Steve Marr Blog

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Category >> Strategic Planning
Jan 26
2015

Understand the Cost of Customer Acquisition

Posted by Steve Marr in Untagged 

Every business needs to understand how much it costs to acquire a customer. Some don’t believe there is a cost. They think customers are like kiosks in a shopping mall; they don’t have to advertise to get customers. However, the high rent for kiosk space is part of the cost of generating a customer. If the rent is $2,500 and you obtain 1,000 customers, your cost per customer is $2.50. You need to determine if this cost to get one customer fits your plan.

Internet markets that pay per click can figure out how much they pay in advertising and determine the cost of acquiring a customer. If you sell a product with $50 profit, you may be able to pay $35 to $40 to acquire the customer. However, the less you pay; the better.

Jan 07
2015

Location Market Research

Posted by Steve Marr in Untagged 

Real estate investors know the value of location, location, location. Retail business owners also understand the value of location. Paying a specialist to research location is very expensive. Picking the wrong location is even more costly. When business leaders on a limited budget how ask me how to locate their business, I suggest they follow the Burger King system.

Jan 02
2015

How Do You Compete?

Posted by Steve Marr in Untagged 

You may believe that you compete for customers very well at every level. Often this is a myth. You need to establish your Unique Sales Proposition, or USP. You can read my earlier article here: http://bit.ly/1yodS7C. Generally, you compete based on price, quality or service; but not all three at the same time.

“Scott” was an extraordinary wood worker. He could take damaged wood furniture and antiques and make everything incredibility beautiful. I have never seen anyone provide better quality in furniture repair. However, he was expensive, 2 or 3 times more than others. And he would take his time so service was slow. If your dining room table was damaged, he would do the best job; but don’t expect to serve dinner on your repaired table next week. Customers who want a better price or faster service will go to his competitor.

Dec 31
2014

Entry Barriers to a Business

Posted by Steve Marr in Untagged 

I received a question from “Walt” who wanted to start a delivery service to elderly people. Walt thought he could target older folks who had difficulty getting out. My first question to Walt was “What would be the barrier to prevent competitors’ entering the market if you were successful?” This is a key question to answer when starting a business. The lower the barrier, the easier others can imitate you.

Nov 07
2014

Would You Give Up Equity For Startup Help?

Posted by Steve Marr in Untagged 

A new business tends to be short on cash. Perhaps the idea is great, but the owner lacks business skills or marketing ability. Many new businesses can’t afford the expense of hiring a marketing guru or business expert. 


One way to address this is to exchange business equity in return for a stake in your business. While this exchange may see seem counter intuitive, it could make an appreciable difference for a startup. For example, if the key to a startup is marketing; offering 10% ownership in your business may be attractive to an expert. The idea is to identify the skill and expertise you need, the one that requires time you don’t have.  Then, instead of paying cash, offer some equity in the business. Many owners may not understand the value others can provide, but the marketplace does.