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Competing – using a low-Price strategy

by Rick Baker
On Mar 18, 2011
At our Leaders’ workshops we tie two marketing concepts together. The two marketing concepts are ‘the PQS Triangle’ and ‘Differential Advantage’. Both of these concepts are ‘vintage’ marketing thoughts…..things we learned a few decades ago.
 
PQS Triangle is a picture, designed to make it clear businesses can set its marketing strategy based on a combination of Price, Quality, and Service. Rarely, if ever, can a business succeed if its marketing strategy is designed to win at all of P, Q, & S. Put another way – it is virtually impossible to deliver the lowest Price, the highest Quality, and the b set Service all at once. Something has to give. For most of our Clients the thing that has to give is Price: most of our Clients are not in a position to offer the lowest Price.
 
Differential Advantage answers the question: Why do our Clients buy from us rather than do nothing or buy from one of our competitors?
 
When the PQS Triangle and Differential Advantage are combined we have the essence of the marketing strategy.
 
For certain businesses the marketing strategy does contain Price – ie, the business can compete by offering better prices than their competition.
 
We think this is rare [even though we recognize many of our Clients’ Clients want it or demand it].
 
We think many businesses struggle and fail because they use a low-Price strategy when that is a doomed strategy.
 
However, there are 2 scenarios when a business can compete using a low-Price marketing strategy.
 
Those 2 scenarios are:
  1. Volume Leadership scenario: when your business has massive volume you can use your buying clout to reduce your supply costs and you can use ‘economy of scale’ to reduce your operating costs. Then you can reduce your Prices, hold a Price advantage over your competition, and grow your business. Big-box stores can always offer better Prices than boutiques.
  2. Educated Entrepreneurship scenario: when you have obtained specialized knowledge [for example, from being an employee at a big business] you can draw on your specialized knowledge to compete with bigger, less-entrepreneurial or more-bureaucratic businesses. This is how many entrepreneurial businesses get started.
Now – there may be other scenarios where you can use a low-Price marketing strategy and run a profitable and sustainable business.
 
If there are then we would really like to know them.

Tags:

Entrepreneur Thinking | Marketing | Sales

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Sales Tweet #117

by Rick Baker
On Dec 28, 2010
Sales Tweet #117 Relationships: that's where Sales takes over from Marketing.
 
The Thinking Behind the Sales Tweet
Regardless whether it is brief or time-staged or if it is deeply meaningful or superficial, the Sales function happens directly between 2 or more people. The purchase-and-sale experience is personal…for both the Client and the Salesperson.

Tags:

Marketing | Sales | Thought Tweets

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About Relevant Brands

by Rick Baker
On Dec 22, 2010
Many of us spend a lot of time thinking about Business Development.
 
We think about Marketing & Sales, we think about Communication, and we think about Branding.
 
We know business-development things that are working.
 
We know things that worked at one time but no longer work now.
 
We keep our eyes open for thoughts and ideas on how we can improve what we are doing.
 
Here is something I read recently about branding1…
 
 “Relevant brands understand certain principles:
  • Insight. Relevant brands care about what we actually do, not just what we think2.
  • Innovation. Relevant brands know the difference between what is purely remarkable and what actually works.
  • Investment. Relevant brands understand the imperative of sparing no expense when it comes to satisfying our needs.
  • Design. Relevant brands live and breathe simplicity3.
  • Experience. Relevant brands realize that it is more important to touch us in real life than on television.
  • Value. Relevant brands are more than worth every penny4.
Footnotes:
  1. `Relevance, Making Stuff That Matters`, Tim Manners (2008)
  2. This aligns with Spirited Leaders` definition of Integrity
  3. This aligns with Spirited Leaders` philosophy Seeking Simple
  4. Our business contains Value when Clients know we deliver Value to them. This aligns with Spirited Leaders` philosophy V-C-C-V

Tags:

Marketing

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Think About Your Clients’ Clients

by Rick Baker
On Nov 24, 2010
How much time do you spend thinking about your Client’s Client?
 
Whatever the amount…that’s time well spent.
 
Most of us spend much time thinking about our Clients.
 
We ask ourselves questions like:
  • What’s our Target Market?
  • What Value does that Target Market need and seek?
  • What do we do to satisfy that need?
Often, we get so tied up in the details of market niching and market differentiating we miss the obvious.
 
Often, we miss the thing every one of our Clients want.
 
Our Clients want more Clients.
 
Your Clients want more Clients.
 
So, we should set aside some time to think about our Clients’ Clients.
 
Thinking about individual Clients, one by one, you can ask yourself questions, including:
  • Who do I know who would like to be a Client of my Client?
  • How can I set up a meeting between my Client and a probable Client for my Client?
  • What does my Client need to do to attract more Clients?...How may I help?
  • How does my product or service mesh with my Client getting more Clients?...Be specific.
  • Am I LinkedIn with probable Clients for my Clients?
  • Are my LinkedIn friends connected to probable Clients for my Clients?
Ask yourself the questions.
 
Then act.

Tags:

Clients' Clients Philosophy | Marketing | Sales

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Credibility and your Marquee Clients

by Rick Baker
On Nov 10, 2010
If you do not have a Marquee Client then it would be worth your while to figure out how to solve that problem. You could make that your #1 priority.
 
If you do have one or more Marquee Clients, then…well done. You have one of the most-important ingredients.
 
Your business-success recipe calls for this ingredient, your Marquee Clients.
 
How do you know if you have Marquee Clients?
 
Marquee Clients have these sorts of qualities:
  • They are well-known in your target market area
  • They are respected
  • They are successful
  • They are growing and vibrant
  • They illustrate leadership qualities in their market sectors
  • They employ business leaders
  • They employ community leaders
When you serve a Marquee Client you prove your strength and your capability.
 
Marquee Clients validate your ability to live up to your word.
 
As the Heath Brothers say, in their Sinatra Test…‘if you can make it there you can make it anywhere’.

Tags:

Leaders' Thoughts | Marketing

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Believing it makes it true

by Rick Baker
On Oct 27, 2010
Seth Godin wrote a book titled 'ALL MARKETERS Tell Stories, The Underground Classic That Explains How Marketing Really Works - and Why Authenticity Is the Best Marketing of All'. The title was 'ALL MARKETERS ARE LIARS' and the words 'ARE LIARS' are crossed out and replaced with two handwritten words, 'Tell Stories'.
 
Here’s a sample of Seth…
 
Yes, the revised cover of the book is catchy...
  • ALL MARKETERS ARE LIARS (in big capital letters) catches our attention. It appeals to the side of us that is inundated with poor marketing messages.
  • The handwritten 'Tell Stories' softens the blow and
  • The subtitle about 'Authenticity being the Best Marketing of All' takes us to a really nice place
I think the book cover alone confirms Godin is worth reading.
 
At the inside of the front cover flap, we see Seth Godin's three essential questions for every marketer:
  • "What's your story?"
  • "Will the people who need to hear this story believe it?"
  • "Is it true?"
"All marketers tell stories. And if they do it right, we believe them."
 
"And believing it makes it true."
 
The cover flap then states:
 
"But beware: if your stories are inauthentic, you cross the line from fib to fraud. Marketers fail when they are selfish and scurrilous, when they abuse the tools of their trade and make the world worse."
 
This is a great example of advice that passes the Seek Simple test.    
 
We should understand how experts such as Godin reach their conclusions and we should understand the real-life examples they provide to illustrate 'what works' and 'what doesn't work'.
 
That will allow us to make best use of the advice provided by experts.
 
That will allow us to train our people.
 
For example, we should train our marketers to ask Godin's three essential questions:
  • "What's your story?"
  • "Will the people who need to hear this story believe it?"
  • "Is it true?"
Footnotes:
  1. Here’s a link to a closely related blog https://rickbaker.ca/post/2010/09/28/Sticky-SUCCESs.aspx
  2. Napoleon Hill said: Whatever the mind can conceive and believe the mind can achieve. http://www.youtube.com/watch?v=2hA-7aq6OXI

Tags:

Attitude: Creating Positive Attitude | Marketing | Optimism & Pessimism | Personalities @ Work | Sales

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