In Search of Excellence- Lessons from America's Best-Run Companies -  Tom Peters, Jr Waterman, Robert H

Robert B. Cialdini
Publisher: Glenview, Ill: Scott, Foresman
ISBN: 0673189422


This is a synopsis only. RESULTS.com recommends you buy the original book.


Short Cuts – The Power of Perception

• In today’s busy, information overload society people take mental “short cuts” to save themselves from thinking or doing their own research

• E.g. - people perceive that higher price = higher quality.

• Many times the same goods (ones where people have nothing objective to compare their value to) can be dramatically increased in price and suddenly they will achieve dramatic increase in sales.

• (Chivas Regal Scotch Whiskey struggled as a brand until they raised the price far above its competitors – then sales skyrocketed)

• A discount coupon even if it offers no real savings triggers the same number of people using it – than a coupon that offers significant savings

• People believe that if an expert says so, it must be true and don’t pay attention to the details in question

Instant Influence

• The speed of change and the volume and complexity of information means that we are increasingly unable to process all the relevant information necessary to make sound decisions

• We tend to make decisions based on a small subset of information which we extrapolate to represent the total

• Marketers and governments know this - hence they know that we will unconsciously react to the Laws of Influence and not even realise what is happening or why we are doing what we are doing

• Learn the laws of influence – and be more aware of what is really going on around you in your interactions with people, advertising and the media.

• Ask yourself – What is happening here? What are their motivations? How are they trying to influence me? What are my choices? What do I really want?

“Because”

• The word “because” triggers an unconscious compliance response

• When we ask someone to do something they we will be likely to comply if we provide a reason – any reason

• The reason itself is inconsequential in eliciting the response

• E.g. “Can I please go first, because I am in a hurry” is just as likely to get people to stand aside as having some more plausible long-winded reason

The Law of Reciprocity

• The rule says that we should try to repay in kind what another person gives us

• Human civilisation evolved by people giving goods and services (without fear of loss) so in return they could expect to be repaid with other goods and services.

• A feeling of future obligation to repay was trained into us by socialization.

• People in general do not like to feel indebted to others and will want to return the favour as soon as possible

• There is a universal dislike in all cultures for people who take and do not give in return

• The Hare Krishna organisation’s incredible economic growth is fueled by reciprocity – they give a free “gift” (a book or even a flower) and refuse to take it back. Then they ask for a contribution to their cause

• There is a strong cultural pressure to reciprocate a gift – even an unwanted one (ie Xmas cards)

• After accepting a free “gift” customers are more willing to purchase goods / services they would have otherwise declined

• Successful politicians provide favours to other politicians and store them for when they need to call on a favor in return. The recipients of their favours feel obligated to vote for their legislation later

• Medical researchers funded by drug companies feel obliged to favourably recommend the company’s drugs

• Samplers in supermarkets invoke this rule immediately when you taste the food, and there is a subconscious compulsion to repay them by buying the product

• Free trial periods have the same effect. People feel obligated to pay for and keep the products once they have used them

• Free consultations and seminars use this principle also

• Fundraising dinners have learned it is better to wait until you have had the meal before they ask for donations

• A woman who allows a man to buy her drinks is immediately judged by him as being more sexually available to him

• Another way to invoke reciprocity is to combine the Law of Contrast. Ask someone to do a favour for you (the reverse of doing a favour and expecting one in return). Ask for a big favour that is unlikely to be agreed to. When they decline, then make a concession by asking for a smaller favour (the favour you actually wanted all along) and you influence the other party to reciprocate by making a mutual concession (ie they will likely comply with your request). Unions do this in their wage demands. Children ask for $10, get a refusal, then ask for $5 (which is what you really wanted), and the parents will likely comply

• Another version of this is where the door to door salesperson does not get the sale, but the prospect is then willing to provide them the names of their friends as customer referrals as a concession.

The Law of Commitment and Consistency

• Once we make a choice or take a stand, we encounter internal and external pressure to behave consistently with that commitment

• We justify our decisions in our minds and continue to behave according to our earlier decisions

• In most circumstances it is commendable to say “my word is my bond”, but the drawback is that it binds us to old ways of behaving that may not be relevant anymore

• We use this law as a shortcut to not have to think through issues every time

• Salespeople invoke this law by saying to prospects, “If I could get you the model you want and the price was right, would you be prepared to buy today?”

• The strategy is to “start small and build”. Get a small commitment, then people will feel the need to be consistent with their earlier decision when you ask for a bigger commitment later

• The law of consistency is sometimes called the “foot in the door technique”. Get them to say yes to you demonstrating your product to them, and you are more likely to make the sale

• Charities know people who have already donated once, are likely to say yes in the future

• Therefore be careful about agreeing to what seem to be trivial requests. It can make you feel compelled to comply with larger requests that are only remotely connected with the original request

• During the Korean War the Chinese would isolate an American POW and over several hours of (friendly) interrogation get him to admit that the USA was not perfect. From there they would build on his commitment and get them to write & sign a small statement about how capitalism had its faults in return for some cigarettes etc. When the POW returned to the barracks he would hear his essay being read aloud over the prison camp speakers, and his comrades would label him a traitor. He would defend his actions, but from that point on would be forever shunned by his fellows, and eventually become a willing collaborator with the enemy, willing to spy on his comrades

• Beware of signing petitions – it will subconsciously influence your behaviour in the future to be consistent with your earlier position on this subject

• People use this law to label people and then control them. Once you accept someone’s label for who or what you are, you feel obligated to behave according to this label. I.e. “Do you consider yourself to be a generous person? Great then you’ll be willing to help me out with ….etc”

• Give people a reputation to uphold, and you can wield great influence

• Getting customers to fill out the sales contract, prevents them from backing out from paying later

• Writing down goals, increases your commitment to taking action toward their attainment – telling others about your goals heightens the commitment

• Competitions like “Tell us why you like our product in less that 100 words and you’ll win a prize” are powerful influence tools. Once you have entered you will always feel compelled to choose the product

• Groups like Weight Watchers and Alcoholics Anonymous are successful because they get people to publicly announce their intentions – and thus they are more likely to follow through

• The more effort that goes into a making commitment, the greater the ability to influence the person who made it (eg inviting someone to come to your office for a free consultation etc)

• When advertising, you are best to not show prices. Even getting prospects to phone up is a commitment that you can use to your advantage

• The more active, public and effortful you can get people to make the commitment, and the more they make it of their own free will (no coercion) the greater the influence on their behaviour

• Car dealers are notorious for “low balling”. They sell you a “cheap car”, then once you have made a commitment to buy (or even visit the showroom!) you realise that you have to pay extra if you want a stereo, air conditioning etc. (The law of Contrast also comes into play. After you have spent $20,000, an extra $200 doesn’t seem so much)

The Law of Social Proof

• We determine what is correct by finding out what other people think is correct

• We view a behavior as being correct to the degree we see others performing it (especially those we identify with as being similar to us in appearance or background)

• The greater the number who believe in an idea, the more we think they must be correct – that perhaps they know something we don’t

• Canned laughter during sitcoms increases the humorous responses of the audience and their rating of the humor of the TV show – even when they know the laughter is not real

• Bartenders / buskers put some of their own money (gold coins / notes) in their collecting jars giving the impression that everyone is tipping generously & influencing others to do likewise

• Evangelical preachers / magicians / comedians sow their audience with ringers to act in a prescribed manner and thereby influence the rest of the audience to do likewise

• Nightclubs deliberately create queues so that people think it must be popular

• Advertising uses social proof to influence us when it claims “fastest growing” “most popular” “trendiest” “number one” etc

• Advertisers also try to use people who look just like the intended target user for the product – so people who identify with the actors in appearance and background will be influenced to view the product favourably

• Suicides / murders / accidents tend to invoke copycat occurrences – the more publicity they get, the more similar occurrences happen soon afterwards

• When newspapers publicise a young person’s suicide, youth suicide increases – including youth vehicular suicide.

• 4 people looking skyward will get 80% of all passersby to do likewise

• Children shown violent programs will afterwards act in a more harmful way to each other

• In any situation where we are unsure of ourselves we look to others for guidance – hence the common occurrence where an accident victim lying on the footpath in need of help is ignored by passersby

• In an emergency situation social proof can often be completely wrong. Many people have died in fires as a result of the group not reacting to fire alarms.

• The Jonestown cult suicides – the 910 members were isolated from society and took their lead from the group leaders to willingly drink cool aid laced with poison

• Farmers know that if you can get the herd leader animal moving in a certain direction, the rest of the herd will follow

The Law of Friends (Liking) & the Law of Association

• We tend to say yes to the requests of people we know and like

• Network Marketing (MLM) / Tupperware etc use this law to successfully sell product

• Even a mention of a friend’s name can influence a buying decision – hence the power of salespeople getting referrals “Your friend Mr. X suggested I call you as he thought you might be interested in this product”. Turning salespeople away in this case is more difficult – it’s almost like rejecting the friend

• We are genetically programmed to “like” attractive people – and as such we tend to comply with their requests.

• Therefore if we wish to influence people – the more we can enhance our attractiveness the more effective we will be

• The “halo effect” – we automatically believe that good looking people have the traits of talent, kindness, honesty and intelligence. This unconscious reaction makes us assume “good looking = good”

• Good looking people are more likely to get your vote, get hired and get favourably treated by the justice system

• Advertisers frequently feature good looking people promoting their products

• A fashion model / celebrity lends their perceived positive traits to the product they are promoting (the Law of Association) – thus we like it more

• We also tend to like people who are similar to us in appearance, dress, behaviour, political allegiance etc.

• Even little things, like if their name is similar to ours in direct marketing letters we tend to be more likely to respond favorably

• Good salespeople know how to find common interests with their clients and appear more likeable (as well as mirror client’s posture / vocal patterns etc)

• They also “take our side” and “do battle with the boss” to get a good deal for us

• Good cop / bad cop. The suspect sees the good cop as being on his side and is more likely to confess to him (the law of Contrast also applies here)

• Most people are suckers for flattery – we tend to believe praise and increasingly like those who provide it

• Conversely there is an unconscious tendency to dislike the person bringing us unpleasant information “shoot the messenger”.

• Therefore association with good things makes us more likeable, association with bad things makes us less likeable

• “We will be known by the company we keep”

• Sports fans see the team they are supporting as representing “them”. If the team wins “they” feel superior by association

• People desire to live in prestigious neighbourhoods, attend the best schools, eat at the best restaurants, associate with the “in crowd” – to invoke the law of association

• The desire to bask in the reflected glory of others (the Law of Association) taken to the extreme does suggest low self esteem and external motivation however (groupies / rabid sports fans / stage mothers)

• Having team goals in a company leads to greater cooperation and liking for each other – than individual competition

The Law of Authority

• We unconsciously obey symbols of authority without question

• We are trained as children that obedience to authority is “right” and disobedience is “wrong”

• People have an extreme willingness to go to almost any lengths to obey the command of authority (hence the Nazis convincing the German’s to persecute the Jews etc)

• Nurses obey Doctor’s prescriptions – without thinking or questioning

• Advertisers use people posing as Doctors or Scientists to promote their product – the white coat uniform adds to the influencing effect

• Uniforms, titles, qualifications and other symbols of authority (ie the well tailored business suit and highly polished shoes) have the same unquestioning influence effect

• Physical size also conveys authority (as it does in the animal kingdom) – hence high heels, shoulder pads, and the fact that tall people are more likely than short people to rise to positions of leadership

• Fine clothes, jewelry, cars and possessions convey authority.

• Authority is easily faked - ask yourself, “Is this person really an expert or is it just superficial appearance? What is the evidence of their authority? How truthful can we expect them to be in the circumstances?”

• Clever influencers will argue against their own interests to assure us of their sincerity – this helps “prove” their honesty to us. Invariably of course the drawbacks will be outweighed by the advantages. “We’re more expensive – but we’re worth it” “Listerine – the taste you hate twice a day”

• Clever waiters will say – “The dish you chose is not as good tonight at usual. Might I suggest instead…..” (This invokes several laws – liking / trust / reciprocity / authority)

• Letters of recommendation obtain the most favourable results when one minor negative comment about the candidate is included – rather than wholly positive comments only

The Law of Scarcity

• Opportunities seem more valuable to us when they are less available

• Rarity increases the value of an item (jewels / art / stamps)

• People are more motivated by the fear of losing something than they are of gaining something

• A ringing phone is more compelling than the conversation we are having – what are we missing if we do not take the call?

• Marketing that implies what we will lose if we don’t act - is more compelling to purchasers than outlining what we will gain

• “We have only one left in stock / Offer expires this Friday / Hurry while stocks last / for a limited time / Buy now, or pay full price when the next shipment arrives / I am booked out – but if I move things around I may be able to fit you in on Friday” etc

• Whenever our free choice is limited, or we are prevented from accessing something - we react by wanting it more (censorship / prohibition)

• This tendency starts at age 2 (“The terrible twos”) – where we start to resist being told what we can and can’t have, and rebel against constraints on our freedom. Children constantly test the limits of their freedoms (a wise parent provides consistent boundaries). The teenage years are another especially rebellious time – although we tend to react against restrictions to our freedoms all our lives

• Adult tools of influence like persuasion and preference are more effective tools with teenagers than prohibitions and controls

• Taking something away that was previously given intensifies desire for its return

• Mikhail Gorbachev gave the Russian people increased freedoms (the policies of glasnost and perestroika). The KGB staged a coup placing Gorbachev under arrest and pledged to reinstate the old suppressive order. The people revolted at the prospect of losing their newfound freedom and took to the streets to secure Gorbachev’s release.

• The lesson applies to families also – the parent who grants privileges and freedoms, and enforces rules erratically invites rebellion from the children when they try to reinstate the rules

• Censorship makes people want the information even more. In fact they become even more sympathetic to the information even though they have yet to see it!

• For fringe groups the clever influencing tactic is to get your views officially censored, then publicise the censorship

• Judges ruling evidence as inadmissible is the same as censorship – the jurors unconsciously place more weight on this evidence

• Information does not have to be censored for us to value it more; it need only be scarce

• We want things more when we are in competition for it “While stocks last!” “I have another person interested in making an offer” (also “feeding frenzies” at January department store sales / buyers getting emotional & competitive and over paying at auctions)

• When a new admirer appears on the scene, relationship partners become especially possessive

• Auctioneers fabricate dummy bidders to invoke scarcity

• Our typical unconscious reaction to scarcity & competition hinders our ability to think rationally as to an item’s real worth and we tend to overpay

• If you are a seller – give all your prospective buyers the same appointment time to view your product to invoke scarcity and competition amongst them

Doug Hall,
Publisher: Emmis Books
ISBN: 1578601797

This is a synopsis only. RESULTS.com recommends you buy the original book.

Business success is not random. There are reproducible scientific lessons that can help you win more, lose less, and make more money with your products, services, sales and advertising efforts

75% of new businesses fail within 5 years. 75% of new product / service launches fail - and are discontinued within 2 years. A 25% chance of success is terrible odds. Most business owners will have a greater probability of success if they went to the casino and gambled their investment

Working harder won’t do it. You need to think smarter.

Those who excel in marketing, at a reproducible level (anyone can get lucky once), are students of the marketing craft and understand the strategies that have higher probability of success. They are professionals who study the literature.

Research for this book comes from the analysis of more than 6000 client groups, and more than 1,200,000 customers. The findings apply to both products and service

Canadian philosopher Marshall McLuhan once said, “The medium is the message”. Research has proved this to be wrong. It is the message that motivates the customers, not the medium. It is what you say, not where you say it that matters most. The message is king.

It is important to note, that no amount of communications enhancement will help where the products or services are not competitive.

Who, Why, What, How.

Target market = “Who” your ideal customers are

Dramatic and Meaningful Point of Difference = “Why” your target customers should care

Overt Benefit = “What” you are offering to your target market customer

Real Reason to Believe = “How” you are going to make good on your promise

Target Market

Target market = “Who” your ideal customers are

The rule = “Delight the few to attract the many”

• Your target market are the customers you seek to delight and excite the most with your offer

• Your target market are your most profitable customers with the most potential for growth

• When you have a clear target market

  • Your product and service design has more clarity and focus

  • Your customer communications are much more effective

• Note – while the target market is the centre of your business “bulls eye” it does not necessarily mean they will make up most of your sales volume

• Whenever you focus on a specific target market you immediately enhance customer perception of you as being an expert – and experts can expect to get paid more and earn higher margins

3 Laws of Marketing Physics

1. Dramatic and Meaningful Point of Difference

2. Blunt Overt Benefit

3. Real Reason to Believe

Notes about the 3 Laws of Marketing Physics:

Spending more money is rarely the answer to more growth.

It’s the quality of your idea that matters. No amount of communications enhancement will help where your products or services are not competitive.

Successful selling requires 2 simple tasks:

1. Making the effort to contact potential target market customers

2. Delivering an effective message

The research in this book will help you to deliver an effective message.

You still need to get out there and make the effort!

Dramatic and Meaningful Point of Difference

“Why should I care?”

Dramatic and Meaningful Point of Difference = “Why” your target customers should care

Increases your chances of marketplace success 353%

• Your mission is to create a monopoly – by being so dramatically different to your competitors

• If you’re not meaningfully unique, you’d better be cheap

• Without uniqueness you are a commodity and will only achieve commodity profit margins

• For uniqueness to be effective it must be dramatic and meaningful

  • It must be relevant to the target market, yet unexpected

    • (unexpected = novel, unusual, original, unique, new, different, revolutionary)

  • It must “call out” to your customers

  • It must make a real difference to your customers

  • The only difference that matters to customers is the experience they receive

• Dramatic & Meaningful Difference gets you noticed, remembered, and acted on by customers

• Make sure you can explain it simply to someone who is not knowledgeable in the field

• Can a 12 year old understand what makes you unique?

• Take whatever you think makes you different and multiply it by 10. Be boldly unique

• Dramatic and Meaningful Difference is the greatest weapon a small business has in competing with large companies.

  • As a company gets larger, its courage tends to get smaller

  • Larger companies tend to play it safe rather than trying to be unique

• Dramatically different ideas are usually hard to execute – they challenge you operationally

  • Is it a sustainable, defendable difference?

  • Can you execute effectively?

  • Is there a barrier to competitors copying you?

  • Dramatic differences cause you operational chaos and stretch you to deliver, and can invoke initial resistance from staff

• To be dramatically different is hard work – but worth it (353% more worth it!)

• You must continually develop your Dramatic Difference – if you are successful you will eventually have “me too” competitors

• What starts as a monopoly soon becomes a commodity

• Data shows that 80% of all copycat products fail – (but their entry into the category has the effect of lowering category margins)

• Always focus some of your resources on creating the “next big idea” for your uniqueness

• Being “new” and “having news” is the #1 driver of advertising success

Common mistakes with Dramatic and Meaningful Point of Difference:

• Delusion – refusing to face the fact that your company is not truly dramatically different

• Your uniqueness is too easy for competitors to copy and implement

• Exaggerating a difference based on minor distinctions that require “insider knowledge” but are irrelevant, or not easily understood

• SOS = “Same Old Stuff” - Having a “me too” product or service and hoping that a better marketing message will produce a miracle

  • Your Dramatic and Meaningful Difference must be built into your product or service

  • You uniqueness must come from within

• Shallow gimmicks

• Solving yesterday’s problems

How to craft a Dramatic and Meaningful Difference:

Be a Pioneer

• Having a future focus is 10 x more predictive of success

• Lead your marketplace – don’t copy

• Do not ask customers what they want. Innovation does not come from customers

• Customers don’t know what they don’t know. No customer asked for an iPod.

• Anticipate the future needs of customers. Vision takes courage.

• Pioneer companies enjoy a 4 x sustained advantage – they can command ongoing premium pricing over clones

• Create the news – be the first to offer a “….”

• Create new market categories – position yourself as leader

• Claim a dramatic point of difference

• Pursue change even when you don’t have to

• Learn more about your customers and your industry every week

• Make learning a daily activity

• Be open to new information – new facts

• Be prepared to change your mind with new information

“An excessive customer focus prevents firms from creating new markets and finding new customers for the products of the future. They unwittingly bypass opportunities.” (Harvard Business Review)

“A customer can seldom say today what new product or service would be desirable in 3 years from now, or a decade from now. New products and services are generated, not by asking the customer, but by knowledge, imagination, risk, trial and error on the part of the producer, backed by enough capital to develop the product or service and to stay in business during the lean months of introduction” (W Edwards Deming)

Pursuing dramatically different ideas takes courage

It takes courage to lead customers into the future

Blunt Overt Benefit

“What’s in it for me?”

Blunt Overt Benefit = “What” you are offering to your target market customer

Having 1 blunt overt benefit will nearly triple your chances of marketing success

• Customers stay with the status quo until they see an overtly appealing alternative

• Be blunt. The more obvious it is what you do - the increased chances of success

• Focusing on benefits instead of features is critical for marketing success

  • Features = facts, figures, technology, details about your product / service

  • Benefits = what’s in it for the customer? What do they receive, enjoy or experience?

• Engineers, scientists, and technology driven companies are prone to making the mistake of focusing on features – and communicating their love of the technology

  • For every feature ask from the customer’s perspective – “So what?”

• Benefits must be specifically related to your target market customer

• Tell customers exactly what you will do for them in a direct, easy to understand manner

  • Is it specific about what’s in it for the target customer?

  • Is it clear and obvious?

  • Does it excite and compel?

  • Is it unique vs. the competition?

  • Does it work visually as well as when said out loud?

  • Is it easy for customers to spread via word of mouth?

  • Does it travel well? E.g. the game of Chinese whispers – does the message stay the same as it is passed on from person to person?

• Research shows you need to be blunt and overt in order for your target customer to “get it”

• It’s not boasting when you can really deliver

• The clearer you are about what you do, the more customer word of mouth referrals you get

• Being clever and obscure does not create customer curiosity, they simply reject you

• Can a 12 year old tell what your company does by looking at your business card? By looking at your branding? Your tagline? Your advertisements?

• It’s OK for a customer to say “NO” because your Overt Benefit does not apply to them (i.e. they are not your target market customer)

• It is inexcusable for a target market customer to say “NO” because they do not understand your Overt Benefit

• Sometimes people fear that they might insult the intelligence of their customers if they are too blunt & overt

  • Don’t worry you can’t. You will attract the right customers for the right reasons

  • Being blunt and overt ensures the enquiries you get from your marketing will be pre-qualified and already interested in exactly what you are offering

• The more you focus on doing 1 thing great, the greater your chances for success as a brand

• Analysis of over 4000 concepts shows that if you offer more than 1 or 2 benefits - you lower your chances of marketing success.

• The strongest brands and strongest companies offer 1 focused benefit

• There are many cars, but few “real brands” that are associated with 1 benefit

  • BMW – driving

  • Volvo – safety

  • Toyota – reliability

  • Mercedes – engineering

  • Ferrari - speed

• Contrast this with brands that try to be all things to all people

  • Ford = ?

  • Chrysler = ?

• When customers hear your brand name, what 1 benefit do you want to come to their mind?

  • Ask your customers what 1 thing comes to mind when they hear your brand name?

  • Ask your staff what 1 thing do we offer our customers?

  • Are they all saying the same thing? If not – you have work to do

• People fear that by focusing on 1 thing, they will limit their customer base. They think that by promising everything they will broaden their business potential. However, the data shows the more you dilute your focus – the more you limit credibility and customer appeal.

• When you proclaim and then deliver excellence in 1 specific area, it gives credibility to your entire business. Rather than limit your customer base, you can actually grow as perception of your excellence and focus. Customers assume that if you do 1 thing great, you must have excellence in other areas too.

• The most difficult, yet important decision is to decide what you are not going to be.

• You may feel like you are giving something up, but saying NO to promoting other offerings gives you a greater chance of success. Saying NO enhances your employees’ effectiveness

• Your 1 Blunt Overt Benefit is actually your brand / company mission – it focuses your employees on what really matters

• Your Blunt Overt Benefit is what your brand stands for, what your company stands for

• Your Blunt Overt Benefit can be either rational or emotional – the data shows there is no difference in their effectiveness. The key is to do 1 thing great and focus.

• When a customer buys your product or service they are buying the “end result” they can visualize in their mind

  • What is the defining moment of success for your product or service?

  • How could you show the end result visually?

How to find your Blunt Overt Benefit:

• What is the reason you got into business in the first place?

• What problem did you set out to solve?

• What are you most proud of / excited about regarding what your company offers?

• What would your most loyal customers boast most about what your company offers?

• Complete this statement: We are the best / first / only company to offer….

Common mistakes:

• Providing a solution (or inventing something) to solve a non-existent problem

  • This is the #1 mistake. The customers must have tension for change

• Selling the absence of a problem - instead of a positive benefit

  • Instead of saying “no preservatives” it is better to sell your health benefits

  • Selling “we don’t have a negative” requires customers to know that all other products have that negative. When you ask customers to do more work - you get fewer sales

• Assuming customer knowledge

  • Make sure a 12 year old level of comprehension can understand your benefit

• Selling “low prices”

  • The only time you can “own” this benefit on a sustainable basis is if you are large enough to have economies of scale or are vertically integrated to the extent that you have a sustainably lower cost of production (e.g. Wal-Mart, Dell, Southwest Airlines)

  • Do not market “low prices” unless you truly have lower costs than your competitors

• Being too humble

  • Being overt can feel like boasting - some people are scared to blow their own horn.

  • It is not boasting when you are telling the truth and you can do what you say

  • Beware of comments from close friends and focus groups – who tend to try to water down your offer – because they are familiar with your offer and will say “You don’t need to say that, we know that”. The real world is not familiar with your offer. Your business has mere seconds to get a customer’s attention. Be blunt and overt.

• Doing what everyone else is doing

  • Your overt benefit needs to be unique. If you “play safe” and offer the same things as your competitors you will have no impact.

Real Reason to Believe

“Why should I believe you?”

Real Reason to Believe = “How” you are going to make good on your promise

You are 2 x more likely to succeed if you combine your Blunt Overt Benefit with a Real Reason for them to believe you

• Customers will not commit to purchase until they perceive a Real Reason to Believe that you will deliver on your Blunt Overt Benefit

• You need to provide evidence that you will do as you promise

• Your Blunt Overt Benefit is “what” you are offering. Your Real Reason to Believe is “how” you are going to make good on your promise.

• To succeed in marketing you need the “what” and the “how”

• Customer evaluation of your Real Reason to Believe happens in a split second

• Overt Benefit generates the interest; the Real Reason to Believe is what closes the sale.

• “Real” = you must tell the real truth. Authenticity is the #1 most important personal value

• Customer trust in marketing messages and product and service claims is at an all time low – after having been duped by companies’ and politicians’ hype for far too long

• Real Reason to Believe is built or diminished by small actions e.g.

  • Clean uniforms and clean sign-written trucks increase your credibility

  • Staff answering the phone professionally and courteously increase your credibility

  • Dirty food trays on a airplane make you question the airline’s engine maintenance, and decrease your credibility

• Credibility is like a bank balance. Today you start with a negative credibility balance and need to build trust. 93% of customers do not believe advertising anymore.

• When customers trust you they:

  • Are more willing to make the purchase.

  • Will drive further to do business with you

  • Will be more loyal

  • Will pay more, and be less tempted to shop elsewhere for a cheaper price

• Successful TV infomercials that stay on the air for a long time provide some of the most effective examples of Real Reason to Believe. They provide:

  • Visual demonstrations

  • Customer testimonials – aimed at converting skeptics

  • Common sense explanations of how the product works

  • Verification of the expertise and pedigree of the inventor of the product

• Bricks and mortar stores have an advantage of more credibility than infomercial companies or internet companies because people can see and try products for themselves and know they can come back and present any problems to real people

• Internet companies need to provide as many Real Reasons to Believe as they can

Real Reasons to Believe strategies:

• “Kitchen logic”

  • Use common sense language to explain in a direct and straightforward manner why you can deliver your Blunt Overt Benefit e.g.

    • We make the most durable jeans – because we use triple-thick denim

• “Personal experience”

  • Demonstrations are more effective than testimonials

  • Let customers see, feel and experience your brand

  • Sampling

    • Sensory feedback – see, smell, feel, taste, touch, experience

  • Demonstration

    • Includes “before & after” photos

    • Images of a product being used in extreme circumstances (so customers can imagine how well it performs in their ordinary personal circumstances)

• “Pedigree”

  • Detail the heritage of your brand

  • “Development pedigree”

    • Describe the design, creation, recipe, or process behind your brand

    • (Remember these types of Real reasons to believe are not your overt benefit – they are simply reasons to believe you can deliver your overt benefit)

  • “Marketing pedigree”

    • Use market data to communicate credibility e.g.

      • “The #1 selling XYZ in …”

      • “Winner of the ABC award 2 years in a row…”

  • “Trademark pedigree”

    • Use a trademarked brand name that is already trusted to endorse your new brand – e.g. line extensions

    • The danger is when companies use line extensions to stretch their original trusted brand into another category that is beyond what it currently stands for

• “Testimonials”

  • Either from customers or experts (get their signed permission)

  • Celebrity endorsements (For celebrities to add credibility, the fit needs to be right and they need to be perceived to have some expertise in the area)

• “Guarantee”

  • The power of your guarantee is directly linked to the level of risk your company is perceived by the customer to be taking

  • Keep fine print to a minimum – you must maximize customer confidence, not reduce your legal risk

  • Be bold & confident in order to give your customers peace of mind

Common mistakes with Real Reason to Believe:

• Not big enough reasons

• Not enough reasons. When in doubt, add more

• Irrelevant reasons

  • Needs to be synergy between your Blunt Overt Benefit and Real Reason to Believe.

• Are your marketing communications saying the same message in all your media channels?

• Are your staff all saying the same messages about your company (on the phone / at trade shows etc)? When the messages are different you lose credibility with customers

• “Me too” reasons – following the rest of your industry (“they all say that”). The more a strategy is used in a category the less credible it becomes e.g.

  • All scotch whiskeys talk about their pedigree

  • All mail order companies offer a money back guarantee

  • (You need to come up with a unique strategy to break the cycle of cynicism)

• Destroying your own credibility

  • Usually done by lawyers inserting fine print to limit company liability

The 3 Laws of Capitalist Creativity

1. Explore Stimuli

2. Leverage Diversity

3. Face Fears

• Brainstorming is not effective or efficient = the “suck” method of creativity

• Brainstorming is 50 years old. Data shows brainstorming does not work well in business

• Create a multi-sensory stimulating environment = 2 x more creative ideas developed

• Leverage diversity – surround yourself with people who think differently to you (different cultures, ages, backgrounds, thinking styles etc)

• Let people write their own ideas / solutions individually first

• Then people present their written ideas to the group

• Don’t worry about practicality of ideas in the initial stages

• Generate many ideas

• Suspend judgment

• Drive out fear – encourage dissension and debate

• Left brain people are just as important as right brain people in the creative process– leverage both styles

• Right brain = energy to lead change

• Left brain = doers = turn dreams into reality = bring discipline to the creative process

• Experiment on small scale. Fail fast – fail cheap

• “It is not the strongest that survive, nor the most intelligent, but the ones most responsive to change” (Charles Darwin)

• Take risks – the players who hit the most home runs have the most strike outs

• Courage comes from believing you are making a difference

by Al Ries and Jack Trout
Publisher: New York : McGraw-Hill
ISBN: 007052730X

This is a synopsis only. RESULTS.com recommends you buy the original book.

Marketing Warfare

War is often used as a metaphor for business, but most authors are unaware of military strategy and what really works. The study of warfare is a study of how to win, and how not to lose.

The principles of military strategy have been refined & perfected over 1000’s of years. Marketing as a discipline is less than 100 years old.

It’s not about aggressiveness and fighting. The best approach is seldom a direct head on attack. (i.e. it is a mistake to market the benefits of your product X vs the competitor’s Y)

Instead, ask yourself, what is most likely position to take that will undermine the competitor’s position?

Apple is good example – it stopped going head to head with Microsoft, and outflanked it by launching iPod.

Aim to be the first to offer a something in a new category

The Principle of Force

Superior numbers wins most of the time (biggest sales team, biggest marketing budget)

Quantity overcomes quality most of the time (Microsoft / Coke etc dominate over better quality products).

You don’t win with better people, product, service – you win with better strategy

You must accept customer perceptions as their reality, and focus your marketing accordingly. The customer defines who is the leader in each category.

You can’t change customers’ perceptions once they have been formed with your “so-called truth” about who has the best quality product.

You don’t win with a better product, you win with better perception (positioning)

The Superiority of Defense

It is hard to take customers (territory) off a company that already occupies it

People fight harder to resist losing something they already think they have

You need to gain your own high ground (perception of leadership).

It’s easy to stay on top of the hill, hard to dislodge someone off it

Avoid entrenched competitors

Market research – don’t ask people what they want, ask how they perceive you and your competitors

Don’t try to control everything (line extensions). Spread yourself too thin and you are liable to attack on a narrow front from a focused competitor

The 4 key strategies

Out of 100 companies

1 = Market leader playing defense
2 = Offence – competitors being opposite of the leader
3 = Flanking
4 = Guerilla

1. Defense

Only the dominant market leader should play defense

The best strategy for dominant leaders is to attack yourself. Create new products that make your old ones obsolete – (Gillette introduces new razor blades every couple of years etc)

Strong competitive moves should be blocked (Shick releases Quatro = Gillette counters with 5 blade razor). Bock them as they land on the beaches – don’t let them get a toe hold on your territory

By retaliating quickly a large company can protect its territory from more innovative, nimble companies

Block them asap with covering products, and bring economies of scale pricing to bear in terms of pricing. Aim to contain their growth with a blocking product, and go back to focus on creating a new innovation to make your old product obsolete

2. Offence

Go on the offence if you are a strong #2 or #3 brand

Be the opposite of the leader and focus your attack at that point

Find a weakness in the leader’s strength (a strength that they can’t change the market perception of easily).

Attack on as narrow a front as possible. (Don’t do line extensions)

Keep your forces concentrated. Bring the greatest number of your team into action at a focal point

Ask what word do you want to own in the customer’s mind? (one that is the opposite of the leader)

3. Flanking

Go around the competitors. Make a move into an uncontested area.

Create a new category – be the first to occupy this ground. The element of surprise is important

The pursuit is as critical as the attack – you need to pour it on once you get a foothold – to gain the leadership perception before a large competitor launches a “me too” defensive product

Reinforce success, abandon losers quickly. Don’t spend resources throwing good money after bad

Don’t try to be all things to all people. Keep your forces concentrated

High priced, exclusive products can outflank incumbent giants in a way they can’t counter easily (e.g. Absolut Vodka launched at 50% higher price than leading brand Smirnoff).

Use different packaging, distribution, price, design – compared to incumbent products

Don’t ask customers what they want – you need to be innovative and creative, and then generate as much PR as possible (keep it secret – use the element of surprise so incumbents are caught unable to respond - then pour it on)

When creating a new category, don’t look at advertising Return On Investment. In the crucial early times, you should be asking, “How much do we need to spend to ensure victory (ownership of this new category)?”

4. Guerrilla Warfare

Most companies in the world should play guerilla warfare

Find a segment small enough to defend. Pick a segment small enough that you can become the category leader.

Become a big fish in a small pond (focus geographically / by industry / by price point – e.g. Rolls Royce)

Go narrow and deep rather than broad and shallow. You have limited forces. Focus.

Never act like the leader (never introduce line extensions etc)

Don’t be greedy – position yourself as far away from the leaders as you can

You are not trying to take customers from someone else (as per a flanking strategy) – you are in a market all your own (Rolls Royce does not try to line extend down market to compete with Mercedes etc)

Be contrary. Defy conventional wisdom. Do the opposite of what MBA’s recommend.

Have lean and mean operations. Limited support staff. Make quick decisions.

Jump in, jump out. Be prepared to run away to fight another day

Form alliances – band together for self preservation (Century 21 / Quality Inn)

Strategy follows tactics.

Tactics first – then strategy.

Most companies decide their strategy then look for tactics to make the strategy work

Better to find a tactic that works, then build it into a strategy

Strategy should evolve out of the mud of the market place – what works in the field, not out of some ivory tower

Be like the battlefield general - not the conference room CEO

Opportunity Screams - Tom Asacker

Seth Godin
Publisher: Portfolio
ISBN: 159184021X  

This is a synopsis only. RESULTS.com recommends you buy the original book.

The old rule of marketing:

“Create safe, ordinary products – then sell them with advertising”

The new rule of marketing:

“Create remarkable products that your target market will seek out and talk about”

The old ways of marketing are dead. Playing safe is now risky. Stop advertising and start innovating. Be a purple cow. A purple cow is remarkable – it gets noticed. It gets talked about

Customers are harder to reach these days because they ignore advertising

“Interruption marketing” – i.e. mass media advertising is dying (TV / print / radio ads).

Just because you can market to someone, doesn’t mean they want to hear from you. To cut through you need to be relevant

Flashing banner ads on Yahoo don’t work, yet targeted contextual ads on Google do

Satisfied customers are unlikely to advocate your product (“The plane landed safely”).

You need to be truly remarkable – you need to offer them something that is worth talking about (“The cabin crew were smiling and telling jokes and really made us feel special”)

Being better than the rest is not good enough. Very good is not even worth mentioning - you need to be remarkably different – you need to be a purple cow

If you are worth talking about – you will get talked about!

You must design a product / service that is remarkable enough to attract the early adopters, yet simple enough for them to easily spread the word to others. Make it easy for them to share your story with their friends.

A big mistake many companies make is to keep changing their marketing message (marketers feel they need to justify their position). This makes it harder for your early adopters to spread the word.

Be consistent!
 
Your marketing slogan / tagline needs to be:

• True

• Consistent

• Worth passing on

How do you create an idea that spreads? Don’t try to make a product for everybody, because that is a product for nobody.

Focus on your most profitable market segment, the one with the most growth potential, the one that is most influential. Don’t cater for the masses. Cater to your ideal customer

Define your target market first, then design a product / service that is remarkable to them

Understand your target market’s needs and provide the solution in a remarkable way

Get their permission to communicate with them directly to keep in touch with their needs, and offer them more remarkable products & services that are relevant to them (“Permission Marketing”)

Most people are scared of standing out from the crowd, of being criticised - and thus create bland inoffensive products – this is a recipe for mediocrity.

The greatest achievements are usually the ones that get criticised the most. Push the boundaries.

Be extreme and don’t water down your offering to appeal to the masses. If you are not annoying some people you are not operating close enough to the edge. The edge is where the money is.

Explore the limits – be the fastest, loudest, hottest, coldest, slowest, hardest, oldest, newest, friendliest, most hated, most efficient, biggest, smallest etc. Whatever everyone else is doing – do the opposite – and do it in a remarkable way

Make it safe for your staff to take risks and fail. Fail fast, fail cheap.

Measure everything, figure out what’s not working and stop it, figure out what works and do more of it.

Starbucks was remarkable a few years ago. Now they are boring, but that first burst of purple cow innovation allowed them to become one of the largest brands in the world.

Once you have created a purple cow you now have 2 simultaneous challenges:

1. Milk the cow for all it’s worth while it remains remarkable

2. Invent a new purple cow to replace the first one

Instead of spending more money on advertising, spend more money on designing your product or service to be remarkable

Don’t use focus groups to pick your winners. Not everyone has to like your product. Compromise is the kiss of death.

Focus groups hated the Southpark cartoons (too vulgar), the Hummer (too big). But what made these products successful is that they:

• targeted a specific niche market

• they were remarkable

• the people in that target market thought they were worth talking about to their friends

Where do remarkable products come from? Usually from passionate people who are making a remarkable product for people like themselves. Howard Schultz – Starbucks CEO loves coffee.

The Burton snowboard, the IPOD, the Lear Jet all come from people who live for what they do. Remarkable products & services come from people who deeply care!