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Polarization: How to attract the right customers, while keeping the ‘’wrong’’ ones out

With the fast-changing customer landscape, incumbent brands are at risk of being left behind.

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Customer, business, Polarization: How, attract, right, customers, ‘’wrong’,’ ones, out, A guide to identifying your profitable customers and improving your sales (1), customers, Customer Service: 9 ways to go from zero to hero in no time, How to implement customer feedback that will skyrocket your business growth

Customer: Digital disruption is rewriting the rules of business and competition. With the fast-changing customer landscape, incumbent brands are at risk of being left behind. The alarming truth is that if you simply continue to do the same things that brought you success in the past, your business will most definitely fail. Conventional assumptions about value creation are becoming increasingly flaky and unable to deliver continuous profitable organic growth.

Having a brand that targets everyone is like not having a brand at all. Wide-eyed, rookie business owners tend to think that everyone in the world who has any use for their products or services is their potential client. Driven by this fallacy, they try to make everyone like their brand by saying all the right things, without ever alienating any single person. And that’s precisely where they go wrong.

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Even looking back just five years ago, the customer landscape is so different. Back then, the majority of customers were looking for a balance of convenience and advice. But not anymore. These days, customers have polarized into two very different camps:

Some important tips for companies in view of customer Service Week 2019, Polarization: How to attract the right customers, while keeping the ‘’wrong’’ ones out

Transactional customers

At one end of the spectrum, you have transactional customers who know what they want. They buy on price and convenience. To them, you’re a commodity. It’s very much an arms-length approach.

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Consultative customers

At the other end, you have consultative customers who value their time and are happy to invest time to meet with you. They want advice to help define their problems. And they want hand-holding. For them, it’s all about expertise, the relationship, and trust.

[READ MORE: Steps to developing a growth plan for your business]

Specific value propositions

So instead of servicing the middle ground, your overall growth planning needs to accommodate and reflect the shift in customer buying patterns so you can build strong, differentiated customer experience.

Whether you serve one group of customers or both, you need to transform your business to meet new customer expectations. And this means creating specific value propositions, messages and communications for those customers. Your approach to consultative customers’ needs to be different from how you service transactional customers. Customers demand relevant value propositions that meet their individual needs and preferences.

One side demands highly relevant specifically targeted value. The other simply wants good enough value at a low price. And if you don’t give it to them, they’ll simply seek out companies that can. That said, it’s worth noting that a transactional customer can evolve into a consultative customer when the need arises, and vice versa. Part of your growth planning is working out how you will serve them.

[READ ALSO: Why having a growth plan is important for your business]

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No middle ground

Whatever you do, don’t try to satisfy everyone with the same approach. Customers have moved from the middle ground. If you continue to service this space, you’ll soon be servicing no-one.

Why you need to keep certain people out of your business

Product businesses with no maintenance and low customer service needs may never come in touch with the majority of the people who buy their things. Think big retail brands like Unilever, Coca-Cola, Levi’s, etc. You get into the store, buy your thing, consume it shortly afterwards, and never look back again. Customers contact you only if they feel you’ve delivered a sub-par product to ask for a refund.

For service businesses and product businesses with high-touch customer service, it’s a completely different story; we remain in contact with the client for the entire duration of the project, and often even for months afterwards.

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[READ ALSO: Why having a growth plan is important for your business]

The client-professional relationship in this type of engagement is intense. You spend a lot of time talking, brainstorming, debating, presenting and supporting. Every interaction has potential for things to go wrong:

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  • Miscommunication and misunderstandings
  • Difference in expectations
  • Huge variation in client’s knowledge of your industry
  • Unclear responsibilities
  • Different standards of politeness and professionalism

The entire process is riddled with traps, and it doesn’t take much for things to turn south. In time, you’ll learn what types of people you play with. From the first email interaction, it will be clear as day whether this person is your Ideal Client or a Client from Hell (or anything in between).

Branding serves two purpose

Attracting the right kind of clients, and pushing away the wrong ones. We’re all different, and our tastes in friends and acquaintances differ. It’s the same with clients: they’re the people you spend a big chunk of your day with, and of course, you want this time to be as enjoyable as possible.

What is polarization?

Polarization is the effect that happens when you have a strong brand. Different people respond differently to a strong brand message: some love it, while others hate it. If your audience is just silently nodding their head, not responding at all, or ignoring you, this means you have a weak brand.

If you get a lot of positive responses to your marketing efforts, and a few critics or haters here and there, this means your message is strong, and you should keep up with what you’re doing. Having critics is a sign of a strong brand

If you don’t have any, this either means that you have a weak brand, or not enough people know you exist. Polarization is good. Don’t water yourself down for your clients. Be as picky with your clients as you are with your friends.

Some important tips for companies in view of customer Service Week 2019, Polarization: How to attract the right customers, while keeping the ‘’wrong’’ ones out

In summary

You can’t make everyone like you. The pressure of being liked and respected by every single person in the world is making you have boring and unremarkable branding and marketing decisions. Focus on the audience that really matters, and ignore the rest. Stand out and own your quirks.

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Your brand answers your client’s question: “Is this business right for me?” Make sure the answer to that question comes out loud and clear.

 

Patricia
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Investment Tips

5 things you can do to attract equity funding for your business

Equity financing is a reliable funding option.

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5 things you can do to attract equity funding for your business

One challenge that is peculiar to all Micro Small and Medium Enterprises (MSMEs) is that of funding. Of course, the level of challenge depends on the size of the business and the plan that needs to be executed. It is even more so for start-ups looking for funds to bring their business ideas to life.

To solve this challenge, entrepreneurs and business managers explore several sources including applying for loans, grants, partnerships and so on.

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Equity financing is a reliable funding option. It basically involves giving out some equity or ownership in your business, in exchange for capital. This could come from friends, family members or potential business partners, and it is often aimed at raising money to pay short-term bills or financing long-term expansion plans.

READ ALSO: COVID-19: Abuja Sheraton suffers 88% drop in revenues

Recently on the weekly Nairametrics “Business Half Hour” with Ugodre, Tokunboh Ishmael, Co-Founder and Managing Director of Alitheia Capital, discussed the topic “Private Equity Funding for SMEs” in detail.

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Among other things, Tokunbo gave some pointers as to how business owners could attract the right equity financing for their business options. The points summarized below tell you what potential equity finance partners (individuals or partners) look out for.

READ: WARNING: Why you should avoid investing long term in Nigeria’s stock market

Management (Who is the manager?)

Any company or individual who puts up money for your business, in exchange for equity, is definitely concerned about the management.

They want to know if the manager of the business has had any experience managing a similar business before. This is considered a form of apprenticeship and it is expected that whatever knowledge gained would help make you more efficient in dealing with issues that may arise in the course of the business.

READ MORE: UK’s CDC Group invests $39.2 million in West Africa

Does he have the requisite educational background? It does not always take someone with a Masters in Business Administration (MBA) to grow a successful business. But that MBA degree could suffice, especially when you do not possess any other relevant experience.

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Do you have the relevant track record? What happens if you have overseen a business which eventually went bankrupt or crashed due to management problems? Does this make the Equity fund partner more or less willing to put money into the business? Obviously not!

Some people can wake up and be successful entrepreneurs at first try, but this is not usually the case. Most will go through years of rising and falling, or working under others to gain the relevant experience of running a business.

Management is a critical point that any company or individual will look at, when you approach them with the offer of equity in exchange for funding.

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READ ALSO: Between loan and equity funding, which is best for startups?

Opportunities (What opportunities does it bring to the investor?)

Every business idea is an attempt to solve a problem. But what separates successful business ideas from others is that there is something unique about your solution.

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First identify and understand the problem you want to solve, and from there work out a sustainable business solution. Every equity investor will be concerned with the uniqueness of your solution. Is it peculiar to you? Or is it something that everyone else is doing?

If your business idea has an easy entry point, meaning your idea is not unique to you, it would be difficult to get equity funding. Why? The potential investors already understand that you would soon have to deal with serious competitors who might end up doing what you do even better.

READ MORE: Digital economy: How to move your organisation from ‘surviving’ to ‘thriving’

If your business idea shows a potential to make investors part of something big and unique, then you are more likely to get the funds you need. No company or individual wants to invest money in a business idea that will soon be drowned by competition.

You may get some sympathy funds from family members and maybe friends, but not any significant sum that will take you far.

ROI (How soon can investors get returns?)

Returns on Investment (ROI) are a key consideration for any investor (except perhaps charity organisations).

An investor’s concern with returns can best be likened to a retiree’s concern with pension. It is a most sacred topic and in fact, one of the first things they want to find out before putting in their money.

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Based on your business idea and model, do I have to wait a year, two or three years before getting any returns?

A quarter may be too short to expect returns, but maybe three years would also be too long to wait. It all depends on your business venture, and of course, the investor’s plans. If he has plans to start channeling the returns into other ventures within six months, then a two-year wait would not be for that investor.

READ ALSO: Google’s advertising revenue plunges

Returns are not always financial, they could also be social. If the equity company is one that is more disposed towards a certain sector of the economy, say tech or agriculture, then the success of the company brings not only financial returns, but social returns to the company.

This is something you should also look out for before approaching any company for equity funding. You do not want to approach a company with an agricultural business idea, when the company is more disposed towards technology or education.

Ability to scale (Is the business expandable and replicable?)

A private equity partner is also concerned about how soon your business can expand, and how replicable your strategy is. Can it scale up?

Do you have a business idea that is so built around you, that it cannot function without you? Do you have a business idea or structure that will likely crumble if you die? Do you have a process that can be replicated?

The investor wants to know for sure that there are growth and expansion potentials. There is a need to be sure that the business idea you have is not one that can only remain confined to your bedroom. They want to know that you can move from offering your services in one state to serving several states and even the global community.

READ: Why you should consider selling Bitcoin now

Why is this even necessary?

Because, it affects how attractive the business will become to the next level of investors who will take over from the private equity investors. This leads us to the next point they consider.

Exit potential (How can they sell out their equity and exit the company?)

Private equity investors are often not interested in taking over your business from you. Their aim is to bring in money for you when you are starting up, provide you advice and partnership, and sell out when it grows. They are not interested in having investments in different sectors of the economy. This explains why they are often concerned about the exit potential in your business.

Is there the likelihood that we can exit sometime in the future? Or do we just invest and get stuck? How attractive can this business become for the next level of investors – the institutional investors who will come in to own the business with you and stick to the end?

One of the most frightening possibilities to the private equity investor is that when he is ready to exit, there is no one to buy in and take over. So you need to answer the question – how attractive is your business idea to investors, and what is the exit potential?

If all five questions are dealt with satisfactorily, then you are well on your way to getting a good private equity partners to provide you financing for your business.

Patricia
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Where to invest N1 million right now

Financial and investment experts tell us where to invest a million naira today.

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As financial markets around the world begin to settle down in Q3 2020, despite the resurgence of the rampaging COVID-19 pandemic, Nairametrics interviewed some investment experts, entrepreneurs, and corporate heads, both within the country and in the diaspora, asking for their opinions on what assets they would invest in if they had N1 million.

Their responses were as interesting as they were varied—ranging from buying stocks to investing in treasury bills, BTCs, Nigerian Stocks, and even agricultural assets.

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Peter Omoregie, CFA Head of Proprietary trading at CardinalStone Partners

If N1 million is up to 0.5% of my net worth, I will invest in fundamentally sound stocks; gives me a good hedge against the rising inflation.

READ ALSO: 6 easy steps to securing a financially balanced future

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If N1 million is all I have saved, I will invest in TBILLS, because I can’t take the risk – I have less ability even if I have the willingness. If one million is 0.05% of my net worth, I may just invest it in Bitcoin – I don’t mind losing it. It’s subjective.

Oladayo Oladele, France-based computer engineer, COO Feldel Gas Limited

I will invest N400,000 in FGN short term bonds because of the less risk associated with this option. The rest will go into shares with sound fundamentals such as Tier 1 banks (GTbank, FirstBank, and Zenith Bank) not forgetting blue-chip stocks like MTNN and DANGOTE.

What comes to mind at first is “invest in small business,” but due to experience, most small businesses lack enough structure to give appropriate ROI. I would rather choose investment options with low risk, even though they give fewer returns.

READ ALSO: Silver surpasses three-week high, joins Bullish momentum

Temitope Busari, CFA, Treasurer of a leading consumer finance institution in Lagos, Nigeria

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When it comes to investing, I’m always quick to note that it’s never a one size fits all approach. It typically depends on the individual’s preferences; risk appetite, short to long term obligations, financial goals, etc. Is this money you can afford to forget for the next 5 years or would you be needing it for rent next year?

Personally, if I had an extra N1million in investment capital today, I would convert it to USD and invest in global stocks. At only about $2,500 it would be a welcome opportunity to cut my teeth in the post-COVID-19 US equity market.

Afolabi Durojaiye, ACCA, Accountant at a multinational alcoholic beverage company

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Deciding on how to invest N1 million depends on whether I want to invest it for the long or short term. If it is for the short term, I will be investing 70% in mutual funds, which currently have ROI of an average 6%per annum, and the balance of 30% will be invested in Agrotech with an average return of 35% over a 9-month period. If it’s for the long term, considering the best time to invest in stock is when there is depression and equity instruments are cheap, I would use 80% to buy blue-chip stocks like GTBank, Zenith, etc. and 20% will be invested in mutual funds.

READ ALSO: Nigeria’s Capital Market: Equities, ETFs, Bonds and Beyond

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Silas OZOYA, Managing Partner/CEO SUBA Capital

With N1 million as a personal investment portfolio, I would invest N500, 000 in Agriculture through an AgriTech or agro-investment fund management company.

Corn investment would be a good fit now, given the ban on importation of corn by the Federal Government of Nigeria. So, the price would go up now, which means the return in investment would also be good.

READ MORE: CrowdFunding: Who is qualified according to new SEC Guidelines

I would further split the balance N500,000 in three ways:

I would invest N200,000 in foreign stocks via verified brokerage apps, and the other N300,000 in local stock, foreign exchange, and cryptocurrency trade to spread and manage the risk.

Anyone reading this should do due diligence on the AgriTech company, agro-investment managers, foreign exchange, and cryptocurrency traders they intend to leverage, weigh the risk, and understand their charges.

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Adebayo Juwon, FTX consultant for African markets

To start with, N1 million isn’t a lot of money like it sounds, considering the current status of the NGN. I’d recommend that a business-minded person should keep most of his/her funds in USD. The crypto space has made this a lot easier; you don’t have to enter a banking hall to convert NGN to a more stable asset like USDT.

A quick illustration of what has happened to NGN in the past few months: USD appreciated 25% against NGN, this simply means if you had 1M in January, your N1 million will now be worth N750,000.

READ MORE: Where to Invest N5 Million right now

As a crypto trader and investor, If I have N1 million lying idle, I’d consider staking in decentralised finance (defi) project, which gives the advantage of hedging and gaining better interest over time.

Chimezie Chuta, founder Blockchain Nigeria User Group

I will simply invest in Fish Farming business, with a focus on smoked fish packaging and sales. I believe the fish market in Lagos and across Nigeria is really big and investment will yield profit up to 25% monthly. With the right marketing strategy, I have no doubt about the returns as food is essential in life.

You would wonder why I will not invest in Bitcoin or cryptocurrency trading. My reason is that I expect to repay the loan and investing in crypto is not too different from gambling. There are no guarantees. You can lose all the money or double it. But practical businesses like this one offer better investment protection and chances of going down to zero are minimal.

But what I personally do with that kind of money is to buy and hold bitcoin for a long period, say 1 year. I’m betting on the long-term profitability of a few crypto assets so I’m bullish on them for a 1-3 year period. Bitcoin, Kinesis, Ethereum, Vite are a few of such.


 

Disclaimer: Please note that these are opinions and should not be construed as an investment recommendation or financial advice by Nairametrics. Kindly consult your financial adviser for a professional advisory service.

Patricia
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Cryptocurrency

How to become a successful Bitcoin trader

Major steps that are needed if you want to become a successful BTC trader.

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BTC Whales, Bitcoin is scarce, entities, individuals hold for long term

A BTC trader is simply an individual who seeks gains from differential changes in the market price of BTCs. The main objective the BTC trader has in mind is buying prices alow and selling when the flagship currency gains higher. BTC trading can thus be very lucrative and has become one of the fastest-growing careers in the financial spectrum. 

Data obtained from a leading BTC analytic firm, Coinmarketcap showed that the market capitalization of BTC currently stands at over $170 billion. This further illustrates that in 2013 BTC moved from $13.30 to its present-day value of over $9000, meaning that early bird BTC traders had gained over 67,600% since it began. 

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Consequently, this article will show major steps that are needed if you want to become a successful BTC trader. 

Explore Research Data From Nairametrics by Visiting Nairalytics

Self-Control & Discipline  

Adebayo Juwon, an FTX consultant for Africa, spoke to Nairametrics in an exclusive interview, explaining in detail the need for a BTC trader to be very disciplined and have a security-conscious mindset. He said; 

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“Firstly I must note that trading is not for everyone, to be a successful crypto trader, self-discipline is a prerequisite to achieving one’s goal. The crypto market is very much volatile than what the traditional traders are used to, hence more risk and reward. 

“A crypto trader must be security conscious; you’re responsible for your account security in the crypto ecosystem, as hackers are preying on whose account is less secured.” 

READ ALSO: CBN provides guidelines to address credit, liquidity risks, others  

Risk Management 

A successful BTC trader must be able to understand the relationship between reward and risk management. This entails high understanding levels about the degree of randomness in BTC market and the risk involved in taking such risk. As a successful BTC trader, you are required to understand when its best to trade BTC as market conditions change from time to time. 

Adebayo Juwon, FTX consultant for Africa also added vital points on why a BTC trader should never ignore risk management. He said; 

“Also, to be a successful crypto trader, one must have good risk management in place, in a highly volatile market your profits can be zapped away in minutes. Risk comes in different ways in the crypto market, there are lots of scam projects with the good marketing team, they tend to attract investors also, it’s very important to do your own research in the crypto space, and rely less on market sentiment.” 

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READ MORE: Tether mints 80,000,000 USDT to unknown wallets within 24 hours

Timing 

Recall that some days ago Nairametrics, revealed the best time many BTC traders prefer to take their trading positions in the BTC market, thus preferring to trade around the American trading session because of the high price swings that occur at the start of New York stock market trading time -about 2.30 pm GMT. This means there were higher chances of making more money at the start of  American trading sessions than other trading sessions (London and Asian trading session).  

Basic fundamental and Technical analysis skills 

Every successful BTC trader must keep track of macro fundamentals going around the BTC community because such information more often determines the market price of Bitcoin.  Either rumours or news have exponential effects on the BTC market and often create lucrative trading opportunities. 

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Chris Ani, a professional BTC trader in a phone chat interview explained to Nairametrics in detail, the major attribute every successful BTC trader must possess, including the need to have basic trading skills. He said; 

 “To prevent yourself from becoming a slave to the market, you must be trading small enough size on your trades that you are not emotionally attached to them. Trading opportunities wait for no one. 

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“You have no idea when and where they will appear. Whenever they appear, you have to be ready with your trading plan.  You must also master technical and fundamental analysis and most importantly the one that works for me, understand the seasons and market structure so as to know when to trade, allow big wins run, or rather exit the market in order not to lose your money.” 

Finally, it’s very important to understand that no matter how good you get at BTC trading, you will often make mistakes and lose money. Always remember, trades that go bad are part of what will make you successful in the long term. Success in BTC trading simply means you are winning more relatively than losing. 

 

Patricia
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