Month: February 2018

Choose Just ONE Metric

In the words of the Highlander, “There can only be one” or from Jack Palance’s character in City Slickers, “Just one thing. You stick to that and the rest don’t mean —-.”

The point is if you give your team too many metrics to chase or different metrics for different folks , everybody isn’t pulling in the same direction. So, just pick one thing for your entire team to focus on: Profit $, Acquiring New Customers, Revenue, whatever, but make sure there is no question in your organization what it is and everybody is doing everything they can to head toward that goal.

Just One Thing!!

 

Think Twice Before Lowering Prices

Sometimes it feels easy to do what the customer asks and just cut a price a bit. So what if you shave a bit of profit off of your current business, you’re sure you will make it up in volume. Well, let’s see how much volume increase is needed to offset a cut in price starting with say a baseline of $15 with 50% margin…

Cost Cut Volume Increase Needed

…if you decrease the margin from 50% to 45%, you have to grow revenue by 22%. If you decrease by the margin from 50% to 40%, you have to grow revenue by 50%!! On the other hand, if you can manage to increase your pricing marginally, you can decrease revenue quite a bit and still maintain profitability.

Keep this in mind the next time someone says, “Hey, old buddy, old pal, can you hook me up with a little better price?”

 

Pick a Word, Any Word, But Own It

The essence of marketing is narrowing the focus. How narrow? Can you sum up everything you want to convey in one word? Can you own one word all to yourself in your prospect’s mind? This is powerful.

Keep it simple

What word you choose? Well, not an invented one and not a complicated one either. The simpler the better… right out of the dictionary. The best words are simple and explain the benefit you are providing. Once you choose it, don’t chase trademarks… you want others to use it… to be a leader, you must have followers. Examples:

FedEx: they sacrificed all other methods of delivery in their business to own “Overnight”
Prego: they took share from Ragu by borrowing words from Heinz (in another category) and went with “thicker”
Volvo = Safety
Dominos = Home Delivery

Words you can’t use

You may have your heart set on picking words like “Quality” or “Honesty”, but these don’t work as everybody says they stand for these and no one is taking an opposing view, so you can’t take a stand here. The “Unquality” corporation or the “Dishonest” political candidates have no volunteers even though there may be many in existence

If somebody else owns it, look elsewhere

If a competitor already owns a word in the prospect’s mind in your space, look elsewhere. Example: Volvo owns safety and many others have tried to say they do too, but Volvo still wins after vast sums have been spent on futile advertising. Another example: Atari owned video games but once business slowed they tried to make Atari = “Computer”, but there were too many others already in that space and they lost. The sadder part is they gave up “video games” to Nintendo who has owned it since. You can’t go for a word too similar to your competitor. You need to pick another attribute and own it. You can’t predict the size of a new attribute’s share, so never laugh.

Some great reads that I borrowed liberally from:

Positioning by Al Ries and Jack Trout

22 Immutable Laws of Marketing by Al Ries and Jack Trout