The 7th Grade Science Lesson Business Schools Neglect

Sir Isaac Newton

Sir Isaac Newton

Do you remember learning Sir Isaac Newton’s “laws of motion” in school? I wonder, were you like most of your classmates, questioning whether knowing this stuff would do you any good in the real world?

Today I want to apply Newton’s thinking to something other than physical science. You know me: I always have to look at things differently.

Newton’s 1st Law of Business?

Newton’s first law of motion states that objects tend to remain in the state of motion that they’re in. We use the term inertia to describe this phenomenon. Moving objects want to keep moving. Stationary objects like to stay still,

You can probably already see where I’m going with this.

If you’ve ever been in business, or seriously considered launching a one, you have almost certainly experienced what I’m talking about. Getting started is hard, isn’t it?

Changing your state of motion from stationary to forward motion takes a lot of energy. Not to mention if you have to get others to move with you! No part of the process requires more hard work than the initial phases. Think of the space shuttle. It takes two rocket boosters and a fuel tank bigger than the shuttle itself just for lift off. The rockets and fuel tank are unnecessary after the astronauts are several miles from the ground. I’m only guessing here, but I imagine that 95% of the fuel burned during the entire voyage is consumed in the first few minutes. Defeating inertia is not easy.

Once you’ve got things started and moving along, you’ve put the Newton’s law to work on the other side of the coin. Inertia in motion is also called momentum. Everything happens more quickly and with much less effort. It becomes difficult for any external force to stop you from getting where you’re headed in the same way it’s difficult when you first get started. Like trying to stop a freight train gliding down the track.

These principles work for your business as well.

Let me state my point explicitly. If you’re going to accomplish anything in business (or life in general) you have to overcome your natural state of non-motion. This is the hardest part. As people in the society most of my readers live in, it is a rare occurrence to find truly action-oriented adults. (My contention is that they beat this characteristic out of students around the same time they’re teaching them about Newton’s laws of motion. But that’s another topic entirely.)

Success Is a Choice

Inertia is the reason that success is never accidental. It may, however, be coincidental. For example, if a microbiologist stumbled across the cure for AIDS, you couldn’t call it a total accident. He or she was messing around in the lab, and happened to make a great discovery. It’s more of co-incidence, An unexpected result came from action already being taken. See what I mean?

The Dip

Seth Godin wrote a best-selling book called The Dip. The book (which I haven’t actually read) describes periods of struggle during any venture that really separate the “boys from the men,” as it were. If you push through the dip, you’ll find greater success than ever before. But most people can’t summon the willpower to continue working through such a trying time. According to this law of motion, the biggest dip can be found at the very beginning of any project. I’m willing to bet that Seth would agree. (If you read this, Mr. Godin, feel free to chime in.)Although creating a roadmap is essential to any endeavor, thinking about doing something doesn’t count as getting started. It’s the easiest thing in the world to get excited about a new idea or vision. Moving past that stage is harder. The emotion has to be translated into motion.

The Happily Mediocre

It wasn’t intentional, but there are no concrete business building lessons in this article, just one overriding concept. Do something! Fear, discomfort, looking crazy, the desire to conform (and the desire of the happily mediocre keep you from shining too brightly) and plenty of other reasons stand opposed to you. You’ll have to really dig in and push forward. Once you get the ball rolling a little, you will not regret the effort. Victory is waiting on you. But you won’t win by accident.


Donnie Bryant

Donnie Bryant

Marketing that works. Copy that converts. Results that matter.

Direct response copywriter, Donnie Bryant, welcomes questions about overcoming marketing inertia. Get in touch with him through email (db@donnie-bryant.com), by phone at 312-450-9291, or follow him on Twitter: @donniebryant.

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Customer Acquisition on Cruise Control – Systemic Marketing™

Cruise Control

Cruise Control

Imagine that you’re driving your car through the countryside. The road becomes slightly inclined, and your car begins to slow. You press a bit more firmly on the accelerator, and the car picks up speed again.

But then, you encounter a rather steep hill, and your car rapidly slows. You mash the pedal down, but the car feels sluggish, and takes a while to respond. Fearing a stall, you downshift to a lower gear. The engine picks up speed, the car begins to accelerate, and you successfully ascend the hill.

What happened to your fuel economy during this hill climbing incident? Can we agree that it suffered?

That’s because human beings are not particularly good at recognizing change. Until that change is obvious, we don’t adjust. Then, in order to restore the optimal conditions, we frequently over adjust.

Sometimes operating at peak performance is more a matter of luck than judgment. If only we had a device which would speed our reactions…

Enter the Cruise Control

The driver clicks the “set” button and a small comparator constantly checks the actual velocity against the desired velocity. The slightest change activates the throttle linkage to maintain the set speed without any intervention from the driver.

A good cruise control system aggressively accelerates without overshooting and maintains constant road speed, regardless of the mass of the vehicle, the weight of the passengers, or the road’s degree of incline.

Is Cruise Control a Convenience?

Yes. Yes it is. Cruise control offers convenience. It offers other benefits, too.

Use of such a system:

a) requires less attention of the driver. It requires less intervention by the driver.
b) adds a degree of predictability allowing better planning of rest stops and arrival times.
c) makes the trip less costly by maximizing fuel efficiency in miles per gallon.

Why doesn’t everyone use a cruise control?

Pretty much, we all do. At least when it comes to driving.

It’s advantages are so strong, and so desired by drivers, cruise control systems have become standard on nearly every new automobile.

Why Isn’t Cruise Control Standard in Marketing?

A cruise control for marketing would offer the same advantages to a company.

a) It would necessitate less attention from the “driver” – thus, less of the driver’s intervention.
b) It would allow for greater predictability in planning.
c) It would operate more efficiently, and thus produce higher ROI.

It sounds like a good entrepreneurial idea, doesn’t it – automating customer acquisition, much as an entrepreneur automates every other process in his company?

Cruise Control Flowchart

Cruise Control Flowchart

The answer is a qualified, “yes.”

Seasonal businesses can’t control the seasons. Extravagances will be subject to swings in the economy. Emergent responders can’t predict emergencies. But for a great many businesses, marketing cruise control is a very real possibility.

It has to do with the way potential customers are identified.

Revealed Targets, Non-Revealed Targets

Targeting involves defining and identifying the shoppers who are most likely to purchase. The ultimate identification reveals your potential customers names and addresses. This is possible if your target has, for example, subscribed to a magazine, lives in a particular neighborhood, or must be licensed with a legal entity.

Non-revealed targets are not identified as individuals. Non-revealed targets might include Country music fans, people who like Italian cooking, or parents considering hiring a tutor for their child.

Revealed targets can be contacted directly. Non-revealed targets are best reached through mass media.

Its much easier (and cost effective) for a marketing cruise control system to send offers to additional individual prospects.

What if Your Business Ran At Full Capacity?

Any company which will find an advantage in constantly running at full capacity will benefit from a Cruise Control system for marketing.

  • A pediatric dentist with an empty chair several hours each week.
  • A heating and air contractor with too few maintenance contracts.
  • A furniture store with inventory turning too slowly.
  • A jeweler with unpredictable demand for repairs.

And, of course, any owner preparing his business to be sold in the next few years.

Marketing Cruise Control is part of the Fishing for Customers Systemic MarketingTM system, which we’ll be discussing over the next few weeks. After all, it only makes sense to catch the limit when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about setting up a Marketing Cruise Control system for your company? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

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Making Decisions

Peter Drucker

Peter Drucker

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Danger in the Discount

MP3 Player

Generic MP3 Player

Can you imagine a more idiotic challenge than to see which business can use up it’s investment capital and be forced out of business first?

Its what happens each time a new business opens with no strategy other than to sell at a lower price.

Dropping price doesn’t work. Long term, it never works. And in the short term it can’t create long term customers.

Let’s create a hypothetical example:

John finds a Chinese source for an 8mb off-brand MP3 player, which he can buy in quantity for $10 each. John checks eBay and finds the comparable offerings are priced at $40 each.

Wow,” says John. “Those other sellers are being greedy. I’ll mark mine $30 each and sell a TON of ’em.” He estimates the cost of shipping, discovering it will cost roughly $6. John decides to charge $10 for shipping “and handling.”

Thinking he will quickly sell all 100 units at $20 profit, plus a $4 shipping markup, he’s counting on taking in $2,400, and making a net profit of $1,400.

John invests $1,000 dollars, purchases 100 players, and is now in business. He lists them on eBay for $30, plus $10 shipping and handling.

John is right. There is a demand at that price point. He sells 16 the first day and 17 the second.

On the third day John makes no sales. Worried, he browses eBay to figure out why.

What’s this? This guy “Tom” has the same player listed at $27.  Worried, John drops his price to $25, and sells five more before, again, his sales abruptly stop. He finds Tom’s eBay store is still selling them at $27. Puzzled, he digs a bit deeper and discovers “Bob” now has ’em for only $22.

John ponders. “Well, I’ve made some money on these. I think its time to get out of the MP3 player business.” He drops his price to $15, offers free shipping, and expects to blow out the remainder and retire.

John sells 16 more before his sales again stop. He checks. Tom is reacting to the new competition by selling his players at $11 each.

John cuts price below his cost, and offers his last 27 units at $8.50, plus free shipping. Another 19 are sold before “Andrew” offers the same player for $7.50, and free shipping.

Tired of losing money, John contacts Tom, Bob, and Andrew, and offers his last 27 units to them for $270. None of them take him up on the offer.

John cancels his eBay account, and determines everyone on his Christmas list will get an MP3 player for Christmas.

Shall we calculate John’s profit on this venture?

John's P&L

Ouch!

John could be considered a dabbler. A great many eBay sellers are.

Some, on the other hand operate real businesses. Look at the feedback scores. Nobody gets to thousands of transactions as a dabbler.

People like John are not the folks Dun & Bradstreet speak of when they report 6 out of 10 businesses with 20 employees or less don’t make it past their first year, and 9 out of 10 don’t make it to their 10th anniversary.

Going Out of Business sign

Going Out of Business

D&B goes on to say that only 10 percent of all of the business failures in the US file for bankruptcy. The rest close voluntarily because operating their companies turn out to be way too much work for the meager income they provide.

The biggest cause of insufficient income?

Pricing too low.

Why?  Because all of a new businesses operating costs are higher.

A new businesses can’t BUY inventory at a lower price than the big box stores. It can’t ship at a lower price. And it doesn’t spend enough on advertising to buy in the bulk required to get reduced pricing there, either.

Combine higher operating costs and lower profits with discounted pricing, and you have a situation my friend and colleague, Jeff Sexton, refers to as the “race to the bottom.”

With lower price as your selling strategy, you’re competing with at least eight other ventures already in the process of going out of business.

What’s the Solution?

Raise your prices.

C’mon, McKay,” I hear you asking.  “Just how do you suggest I raise prices in a bad economy when all of my competitors charge so little?

Ah.  Fair question.  We’ll discuss that in a couple of days, as we continue fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about pricing for profit? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

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Your Favorite TV Ad

Honda Pilot

The car in question.

I like group a capella singing. I love group a capella sound effects.

My favorite radio commercials of all time are a series for Trop ArcticTM All Season Motor Oil produced in the late 70s.  A group of exceptional jingle singers imitated the sound of a railroad crossing, complete with warning bells, locomotive sounds, and a perfect doppler effect as the train roared by.

That was radio in 1979.  In 2011 there is an equally well done television ad.  Its running right now.

Have you seen this ad?

An SUV drives down the highway. Three boys in the back seat. Three girls in the middle seat. A pair of adults (Dad and Mom?) in the front. The blonde boy in the middle of the back seat starts making mouth noises.

“Bum bum.”   (high) “Bum bum.”   (low) “Bum bum.”   (back to normal) “Bum bum.”

As he repeats, the leftmost girl in the middle seat opens up with “ah-ee ah-ee ah-ee ah-ee.”

The kid directly behind her holds up his soft drink cup, empty of soda, and rattles the ice.  Cut to Dad simulating downward a bass glissando.

Bam! The eight people in the car are now each performing their respective parts of a song intro which is becoming very familiar. Kids are fingering their shoulder belts as if they’re playing guitars, and as the camera pulls back to show a full view of the automobile, the passengers all burst into the classic Ozzy Osborne, “Goin’ off the rails on a crazy train.”

Have you seen this ad? If not, I’m sure you will. The ad is scheduled to run during “Dancing With the Stars,” “Big Bang Theory,” and“The Biggest Loser.”

Shall we make some predictions?

People all over America will claim this is their favorite ad. The RPA agency of Santa Monica will win awards. And sales of Ozzy’s catalog will spike before Christmas.

This ad won’t sell cars

Here. I’ll prove it. Show of hands – who knows the ad of which I’m speaking? Oh, a bunch of you. Let’s see… one, two, three… twenty-seven, twenty-eight, two hundred nineteen, a few more…

Now, keep your hand up if you can name the car.

Oh. My. Nobody?  Nobody remembers the car being advertised?

And that’s the issue, isn’t it.

In my favorite radio ads the singers pause the sound effects several times to sing out boldly, “Trop ArcticTM, All Season Motor Oil. Long live your caaaarrrrr.

Thirty years later I still remember those Trop ArcticTM ads.

But vast numbers of viewers who will claim this new TV ad is their favorite, won’t know who to thank for the entertainment. An automobile manufacturer who probably spent half a million dollars to produce this ad, and several million more for TV airtime, will not receive the highest and best use of his advertising dollars.

Because we don’t remember the name of the automobile. We remember “Crazy Train.”

This is a catchy, very well produced, and very bad ad. Please don’t create ads like this if you’re fishing for customers.

Your Guide,
Chuck McKay

PS. Oh, you really can’t remember the make and model of the car in the ad, and it’s driving you crazy? Here’s thirty seconds of some pretty well done TV.

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about creating ads which help customers to remember your name? Call Chuck at 760-813-5474. Or “E” him at ChuckMcKay@FishingforCustomers.com.

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Focus on Customer Value to Survive the Coming Shake Out

Out of Business Sign

Out of Business sign

There’s a shake out coming.

Historians will call this a period of consolidation, in which businesses are eliminated, or acquired through competition.  They will have had the benefit of time.

You and I will remember this as a time of small businesses going out of business.

If your company presently competes with 9 others, and there’s only enough business for six, three will close their doors, or sell out to a competitor.

Of the six remaining, two will barely keep the doors open, three will settle into a comfortable status quo, and one will thrive.

That one will understand how to deliver customer value.

Customers who grew up in times of plenty, loose credit, and purchases on a whim have mentally shifted to a time of considered purchases. They seem to be asking “Do we need it? What must we give up to get it? How good will it be?”

Changing consumer attitudes

Sales are off.  However, goods and services are still being purchased.  Automobiles break down regardless of the economy. Kids still outgrow shoes. Appliances still need repair.

But now every purchase gets considerably more deliberation.

This does not mean you need the lowest price. I promise, price is one of the less important factors in a buying decision.

Hundai Accent

Hundai Accent

Need proof? The Hyundai Accent, at $10,705, has the lowest MSRP in the country.  Do you drive one?  You don’t?  Humm.  There must be reasons other than price on which you based your purchase.

In fact, a 2010 J.D. Power study indicated that only 38 percent of buyers chose their car due to price, while 52 percent said their choice was due to the way they were treated on the lot.

And those 38 percent who focused on price?  You can understand why they said it was important.  When a shopper can’t see any difference between our offerings and those of our competitors it only makes sense to buy the less expensive of apparent equals.  Plus, out of all the factors which influence her decision, price is the easiest to understand.

But don’t believe she’s looking for cheap.  She’s not.  She’s looking for value. Simply stated, value is what the customer gets for what she pays.

Let’s illustrate with a couple of examples from the Great Depression.

Blue Plate Special

Blue Plate Special

Blue Plate Special

Running a neighborhood diner is an exercise in timing. Run out of banana cream pie before people stop asking for it, and you lose sales.  Prepare too many, and they spoil.  Few things are as depressing to an owner as calculating lost profitability awhile watching six slices go bad. During the depression, before refrigeration became cheap, the “use by” dates were much more critical.

And cooking up all of those things which might spoil if we don’t use them will only create more servings of foot to join those unsold pie slices. Unless…  Unless…

Unless we can increase demand for that particular dish.

Here’s an idea: let’s offer a good sized portion of wholesome food at a reduced price.  Customers won’t cares that the offer is for our own benefit. Most won’t care what we select for the entree, as long as its a genuine value to folks aware of every penny they’re spending.

The blue plate special was a strong value-based strategy which worked well 80 years ago. Could it work again today? I suspect, yes.

The Two Pants Suit

Men's Suit

Men’s Suit

This one is pure genius. A jacket and trousers (and sometimes vest) don’t make a suit of clothes. Making them all from the same fabric does. Wearing mismatched fabrics only draws attention to the fact that the wearer doesn’t have a suit.

The useful lifetime of a suit of clothes is usually limited by the trousers. They wear out, or are otherwise damaged, far before the jacket shows normal signs of wear.

The solution? Make a second pair of pants from the same fabric, and double the useful life of the garment investment.

Will people pay more for that extra fabric and tailoring? Yes. Yes, they will. Ask them to pay 20 to 30 percent more for twice the usage, and see how quickly they line up to buy.

And that’s why we stress value, rather than price.  Sometimes to be considered value, one does reduce price. Other times real value requires paying more.

Shoppers want:

1. More

2. Higher Quality

3. For a Longer Time

4. A Reduced Price

Pick one. Better yet, pick two. Survive the shake out by making your choices those which your competitors do not, can not, or will not offer.

Price always comes last. Location, brand familiarity, and business reputation can all be more important than minor price differences – an in a competitive selling situation, those differences will tend to be minor.

And a bit of imagination can certainly help to showcase what’s important to a shopper.

Five Guys Bounteous French fries

Five Guys Fries

Five Guys Fries

Is there a more competitive niche of the restaurant business than burgers and fries? And yet, one of the hottest players in this industry is Five Guys, who’s French fry servings are legendary.

They put your fries in a large styrofoam cup, filled to overflowing. The cup goes in a paper bag, and they pour in more fries, until the already generous serving size has more than doubled.

It’s value.  Is it inexpensive? No, the average ticket for a burger, fries, and beverage at Five Guys is about $11 – roughly double that of McDonalds. Customers not only pay it, they brag about the place to their friends.

KFC’s Containers

KFC Reusable Containers

KFC Reusable Containers

While other fast food restaurants package their meals in disposable paper or styrofoam containers, Kentucky Fried Chicken is now sending side dishes home in Tupperware® or Gladware® styled re-usable containers.

Serve from them. Re-seal leftovers in them. Wash them. Use them for other leftover items.

They probably cost KFC a few pennies more. The company gets points for customer value, and bonus points for being environmentally conscious.

Gallery Furniture

Gallery Furniture

Gallery Furniture Delivers

If a customer lives within 100 miles of Houston’s Gallery Furniture, they can expect same day delivery and set up by store employees.

Buy it today, have it in your home tonight.

They even call 30 minutes ahead to let you know when they’ll arrive.

Sometimes value has nothing to do with price.

Rexel Electric Becomes Destination

Rexel store

Rexel store

When my friend and colleague Mike Dandridge took over the Rexel electrical wholesale store in Midland, Texas, he installed a Senseo® Coffee Brewer and a cross section of gourmet coffees. Dandridge baked chocolate chip cookies throughout the day in a convection oven.

He piped comedy albums into the background music system, installed plantscapes throughout the store and Christmas lights around the counter. Dandridge placed Mr. Potato Head and Etch A Sketch, along with other toys at the counter.

And, of course, he focused on excellent customer service.  Over the next three years Rexel sales more than quadrupled.

Did Rexel try to undercut Lowes or Home Depot on the price of electrical supplies?  No.  They understood the value in the shopping experience.

Exceptional value, as perceived by shoppers, is rare, which is what makes these such great examples.

We assume the differences in our offerings are significant to our shoppers. We assume the “value added” we stack on top of our products and services are appreciated by shoppers. All too often, we’re wrong. What happens when the “extras” we draw their attention to aren’t even on their radar?

If they want bells, don’t give them whistles

Value is the price she expects, compared to the price she pays. Stack on more and more things she doesn’t care about and wouldn’t pay for, and instead of adding value, we merely clutter the dialog with irrelevancies.  We risk becoming irrelevant if we don’t understand to what our shopper pays attention.

Do we know what she values? How sure are we that we know?

survey clipboard

Survey

I’d suggest we ask.

List the attributes you suspect are important, and ask your customer to rank them from most to least important.   She can’t rank those attributes equally, and you can put  this information to immediate use.

Ask her about delivery and set up, documentation, portion size. Ask about entertainment, speed of service, problem resolution, free refills, courtesy of staff. Maybe even ask about price.

But limit the choices to five or six in order to get her to complete the survey. How many customers need to complete it to be useful?  It doesn’t take that many, actually. We only need a basic understanding, not statistical predictability.

25 to 40 completed surveys will provide a solid insight into what shoppers consider important. Knowing which bait works best is important when you’re fishing for customers.

Your Guide,

Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about articulating your value, and making sure your customers appreciate it? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

 

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You Can’t Win Customers With a Boring Newsletter

Newsletter image

Newsletter Example

Typically, people involved in business, especially in competitive industries, think what they do is fascinating. To people outside the industry, they aren’t.

So, when you fill your customer newsletter with riveting content which involves your new line of adhesive tape which is now 13/100 of an inch wider, or that your bookkeeper has a new grandchild, you’re signaling to potential customers that you don’t care about them. I assure you, they will return the attitude.

If your newsletter is considered marketing for your company, then let’s look at how to make it more effective.

 

How to Write a Winning Client Newsletter

The Customer Must Always be Your Focus
My clients don’t care about my internal operation. Your clients don’t either. But they always care about themselves and things which affect their lives.

Write About Things People Will Actually Use to Improve Their Lives
Interestingly, your topics don’t have to be related to your business. Send information about inexpensive insulating tips, chili recipes, or even houseplants that thrive in your climate. Conduct contests. Give small prizes away “just because.” Project friendly and fun.

That doesn’t mean don’t write about what you do, just recognize that there’s a limit to the number of times you can show how to save money with your product. (That limit is once, provided it was interesting the first time. If not, the limit is zero.)

Publish Consistently
How often do you want your customers to think about you? Monthly is good. So is bi-monthly or quarterly. Don’t stretch it out to more than three months at a time, though, or people will forget and your latest mailing will be just another piece of “junk mail.” Pick a schedule, and then stick to it.

If you tell people to expect your newsletter every month, skipping a month makes you appear to be less reliable. Keep your promises, even the little ones.

Market With Your Newsletter
Publicly thank your customers for specific referrals. Print your more compelling testimonials. And always have a compelling offer in every issue. Done correctly this isn’t just a “feel good” piece you’re putting out… it’s also a low pressure sales tool.

Newsletters Work Best Long Term

Customer relations is a process. It will take several issues for customers to just get in the habit of reading your newsletter.

It will take longer for it to prompt referrals or sales.

But when you present your company with professionalism, do so reliably, and talk today about what people are talking about today, you’ll find customers look forward to receiving anything you send them.

And that’s the bait your competitors simply can’t buy when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about getting your company’s news out? Drop Chuck a note at ChuckMcKay@FishingforCustomers.com. Or call him at 760-813-5474.

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Buddy, You Don’t Offer Enough Value

Value Added

Value Added

Are you familiar with the term, “velocity of money?” You’ve maybe heard it said that a dollar changes hands roughly seven times before it parks in a savings account or a long-term investment. Velocity is the relative speed at which the changing happens.

A dollar that enters the community in January and circulates through six other hands by April is evidence of a very different economy than one which enters in January and finally parks in August.

Right now, money is changing hands at the slowest rate in decades.

Unemployment is high, but employment is still much higher. For every person without a job in this country, seven are still working, still wearing out clothing, putting miles on cars, buying groceries, paying rent, and tithing to their churches. They’re still spending, but at a greatly reduced velocity.

The people who are spending are carefully considering each purchase. They’re not buying cheap. They’re buying value. Cheap is price compared to other similar offerings. Value is actual price compared to expected price.

Value, over and above.

I’ve recently had conversations with three independent practitioners in the financial industry. One is a stockbroker, one a fund manager, and one a financial analyst. They each asked the same question: “How can I meet more high income investors?” The stockbroker summarized his goal as: “I can’t make any money dealing with the people in this community. I want to find clients so wealthy that I can back my pickup up to their door and shovel the money directly into the truck bed.

There’s a major flaw in his thinking. High net worth investors already have a broker, or a fund manager, or a financial analyst. The professionals they choose to work with were carefully vetted before the relationship got underway. And, should they ever become disillusioned with their current advisors, they will look for someone who offers a greater value than the current advisor does.

What value does our stockbroker friend offer investors?

Pretend you are a high net worth investor, and you have a $2 million portfolio. Will you trust your money to an advisor who’s clients are primarily in the $250,000 range? Or will you want to be the smallest account managed by an advisor who’s average client has a $200 million portfolio?

There’s an implied competence in someone with whom much bigger investors have already trusted their money. As the new guy on the block, if you’re not already working with those clients, you’re going to have to offer something other advisors don’t.

Can you be the only advisor who meets with his clients quarterly, or semi-annually to re-evaluate their immediate and longer term goals? In a rapidly changing economic landscape, frequent attention may be of value.

Can you be the advisor who out performs the market by three or four points? Can you do it consistently? Can you offer proof of that?

Can you specialize in super-serving a niche market? Self-employed professionals? Single women? Law enforcement employees? What does your understanding of their specific circumstances ad to your value?

Value – the operative word for the decade.

Are you in retail? Do people come to you to shop? What do your customers get that no other retailer offers them? Do they recognize that value? Could you articulate it in two or three sentences?

Are you a service professional, selling your plumbing, painting, or air conditioning expertise? Why would a customer find your service more valuable than other service professionals? Can you explain that in a typical elevator speech?

Do you operate your own professional practice? What can your architectural clients, your dental patients, your legal clients expect you to provide that other professionals don’t offer? Do they already understand your value? How do you know?

What value do you offer?

Its a critical question for the next decade. People are still spending. They’re not looking for cheap. They’re looking for value. Without it, you’d best hunker down and hope you can keep enough cash coming in to keep the doors open. If you have real value, but need help explaining and projecting that value to the marketplace, my direct number is 304-523-0163.

The ability to state it simply, and to communicate that value to your potential customers is critical in this decade as you fish for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about articulating your value, and making sure people know it? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

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Track Advertising Results

Roy Williams

Roy Williams

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Data Mining for Better Ad Copy

Data Mining

Examining your customer data may lead to better advertising appeals.

Pretend with me that you run Acme Office Supplies. You’ve just conducted a survey asking your customers why they shop with you. The overwhelming answer: convenience.

Is your research done? Do you tell people how convenient you are in all of your advertising and wait for more folks to say, “Yes. I’ve been hoping to become aware of a convenient office supply store. I shall go there now to purchase supplies?

Too many store owners would. I’m here to suggest a more effective use for your advertising dollars. This technique is derived from RFM Analysis, a tool I frequently use with new clients.

Today We’re Going to Concentrate on the “F”

The “F” in RFM stands for Frequency. Sort and rank your active customer base by the number of purchases they made from you last year, with the higher numbers at the top. Some numbers will be the odd loner. Others will cluster to form groups. I predict you’ll see patterns which can provide a great deal of marketing information.

I’ve chosen three clusters for illustration. Customers who bought 50 times in the last year, those who made 12 purchases, and those who only came in twice. These numbers correspond with weekly, monthly, and a couple of random purchases of office supplies.

What Motivates These Purchasing Patterns?

Wouldn’t you suspect that anyone purchasing weekly is experiencing cash flow issues? He needs the profit from this week’s sales to fund the supplies he needs to conduct business next week.

The monthly buyer likely values his time. Because of that, he keeps a well-stocked supply closet and doesn’t make unplanned trips to the store.

Twice a year? This guy is not one of your regular customers. He has his own preferred supplier, but found himself on your side of town just before closing time and needed something before he could get back to his regular store.

Here’s the Interesting Part

All three of these clusters of customers may very well tell you their prime motivation is “convenience.”

  • Convenience to the weekly shopper picking up getting exactly what he needs, only as he needs it.
  • Convenience to the monthly shopper is never running out of supplies before he’s ready to make his monthly shopping trip.
  • Convenience to the occasional shopper is not having to drive to his favorite store when its really out of the way.

The message which resonates with each will be somewhat similar to the others, and yet, not quite right for any other business. Our second customer, for instance, doesn’t share the first’s concern about cash flow. Our third never considers stocking up.

So, is a single advertising message the way to go? We both know it’s not. However, there is a similarity that can be summarized by the “convenience” answer on your survey. We can still use that similarity.

Build a Campaign

Give examples of each under the “we’re convenient” umbrella. How about, “What does convenience mean to….

What does convenience mean to Robert Smith?” followed by Robert’s explanation that in this economy, he makes every dollar work it’s hardest, and Acme Office Supplies keeps in stock everything he needs. The ad could end with “Acme is convenient… whatever that means to you.”

What does convenience mean to Jack Johnson?” Jack’s story centers around the value of his time, and again closes with “Acme is convenient… whatever that means to you.”

And convenience to Debbie English? Debbie could tell about Acme’s location, or its hours of operation, or that it’s open weekends. Regardless of the specifics of Debby’s hot button, the closing will tie back to the campaign. “Acme is convenient… whatever that means to you.”

Dig a little deeper and you’ll find Neil, and Sally, and Rick. Each has a story that can help to build Acme’s image, and tie the overall campaign into one memorable whole.

Rotate the ads if they run on TV, on Radio, or in the Newspaper. Send the individual ads as postcards to customers in the appropriate clusters.

One Additional Step

With your new understanding of customer group motivation, can you offer inexpensive customization of your services?

Could you create an order form for Robert that let’s him check off the supplies he needs this week, or perhaps list his usual purchases but leave blanks so he can fill in the amounts? Robert could fax the order to you, and you could deliver it first thing in the morning.

Could you send someone to Jack’s office with his custom order form – one that you and he developed together to determine his optimum level of supplies? You could schedule that appointment weeks in advance, survey his stockroom, and just like you do for Robert, deliver tomorrow morning. Because of his time sensitivity, Jack would find this service exceptionally valuable.

Customize once. Re-use indefinitely. And customized bait usually works better when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about uncovering strong customer motivations?  Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call Chuck at 760-813-5474.

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