Revenue Growth is Greater Than Price Increases

Higher prices affirm customers’ beliefs in value and attract even more buyers. This approach works for any business, of any size, in any industry.

A November 2, 2011 Barron’s article reports that Kraft Foods’ third quarter net revenues grew 11.5% in part due to a 7% price increase.

That means Kraft’s revenues grew a whopping 64% more than the price increase. For many business leaders this seems impossible. After all, conventional wisdom says buyers tend to find alternatives when prices go up, right? In reality customers have greater confidence in a product or service when its price reflects the value they’ll receive.

What does this mean for you? That you too can enjoy the results Kraft experienced. Here are the keys:

  • A reputation for quality.
  • Knowing who values that quality.
  • Pricing that reflects high value.

Let’s continue with the Kraft example to see how these apply.

Reputation

Kraft has a reputation for quality that’s spanned more than a century. The good news is you don’t have to be around that long to develop a reputation for quality. But consistent delivery of quality, however you and your customers define it, is essential to having revenues that grow faster than your price increases.

Knowing Your Customer

Kraft knows its customers have discerning tastes and are willing to pay a premium to get that taste. Their customers also value consistency in the product. In addition, their customers have an intuitive sense Kraft has their best interests at heart - that Kraft wouldn’t take risks in the manufacturing of their products that might cause the consumer problems.

Pricing

Kraft’s premium pricing adds further assurance of the quality, consistency and concern for their customers. Higher prices affirm customers’ beliefs and attract even more buyers to Kraft’s products. That’s how Kraft can enjoy 11.5% revenue growth with a 7% price increase.

As you can see, there’s nothing magical about what Kraft has done. This approach works for any business, of any size, in any industry. It’s up to you to employ these keys so you too can enjoy a similar level of success.

Dale Furtwengler is the author of the internationally acclaimed book, Pricing for Profit. His company, Furtwengler & Associates, Inc., helps companies get higher prices regardless of what their competitors or the economy are doing. For more pricing/branding/marketing/sales tips visit his website, PricingForProfitBook.com

Generate Optimal Results When Networking

Tom Ruwitch asks the panel, “When attending a networking event, what is one strategy, tactic or rule that you always keep in mind to generate optimal results for you and your business?”

As a business owner, you understand more than most, your time is money. You also realize networking is key to growing your business, even though sometimes networking events seem to be less successful than you’d like. For many who attend networking events, outcomes can be frustrating if you are not prepared to meet new people, do not set and achieve your business goals for attending, or fail to have purposeful and fruitful conversations with qualified prospects.

Building trusting relationships that lead to satisfying business transactions takes time, genuine care and a balance between people skills and a focus on your business goals and aspirations. Respect for self and others and a consistent relaxed and abundant mindset allow for business to flow due to a genuine helpful intent.

Read what nine independent e4e business owners and recognized experts report on the strategies, tactics or rules they keep in mind to generate optimal results when at networking events. In this way, you draw on the real-time experience of our experts to quickly decide strategies to benefit you and your business.

Four of our Nine Panel Experts:

Bill Prenatt

Actually, there are three strategies I execute on consistently: 1) I set a goal for how many valid prospects I expect to meet and I plan to enter into my data base; 2) I communicate clearly what business I’m in and what kind of prospect I’m interested in meeting. This usually cuts the conversation short with people I’m not aligned with; 3) I make it a habit to connect at least three prospects with existing connections.

Judy Ryan

e4e partner Fred Miller offered a great strategy in one of our recent workshops. He said we should not allow our time to be monopolized during a networking event. He gave an example of a person handling this in a thoughtful manner by saying, “Please excuse me. I committed to myself I’d meet 10 new people before the main event starts and I have a few more to go. Great meeting you!” What a wonderful, respectful and direct way to be upfront about wanting to meet more than one or two people at an event.

Keith Vollmar

Here is what I do when attending a larger networking event. For each meeting:

1. Walk away with no less than 2 business cards of individuals I have not met before.
2. Make sure I say hello to 2 or 3 established business friends who are key potential referral sources for me.
3. Ensure one new person gets the most out of networking event.

This is my routine at MO Venture Forum or similar larger group. For smaller groups, it depends on the number of people attending.

Cathy Sexton

For starters I have made the decision to cut way back on networking events. I think the time spent on networking events can get way out of hand if we are not careful. So my current strategy is to only attend with two purposes. To continue to build already valuable relationships and to make sure the events have my ideal clients also in attendance.

These are just a few of the partner responses. 

Check out this article in the Academy to get all of them.

For further information, support and advice from thirty experts on this topic and many others, become a member of the e4e community by visiting our website at www.e4ecommunity.com

Video: What to Wear for a Video Shoot

Expert Steve Smart provides important clothing tips when preparing for a video shoot.

Avoid that weird effect

You know you want to look your best for your presentation. If you're being recorded on video there are several things you have to know. Some clothing patterns produce a strange effect in video. You may have noticed it before and wondered what it was. It's called the moire' effect or the moire' pattern. It's pretty distracting and prevents you from making your very best presentation.

It's usually caused by stripes or small, tight patterns in a shirt, sport coat or other article of clothing. You might get away with a larger pattern but I like to recommend a dark solid whenever possible.

Do I have to wear dark colors?

Not necessarily, but it's a safer bet. I'm getting away with lighter colored shirt shirts in this video, but the lighting was favorable for that. I've been on some shoots where the lighting could not be controlled as well. Lighter colors, (white, for example) washed out and created an undesirable effect.

Prepare for the microphone

Audio technicians sometimes get pretty creative. But it will help if you're prepared to keep things on the easy side. Choose clothing that easily allows a microphone to be attached. The ideal location is in the center, a few inches under your chin. There will also be a little black box that will be attached to your waistband or belt. It can also be placed in a pocket.

When getting you fitted with the microphone, your technician might want to hide the cord. That's often done by dropping the line down a shirt or wrapping it around the back underneath a sport coat. Be prepared for that.

Helpful hints for ladies

Remember that little box? It won't be terribly heavy, but make sure that wear a skirt that won't sag down. That's a distraction you certainly don't need.

Jewelry is another consideration. Your audience might not hear it, but the microphone can easily pick up distracting clicks and jangles. Be careful with your selection of earrings, bracelets and necklace.

I recently had a situation where my subject moved around to test for jewelry jangle. It seemed that all would be fine, but she moved during the presentation in ways we didn't anticipate. It created an audio problem we could only solve by pausing the presentation to remove her necklace. Keep that in mind as you dress for your shoot.

Clothing is just one element, but now you'll be a little better prepared for your video shoot.

Steve Smart works with busy entrepreneurs who want to improve their marketing efforts. He lives in St. Louis and can be reached atsrsmart@2Qsolutions.net or 636-699-8772.

Who does a good job pricing?

Pricing expert Dale Furtwengler offers insights and strategies based on real-world case studies, demonstrating pricing models that have bombed or show consistent benefit.

Some days, despite your best intentions, you fumble the ball. Such was the case at the Retail Customer Experience Executive Summit when I was asked, “Who [among retailers] does a good job of pricing?” My response was “most companies.” What I should have said was ‘most companies initially.’

Most companies have a pretty good sense where they fit on the spectrum versus competitors. Using the image spectrum:

  1. Walmart is the low-price provider.
  2. Target is viewed as more hip and can command higher prices to reflect that image.
  3. JCPenney used to be (who knows where they’re headed today) known for dependable, but not readily recognizable brands and their pricing was 3 to 5 times the Walmart alternative.
  4. Macy’s carried very recognizable brands, with strong image appeal and able to command prices 6 to 8 times the Walmart alternative.
  5. Nordstrom is the most upscale of these five companies and commands premiums of 12 to 14 times the Walmart alternative.

Using image as the focal point for each of these companies, their initial price positioning makes a lot of sense. Unfortunately it’s all down hill from there.

The first mistake they make is to price ‘competitively’. That typically means at, or below, industry pricing for their segment of the spectrum. They choose to price this way despite the fact they claim to offer ‘more’ or ‘better’ of whatever they deem their value to be.

The second mistake most retailers, indeed companies in every industry, make stems from the extremely poor job they do communicating value. You don’t have to trust me on this. All you have to do is look at the ads the companies cited above offer, then answer this question “Does the ad emphasize their position on the image scale?”

Of course not. With the possible exception of Nordstrom, most ads are about their latest sale. If their marketing messages did a better job of helping their customers experience their stores without being there, they’d be able to command higher prices than is typical for the area of the spectrum they occupy.

The third mistake is sales these retailers regularly offer. Fluctuating prices confuse consumers about the real image value of their offerings. These sales take many forms including discounts, rewards programs, coupons and loyalty programs, to name a few.

These sales muddy the water for customers. The concept of value, whether that value is image, innovation or time-savings get lost in the myriad of sales offered. In the process we train customers to wait until we offer a discount to buy.

That means the customer is postponing the satisfaction of owning your products/services. For you it means lower profit margins and additional marketing costs to acquire enough new customers to not only replace those lost profits, but to grow them.

Now back to the original question, “Who [among retailers] does a good job of pricing?” Companies I think do a good job are:

Panera
They repeatedly raised their prices throughout the recession and experienced sales growth in excess of the price increase.

The only criticism I have of Panera’s pricing is their rewards program. Reward programs are effectively discounts. Rewards programs do not increase my desire for their offerings. I’m not going to visit any more frequently or buy larger quantities because of the reward. That means that they’re offering me a discount to buy what I’d have bought at a higher price. Rewards programs increase retailers costs in two ways – establishing and maintaining the reward program and providing a discount to customers who are willing to pay higher prices. Ouch!

Apple
The key word with Apple is consistency. They consistently charge premium prices on all new offerings and tend to hold those premiums throughout the product life cycle.

The one faux pas I recall was reducing the price of the original iPhone by $100 within 60 days of its release. The hue and cry of the early adopters resulted in a refund of roughly $100 million to those early customers. That’s what happens when you move away from your value proposition in an attempt to garner market share which is what I believe the motivation was for the price reduction.

Apple may be on the verge of making another pricing mistake. Rumor has it that they’re coming out with a new tablet to compete with Google’s Nexus 7. If they do, it’ll be interesting to see how they launch that offering. If they offer a better product and price it accordingly, the market will continue to view them as an industry leader who is entitled to premium prices.

If, however, they price the new tablet to compete with the Nexus 7, they’ll appear to have relinquished their industry lead and be reduced to ‘commonplace’ in the eyes of the consumer.

Kraft Foods
I don’t recall Kraft having raised prices during the recession, but as soon as it appeared the recovery was under way they immediately began raising prices and continue to do so with some frequency. Like Panera, they’ve experienced sales growth in excess of their price increases. Indeed, their sales growth was 50% higher than their price increase in the 3rd quarter of 2011. The keys to these companies’ success in pricing are:

  1. Consistency in their customers’ experience.
  2. Charging prices that reflect that consistency and support their value claims.
  3. Raising prices in good times and bad, further reinforcing the perception of value in their customers’ minds.
  4. Continuously finding new ways to serve their customers in ways those customers want to be served.
  5. Initiating change in their markets instead of mimicking others changes.

The pricing mistakes that companies like these are most likely to make are:

  1. Focusing on market share growth instead of customers’ needs/interests.
  2. Discounting in any form (sales, rewards programs, loyalty programs) confuses the customer. It’s hard to tell what something is really worth when the price fluctuates for no apparent reason. Can anyone tell me what a gallon of gasoline is worth?
  3. Failing to raise prices in good times and bad.
  4. Losing sight of who its ideal customer is. Think JCPenney.

Basically, any company that:

  1. Charges a premium to the market.
  2. Continues to raise prices regardless of what the economy is doing.
  3. Stays focused on its ideal customer.
  4. Avoids the temptation to discount, reward their customers or create loyalty in ways other than providing superior experiences.

…is doing a good job of pricing.

For those at the summit, my apologies for the fumble. Hopefully I’ve recovered the ball with this post.

Do you have a clear brand promise? Find out by using my confidential Brand Promise Self-Assessment.

Are you getting compensated well for the value you provide? Use my confidential Pricing Self-Assessment to evaluate your company’s pricing.

Are your marketing messages attracting the right customers? If you’re getting primarily price buyers you may want to use my confidential Marketing Self-Assessment to discover why.

Is your sales force putting pressure on you to lower prices? Our confidential Sales Self-Assessment can show you why. Check out Dale’s latest ebook, Brand Promise: What Do YOUR Customers Expect? You have a brand. The question is “Is it the one you want?”

If you’d like to increase your prices, profits and customer base, call Dale at 314-707-3771.

Video: Four Great Reasons to Use Email Marketing

Expert Steve Smart talks about four of the top reasons to use email marketing and a few points on getting started.

Email marketing should be in your tool belt.

Many tools are available to help you build your sales funnel. Email marketing is a great way to help you grow your business. If you're not already using email marketing you'll find a few reasons here to get started.

Check Out These Four Great Reasons to Use Email Marketing

1. Email Marketing is Powerful

Tremendous reach can be achieved with email. Because nearly everyone has access to it, you have the potential to reach an audience of immense size. The proliferation of smart phones has only expanded the value of email marketing. The percentage of people reading mail on their phone has been increasing steadily. Currently it's at around 40% and climbing.

Email marketing is also powerful because it tells your story to a willing audience. Of course, that's assuming you use legitimate list-building methods. When people opt in, they're telling you they want to hear from you. Building a list in a professional manner sets you up to succeed.

Interactivity is a powerful aspect that makes email marketing so desirable. Recipients choose whether to open, where to click and how to complete your occasional surveys. An engaged audience builds warm leads.

2. Email Marketing Tools Are Robust

Using an email service provider gives you great capabilities. Deliverability is among the best features. There's no point in having a big mailing list if your audience is not being reached. An email service provider and proper list building practices are your one-two punch.

Reports give you valuable, detailed information about the interests of your recipients. The information you gain enables you to segment your audience, so you can deliver more relevant content.

Email surveys enable you to find out more about your customers' interests. That in turn helps you craft better messages, improve your content and possibly discover opportunities for new products and services.

Email is made attractive through color and images. But don't make the mistake of thinking it's all about being pretty. Top quality content offering value wins the day.

3. Email Marketing is Effective

You don't have a crystal ball to know exactly when people are ready to buy. And you know enough not to harass them with regular unwanted calls. Email marketing enables you to reach out regularly to offer value and maintain top-of-mind awareness. They'll think of you when they're ready to make a purchase.

4. Email Marketing is Cost Friendly

The cost of using an email service provider is very low. Content development, however, can be a bigger piece of the puzzle if your business offers services rather than goods. The good news is there are ways to introduce cost efficiencies into the process.

  • If your content is based on articles, for example, find ways to reduce the costs related to the development of those pieces. Have a whole series written at one time. Whenever possible, maximize the use of existing content. That content can also be the basis for video scripts.

Five Steps to Getting Started

Like anything else, using email for marketing purposes requires some effort and advance planning. Here are five things you need to do to get started.

  • Use Best Practices to build your list. One thing you DON’T want to do is to buy a list. What you DO want is to provide value and give people incentive to sign up.
  • Choose an ESP (email service provider) you can depend on. Pricing is not your only consideration. Examine their features and find out about their quality of support.
  • Plan your content. Don't wait until the last minute every month. Reduce your stress and increase your effectiveness by creating an editorial calendar.
  • Measure your results. Make a plan to measure the results of your campaigns for continual improvement. You’ll be glad you did.
  • Get the support you need. I have a saying: Trying to do everything yourself is a bad idea. A knowledgeable employee or an outsourced marketing professional will be greatly useful.

Need help with your marketing efforts? Contact Steve Smart – your outsourced marketing department 636-699-8772.

When Is a Reward NOT a Reward?

Sellers are giving discounts to customers who would have bought anyway - at full price. Unfortunately, this does not hit home until it’s too late.

A lesson from Panera Bread Co.

In my February 28, 2011 post, Buying Customer Loyalty, I railed against reward programs. One restaurant chain, Panera Bread, has proven my point via the type of rewards it offers. Yes, I have a Panera card. I’m not above taking discounts offered even though I don’t advocate discounting to my clients.

In the earlier post I stated the customers’ need/desire for offerings don’t increase just because they’re receiving a reward. What does that mean for sellers? They’re giving discounts to customers who would have bought anyway - at full price. Unfortunately this reality does not hit home until the reward program is already in place.

What I have noticed recently with the Panera program is the rewards offered are not what I typically purchase. Based on the rewards offered, Panera is encouraging me to try new things or to visit at times I don’t normally visit. That’s not a reward, that’s a marketing strategy.

While I don’t have a problem with marketing strategies that encourage buyers to try new things or to return more frequently, I resent a ‘reward’ program that tries to accomplish the same goal. Maybe I’m too stringent in my definition of reward, but to me it’s something that has value to the recipient. When that ‘reward’ places the welfare of the presenter over the recipient, it loses the right to be called a reward.

The question is “How do you offset the revenue losses your reward program created while maintaining credibility with your customers?” Keep your marketing efforts and reward programs separate. It’s all right to announce new offerings, encourage customers to visit at times they typically don’t, to explore alternative uses of your offerings in your marketing materials, in any media you choose, just not in the rewards program.

Converting a reward program to a marketing program is a violation of your customers’ trust. Losing their trust is one of the quickest ways to drive your customers to your competitors. If you have fallen victim to the temptation of reward programs, don’t compound the problem by converting it to a marketing program.

Dale Furtwengler is the author of the internationally acclaimed Pricing for Profit. His company, Furtwengler & Associates, Inc., helps companies get higher prices regardless of what their competitors or the economy are doing. For more pricing/branding/marketing/sales tips visit his website, PricingForProfitBook.com

Video: Connecting

Expert promoter and master at connecting, Karen Hoffman shares her tips for how to ensure the connections you make with others count.

Expert promoter and master at connecting, Karen Hoffman shares her tips for how to ensure the connections you make with others count. Her advice includes:

  • Focus conversations on how you will work together
  • Make your connections relational, not just transactional
  • Go deeper with fewer people vs. skim the surface with many
  • Stay open-minded, open-hearted and suspend judgments
  • Find and focus on people you know, like and trust

Karen Hoffman is founder of City of Experts and Gateway to Dreams, organizations designed to connect and promote people so they can live their dreams and provide their valuable services to the world. Call her today at 314.503.6376 or Karen@cityofexperts.com

How Guest Blogging Builds Your Online Credibility

Guest blogging is an easy way to increase the value of your own website.

Imagine every website on the Internet had a value from 1 to 100 dollars. The websites that had no updates, no social interaction, and no ease of use were only worth a few dollars, if that.

The sites consistently updated, with visitor interaction and easy to use, are worth more.

Now imagine the people (or company) that determines your value looked at more than just what you were doing on your website to come up with their evaluation. They also looked at other, similar sites sending them signals to your valuation - links, mentions (citations) and shares.

Those sites, then could determine a portion of the overall value of your site.

And if that were the case, wouldn't it be smart of you if you take advantage of any opportunity to positively influence your sites value? Of course it would.

Guest blogging is a great way to increase your website's value. And being picky about the value of the site you want to guest blog on is just as important.

In the analogy above, wouldn't you agree that a link from a $56 site be better than that of a $12 site? Again, of course you would. So make sure you not only guest blog on other sites, but make sure the ones you choose have established value.

Oh, and allow me to toss one more equation into the mix - the related value to your site. Guest blogging isn't just about finding high value sites and posting an article there - you should also consider the similarity of the two sites. A safety goggles article would be worth much more on Home Depot's website than it would on the equally valuable Bed Bath & Beyond site.

After reading this, you may surmise that getting 4 articles on 4 sites worth $14 each is easier than getting one article on a $56 site -and you'd probably be right. But is the risk worth the reward? Or as I heard this past week - is the juice worth the squeeze? Not usually. There's a reason why those sites are only worth $14 each, and if they aren't following the same process, your site value and your reputation will just be dragged down with theirs.

For more guest blogging and SEO tips, subscribe to my newsletter or check out my blog.

Are Market Share, Pricing and Profitability ‘Strategies’ Smart?

Companies whose primary goal is to pursue market share, often don’t fair well. Why? Their focus is on their goals, not their customers’ interests.

A September 11, 2013 Reuters article, iPhone 5c: Apple picks profit over market share yet again, provides an opportunity to make a distinction between market share, pricing and profit strategies.

In the Reuters article, we’re finally seeing the financial press acknowledge there is a trade-off between profit and market share. Generally the financial press is critical of companies that lose market share:

  1. Without defining the market.
  2. Without determining the bottom line impact of the ‘lost‘ market share.
  3. While implying that profits are going to decline due to that loss.

Yet, as we saw in my September 10, 2013 blog Market Share vs. Profitability, many companies experience greater profits when they shrink their revenues. Why? Because they’ve rid themselves of customers who don’t value what they offer. Consequently, they’ve eliminated low-margin, high cost business (price buyers are always demanding more without being willing to pay extra to get it).

With this background, let’s explore the distinctions between strategies that focus on market share, pricing and profitability.

Market share
Companies whose primary goal is to pursue market share, often don’t fair well. Why? Their focus is on their goals, not their customers’ interests. Indeed, my eldest nephew who is a certified financial analyst says, “Whenever I hear a company has decided to go after market share, I send a ‘sell’ recommendation because, within 18 to 24 months, that company will be in trouble.”

A clear example of that is Toyota. Without a doubt, Toyota had the premier reputation for quality in the mid-price automotive market. Shortly after announcing they intended to be the #1 automaker, they had a recall that cost them conservatively $1 billion dollars.

The reasons a market-share strategy fails are:

  1. The companies don’t define the market; they assume all buyers are potential customers.
  2. They often discount heavily to get customers who don’t value what they offer and lose margin on the customers who do.
  3. They significantly grow their infrastructures to accommodate the additional, albeit unsustainable, demand.
  4. They put their goals ahead of their customers’ interests antagonizing customers in the process.

Other than that, it’s a perfectly fine strategy.

Pricing
There are basically two pricing strategies - a low-price strategy and a value-based strategy. Which works better? Let’s look at actual results from well-known, well-respected companies.

From 2009-2012 Apple tallied an impressive 44.3% compound growth rate (CGR) in revenues and improved operating margins by 14.5%. During that same time, Walmart’s revenues grew by 3.5% (CGR) and lost .5% in margin and Amazon gained 26.3% (CGR) in revenues but gave up 33.3% of its operating margin to do so. Which of those experiences would you prefer?

Here’s your mental exercise for the day. Is a low-price strategy also a market-share strategy?

Not necessarily. Toyota decided to go after market share, but chose not to change its pricing to do so. When Walmart decided to go after Target’s customers, they knew they’d have to do something different to garner that market. The fact that their attempt wasn’t successful doesn’t alter the fact they had an awareness of the need to do something different.

Profitability
While many would say profits are the reason companies are in business, the reality is profits are a byproduct of enhancing customers’ lives. Any company focused on profits inevitably makes decisions placing the company’s interests ahead of its customers’ welfare and then lose those profits. In this regard market share and profit strategies are similar.

Lesson
So where does that leave us? What are we to take away from this discussion? The lesson is that none of the three - market share, pricing or profitability - are good ‘strategies’. Your strategy needs to be ‘enriching the lives of others.’

If your product or service makes someone’s life easier, or fun, exciting, safer or better in any way, you’ll enjoy great success when you build a value-based pricing approach into that strategy.

Adopt a market-share or low-price strategy and you’ll shift your focus from your customers to your company and suffer dire consequences. So when developing a strategy for your business:

  1. Focus on how you’re going to enrich the lives of your customers.
  2. Price to reflect that enrichment.
  3. Enjoy your well-deserved success.

Dale Furtwengler is the author of the internationally-acclaimed Pricing for Profit. His company, Furtwengler & Associates, Inc., helps companies get higher prices regardless of what their competitors or the economy are doing. For more pricing/branding/marketing/sales tips visit his website, PricingForProfitBook.com.

Is Strategic Pricing Dead?

Given the accessibility of information, is it possible to be strategic in your pricing? Or do the ever-shifting sands of your competitors’ prices trap you?

Given the accessibility of pricing information today, is it possible to be strategic in pricing your products and services? Or do the ever-shifting sands of our competitors’ pricing trap us all?
Here’s a quick way to tell whether or not you’re being strategic in your pricing:

  1. When you create a new offering do you establish one price or a series of prices?
  2. When you change your prices, is it typically your initiative or a reaction to your competitors’ pricing?
  3. Do you match your competitors’ pricing?
  4. Does your product’s/service’s life cycle influence your pricing decisions?

The answers to these questions tell you all you need to know about whether or not you’re using a price strategy or merely reacting to your competitors’ pricing.

One price or series of prices?
If you’re establishing a single price for new offerings, you’re not developing a pricing strategy. Effective price strategies must include a series of prices to reflect:

  1. Your product’s/service’s life cycle.
  2. Changing customer tastes.
  3. Competitor offerings - current and anticipated.
  4. Value (pricing) by market segment.
  5. Offerings to companies outside your industry who compete for your market’s dollars.

This is not an all-inclusive list, but it gives you a sense for what’s involved in establishing a pricing strategy. Each of the items on the list indicate why we don't live in a one price fits all world. Here are some examples to illustrate this point.

Early adopters of innovation willingly pay multiples of what the mass market pays. That’s why it’s important to know what price you’ll charge at each phase of your product’s/service’s life cycle as well as how you’ll know when it’s time to change your price.

Similarly, prices can be dramatically different for different market segments. Why? Because the value to each segment can be dramatically different, as can the willingness of each segment to embrace change (new offerings). Some markets are more progressive than others.

When a competitor comes out with a new offering, especially one that appears to be superior to yours, how do you respond? How does that influence your pricing? More importantly, should it?

Many companies ‘improve’ their offerings only to find their customers are unwilling to pay for the improvement. Do you have a mechanism in place to evaluate the value of a competitor's improvement? If not, you’re likely to follow them down the rabbit hole or you'll lower prices when there's no need to do so.

Hopefully these illustrations demonstrate the importance of having a pricing strategy, one that incorporates a series of prices and price change triggers.
Now, let’s contrast this approach to reactionary pricing.

Price matching
Regardless of whether or not you’ve promulgated a price-matching program, if you regularly raise or lower your prices to reflect your competitors’ price changes, you’re price matching. There's nothing strategic about price matching. You have relinquished control to your competitors.

Yes, I’ve heard business leaders' claims that they need to be competitive, that products eventually become commodities and that buyers are price conscious. Unfortunately the business ‘leaders’ making those claims aren’t defining their terms.

What does it mean to be competitive? When does a product become a commodity? Are buyers really price-conscious? Let's explore each of these questions in more detail.

Competitive
What does it mean to be competitive? Offering more for the same price as your competitors are getting, is not being competitive, it’s folly. It confuses your customer! Here’s what they’re thinking - “If your product/service is so much better, than why doesn’t it cost more?”

That’s right. Despite all the claims that customers are price-sensitive, this price/value comparison gets made, if not consciously, then subconsciously. It’s intrinsic to the human psyche. Here's a situation that many of us have experienced.

You stop at your favorite ice cream shop and order your usual dessert. The clerk says “That’ll be $3.75.” It’s $.25 more than you have been paying.

Do you hesitate, even if for only a few seconds, before completing the purchase? Of course you do. You’re mind did a quick price/value calculation. If this is really your favorite ice cream, you'll quickly decide you're worth it and treat yourself despite the higher price. We do this all the time.

Because this thought process occurs subconsciously we don't realize we're making these calculations. Nor do our customers.

The moral of the story is to stop listening to the white noise of public opinion and pay attention to what our human nature tells us - to get more, you have to pay more. Then tout your value and price accordingly.

Commodities
I can’t tell you how often business owners/leaders tell me their offerings have become commodities in the eyes of their buyers. My response is always the same “If that’s really true, if you can’t add any value to that product, why are you still selling it?”

Come on folks, if what you’re offering is so readily available, if it’s of so little value to the customer, if customers view it as a necessary evil instead of something they desire, then why devote time, energy and resources to selling it? Why aren't you shifting your resources to producing and selling what your customers really want?

Conversely, if you are able to add value to the product, then why don’t your customers see that value? Why aren’t they willing to pay more to get that value?

More often than not it’s because you’ve devoted your marketing dollars to touting your low prices instead of the value you’re adding. Shift the focus of your marketing messages and you’ll shift your customers’ focus as well.

Price conscious customers
I’m not going to belabor the point. The reason customers are price conscious is we’ve trained them to be so. The vast majority of our marketing messages focus our customers’ attention on price instead of the value we provide. We’ve trained them to be price conscious, now it’s time to train them to be value oriented.

Is strategic pricing dead?
Almost, though it needn’t be. We have it within our power to become more strategic in our pricing. The knowledge and tools already exist and are readily available; we simply need to employ them.

The choice is basic - either you take control of one of the greatest drivers of your company’s profitability, your pricing, or you allow your competitors to control it. To me, that’s a no-brainer.

Dale Furtwengler is the author of the internationally acclaimed Pricing for Profit. His company, Furtwengler & Associates, Inc., helps companies get higher prices regardless of what their competitors or the economy are doing. For more pricing/branding/marketing/sales tips visit his website, PricingForProfitBook.com.

Video: Brand Personas – What and Why

Creating Brand Personas can help build a stronger culture and brand for your business. Learn what larger corporations have been doing for quite some time now.

What is a brand persona? A fictional profile of customer types written down in plain English. Why create Brand Personas? They help you understand your customers better. Instead of nameless, faceless, demographic data that makes it harder for you to have empathy, create personas that allow you to understand that pain points of your customers. After all, Branding = Relationship. And you can’t build relationships if all you are basing your marketing on is statistics.

To truly understand your prospects and customers, you need to have a relationship and understand motivations and hardships. Creating Brand Personas can help you create a customer-centric culture and improve your marketing initiatives.

Video: Keyword Research – What and Why

One of the biggest mistakes small business owners make is forgetting about Keyword Research before executing online marketing tactics.

What is keyword research? It is research to find out how certain keywords will perform and generate traffic on search engines such as Google, Yahoo, and Bing.

Why go through the trouble of keyword research? Google is the new Yellow Pages in today's world. Information is available 24/7 through the Internet and other media channels. Smart devices now connected us more than ever before and make content widely available for consumers to make more informed decisions. If you want your business to be found online, it is best to know what your audience is tying in rather than making assumptions. You can also learn a lot about what your competition is doing and why they may be outranking you on search results.

Keyword research can be considered a turbo boost on how to get more traffic.

What does the customer think when you don’t take the high road?

Why you should ignore your competition and not engage them in a competition.

What do your customers think when you fall into the trap of bashing your competitor instead of taking the high road and staying focused on them instead?

I recently read an article about two local St. Louis attorneys who participated in a panel discussion about marketing within the legal profession. The two attorneys "let barbs fly" during this discussion. Hopefully these two attorneys don't have the same lack of values when it comes to doing business.

Their exchange begs the question: what is gained by criticizing your competitor in a public forum, or in your marketing strategy? Personally I see nothing is gained and in fact you have likely lost valuable ground because you have legitimized and acknowledged your competition. In fact, you have created a comparison between you and your competition that may not have occurred in the first place. Now every time a prospect hears a marketing message about one attorney, they think of the competing firm. I have never needed the services of either firm, but I personally have a link between both of them. And the link is not a positive one.

When it comes to professional services, such as hiring a marketing or PR firm or a lawyer, often times people think: “I’m going to talk to three firms before I make a decision.” Yet in all reality, people rarely interview multiple firms unless it’s through a Request for Quotes (RFQ) process. Instead, they make their decision based on referrals, word of mouth and reputation. So the key is to maintain a positive reputation.

In order to do so, it’s best when you take the high road and refrain from falling prey to volleying poisonous barbs with your competitors. Operating from high values instead results in a brand and reputation people respect and support. Your brand becomes positive and strong because you end up with a reputation people are happy to connect with; they value your positive, forward-thinking messages.

Can people connect with nasty barbs? Absolutely. A comment in the article cited one of the attorneys as saying that the expected turmoil was worth the price of admission for this specific conference. He had settled for drama and entertainment, but not necessarily good marketing.

In the end, customers don't care about you as much as they care about their experience of working with you. So before you fall into the trap of behaving in ways that set a competitor bad mouthing you, remember it’s smarter and more profitable to take the high road. In doing this, you are more likely to focus on what you want to deliver and your prospects remember that you have their interests in mind above all else.

For more information on this topic and other marketing and PR strategies and practices, visit www.kolbeco.net or contact me at 636-379-3895 x 13.

Four Reasons to use an outsourced marketing professional

Contrary to instinct, doing everything yourself does not, in the end, save money. Consider a different… scratch that… a BETTER approach.

Don't wait until you're pulling your hair out to discover the benefits of outsourcing. I have benefitted from my recent choice to outsource some of my own marketing efforts. Yes, there is a cost associated with that, but there's a bigger cost in doing everything myself.

If you're an experienced business owner, you've already made this discovery. Even though your instinct tells you to do everything yourself, you've discovered the liberating secret of proper outsourcing. Have you considered doing that with your marketing efforts?

Check out these four reasons to use an outsourced marketing professional

1) Doing everything yourself is a losing proposition

You suffer in several ways when you do everything on your own. You run out of energy and your mind becomes over-taxed. Let's face it; you can't do everything with excellence. At some things you rock, at others you do terribly. And the stuff you don't do well is often the stuff you hate doing.

You wouldn't hire people who are poorly suited for important work, so why do that yourself? You know you'll only lose productivity. What might go unnoticed, however, is the fact that the brainpower you've been wasting could have been used to build your business more effectively.

2) Two heads are better than one

Complex decision-making is much easier with a team. A fresh set of eyes and a different outlook make a remarkable difference. Your own perspective and knowledge base is not enough. Why not turbo-charge your abilities by getting input from an objective party? Quality marketing decisions and effective planning happens faster and more easily when you team up with someone else.

3) Your time is valuable

Calculate the hourly value of your time. It's probably worth more than you think. If you determine your time is worth $145/hour, for example, you can easily justify outsourcing certain things to people who can perform the same work better and faster for far less.

Your time has more than "production" value. Consider the hidden value that can't be calculated.

4) Brighter ideas come to light when you create "space"

Be proactive. Moving your business forward requires quality "think time." New and better ideas don't come freely when your mind is crowded. If you constantly function with no margin of time you never develop those business-booming ideas lurking in the shadows.

You can't afford to remain stagnant. Clear your plate. Bring other people into the mix. Free up your brain space to think creatively.

It's not IF, but HOW you use an outsourced marketing professional

If you own a business that's too small to afford a full time marketing manager, you owe it to yourself to get help from an outside source. Keep these points in mind.

Right sizing is essential: Use someone who has the flexibility to tailor his or her services to the needs of your business. Do you need a collaborative partner to help you think through your options and plan your next steps? A marketing coach might be the perfect solution for you. On the other hand, you might need the skills of someone who rolls up their sleeves and performs the work for which you don't have the time or ability. Find someone reliable who offers a variety of marketing services.

A structured approach lightens your load: You already have too many plates spinning. Some of them might be out of control. The last thing you need is more chaos. You'll find great relief when you use someone who brings order to the table.

How much is it costing you to do it all yourself? Don't put it off any longer. Contact a marketing professional today and find out how you can benefit from outsourcing.

Need help with your marketing efforts? Reach out to Steve Smart at srsmart@2qsolutions.net.

Video: The Importance of a Content Marketing Plan

A content marketing plan is extremely important. Many business owners want to get into email marketing, then suffer negative effects working without a plan.

Having a content marketing plan is extremely important. So many business owners understand conceptually they want to get into email marketing, social media, putting out a blog and then they get into it without a plan. Before doing this, marketing expert Tom Ruwitch recommends you consider the high price of operating without a good content marketing plan. What he witnesses from his extensive work with clients is that without one, you are more likely to

  • Get to deadlines and panic because you don’t know what you want to write.
  • Spin your wheels, waste time and fail to work productively
  • Miss the mark on being aligned with your sales calls and the needs of your target audience

Your plan should project an organized schedule of content concepts for three to six months. You will move forward confidently when you then commit to that plan. You save yourself a lot of headaches, are able to provide a cohesive message and work productively. For support in defining your content marketing plan, contact marketing expert Tom Ruwitch at MarketVolt by phone 314-993-3732 ext 18 or by emailtom@marketvolt.com or visit his website www.marketvolt.com

Video: Cold Email Marketing

One of the biggest mistakes business owners make is getting emails, and immediately presenting a sales pitch, only to find that nothing comes of it.

Many business owners want to target a specific ideal customer and don’t have a warm introduction to do so. Cold emailing is identifying a prospect you want to do business with, finding their email and getting information in front of them that is appealing and effective. Cold emailing is different than a permission-based email campaign. Expert Josh Turner cautions viewers to be mindful and lawful using email by following a proven approach for sending appropriate messages to prospects, including:

  • Approach prospects in a meaningful and responsible manner
  • Observe rules of conduct that keep you within legal email guidelines.
  • Hold the intention to initiate a conversation with your prospects rather than throwing them a sales pitch

For valuable support and guidance creating LinkedIn approaches that have been proven to work, contact LinkedIn expert Josh Turner atjoshturner@gatewaycfo.com or visit his website www.gatewayCFO.com

Video: Business Websites

A brochure website is very static. There’s so much more business owners can do with their website to gain a greater return on investment.

Web development expert Cesar Keller answers the question, “what is the difference between a brochure website and a business website?” His answer is that a brochure website is a very static website, simply a dump of content. There’s so much more that business owners can do to gain a return on investment. Today’s websites include the brochure data but are capable of extending value way beyond that aspect alone. Cesar Keller reminds viewers that among other things, your website can:

  • Assist you in building a pipeline of prospects
  • Be a living, breathing mechanism that brings you business
  • Incorporate tools that automate the building of your business
  • Provide processes that automatically function to save you time and gain you connections
  • Help you to convert prospects by moving them through the process steps that ultimately lead to sales

To learn more about and see the results possible through the skills and proven track record of Cesar Keller and SimpleFlame, call Cesar at 314-266-3485 or email him at cesar@simpleflame.com

The Power of Passion in Succeeding in Marketing and PR

It’s not just about a diploma hanging on the wall. Want to have success in marketing? Be passionate, push boundaries, and most importantly, make mistakes.

You have invested in your education and have a degree? Whether you have or not, your success depends on something more: Passion

So, you have a degree in marketing, communications or public relations. What does that mean for entering the work force? The harsh reality is that in many employers’ minds, it may not mean much, as a large number of people with college degrees have no practical experience and/or meaningful internships.

Of the resumes we receive at KolbeCo, roughly 20% have meaningful experience. In addition, they are not students of the media, meaning they don't watch the news, read the paper or are active in building a professional brand for themselves on social media.

As I look back at previous generations, many professionals of years past did not have the educational experience, but they had practical experience. They learned on the job. They were always passionate students of their trade.

Allow me to share my grandfather’s story, a man who faced a challenging childhood, managed to get a high school education, and started his career selling irons door-to-door during the Great Depression. But the man who began as an iron salesman had a passion for engineering. He was self-taught, never stopped learning, and went to work for Douglas Aircraft in California, which later merged and became McDonnell-Douglas.

During his time there, he became the chief engineer on the AV8 Harrier project and worked in a lead role on the Apollo project. Yet he only had a high school diploma. Why was he successful leading a team of 2200 engineers? Because he was a student of engineering – even in retirement!

He loved designing aircraft, and it was a big part of his identity. He remembered many of the internal debates within the walls of McDonnell Douglas – now Boeing. These were passionate debates on how to address problems and make designs better. Believe it or not, I have met people on his team who remember debates with my grandfather from 30 or 40 years ago! That is what I call passion.

I believe there are lessons to be learned from my grandfather’s story – lessons that translate to the marketing and PR industry. The story teaches us that it’s not just about a diploma hanging on the wall. Want to have success in marketing? Be passionate, push boundaries, and most importantly, make mistakes. Want to be a great PR person? Have a true, authentic appreciation for the media. Become a consumer of media – read a journalist’s articles, watch the news, follow them on social media, learn the audience. You will soon understand what a journalist or a producer likes. You don't need to ask them and shouldn't have to. As you learn this you become a resource as a PR person and not a pest.

But being a great professional is also about finding your personal passion, and gaining life experience. Looking to enter the marketing field and not sure how to get started? Volunteer at a nonprofit. Explore the world. The more depth you have as a marketing person the more creative you can become. While some of this comes from experience, there are numerous creative people who are young and always thinking of new ways to push the boundaries. As a new graduate, look to push the more senior experienced people to their limits as well. They will appreciate it if they too are passionate people.

Education is a great start, but where you go from there is up to you.

For marketing, branding and public relations assistance visitwww.kolbeco.net.

The Top Ten Questions When Considering Accounts Receivable Factoring

A business owner is considering Accounts Receivables Factoring to grow his business. Here are his top ten questions. An experienced factor supplies the answers.

What are ten of the most common questions of a business owner considering Accounts Receivable Factoring? An actual business owner has supplied this list of questions.

1. What will my customers say when they find out I am factoring my receivables?

Receivables-based financing is used by many of the largest corporations in the world to improve cash flow, support growth and increase profits. Many of your clients’ customers may use this service themselves and others have become familiar with it through vendors. The fact your company qualifies for this “credit line” makes a strong, positive statement about your company.

2. Will I lose control of my company?

You actually have more control over receivables when factoring than you would have with other traditional financing such as angel or venture capital as most of these funding resources want you to sell your business in the near future or they might want to replace management if they are not comfortable with the way your business is operated. With Accounts Receivable Factoring, factors keep you abreast of the whole payment cycle. You have visual access to your factoring account and can see open or closed invoices. Combined with purchase order funding, accounts receivable factoring provides you with the cash flow you need without having to give up ownership in your business.

3. How is accounts receivable factoring different from accounts receivable factoring from a bank?

The factoring company focuses on the creditworthiness of your customers while banks focus on your company’s financial history and cash flow. Since accounts receivable factoring is not a loan, it does not appear on your company’s balance sheet. Factors can make a quick funding decision while banks may take weeks or months to approve a loan.

4. You are charging 3% discount on thirty days, isn’t that a 36% interest rate?

This is an advance on receivables, not a loan. Therefore, you cannot calculate your cost that way. If you sell $100,000 in receivables per month and pay 3% per month, your cost is 3% of the total invoice amount or $36,000. You have at your disposal $1,200,000 per year. If you give your customers a 2% discount for paying in 10 days are you paying 72% interest? (2% on 10 days is 6% per month over 12 months = 72%). Can you see the error in this logic?

5. What do I need to qualify for accounts receivable factoring?

You need to be invoicing customers and you need a credit worthy customer. We check the credit of your customer, as this will give us an insight as to how your customer will pay. Incidentally, a good thing happens when your customer finds out you are factoring. These customers tend to pay faster. Why? Because factoring companies report payment trends to the credit bureau. And companies know if they don’t pay on time, their credit drops and this impacts the availability of their future credit. Also most factors want their clients to be registered in the state where they are doing business. You can be a new company, an established company in a growth pattern, or a company that cannot get a loan at this time and still can factor.

6. Can I keep my existing bank line of credit or my SBA loan?

Yes. While factors want to be in first position regarding factored receivables, we complement and work in cooperation with your existing lender to enable you to access even larger amounts of cash to keep your company moving forward. Banks are happy if you factor. You keep your money in their bank and we put more money in your account. They keep you as a customer and then when you want or can qualify for a bank loan, they are right there to help you with that transaction.

7. My payroll is next week; will I have my funding in place to pay my employees on time?

Factoring is quick, easy, and efficient. It has little paperwork. As part of the setting up process, you give a notification letter to your customer to let them know you are now working with us. We supply the form letter. You put it on your letterhead and send it to your customer. Invoice verification is an essential and accepted part of factoring. As soon as your customer signs and returns the notification letter to us, you can start receiving your first advance upon verification of the invoice. Usually it takes about 3-5 days to set up the process. Then advances can be made within hours.

8. How often can I factor?

You can factor as often as you need. Many customers factor several invoices per week, some factor once a month. It depends on your business and the industry you are in. There is no contract regarding length of time to factor. Stop when you wish, or continue as needed.

9. What are some of the other advantages companies enjoy when they factor?

A. They can take advantage of future sales and can execute on a big emergency or unexpected order.

B. They can use vendor discounts to save money.

C. Their credit score increases because they are now paying their bills on time.

D. They can add the factoring fee to their bid. This fee is written off as a business expense. Therefore they are getting immediate cash with little or no debt.

E. They can now focus “on” their company instead of “in” their company and can plan growth more efficiently.

10. What happens if my customer does not pay you?

There are usually two reasons why the customer doesn’t pay. A customer goes bankrupt or insolvent or there is something wrong with the product or service. Factors tell you if their due diligence shows your customer is not financially stable. This is another advantage of factoring. Secondly, factors will not be responsible for anything with the product or service. In any case, we can either take back an exchange invoice to collateralize the advance or we can charge the non-paid invoice back to you through a payment from your reserves.

Conclusion:

Accounts receivable factoring is a great choice for companies, especially those who cannot get traditional funding. While it may cost a little more, many business owners are willing to pay more to have the funding immediately needed to complete present contracts on time and on budget and have funding to go after future business instead of losing business waiting for checks to come in. Factoring is a way of receiving immediate cash with little or no debt and allows the business owner to have the peace of mind and time to work on their business without worrying about late check payments.

To find out more about accounts receivable factoring and to see if it is a financial fit for your company, contact Lexx Funding, Inc. at 636 458 2612 and ask for Joy Ann or email her at joyann@lexxfunding.com.

Writing for the Web

Content… it's the meat of your website.  A beautiful design can only get you so far.  It’s important to not only consider your message, but also refine the way you write your message for users to absorb on-screen.

 

Imagine how you feel when you visit a web site and immediately feel overwhelmed by small text and an abundance of content?  The messaging could be perfect, but the delivery of the message needs to be refined for the web medium.  Often times, companies approach content for their website like well-written documents, like reports, marketing literature, brochures, etc.  Web writing requires a unique approach, and in fact should seem very personable.  Besides some basic marketing writing tips, I will cover a few critical considerations that make a huge difference in how your website visitors digest your website information.

Write for Your Audience

As a rule of good marketing, make sure you have identified your target audience, and write to their needs, pain points or goals. It would be great to consider the following questions:

  • Who is your audience?
  • What content are they looking for?
  • What do they know about the topic/issue?
  • What are their reasons for reading this text/page?

In addition to identifying the information for your audience, also consider the relationship you want to create with your visitors, and ensure your tone matches.

Write for the Medium

This is where most people have the hardest time.  Writing for the Web is very different from writing for print. Visitors will not print your web pages and read them.  Users come to your site, and make a snap decision if this is “the right place”.  If they cannot figure out who you are, what you do and whether you are relevant to what they are looking for, they will leave.

People do not read a website, in the traditional sense.  79% of users scan the page instead of reading word-for-word. This could mainly be because reading from computer screens is 25% slower than from paper. It’s important to note that in our information age, attention is the scarce resource.  To ensure your content is digested, a good rule of thumb is to keep web content 50% of the word count of its paper equivalent.

In addition to text, since users like to scan, remember to vary your “content.”  Information can be presented a number of different ways on a website that is not as ideal in print. Take advantage of your medium.

Include Search-related Keywords

Besides direct traffic from clients and referred visitors, people find you, your services, solutions and/or products through search.  In fact, more than half of web users rely on search engines to navigate pages or find relevant information online. So it’s important to use keyword-rich, relevant query terms on pertinent pages that can be used to search for the topic of the page.  The reason this is so important is because search engine results only provide relevant queries, which is based on the relevancy of certain keywords used within the context of the page.  You hear people reference being at the top of Google. This is very true; people typically do not go past page 1 or 2 of a search query.

The best way to generate a list of your ideal keywords is to research common synonyms and generic terms used by customers or competing companies, and include those within the content of the page.

These tips help improve your visitor’s time on site and with conversions, even if that means a successful contact form submission. If you can talk the right talk to your identified audience, write specific to the web medium, understand how people use the web to digest information, and ultimately craft your message to be tracked appropriately by Google using relevant, keyword-rich content to your visitors, your web writing has worked for you.

For deeper strategies, techniques and takeaways on writing specifically for the web, read “Essential Strategies for Web Writing”, available to Academy members.

Short Circuiting Your Brand Through Employee Disengagement

I was recently contemplating a trip with the guys when I suddenly received an invite to the Brickyard NASCAR in Indianapolis. If you know me, my idea of a man weekend is backpacking in the Rocky Mountains. But I thought new experiences are always good.

We arrived in Indianapolis the day before the race and decided to walk around the famed Indianapolis Motor Speedway. As we got into the track, we took a tour and went to the vendor exhibits. The exhibit space was a lollapalooza of brands. Millions had been spent to engage loyal NASCAR fans.

We decided to look for one of our client’s exhibit spaces. After we took some pictures of the client's racecar in the Chevrolet exhibit, I went exploring.

Being a marketing junkie, I went and visited the Chevrolet “customer engagement” area; the area had computer terminals so I registered. I checked three boxes and the PR team gave me a free T-Shirt. About a minute later I received an email from Chevrolet thanking me for my interest in Chevy automobiles. Nice and quick follow up.

Then I saw the Chevy Volt that has become a political lightening storm. Being the curious type I decided to pay the car a visit. I asked the person at the exhibit what she thought of the car and she said, “Not much, I think it is really a dumb idea”. Then I said, “Well that is brutally honest.” So through further conversation I asked her if she worked for GM and she said she worked for a PR firm in New York (She named the firm). I suddenly cringed thinking what this client is paying to have this person promote a unique product she doesn’t believe in. Obviously they have an employee who is not fully engaged.

In the end, the thing I took away from the exhibit was the comments about the Volt. In a different light it was a really nice car. But as she explained all the benefits and tax incentives available, not one stuck in my head. I just kept thinking this person doesn’t believe in the product. Often times employee disengagement is not this obvious. So think how only a partially disengaged employee may impact your brand.

On a different note, Chevrolet did send a follow up direct mail piece to my house and had a local dealership email a couple times.  This was a nice follow up piece and is something any brand can take advantage of, whether large or small. The only thing it didn’t address was the lack of engagement by the person working the Volt display. Below is the piece I received:
Just remember your people make or break your brand. So keep that in mind when staffing shows or with any touch point with customers. It doesn’t matter if you spend millions on marketing or thousands.

If you would like to know more about experiential branding, and create a stage for your business that your customers will not forget, call KolbeCo and ask for Scott at 636.379.3895 or email scott@kolbeco.net.

What Can Marketers Learn from the Netflix Research Machine?

Effective Problem Solving Tools help your organization succeed.

Netflix began as a DVD rent-by-mail service that evolved -- first into a video on-demand provider and most recently as a broadcaster of original content. In January, Netflix premiered “House of Cards,” a political drama directed by David Fincher and starring Kevin Spacey. The show is loosely based on a British television show of the same name. It is exclusively available -- for no extra charge -- to Netflix subscribers.

The show has garnered critical praise and plenty of buzz among analysts who question whether Netflix will succeed in the original programming game.

Don’t bet against Netflix. The company has made a very educated bet on this program -- a bet that can teach all marketers some valuable lessons.

“Executives at the company knew it would be a hit before anyone shouted ‘action’,” according to a New York Times article that describes Netflix’s decision to carry the show.

Before committing to “House of Cards,” Netflix studied data from its 33 million worldwide subscribers. According to the Times article, the company looked at several data points:

  • How many people and who watched from beginning to end “The Social Network,” the 2010 film about Facebook also directed by Fincher.
  • How many people and who have watched films with Kevin Spacey.
  • How many people and who watched the British “House of Cards.”

The intersection of these data points represents a vast, prospective audience for the new show. Even those who fall into just two of the three camps -- Social Network, Spacey, and British version -- are likely to give the new show a try. Netflix wasn’t guessing when it committed to House of Cards. Netflix knew it had an audience for the show.

So what can small business marketers learn from this behemoth with 33 million customers?

The question Netflix asked is the same question you should ask: How many and who? The more you know about your prospects and clients, the more you can offer products and services that will sell, and the more you can identify and connect with those most likely to buy.

You can employ marketing media and tactics that answer the questions:

  • How many people and who opened the email I sent?
  • How many people and who clicked the link in that email?
  • How many people and who liked and/or shared that post on my social media page?
  • How many people and who downloaded the free report I offered on my web site?
  • How many people and who checked the box indicating interest in product ‘x’ in my online survey?

The “House of Cards” story shows how a company may use this data to instruct product development.

“How many and who..?” also can help a business separate prospects from suspects. I haven’t received this email yet, but it won’t surprise me if I eventually receive an email from Netflix promoting a new film with Kevin Spacey, or another movie directed by David Fincher, or another show like “House of Cards.” I might receive that email because I’ve been watching “House of Cards” and Netflix knows it.

The more you know about the people on your list, the better able you are to deliver relevant content to them.

Amazon mastered this long ago. Netflix is well on its way.

The good news: You have access to email marketing, social media, web analytics, and other tools that empower you to ask and answer -- just like Netflix: How many and who?

A Snapshot or a Story

Marketing people don’t always agree…if you had just one tool to use to sell, would it be words or images?

 

Talk to some marketing people and they’ll tell you no one reads anymore, that all people want to see is a picture of whatever it is you sell.  Others tell you images you create in the mind of your prospects are much stronger than real images seen in print or on television.  The best way to create these mental images, they say, is through the skillful use of words.

If I had to choose one over the other – if I only had one tool I could use to sell, I would use words.  After all, there may not be a more powerful force on the planet than words.  Words can unite a nation, inspire confidence, cause men and women to willingly risk their lives for a cause, and move people to cry, laugh, or become blind with rage.

As the old proverb says – the tongue holds the power of life and death.

But, here’s the thing, why choose?  Why not use both words and pictures in your marketing and advertising pieces?

Why not create a look, feel, and message all communicating the same strong, believable story.  What should your strong, believable story be?  That you are the go-to company for whatever it is you sell to the market of your choice.

I’m not a graphic designer, nor an artist.  I’m a copywriter.  So, I have purposefully surrounded myself with great graphic designers.  I’ve been in the business long enough to know what is likely to work, and what won’t.  But, I’m never the one who creates the final layout, logo, or graphic piece.

My guess is that as a business owner, graphic design isn’t your thing (probably not writing either for that matter).

One of the absolutely most valuable things you could do for your business is partner with a great marketing person or team.  Someone who understands how to craft a message to move your prospects to take action, and who understands graphic design should further enforce your message or story.

So, which is more powerful a snap shot or a story?

The answer: the right combination of both is ultimately the most powerful.  A strong story, descriptive images, and a well-designed logo all mesh together to create a powerful marketing message.

Your logo is a picture of your message.  It’s the stamp, or seal communicating the essence or your story – your brand.

Does Your Sales Pitch Pass the “Why” Test?

Why should your prospect care about the product or service you are pitching? If you start with that question you distill the core benefits that drive sales.

Earlier this summer, my wife and I shopped for a new mattress. The first salesman we encountered pitched one with a new-fangled spring system. He described the coil count, the wire thickness, the spring material, and other data meant to convince us we could not live without this mattress.

When he ended his speech, I asked, “Why should I care about all of that stuff?”

He looked at me as if I was a Martian.

“I’m sorry,” I said. “I suspect everything you told me is important. But I don’t understand why any of this matters.”

He sighed. “Because our springs are more durable,” he said.

I didn’t say anything, but the expression on my face said it again, “Why should I care?”

“The springs hold their shape,” he added.

Standing nearby, the store manager joined the conversation. “Do you suffer any back pain?” he asked?

“I do,” my wife said.

The manager explained that as mattresses age, the springs begin to compress. That creates soft spots and valleys, which contribute to back pain. This mattress protects your back because the springs are stronger and longer lasting.

A mattress that protects my wife’s back! Now that’s a reason to care.

Do your sales pitches pass the “why should I care?’” test? Too often, we pitch our products and services by discussing the what and the how, rather than the why.

Thick, multi-coil, steel springs are the what and how. Protecting your back is the why.

Marketers often refer to features vs. benefits. But I prefer what/how vs. why. The words “what,” “how,” and “why” frame the questions:

Why should I care? If you answer that question first, you articulate the core benefit. Then you prove your case with the what and how.

The mattress store manager understood that. Rather than start with spring count and other data, he reminded us we care to protect your backs; we care to have a mattress that lasts, on average, five years longer so you can save money and protect the environment; and we care to sleep better.

When he claimed we would sleep better, I asked him, “How…?”

The independent spring system means one person can toss and turn on one side of the bed without rocking the other side of the bed.

The manager started with why (“so you can sleep better) and followed with what and how (“the spring system”).

Review your sales pitches -- what you say on the telephone, the copy you place in advertisements, the words you write in emails and letters. As you discuss your products and services, imagine you are a prospect and ask, “Why should I care?” Craft an answer for the prospect and repeat the “Why...” question.

Remember, the mattress salesman did not get to the real “why” -- even though I asked him more than once. We often default to the what and the how. So keep asking, “Why...?” until you distill your story to its core benefits. If you practice this technique regularly, you will naturally begin your sales conversations where they ought to be -- with the why.

For specific help increasing your marketing voltage, visit me at www.marketvolt.com.

Website Shortcuts That Lead to Disaster

Allow me for a moment to read your mind.

Let’s see… ah, you want to be at the top of Google when someone searches for your business.  Good plan, terrific goal and smart way to use your marketing budget for the next year.

Can you imagine for a minute how many business owners think the same thing at some point? “We need to be at the top!” they say.  I’m sure a lot say it, but only a few act upon that idea.

Or they act on it in all the wrong ways.

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