From The Urbach Letter –
Marketing Mindset (Part 2)
Last month I introduced you to the first six success factors of the marketing mindset. If you’re new to The Urbach Letter, click here to read part one in the archives. Continuing right along, here are factors seven through twelve:
#7 – The Optimism/Pessimism Factor: Smart entrepreneurs are big picture optimists but detail pessimists. What this means is that successful people believe they will prevail in reaching their major goals. They focus on the essential “major outcome activities” in their lives, and are propelled forward by a confidence and rational optimism that things will fundamentally “roll their way.” However, these same people realize that the details can and will get screwed up in every way imaginable. The printer WILL mess up the job, the lettershop WILL try to cut corners, it WILL snow on the big sale day, etc. They expect these things to happen and develop contingency plans to deal with them. This is known as “healthy paranoia.”
In line with that, here are the 3 things you should never delegate:
1. The Checkbook. Even if you don’t personally keep the books, keep yourself very much in the loop when it comes to reviewing where the money is going. A little paranoia here can go a long way.
2. Legal Matters. You do read everything before you sign it, right? Many people don’t. They assume it’s all OK. It’s not. Even if the document comes from your lawyer. Oh, and by the way, the time to start really worrying is when your lawyer says, “Don’t worry, I have it all under control.”
3. Marketing. It’s a big mistake to delegate THE most important aspect of your business. As I said before, it’s the highest payoff activity there is. What else ARE you doing?!!?
#8 – The Purpose of Business Factor: A lot of people forget this, but as the owner, your job is to take money OUT of your business, not put it in! You have to think about your office or store as a “money machine.” If your machine is not humming, it’s time for a tune-up! However, you may think things are going along fine when they’re really not. This often happens when you focus on gross sales only. There’s a lot of gross versus net confusion in the business world. I know many people who have the attitude that if sales are high enough, all problems will go away. They say, “If there’s enough gross, there has to be some net around here somewhere.” This is foolish. NET is the only number that counts. However, some businesses are not suited for growth. If you’re going to expand your business, make sure it’s “smart growth.” You see, business owners, in general, fall into a rut running their business. They stop learning about new technologies, new marketing strategies, new market opportunities, etc. However, as Cavett Robert once said, “School is never out for the pro.” Ask yourself this question: “What do you know this week that you didn’t know last week?” If you don’t have a good answer, you’re not studying hard enough.
#9 – The Personality Factor: As I’ve said many times, people want to do business with people (not faceless corporations). Since none of your competitors understand this simple point, use it to your advantage. Know that there are 2 aspects to “personality” when applied to the promotion of your business: celebrity and credibility/believability. Consider how powerful a celebrity endorsement can be. How many of those fat-free grilling machines would that appliance manufacturer have sold if George Foreman wasn’t pitching them? Most people actually believe George himself was in the R&D lab designing the stupid thing. You don’t need to hire an out of work actor or athlete to be your spokesperson (although it will only cost you about $10K to $25K per year to get a nationally known person to endorse your business locally). You can become a local celebrity yourself (i.e. “Anytown’s XYZ Expert”). Use your advertising and public relations to inject yourself into the community’s consciousness. Run your photo and personal comments in all your ads. Leverage publicity and public speaking opportunities to position yourself in the community. It’s not hard to do. You just have to want to do it.
The other component of “personality” is credibility/believability. Hopefully, you already know how crucial this is in most businesses. People will not buy from you unless you’ve earned their confidence. However, while credibility is mandatory, it’s no longer highly persuasive by itself. You now need to provide solid “reasons why” people should favor you with their business, every time you interact with them.
#10 – The Specialization Factor: The easiest way to increase your sales is by appearing to be a specialist in something — even if you’re really not. For example, you can be the jeweler to the gay and lesbian community, the financial planner to the doctors and nurses of your local hospital, the travel agent to the country club set, etc. People will pay more for the specialized product. However, they will also pay more for specialized attention. Furthermore, specializing allows you to target market, drastically reducing your advertising costs, and makes it much easier to develop a persuasive USP (Unique Selling Proposition).
#11 – The Differentiation Factor: Unless you differentiate, price always becomes the deciding factor for your customers. Give them something else to think about.
#12 – The Big Payday Factor: It’s smart to engineer occasional big paydays into your business. A few times a year, run a promotion that will generate a large amount of take-home cash for you. It’s not that hard to do. Again, you just have to want to do it. However, you can’t be in perpetual promotion mode. The market will tire of it and you’ll burn yourself out. The Big Payday Factor has to be counterbalanced by the Consistency Factor. Make sure there is always part of your business that chugs along and creates a steady flow of revenue. Let me illustrate with an example. Here’s the dry cleaners’ secret: if they get somebody to visit them 4 times in a row, they practically have a customer for life (or until they drop the ball). Here’s how they do it:
1. The first sale is made via an irresistible offer (for example, clean anything/everything in your house for 89 cents each).
2. The second visit is to pick up the cleaning. They get a bounce-back coupon with another great offer.
3. The third visit is to drop off cleaning using the bounce-back coupon.
4. By the time they’re back the fourth time, the business relationship has been cemented.
Know this: the second sale is more important than the first! It’s the difference between having shoppers/customers in your store/office and clients in your business.
Most of my articles in this part of The Urbach Letter focus on one particular aspect of marketing and business-building. By going into depth on a single topic, I can present lots of “how-to” information and examples. However, as you’ve undoubtedly noticed, this two-part article focused more on “what to do” rather than “how to do it.” That was on purpose. “What to do” and “how to do it” are the yin and yang of marketing. They balance each other. Here’s one of my favorite quotes from management guru Tom Peters: “There’s a world of difference between doing things right and doing the right things.” Articles like this one are intended to help you make sure you’re doing the right things. So don’t be disappointed that you didn’t learn any new “tricks” in this issue. I’ll provide you with a veritable arsenal of them as time goes on. What’s important is having the knowledge of when and where to deploy them.
Besides, a lot of my readers need a bit of a kick in the pants now and then. A reminder that marketing is the engine that pulls their train… not a side activity lumped in with writing checks and ordering office supplies. There are dozens of highly profitable strategies you’re probably not using. For example, a super-strong guarantee. Despite the fact that many of my clients have enjoyed enormous increases in closing rates using a risk-free guarantee (i.e. “If you don’t love it, you don’t have to keep it”), many others are afraid to even try it for a month to see what happens.
I suggested this to a jewelry store owner and he almost had an aneurism over it. Shaking, he said, “B-b-but, what if somebody wants to return a diamond for a c-c-cash refund?” My reply? So what! You give them their money back, part friends, and sell that diamond to somebody else (who wouldn’t have even come in had you not advertised your risk-free guarantee). Let me put this in perspective for you. A while back, I talked with a man who owns an engineering company that manufactures “aseptic” valves for the pharmaceutical processing industry. His customers are the huge drug companies and the valves he sells are welded on huge stainless steel processing vessels. He had a lot of trouble breaking into the industry because there was a Fortune-500 competitor well entrenched and nobody wanted to take a chance on the new guy. His valves cost about a thousand dollars each. A lot less than the competition (and he had better technology too). Still, they didn’t buy. The risk was too high. What to do? He came up with his version of the ultimate guarantee. If his valves didn’t perform as he promised and the customer was unhappy for any reason whatsoever, he would give them a full refund, pay to have his valve cut out of the processing tank, pay for the competitor’s valve, pay to have it welded in place, and pay for the re-certification process. That last thing is the most expensive (about $30,000) bringing his total cost to fulfill the guarantee to about $50,000. And this is on a $1,000 sale!
Well, turns out, this tactic *made* his business. He’s now very successful due to this one bold initiative. The guy definitely has the brass cojones factor. How about you?