Feb 11, 2021 | Change, Communication
Pretty obviously, ‘Free’ is the most powerful word in marketing. It is the best way to get people to trial a product, make the trial free, no risk, no commitment, no money. However, it is hard to make ‘free’ commercially sustainable.
The second most powerful word is ‘because’
‘Because’ gives people permission to do something they would not normally do, it provides the reason to change behaviour, it removes the discomfort of the change, we can always revert, we just did it this once ‘because…’
Next time you want to go to the front of the line in a supermarket, try asking politely, and using ‘because’ when you ask. The addition of some emotive reason after the because will increase the likelihood of an ‘OK’ even more.
E.g. ‘would you mind if I go in front of you‘ success rate about 20%
‘Would you mind if I go in front of you because I only have a few things” success rate about 40%
‘Would you mind if I went in front of you, because I only have a few things and my sick mother is waiting in the car‘ success rate about 80%.
Try it the next time you want someone to do something for you.
Header cartoon courtesy of Scott Adams, and Dilbert.
Feb 1, 2021 | Customers, Marketing
I regularly see and hear people suggest that ‘thinking from first principles’ is a great thing, a foundation of success. Often when these people are flogging a product or service of some sort, their offering somehow becomes a function of a first principle.
‘This marketing automation stack is built from first principles‘ is a claim made by a vendor to an acquaintance who runs a modest but long-lived SME. The business is constrained by IT limitations of various types. A combination of lack of cash, underdeveloped understanding of the tools available and how they work both individually and together, and general wariness about florid claims about the returns that will arrive, magically, on installation,
What should we mean by ‘first principles’?
Aristotle defined it as ‘The first basis from which a thing is known’. Philosophers since have added their own wrinkles, but it comes down to the few single facts that provide the foundation of whatever idea you are considering. When you break a problem down to this level, it enables you to, sometimes, reassemble from a different set of possibilities, ideas from different fields, and end up with something new.
Thinking from first principles is challenging.
Our brains have evolved to reduce the cognitive load as a survival mechanism. Fight or flight must kick in quickly, automatically, just in case the rustle in the weeds is a sabre-toothed tiger. We therefore have mental models, or patterns we use unconsciously to classify things we see and set out to think about. Even when we set about thinking carefully, we are still subject to the mental models we have built up, the analogies and experiences we have that enable us to respond with the minimum of cognitive energy.
John Boyd used the evolution of the snowmobile as a demonstration of ‘First principles’. A snowmobile combines the body of a boat, the tracks of a tank, motor and controls of a motor bike, and skis, to deliver a machine that gives mobility on the snow. Similarly, Elon Musk used first principles to build his own rockets for SpaceX. He broke up a rocket into its component parts, then built his own rockets with parts sourced independently. Musk’s whole business empire is based on reimagining something and rebuilding from first principles. Arthur Conan Doyle via his character Sherlock Holmes, advocated the same approach. ‘When you have eliminated the impossible, whatever remains, however improbable, must be the truth‘. William of Ockham in the 14th century wrote similar words that have been passed down as the wisdom of Occam’s razor.
When you apply this thinking to marketing, and consideration of what it is that makes a successful business, you come down to one simple first principal.
Happy customers, who willingly and spontaneously refer you to others.
When you have happy customers, little else matters beyond a competitive capability to supply the product or service at a competitive price that returns an industry average gross margin.
What are the first principles of your business model?
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Nov 18, 2020 | Innovation, Marketing
Almost every piece of advice about selling, including a lot on this site, contains in one way or another, the notion that in order to be successful, you have to solve a problem for the buyer.
In other words, scratch the itch and the itch will go away.
We all know that is not always true, the itch often remains, just a bit relieved, or satisfied for the moment, perhaps to return.
There is a further step you can take.
Frame the proposal as an investment, something that will deliver ongoing value, rather than just be the antidote to an itch, the solution to a problem.
Many years ago I worked for Cerebos in Australia. One of the now disappeared brands we had was Cerola muesli, back in the days when muesli was a bit unusual. The breakfast cereal market was nowhere near as fragmented and competitive as it is today. Cerola was doing OK, generating increasing sales at good margins, albeit a minnow in comparison to the major cereals on the market.
With the support of the then marketing manager, I worked up a proposal to spend a significant chunk of money to manufacture and market a ‘muesli bar,’ a snack product that would sit between the perceived goodness of breakfast cereals, and convenience and taste of a confectionary bar. A wholesome breakfast on the run, and snack. I had a lot of subjective material, trends that seemed to be converging, gaps in consumer behaviour that may accommodate such a product, an admittedly dodgy bit of limited market research done with prototypes made by hand in the lab, and a strong conviction.
My failure to convince the MD at the time was total, and quick. No way would he accept such a proposal in the absence of strong quantitative reasons, little risk, and certainty of a quick return.
Nine months after getting my arse kicked for proposing something so dumb, Uncle Toby’s came out with their version of a muesli bar, and cleaned up.
The lesson I took away from that disappointment was that framing a proposal to spend money to a profit sensitive MD is like suggesting we stick a few holes in the bottom of the boat, and hope they do not let in any water. Instead, the proposal should have been framed as an opportunity to turbo charge the motor we already had, an investment in a profitable future. Such a framing would have had a way better chance of gaining the support of the MD.
A second lesson I took, which was the outcome of youthful arrogance and stupidity, is that you never say ‘I told you so’ to someone who does not like to be told.
Nov 16, 2020 | Branding, Marketing
What is the one word, perhaps two, that best defines and communicates the promise your product delivers.
This is not an easy thing to define, but when you do, it is a powerful ‘moat’ around your brand that insulates you from competitive pressure.
However, like any moat, it needs to be maintained, renewed, modernised, or it will fill with weeds, and be less effective at repelling invaders.
The best array of examples I can think of come from the auto market.
BMW: Performance. Volvo: Safety. Toyota: Reliability. Ferrari: Design. Rolls Royce: Luxury.
There are a few more from other domains that come easily to mind. Apple: Different. Coca Cola: Refreshment, and from my own experience, Ski yogurt: Fruit. Meadow Lea: Congratulations. These two Australian examples are both now eroded to zilch, through 25 years of marketing naivety, neglect, and commercial stupidity. They are a powerful reminder of the need for constant maintenance.
Once you have isolated the word, it can be used to drive all your communication, in all its forms, in all media, down to the way in which the livery on the delivery truck is designed, the way the phone is answered, and the detail at the bottom of an email.
In relation to StrategyAudit, I would like the word to be ‘Wisdom’ but that is probably for others to determine.
Header credit: Once again, I am indebted to Hugh MacLeod at www.gapingvoid.com
Nov 4, 2020 | Communication, Management
There is a lot of useful, standard advice about how to ensure meetings are productive. Have an agenda, a time limit, ensure only those who can contribute to the discussion attend, ensure there is agreement about what next, ensure everyone has the opportunity to speak, and so on. There is one more structural item not usually noted, that I have found to work well.
1/3, 1/3, 1/3.
The agenda is structured into thirds, as is the time allocated.
The first third is addressing the past. You cannot change it, but you must understand it, and absorb any lessons. This part of most discussions is often where the time is consumed, leaving inadequate time for the more important discussions about what next.
The second third is discussion about what is immediately in front of you. Depending on the meeting, this may be a day, week, month, and so on. There are decisions to be taken that impact the immediate future, take them.
The third is a discussion on the longer term items that will impact the group in the meeting. Depending again on the level of the meeting, this can be anything from how to fill a hole in the production team when Jim takes long service leave, to discussion of the potential risks of a long term threat to the enterprise.
The format works at all levels, offering a framework within which to manage the meetings, from a 10 minute stand-up at the beginning of the shift, to board meetings, and the three day strategy session held annually.
It is the responsibility of the meeting chairperson to manage the time and agenda coverage, but the general recognition that the 1/3 structure will be used, just makes that job a bit smoother.
Once again, with thanks to Scott Adams, I have called on the wisdom of Dilbert for the header.
Oct 26, 2020 | Management, Marketing, Small business
Cash when it is working for you, is king.
However, cash sitting idle in a bank account fritters itself away, slowly, and over time.
Inflation, small purchases, fees, all eat away at the cash like mice in a wheat silo. A bit at a time.
Cash does not generate cash flow without being put to work. It is like going to the gym, it takes time, effort and commitment, but the result will show. Even when there are short term setbacks, interruptions, and periods of despondency acting as a brake, keeping working works.
We are in a time of unprecedented change.
This is more than just the Covid hangover starting to evolve, all that has done is greatly accelerate the changes that were emerging on the fringes.
The status quo in many areas has been thrown out the window. While that is deeply unsettling, and creates challenges most of us have not seen before, the flip side is that it also throws up opportunities not seen before.
Opportunities to fill the merging market niches, to pivot to different business models, serve new customers in different ways, or just grab assets and market share from less nimble competitors.
All of this consumes resources. The management time and inclination to make the necessary changes, and the cash to make it happen.
Successful businesses understand in detail how, and how much cash their enterprises generate. They keep borrowings to a minimum, giving them the ability to grab opportunities as they emerge, but they also keep their cash working, hard.
Header carton again courtesy of Scott Adams and his alter ego Dilbert.
