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 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.
Jul 27, 2010 | Customers, Management, Sales
Independent produce retailers appear to be resurgent, based on the quality of their offer to consumers.
For years anybody who has been involved with FMCG has known about the challenge of the “last 10 yards“, the distance between a supermarkets back dock and the selling face. Retailers talk about out of stocks, and lost sales, suppliers struggle with short lead times, demanding delivery schedules and the lack of accurate and collaborative forecasting.
Added to these are these challenges presented by fresh food, perishability, appearance, consumers determination to handle and “cherry-pick” the produce, and the nightly put-away. The major supermarkets would appear to be losing share to resurgent independents, as they have responded to the supply chain challenges with greener fruit, more resistant to damage, and offering a longer period to maximise the opportunities for sale. Downside is that green fruit is not much good to eat.
Produce is a difficult category where training and product knowledge is more important than in any dry grocery category by a mile. Why then are there casuals in produce? Last week I saw, not for the first time, a seventeen year old tipping a box of tomatoes onto a display like they were Lego bricks, surely some training would be useful? In this case, it was the last 10 inches that stuffed the tomato.
No wonder specialists who know their business, and can manage the challenges particular to a category are doing a better job than generalists, and consumers are responding.
Jul 21, 2010 | Category, Customers, Sales
So much choice in everything we do, isn’t that great?
Maybe not.
There is so much choice in most things that now we are running the risk of paralysis, procrastination, and often, we just walk away.
Barry Schwartz, a psychologist and terrific communicator puts the hypothesis that in western societies, less choice would make us happier, a view somewhat at odds with the conventional wisdom that greater choice is one of the great benefits of economic and social development.
Consider what is happening in supermarkets. Retailers are setting out to drive category growth, suppliers are fighting each other for a share of the existing, and the growth, usually by line extensions, and each wonder why all the activity leads to the same sized cake being cut up a bit differently but at great cost to all parties.
Perhaps the array of choice is causing the potential growth to turn around and walk out the door, confused and uncertain?
Jul 11, 2010 | Branding, Communication, Customers, Sales
It is often pretty easy recognise marketing hyperbole when we see it, particularly in a category where we have some knowledge. However, in a category where we have no knowledge, it probably is not as easy to pick the fact from the flummery, so even some of the more extravagant claims made may get through the mental fence.
Therefore, hyperbolic claims extolling the virtues of a new small car for example, are more likely to be rejected by the men who may engage with the ad, because they largely believe they know a bit about cars, rather than women, who believe they know little about cars, and are therefore less able to pick the BS from the facts.
This becomes very relevant when marketing a product to a category of consumers who know a bit about the product, and are therefore going to be more critical of the message based on what they know, or believe they know about the category, so be careful of the hyperbole, it will almost always turn off potential buyers, rarely persuade them.
Jun 21, 2010 | Management, Sales, Social Media
In this digital age, the first contact in most situations is digital, where the marginal cost is approaching zero.
This simple fact has changed the sales cycle, as this contact can evolve into an offer to become closer, or it can become a barrier, but each party understands implicitly that the rules have changed.
The question now is not one of how quickly can a sale be closed, or indeed, the process brought to an end, there is more dancing involved, largely because the dancing is cheap, non threatening, and easy. For a sales organisation, there are a few simple questions:
- What sort of digital tools do we need to engage key prospect groups?
- How much time and effort should be spent on developing a sale before we reach the go/no go point?
- How much do we need to give away?
“Give away” now more often than ever strays into the arena of proprietary IP, as efforts to differentiate and add value in a commoditised world accelerates
