Strategy
 To interact with Lorenz Lammens Inc. and other clients, leave comments on this blog or visit the 'Profit Online' Forum.
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Wednesday, 12 November 2008 11:23 |
A recent survey by Projectword.co.uk found that 50% of start-ups had not employed any marketing at their launch and some 36% had no intentions of undertaking any marketing. Word of mouth was regarded as more important. Such patterns may serve to explain the reason why 1-in-4 small businesses do not reach their fifth year of trading.
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Thursday, 30 October 2008 08:02 |
 Westvleteren is a beer produced by an order of Belgian Trappist monks in my country of birth. The beer has achieved cult status for two reasons: it is superior in taste and it is difficult to obtain. If you want to purchase their beer you have to:
- make an appointment to buy the brew by calling the Beer Phone. Yes, you read it right, the Beer Phone. The monks, who have taken a vow of silence, make an exception to talk to you at this special phone
- The beer remains unlabeled, and is sold only once a month. A limit of two cases per person applies.
- The monks cap production at 60,000 cases per year.
It is a powerful example in driving up price and brand equity by offering an intangible add-on value. Westvleteren is a beer like any other, but by changing the way the beer is created and the scarcity with which it is distributed they add a spiritual and religious element to it.
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Tuesday, 28 October 2008 06:22 |
Pricing your product and GETTING the right price for your product (that's the one your customer thinks your offering is worth) are subject to complicated strategies. One tactic is to keep your eyes on the intangibles.
If your price isn't higher than the commodity price, you are doing something wrong or your product is just nothing special. Many companies whoever don't dare to cost more out of the concern that they don't know how to answer the question: how do I sell my product or get a repeat sale if I am more expensive?
A product is always just a product. But look at the things you buy on a daily basis - you pay for the intangibles, those add ons that have are priceless. The stuff that you can't get anywhere else, but that are invaluable to you - character, security, familiarity, the feeling that somebody cares, comfort, luxury, status, etc.
How to add the intangibles to you product?
Personalize: brainstorm with your client how you can make your product tailored to their needs. In order to save time, prepare: segment your demographics, categorize your clients in different groups with different requirements. Anticipate their needs, so that when you call them, you already have most of the answers. This will save you both time and make personalization easier and cheaper to achieve. Call your prospects before they know they need you based on what you learn about their needs. Inform them about the solutions you present they weren't aware were out there.
Enthusiasm: you know it is priceless. You've dealt with sales people or consultants before who were passionate about their job and your problem. They had a can do mentality, were positive about your needs and communicated in a way that made you feel confident, reinvigorated and passionate about your project or business.
Speed can be an invaluable factor for some clients. They will happily pay more if needed. What can you do to speed up your business (even if you need to create a new pricing package to make it work...)
Generosity is a powerful differentiate. Over deliver on your promises and stick it out with your client even when things get difficult (within reason). They'll pay you back in spades in recommendations. Or one day, when you need to call on them they'll gladly offer you their help.
Error resolution: how do you deal with clients when you make a mistake. We all get things wrong, how we deal with our errors reveals our true character.
Peer pressure: if you can make your brand the trusted or the fashionable solution, your prospects will have to consider how the market will view them if they don't choose you. Invest in your brand. Engage in case studies, public speaking, amass quotes from clients and industry analysts, do whatever it takes to build your brand, day by day, drip by drip, until it sticks.
Hope: when prospects need to make a decision about purchasing a product, they seek to solve a problem. Your ability to give them hope that they can solve the problem in a way that they'll benefit is a powerful decision influencer.
It is a myth that people decide on price. We are emotional beings that make decisions based on our intangible factors such as a feeling of trust, how reliable the company appears to be, worries about what the boss will think if the solution turns out to be half baked, a sense of being lost in detail and industry lingo when we try to compare options, a fear of being taken for a ride, our need for security, etc.
Sell what people really care about, don't sell on price...
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Friday, 24 October 2008 06:24 |
Nearly 4 years ago I had a contract with cell phone provider One-2-One. Reception on my phone was terrible, and when it became T-Mobile, things did not improve for me. After a couple of work phones, I switched to the network "3", and saw my bills reduced and my reception was brilliant, even where others with other networks struggled.
None of my friends switched to "3". 3 years ago, when they experimented with the service, they found that 3's reception was terrible.
Bottom line: I swear by 3, my friends swear by T-Mobile. All because of our first experience with the network that remains ingrained in how we view the brand.
It's worth getting it right the first time...
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Tuesday, 21 October 2008 12:22 |
I was emailed by company x, a small family company, asking me if I could help them out. They had near to zero sales in the last month.
I asked them what they had done to find out why their sales had dropped so low. They hadn't contacted any of their customers to find out and assumed it had to be the recession. The problem with that assessment is that that makes you pretty much powerless against the problem. You have to identify the problems other than the recession, problems that you can do something about (mind you, you could make the recession work in your favor...). Find those factors that empower you, give you control because they are the elements that you can change within your own company. Let's not forget, we are all still doing business, admittedly a little bit less than usual. You need to start thinking about how you can make customers buy from you instead of your competitors.
So what to do when you are losing clients?
Okay, here's the golden rule: when you are losing customers, talk to them. Every single one of them. Even better, you should be talking to them all the time. That's why you have an entertainment budget for your sales department, that's why you train them, set goals, that is why you are running a PR dep. Still, when sales dwindle, you may assume you know why but don't guess. I've worked with many businesses, some well established, that find that the manufacturers of the products they distribute are now competing for the sale. Others suffer because of technology shifts or deregulation. Sometimes only communication can bring this to light.
 The strategy is to grow a new value proposition, pronto, that can answer the natural question: 'Why should I buy from you? What's in it for my company?' What is your value proposition? How do your clients know they will benefit from their relationship with you (in fact: will they benefit - are you set out to create real value for your customers?)
So much of what passes for marketing is "me, me, me" copy about a company's description of services. Some of it is interesting, but nobody visits you to hear about you, they wanna find out what you've got for them. Analise the way you look at the propositions of other businesses. What really catches your eyes. What creates the desire to call - to buy?
I've helped some companies enter the market, and they usually quickly establish themselves against their competitors by finding out what needs of their customers their competitors have not yet answered. They simply analyze the market, the potential buyers, put themselves in their place, conduct buying behavior with the competitor and find out where the sticking points are. A consumer chain analysis (from the first awareness of need all the way to the point of disposal) brings further unanswered needs to light.
So what to do when you are losing clients? Talk to them. Crawl in their skin. Be your own customer and see where the irritations and frustrations lie. Create focus groups, or even better: a forum where your clients can freely tell you what they would like to see improved. (I agree customers are usually the worst at telling you what you should do, but the forums will unveil trends, problems which you can answer with strong strategic proposals. Look at your customers to identify problems, but look at your teams to create a overarching vision - otherwise you'll be firefighting forever).
In one case the conversation with the client revealed they wanted a project manager onsite and were willing to more than double the sale to get it. In another case a more flexible leasing program was developed to counter the new competition. In both cases these companies went from 'doing things well for you and a bunch of other people' to commanding the attention of their markets.
What do you need to know to uncover the rift in your business sales and marketing efforts?
It's a new world and the customers are in control. Find out what keeps them up at night and you will sleep better.
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