You And Your Story Are The Best Differentiators For Your Business

 Posted by at 12:26 pm  Marketing  Comments Off on You And Your Story Are The Best Differentiators For Your Business
May 222017
 
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You And Your Story: The Best Differentiators 

We are all looking for differentiators that make our business stand out in the market, right?

There’s good news! You and your story are likely best differentiators you will find for your business! It’s good news, as you are in complete (mostly) control of sharing your story with your prospects and your customers.

I’m mainly speaking about small businesses here, of course, but you don’t have to search far to find big businesses that have become big by sharing the personal story of their founders. How often do you hear Tesla spoken of without Elon Musk being mentioned in the same sentence?

There’s more good news. You don’t have to have a pristine background and story with a straight line to success in order to be successful using your story as a differentiator in your marketing and sales process. In fact, given the way humans root for the underdog and love stories of overcoming adversity, you are better off if your back story includes some difficulties and challenges you’ve had to overcome!

Why is it good that your backstory has some “hair” on it? Think about it for a moment. It shows that you are human! We want to do business with other people we like and trust, not with some formless, faceless large business! There is no better evidence of your humanity than having faced adversity. And there is no better evidence of your commitment to success than having overcome adversity.

Consider for a moment the companies, particularly the local ones, that you choose to do business with. If you have a choice, do you do business with the company whose owner you know and trust, or do you go to a large company with which your only connection is that you give them your credit card or cash and they give you the product or service you are seeking?

I realize that the answer to this question is complex. It’s not as simple as just doing business with people you like. You also need to take into consideration key factors such as cost, convenience, and to some extent, quality: the main reasons for the existence of the Walmarts of the world. All else being roughly equally, though, would you rather buy from someone you know, or a big corporation? For me at least, the answer is almost always “someone I know and trust” and perhaps more importantly, like and want to help.

I’ve paid special attention to this topic in my own family’s purchasing recently, and I’ve noticed that we almost always opt for the local vendor we know, or even the not-so-local vendor with which we’ve established more of a personal connection – an online vendor, for example. Examples include our purchase of pre-made meals, running gear, HVAC services, real estate services, nutritional supplements, and the list goes on.

So, if people are more likely to buy from people they know and like and you could say “are rooting for,” how do you establish this status in the marketplace?

First, and most obviously, if you want to take advantage of this differentiator in the marketplace, you must provide a good product and/or service! It goes without saying that if you don’t provide a good experience and satisfy the needs your prospects and customers are seeking to have satisfied, you will not have repeat customers.

Second, once you have the great service and customer experience piece solved, which admittedly is no small task, you can begin to share a bit about your story with your target market, including prospects and existing customers. What made you start your business? Why are you so committed to providing the best experience possible for your customers? What are some of the challenges you’ve overcome and what are some that you continue to face in your effort to do anything possible to make your customers’ experience the best possible in your market? Don’t hesitate to share challenges and failures, especially when you’re able to show that you’ve persisted (or are persisting) to overcome them, which further shows your commitment to the marketplace. This can be especially effective on social media.

Third, find a variety of channels to share this information with your target market! As a small business, you cannot be everywhere. You’re better off focusing your advertising and marketing efforts on lower cost, higher leverage marketing mechanisms such as social media. That’s not to say that you should not advertise through traditional print and broadcast mechanisms, but do so judiciously, and when you do, don’t be afraid to incorporate a piece of yourself and your story and that of your company into the marketing and advertising materials! Don’t make your marketing and advertising just about features and benefits – you will find it very difficult to differentiate on that basis alone.

Fourth, and finally for now, use video where possible! If a picture is worth a thousand words, video, especially if done well, may be worth a million. It allows you to tell a more complete story and to convey whatever message you’re trying to get across to your target market more thoroughly and convincingly. It also gives you an opportunity to reinforce your “voice” (what you and your business represent and want to be remembered for) in the market, further strengthening your chances of leaving an impression of humanness and credibility on your target market. As humans, we want to do business with other humans, particularly those we like, who we know have faced and continue to face and work to overcome many of the same challenges we face on a daily basis! As long as you’re selling to humans, which I imagine you are, at least most of the time, you and your story are the best differentiators for your business.

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

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The Biggest Reason Your Marketing Is Not Working

 Posted by at 1:19 pm  market research, Marketing  Comments Off on The Biggest Reason Your Marketing Is Not Working
May 202017
 
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Are you trying to figure out why your marketing is not working?

Take a moment to think about your marketing strategy and the marketing materials that you and your team have created. Are the materials professional in their appearance? Do they put you and your business in a positive light and show that you’ve assembled a great team and created a business that anyone in their right mind would want to do business with?

If you could answer “Yes” to the above, congratulations, but unfortunately this is not enough to make your marketing work! If your marketing does not start first by considering the problem your prospect is trying to solve, then, and only then, showing that your company is the one that has the most compelling solution to that problem(s), you’ve likely missed the mark!

All marketing must start with the needs, fears, and propensities of your prospect in mind. If it doesn’t, you may get lucky and end up with marketing that works, but you’ll greatly increase your chances of success if every stage and every element of your marketing is based on solving known issues that the prospect is actively trying to solve!

Let’s look at a couple of simple examples.

Example 1

Pizza Place 1: We have great pizza! It’s based on a recipe that’s been in the family for 100 years! Come give it a try! Our excellent cooks and wait staff are looking forward to serving you.

Pizza Place 2: Our customers have voted our pizza place the best pizza in town four of the last five years! We guarantee it will be out in fifteen minutes or less, piping hot and tasty, or the next time you come in, the pizza is on us. We also deliver, with a thirty minute or less guarantee, in case you’d like to stay home and enjoy our delicious pizza while watching the game! Come on in or give us a call at 858-xxx-xxx.

Which of these two pizza places are you likely to visit first? Some may opt for Pizza Place 1, as they like the idea of the family recipe that’s been around a long time. But many, if not most, will gravitate toward Pizza Place 2, for several reasons. First, they will like the fact that customers (not just the pizza place itself) have validated that the pizza is good. It’s not just the pizza place saying how great its pizza, recipe, cooks and staff are. This addresses one of the main concerns of the prospect – will the food be good – of other people like me consistently say it, then I feel more comfortable with giving it a try? Second, many people who buy and consume pizza are used to getting their food quickly – they will like the idea of a 15-minute guarantee. Again, looking at their needs, if they’re looking at pizza or some other form of fast food, there’s a decent chance they are hungry already, so tasty food delivered quickly is very appealing. Finally, though this may be more subconscious, they will like the idea that Pizza Place 2 also delivers with a guarantee, which shows they likely have it together operationally – another signal of a well-run operation.

Obviously, we’re only talking about which place you’d go to first, or on a one-off basis if you were traveling. Once we’re talking about repeat visits, a lot will be predicated on how good the food is, what the service is like, what the overall experience is like, and in general, whether the respective restaurant delivered on what it promised during the initial visit.

Example 2

Gym 1: It’s only $10 per month and we’re open 24 hours, so you can come in at your own convenience. We have modern equipment, including all the free weights you could ever want.

Gym 2: We are a judgment free zone! We have all the most modern equipment and we’re open and staffed 24 hours a day, for your convenience and safety!

Which place would you try first? Your answer will depend on which category of gym prospect you fall into.

If you are a young, likely male gym-goer that’s on a tight budget and works during the day, you will likely gravitate toward Gym 1. If you are a female, less testosterone-driven young male, and/or senior person who likely values safety and not being judged, but also cares about convenience, you will likely gravitate toward Gym 2.

The above leads to the discussion of another important topic, which is market segmentation (aka niches), a concept we’ll deal with another time.

But regardless of the need for segmentation and understanding which segment(s) you’re targeting, Example 2 serves to further illustrate that prospects will make trying and buying decisions based on their perception of how well your product or service offering meets their needs and solves their perceived problems. It is, therefore, very important that you are constantly in touch with those prospects and their (preferably unmet) needs on an ongoing basis!

Could you name and describe in detail the five biggest issues (fears/concerns/problems/frustrations/etc.) that your prospect is dealing with right now? If not, you are not in a great position to market or sell to your prospect yet! In order to be effective, your marketing and sales approaches must be structured and delivered with content and in a way that makes the prospect believe that what you’re offering is the solution to their problem(s), or at least a big step in the right direction. Without this knowledge, you may create marketing and sales materials (or presentations, etc.) that happen to hit on the key issues for the prospect, but if you do, it will have happened by chance, rather than by proactively seeking this critical information about where your prospect’s “head is at,” then structuring your delivery to help him/her solve the critical issues at hand.

Re-create the examples above with your business and market. How does it look? Where would you go, or whom would you go to first?

Take the first step toward making your marketing more effective. Take time and do the research – preferably first-hand, talking directly with prospects – to understand where they’re coming from and what their pressing, unmet needs are. Once you understand this information in as much detail as possible, you will be able to create marketing and sales materials and approaches that will yield the results you seek. Beware though, these needs may change over time, so make sure you are staying in touch with the needs of your prospects and current customers! Talk with them frequently, directly, and through other market research mechanisms, the adjust your marketing accordingly.

Are your current marketing materials more about you and your company than about your prospects and their issues/concerns/needs? If yes, you need to work on changing that as soon as possible! Get started today!

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

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Apr 292014
 
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7 Things

Seven Things All Small Businesses Should Be Doing On Social Media

Many small business owners are now active on social media. Whether you outsource your marketing, have an in-house staff or you are a solo entrepreneur doing it all yourself, making sure to get the most out of your social media marketing is important!

Talk to a web designer and s/he will tell you web design is of utmost importance. Talk with a graphic artist and branding becomes your #1 priority. Talk with a social media manager and engagement, blogging and audience building should be at the top of your list. Are you confused yet?

There are many things you should do online if you ask the ‘experts’. Whatever you decide to do online and whatever time you have or budget to pay for it, make sure it is done professionally, with consistency and frequency.

Going back to basics though, especially for those just starting out, here is my BEST ADVICE for small business owners.

  1. Own your own online real estate. Get a website! There is nothing, I repeat, nothing – no other platform – better than your own site. Get a .com and get a website. You can do and say whatever you want on that site and you own it. Traffic to your site will be for you to do with as you want and building that online presence cannot be done anywhere else.
  2. Choose your social media platforms wisely. Once you commit to a certain platform, be present and post relevant information. Information should be relevant to your current audience, that specific platform and potential customers alike.
  3. Engage with your audience and stop broadcasting. Ask questions, provide industry information, quote experts, post behind the scenes looks, updates and pictures of office, staff and events.
  4. Have consistent branding and know who you are first! Use your ‘elevator pitch’ to find your key marketing points and make sure those come across quickly in your branding. This includes written content as well as images and graphics.
  5. Fill out those profiles with as much information and keywords as possible. Social media profiles get indexed by search engines. What will they find when they index yours?
  6. Have a blog, create content consistently and frequently and learn where and how to distribute it. One great way to create blog content is to turn every single question asked of you about your business into a blog post where you answer that question.
  7. Know what you are doing online, why you are doing it and where you want to be! Track your efforts, track your leads and analyze what you are doing to improve your stats.

+ 2 BONUS:

  • Doing all of the above without a strategic plan will set you up to fail. Start with a strategic social media plan which includes short and long-term goals.
  • Include social media in your marketing budget. This money could be used for advertising (PPC, Facebook ads, Twitter ads, SEO services etc.), graphic design, running contests, social media tools, website management, social media management, consulting services and more!

The value of social media is directly related to the effort you put into it. I can’t say it enough, but I will do so again: being present where you have a presence is super important. It’s how you build your reputation and brand. Would you invite guests to come over to your home, leave the lights on for them, but forget to be there yourself?

Dorien Morin-van Dam
Social Media Consultant & Strategist at More In Media
Connect with me on Social Media
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Nov 112012
 
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What Makes You Happy And Drives Your Behavior?  Self-esteem.

Have you ever asked yourself what drives your behavior?  Being the introspective type, I ask myself this question quite often.  I have found that the answers can vary quite widely, but once I dig a little below the surface, they always come back to one main driver of behavior: self-esteem.  Everything I do, and often how I do it, has to do with my self-esteem, with my concept of who I am, who I want to become and whether I’m making progress or losing ground.

I’m not a psychologist, but in the various roles I serve in my life, including coach, entrepreneur, advisor, parent, sibling, son, etc., I have observed that most everyone’s behavior is driven by their self-esteem.  If their self-esteem is low, they tend to either accept it and act in a defeated manner, or they do whatever they can to improve it.

How about you?  Does your self-esteem drive your behavior?  Think about the choices you’ve made recently and in the past; what’s been the main driver of those choices?

Let me give you an example – the choice of car.  If I choose a fancy sports car, it’s likely that I want to stand out and receive positive comments and looks.  Why?  It makes me feel good; it makes me feel unique.  What if, on the other hand, I choose a non-descript, non-attention-getting “green” car that gets amazing gas mileage?  I probably see myself as making an important contribution to the planet.  It makes me feel good; it makes me feel unique.  Either way, I’m looking to make a car choice that’s consistent with how I see myself, so that I can maintain, or improve my self-esteem.

How about the buyers of your products and services?  How much of their buying decision is based on their self-esteem, on their need to feel good about their choice and feel unique?  My bet is that self-esteem plays an important role in their decisions.  For example, if you sell an upscale product or service, consumption of that product or service makes them feel important and proud that they can afford the “best”.  All of this feeds into their self-esteem!

Astute marketers play on these self-esteem needs and drive purchase decisions based on this knowledge.  Think Apple.  Are their products really that much better than the alternatives on the market?  In some cases, yes, but in many cases there are other products that get the job done just as well or better, at a fraction of the price.  But the Apple solution carries status and it says, “I’m hip,” “I’m current,” “I’m unique and I can afford the most stylish and elegant solution”.  All of this feeds into an improved sense of self and improved self-esteem.  “Think different.”

There is an innate need as a human being to be unique, to feel like you are the one and only “you,” and you are worthy of such status.  Smart marketers know this.  Smart coaches know this.  Smart parents know this.  If you want to effectively influence yourself and others, you need to know it and put it to use too!

Understand that self-esteem is an important driver of your behavior and that of others.  There are many ways to influence self-esteem, positively and negatively.  I’ve only touched on a few here.  Begin to be a student of self-esteem drivers and start using them to your advantage as you work to positively influence yourself and others!

I look forward to your thoughts!  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

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Sep 262011
 
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be bold

Be Bold.  Rise Above The Noise.

As an entrepreneur, it is important to be bold.  We live in a world where there is so much “noise” of all sorts, that if you’re not willing to be bold, it’s likely that you will get “lost in the shuffle”.  Think about it; how many TV ads, radio ads, emails, billboards, print ads, and other marketing messages do you receive in a day?  What percentage do you think you pay attention to?

The bold are not always loved, but typically they are respected and in a lot better position to be remembered and ultimately, to be successful.  Particularly as a relatively new venture, but also true for more mature businesses, one of the biggest challenges you will face is making yourself and your company stand out from the rest of the pack.  Without being bold and trumpeting your strengths and differentiating factors, it is unlikely that you will stand out and succeed.

I realize that this concept of being bold will not appeal to everyone.  In fact, a lot of the time, I’d rather “fly under the radar” as well.  Unfortunately though, as an entrepreneur, you typically need to find a way to be noticed, in order to be successful.  This is not to say that you should be obnoxious, but it is to say that you will probably have to do some things that you’re not entirely comfortable with, in order to become known.  Use your imagination.  The wilder, the better.  Stay within the law, of course, but with those guidelines, the sky is the limit.

Take for example mega successful billionaire entrepreneur Richard Branson – he used to do all sorts of death defying daredevil stunts to promote his early and very successful company, Virgin Records.  I’m not advocating necessarily that you risk your life, but the more different and exciting that you and your company can be (within reason, given the industry you’re in, of course), the more known and successful you are likely to become.  Be creative in your boldness.

If it makes your stomach turn just thinking that you need to be bold, try looking at it a bit differently.  Don’t think of it necessarily as the peacock, strutting its beautiful, loudly colored feathers in an effort to be noticed.  Rather, think of it as “finding your voice”.  I hear this phrase used quite a bit in the online, blogging and social media space, and being more of an auditory person, it has a visceral appeal for me.  In essence, it says that you don’t necessarily need to make yourself stand out by being “loud and obnoxious”.  Instead, you can do so by finding “your voice,” or unique and distinctive way that you communicate with your target market and other constituencies.

As long as the “voice” that you choose resonates with your constituencies, you can establish yourself as someone (or some company and brand) adding value with a unique perspective and approach, which makes you someone worth listening to.  I think Apple, one of the most recognized brands in the world, with one of the most loyal groups of followers and customers, does a great job of getting its “voice” across to its markets.  It does such a clever job of doing so, in the way its products are designed and in all of its communications, that the target market actually believes that it’s “their voice”.  And as you know, most people love the sound of their own voice.

So, if you’re sitting there thinking, “I don’t want to be bold and obnoxious,” well, you really don’t need to be in order to establish your “voice” in the marketplace.  You must, however, be unique and most importantly, be adding value, from the perspective of your target market and other key constituencies.  Remember, if you don’t find a way to rise above the “noise,” no one will ever know about the great products, services and solutions you provide.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

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Sep 142011
 
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Elements of a Basic Marketing Plan

Some Elements of a Basic Marketing Plan

11 Essential Elements Of A Basic Marketing Plan

If you are going to sell products and/or services, you should have a marketing plan.  You could just “wing it” like most people do, but you are likely to have better results if you do some planning up front.  You don’t need to go crazy and come up with a 100-page marketing plan, but just as with everything, if you have some idea where you’re trying to go, it’s likely going to be easier to get there.

So, here’s an overview of the elements of a basic marketing plan, as well as a few tips about how to look at them and how to optimize your results.  Note:  marketing plans come in all shapes, sizes, and levels of sophistication.  The elements covered here are the fundamentals.  You can and should go far more in depth, if you are so inclined.

Marketing Plan Element #1:  Brief Description Of Problem You’re Solving For Customers

I like to see marketing plans start with a “problem statement”.  That immediately forces the entrepreneur to think about and articulate what they are selling in terms of the customers’ needs.  As you know, customers buy benefits, not features, so it’s key to consider what problem your product and/or service is solving for your prospective customer.  That’s what they’re buying. For example, to use the old marketing adage (paraphrasing), customers don’t buy a drill; they buy the ability to make a hole.

Marketing Plan Element #2:  Description of Your Products and Services

In this section, provide a description of the products and services you offer, or plan to offer.  Nothing fancy here and you don’t have to go into scientific or technical detail regarding every aspect of your offerings.  Rather, this is where you describe your offerings and how they solve the customer problems you identified in Element #1.

Marketing Plan Element #3:  Overview of The Market Opportunity

Here you cover the overall size of the market, in terms of units and dollar value.  If you are coming out with a new, innovative product, there may not be sales of that specific product, as yet.  However, that is not an excuse for not trying to estimate the overall size of the market for what you’re offering.  Having an overall market size estimate is important, particularly in order to “sanity check” your sales goals and projections.  Depending how far and wide you will distribute your product or provide your service, make sure that you break the market size estimates into relevant geographic sub-totals.

Marketing Plan Element #4:  Competitor and Substitute Analysis

This section will include a matrix of your competitors that sell the same product or services, and of substitutes, which may not be exactly the same, but may solve some, or all, of the problem that your prospective customers care about.  As discussed, your prospects don’t particularly care how the problem is solved; they just want it done as quickly, easily, and economically as possible.  Another important point here is:  don’t commit the cardinal sin of saying “we have no competitors,” or “we have no direct competitors”.  While that may be true, it’s probably not.  Even if it is, you still need to understand and articulate how prospective customers are currently dealing with the problem you’ve identified.  That is, after all, the basis of the opportunity you’re going after.  Without that problem and resulting need, no one would buy what you have to offer.

Marketing Plan Element #5:  Discussion of The Segments (Niches) You Will Target

You described the overall market above, in Element #3.  It’s now time to dig deeper and identify the relevant segments of the market.  This is a place where big companies and other sophisticated marketers spend a lot of time and money on analysis.  The better you identify and understand the needs of the various segments of the market, the better you are able to market and sell to them effectively.  Don’t think simply, “we’ll just get one percent of the overall market and that will be a big sales number”.  It does not work that way.  You must determine, based on a variety of factors, which segments are most attractive and focus on selling to those segments.  Those factors include:  the composition of the market in the geography you are targeting, the products/services you are capable of providing, your marketing budget, etc.  As a small company, you simply do not have the resources to sell and market to the market as whole.  You must pick your segments and focus, focus, focus.  Obviously, you can course-adjust as you learn from your research and results, but you must be very focused, especially at the beginning.

Marketing Plan Element #6:  Your Marketing and Sales Objectives

How will you know if you succeed with your marketing plan?  You need to have goals to measure your results against.  Those goals should include overall revenue targets, as well as objectives broken down by product, service, geography, etc.  The more specific you can be with these goals, the easier it will be to communicate them to your team and have commensurate rewards and accountability.  Even if you don’t hit your goals, you at least will have a benchmark and you can then adjust for future periods.  Whatever you do, don’t put together a marketing plan without including goals.  That would be like setting out to sea without a particular destination in mind.  It would be hard to know if you arrived.  It would also be hard to plan other important aspect of the journey, like how much fuel (“marketing budget”) and provisions (“other resources”) you would need along the way to your target destination.

Marketing Plan Element #7:  Review and Analysis of Pricing

Pricing is one of the trickiest elements of marketing and probably the one I get the most questions on.  At the end of the day, you want to set your price right at the point where you’ll maximize your profits.  Good luck with that, particularly as a small business without a massive amount of historical price and demand data.  As an entrepreneur, you need to look at price in terms of what the market (competitors) is charging and what it is costing you to provide your product or service.   The last thing you want to do is set the price too low, lose money on every sale, and try to “make it up in volume”.  Conversely, you don’t want to set your price so high that no one buys from you.   There is a happy medium.  You will need to test various price levels to find that happy medium.  As you do so, bear in mind that the more “commoditized” your market is, the less potential you will have for deciding the price you can charge.  In a fully commoditized market, the price will be set by the market and you will either have to be able to make profit at that level, or get out.  In other non-commoditized markets, there may be a very wide range of prices for essentially the same product or service, with the pricing difference largely based on good marketing, positioning and differentiation.  Test, test, test, in order to find the optimal pricing for your products and services.

Marketing Plan Element #8:  Description of Sales Plan and Distribution Approach

Here you will describe in detail the approach you will take to selling and distributing your products and services.  Will you have a direct sales force?  Will you sell through partners?  Will you sell online?  There are many possibilities and usually you will use a combination of approaches.  It will depend heavily on what you’re selling, how complex the sales process is, the scale and scope of the markets you are going after, etc.  Make sure you take into account how your margins will be affected by which sales approaches and channels you are employing.  As with all aspects of your plan, you will need to keep testing, so you can find the optimal mix over time.

Marketing Plan Element #9:  Advertising Approach and Budget

How will you advertise your products and services?  Will you use print, television, radio, internet, etc?  How much will you focus on each?  It will depend to a large extent on what you are selling, how large your ad budget is and how wide a geography you are targeting.  You will want to set up a line-item budget for each advertising medium you will employ.  In the next step, you will track the effectiveness of your advertising and marketing in each medium, which will help you determine where you should spend more, and where you may want to cut back.  Again, this is an area where you will want to test and course-correct constantly.

Marketing Plan Element #10:  Metrics To Be Tracked

Depending on your market and the products and services you are offering, certain marketing metrics will be more important than others.  The ultimate goals is to track “touches” (impressions, views, other interactions, etc.) on clients that then convert to inquiries, leads, prospects, and ultimately, sales.  Not all prospects that see your advertising and marketing materials will buy, of course.  Your objective is to figure out which of your advertising and marketing approaches are providing the most “bang for the buck” and do more of those.  You will find that what “works” will vary by market segment and geography.  You must steadily test and “tune” the approaches you are using.  The more detailed the metrics you track, the more precisely you will be able to do this “tuning.

Marketing Plan Element #11:  Marketing Strategy Feedback Loop   

It is critically important that in all steps above, you are constantly testing and course-adjusting according to the results that you achieve.  If you are going to put money, time and other resources into marketing and sales, you owe it to yourself (and your investors, if you have any) to keep close track of the results and make sure that you are optimizing your “spend” as much as possible.  Also, don’t get complacent and think that what’s working today will continue to work the same way in the future.  In the dynamic world in which we live, where change always seems to be accelerating based on technological advances, it’s important to remain vigilant and make sure that your approaches are “changing with the times”.

There you have the elements of a basic marketing plan.  Have you put together such a plan?  What elements did you include?  Which parts do you think are most important?  Are there others that you’d add to the list of “basic elements”?

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

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Sep 102011
 
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Differentiate. Don't become commoditized.

Differentiate.  Don’t Become Commoditized.

How do you differentiate your company and its offerings in the marketplace?  What do your products and services provide to your customers that add value to them?  Is what you offer differentiated from what your competitors offer, or are you at risk of becoming “commoditized”?

What does it mean to be commoditized, you may ask?  The way I’m using the term in this article, it means that the product or service that you’re providing has absolutely nothing that differentiates it from what other providers in the market are offering.  That would be “fully commoditized”.  There may be other cases where there are some small differentiating factors, but even though in that case you’re not fully commoditized, effectively you are, because in the minds of consumers those differences are minimal and relatively meaningless.

Ok, so what are the implications of being commoditized?  Is it a good thing or a bad thing?  As you can imagine from the way I’m describing it, from your perspective as a provider offering your services or products in a “commoditized” market, it is typically a very bad thing.  I could illustrate the negative effects of commoditization for you with numerous examples from my entrepreneurial and advisory career, but I will use just one that occurred recently, which I think will be more than enough to get the point across.

A few of the facts in the example I’m about to provide you have been changed to protect the innocent, the guilty and the commoditized.  None of those changes has any impact on the point of the story.

Last week I was on a conference call for one of my businesses regarding a deal with a total value to the service provider of roughly $250,000 and a total potential implication for the customer of more than $25 million over time.  The deal was in the information space.  The service provider in this case was essentially a broker (aka intermediary) who, in the eyes of the customer, brought no more value to the table than introducing the buyer and seller.  The service provider has several large competitors, not quite as large as they are, but large nonetheless, that offer essentially the exact same brokerage services.

The story got interesting last week because this service provider, who had been doing business with the customer for five years, decided to try to introduce a limitation of liability clause into their contract for the upcoming service year.  They wanted to limit their liability to $5 million for any mistakes they made, even though the implications or damages for the customer could be as high as $25 million.

To further set the stage, the service provider has roughly $10 billion in revenues, the customer has about $400 million in revenues and we’re even significantly smaller than that.  So you can imagine that in a normal negotiating scenario, this large service provider would simply “have their way”.  They would say, “take it or leave it”; there’s now a $5 million limitation of liability in the contract and if you don’t like it, too bad.

As you can probably guess from the subject matter of this article, that’s not how this story went.  When this service provider tried to introduce the limitation of liability into the contract, they’re the ones who ended up hearing “take it or leave,” not the much smaller customer.  They heard things like, “you’re selling a commodity,” “none of your competitors are looking for a limitation of liability,” “the only place you can really compete is on price”.  I could tell, not surprisingly, from the tone of the call and the deliberate, unanimated voices of the attorney and other negotiators for the service provider, that they knew we were right.  They were literally powerless in the discussion, with no negotiating leverage.  Their salesperson made some weak pleas and arguments about how they had a better team and how they could use their size on our behalf in the marketplace, but in the end, it fell on deaf ears.  We knew it was just hyperbole and the reality was that they had been “fully commoditized”.  We told them to remove the limitation of liability, or we were moving to a competitor.

Hopefully this example illustrates for you the extreme danger of becoming “commoditized”.  You lose all power.  The only real place you can compete is on price and typically, that’s a losing game.  Unless you are a large trading company, doing a huge volume of business, competing in a commodity market is generally a losing game.  Try to be as proactive as possible about finding ways that you can differentiate your company and very importantly, its offerings, so that they are at least perceived to be different in the marketplace.  I’ll give you one example of where I’ve seen that done very well, before we wrap up this article.

For those of you who live along the mid-Atlantic coast of the United States, or have visited there, you may be familiar with a convenience store and gas station chain called Wawa.  There aren’t too many businesses that are more commoditized than gas stations, but as Wawa has exemplified, it is quite possible to differentiate on the convenience store aspect of the operation.  I may not even have realized how differentiated they were, if not for my kids.  Every time we take a road trip from our house in the southern part of the U.S. to visit family in the mid-Atlantic and Northeast, the first thing I hear from my kids, several hours before we get anywhere near a Wawa is:  “Dad, when we get to Maryland, can we stop at Wawa for lunch”.  Amazing!  It’s a convenience store, not a restaurant!

So how has Wawa won the hearts of my kids?  They have a great deli, with innovative electronic ordering machines where you can customize your own sandwich and get all the stuff you love on it.  It’s not cheap, mind you, but that of course is of little relevance to my kids.  It is also very clean inside, unlike many gas station convenience stores you may enter.  That includes the bathrooms, the cleanliness of which is, of course, extremely important.  The employees are also well-trained, friendly and proactive in making sure that you are finding everything you want.  In short, it’s a very well run operation, with great food, in a place where you wouldn’t expect to find it.  So unlike the service provider I mentioned in the example above, Wawa has not been commoditized.  I cannot simply say to my kids, “don’t worry, we’ll just stop at some gas station and deli down the street, as it’ll be the same”.  It won’t be the same, my kids know it and they’re not happy with anything other than Wawa.

What do you do that differentiates you in the marketplace?  Think it through very carefully and to the extent possible, make sure it’s not just one thing.  Also, make sure you keep paying attention when you’ve been in business a while.  There can be a tendency to get complacent and “rest on your laurels”.  That’s when other competitors come along and recognize changes that are happening in the marketplace, take advantage of those changes and do what Wawa did in a market that had been commoditized years before.

Becoming “commoditized” and being powerless to negotiate on any aspect but price is a very bad position to find yourself in.  Be proactive and do everything you can to make sure it does not happen to you and your business.

Epilogue:  We recently had the follow up call with the service provider who wanted to insert a limitation of liability (LOL) in their contract, when no competitor was doing the same.  The service provider told us that they could not move from the $5M LOL.  The customer simply told them that there was not much more to talk about then.  The service provider will need to serve out the couple of remaining months on the current contract, as they’ve already been paid for it, but will have no involvement in future intermediary services for this customer.  One of the service provider’s competitors is willing to take on the business without any LOL and it looks likely that the overall cost to the customer will be less.  That’s the beauty of competition for the buyer and it’s an important lesson for all of us:  do not let yourself become commoditized!  If you do, rather than standing for limitation of liability, LOL will stand for “laugh out loud” on the part of customer, when you try to introduce one-sided changes into your contract, or try to apply leverage into negotiating anything.  If you’re commoditized, you will have little to no leverage — an unenviable position.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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Aug 312011
 
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How To Sell More With Cognitive Dissonance

Even though the vast majority of people will tell you that they “don’t like to sell,” when pressed, they’ll still admit to you that they’d like to know how to sell more, right?

Selling anything is a very uncomfortable process for many people, almost as bad as public speaking.  This is not the article to go into all the reasons for the overwhelming discomfort felt by most when they even think about having to sell something to someone.  In brief, at the core of the discomfort is a fear of rejection and a great hope that the prospective customer will just figure out that our solution is better.  For those of you who have fought the sales and marketing battle for any period of time, it’s understood that most prospects don’t “just figure it out”.

So, if you don’t love to sell, this article will not fully help you overcome that feeling, but it will give you a better understanding of a tool that you should be using constantly to conquer even your most hardened, “objection rich” prospects.  That tool is cognitive dissonance, or as I sometimes like to call it, “cog diss” or “Socratic cog diss”.

Ok, so what is this cognitive dissonance?  It is defined by Webster’s Dictionary (merriam-webster.com) as:  psychological conflict resulting from incongruous beliefs and attitudes held simultaneously.  In other words, you cannot believe two different (and inconsistent) things at once.  If you give it a try, you’ll realize that almost always, your mind will grind to a screeching halt and basically force you to choose one or the other opposing belief.  If it doesn’t, or you refuse to make a choice, your mind will send you (figuratively) around and around in circles until you finally make a choice between the “incongruous beliefs”.

What does cognitive dissonance have to do with sales and marketing, you ask?  Everything.  In sales and marketing, whether subtly or very directly, we are trying to convince a person or a group of people to make a purchase, or take some other specific action.  In order to do so effectively, we must persuade them to believe that going with our product or service is the right thing to do.  We must convince them, or better yet, have them convince themselves, that purchasing our solution will best solve the issues that they want to solve.  We know we’re not offering the only solution, but we want the prospect to come to the conclusion that we’re offering the “best solution”.

In order for the prospect to think that our solution will best solve the problem or issue they are facing, it is likely that we will have to help them change what they already believe!  Chances are that when you show up on the scene, whether it be virtually or in person, the prospect does not have the preconceived notion that you are the best solution and the sale is “yours to lose”.  Does that happen to you often?  If it does, then congratulations, as you and your company have done a great job of positioning your brand and offerings in the marketplace.  For everyone else, listen carefully.  Just about the only way for you to overcome the “objections” running around in the mind of the prospect, will be to introduce cognitive dissonance to the “conversation”.  Let me give you an example to clarify.

Let’s say that you sell financial planning services.  To keep it simple, let’s say that you focus just on helping clients optimize their investment portfolios, based on their risk appetite and other key factors, such as age, current and desired future lifestyle, etc.  If you sell such services, one of the common objections you probably run into is, “thanks, but I have that covered with a financial planner friend of mine that I’ve been using for ten years”.  This objection is not uncommon in all kinds of industries, with the prospect’s essential belief being, “I don’t need another solution; I’ve got this covered”.  There are probably few prospect objections more difficult to overcome than this, particularly in this specific case, where the clever prospect plays the “friend card” and also refers to the long-term “10 year” solution already in place.

In such cases, and in all cases where the prospective customer has convinced himself or herself that they’re “all set,” the best tool that you can put to use, and perhaps your only real hope, is cognitive dissonance.  How do you do it?  First, you must do your homework and understand in great detail the true risks the prospect faces with their “all set” attitude.  Next, you must ask a series of questions in an unobtrusive and inoffensive way that cause the prospect to understand that maybe they don’t have it all covered after all.  Finally, you must demonstrate with as much certainty as possible that your solution offers a much higher probability of satisfying the concerns that they have about potential risks they face and benefits they seek in making this purchase.

Now back to the financial planning services situation, to make the example more concrete.  Let’s say that your prospect tells you they’re “all set”.  Rather than walk away with your tail between your legs, ask them for the chance to ask them a few questions, in order to “confirm that they have some key emerging market risks covered”.  They’ll object again, with a strong desire to “protect their certainty” – by the way, no one likes to be in a state of cognitive dissonance – uncertainty is uncomfortable.  Assure them that you’ll be brief and won’t waste their time.  When you sit down with them or speak with them on the phone, your job will be to “sow the seeds of doubt” (cognitive dissonance) in the top five areas of risk that they likely face in their “all set” state of mind.  Given that the tax code and other factors related to financial planning change with great frequency, you probably won’t have a shortage of potential “doubt seeds”.  Choose and utilize those that you believe to be most relevant to the prospect.

There are a couple of caveats to using cognitive dissonance in your sales and marketing.  First, and perhaps most importantly, you will have to find a balance between pushing hard enough and not being condescending.  You’ll need to test this.  Being condescending is not likely to get you anywhere.  Finding just the right mix of “cog diss” is likely to get you results beyond what you’ve ever achieved in the past, so it’s worth seeking and finding the balance.  Second, don’t expect miracles.  Moving prospects off of long held beliefs and objections is very difficult.  In most cases, you will not get through to them, particularly on the first foray.  Think of it as a war, not a battle.  Keep “going after” those deeply held, but usually not-very-well-thought-out, beliefs of your prospective customers, and with perseverance, it will likely yield excellent results.

The key to remember in this cognitive dissonance approach is that it is very hard, if not impossible, for people to keep “incongruous beliefs” in their mind for very long.  They simply cannot co-exist simultaneously in someone’s mind without “driving them crazy”.  Your job then is to make sure that the beliefs you are trying to introduce must win at some point in the battle or the war, otherwise the pre-existing beliefs will have won, de facto.  Sometimes the prospect truly is “all set” and well-served, but in many industries, that is the exception, rather than the rule.  If what you’re offering truly is the better solution, you will feel very comfortable regularly providing the seeds of cognitive dissonance, so that your prospect can come to the right conclusion and buy from you!

We have had great success with this “cognitive dissonance approach” and mindset in our businesses.  I’m very interested in your thoughts, comments and feedback about your own experiences.  Please leave a comment or feel free to contact me at the email address below.

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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Aug 202011
 
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Just Remember: Hope Is What You Are Selling

If you would like to improve the results of your sales and marketing, just remember that hope is what you are selling.  There is very little certainty in life, so with every purchase we make, we are hopeful that it will give us certain results.

There is a deep psychological basis for this “hope,” which is rooted in what you often hear characterized as “people make decisions for two reasons – to avoid fear or to seek pleasure”.  If we explore this a little deeper, the avoiding fear piece seems pretty straightforward; it is, at least in large part, the famous “fight or flight response”.  The “seek pleasure” part is a bit more complex though, as the “pleasure” can come from an extremely wide variety of sources, including the simple hope that certain aspects of our lives will improve or we will get a feeling of comfort and peace, even if for just a short period of time.

Let’s look at a few examples of how we make certain purchases to seek the “pleasure” of hope for a certain feeling.  The first example would be buying and eating candy or junk food.  Why do we do it when we know it has no nutritional value and in fact can be very bad for our health?  We do it because we are hoping that it will give us a pleasurable feeling.  We hope that it will quickly satisfy our sense of hunger and relieve our headache caused by low blood sugar.  We hope that it will satisfy our “sweet tooth” or make us feel happy and soothe our anxiety when we’re depressed or upset about something.  We don’t do it for purely rational reasons; we do it largely for emotional reasons, as we are hoping it will give us a certain feeling.

Now let’s look at a much more expensive purchase:  a luxury car.  Why do we spend two or three times as much money on a luxury car, when there are other perfectly good cars that will get us from point A to point B just as quickly and as safely?  We do it because we hope that having such a car and riding around in it will make us feel good about ourselves.  We hope that it will give us a sense of importance and status in society.  We may also hope that it will give us a sense of exhilaration when we step on the gas pedal and go from 0 to 60 in 4.6 seconds.  We hope that having that luxury car will give us a wide variety of feelings that will make us happy.

We’ve talked about some products, but how about services, even business services.  Are they purchased based on hope as well?  Absolutely.  Just about every purchase that is made in the business world is also based on hope.  As I stated in the beginning, and as you are no doubt aware from your own experiences, there is very little certainty in life.  This is equally true in the business world.  Take, for example, the purchase of strategy consulting services, or coaching services.  What is the hope of the buyer of such services?  Depending on which class of services, the hope is likely for better performance of the business or of the particular executive contracting the services.  The contracting executive could also be hoping to alleviate the workload of his team and free them up for other tasks he hopes to focus on more.  In either case, the purchaser may hope that the improved results lead to a bonus for him or her.   That bonus would then allow them to make other purchases that they hope will give them other good feelings.  You see how the cycle continues.

So now that we’re talking about hope and expectations, we get to another very important point to bear in mind in your sales and marketing:  prospective buyers love testimonials.  Why is that?  Well, given that there is no true certainty that what you’re offering will give them the feeling(s) and results they hope to obtain, they want to hear stories of others who have used your products or services and enjoyed the exact results they are seeking.  This is often referred to as “social proof”.  It’s pretty straightforward, but often overlooked.  Prospective buyers are just trying to close the gap between hope and certainty.  They know they are unlikely to close the gap 100%, but they’d like to get as close as possible, before taking a closer look at your offering and ultimately, taking the risk and pulling the trigger on making a purchase.

This leads us to another fundamental point:  customers are buying benefits, not features.  This notion of hope can help us gain further understanding into why it is so important not to make the common marketing mistake of focusing on the features, rather than the benefits, of your offering.  Prospective customers simply don’t care about the features.  They want to hear about the benefits that are aligned with the feelings and results they are hoping to achieve by buying your product or service.

When you are planning and executing your marketing and selling, make sure you dig deeper to understand the hopes and aspirations of your prospective customer.  This applies equally whether you are selling to consumers or businesses.  Regardless of whether we’re talking about a bottle of perfume or a high-speed copy machine, every prospective customer has hopes attached to their potential purchase.  You must understand at as deep an emotional level as possible what those hopes and aspirations are, and you must then position your offering to be the one that best satisfies them.  If you approach all your marketing and sales from this “hope” perspective, you are likely to be very pleased with the results you achieve.

I look forward to your thoughts and comments.  Leave a comment below.

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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Aug 152011
 
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Do You Truly Add Value?  Are You Differentiated?

Whether you are an employee or an entrepreneur, you will want to ask yourself this question:  Do I truly add value? If you’d rather use more popular terminology, it would be:  What’s my value-added?  Either way, answer honestly.  Also, ask yourself, am I differentiated?  Your present and future livelihood depend on the answers to these questions.

What is meant by value-added?  Since we’re focused on entrepreneurship and leadership, I will answer from that perspective, but if you are still an employee, the same logic applies.  Value-added simply means that in any transaction or activity with which you are involved, what value are you contributing?  The funny example I always think of is when there are three people standing around filling a pothole on the road, with two leaning on their shovels and the other one doing all the work.  In that case, the one actually filling in the pothole would be adding value by exerting physical force to get the job done.  If you were being generous, you’d say the other two may be providing moral support and/or direction.  If not, you’d say they were not adding any value and were simply taking up space and “converting oxygen to carbon dioxide”.

Let’s look at an entrepreneurial example.  Let’s say that you are a broker or “intermediary”.  There are hundreds of different types of intermediaries, but let’s use the example of an M&A advisor.  More specifically, in this example, let’s focus on a sell-side M&A advisor – someone who advises people selling their companies.  You will hear such a role referred to as everything from “business broker” to “investment banker”.  Each label used has different connotations which generally differentiate between the size and sophistication of the deals handled.  You’ll often hear the term “business broker” in the context of selling smaller “mom and pop” type businesses, where the term “investment banker” usually is used in the context of larger and more complex deals.

What is the true difference between the value-added of a “business broker” and an “investment banker”?  Often, not much, but sometimes the difference can be dramatic.  A “business broker”, in many cases, is at least perceived as doing not much more than matching a buyer with a seller.  Such value-added certainly is vital in getting any transaction done, but it’s seen as commoditized, as it often does not involve much specialized knowledge.  The value-added of an “investment banker,” on the other hand, is often perceived as including match-making PLUS deal structuring, negotiation, usage of an extensive network of other high-level tax, accounting and legal professionals, etc.  While in reality, these differences may not always exist, that is usually the perception and for this reason, “investment bankers” are perceived as adding more value and therefore, they typically end up earning significantly more compensation than “business brokers”.  In this game of added value and differentiation, often times positioning and perception are just as important as reality.

How does this value-added and differentiation picture look in your product or service business?  What is the “special sauce” that you bring to the table that makes prospective customers want to choose you or your company and its offerings?  If your answer is “not much,” you need to begin to remedy this right away, because just as in a workplace environment, particularly in lean economic times, those that can’t point to specific, differentiated added value that they are bringing to the table, are typically among the first to be shown the door.  The corollary to that is, even if they’re not shown the door, they’ll often have to work for less compensation, just to keep the client or the job. Without demonstrable value-added and the ability to position themselves appropriately, they simply have no leverage in keeping their current clients or finding new ones.

Why do you think it is that the top salesperson at a company often earns more than the CEO?  It is for this very “value-added reason”.  The value-added of a top salesperson is easy to identify and quantify.  It’s how much of the company’s product or service they sold over a certain period of time.  And in some companies that are a bit more sophisticated in their measurement of value-added, it’s how much they sold AND the profitability of those sales.  In the end analysis, adding value is not just about generating sales, it’s about generating PROFITABLE sales.  Keep this in mind as you’re thinking about your own value-added and differentiation scenario and strategy.

Where do you as an individual, and where does your company as an organization, add value in the marketplace?  How is that differentiated from what every other “player” in the game is doing to add value?  How well have you been able to position yourself and your offerings as adding significant value in the marketplace? The answer to these questions is CRITICAL, because without differentiation, commoditization, which typically yields a scenario of lower prices and profits, will soon be knocking at your door.

I realize that to some extent, these concepts of value-add and differentiation are “strategic thinking 101,” but what I see in my own businesses and advisory work is that too many people, even otherwise excellent CEOs, can fall into the trap of not seeing commoditization creeping in from every angle.  Most markets these days are extremely dynamic.  You need to make sure that you and your business remain dynamic as well and constantly examine ways to add more value, differentiate, and stay a step ahead of the commoditization reality.

I look forward to your thoughts, comments and questions on the topics of adding value, differentiation and commoditization.  Leave a comment below!

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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