Creating the message for your niche

Sales, Marketing, differentiation, Positioning, Product Management, segmentation, messaging

While finding the niche is tough, I have found creating the messaging to make people raise their hand to show interest is the toughest part

This requires immense attention to the nuances of the words being used. You need to keep chiseling on the words such that you use the least amount of words with the highest impact.

But even before you get down to putting words on paper, how do you make out ” what’s going on in the customer’s mind”

The famous Clayton Christensen experiment on the job of the milkshake was directed to exactly figure out what’s going on in the minds of people who buy a milkshake in the morning at McDonald’s.

You will need to test hypothesis and have the patience to continuously iterate and improve on what’s working and dump what’s not.

Somethings which I have found very useful are ideas from Jay Abraham and Dean Jackson. I would highly recommend reading Jay’s book Getting All you want from What you Have and listening to the MoreCheeseLessWhiskers podcast by Dean.

Once you know the usage, which we discussed in the last 2 posts, you can start making some hypothesis by getting into the shoes of the customers.

In the dry cleaning example that I used yesterday…maybe you could think if they are a single parent doing multiple jobs or they could be a family with both parents working….each could have a different challenge

In the case of the Disaster Recovery example which was a B2B case, maybe the customer has their own DR site is now looking for a different kind of a DR…they would think in terms of the different types of technologies available, feasibility etc. While someone who is going for a DR execution for the first time could be more interested in where do I start from.

Like I said earlier, this is one of the toughest jobs because you have to be creative in conceptualizing and building the message but you have to be scientific in measuring and testing your different messages.

Till next time then.

Carpe Diem!!!

Growing the business in a niche – Part III – Life Time Value

differentiation, Marketing, Positioning, Product Management, Sales

In my post yesterday I spoke about how you could go about partnering with inflencers and other merchants / companies who sell to the same niche.

There are 2 decisions to make the above successful.

First is the fact that you will need to hustle and connect with people. No one is going to find you. You have to make yourself found.

The second is the arithmetic behind the number of people you can partner with.

Which brings me to the concept of Life Time Value. This concept is explained very well by Jay Abraham and then Joe Polish and Dean Jackson

Most people, including people working in large companies don’t understand this concept, due to which they take short term decisions in accepting the first order.

Let’s say you have an average deal size of $100,000. In this you have a gross margin of $10000/-. This customer can buy from you the same product or service maybe 2 more times over the next 5 years. Which means over the next 5 years this one customer can give you a gross margin of $30000/-

Now if you have given this customer exceptional service then she may also refer one more customer like herself to you who could also give you another $ 30000/-

Which is a total of $60000/-. However you won’t make this if you don’t get the customer in the first place. The longer you can keep your customers to keep coming back for mere the higher this value becomes. As Joe Polish says, it also helps you to stop thinking in episodic nature and start thinking of very long term relationships with your customers.

Which brings us to the next point, how much are you willing to spend to get the customer first. This could be in terms of giving your partner all the first year margin or giving added value of $10000 to the customer. I am generally not in the favor of giving a discount because it becomes very difficult to raise prices once customers get used to one price point. Like I mentioned in my post yesterday, you could go on the ilovemarketing podcast or the morecheeselesswhiskers podcast and get a lot of examples how businesses of all sizes have used this.

The more you can afford to spend to get a client upfront and the longer you can be at it, the more successful you will be in getting your product or service to take over the market.

Till next time

Carpe Diem!!!

Simple versus Easy

Affirmative action, compounding, Human Brain, Sales

Why am I getting into semantics. Most people use them interchangeably.

Simple however is not Easy at all.

I lead a team of sales and marketing people. And whenever we have a review and the people who are behind on target come back with various excuses for not being able to do things. Sales incidentally is a very Simple job.

You need to meet enough people to solve their problems, for which they are willing to pay. Simple statement.

However this is where things become difficult and are not EASY at all. How do you find enough people to meet who have a problem you can solve. Then starts the next item whether the person wants you to solve the problem for them. How do you ensure you are meeting enough people on a regular basis.

Most human beings believe that they will do some extraordinary effort and the problem will get solved before the deadline. Which does not happen. Magic rarely happens in nature.

In terms of the sales guys there are only 3 ways that a business can grow as Jay Abraham mentions – you sell to more people, or you sell more often to the same people or you sell a higher value to the same people. Now however if you combine the 3 ways, you can actually do wonders because of the geometry which comes into place. Again Simple but not easy. Because you need to take steps everyday, day in and day out to ensure you are doing these simple things. Which for the human being is not easy. That’s where most sales people fail.

Let’s take another example of simple versus easy.

Einstein came out with the simple equation – E=mc^2. Very simple equation where energy is equal to the product of the mass with the squared value of speed of light. However while most people – including me – can write this equation like above, we can’t understand its usage in real life. This equation however helped Einstein explain and build his whole theory of relativity. If you watched the serial Startek Enterprise on television in the 1980s, Captain Kirk and his team use to transport themselves from their ship to somewhere else using the same equation conceptually – by first converting mass into energy and then at the destination – back from energy into mass.

Another example of a very simple equation which is not easy to comprehend and for which I keep ranting in this blog.

The compounding equation – Sum=Principle Amount*(1+(rate of interest/100))^No of periods (years/days/months) – S=P*(1+R/100)^N

I myself did not realise the implications of this equation till 2013, while I had learnt it in grade 7, almost 40 years before. If you can learn to ensure that you are on the positive side of this law you will become rich even if you just keep investing small amounts at regular intervals for a long long duration of time. However if you think that someday you will be able to invest money and you will suddenly become rich, it’s a fallacy of the human mind.

On the other hand this same equation is used against you by the finance companies who give loans or credit cards. I shared in my last post some graphs of how credit card debt is one of the major causes individual bankruptcies and why people are never able to get out of education debt. I had been in this situation till about 2013 but took forceful steps to come out of it.

A lot of things in life are based on simple principles like I have shown above. However they become easy to follow only with practice/rigour/discipline. You have to keep doing the grind every day. The sales guys have to meet enough people everyday to identify if they have problems which we can solve. You have to work out everyday to ensure that your muscles don’t slack. You have to set up automatic systems which take out money from your bank account and invest them.

Left to your mind, it will always play games and make you feel that you will somehow suddenly be able to accomplish magic.

Keep at it. Carpe Diem!!!

Compounding to get better in life

Uncategorized

I was having a discussion with my marketing manager the other day on the plans for the new financial year. How her team was expected to meet their targets, how her team was to help get the sales team to be producing results and how my overall team of different functions would get to double their turnover.

The moment you think of doubling something, it throws up resistance in the mind of everyone involved.

JAY ABRAHAM has a very simple equation for sales – which uses the concept of compounding – Total Value of sales = number of new clients*number of times existing clients buy*value of sales – if you need to double the total value of sales you don’t need to increase everything 100% – if you just work on increasing each of the three parts of the equation by about 30% – the total growth is double.  If you don’t believe just multiply 1.3*1.3*1.3 = 2.197.  For a further explanation on this you could read his book “Getting Everything you can from All you’ve got” . Its an awesome book on scaling a business.

Now for someone even increasing each item in the above equation by 30% could seem like a lot.  But each item above is made up of multiple processes.  Like getting new clients could involve improving the database by 10%, improving the quality of calling by 10% and improving the quality of proposals by 10%.  Just improving each of these processes by only 10% will increase the process of getting new clients by 30%.  You can go further in breaking down each process.  the process of improving the database could further be broken down into attending 5% more events and in each customer meeting try to build connections with 5% more people and so on. Once you can start looking at each process minutely and keep improving the task of doubling any item is relatively very easy.

Verne Harnish in his book, Mastering the Rockefeller Habits talks about how Michael Dell would continuously want to monitor issues in processes that were being followed in his company because he believed that once he got those eliminated the overall benefit to the organisation in the long run would be enormous.

Japanese have a method called “kaizen” which is to look for continuously doing small improvements, in the process or in the product.  The logic is that if you were to do very small improvements continuously you could compound to have very large benefits over a period of time.  If you were to improve just 1% every day of the year, by the end of the year you would be 36.5 times better than you were at the start of the year.  Not 36.5% better but 3650% better.  That’s the power of compounding.

Compounding can go down to each level and still the same rules will apply.  Its fractal.  Like 80/20.  In every 80/20 there is an 80/20 and in every second level of 80/20 there is generally a third level of 80/20 and so on.

The same law will keep applying.  And its so simple.

But don’t get fooled by its simplicity.  What is simple may not be easy to do or may not be easy to want to do.

I have started getting a very strong belief as I get older that people don’t believe in things which are simple. A lot of times while I am talking about this, I am also guilty of getting carried away with shiny objects which look complex.  People like to address tasks which are complex, because simplicity seems too good to be true. Or maybe people don’t get the thrill when they do simple things.  May be it doesn’t seem heroic.

To Simplicity…..

 

 

 

…..use the content from Verne Harish on page 72 & 73…..also use Jay Abraham’s equation of 3 ways of increasing  something….