Imagine for a moment that when you got ready to do your grocery shopping every grocery store in your area suddenly showed up at your front door and offered you their best rock bottom price on the stuff you were looking to buy? Would you ignore the lowest price and buy from Kroger instead simply because they are Kroger? Probably not.
Now imagine if among the grocery stores that showed up a farmer came as well and while he wasn't the lowest price person that came, he offered wholesome, fresh, and all organic foods. Now would you choose the lowest price producer or would you be willing to buy from the farmer that had a better product, but not the lowest price.
This strange scenario is exactly what the Internet has brought to us today. If you are ready to buy something in about 3 minutes you can have your computer go out on the Internet and bring back a list of the the products you are looking for, ranked from lowest price to highest. Each of these companies will even ship it right to your door.
The Internet has created a true commodity market for a lot of products. In my example at the beginning of this post is not realistic and unless you have a ton of extra time on your hand driving or calling all around town to get the lowest price on your groceries you will end up paying a premium on some of your stuff.
However for the things that you buy on the Internet this is not true. Several search robots and other tools will give a total list of online sellers and give you the option of buying at the lowest price, so why wouldn't you buy at the lowest price since it is so easy find and buy at the lowest price?
USP - What is yours?
The answer is USP which stands for Unique Selling Proposition. This concept is what truly makes you different from other competitors. Hint here, lowest price is not a good USP. Unique selling propositions can be based on service, quality, brand appeal, and many other elements, but the key is they are things that are unique to you and difficult or impossible for your competitors to duplicate and still offer it at the lowest price. If your competitor can match your USP perfectly and still offer the lowest price maybe you should find another line of work.
If you have an eCommerce site you need to know what you are selling (hint: I am not referring to the product itself) for example when people buy a plane ticket they don't really want a plane ticket they want the ability to be transported from point A to point B quickly and efficiently. So I ask you again what are you really selling.
Next how can you add value to what you sell that is difficult or impossible for your competitor to offer? You need to be able to create true value for the premium you are going to charge for your product.
USP is Critical to Your Survival
If you can't add distinction and value to your product then the consumer has no reason to pay anything more to you than the lowest price for the product or service, which means that with the Internet they probably won't buy from you. Sad, but true.
I know I am shattering the dreams here of tons of people that hired consultants that said just put your business on the web and retire to Maui. Running a business on the web is just as difficult as running it in the bricks and mortar world, maybe even more difficult because without a solid USP you are going to be reduced to a commodity in very short order.
I recommend that if you truly want to succeed on the Internet that you start with USP. Find out those unique selling points you can offer and charge for them. If your USP is truly unique and not easy to duplicate and if you can get traffic to your site and persuade them to buy with your copy and USP then you will make money.
Man that is a lot like a real business and work isn't it? Better cancel that flight to Maui.
Michael Temple
Wednesday, July 19, 2006
Friday, July 07, 2006
Twice as much, but same total
Back in the days of my youth I had a childhood friend that I used to spend the summers with including a couple of weeks per year with them at his family's cottage on a nice lake. My friend's father was the type of person that always had a neat way of looking at the world and great insight into people and business.
One day after coming in from swimming I saw my friend's dad cutting a brownie out of a pan of fresh brownies. First, he cut the entire pan into nice even squares and then carefully removed one square for himself. He then proceeded to cut that square in half and only ate that half. I didn't say anything to him, but about 15 minutes later he went back and ate the other half of the brownie.
Now with my curiosity peaked I asked him why would he take a normal size brownie, cut it in half and eat both halves 15 minutes apart? Without missing a beat he replied "so I can eat twice as much"...
Now math wasn't my best subject, but I was pretty sure there was something wrong with his math and his logic. He didn't say anything else and for 30 seconds I sat there in silence trying to figure out what the heck just happened. Finally, I replied, that doesn't make any sense whatsoever! He just laughed and walked away.
For years I have remembered that day at the lake and still can't figure out his logic to this day. Since we are in the midst of summer right now and I recently got back from a lake I was thinking of this event again. I started wondering if this logic applied to marketing and sales and sure enough I think it does.
There are plenty of marketers out there that go out and slice the market up into tiny segments and then proceed to cut those segments into yet smaller segments. Then they do this flurry of activities and don't seem to get any more sales than before. They create expensive customized marketing to each of these little segments hoping to boost response rates. In sales, reps will go out in the field and spend twice as much time doing wasteful activities and at the end of the day will still have the same [poor] results.
My point is that there are a lot of web sites, marketing campaigns and sales reps out there that do twice as much, but still end up in the same place as if they had done half of that work. Why? Several reasons actually, but I am going to focus on just a couple. One is that they aren't figuring out how to pre-qualify the target market with their copy or their offers.
By their very nature headlines, copy and offers can speak to a very specific group of people and call out only the ones that are truly good prospects. Sales people will sometimes waste tons of time doing paperwork, driving around meeting customers on opposite ends of town, and other activities that are wasteful. In short both the marketers and sales people end up doing twice as much work and still end up getting the same slice of the pie.
Poor copy, bad lists, poorly organized web sites, wrong target markets and a host of other factors are to blame. Year after year this goes on and year after year it never improves in many companies. The reason is that with so much "activity" going on they must be doing everything right, but yet they still end up with the same thing when they are done.
I think the reason for this is that most marketing (including Internet marketing) is not treated like direct marketing. For years direct marketers were forced to show results. Everything they do is measured. They measure how many pieces go out, total cost, how many responses, which pieces produced the most responses, how fast those responses came back, total lead cost, per lead cost, increase in sales, etc.
Unfortunately too many marketers today and Internet marketers aren't forced to do business the same way. They can promise cool technology and the newest and best gee gaw on the market and businesses will pony up the cash for it. This is one of the reasons for the dot bomb crash in the late 90's among other things.
My point is that if all marketing was like direct marketing and all the stuff you did was measured for its exact effect you would start cutting out the half of crap you are doing that isn't bringing any benefit to your business. There is a saying in advertising that half of what you spend on advertising is a waste, unfortunately you don't know which half.
Your Internet marketing campaigns from the email sent out, delivered, opened, clicked on, landing page visited, time spent on page, number of visitors, number of sales, and total sales is all measurable. Unfortunately too many companies don't conduct a campaign this way. They just put up a web site, forget about it and wonder in a random meeting at some point in the future if that stupid "web thing" they bought was worth it.
The goal should be to measure everything. If you put up a new article on your site put it on a special landing page first and notify your eNewsletter subscribers that it is available and track how many come and download or read it. If you are doing banner advertising make sure that the ad clicks through on a unique page that is not part of your overall site so you can measure how many people come through. If you are not sure what message to use in a campaign do an A/B split and create two landing pages with the two versions on each one. Then send out two batches of emails with half giving links to "A" and half to "B" then figure out which of the two messages produced more sales.
The next time you do a campaign take the best one of the two and change two things and run another split test and see which of those two pulls better. Keep doing this and keep perfecting until you have a campaign that has eliminated the half that doesn't work and gets you the results you want. This is scientific and while I would love to take credit for it marketers much older than me came up with these concepts years and years ago.
The goal is to continually and ruthlessly cut out the wasteful non-producing marketing activities and keep the stuff that works. Your goal should be to grow sales, but if you fail to do that at least be sure to only do half of the amount of wasteful activities to get to the same spot!
Michael Temple
One day after coming in from swimming I saw my friend's dad cutting a brownie out of a pan of fresh brownies. First, he cut the entire pan into nice even squares and then carefully removed one square for himself. He then proceeded to cut that square in half and only ate that half. I didn't say anything to him, but about 15 minutes later he went back and ate the other half of the brownie.
Now with my curiosity peaked I asked him why would he take a normal size brownie, cut it in half and eat both halves 15 minutes apart? Without missing a beat he replied "so I can eat twice as much"...
Now math wasn't my best subject, but I was pretty sure there was something wrong with his math and his logic. He didn't say anything else and for 30 seconds I sat there in silence trying to figure out what the heck just happened. Finally, I replied, that doesn't make any sense whatsoever! He just laughed and walked away.
For years I have remembered that day at the lake and still can't figure out his logic to this day. Since we are in the midst of summer right now and I recently got back from a lake I was thinking of this event again. I started wondering if this logic applied to marketing and sales and sure enough I think it does.
There are plenty of marketers out there that go out and slice the market up into tiny segments and then proceed to cut those segments into yet smaller segments. Then they do this flurry of activities and don't seem to get any more sales than before. They create expensive customized marketing to each of these little segments hoping to boost response rates. In sales, reps will go out in the field and spend twice as much time doing wasteful activities and at the end of the day will still have the same [poor] results.
My point is that there are a lot of web sites, marketing campaigns and sales reps out there that do twice as much, but still end up in the same place as if they had done half of that work. Why? Several reasons actually, but I am going to focus on just a couple. One is that they aren't figuring out how to pre-qualify the target market with their copy or their offers.
By their very nature headlines, copy and offers can speak to a very specific group of people and call out only the ones that are truly good prospects. Sales people will sometimes waste tons of time doing paperwork, driving around meeting customers on opposite ends of town, and other activities that are wasteful. In short both the marketers and sales people end up doing twice as much work and still end up getting the same slice of the pie.
Poor copy, bad lists, poorly organized web sites, wrong target markets and a host of other factors are to blame. Year after year this goes on and year after year it never improves in many companies. The reason is that with so much "activity" going on they must be doing everything right, but yet they still end up with the same thing when they are done.
I think the reason for this is that most marketing (including Internet marketing) is not treated like direct marketing. For years direct marketers were forced to show results. Everything they do is measured. They measure how many pieces go out, total cost, how many responses, which pieces produced the most responses, how fast those responses came back, total lead cost, per lead cost, increase in sales, etc.
Unfortunately too many marketers today and Internet marketers aren't forced to do business the same way. They can promise cool technology and the newest and best gee gaw on the market and businesses will pony up the cash for it. This is one of the reasons for the dot bomb crash in the late 90's among other things.
My point is that if all marketing was like direct marketing and all the stuff you did was measured for its exact effect you would start cutting out the half of crap you are doing that isn't bringing any benefit to your business. There is a saying in advertising that half of what you spend on advertising is a waste, unfortunately you don't know which half.
Your Internet marketing campaigns from the email sent out, delivered, opened, clicked on, landing page visited, time spent on page, number of visitors, number of sales, and total sales is all measurable. Unfortunately too many companies don't conduct a campaign this way. They just put up a web site, forget about it and wonder in a random meeting at some point in the future if that stupid "web thing" they bought was worth it.
The goal should be to measure everything. If you put up a new article on your site put it on a special landing page first and notify your eNewsletter subscribers that it is available and track how many come and download or read it. If you are doing banner advertising make sure that the ad clicks through on a unique page that is not part of your overall site so you can measure how many people come through. If you are not sure what message to use in a campaign do an A/B split and create two landing pages with the two versions on each one. Then send out two batches of emails with half giving links to "A" and half to "B" then figure out which of the two messages produced more sales.
The next time you do a campaign take the best one of the two and change two things and run another split test and see which of those two pulls better. Keep doing this and keep perfecting until you have a campaign that has eliminated the half that doesn't work and gets you the results you want. This is scientific and while I would love to take credit for it marketers much older than me came up with these concepts years and years ago.
The goal is to continually and ruthlessly cut out the wasteful non-producing marketing activities and keep the stuff that works. Your goal should be to grow sales, but if you fail to do that at least be sure to only do half of the amount of wasteful activities to get to the same spot!
Michael Temple
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