It goes by many different names. USP, Unique Selling Proposition, Competitive Advantage, Brand Promise, Value Proposition, and Point of Difference.
It’s the PROMISE that is made to prospective customers to influence them to choose your product over your competitor’s. Every business needs one. Lots of companies have one. Frankly, most of them aren’t very good.
Here’s three ways to measure the effectiveness of your PROMISE:
1) Is it unique? Does it set you apart from your competition?
2) Is it relevant? Do potential customers care that you’re offering it?
3) Can you deliver? Are you willing and able to fulfill your promise?
If you meet all three of these criteria, you have a successful PROMISE, and, based on the three examples below, a successful business as well:
● Melt in your mouth, not in your hand.
● Fresh hot pizza at your door in 30 minutes or it’s free.
● When your package absolutely, positively has to be there overnight.
If you think about it, a successful PROMISE is an all or nothing proposition:
UNIQUE + RELEVANT but not DELIVERABLE = one-time customers and bad word-of-mouth.
UNIQUE + DELIVERABLE but not RELEVANT = Nobody cares!
RELEVANT + DELIVERABLE but not UNIQUE = Parity or commodity position
Your PROMISE should really be called a Unique Buying Proposition, because if it is done right, you won’t have to sell your product--people will be asking if they can buy it.
Want to talk about developing or refining your PROMISE? Your CMO can help!
Thursday, January 21, 2010
Ten ways to make your competition work for you
How much effort do you put into tracking your competition? For most of us, the answer is--not enough. You wouldn’t try to run your business with no regard for the law, or economic conditions, or your customers. But it is surprising how many people feel they can run their businesses with little or no regard for their competition.
There are exceptions. Pizza parlors carefully monitor competitive menus and promotions. I’m sure General Motors spends a lot of time keeping an eye on Toyota. And airlines pay close attention to competitive pricing and initiatives. But many other businesses pay only occasional and cursory attention to their competitors. That’s a mistake.
Here’s ten suggestions for gathering and (more importantly) making use of competitive information:
1) Reach corporate consensus on who your competitors currently are (this may be harder than you expect). Review this list regularly (semi-annually?)
2) Make someone responsible for tracking competition. It isn’t hard--your receptionist can do it if you tell them how.
3) Prove you think this information is important. Review competitive information regularly, and share your findings with the appropriate people.
4) Set up a grid comparing the details of your offering(s) to those of the competition. This can include anything meaningful-- prices, sizes, flavors, channels of distribution, store hours, shipping costs, return policies, etc. Look for differences and decide if they are advantages or disadvantages for you; then leverage the advantages and chip away at the disadvantages.
5) Benchmark competition by printing out all the screens on their website, then have someone look for changes on a regular (quarterly?) basis. Pay particular attention to pricing, product portfolio changes, service offerings, news releases, etc.
6) If your competitors are public companies, buy a share of stock in each so that you will receive their mailings.
7) Have your employees collect and forward sales collateral and advertising from the competition to the person you’ve made responsible for competitive tracking (another good reason to have such a person). Find a way to reward them for their efforts!
8) Don’t just watch established competitors. While start-ups may not be an immediate threat, they obviously feel they’ve found a significant chink in your armor, or they wouldn’t be entering the industry. Analyze them carefully to find out why they think you’re vulnerable.
9) Periodically (annually?) do a threat assessment that considers competition from outside the industry. It wasn’t a hard-copy carrier that crippled FedX’s overnight letter business, it was FAX machines.
10) Set up an exercise where you create combined teams of internal and external people with the assignment of putting you out of business. Then take a long look at the plans they develop. If they can think of it, so can your competition!
Having trouble finding time to watch the competition? Your CMO can set up a system for you. I’ll even monitor the competition for you, so you don’t have to. Let me know if I can help!
There are exceptions. Pizza parlors carefully monitor competitive menus and promotions. I’m sure General Motors spends a lot of time keeping an eye on Toyota. And airlines pay close attention to competitive pricing and initiatives. But many other businesses pay only occasional and cursory attention to their competitors. That’s a mistake.
Here’s ten suggestions for gathering and (more importantly) making use of competitive information:
1) Reach corporate consensus on who your competitors currently are (this may be harder than you expect). Review this list regularly (semi-annually?)
2) Make someone responsible for tracking competition. It isn’t hard--your receptionist can do it if you tell them how.
3) Prove you think this information is important. Review competitive information regularly, and share your findings with the appropriate people.
4) Set up a grid comparing the details of your offering(s) to those of the competition. This can include anything meaningful-- prices, sizes, flavors, channels of distribution, store hours, shipping costs, return policies, etc. Look for differences and decide if they are advantages or disadvantages for you; then leverage the advantages and chip away at the disadvantages.
5) Benchmark competition by printing out all the screens on their website, then have someone look for changes on a regular (quarterly?) basis. Pay particular attention to pricing, product portfolio changes, service offerings, news releases, etc.
6) If your competitors are public companies, buy a share of stock in each so that you will receive their mailings.
7) Have your employees collect and forward sales collateral and advertising from the competition to the person you’ve made responsible for competitive tracking (another good reason to have such a person). Find a way to reward them for their efforts!
8) Don’t just watch established competitors. While start-ups may not be an immediate threat, they obviously feel they’ve found a significant chink in your armor, or they wouldn’t be entering the industry. Analyze them carefully to find out why they think you’re vulnerable.
9) Periodically (annually?) do a threat assessment that considers competition from outside the industry. It wasn’t a hard-copy carrier that crippled FedX’s overnight letter business, it was FAX machines.
10) Set up an exercise where you create combined teams of internal and external people with the assignment of putting you out of business. Then take a long look at the plans they develop. If they can think of it, so can your competition!
Having trouble finding time to watch the competition? Your CMO can set up a system for you. I’ll even monitor the competition for you, so you don’t have to. Let me know if I can help!
Get your hands dirty!
When was the last time you personally did any did any prospect/customer research? Not commissioned research, not read a summary of research, but actually did the research yourself? I know you have a ton of other things to do, but if you haven’t participated in any research in the past twelve months (and I’ll bet you haven’t), then you’re really missing an opportunity. To quote John Frank, editor of the American Marketing Association’s marketingnews: “It’s much too easy in marketing to just be looking from the inside out to what you think customers want and/or need.”
Authorities and pundits are pretty well agreed that significant advances in new product development or substantive competitive advantages won’t come from just asking prospects/customers what they want. Great new products and real competitive advantages come from insights into the attitudes and motivations of your target market, as observed from their behavior. And if it is hard for people to come up with those insights from direct observation, imagine how much more difficult it is to come up with them by simply reading research data and summaries!
I don’t know about you, but there have been times in my career when I’ve commissioned important research, then because of the pressure of other responsibilities, never looked at the actual data gathered, but simply read the executive summary. (How many of you have interview CDs or DVDs of prospect/consumer interviews sitting in a drawer that you’ve never listened to or watched?)
It’s a rare report that can communicate all the non-verbal cues that direct observation reveals—the emotion in someone’s voice, or the passion implicit in their body language. How often do you actually use your product: cook and eat the food item you make, or apply for your insurance policy online, or ride the bicycle you manufacture? How often do you watch someone else do it? There is no substitute for first hand experience and observation! Lots of things can be safely delegated. This one can’t. Or at least this one shouldn’t be.
No one says you have to design your own research or schedule your own interviews. Let your marketing research department or supplier create the questionnaire and handle the administrative details. But you should be there—at least once in a while. Because if you aren’t, you’re missing a golden opportunity to come up with the insights that you are uniquely qualified to find.
Authorities and pundits are pretty well agreed that significant advances in new product development or substantive competitive advantages won’t come from just asking prospects/customers what they want. Great new products and real competitive advantages come from insights into the attitudes and motivations of your target market, as observed from their behavior. And if it is hard for people to come up with those insights from direct observation, imagine how much more difficult it is to come up with them by simply reading research data and summaries!
I don’t know about you, but there have been times in my career when I’ve commissioned important research, then because of the pressure of other responsibilities, never looked at the actual data gathered, but simply read the executive summary. (How many of you have interview CDs or DVDs of prospect/consumer interviews sitting in a drawer that you’ve never listened to or watched?)
It’s a rare report that can communicate all the non-verbal cues that direct observation reveals—the emotion in someone’s voice, or the passion implicit in their body language. How often do you actually use your product: cook and eat the food item you make, or apply for your insurance policy online, or ride the bicycle you manufacture? How often do you watch someone else do it? There is no substitute for first hand experience and observation! Lots of things can be safely delegated. This one can’t. Or at least this one shouldn’t be.
No one says you have to design your own research or schedule your own interviews. Let your marketing research department or supplier create the questionnaire and handle the administrative details. But you should be there—at least once in a while. Because if you aren’t, you’re missing a golden opportunity to come up with the insights that you are uniquely qualified to find.
The more satisfied you are the more danger you are in
Because for most people, satisfaction means “things are going good, and I don’t have to change them.” And the longer you leave things unchanged, the more time you are giving the competition to catch up with or leapfrog past you.
The best friend a marketer has is the attitude that things can “always be better” and the discipline to act on that attitude. We’ve all got a lot of demands on our time. The marketing environment is more challenging than ever, and there is always a new crisis on the horizon.
In addition to these distractions, we’ve all heard “if it ain’t broke, don’t fix it.” And certainly New Coke fiasco and the Ford Edsel are stark reminders of how “improving” a product line can go wrong. [Not to mention how I’ve never forgiven Frito-Lay for making their previously excellent restaurant-style salsa so much “better” so that I had to switch to Hernandez!)
On the other hand, there are numerous examples of how complacency has led to decline. From the movie studios ignoring television to IBM’s lack of interest in home computers to Kodak and Polaroid’s reliance on film, we can all name instances where “satisfied” companies have had their lunch eaten by competitors.
So is it a case of “damned if I do and damned if I don’t”? If that was true, it would make sense to take the path of least resistance and do nothing.
But it isn’t true. If you don’t, then you can count on the competition to work like crazy to come up with a better value proposition for your customers. Some will fail, but most of us have so many competitors that the odds are in favor of one of them succeeding.
However if you do, rigorous marketing research and pilot testing can significantly lessen the chance of failure. And at least if you’re taking action, your fate is in your hands rather than the hands of your competitors.
Successful marketers (and companies) find ways to institutionalize continual improvement. They regularly schedule the time and manpower to pay careful attention to consumer wants and needs, stay up-to-date with improvements in technology, and carefully monitor competition. Finally, they make improvement a regular part of their goal-setting.
So stay dissatisfied. And when you retire, you’ll be able to look back on your career with satisfaction!
The best friend a marketer has is the attitude that things can “always be better” and the discipline to act on that attitude. We’ve all got a lot of demands on our time. The marketing environment is more challenging than ever, and there is always a new crisis on the horizon.
In addition to these distractions, we’ve all heard “if it ain’t broke, don’t fix it.” And certainly New Coke fiasco and the Ford Edsel are stark reminders of how “improving” a product line can go wrong. [Not to mention how I’ve never forgiven Frito-Lay for making their previously excellent restaurant-style salsa so much “better” so that I had to switch to Hernandez!)
On the other hand, there are numerous examples of how complacency has led to decline. From the movie studios ignoring television to IBM’s lack of interest in home computers to Kodak and Polaroid’s reliance on film, we can all name instances where “satisfied” companies have had their lunch eaten by competitors.
So is it a case of “damned if I do and damned if I don’t”? If that was true, it would make sense to take the path of least resistance and do nothing.
But it isn’t true. If you don’t, then you can count on the competition to work like crazy to come up with a better value proposition for your customers. Some will fail, but most of us have so many competitors that the odds are in favor of one of them succeeding.
However if you do, rigorous marketing research and pilot testing can significantly lessen the chance of failure. And at least if you’re taking action, your fate is in your hands rather than the hands of your competitors.
Successful marketers (and companies) find ways to institutionalize continual improvement. They regularly schedule the time and manpower to pay careful attention to consumer wants and needs, stay up-to-date with improvements in technology, and carefully monitor competition. Finally, they make improvement a regular part of their goal-setting.
So stay dissatisfied. And when you retire, you’ll be able to look back on your career with satisfaction!
Wednesday, May 20, 2009
It’s all about…THEM
You’ve all heard people (somewhat) jokingly say “It’s all about me.” And truth be told, even the best of us can sometimes feel and act that way, if only unconsciously.
The business version of this would be “It’s all about us.” And unfortunately, many companies tend to behave that way most of the time, despite mission statements that describe how customer-centric they want to be.
This is both understandable and regrettable.
Understandable because the most important thing to a company is naturally its own survival.
Regrettable because the company’s best chance of survival is to focus on what the customer wants, not what the company wants.
Let’s focus on sales messages. During a recent American Marketing Association meeting Bob Gilbreath (CMO of Bridge Worldwide) talked about three levels of customer needs.
--The most basic is solutions: communicating valuable information, incentives, and answers.
--Next is connections: providing useful or entertaining experiences that can be shared with others.
--And at the top of the needs pyramid is achievement: things that someone can use to improve themselves, their family and friends, or the world.
Note that nowhere in this list of needs is
“know about company XXX”
or
“know about company XXX’s product(s)”
Yet that information usually makes up the bulk of the communications we send to our customers and prospects. So why should we be surprised and disappointed that 15% is considered a typical “open” rate for emails, people fast forward through our TV commercials, and 1% a great response rate for direct mail?
Here's the point: people will only pay attention to messages they think THEY will get value from.
Before you can get prospective customers to listen to you, you have to get inside their heads! You have to break free of the 20th century mindset of talking about yourself (ie. your company) under the mistaken impression that people care. Instead, you need to identify your target market(s), zero in on what THEY care about, and customize your messages to their interests and needs.
Your message content is the key! The only way to get your message read or listened to is to tailor it to one of Bob's three levels of needs. Do it often enough, and well enough, and those open and response rates will start going up.
I don’t have the room here to give you examples of how to do that-- but I’d be happy to provide as many as you like over a cup of coffee some time. I’ll even buy. Give me a call!
Now is a great time to improve your products!
Today’s economy gives five added incentives to tune up your product portfolio.
1) With business down, many firms aren’t working at capacity. So it is easier to free up people to examine your products for competitiveness and profitability and take steps to improve them.
2) Compared with other marketing expenses, product improvements can be relatively inexpensive to implement.
3) Many firms are reacting to the downturn by discounting their price, which hurts short-term profitability and degrades long-term value perceptions. Product improvements allow you to maintain or improve profitability and increase the perceived value of your offerings.
4) Product improvements create news, attracting attention without the need for expensive advertising. They also boost the effectiveness of any advertising you do.
5) Product improvements help keep current customers from bargain shopping among your competitors.
Five product improvement steps:
1) Talk to your customers! Find out what’s important to them.
-------------------------------------------------------------------------------------------------
Brand Keys conducted an analysis of 1,847 products and services, in 75 categories, via their Customer Loyalty Engagement Index. On average, the study found that only 21 percent of all the products and services examined had any points of differentiation that were meaningful to the consumers. This is nearly 10 percent less than a benchmark study that was conducted in 2003!
-------------------------------------------------------------------------------------------------
Two good questions are “What one thing about our product should we never change?” (Then probe for others) and “If you could change one thing about our product, what would it be?” (Then probe for others).
2) Chart your position versus competition, comparing target segments, features & benefits, cost, profit margin, distribution, marketing, service, and other relevant factors.
3) Clearly identify what you want your products to stand for. Then be sure you live up to your positioning. Lip service won’t cut it with customers. For example, don’t claim high quality unless you can provide it!
Once you stake out a position, review your marketing mix to be sure there’s no dissonance (for example, don’t position your product as high quality and then discount the price…)
4) Don’t keep improvements a secret. Tell people about it! Make sure they are trumpeted on your website, in your sales collateral, and in relevant industry and general publications. Remember, competitive advantages are short-lived, so you want to maximize the initial impact of product changes.
5) If the competitive advantage created by product improvements is short-lived, an ongoing differentiation process is necessary. Don’t wait for the next recession to follow this advice again. After completing step #4, schedule a return to step #1 and repeat!
I have developed and introduced 21 different products and product lines, and tested over 4,000 new products. If you feel you might benefit from outside help in tuning up your product portfolio, give me a call.
1) With business down, many firms aren’t working at capacity. So it is easier to free up people to examine your products for competitiveness and profitability and take steps to improve them.
2) Compared with other marketing expenses, product improvements can be relatively inexpensive to implement.
3) Many firms are reacting to the downturn by discounting their price, which hurts short-term profitability and degrades long-term value perceptions. Product improvements allow you to maintain or improve profitability and increase the perceived value of your offerings.
4) Product improvements create news, attracting attention without the need for expensive advertising. They also boost the effectiveness of any advertising you do.
5) Product improvements help keep current customers from bargain shopping among your competitors.
Five product improvement steps:
1) Talk to your customers! Find out what’s important to them.
-------------------------------------------------------------------------------------------------
Brand Keys conducted an analysis of 1,847 products and services, in 75 categories, via their Customer Loyalty Engagement Index. On average, the study found that only 21 percent of all the products and services examined had any points of differentiation that were meaningful to the consumers. This is nearly 10 percent less than a benchmark study that was conducted in 2003!
-------------------------------------------------------------------------------------------------
Two good questions are “What one thing about our product should we never change?” (Then probe for others) and “If you could change one thing about our product, what would it be?” (Then probe for others).
2) Chart your position versus competition, comparing target segments, features & benefits, cost, profit margin, distribution, marketing, service, and other relevant factors.
3) Clearly identify what you want your products to stand for. Then be sure you live up to your positioning. Lip service won’t cut it with customers. For example, don’t claim high quality unless you can provide it!
Once you stake out a position, review your marketing mix to be sure there’s no dissonance (for example, don’t position your product as high quality and then discount the price…)
4) Don’t keep improvements a secret. Tell people about it! Make sure they are trumpeted on your website, in your sales collateral, and in relevant industry and general publications. Remember, competitive advantages are short-lived, so you want to maximize the initial impact of product changes.
5) If the competitive advantage created by product improvements is short-lived, an ongoing differentiation process is necessary. Don’t wait for the next recession to follow this advice again. After completing step #4, schedule a return to step #1 and repeat!
I have developed and introduced 21 different products and product lines, and tested over 4,000 new products. If you feel you might benefit from outside help in tuning up your product portfolio, give me a call.
Business Blogging—a marketplace differentiator
Yeah, I know, when you think about competitive advantages, your mind instantly turns to price, packaging, promotion, and all that other MARKETING 101 jazz. But what if you’re already doing all of that and (because everyone else is doing it too) you still need more of an edge? Well, how about blogging?
Remember:
· People do business with people they like.
· People do business with people like themselves.
Blogging is a great way to convince current and potential customers that you fit into one of these two categories. And it offers the chance to reinforce that conviction repeatedly over time.
In an earlier “marketing thought” I described the persuasive power of stories. Blogging is an efficient way of telling stories that will present your people and product(s) in a positive light. Business contacts tend to be impersonal. Blogging puts a personal face on your company and product or service, building an emotional connection that increases your chances of acquiring and retaining customers.
Potential blogging topics
1. Think anecdotes and personalities—“personal face”—remember?
2. Talk about how your company was founded—what are its “roots.”
3. Provide personal details about your employees (include pictures!) tied to what they do at work.
4. Talk about the procurement or manufacture or quality inspection of your products.
5. Discuss your employees’ qualifications for providing whatever service(s) you provide.
6. Provide pictures (literal or through words) of your facilities.
7. Talk about what went into developing or introducing a new product or service.
8. Provide a case study or testimonial.
9. Provide a tip or suggestion, and describe where it came from (who and why).
10. Describe your experiences at (or reactions to) an industry event like a trade show; provide information about upcoming events.
You can provide a link to information about products or promotions, but make it an “afterthought.” Lead up to it indirectly, keep the reference brief, and provide a link to the detailed information.
Who should blog
Unless you have someone who is unusually prolific and verbose, you’re going to need either an outside writer or a team of several contributors. Not everyone will be a good blogger—do an internal “talent search.” Look for passion, and hire professionals to “polish” your postings if necessary.
How often to blog
At least once a month for B2B, and probably not more than once a week.
At least twice a month for B2C, and probably not more than twice a week.
The more “pithy” and relevant your blogs are, the more people will want to read them.
Create a publishing calendar or schedule. Don’t leave your timing to chance.
Treat this like any other marketing initiative; set objectives and track readership and results.
If you think blogging sounds too “artsy-fartsy” to provide concrete business results, then you’re going against the corporate marketing wisdom of companies as big as Boeing, Dell, Kodak, and General Motors, and as small as... me!
Intrigued, but don’t know how to get started? I can help with everything from technology to identifying potential contributors to creating postings. Give me a call!
Remember:
· People do business with people they like.
· People do business with people like themselves.
Blogging is a great way to convince current and potential customers that you fit into one of these two categories. And it offers the chance to reinforce that conviction repeatedly over time.
In an earlier “marketing thought” I described the persuasive power of stories. Blogging is an efficient way of telling stories that will present your people and product(s) in a positive light. Business contacts tend to be impersonal. Blogging puts a personal face on your company and product or service, building an emotional connection that increases your chances of acquiring and retaining customers.
Potential blogging topics
1. Think anecdotes and personalities—“personal face”—remember?
2. Talk about how your company was founded—what are its “roots.”
3. Provide personal details about your employees (include pictures!) tied to what they do at work.
4. Talk about the procurement or manufacture or quality inspection of your products.
5. Discuss your employees’ qualifications for providing whatever service(s) you provide.
6. Provide pictures (literal or through words) of your facilities.
7. Talk about what went into developing or introducing a new product or service.
8. Provide a case study or testimonial.
9. Provide a tip or suggestion, and describe where it came from (who and why).
10. Describe your experiences at (or reactions to) an industry event like a trade show; provide information about upcoming events.
You can provide a link to information about products or promotions, but make it an “afterthought.” Lead up to it indirectly, keep the reference brief, and provide a link to the detailed information.
Who should blog
Unless you have someone who is unusually prolific and verbose, you’re going to need either an outside writer or a team of several contributors. Not everyone will be a good blogger—do an internal “talent search.” Look for passion, and hire professionals to “polish” your postings if necessary.
How often to blog
At least once a month for B2B, and probably not more than once a week.
At least twice a month for B2C, and probably not more than twice a week.
The more “pithy” and relevant your blogs are, the more people will want to read them.
Create a publishing calendar or schedule. Don’t leave your timing to chance.
Treat this like any other marketing initiative; set objectives and track readership and results.
If you think blogging sounds too “artsy-fartsy” to provide concrete business results, then you’re going against the corporate marketing wisdom of companies as big as Boeing, Dell, Kodak, and General Motors, and as small as... me!
Intrigued, but don’t know how to get started? I can help with everything from technology to identifying potential contributors to creating postings. Give me a call!
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