The micro environment is everything that sits immediately around your business – your customers, competitors, suppliers and what I refer to as ORM: Other Routes to Market.
You’ve looked at the wider world or the macro environment, now it’s time to look closer to home or the micro environment and how these factors should help you define your marketing strategy.
You need to know what’s happening with your customers. Are they getting older, or younger? Are they spending less? Have attitudes changed and are you Marlboro when everyone is now smoking e-cigarettes? What are they doing and how is their buyer behaviour changing?
You may find you’re not making as much money or that certain products aren’t selling as well as they did. I worked with a travel company which had been running successfully for 50 years, but their customers had aged with the business, and soon wouldn’t be travelling.
They shifted their attention to the younger market, to see when people start to travel, particularly luxury holidays, and developed a suite of products for the honeymoon market. This was a way for them to pull in new customers who would one day travel with their families, and then on their own again.
Many businesses would prefer not to look at their competitors, but sitting down and doing this dispassionately is beneficial. Look at how they market themselves, what they offer, how they describe themselves and what message they’re projecting to the customers and if this translates into reality.
I’d also suggest you look at their qualifications and who the people that run the business are. You may be surprised by what you find out.
We often think our competitors are better than they are, when really, they’re just people who want to be in business.
Once you start to look at your competitors, you’ll see how you differ from each other. You may see they have strengths in one area and you have strengths in another, which could make for a great collaboration opportunity. They may have an in-depth knowledge of your target market, so don’t discount them. Your competitors speak the same language as you, and will have encountered many of the same problems.
Your competitors aren’t your adversaries!
But, be realistic about what your marketplace is like – is there plenty of work for everybody, or is it over-saturated and at risk of nasty tactics from unscrupulous competitors? Evaluate and choose the best course to navigate through it for your business.
Find any mentions of them in the press or online, and be objective. Your customers will also be looking at your competitors, and are looking to see how you are different.
Suppliers are a really great source of information, as they know a lot about the market. They not only supply you and your competitors, but others further afield. They are a link between you and the macro environment, because any changes coming will likely affect them too.
Many businesses get great referrals to new clients and key information from their suppliers. In some marketplaces, the suppliers are very strong and it’s they who set the terms, which is why relationships with them are so important.
Think about your own business and who your suppliers are. Are you trying to specialise and be the best in the marketplace, but find your competitors are using the same suppliers? In that case, you can’t differentiate that way, so you need to offer something else in terms of service delivery or the experience you have.
Are you worried your marketing isn’t working right now?
If leads and enquiries are drying up, you’re not attracting the right customers or you’re not making enough profit – it’s time to investigate.