Be Different or be dead

April 14, 2014

This is why you shouldn’t worry about your competition

Source: Pexels

This is why you shouldn’t worry about your competition.

Traditional marketing strategy spends a copious amount of time focusing on how to erect barriers to competitive entry.
Unfortunately in my experience this doctrine doesn’t go far enough and it certainly doesn’t create a sustainable competitive position for an organization.

Worrying about the competition is not where energies should be spent.

Worrying about the competition is misplaced — Here are 7 reasons why this traditional business approach doesn’t work:

It’s not a particularly unique approach to the market — Most organizations seem to follow this approach to minimize competition in their business; if everyone pursues the same strategy, how can it result in a differential advantage for any one of them? The truth is, it’s a business school course and every student takes it and typically tries to apply IT when there are other strategies that work much better.

The notion is rooted in a more theoretical perspective and falls short of the practical need to show business people how to do it. It’s all very well to salute a strategy that is rooted in strong theory, but if it can’t be practically implemented in the real world, it’s of little value.

It’s a distraction — While an organization is consumed with trying to find ways to keep the competition out, it’s not spending enough time to ensure their existing base of loyal customers are taken care of.

And it spawns an unhealthy culture that is preoccupied with preventing market activity rather than doing whatever is required to beat the competition in the trenches where the customers are. Earning their business everyday should be the priority rather than erecting barriers to others coming in to compete with you.

It diverts marketing attention — Away from investing in value based offers for the existing customer base. Rather, marketing resources are employed on other activities — regulations, patents and government restrictions — designed to keep competition away.

It creates an illusion — That competition can be restricted. It’s futile in the long run because a hungry competitor will always find a way to gain access to your markets and your customers. You will never keep them out or restrict their natural market activities.

It tends to focus on artificial non-market tactics — To prevent more competition such as regulation and law rather than beating them by providing amazing customer service and unmatched value.

It’s an ineffective use of valuable resources — With an outcome that is inevitable. Back in the day, the incumbent telecom carriers spent an enormous amount of money trying to prevent competitive entry into traditional monopoly markets through a time-consuming and expensive regulatory process.

The competitive tsunami wasn’t deterred, however, and they should have been paying more attention to creating better customer service and a marketing engine that provided compelling and unique value.

I am not suggesting that you shouldn’t pay attention to the competition, existing and potential.

But don’t get obsessed about preventing them from doing what is reasonable given free market conditions.
If they have an opportunity with your customers, expect them to make a play and respond by shielding your loyal customers from the onslaught of their competitive value proposition.

If you feel that a certain non-market response is necessary, go ahead and do it. But don’t let it be all-consuming. Don’t let it gobble up all of your resources. And don’t let it drain the effort in executing a customer response to the threat.

Observe your competitors but ACT for your customers.

Make it so difficult for your competition to attract your customers away from you - by providing them with constant unmatched value - they will be frustrated and will have to endure so much pain, they will decide it’s not worth it. And they will retreat.

How can you hold them? — What are some of the actions you can take to keep your customers close to you and prevent them from leaving?

Music is a great teacher.

The Grateful Dead informed us on how to create a unique competitive claim.

You don’t want merely to be the best of the best. You want to be the ONLY ones who do what you do — Jerry Garcia, The Grateful Dead

And The Eagles’ Hotel California declares the impossibility of patrons leaving.

You can checkout anytime but you can never leave — The Eagles

The message is cool. It’s mysterious. It’s haunting. It’s foreboding. It’s dramatic. It’s scary. It’s suggestive of a clandestine move.

Here are 8 actions you can take to prevent customers from ‘leaving your hotel’:

▪️Don’t be concerned about what the competition is doing; focus on the action that YOU need to take to enrich the stickiness of your products or services;

▪️Action to prevent leaving must be taken quickly. The time it takes to get to check-out and leave the building is short; rapid innovation of offerings your customers love is mandatory;

▪️Abandon the conventional; take risks with out there solutions;

▪️Give ‘em something more. Move ‘em to ‘another room’ with added value. Transform them into another world where a new reality intrigues them to stay;

▪️Intercept them as they make their way to check-out. Don’t follow up after they have left. Have your spider senses ready to know they intend to leave and disrupt their intentions;

▪️Give them a new experience that makes them want to stay. Give them something so dramatic that it will take their emotions to a new level;

▪️Make it personal Speak to them specifically. What works for Mr. Smith won’t work for Mr. Jones;

▪️SURPRISE! SHOCK! JOLT! AMAZE! FRIGHTEN! them to stay. Do whatever it takes.

Too much attention is given to the threat of others taking guests from our hotel.

If you want to worry about something, worry about the door closing behind them.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 4.14.14 at 01:39 am by Roy Osing
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April 6, 2014

How your customers can become addicted to you in 5 simple ways

Source: Unsplash

How your customers can become addicted to you in 5 simple ways.

Addiction isn’t a casual interest or a take-it-or-leave it attitude.

When customers are addicted to a particular organization they are “all in”. They have a habit of dealing with the organization through thick and thin. It is that tough to kick. It’s like looking both ways before crossing the street. They just do it without consciously thinking about doing business with someone else.

Every organization covets the customer who will habitually buy from them.

The issue is, they aren’t just out there to be taken. There isn’t a tribe of addicts for the taking.

They have to be created.

And the problem today is that most organizations are so driven to make the sale, they don’t focus on doing what is necessary to turn the casual buyer into the raving fan with the habit.

Here are 5 things you can do to help your customers develop the habit for you:

1. Don’t focus on the sale.

If you do things right you will not only make the immediate transaction, you will earn a revenue stream for a long time to come.
This is all about changing the culture of the organization away from short term gratification to building the capability to earn in the long term. As long as quarterly earnings drive behaviour, the need to create addicts will take the back seat.

2. Recruit relationship-building sales people.

Look for demonstrated accomplishments of this competency. If you don’t have frontline folks leaning the right way, habits will not be formed.

3. Look at your front end systems.

Is it easy for a customer to enter your realm and get what they want? Is your web site easy to navigate? Can they reach a human being if they need to?
Do you force people through an IVR with a dozen questions to answer? Simplify your processes. Make them human friendly. People don’t give a damn about your internal issues!

4. Have a strategy when you screw a customer over (and you will).

Recovering from a service OOPS! has amazing implications when it comes to creating addictive behaviour from your customers. Fix it + SURPRISE ‘em is the formula that will turn a postal customer into an addict.
If you do it right they will forget that you screwed them over in the first place.

5. Declare a policy: we don’t care about our competitors! We care about our customers and believe that if we do a great job at serving them, we won’t have to worry about the hordes at our door.

The fact is, when you are worrying about what “the bad guys” are up to, you are nor concentrating on the experiences you have to create for your customers to turn them into addicts.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 4.6.14 at 03:10 am by Roy Osing
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November 4, 2013

How much do you need to invest in your best customers?

Source: Pexels

Your most precious asset is the person who has been loyal to you for years.

Who cares about what you do.

Who pays their bills on time.

Who you can count on when the economy challenges your business.

Precious assets need to be leveraged to grow your business.

It’s the most cost effective way of spreading your word to potential customers.

The return on investing in a loyal customer to get a new customer is HUGE in comparison to traditional advertising methods.

Question is: are you making the most of the precious asset you have?

Here are some things to think about:

— do you have a list of your top 10 most loyal fans who have demonstrated their willingness to recommend you to others? You have to channel your efforts to the critical few.

— do you meet with them regularly and ask them for help?

— do you have a referral program customized for each of them? Remember no two fans are alike and will have different needs in order to refer you to their friends and associates.

— do you regularly update your fans on what’s going on in your business? If they don’t have current information, they won’t be able to “talk you up” to others.

— do you actively engage them by asking their advice in your business matters? People want to feel needed, and if they do they are more likely to step up and help you.

— do you remember their “specialness”? Birthdays, anniversaries, family names, recreation they love?

Your top 10 will produce high returns for you in terms if growing your business.

But you have to work for it.

Give and get.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 11.4.13 at 05:14 am by Roy Osing
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August 19, 2013

Why the best thing marketers can do is study ‘ME’

Source: Pexels

Why the best thing marketers can do is study ‘ME’.

When the marketer studies ‘ME’, magic happens.

‘ME’ marketing will destroy traditional marketing; it’s all about the individual not the crowd.

Brilliant marketers get that ‘ME’ segments generate higher returns than market segments produced by traditional marketing.

The four bases of commonly prescribed market segmentation are demographics, psychographics, behavior and location (‘geographics’) and the marketing process is to develop programs targeted at potential customers with similar traits within a particular segment.

Segmentation studies are based on observations of population behavior;  the characteristics of the masses (represented by the ‘average’ person in the population) determine the conclusions of the study.

Why are these four segments used as the prescription for marketing segmentation? Because this type of data on people is readily available to the marketer.

Census data provides demographic and location information, billing and web visitor tracking systems produce product usage information and standard market research studies ask for lifestyle preferences which people are generally ok with providing.

For a marketing program, individuals are ‘mapped’ into each of these segments and are assumed to be like everyone else in their segment in terms of their likelihood to be attracted to a particular marketing program targeted to the segment.

The marketer’s assumption is that each person in the segment ‘looks the same’ in terms of the segmentation variable chosen and because of this similarity will all exhibit the same buying propensity.

Source: Unsplash

I’ve always found this assumption to be a non-starter. Just because I’m a skier does not in any way suggest that other skiers would be interested in buying the same products as I do.
And just because I’m in the boomer demographic with a specific income in no way is a good predictor of what others with similar characteristics will be interested in buying. 

In this approach, an ‘average’ target for a service might be ‘a male boomer with an annual income of between $60 - $100K who lives in Vancouver and who has an annual ski pass at Whistler’.

And the flaw is that there may actually be some people who do have the targets attributes and who would be interested in what is being offered, but there will also be many with these attributes who won’t be interested and who will not be interested in the offer.

Traditional segmentation produces hits and misses and the marketer hopes there are more of the former. But you can’t count on it. 

There are two serious issues with traditional segmentation methodology; its underlying assumptions are flawed.

First, having segmentation variables prescribed with the simplifying assumption that people tend to make purchase decisions on the basis of their demographics and so on, is fallacious; people express their differences with their own buying triggers which can’t be prescribed up front.

And second, assuming that people who exhibit the same segment characteristics will make similar buying decisions is simply not true; there are many sub-clusters within any given segment that have their own buying motivations quite apart from those in the overall segment.

‘ME segmentation’ is different from the commonly-used methodology, and should be adopted by a marketing organization that wants to stand out and perform above their peers.
ME segmentation poses the research question to an individual person not the population.

ME segmentation is strategic

It is considered as a strategic exercise which asks the question “How should the market be segmented to expose as many opportunities as I can?” not how do I assign my customer base into the prescribed segments.

The prescribed segmentation variables such as demographics, location, usage and lifestyle are not automatically used; they are given mild attention only: the focus is on determining the appropriate variable that will unlock the growth key for the organization.

The objective is not to place people in the prescribed segments, but to discover the appropriate segmentation elements that will produce the best sales result.

For example, if a specific web application best appeals to a Gen-Z individual with an IOS device, lives in Tsawwassen BC, is a member of a family of 4, and has a household provider who is female, then this is the appropriate segmentation to use.

Source: Unsplash

It’s focus is on differences

Traditional segmentation seeks to define small numbers of customer groups that share similar characteristics, and these characteristics are broad and general in nature.
People who are over 65 years old who have right-of-centre political beliefs, women who live on the west coast who are pro abortion are examples of the segments that are produced by the traditional approach.

ME segmentation, on the other hand, is a process driven by the intent to find differences in customer clusters in order to expose as many customer clusters as possible.

Opportunities come from the differences between people NOT similarities among them.

And greater the number of segments that are defined, the more intelligence you have on each person in the cluster AND the better the ability to match a product, service or experience to their specific individual need.

It’s end game is on ‘the many’

As stated above, ME segmentation tries to define as many different customer clusters as possible in order to get closer to the individual with the belief that if you have a tight fit with an individual person, you have a better chance of selling them something than if the person’s desires are watered down by a larger group.

The probability of making a sale increases due to the fact that you are better able to match your offering with the more precise needs. wants and desires of the individuals in each cluster.

Person-research will yield many conclusions; one for each person you talk to.

And each conclusion will be valid unlike conclusions from population research which will be valid for some individuals (who just happen to be exactly identical to the population profile) and invalid for others (whose special unique characteristics don’t match the population profile.)

Better to have 100 different conclusions from 100 individual people rather than 1 conclusion based on the “average” person in a population of 100.

It’s never-ending

ME segmentation is a continuous process of going deeper and deeper into a cluster of customers. Obtaining more and more information on the individuals in the cluster.

The marketer needs to keep looking for differences until they are nose-to-nose with an individual because that’s when total understanding of people’s desires is achieved.

If there were one million customers, the result of the ME process would be one million segments of 1.

What are the implications of a million clusters of 1?

▪️you would be different as few undertake the journey;

▪️you would have more rich and deep knowledge on your customers than your competitors have;

▪️your sales potential would increase exponentially;

▪️you would build both share of market and customer share;

▪️customer loyalty would increase because you are better able to match your solutions to their needs and wants;

▪️you would be better able to survive unpredictable ’body blows’ you might suffer in an ever changing world because you are so tight with your customers.

All because you choose to put in place a marketing philosophy to treat segmentation as a continuous strategic learning down to the individual.

Keep segmenting your market until you are nose-to-nose with a person.

Source: Unsplash

The role of the ME marketer

Within the ‘ME’ context of segmenting markets down to ‘the nose’ of an individual and examining their needs and wants rather than treating markets as homogeneous groups, the ME marketer’s role is different than what marketers have done in the past.

The ME marketer:

— Is driven by individual people have to say, not by what is implied by large markets or populations, and puts the individual before the average needs of the crowd;

— Is ok with the possibility of creating a unique marketing plan and product or service solution for an individual;

— Drives IT to ‘mass-personalized’ serving systems capable of uniqueness delivered to thousands of customers;

— Reserves Customer Appreciation Day events for specific customers who have demonstrated their loyalty to the company for many years;

— Looks to the power of new technology to define the needs of individuals and to use the secrets discovered to create personalized solutions and not to flog their current product portfolio;

— Uses every tactic available to build long term relationships with people rather than flog products at them with a focus on making short term sales. They see AI as a way to create new experiences for people and not a productivity tool;

— Is a strong advocate for the customer inside their organization, ‘doing battle’ for them to protect their interests in their own bureaucracy;

— Does whatever it takes to try and eliminate any dumb rules in their organization that infuriate customers and threaten their loyalty.

Mass marketers are the dying breed of the profession, and it starts with the practice of segmentation.

Segmenting down to ‘the nose of a person’ enables a deep understanding of what people want and desire, and exposes opportunities to not only enhance marketing productivity but also to create sustaining long term value for the organization.

ME markets are superior to crowds.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 8.19.13 at 06:05 am by Roy Osing
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