The power of “Why” in a sales pitch

The power of “Why” in a sales pitch

Feb 4, 2016 | Customers, Marketing, Social Media

One of the standard problem definition techniques I use is the classic “5 why” process pioneered by Toyota. Just keep on asking “why” to peel back the layers pf the onion to get to the real problem, rather than just being satisfied that addressing the associated and superficial symptoms is enough.

You rarely get past 5 before the guts are on the table, I certainly never have.
It can be a tough and extended process, but it works.

It also works when you are on the receiving end of a sales pitch.

Late last year I sat with a client through a series of pitches by advertising agencies, all heavy on rhetoric and marketing cliché, but mostly a bit light on strategic and creative grunt.

‘Why do you think this idea will deliver the strategy’?

‘Why is it a great idea as you claim’?

‘Why do you recommend this media mix’?

‘Why do you believe these metrics are useful’?

All pretty valid questions I thought.

As one group of hopefuls left, one asked another not realising I had followed them out to offer a final handshake  “Why was he bloody there?”

Had they been able to answer any of the questions satisfactorily, they may have got the gig, but as it stands I suspect they have no idea why they missed out.

I rest my case.  .

The (almost) impossible task of brand building momentum. A personal story.

The (almost) impossible task of brand building momentum. A personal story.

Jan 29, 2016 | Branding, Customers, Innovation, Leadership, Marketing

What is  a brand?

When you think about it, a brand is a just a promise embodied in a product.

A promise of performance, and delivery of value.

It survives and grows, retains and builds relevance and attraction only when the promise is delivered.

Finding the promise that can be delivered in a way that is sufficiently different to make an impact is really difficult.  Making a promise that is the same as everyone else’s promise, and the brand becomes indistinguishable, just another label on the shelf.

30 years ago I was heading a marketing group that amongst other successes, relaunched ‘Ski’ yoghurt in Australia. The relaunch was a huge success, and over the following 3 years, our national market share went from single figures to well over 35% in a market growing at double digit rates.

There is a lot of patronising bullshit around about the way to build a brand, advice that sounds nice but is usually just a template that promises an outcome, a bit like the paint by numbers paintings an old aunt had adorning her walls. Not very good, and certainly not original.

So, I thought that the hindsight afforded by the almost 25 years since that  Ski relaunch might be valuable as you consider your own brand building exercise.

Following are the lessons I took away, often with the enlightenment that comes with hindsight, as the appearance of organisation and planning is a bit of a fiction, the real situation was considerably more chaotic as we juggled competing priorities, competitive and financial pressure, and all the jostling and risk mitigation that goes on inside big businesses.

 

Be different.

At the time conventional wisdom was that the fruit in yoghurt had to be mashed, the product homogeneous, that lumps of fruit were not good. All the research told us that consumers wanted their fruit yoghurt to be consistent with the fruit mashed and evenly distributed, and the launch of Yoplait a few years earlier had kick started a genuinely competitive race and significant market growth.

We relaunched Ski on the proposition  of taste. The best tasting yogurt, the only one with pieces of fruit. It completely distinguished us from the then market leader, Yoplait, and all other brands, and gave consumers who liked or did not mind whole fruit in their yogurt a real reason to buy Ski. Of course, some rejected it, but many did realise after trying that they did prefer it, and whilst there was a lot of supporting activity and pack changes, the market share of Ski zoomed. A few of the small producers copied us, but the market leader could not, as their whole manufacturing process was designed to deliver a homogeneous product.

The value of true differentiation backed by a brand promise that was carried out and of value to at least some consumers was clear.

Across the range Ski was so different that  it created new segments within  the yoghurt category, segments we owned because we created and named them, and which made competition hard and expensive for our opposition.

 

Get onto a roll.

When you have a line-up of innovations that do add value, you can roll them out progressively and the competitive impact is cumulative, you leave the competition struggling to catch up with your first one, and spending valuable marketing resources to stay in the game while you roll out the second, and third iteration. I would not claim that Steve Jobs knew anything about Ski, but that is the exact strategy that Apple used from the launch of the original iPod on.

In our case, we relaunched Ski with the different product as noted, but we also changed the naming conventions that had prevailed. For example, the low fat version changed from Ski Low Fat to Ski DeLite. Worked a treat, and went some way to redefining the low fat category. The next ‘roll’ of the dice was to relaunch the 1kg size into the now common rectangular packs. To that time all 1kg Packs had been round, as they were operationally easier and the packs were much cheaper. However, we noted that most female buyers, and they made up 90+%  of purchasers, could not easily handle the product in one hand, they did not fit on most refrigerator door racks, and were less than optimal on the retail shelves.

When we changed all this, sales of 1kg exploded, and gave us new retail distribution. We then followed up with Ski Double-Up, a product that had a range of ‘toppings’ in a separate compartment  of the pack, and a completely different yoghurt that emerged from the combination of new strains of culture and operational process innovation,  that revolutionised the market again, creating an entirely new category.

Your customers may not be who you think they are.

Innovation is a powerful way to attract fringe, lapsed or just reluctant buyers into a market. When we launched Ski Double-up the typical consumer was young, educated, and female.  Consumption by men of yoghurt was only about 20% of female. Ski Double-Up changed all that. Not only did it attract more men, they were significantly older in profile, those who would not touch ‘yoghurt’ as it has been with a barge-pole. They tried Double-Up, liked it, tried other versions, and became regular and loyal consumers, adding significantly to the scope and scale of the Ski brand.

 

Start with ‘Why’.

Defining the ‘Why’ of your brand is a foundation of all branding activity. The best articulation of “Why’ is the now famous TED talk by Simon Sinek.  A brand without a clear and distinctive ‘Why’ is just a label. Sinek uses Apple as an example several times, because as he says, ‘everyone gets it’ and they do. Apple is a branding icon, but not the only one. Recently I stumbled across a new brand from a start-up, one that is breaking new ground on a number of fronts, competing against some of the biggest and best marketers in the world, but will (I suspect) succeed on the strength of their “Why’. It is whogivesacrap toilet paper, purchased by consumers  direct rather than via retailers, with a very clear ‘Why’. Many, almost certainly most will not buy into the why, but enough will to make the brand and business a success, and they will do some good in the process.

The corporate benefit of ‘Why’ is that everyone in the business can buy into it, and the resulting culture can become a very powerful motivator and driver of performance. In our case, the ‘why’ was that we were producing a natural, healthy product, our workforce has all been taken into our confidence, and they were our market research as we ran taste group after taste group in the factory during the development process to get the variables right. When the products became very successful, those people  saw what their contribution had resulted in, and took great pride in it, making a huge contribution to improving the production efficiencies .

 

Sweat the small stuff.

Details matter, a lot. Steve Job’s obsession with the experience of opening a shipper containing an Apple product contributed  a core part to the brand identity of Apple. With Ski we pioneered amongst other things a  process that used a new and expensive printing process that both accommodated the square shape of the 1kg tub, and delivered crystal clear graphics. It was expensive and difficult, but  the attention to the detail that could have been dismissed for cheaper more utilitarian solutions paid huge dividends in volume, and profitability albeit at skinnier margins.

 

Be brave & committed.

Nothing really useful will evolve from just doing the same thing as others, but just a bit better. Being different means taking risks, being brave, pushing the envelope, all those clichés that mean someone has to be brave enough to open the door to the unchartered. That takes guts, rare in todays corporate world,  but around aplenty in small and medium sized businesses.

When we changed Ski 1kg to the rectangular tub, there was no way back. Over a week long factory shutdown, the old machinery for  filling the round tubs was removed, and the new rectangular filling machines installed. Had the change failed, there was no way back.

The steps we took with Ski were all brave at the time. We changed the dynamics and shape of the market, a seemingly obvious step,  but at the time it was sweaty palms all around.

 

You have to be smart.

The marketing group had some very smart people, but more than that, it was a collectively smart group. There was great collaboration and support, and the longevity of the group was substantial, which had offered the opportunity to make a few mistakes and learn from them. At a time when the average tenure of marketing personnel was about 18 months, we averaged 6 years, giving us a significant depth of market understanding and intelligence. Just as important, or perhaps more so, we had the support of the CEO of the division who was prepared to support and encourage the things we did, and I am sure his palms were sweatier than any others, although at the time it never showed. His confidence in us, and support in keeping the corporate drones at bay never wavered. Innovation is impossible without that sort of support from the top.

 

It is really hard to continue to succeed.

This is a warning.

If you succeed, when the applause is over and the credit appropriated, the corporate gnomes come out to play, those who do not understand the dynamics of a brand. If you go into a supermarket today, Ski is an also ran, it looks like it is back to single figure market share, a shadow of its former self we had built. The brand we developed was raped by the accountants and sycophants who killed the golden goose by greed, short ‘termism’ and stupidity, rather than continuing to nurture and invest. The temptation to do so will be strong, and it takes a CEO with brass ones to resist the siren call of the throngs and maintain the investment required.

That rot had started a year or so before I was toddled off. By that time the corporate structure had changed a couple of times, and I was unable to keep the support that had enabled the success in the first place in the face of the changed structure and personnel. Unable to stay quiet in the face of the short term lure of the margins instead of continuing the investment for the long haul, I insisted on being the resident ‘Cassandra’  and ended up paying the price.

As I wrote this post I had to shake myself that it was 25 years ago.

Seems like yesterday.

A lot has changed in the marketing landscape, but the essentials remain the same.

What is the difference between Mark-up and Margin?

What is the difference between Mark-up and Margin?

Jan 13, 2016 | Customers, retail, Sales

Words are wonderful things, they allow us to communicate meaning.

However, some words are easily interpreted in differing ways, making the shared  understanding challenging, and sometimes the differences are exploited in a selling situation.

One of the common “pea & thimbles” I see when small FMCG (CPG to my American friends) businesses are negotiating with chain retailers is the variable use of mark-up  and margin, particularly by retail buyers in a high pressure sales situation where the supplier is being put through the wringer.

Following is a quick explanation of the generally accepted meaning of the two terms.

Mark-up reflects the number, absolute or more generally percentage that an item sells above its cost.

If an item costs you $1.00, and you sell if for $1.50, the mark-up is 50%

Mark-up = profit/Cost

Margin is the profit made as a proportion of the sale price. Using the simple example above, profit is .50 cents, the selling price is 1.50, so the margin is 33%.

Margin = gross profit/revenue.

Imagine you are negotiating a promotional deal with a buyer, a discount for a period of time against an agreed  purchase  volume by the retailer.  The buyer uses the terms interchangeably, referring to his margin as only 33%, when his minimum allowable is 45%, conveniently forgetting that one is margin, the other mark-up. He uses that as a means to persuade you to dip deeper into your pocket to fund the promotion based on the significant orders you will be receiving, and might even do a ‘once-only, just between us’, deal where he accepts 40%.

markup Vs margin tableHe has not done you a favour, but he has enhanced his margins, which is generally the retails KPI, considerably.

 

 

3 stage elevator pitch that works

3 stage elevator pitch that works

Jan 7, 2016 | Customers, Marketing, Small business

 

Opportunities to deliver our elevator pitch often happen in social and unplanned situations, you just meet someone, and the automatic question is ‘what do you do?’

That is the opportunity for an elevator  pitch, rather than just a polite response.

You might deliver hundreds to those who are unmoved, but now and again, you can get lucky.

I have heard many delivered, and mostly they are a recitation of what someone does.

Not unreasonable given the question, but ineffective as a marketing tool.

For example, in my case, the typical elevator pitch would be:

“I am a marketing and strategy consultant with wide general management experience domestically and internationally. My background is largely in the food industry. Businesses with whom I have worked range from FMCG manufacturers, to those supplying into the FMCG supply chain with everything from produce, to raw materials, specialised ingredients and packaging, to services. The sorts of projects have ranged from  creating marketing strategy and programs, coaching sales staff on key account management, optimising  marketing effectiveness,  building collaborative farmer supply groups, optimising factory operations, contract general management, and everything in between. ”

This does describe me, but is pretty dull, and fails to get much traction.

To make an elevator pitch worth listening to, you have to successfully do three things:

  1. Get the attention and interest of the one you are speaking to. Best way to do that, perhaps  counter intuitively to most, is to ask a question.
  2. Having gained their attention, deliver the nature of  the service so that you  both know whether or not it may be of interest to them, or someone they may know.
  3. Finally, deliver the benefit that comes from working with you.

 

So, in summary it is a three part process:

Question: “Do you know that ….”

Description: “What I do is….”

Benefit: “So that…..”

 

Taking your own advice is sometimes hard, nevertheless, here it goes.

“Do you know that of the 250,000 businesses started every year in Australia,  70% fail in the first year, and only 10% survive 5 years?

What I do, is bring a depth of experience from across industries and functions with a focus on marketing, sales  and strategy, to small and medium sized businesses that they cannot afford and usually do not need on a full time basis.

That depth and breadth of experience radically increases their chances they are one of the 10% that survive, but more importantly, that they are one of the few truly successful businesses”

 

Try it for yourself, it does work.

7 steps to a certain sale

7 steps to a certain sale

Jan 6, 2016 | Customers, Sales, Small business

Forests have been denuded as ‘experts’ publish their complicated sales processes.

Most have value coated in all sorts of hyperbole, jargon, psychological puffery, and sometimes just plain old mysticism.

However, when you add a bit of plain common sense, the sales process while not easy, and usually somewhat complicated by circumstances and personalities, is simple to articulate.

  1. Find a potential customer who has a problem to which you have a solution
  2. Find a potential customer to whom your solution delivers value that can be quantified
  3. Find a potential customer to whom your quantified value is superior to alternatives
  4. Communicate the value you can deliver to that potential customer
  5. Tailor as appropriate your solution and payment options to their specific circumstances
  6. Make the case
  7. Take the order.

Now, to stop the killing of trees, even digital ones, and save yourself some time, figure out how to apply this simple framework to your products.

Need some help, call me, and have a great 2016.

things I learnt, and relearnt, about marketing in 2015

things I learnt, and relearnt, about marketing in 2015

Dec 22, 2015 | Branding, Change, Customers, Management, Marketing

The year has been a blur, they go faster as I get older, something I find disturbing. Rushing headlong towards the daisy bed seems illogical when there is so much left to do.

I will be 64 in a few weeks, must be a song there somewhere, but it seems that the older I get, the more I learn.

How does that work?

Perhaps that  is because I have a wide and deep foundation built up over all those years that offers many places to tuck some added knowledge in, and the connections to other parts of the foundation are that more visible.

Anyway, here are the headline  things that struck me during the year.

All that is old is new again.

The king of Mad Men, David Ogilvy said it best, something like 50 years ago.  “It takes a big idea to attract the attention of consumers and get them to buy your product. Unless your advertising contains a big idea, it will pass like a ship in the night. I doubt if more than one campaign in a hundred contains a big idea.”  Never before has this been so relevant, as we drown in a sea of mediocre so called ‘content”. What is an old fashioned ad if it is not content? What is an informative film made to show users how to build something, or adjust the points on my old Dodge, if not content. Just because the rules of engagement have changed, i.e., those on the other end of a communication can now tell us if it sucks, either by writing to us, responding on a site that scored whatever it s we flog, or ignoring it. The challenge remains the same. Find your market and build an emotional connection with them.

Scale is not everything.

In the pre internet days, a young academic named Michael Porter wrote the definitive book on competition. One of his 5 forces was all about scale. If you had it, you carried the hammer others could only aspire to, volume sales, negotiating power in your supply chains, power to advertise and promote, it was a huge barrier to either scale or hide behind.

No longer.

The net has destroyed much of the competitive power of scale. One of the greatest wielders of power I see every day are the two FMCG retail gorillas in Australia, who between them hold 75% of FMCG (CPG to my US friends) market share. Yesterday I went into woollies to buy the Xmas ham. My job for  years. In about 30 linear feet of chiller shelf, with many SKU’s of ham on the bone, not one was a proprietary brand. Every single SKU was Woolworths in some guise or another. Clearly buying scale at work for woollies, but I walked out hamless, and went to a small supplier who has a retail outlet about 15 k from my home and bought a ham there. Good price, good service, and probably a better ham because the margins had not been screwed to the bone by Woolies exercising their power of scale. (poor pun, sorry)

The tool relies on the tradesman.

There are so many tools around, to do just about everything, but by themselves they do nothing. All still require a skilled person to get the most out of them.

I have laid many bricks in the course of renovating two old houses, paid my way through Uni all those years ago on building sites, so I know how to do it, but look in my backyard, and you can tell the brinks I have laid, and those laid by a tradesman. If you want something done properly, only do it yourself it is what you do, not what some webinar on YouTube tells you can do.

Do not be seduced by the newest shiny thing.

Simplicity is really hard.

‘The ultimate sophistication is simplicity’.

Steve jobs said those words, and others before and after have said similar things that have been proven time and time again over the years. In todays world it holds more true than ever when it is operationally now so easy to add features few want, sacrificing simplicity and elegance in the process.

We tend to fall in love with our products, forgetting people do not care about them, only what they will do for them, what problems they solve, what value they deliver.

Dunbar’s number still rules.

We might have hundreds, even thousands of “friends” and connections, but we can only manage a limited number. We have been again seduced to believe that there is value in the breadth of many  connections, sacrificing the depth with a lesser number. I would rather have a list of 100 people who knew me well, would take a phone call from me, recognise the value I can bring to them, and are prepared to recommend me to others  based on that value, than a million friends on Facebook, LinkedIn, or any other of the other houses of digital one night stands.

Customers are people.

Customers and potential customers are not “targets” or ‘target audiences’, or ‘potentials’ or ‘rusted-on’ or any of the other expressions I hear regularly. They are people , they control their pockets in ways unimaginable just a few short years ago. Treating them with distain, or even a hint of condescension, tan they are able and willing to pack up and go elsewhere.  The power is very much in their hands  now, not those of the marketer, so make your communication as personal and specific as you can. I get lots of emails with the salutation “Dear Friend”. If I was so effing dear, why not use mu name. They never get opened, and a rule gets put in my email package to dump them into the Spam file never to be seen again. Dear friend indeed, give me a break!

Trust is the make or break metric.

Trust is a word that gets bandied around like a novelty game at  the Easter show. Everyone agrees that trust is a key, but so few recognise that Trust comes from consistent, transparent and generous behaviour, it is hard earned and easily lost, and never given without deep consideration. Don’t let this important word pass your lips unless you really mean it, and back it up with behaviour over a long period.

The nature of assets.

Almost forever, corporate assets in enterprises of any size from micro of MNC have been one of three in some sort of ratio: people, technology, and capital.

Now there is a fourth.

Data.

The integration of data cross functionally, through the value chain, and increasingly with outside “big data” is becoming rapidly more important than the traditional three as the world digitises and competition is increasingly dependent on the availability and accuracy of data from a range of sources.

One of my mates runs a small freight business. He recently added GPS, and a simple program to route his small fleet in real time, that integrates with public traffic info. Now he is wondering if he can  do with less trucks, and maybe make a bit of a return on his investment for a change.

Recall the furore when the email addresses of Ashley Madison subscribers  were hacked and made available for download. The asset value of data has rarely been more publicly demonstrated.

Beware the seductive hiss.

Snake oil salesman have found a new well of clichés and poisonous  bullshit to throw at you.

Beware.

Next time you hear the word ‘awesome’ (my current greatest hate cliché)  run like hell, and save yourself the time and potentially money these sophisticated purveyors of snake oil will try and winkle out of you.