We don’t own a car; if we did, it would spend most of its time accumulating bird poop in our drive-way.
Fortunately, there’s a ZipCar one street away from us. Zipcar is a car club, where you pay an annual membership fee to rent a car parked nearby on an hourly basis.
It’s more convenient than traditional car hire, where you have to travel to the local branch and rent the vehicle for at least 24 hours (not to mention confronting their scary insurance pitch). It’s the freedom of car-ownership without the hassles of ownership.
But ZipCar almost failed
With over 1 million members in 500 cities, the company disrupted the car-hire industry and was eventually bought by Avis. But this “overnight success” took many years to pick up steam. In their first year of business, only 73 members joined. By 2003, 4 years after launching, they had 6000 members and 130 cars across 3 cities. Growth leveled off and stagnated. ZipCar’s founder, Robin Chase, tried many initiatives to propel demand, but she was eventually ousted by investors.
Keys to the future
When the Scott Griffith came on board, a whole host of strategies were discussed: advertising, pavement and shopping mall sign-ups, publicity events, etc. After spending time listening to customers, Griffith realised the key to the future was density. For the Zipcar to be a true car-replacement service, the car had to be parked on a member’s doorstep. But at the time, members had to walk 20-30 minutes to use one. Apparently, that’s long enough to stop us from booking a car.
How demand took off
Instead of stretching their fleet of limited cars across more districts and cities, Zipcar consolidated the fleet to a few dense clusters of select urban neighbourhoods filled with their target customer profile – young, tech-savvy, environmentally-conscious consumers. They then launched colourful neighbourhood-specific marketing campaigns, like dumping a used sofa on the pavement with a sign that said You need a ZipCar for this. They reduced the walking time to the nearest vehicle to two minutes. This strategy catapulted the value offering to members. Demand took off.
Heartened by the growth spurt, Zipcar approached the deans of universities – densely populated communities with parking problems. These partnerships with colleges and universities provided a fantastic long-term growth trajectory; once students graduated, they would become customers in their own right.
What freelancers & new business-owners get wrong
Going hyperlocal was the key to ZipCar’s appeal and growth. Spreading themselves too thin to reach a wider audience stifled their ability to offer an attractive value-proposition. Going niche is also the key to your steady growth. But trying to reach everyone is an incredibly common mistake for new business owners and freelancers. It’s a strategy based on fear, the fear of missing out.
Take Facebook as another example. When it launched in 2004 it was exclusively available to Harvard students. Then it grew to other colleges around the country. Then to high-schools, followed by international schools. It wasn’t until September 2006 that it became available to the general public. Amazon started out selling books. They became the best at selling books online and today they sell everything. How many line items on your credit card statement are directed to Amazon?
Lack of clarity about your target customer makes new business owners spread themselves too thin; by juggling many different audiences, they end up not fully understanding or successfully selling anything. You might need to test to a degree, i.e. pilot your project or service. But even testing should be focused; pick one target audience type and fail fast. Or if you have happy customers, pick one customer type and focus serving more of them. Clarity clears a path to your potential customers and a more sustainable business.
Remember, if you talk to everyone, you’re talking to no one.
How to stand out and charge more
Telescope Targeting: perfecting your position
Down the road from us is Greenwich Park, one of the glorious Royal Parks we have in London. When you stand on the hill outside the gates where the Meridian line sits, you have gorgeous vistas of London, from the Docklands to the London Eye. Like anyplace with panoramic views, on top of the Empire State Building, outside the Sacre-Coeur in Paris, you’ll find a coin-operated telescope. When you look through the telescope, you no longer see vast landscapes of activity, but rather hone in on specific buildings, like the London Eye or St Paul’s Cathedral.
As you start out, you need to be as focussed as these telescopes with your customer targeting. When you reach out to everyone, you make yourself a small fish in a big pond. When you telescope target, you make yourself a big fish in a small pond.
Get crystal clear
The questions below will help your refine your positioning. It might be quite a hard exercise at first, but you’re not alone. I made many mistakes and had to take a step back and get clear on who I serve. It’s better to put in the effort now rather than wasting time on guesswork or working with the wrong clients – as I once did, and nearly did a few more times – which is not a good experience, because you end up hating what you’re doing. (And for those of you that have done this before, it’s a worthwhile exercise to revisit. After all, repetition is the mother of skill.)
Telescope Targeting: 4 questions to help you focus
- Pick one happy customer and write down what you know about them. Even better, call them and get to know them. Find out where they spend their time, online and off. If you don’t have a happy customer, pick one potential customer type, by demographic or job title.
- What’s a common pain or problem experienced by that happy customer? Eg. If you offer training or people services, you want to find out about issues with staff and company performance. Or if you of sell an app that saves time, you want to know about their productivity challenges.
- What solutions can you offer, while demonstrating credibility, integrity, with simplicity and authenticity?
- Where can you show results? For example, customer growth, volume of customer complaints, treasured memories from a special day, a noticeable difference in body etc.
What should you stop doing
When you first start out, you’ll find you’re often tempted to spread yourself too thin, for fear of missing out on possible new business. This is a recipe for disaster. You slow yourself down, reduce your competitive advantage and attract clients you don’t like working with.
- Which markets/types of customers do I need to stop pursuing?
- Which customers are impossible to work with or not worth helping?
Remember, when you’re talking to everyone you’re talking to no one. Lack of hyper-local focus leaves you open to getting lost in a sea of sameness, with competitors leap-frogging over you.
When you’re first starting out, saying:
“We help GPs in South-East London reduce waiting-lists and give delightful customer service”
“We help businesses reduce waiting-lists with our tech”.