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by Rick Baker
On May 2, 2012
A year ago, I wrote about Competing - Using a Low-Price strategy….the introduction was:
At our Leaders’ workshops we tie two marketing concepts together. The two marketing concepts are ‘the PQS Triangle’ and ‘Differential Advantage’. Both of these concepts are ‘vintage’ marketing thoughts…..things we learned a few decades ago.
PQS Triangle is a picture, designed to make it clear businesses can set its marketing strategy based on a combination of Price, Quality, and Service. Rarely, if ever, can a business succeed if its marketing strategy is designed to win at all of P, Q, & S. Put another way – it is virtually impossible to deliver the lowest Price, the highest Quality, and the best Service all at once. Something has to give. For most of our Clients the thing that has to give is Price: most of our Clients are not in a position to offer the lowest Price.
Differential Advantage answers the question: Why do our Clients buy from us rather than do nothing or buy from one of our competitors?
When the PQS Triangle and Differential Advantage are combined we have the essence of the marketing strategy.
For certain businesses the marketing strategy does contain Price – i.e., the business can compete by offering better prices than their competition.
Now, about Competing – using a Value-based Price strategy:
Hanan & Karp expressed the concept concisely in ‘Competing on Value’.
"A value-based price has five characteristics:
- Price is premium price.
- Price is compared with the improved profits it contributes to a customer’s business, not to competitive prices.
- Price is recoverable by the customer’s improved profits and is therefore an investment rather than a cost.
- Price is not discountable.
- Price is applications-specific. It varies in direct proportion to each customer’s improved profits."
This, of course, is the exact opposite to competing – using a low-price strategy.
So, the spectrum of pricing strategies goes from low-price at one end to value-based on the other end.
Where do you position your pricing in that Price-Strategy Spectrum?
by Rick Baker
On Nov 24, 2011
People get bored real quickly these days!
Probably, I have lulled you to sleep already and I have only begun to write.
If you will just hang in a bit more I will try to be quick with this message.
Maybe bullet points will help?
- People get bored real quickly these days!
- So, we need to do special stuff when we want to communicate with them!
The experts say, "You must be evocative". [translation - "You must pluck at people's emotional chords."]
That's the way to get people's attention.
How do you do that?
How do you pluck at people's emotional chords?
Here are some suggestions:
- Be Authentic: If you have a magnetic personality then use it. If you don't have natural charisma then work at improving your personality traits. Pick traits you desire to have then work at incorporating them into your character...I mean - want to improve and then work at it for the rest of your life.
- Be Intentional: Know exactly why you want to pluck at people's emotional chords. Your intent must have more substance than just trying to cram a sale or an idea down somebody's throat. A purely self-serving intent will not succeed.
- Be Colourful: Emotions have little interest in logic. Emotions like shiny objects, fast-moving things, colourful things, sharp sounds, funny things...stimulating things. Emotions like all these types of things but emotions do not like logic.
This is just an introduction.
If your communications are not achieving the results you seek then make some adjustments.
If you think your people are not 'getting it' then make some adjustments.
If you think younger folks don't listen then make some adjustments.
After all...your goals are important!
And...
'Being Evocative' is the new Starting Point!
by Rick Baker
On Nov 11, 2011
After all…I have lots of choices:
- I can buy from one of your competitors
- I can buy stuff nobody in your market sector sells
- I can keep my money
So, with all those options…
Why should I buy from you?
Picture yourself as a salesperson.
You are supposed to be selling…and you want me to become your customer, your Client.
Then, right out of the blue I spring this question on you,
Why should I buy from you?
How, on a Minus10-to-Plus10 Scale, do you feel when I ask that question?…
…where:
Minus10 means you have a panic attack right on the spot…when you are revived you are pleased to see that I have left the building
Minus5 means you squirm a bit, look down, and then look over my shoulder in hopes of finding a more-reasonable shopper
Zero0 means you don’t really understand the question so you smile politely and feign poor hearing, offer you hand, I shake it, and you walk away
Plus5 means you really like sales work and you are pretty sure you know the right answer…you move into selling mode while I am looking puzzled
Plus10 means you are thrilled…you know your company’s Differential Advantage and you know exactly how to communicate it with enthusiasm to people like me
***
In an effort to help you get to Plus10…
Answer these questions:
- What makes your company different from your competitors?
- What’s special about your company?
- Why would I even give a care about that special thing?
- What’s special about your products or services?
- Why would I need that special thing?
- What feelings make me want that special thing?
- How do you package a communication that excites and magnetizes buyers?
Of course, you should ask yourself many more questions before you finalize your company’s Differential Advantage.
PS: A suggestion from Michael Gerber: Make a promise your Clients want to hear. Make a promise your Competitors wouldn’t dare to offer.
Footnote
Our definition of Differential Advantage: a company’s Differential Advantage is a concise statement that answers the question, “Why should I buy from you rather than buy from one of your competitors, buy some other thing, or do nothing?” Even if you have the best answer in the world, your answer, your Differential Advantage, will not appeal and magnetize everyone. It will appeal and magnetize your Ideal Clients…and that’s the whole point.
by Rick Baker
On Aug 10, 2011
Let brilliant people save you a whole bunch of time.
Most great leaders put authentic humour to good use. Probably, you agree a little well-placed humour could go a long way to easing work stresses and strains.
How would one go about developing authentic humour skills?
One answer is: borrow some brilliance from leaders who illustrated skill in this area.
Here are some examples:
- Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute. THAT'S relativity. Albert Einstein
- "A woman is like a teabag, you never know how strong she is until she gets into hot water.” Eleanor Roosevelt
- “Canada is a country whose main exports are hockey players and cold fronts. Our main imports are baseball players and acid rain.” Pierre Elliott Trudeau
Say you want to learn how to make the best use of authentic humour. By borrowing the brilliance of other great leaders you can learn how this can be done. In each of the above examples, the leaders accomplish humour by poking the finger of fun at themselves. In the first example, one of the greatest scientists in history, Albert Einstein makes fun of his major physics accomplishment. In the second example, the wife of the USA’s leader and a leader in her own right, Eleanor Roosevelt pokes a little bit of fun at her gender. In the last one, Canada’s leader Pierre Elliott Trudeau makes fun of his country before making fun of his country’s nearest neighbour.
Two messages:
- You can learn from other leaders and you can tweak your character so it aligns with the pleasing personality a leader must have to inspire followers. This, like everything else of value, requires some work.
- After giving it some thought, you may decide you should tweak your use of humour…up a bit…or down a bit.
That was an example of what Spirited Leaders calls borrowing brilliance.
by Rick Baker
On Jul 6, 2011
I drive by this sign at least 10 times a week…probably, closer to 20 times.
It caught my attention the first time I saw it and every time I pass it I wonder if the sign works.
I have had a thing about Integrity claims ever since Enron claimed Integrity as its Corporate Value.
Here are a couple of links to prior Thought Posts….the first one contains a definition of Integrity:
About that sign advertisement: “TRUST THE INTEGRITY OF OUR SERVICE”.
Does the sign work?
Does it bring clients into jiffy lube, the business that posts the sign?
Is it intended to speak to new prospective [probable] clients?
Is it intended to speak to existing clients, providing a reminder of past good service?
Does it exude ‘Trust, Integrity & Service’ the key points of the advertisement?
Does that fellow in the picture have a face of Integrity? Does he look like someone you can Trust?
Does the sign differentiate jiffy lube from its competitors?
Does the sign help jiffy lube achieve its business goals?
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Tags:
Marketing
by Rick Baker
On Jun 21, 2011
Below, when I state numbers I am basing them on my experiences.
I agree with the thinking behind the 80-20 Rule [Pareto’s Law/Rule]. So, I have used 80% and 20% whenever possible rather than try to pretend I have more accurate statistics. I have used 99.44% pure to signal areas where we should not hold false hope for finding the 0.56% needles in haystacks.
- At least 80% of businesses need both Hunters & Farmers. Few businesses can expect to prosper with ‘social media’ alone or a combination of ‘social media’ and Hunter or ‘social media’ and Farmer.
- Start-up businesses need Hunters…they may not need to hunt end-use Clients but they need to hunt business-development allies, funding, etc. [Allies, like CONNECTORS]
- Smaller businesses need Hunters. This is a major problem area because smaller businesses have no ‘room for sales slack’. If the 80-20 Rule is a reasonable guide [and I think it is] then Smaller businesses need to hire 5 sales people to get one Hunter. That’s a real burden on Smaller businesses and their Leaders.
- Less than 20% of salespeople are Hunters [some experts say 15%]
- For business development Specialists trump Generalists at least 80% of the time…that’s giving sales Generalists [Hunter Farmer Hybrids] the benefit of the doubt. [I would not seek Generalists.]
- For complex/conceptual sales, a strong Hybrid sales person [Hunter-Farmer Hybrid] will outperform all others [that’s 99.44% pure]. On the other hand, because so few people are strong Hybrids [as in STRENGTHSFINDER strong] it would be unwise to build a sales plan that relies on finding Hybrid business developers. There are exceptions to this 99.44% Rule. For example, when sectors are deregulated, opportunities open up where the best Farmers in the regulated sector can become the very-good Hunters in the unregulated sector. [I would not seek Generalists.]
- For sales of simpler products and services, Hunters will outsell Farmers and Hybrids 99.44% of the time
- Disruptive Technologies and Viral Products: as the saying goes…sometimes rules are made to be broken. But, be really, really, really sure your technology is highly likely to be disruptive and your product is highly likely to be Viral.
As you can see, I am comfortable creating names for Roles…Hunter roles, Farmer roles, etc. I believe it is important to ensure people know exactly what their Roles mean to the organization. Following up on a comment I read about Law Firms and their descriptions of Roles…yes, I would use Role names if I was running a law firm. Maybe I would use ‘Readers’ and ‘Writers’…but before I did that I would work to come up with better descriptions. And I would add at least ‘Talkers’. ‘Talkers’ would be the Role I would want presenting cases to juries…i.e., presenting persuasive verbal communication. I would spend time coming up with a better word than ‘Talkers’… ‘Verbalists’…something more creative.
Similarly, we could come up with better words than Hunters, Farmers, & Hybrids for our Sales Roles.
After all, Clients are neither ‘prey’ nor ‘livestock’ nor ‘crops’.
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