Thursday, June 26, 2008

It Costs Nothing but is Invaluable

It costs nothing, but creates much.
It enriches those who receive, without impoverishing those who give.
It happens in a flash and the memory of it sometimes lasts forever.
None are so rich that they can get along without it, and none so poor but are richer for its benefits.
It creates happiness in the home, fosters good will in business, and is the countersign of friends.
It is a rest for the weary, daylight for the discouraged, sunshine for the oppressed, and Nature’s best antidote for trouble.
It cannot be bought, begged, borrowed, stolen, or coerced for it has no earthly good to anybody until it is given away.
And if you should meet someone who is too tired to give you one, can you please leave one of yours?
For no one needs it as much as those who have none to give.
Smile!

Monday, June 23, 2008

What is Marketing (and why most people do not know)?

Someone once quipped that you can learn everything you need to know about marketing in a day, but it will take you a lifetime to master. I could not agree with this statement more. Most people see a portion of what they think marketing entails, and conclude that they understand how to market their product or service.

Most people erroneously see marketing as either public relations, advertising, or product packaging or a combination of all of these. What they fail to realize is that marketing is some much more than anyone of this tactical objectives. Marketing’s real objectives include reducing the friction in sales, improving brand awareness, and maximize your return on effort of promoting your products or services. (look for another blog on what return on effort means).

Marketing’s ultimate goal is to create a plan of action and to ACT on that plan. If conducting business is very much like warfare (see Sun Tzu's “The Art of War”), then marketing is responsible for development of the battle plan. And that plan needs to take into account both the long and short view of the battlefield. That means it needs a listing of objectives, needed resources, terrain, enemy strength, positioning and desired outcomes. This plan needs to formulate both the strategic and tactic actions that will ultimately lead to the capitulation of the enemy (gaining market share). 

 
Unlike warfare, business is not a zero-sum action. While a battle plan’s success is measured in victory, a successful market plan uses a variety of metrics to measure success. Success to the marketing plan can be measured in new clients, increased profit, customer retention, margin dollar increases, etc. In order to do any of these effectively, you will need to research your market, customers, pricing, competition, and placement. You will need to determine the best delivery channels (i.e.: retail, direct to market, distribution, etc.) to maximize your margin dollars, and at the same time determine what is the best product mix to minimize your costs.

Marketing is as much a science as an art, and sometimes the objective in a good marketing plan is not to be the biggest, just the best. Still, to go back to why people get marketing wrong. Mostly because they try to make marketing more understandable, they just focus on advertising, or communications, or pricing, or product placement, and not on the whole gestalt of what marketing encompasses.

One thing is certain; the more you know about how to market, the more your realize there is more to know.

Wednesday, June 18, 2008

Your Customer's Customer

Many moons ago, while working at Harris Semi- conductors and a marketing manager, I had a disagreement with my boss about who ultimately paid our salaries. When I told him, “Our customers pay our paychecks; and actually it is our customers’ customers who paid our paychecks,” his retort was that he paid my salary. My boss felt that is was marketing’s job to convince our customers of what they wanted, preferably that it would be what we were trying to sell. Hard to believe that this guy got his MBA from the Sloan Business School!

I knew it then, and it has been proven to me over and over again that my boss was wrong (although I did get sacked for not only this disagreement but many others). What is important then is still important now. In sales, it is NOT what you are selling, what is important is the problems you are solving for your customer. The number one problem customers will face is what should they make to satisfy the needs and desires of their existing and potential customers.

So, if you really want to be successful in marketing, positioning, and selling your product or service, you better know what your customers' customers need. In order to know your customers' customer’s needs, it is mandatory to research their markets, competitors, pricing, and future trends. In having and sharing this information and insight you are offering yourself as a resource and differentiating yourself in the marketplace. The upside on this is that your are not concerned with what your competitors are doing, because you are too busy making profitable sales with your customers. On the downside, it does take more mental effort to be successful, but successful you will be.

Bottom line, STOP selling and START solving.

Tuesday, June 17, 2008

Persistence

Nothing in the world can take the place of Persistence.
Talent will not; Nothing is more common than unsuccessful men with talent.
Genius will not; Unrewarded genius is almost a proverb.
Education will not; The world is full of educated derelicts.
Persistence, grit, and determination alone are omnipotent.
The desire and ability to press on has and always will solve the problems of the human race and divide those who achieve from those who might have been.


Monday, June 16, 2008

Nickel and Diming

During my early business life I was always struck by the fact that “expensive” hotels charged extra for everything, local calls, internet, movies, newspapers, breakfast, etc.; at the same time, more affordable hotels included everything. Although these less pricey hotels did not have marble foyers or linen tables, they did offer things that a very young, weary, traveler wanted: a clean room, safe & quiet environment, and some perks.

For the exorbitant prices you paid at the high-end hotels, everything should have been included. What they should have done is given rebates back for things you did not use instead of nickel and diming us to death.

I read an article in INC Magazine about a judge who was invited to a very expensive restaurant in the Washington, D.C. area. Even though it was a long drive, the ambiance was top notch, the food excellent, and the service superb. Still there was something that ruined the whole experience: He was charged $1 for ice in his $7 mixed drink. It was not the fact that the meal was about $75 per plate, but the fact that he was nickeled and dimed for the extra dollar (instead of just charging $8) infuriated him so much that instead of talking about how wonderful everything was at the restaurant, he only talked about the $1! Needless to say, he never went back to that restaurant.

I see the same thing starting to happen in the airline industry. American Airlines is charging $15 per bag, $3.5 for snacks, and $7 for meals. Incredibly, sodas and water are still free. What American should do is just charge a higher fare and rebate you for what you do not want or use. (Please read my earlier blog about Freedom and Choice). This will put the power of purchase in the hands of the consumer, and you may be surprised that more people than you know are willing to pay extra for extra services. I know for a fact that the purchase rate on a plane is under 2%. Just image what great things could happen is you just trust your customers to do the right thing?

Anyway, what this has done to me is make me look at Southwest and JetBlue. I have always preferred American, but with this nickel and diming, I think the differentiation that American once had is now only a memory.

So remember, do not nickel and dime. Instead, charge what you think your service or product is worth, and then if possible unbundled it. By unbundling, you take out features or services in EXCHANGE for a reduction of price. It becomes a win-win for you and you customers by sharing the purchasing decision, and giving more freedom and choice to your perspective purchaser.

Sunday, June 15, 2008

Freedom and Choice

Recently, I returned from a trip to Washington D.C. with my 15 year old son Jordan. It was amazing to see how many incredible individuals have gone before us to make this the greatest country in the world. As I was able to take in all of these individuals, a repeating pattern began to emerge. What really made these individuals great was the central fact that they believed with all their being extending freedom and choice to ALL individuals.


After this eureka moment, I then started to realize that these are the same two reasons why some companies are successful in good times and bad. Two cases in point: Southwest Airlines and JetBlue. Southwest’s motto is “Your are free to move about the country,” and they have always tried to be the no frills people centric airline. Yes, they did not have first class, but they gave the customers what they wanted (freedom) and choice of low cost fares. JetBlue also realized that Southwest was leaving open the “high-end” choice segment, so they offered EXACTLY what Southwest was offering but at a slightly higher price AND with a lot more perks (seat assignments, no center seats), but again at a choice point that exactly hit consumers sweet spot.

Another way of looking at Freedom and Choice is looking at the power of “AND.” JetBlue looked at the market and asked, “What if we combing first class AND low cost?” Essentially, combining features of the more expensive airlines, such as American Airline’s First Class with those of a discount carrier, such as Southwest’s low cost fares?

Looking at other notables who have employed the “power of and” you have to include Wal-Mart, Target, Virgin Atlantic, Apple, Google, eBay, Linux, Cisco, Hyundai, GE, and Procter and Gamble. Note: Apple and Google are starting to move away from the Freedom and Choice model, and are starting to be perceived as trying to control their markets. Look how the world perceives Microsoft, and how Freedom and Choice will eventually lead to Microsoft’s demise.

(Prediction: Obama will win the Presidential contest NOT because he is a better candidate, or more qualified, nor because he is African-American. He will win for the same reason that Reagan won. He brings the promise of Choice and Freedom. How is not as important as what, and What is the power of AND. If he stays on message, he may well carry over 55% of the popular vote.)

Anyway, how can any of this help you or your business? Well, ask yourself. Is what I am doing really helping people, and if not, how can I give my customers more freedom and more choices. This is NOT to say that you offer all things to all people. THAT is a recipe for disaster. What I am saying is that you FOCUS on offering MORE of what people really want, and if possible, things that until you can along, might have been mutually exclusive (like high quality, and affordable pricing; or like overnight letters and ground package delivery; or more taste and less filling).

So remember, are you on the side of control or on the side of freedom. People in general love the freedom fighters (cue “Braveheart,” “Star Wars,” “Mad Max”). We naturally abhor being constrained, and as Thomas Jefferson once said, “I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man.“ Make this your motto in business, and you are almost guaranteed success.

Monday, June 2, 2008

Why Image (your brand) is Everything

When you think of great brands what comes to mind? Starbucks? Apple? Nike? Coke? Mercedes? Hermes? Everybody talks about wanting a great brand, but so few people understand what actually makes a good brand.
 
First, what is a brand? A brand is what speaks to a consumer when there is no one there to speak for it. Essentially, a good brand is your ever-present salesman. It is the voice inside a customer’s head that tells it that is a good / valuable / well built / sporty / classy / etc. product or service. A poor brand will do nothing but make your potential customers look for your competition.

It is an absolute fallacy to think that all you need for a great brand is a cool or catchy name, or that endorsements “make” your brand, or that technology can sell your brand. First and foremost, you have to have either a product or service that delivers on the promise of your brand.

And now the hard part, what is your brand’s promise? What is the story behind whatever it is you are trying to sell or do or accomplish or help with? If you think about i
t, most good brands have a pretty narrow focus with a well-honed story behind the brand, and they DELIVER on that story.

There are many cases where a good product will have a horrible name. In that case, the adage “give a dog a good name” will apply. Poorly labeled products or services make it more difficult for consumers to recall or remember your name, and essentially puts distance between your product and service and repeat or initial business.

The corollary, of having a great name and a poor product, cannot be fixed by branding. Eventually, no matter how you package it, consumers will figure out that a name alone does not a brand make.

So, when someone says what’s in a name, essentially it could be everything.