making trade-offs to create a path that only you can walk.
SEE TRADE-OFFS IN ACTION
Let’s look at the furniture industry as an example.
Globally, in 2020, furniture was a $500 billion market. By 2027, it’s expected to be $650 billion.
There are hundreds, possibly thousands of different players.
In the United States, as consumers we can buy furniture from companies like IKEA, Target, Room & Board, Article, Pottery Barn, Richardson Seating, and Herman Miller – just to name a few.
Each of these companies made choices about who they serve and tailor their furniture assortment accordingly. For example:
Companies like IKEA or Target emphasize affordability. As a result, they’ve made trade-offs like having very simple designs and modular, do-it-yourself assembly.
Room & Board and Pottery Barn showcase quality and customization. They’ve made trade-offs like fewer SKUs and more options, colors, and fabrics.
And, Herman Miller designs with a very specific modern aesthetic. Their trade-offs stem from those design choices, so you can expect high quality materials and one-of-a-kind exclusive pieces.
In all cases, it’s because that’s what their customers are looking for – so they walk away from fulfilling other needs, creating a sense of clarity and focus for themselves and their customers.
As a result, their customers feel seen and cared for.
LEARN TO SEE TRADE-OFFS
Now, here’s the hard part. You’ve got to let go.
When you make a choice to do one thing, you really do need to stop any action related to the other thing – especially if you’re a Company of One.
You have, of course, limited time and resources. But, you also have limited mindshare. Don’t spread yourself thin by trying to be all things to all people. It’s a recipe for fast burnout.
Honor the choice you’ve made by saying no to anything that doesn’t support that choice.
Sometimes, that might mean stopping something you were excited about. That’s hard to do. But, it doesn’t have to be never – just not right now.
Naming the choice is the easy part – it’s just three questions:
- Who is your customer?
- Who is NOT your customer?
- And, what choices do you need to make to better serve them?
It’s making the actual choice – seeing the trade-off and confidently walking away – that’s the hard part.
Still, by defining your opposite, you can better articulate your position and stand out from the competition.
As always, let your customers be your guide.
Then, you can make trade-offs that reflect what they value.
So, what trade-offs do you need to make today?
ONE MORE THING
Starting and growing a business is not a straight line.
It can feel messy – it zigs and zags, it starts and stops. It can feel frustrating even for the most seasoned business owners. And, that’s ok.
It’s also an exciting challenge. It’s going to stretch you. You’re going to learn a lot – not just about business, but about yourself.
And, that’s why it’s worth it.