Thursday, January 26, 2012

Marketing Mistake #12 - Not utilizing your customer base

Dear business owner, what is your largest marketing asset in your business at this very moment? Is it your products, your industry know-how, location, website, business name or employees?

You guessed right (my readers usually do). Your biggest, fattest, juiciest marketing asset is undoubtedly your customer base. It's the trust and affinity you have built up over time with your clients. Think about it this way: If you had a panga against your throat and simply had to make your next marketing effort work. What would you do? Who would you go to? And what will you offer be?

If it was me I'll introduce new value to existing clients immediately (hint, hint). Study, after study, after study, shows that getting a 2nd sale from a customer is easier than trying to get a new one. Upselling or add on selling is quicker to get going instead of trying to get more customers. How so? And why is that? Let's go deeper ...

Why is it easier to get more sales from existing clients rather than trying to get new ones? What is the underlying reason of this phenomenon? What is the one factor that causes this? Slowly but surely writers are standing on mountain tops with microphones, proudly declaring - "I've got it. I know how to get & keep business! Customers have to trust you first!"

They are in fact right, however ...

Wise businessmen knew it all along...Savvy owners simply narrow their eyes and think ...'well obviously, its the prerequisite of doing business.'



And here's PROOF:

"Trust has a bottom-line impact on results and when trust goes up, speed goes up while costs come down" - CEO of DELL

"Trust is the essential ingredient to building authentic organizations that sustain peak performance" - Harvard Business School

"Trusted leaders and organizations do things better, faster, and at lower cost" - CEO of The Black & Decker Corporation

The moral of the story? Sell all you can to your existing clients first and then go to the outside market. Get it. Got it. Good :)



Monday, January 23, 2012

Marketing Mistake #11 - Not having a simple follow up system

Customers often come into your store, browse your goods and leave without buying. Why is that? Well, maybe they didn't want, need or could afford what you have. Or maybe they really did want to buy, but for some other reason could not.

My point is many legitimate prospects leave your store/place of business everyday that could have (and should have) been your clients. If they took the boat, plane or train to come and visit you or call you, they have displayed interest in you, your company and your products. Which means that these prospects are pre-qualified to do business with you. Know this:

You have the ability to do business with everybody who is qualified for your service!

And get this:

People are on a moving train where their financial situation changes. Meaning that, today Joe blow does not have the money to buy your services. But low and behold when pay day comes and his money is burning through his jeans, just waiting to be spent on his little heart's desire. But here's the problem...

Little joey wants your service. He wants it NOW. His lusty tiny heart is pumping to buy, buy, buy. He can't wait any longer. So he gets it. But not from you. No. From the nearest place where he can find a similar service. After all, everybody sells much of the same thing these days.

So how do you capture Joe in the middle of his buying frenzy? Answer: By installing a toll gate system. Meaning that our friend Joe, has to look at you first before he goes on to someone else. Let me bring it home for you. Design or implement a system to get Joe at his peak buying state. This can even be as simple as an email or an sms.

In closing:

Jay Abraham (America's highest paid marketing consultant) was once asked what the 3 most important words in marketing are. He said: "follow up, follow up, follow up".



Thursday, January 19, 2012

Marketing Mistake #10 - Falsly thinking discounting will attract customers like flies

There's a really disturbing marketing trend going on in business right now. And it's rampant. This marketing disease has literally infected a good number of businesses since who knows when. Among the most serverely infected is the retail industry.

Holy cow. These people throw discount stickers on every item that moves. It's so out of control that these discount "stickies" are in every nook and cranny of every sane retail store in South Africa. Sometimes it's so bad that you can't even see the damn pricetag on the watch you intend to buy.

What's the problem here?

Every retail store out there is using this very 'strategy'. It's outdated, old school and frankly every single one of your competitors uses it. For some reason, most retailers think that pure price slashing can boost sales.

Wrong! It all depends. Lowering your price can increase or decrease sales either way. When you lower price you have to dramatically get more volume. And more volume means, more salespeople, better sales training, more storage space, more overhead and more cost!

What's really funny is the scientific study of Robert Cialdini who proved that raising prices can get you more sales. Ironic isn't it? Cialdini studied a jewelry store who accidently doubled their price over the weekend. When the boss came back, (and realising the clerk's "mistake") he was floored when he saw that almost every single piece of jewelry was sold out at double the price!

But think about it. Think about society in general. We value things we can't get. Tell a kid he can't get a toy and watch his greedy little eyes grow in anticipation. Say to a woman your in a relationship and watch the gleam in her eye flash by. It seems to me the more 'unavailable' you are the more people want you. In fact this one time I wore this fake wedding ring and this stunning blond walked up to me and she said ...

(cencored) xxx

Moving on ... People want what they can't have (point proven). Therefore raising your price, decreasing accessability and so on can boost the desire for your product.


Wednesday, January 18, 2012

Marketing Mistake #9 - Using pre-historic marketing techniques

There are many many ways you can market your business - pay per click, direct mail, cold calling, door to door, joint ventures, social media, traditional media (tv, radio, newspaper) and so on. However, some marketing methods are tough to make work and some just flat out fail. Let me give you an example.

If you sell say, professional services (consulting, coaching, financial advice etcetera) it's near impossible to
get sales through a flyer, inserts, door hangers, billboards and other 'one shot' marketing methods. Why is this?

Because for one the entire industry has been educated to buy a certain way. Most customers and clients buy from experts
or industry authorities. Wouldn't you? I mean, would you buy from a financial consultant distributing flyers at the robot?

Didn't think so...

So selling professional service through a one shot sales approach puts you in a position of
weakness from the get go.

And also it's difficult to try and convince (aka sell) someone without educating him first. If that weren't enough when you go knocking on doors you get what I call "instant rejection". And from there it's an uphill battle for the sale. I'm not saying knocking on doors, cold calling and using flyers are dead.

It DOES WORK. But here's the catch. It only works for certain types of businesses. Commodity type businesses and so on. The fruit stall sells at the stop street, the hairdresser distributes her flyers and web designers often cold call for business. Nothing wrong with that. Keep doing what works.

However...

The investment guy struggles to keep people on the phone, the lawyer finds it tedious to trample along in a suit door to door and the
consultant's flyers get tossed.

The solution? Two step your marketing! Like this:

Give a cold call > send a free report > follow up with an appointment

Send a letter > follow up with a call > book the appointment

Write an ad > follow up with direct mail > ask for the appointment

Do you see the ingenuity behind it all? By shifting your marketing structure the one shot approach to selling is avoided. In fact, if you sell professional service, avoid 1 hit marketing at all costs. You are in the relationship business! Start building a business relationship by having multiple points of contact.

Okay, I have led you far astray in this post. The bottom line is this - stop using prehistoric marketing techniques (1 shot cold calling, door to door, flyers, billboards etc). It does work. But (and it's a big BUT) - it has no leverage, its hard to 'roll out', it's a scattershot marketing approach, it does not build credibility and it does not build your brand.

In the end, I would rather catch a fish with an island size fishing net than with a spear in the dark.

Monday, January 16, 2012

Market Mistake #8 – Not using marketing arbitrage

Arbitrage is defined as:

The simultaneous buying and selling in different markets so as to profit by the difference in price, traffic in bills of exchange, stocks and shares

A mouthful of hokey pokey, right? The arbitrage I’m talking about however, has nothing to do with stocks, shares or bills of exchange. It refers to borrowing, adapting and using already proven ways to eek out market share from your competitors. Specifically it means that you should take the competitive advantage or unique selling proposition of industry leaders in other countries and start to use it as your own. 

Here’s how to do it:

Step 1 – Go to google canada, google uk or google australia and type in your industry (I would for example type marketing consulting into the above search engines)

Step 2 – Look at the web links, headlines, first couple of sentences, opt in boxes and on the ‘why us’ and ‘about’ pages of those websites

Step 3 – See if you can find a proposition that’s unique, compelling or intriguing
Once you’ve done a bit of research you will discover what specific promises or propositions are used over and over again in different countries by different leading industry professionals.


Think about it. Most of these folks are half a world away from each other – yet their propositions may have similar success in their parts of the world. 

Let me give you an example. A very strong unique selling proposition in the early days came from the pizza industry. Domino’s pizza was the first to coin the infamous position: “hot, tasty pizza delivered in 30 minutes or less or it’s free”. A local south african company was very successful in adapting Domino’s competitive advantage (exactly word for word) to gain ground locally. 

My point is this: you don’t have to guess or be creative to forge your own competitive advantage. Simply adapt, modify or use what’s already working. No matter how strong you think your unique selling proposition is – it has to be tested first. It has to matter to your customer. 

Therefore, you can’t go wrong by using a proven competitive advantage (that’s been field tested and proven over and over again) in your own type of industry.

But this is just the very small tip of the iceberg. You can use this marketing arbitrage concept to research product ideas, marketing strategies/funnels, gather industry data to pre-empt competition (a very sophisticated marketing strategy), get email marketing sequences, compare fees … and the list goes on. 

Remember…

“Every minute you spend on planning will save you 10 minutes and 10 dollars on execution” –Brian Tracy

So there. Peace.

P.S How do you know you’ve found the right USP/product idea/competitive advantage etcetera? As soon as you start to read and go “hmm well that’s interesting” or “gee I’ve never thought about it in this way”. Or “Wow, I want to buy this now”. Once you’ve struck gold, remember to adapt, use and model your new USP/product idea/competitive advantage for your business.

Wednesday, January 4, 2012

Marketing Mistake #7 – Not having competitive advantage

Dear Reader
Why should people buy from you? Better yet, why should they do business with you as opposed to doing nothing?
Are you the fastest? Do you have a better than industry standard guarantee? Do you offer extra value in some sort of way? Do you have some sort of edge that the competition doesn’t?
If you have a compelling reason for people to do business with you then... You will start to convert more prospects into clients, get clients to buy in more quantities and get those customers to come back more often.
Not having some sort of competitive advantage can:
·         Start a price war.  Shop A lowers their price to compete with shop B.  Shop B in turn drops its price to compete back.  Soon shop A and B both struggle to turn a profit.
·         Without any competitive advantage you will receive the worst type of customer of all – the price buyer.  This buyer is only motivated by price.  If he can get it 0.10c cheaper somewhere else he’ll do it.  He is not loyal to your brand since he is only motivated by price. 
·         Getting no referrals from customers. In fact, why should they refer their friends when their friends can get the same thing almost anywhere?
·         Lower closing rates for your salespeople. It’s hard to sell something that’s available everywhere. (They will get the classic, I’ll get back to you response)
·         Lose total market share and so forth.


So you need to create some sort of buying edge. A competitive advantage, a unique selling proposition, whatever you want to call it. How many of the big boys have one? Ha! All of them! Take a look:
Head & Shoulders – You get rid of dandruff
Olay – You get younger looking skin
Domino’s Pizza – Fresh hot pizza, delivered to your door in 30 minutes or less or it’s free
Fedex – When it absolutely, positively has to be there overnight
M&M’s – Melts in your mouth, not in your hand
Wonder Bread – Wonder bread helps build strong bodies 12 ways
Nyquil – The nighttime, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine.
BMW – The ultimate driving machine
Avis – We are number two, we try harder
Coca Cola – The real thing
You get the idea right? Is it easy to create one for your business? Heck no, it’s the hardest part. It’s the reason people hire me. Luckily, there are only a few ways to develop one. In fact, I’ve boiled it down to only 5 main categories to create your competitive advantage.
Raymond’s Five Categories For Competitive Advantage:
1.      Be the price leader
2.      Position your company
3.      Own an attribute
4.      Offer extra value
5.      Develop market speciality


Who’s the price leader? Walmart. Who positioned themselves? Olay. Who own’s an attribute? BMW. Who offers extra value? Avis, they try harder. Let’s switch gears and let me give you a local example: Which company in South Africa has market speciality as their competitive advantage? Answer – Curves for women, since they only sell to a specific market.
Are all competitive advantages alike? Nope. Some are stronger than others. Positioning your company as being the first in the industry must undoubtedly be the most powerful competitive advantage or USP you can create. You can then pound your chest and proudly say we are the best because we invented it.
You know what’s a really, really, really easy way to find a competitive advantage? Marketing arbitrage. But for that, read on to marketing mistake number 8.