Category Archives: Value

Are you busy?

According to Henry David Thoreau, even ants are busy.  “The question is: What are you busy about?”

Is it possible that nonstop busyness keeps a person from what is really important?  That was an easy question.  Of course the answer is, yes.  I confess that I am not a big reader of Thoreau, but I recently heard the popular expression; life is what happens when you are busy making plans. 

A mid-year goal for me is to become more aware of the business priorities and make sure my actions are supporting those priorities.  I want to be busy on the right things.  As a marketer, I have the additional responsiblity to connect everything back to customer needs. 

Keeping it simple, focused and possibly even a little less busy.

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Marketing Manager of Spare Tires

Would you buy a car if the dealership explained that a spare tire is not included?  I think I would keep looking and buy somewhere else.  Would you pay more for a car that includes a spare tire?  Huh?  At times the challenge for marketing managers is to market something that customers have come to expect, like a new car, complete with a spare tire (insert jingle here).  It may also be worth considering how your promotions can change customer expectations.  If you include a what was an optional feature, it can be difficult to end the promotion and make the feature optional again. 

Spare tire's for everyone!

The problem I see is that it is not always obvious that you have become the marketing manager of spare tires.  Ask yourself questions about value, keeping in mind that if it is valuable, customers will pay for it. Don’t risk becoming the marketing manager of spare tires. 

  • Will a customer pay for this feature?
  • Are we the only ones offering this feature?
  • Does this feature make our overall value proposition stronger?

If you answer “no” to two or more of these, if might be worth checking to see if your energies would be better spent marketing features that really make a difference to customers.

Ability to win – Harry Potter Movie

Marketing is cool. Many reasons, including the propensity for marketers to create both confusing and meaningful graphs.  We love to tell a story with one graph.   This week I learned this one on customer benefit analysis. 

Ability to win – Graph 

Blue bars represent the customer benefit / what is important.  For this movie example I chose to graph; entertainment, community / family, connection, and price.  The lines represent performance relative to the customer benefit.  Harry Potter is entertainment for young and old, it is a movie to go to with your friends and family, and the connection to the characters is real.  The price paid for Harry Potter is the same as the price paid for any other movie.  Harry Potter has amazing and overwhelming ability to win.  About 6x the gross of Megamind.

Going-to-Market

How do you know the best way to go-to-market with your new product, service or solution?  Every business, even the small ones, have options.  By go-to-market, I mean channel selection, which is distinct from channel management.

Consider the target market.  Going-to-market should be based on what the customer will appreciate and understand.  It should not be based on what the organization has always done or what is most expeditious.  The channel must add value.  Customer in always better than supplier out.  Strive to meet customers where they are and message to them in their voice about their needs or wants.  Keep costs low – for everybody.  On-line channels are so tempting, because of the extended reach and apparent low-cost.  Consider that if a sales call costs $150, a single on-line impression costs $5.  These are not the same thing of course, but the cost difference is so significant that you have to consider an on-line channel for almost any new product, b2b or b2c.  Keeping in mind that a sales call also does not always result in a sale.   The on-line choice is easy if you believe it will sustain sales and long-term profitability.  Usually some aspect of the on-line channel is debatable.

# of sales calls  x  cost of sales call  x  success rate

vs.

# of on-line impressions  x  cost of impression  x  number of impressions to achieve a sale

What are the key questions?

  1. Can we influence the channel and align it to organization goals and customer needs?
  2. Can the channel be scaled up or down to meet customer demand?
  3. Can the channel sustain growth and profitability?

Senior marketing managers should address these questions and prepare and present the go-to-market plan.  The plan will include input from the sales leadership and the chief marketing officer.

What do your customers need?

Hello.  I need to make smooth, fresh ice every hour or so at my ice rink.  Quick, what is the solution?  Knew it.  You thought, “Zamboni.”  What a perfect solution and a great reminder for marketers.  

The definition of customer needs from BusinessDictionary.com is; a problem that a customer intends to solve with the purchase of a product or service.   We could make it more complicated, but let’s try it this way.  The next time you are working on a new product or service, make sure that you can explain why the customer the needs your product or service in customer terms in three sentences or less.  You are not doing it right if you mention your solution in the three sentences.  Without understanding customer needs, there is no incentive for the customer to pay, if they do not pay, you lose your job or go out of business. 

 Frank Zamboni had experience as a mechanic and an ice maker.  With his family, he opened one of the largest ice skating rinks in the world.  Prior to his invention, workers had to go out on the ice with tractors and shovels and then hose water across the surface of the ice.  This was very time-consuming and expensive.   

The Model A Zamboni Ice Resurfacer was invented in 1949 and has been used ever since for the intended purpose.  The invention was based on a tractor blade that made the surface smooth, a device that swept up the shavings and another device to put down a thin top layer of water that would freeze quickly.  Genius!

Competition

I do not believe that Jim Tressel, the Ohio State (OSU) football coach, hates Michigan.  Even though he wants to beat Michigan every year.  My sense of it is that Coach Tressel uses the OSU / Michigan rivalry in a way that improves what his team does and how their season progresses.  Tressel does not disparage or disrespect Michigan in any way.  He shows the rivalry and competition respect.  He focuses on what his team needs to do to win. 

Is it so much different in business?  Healthy competition in the market is good for consumers and drives the competitors to differentiate on service, quality, speed or price (qsp).   Wal-Mart and Target compete in a differentiated oligopoly.  Both want to win every holiday shopper on Black Friday.  Consumers in the US can be thankful  for the healthy competition that exists between these retailers.  Especially because we do not see or hear negative advertising from Wal-mart or Target.

Creating Value for Customers

Creating value can lead to the creation of relationship.  As long as there is the right degree of satisfaction, loyalty follows. Loyalty is rare in 2009, but it remains a goal of marketing. 

1. Customer Value – Customer value is the benefits a customer receives net of the costs of acquiring and using and disposing of a product or service. [ COST/BENEFIT ]

2. Customer Satisfaction – Customer Satisfaction is the degree to which a product or service meets or exceeds customer expectations.  [ DEGREE ]

3. Relationship Marketing – Relationship marketing refers to creating positive,  mutually beneficial, long term associations with customers.  [ ASSOCIATIONS ]

4. Customer Relationship Management – Customer Relationship Management (CRM) includes the activities that are used to establish, develop and grow sales. [ LOYALTY ]

How can organizations build loyalty?  What are the steps?  There will be variations based on target customers and industry, but here is a great article from BNET worth reading and considering.