Sep 19, 2010 | Customers, Marketing, Sales
Watching The Gruen Transfer a couple of weeks ago, one of the panelists quoted one of the oldest adages in marketing, ‘Sell the problem” as if it was a revelation. Fact is, addressing the problem is often forgotten as marketers become so entranced by the features of their products they forget to define the reason somebody would buy it.
People do not buy solutions to problems until they see the solution as costing less than managing the ongoing costs and inconvenience the problem generates, it therefore follows that the best way to sell is to develop the understanding of the relative size of the problem to which you have the solution.
This is the basis of “SPIN” selling, (Situation, Problem, Implication, Need pay-off) which is still the best sales book ever written, outlining a selling process that focuses on what a sale delivers to the buyer, and the best way to get there.
Sep 2, 2010 | Change, Customers, Marketing, Operations, Sales
We spend lots of time dreaming up new stuff, but there are almost always things that we take as given, things that we do not question, usually because they are so basic, that we never think to do otherwise.
Many years ago, a part of my responsibilities was for the marketing of Ski yoghurt in Australia. At that time, all 1kg yoghurt came in round tubs, it was easy, cheap, all the filling equipment was designed for round tubs, as it was the cheapest shape to produce and print, anything else was a dumb idea, and would cost a motzza. I changed Ski to a rectangular tub, and sales tripled overnight, and the market was changed. Consumers for a number of simple, practical, but to then unspoken reasons, preferred a rectangular tub
The whole industry had been dependent on the manufacturers of the filling equipment, who supplied machinery designed to deliver the least cost option, nobody was silly enough to even consider an added cost alternative, so round tubs were the standard, all operational equipment was optimised for round tubs, and the suggestion that you should retool a factory for an alternative was never considered. It’s just that consumers when given the choice abandoned the round tub overnight, and retailers, reaslising a rectangulat tub offered better shelf utilisation, were happy to put them on shelf.
When looking for opportunities, consider the things that are just “there” that are part of the fabric, and are as a result taken for granted, and find one to change.
Aug 19, 2010 | Customers, Marketing, Sales, Small business
Commodity markets have two things in common:
- There is plenty of business to go around, that is why it is a commodity market. In a mature, saturated market, the challenge is to attract some of the business that is around, not build a new market.
- Customers focus aggressively on price, usually because none of the suppliers in the market give them a reason to focus on anything else, and it is an easy common denominator.
Finding a sustainable point of differentiation is never easy, if it was, everyone would be doing it. The starting point is to understand what the commodity you sell is used for, understand how the product adds value to the customer, and restructure the offering around the source of value.
For example, hiring a car is an exercise in price comparison and the convenience of pick-up and drop-off, not much else. A hirer wants a car to give them mobility, flexibility, and economy of time, and money (compared to taxis). Why doesn’t someone charge by the Km after a small base charge to cover insurance and availability. Suddenly, the game is changed! Same with car insurance, we all pay the same differentiated only by the age and location of the driver, and type of car, but cars are about offering mobility, and logically the more you drive, the greater the chance of a claim, so charge by the Km driven after a small base charge to acknowledge the other variables. What about advertising, why not charge by the response, putting some responsibility on the medium to deliver what it promises, even something as basic as printing services, differential pricing based on turnaround times, response rates (even for printed leaflets, brochures, and so on) is possible.
When you charge for the value delivered, as seen by the customer, rather than just the production, the market loses the second of the characteristics noted above, and differentiation has emerged.
Aug 15, 2010 | Branding, Customers, Innovation, Marketing, Social Media
How do you compare prices in a range of stores when standing in the aisle of your local supermarket?
The easy answer now, is “on your iphone“. A crowd called Red Laser have an app that scans the code, compares the product/price to others scanned (presumably there is a data base somewhere out in the cloud) and using google maps is able to compare prices in your general location.
This development has the potential to re-write the equation between brands, the value of things like location and parking, and price in the retail space, and with effectively an FMCG retail duopoly in Australia, it will consume some headspace in Co-op castle in Melbourne, and the Taj in Sydney.
It is a “pity” we wasted millions on a “Grocery Watch” white elephant, a technology/populist bet in the early days of the Rudd government, when a couple of years down the track, a similar thing can be done better on your phone. We now have the same sort of thinking making a 45 billion dollar bet on the NBN, a bet that will impact on generations. Hope they get it right this time!
Aug 3, 2010 | Branding, Communication, Customers, Marketing, Sales, Social Media
Social network marketing is a fundamentally different beast to “traditional “marketing. When talking to marketers, they usually see social media as being in effect free, the challenge is to get the message spread, often by being outrageous, generating awareness for little money compared to traditional media.
To my mind, it is much more complicated than that. “Word of Mouse” on social media has to be earned, and that is really challenging, requiring intimate knowledge of the marketplace, customers, their behaviour, and what is likely to positively engage them. Traditional marketing makes it easy to gain a general level of awareness, you just have to pay for it, but like most things that are easy, the return is very low.
Aug 2, 2010 | Communication, Customers
We have all heard the term, anyone who has ever read anything about negotiation will have it burned into their brains, but what does it really mean in this age of digital collaboration?.
The rules have changed, the old days when you saw an opportunity as a potential benefit, without much consideration of the outcome for the other party are over. As a retailer once said to me in the middle of a very difficult negotiation, when I asked where was the win win in his proposal “we will win today, and we will win again tomorrow”! Not a comment that could build any sort of sense that it was worth my being there.
Recently coaching a client going into a negotiation with a potential customer who had arrived via the website, and so had an idea of the value we could bring to him, we defined the optimum outcome of the first face-to-face meeting not as a sale, but as the creation of trust as a precursor to building a relationship that may involve the specific product on the table at that time, but not necessarily. There were plenty of other opportunities we could see, and assumed there were many we could not. Our objective was to present ourselves as a potential long term partner who could bring far more than just a good product range, customer service, and competitive pricing to the table.
Worked a treat, and will prove to be a real winner all round!
