Friday, February 25, 2011

The five deadliest marketing mistakes - Deadly Mistake # 4

The pain factor on this one is VERY HIGH because you’re probably going to spend a boatload of money before you discover that you’re failing.

Deadly Mistake 4: No unique value proposition.

To illustrate my point, let me take you back, back, back in time to the heyday of U.S. retailing giant K-Mart. Here was a company that predated Target and Wal-Mart but lost the retail leadership position it enjoyed because it lacked a clear value proposition. K-Mart pioneered the idea of everyday low prices but could not keep up with Wal-Mart’s dominant global supply chain technology. So it abandoned that idea and tried to sign on designers and celebrities to provide exclusive clothes and home products to compete with Target. This confused its core customers (seniors who wanted to find the latest in polyester) and loyal Target customers wouldn't be caught dead in a K-Mart.

So, it spent a fortune on bigger, newer stores (remember Super K-Mart?) that were Target-like but still selling goods that nobody wanted … at prices higher than Wal-Mart. Confused yet? I
am :S

Anyhow carrying on with the story, K-Mart’s last gasp was to leverage the chain’s iconic "blue light specials." In the 1990s, it created "Mr. Bluelight". The company said, "Mr. Bluelight does not just represent a sale or clearance anymore. With Mr. Bluelight, we are making the shopping experience fun. We know there are more people than ever today who see shopping as an escape and a reward, and we are giving them the entertainment and excitement they seek."

WHAT?? The best thing they had going for them was the blue-light clearance and now they are abandoning it for yet another value proposition: K-Mart is FUN and EXCITING?
My dear readers, how is that for creating a clear value prop for consumers!!

So what can we learn from K-Mart’s demise? If you’re starting a business, you must conduct upfront research to find your clear points of differentiation – what makes you UNIQUE in the marketplace? Why do customers should buy from you? The prospect’s unmet need your company will satisfy? Thats just the basic concept of value proposition you read in the books.

Once you have that strategy, you need to stick to it with a laser-focus.If you have an established business, your unique value proposition should be already well-understood – at least your customers understand it or you probably would not be in business! Still, you need to constantly check your strategy, adjust, re-invent yourself and defend your position, like Wal-Mart.

Many people get into business who think they can take on existing businesses and simply convince prospects they have a better product or service. They announce to the world, "We might not be first, but we're going to be better." That might be true, but if you're late, and you have to battle well-established competitors, bring a bundle of cash baby!

I'll ask all my readers a question here, was K-Mart really going to challenge a Wal-Mart that was rolling in cash? Never! A well-managed company is going to defend its market share ferociously until you are broke. So, once you have your niche, DOMINATE it.

Another pitfall is having a great value proposition but not being able to explain it simply. Can you explain what you sell and why you sell it in 30 seconds? Sometimes that can be excruciatingly difficult, especially if it's a new category or a new technology that requires education. The biggest marketing successes come with simple, but powerful explanations of the product offering.

Here was Wal-Mart’s value proposition: "Everyday low prices. Always." Compare it to K-Mart’s: "Home of the blue light special." Wal-Mart had a clear point of differentiation and could tell the story in four words, and later ONE word, "Always."

This economic recession is an excellent time to re-evaluate the relevance of your value proposition. Your customer needs are probably changing. Make sure you are innovating to stay aligned with the new unmet needs that are being created all the time.

Monday, February 21, 2011

The five deadliest marketing mistakes - Deadly Mistake # 3

Deadly Mistake 3: Thinking your website IS your marketing strategy

Many business owners imagine the Internet like a Mississippi River of money -- a wide, swollen sea of cash just rushing by! All you have to do is put an Internet site out there and start diverting money away from ol' Man River. This is rarely true.

Here's an excerpt from actual conversation with a seasoned business person looking to start a new business. To protect her identity, let's use codename "Clueless."
Clueless: "I want to start a new Internet business and I want you to help me build a website."
Me: "Well, what's your business idea?"
Clueless: "I don't have one yet."
Me: "Then how do you know you want to start a business?"
Clueless: "Does it really matter what I come up with? I mean you can SELL anything on the Internet! All you need is a website."
I swear ... it happened.

In defense of Clueless and thousands like her, the Internet is an amazing place. I read an article where a woman had made over $10,000 selling tumbleweeds through a website. Well, even a blind hog finds an acorn once in a while. Maybe it's you ... but probably not.

A website must be viewed as just ONE possible sales and marketing communication channel for your business. And it's going to be worthless unless you have .... what? Have you been paying attention gentle reader? Anyone? Anyone? A STRATEGY!

Your marketing strategy serves as your guide to a successful and cost-effective promotional plan. The strategy is built around customer NEEDS, not your passion to have a website with animations and disco music. If you've done a good job on your strategy you'll KNOW if a website is going to be a major workhouse for you or just a pony you have to have out there for show.

For most small businesses, a website is not even the primary sales channel. Usually it's another form of advertising or networking and referrals. Is networking really a marketing strategy? Sure it is. Remember, you're trying to sell more stuff, to more people, for more money. If it helps you do that, it's marketing.

Friday, February 11, 2011

The five deadliest marketing mistakes - Deadly Mistake # 2

One my wisest and favorite teachers would preach, "There is really no such thing as a personal weakness -- just over-done strengths!"

Deadly Mistake Number 2: Creating a plan around your ego

Think about it. It's nice to be out-going, but over-done, it becomes over-bearing. Tenacious becomes stubborn. Laid-back becomes lazy. Most business owners have to be self-assured to found and run a company. But over-done, that means arrogance. That can be annoying, but when it impacts a marketing strategy, it can be a disaster. Every successful marketer knows how to be successful, you have to push aside your personal agenda and serve the customer.

So, painful mistake number two is thinking your business is all about you.

Marketing isn't about who you think you are and what you think customers need.
Marketing is about who your customers think you are and what they think they need.

Please write that one down. There will probably come a time in the life of every business where you need to be reminded of this! Time and time again, I hear clients tell me what they want to sell ... without really knowing what their customers NEED. And by the way, those needs are changing, probably dramatically in this economic environment. What are you doing about it?

You deserve a lot of credit for what you've accomplished in your business. I give you permission to celebrate within your own home. But at work, be humble and put your customers FIRST! Listen, respond. Learn and grow. Most of all, beware of your over-done strengths!

Wednesday, February 9, 2011

The five deadliest marketing mistakes - Deadly Mistake # 1

To err is human, but some mistakes are bigger than others. Here are the five most painful, most horrific, most DEADLY marketing mistakes you could inflict on your company …

I switched my job from a more advertising oriented function which included more of dealing with Media, Publications, PR and event based stuff. Now I have more hardcore Marketing job functions, which include product based research (rather than client based), strategy development and product management. Recently I have been working on the marketing plan for a new product which will be launched in the near future. This provided me a learning curve and I am very excited about it.

I want to avoid the mistakes that many marketers make and try the best practices. Therefore I've decided to put up a series of posts in which I'll highlight the deadly mistake that marketers makes.

Deadly Mistake Number 1: Not having a strategy

I was having lunch with a friend the other day. He opened an innovative retail business last year and has spent tens of thousands on advertising. He's tried everything -- print, radio, TV, Internet, billboards. He's had sales, promotions, and PR events but can't seem to move sales.

So I asked him, "Who's your customer?" He said at first he predicted it would be middle-aged women, but then he noticed mostly couples entering the store. He said senior citizens need his product but he doesn't know how to target them. He tried ads in the local college student newspaper to appeal to young people but it got him nothing. And he thought locals would frequently visit the store but has seen people drive in from neighboring areas, too.

You can see that it's impossible to have an effective advertising campaign without clearly defining who you're selling to; the customer needs you're meeting, competition, pricing, and your points of differentiation. In fact, if you don't KNOW these things, you are probably going to fail while burning through huge amounts of cash.
My friend is firing "buckshot advertising" ... just shooting here and there, hoping he will get lucky and hit a customer. What he needs is a guided MISSILE ... and that's where strategy comes in.

So What makes a good strategy?

Some of the key elements are:
  • Target demographic and market segmentation
  • Market positioning and points of differentiation
  • Product and service attributes - finding under-served needs
  • Competition and external influences, threats and opportunities
  • Marketing channels
  • Pricing
  • Communications and branding - differentiation and value proposition
  • Distribution
Going through a methodical process to research and identify your marketing approach is the most important thing you can do for your business. And it's so LIBERATING! You don't have to guess any more. You don't have to play advertising roulette. You can sell with confidence and it will work because you have data, insight and a PLAN!