Fail often & quick.....then debrief to learn

The above is my first Cardinal Rule of Marketing. If you are not failing, it means that you're not trying many new things. And if you're not trying a lot of new things it's hard to generate a new product or service success.

I have found that the best marketing lessons are empirical. They are not often predicted or pre-planned. The key then becomes to figure ways to observe the behavior of our customers and not predict what they might do.

So how can this be done? At a reasonable cost? Start small....in a specific geography....or with one or two customers who are willing to work with you. Introduce your new product or service with that customer and follow up to observe the results. What's working....not working.....what needs to be changed?
Now take your learnings....revise the offering....and roll out on a broader basis.

Work this process, to get your organization comfortable with innovation. Test....observe....change.....retest......expand. It just may lead to success.
So happy failures......just do them quick and often!!

DON'T LISTEN TO WHAT PEOPLE SAY....

DON'T LISTEN TO WHAT PEOPLE SAY....WATCH WHAT THEY DO!!

In a recent Blog post I mentioned my Cardinal Rules of Marketing. The above was one of them. What does it mean? Does your audience lie to you?

Well it's hard to separate the truth from perceptions when you ask your audience questions. Why....because we are dealing with psychology. People say what they think is positively perceived especially in the presence of other users.

Years ago, as a Brand Mgr for Minute Maid Orange Juice I recall one of those frequently used focus groups. You know, when you ask a collection of your users what beverages do they buy for their kids? In a group, they said "I only serve orange juice or apple juice to my kids." Of course, that is nutritional and they would be perceived as a good mother, right?

Very interesting, however....when you watch what they do, a very different picture emerges. Ask them to open up their pantry to you and you find 8 packages of Coke to 2 packages of juice!! But how can this be? Not what they told you.

So what's the lesson for you? Make sure your marketing and sales people become more skilled at observing behavior than listening to the psychological answers. Look for opportunities to watch what your customer is doing.....with your product/service or your competitors. Learn from their behavior.....it is more accurate.

CARDINAL RULES OF MARKETING

Based on many years of developing, introducing, new products and services....I have been recently asked "What would be your Cardinal Rules of Marketing?"

I thought that was an interesting question and got me thinking about various insights from the real world of marketing. So shown below is my list....enjoy...see how many might apply to you.


BRODY’S CARDINAL RULES OF MARKETING


- fail often & quick.....then debrief to learn

- don't listen to what people say.....watch what they do & buy

- don't try to predict behavior....observe your audience

- don't roll out new products/services....perform limited tests, first

- with fierce competition, you can't afford to wait to get things 95% right......get it 70% - 80% then start selling somewhere & tweek it as you go

- perception is reality.....find out what's in their mind

- people don't buy based on price ......think Starbucks

- to innovate....get out of your office

- prospects often don't know what they want.....give them options to choose

- narrow your focus.....be black or white....not grey

- all of marketing is about segmentation.....don't try to be all things to all people

- prospects don't want to be sold today......provide information & market intelligence for them to buy

- everyone in your firm can influence & effect your brand presence.....constantly guard & polish it

- don't do mother-in-law research....does any grandparent have an ugly baby? Ask your customers & prospects for feedback....several times per year

STICK LIKE DUCT TAPE!!

In a previous Blog, I mentioned the first marketing battle....the battle of the Mind. i.e. your ideas & concepts need to be remembered by your audience. You must break through the clutter...lots of it.

So, how might you do this? I just read a highly practical book which provides some tips to help you "Stick." It is by Chip & Dan Heath and aptly titled: Made to Stick - Why Some Ideas Survive & Others Die.

The key concepts include being:

Simple

Unexpected

Concrete

Credible

Emotional

A Story

So, if you want to quack like a duck....walk like a duck....look like a duck...but better yet, have your IDEAS stick like Duct Tape.....read this book to learn how!!

SEGMENTATION - IT'S WHAT MARKETING IS ALL ABOUT

Can you describe ONE clear niche or segment that your product or service fits? If so, it’s easier for your prospects to remember….and be meaningful to them. Remember most people try to be all things to all people. That’s a recipe for failure!! It’s hard to focus & narrow your audience.


You’ve probably heard it before…..but what is market segmentation anyway? Why is it important? Well, easier to associate. Easier to remember. Top of mind awareness….remember that phrase? Most marketing experts will tell you that the first 1 – 2 Brands that your audience recalls….top of mind….probably has the leading market share. That’s why this is important.


A segment is simply a grouping or cluster of similar characteristics of your product or service. So for your industry…..we can draw out a simple diagram. Think of a continuum from left to right. From low (on the left) to high (on the right.) Low to high on what? Things like: speed of service, quality, variety of features, price, etc. Think about competition and group them into various clusters.


So for example….take the hospitality business or hotels.


Consider Marriott as a hotel: full service, restaurants, ballroom, meeting rooms, appeals to business and personal travelers. Place it toward the right side….maybe ¾ of the way…pricing about $150 - $200 per night depending on the city. Competition would be: Hilton, Sheraton, Hyatt, etc.


Suppose you want to compete on price….more reasonable, but less features. Place to the left of Marriott a segment called limited service. Appeals to business travelers….restaurant really only for breakfast….meeting rooms, but small size….pricing about $69 - $129 per night. Think Courtyard (oh, by Marriott by the way.) Others are: Holiday Inn, Radisson, etc.


Further to the left would be…..economy segment. Restaurant is only continental breakfast, limited….very small meeting rooms, not many….pricing $49 - $99 per night. Think Fairfield Inn (oh again by Marriott….get the picture.) Others are: Hampton Inn, Holiday Express, Motel 6, Drury Inn, etc.


Now go to the far right….luxury segment. Destination locations with maybe golf course or beach resort or mountain setting. 5 star quality and amenities….many restaurants…variety of meeting rooms….recreation activity….pricing maybe $199 - $400 per night. Think Renaissance (gee…owned by Marriott) or Ritz Carlton or Luxury Collection.


I think you get the idea. You can play in just one of these segments or multiple. If you choose more than one….don’t use the same name….it will confuse your customers. Follow the way Marriott Corporation has developed Brands to suit each segment.


Divide your audience opportunities….offer DIFFERENT features for DIFFERENT prices….and you too can increase your market share. Study and analyze the SEGMENTS in your industry…..it’s worth it.

WHAT'S IN A WORD? Positioning

The first challenge and battle that you have, as a marketer, is the battle of the mind. In the mind of your customer or prospect…..that is. You see, it is critical for you to be remembered and remembered for what you stand for.

This is not so easy, given all the messages and interruptions that bombard your prospect. From tv to radio to newspaper to billboards and now messages to you from email….tweets….facebook….YouTube and many more. So, the question for each of you is….how do you break through the clutter and in a way that is memorable to your audience?

i.e. what is the best “positioning” for your product or service? Plus, do you create that or is it already in the mind of your audience? Your first task is to figure out precisely how and in what context, does the prospect think or remember your product or service. Ask them….they will tell you. Conduct some quick and easy surveys and market research.

Tips include: keep your concepts short, to the point. One or two words, if possible. Use graphics to reinforce the message. Narrow your focus….don’t try to be all things to all people. Choose black or white…..don’t be grey (you won’t be remembered.)

There is a concept referred to as “stickiness.” Certain words or phrases just seem to stick. When I talk to audiences, I often ask folks to complete the following phrase:

Winstons taste good, ____________________

(the answer…..like a cigarette should.)

Interesting that this phrase has not been used by Winston, in advertising, since 1955. And yet, most people in my audiences can correctly complete the phrase. It has stickiness.

What word or phrase would people relate about your product or service? Either real or perceived, the concept must generate recall and also generate some positive meaning. Not easy to create….but well worth the effort.

DIFFERENTIATE OR DIE

Your salesperson comes back from a presentation. Did we win the business you ask? No…..is the reply…..the prospect said our price is too high!! What is he really saying?


He doesn’t understand that your product or service is any better than your competitors….either REAL or PERCEIVED. Therefore he wants a lower price. Price is always a factor but it has been shown a number of times not to be the most important factor…..unless your prospect does not see a difference between you and competition.


We are too often led down the path that price is the only thing that matters. This is not a sustainable difference unless you are going to follow a strategy of being the low price leader…..not easy to be. This is the Walmart or Southwest Airlines strategy.


Let’s go back a number of years and think about the coffee business in this country. This is a multi-billion dollar industry and at retail, the leading brands were Maxwell House and Folgers. Products owned by General Foods and Proctor & Gamble (not exactly small or unsophisticated firms.) A container would sell for maybe $2.99 per lb and each of the brands would battle for the better sales any given week or month. Any research conducted would not have shown a consumer problem or unmet need with your favorite brand of coffee.


So explain to me, how, a few years later we find a brand called Starbucks selling for $12.99 per lb and expanding their retail shops across the U.S. If price was the number one factor, Starbucks would have failed. They did not compete the same way…..in fact started out in their own retail stores…..selling more the experience and another place to relax vs selling just a BETTER cup of coffee. Once established, then and only then did Starbucks offer their package at retail, at a substantial premium to Maxwell House or Folgers. And created a new category of gourmet coffee. An opportunity… not fixing a problem that openly existed.


So next time you hear that your price is too high…..maybe you really need to work on how to DIFFERENTIATE your products or create a different user experience!!