ideasarehere

More out of scientific interest than personal need I went to the Media Store and investigated through the shelves, especially DVDs and CDs. Worth noting: TV Series almost take up as much shelf space as feature films. People buy this? Whoa.

And then – for the first time in three years – I actually bought a CD. Because it was cheaper than on iTunes. Jeff Buckley — Grace, it’s one of those albums you must have if you are into music. Awesome. And I’ve been wanting it for quite some time but never saw it in stores. After that, I picked up another CD I thought of as nice to have, and another…and another. And then I stopped, thinking “Wait, what’s going on here?” and I remembered a blog post I had read some weeks ago when the author mentioned that people in the checkout queue always seem to be more excited than after having actually bought the items. Which made me think, resulting in me putting back 3 out of 4 CDs, thinking it would make a lot of more sense to put them on a wish list. Which is a clever option on Amazon.

On the one hand, it allows me to keep track of stuff I think I need, reconsider it after some time, but in the end, thanks to the recommendation system as well, it keeps ever growing. Wish lists are also great to share with your friends and family, so every time they want to give you a present they have some sensible options instead yet another pair of socks.

On the other hand, from Amazon’s point of view, wish lists are a precious source of information, because they tell them what the client thinks he needs. This applies for you as a marketer as well. It’s a good tool to follow up, because it’s connected to future intentions and not the last purchase. The way the list grows is a valuable information too (though prone to error because of misinterpretation). Fast growth and widely spread topics can be indicators of indecisiveness and procrastination, or the tendency of taking on too much at once. But this is something you only know when you have the opportunity to measure and compare the results. It’s interesting that Amazon doesn’t track this but keeps bombarding you with recommendation emails whatsoever, which is not always helping them make another sale I reckon, so you better not copy it straight away for your business. But following up is vital. The more relevant (i.e. centered on the client’s future) the better.

Today I saw a billboard ad with the iPhone 3GS on it, and the text  below it read: “iPhone 3GS. The fastest, most performant iPhone ever.” Of course this ad was not one for Apple but a mobile service company. Still I couldn’t help but wonder if they really thought they’d need to advertise it that way. It’s not like someone who is only slightly into tech doesn’t already know that. In fact, all early adopters are already slavering for the 4G to come in summer, ready to dispose of their 3GSs.

The effect the billboard has is quite opposite to what its creators wanted it to be. First, the strongest association is not between the mobile service and the claim or the phone, but between the phone and the claim, so people are very likely to misinterpret it as an Apple ad. Second, it’s meant to appeal to an audience that is not going to act on it. Third, using a row of superlatives in connection with “ever” is already bad enough, but doing in the face of the new model of the product coming soon, it’s just plain stupid. The interesting thing about this is that the fraudulent touch it has will not be associated with the mobile service but Apple.

And just imagine they would (quite rightfully) try to prevent third parties to commit mistakes like this, what an outrage this would result in. So once again they have no choice but to stand out. I’m pretty sure they will. Any takers?

In every buying decision the price of the good or service is a sensitive issue, which in return makes it a sensible topic to talk about. Recently I spoke with two people about this and the conversations went quite similar although both of them work in different professions. But in the end, it boils down to the same factors.

If I go out to buy a brand new car, for instance, I pay not only for the materials it’s built from, but also the working hours of the people in the factory, R&D, shipping and (they never mention that) the advertisements that brought me to the dealership in the first place. The negotiable part is the dealer’s profit margin. The car manufacturer himself has set a price that allows him to reach the BEP after selling, say, 10,000 units. After that, it’s all profit, so they could lower the price — but what for? People are already willing to pay the old price, accepting that this is what you need to sacrifice to enjoy the benefits.

What I’m really paying for, though, is none of the above. What I’m paying for is the (all inclusive) experience from seeing the ad for the first time, dreaming of driving the car, buying it, really driving it, maybe brag about it, and, some day, dispose of it. This becomes more obvious when we examine commodities. When I buy some chunky chocolate fudge cookies, the cookies themselves have been paid for ages ago, what I’m paying for today is the cookie experience, or, more precisely, the story I’m telling myself about the cookie experience.

The better the quality of the story I’m telling myself, the more it fits with the facts of the product or service, the easier it is to bring myself to pay the asked price. If a lump of gold has a story no one relates to, it won’t sell even for 50% off.

This is why references are valuable especially in service businesses. They help your prospects tell themselves a story about you. And this is what your job as a marketer actually is: Make it as easy as possible for your clients to tell themselves a story that permits them to pay your price. This is the reason why every successful marketer’s first rule is to listen to the prospect. Because only by listening you will find out what they need to know to tell themselves the right story.

Here’s the tough part (though it’s very easy): You have to be (brutally) honest to yourself and (courteously) honest to the prospect, meaning if you can’t give the prospect what she has asked for, don’t ever try to make things up just to win the tender. What you really want is to gain a business that creates future business. If chances are you will fail the first one, maybe you’ll get paid but the door will be closed afterwards. So make sure you really can do what your prospect is asking for. If not, there’s no harm in saying: “Look, I’m best at XY, but from what you’re saying I think what you are looking for is YZ. I could do this, but I’m not the leader of the field there and I want you to get as much out of this as possible. Maybe I can refer you to a friend of mine who is an expert at YZ, she could really help you make giant leap forward.”

By doing so, you do several things simultaneously:

• show you really care about your prospect’s interests
• create rapport and trust because you’re honest
• clearly position yourself as the expert in your field without big fuss, created a story for yourself
• show you’re connected to other experts and created a story for them
• without even mentioning it, you have managed to justify your price and the price of the person you’re referring to

The last point is crucial. In services, people have less problems paying a premium price for experts than paying an average price for a semi-expert — the Long Tail in action. In certain businesses the competition has shifted to be only about price, and this is definitely not where you want to go, because the only way is down.

Here’s why: When you charge 100% price, you deliver more than 100% performance, because you have to prove that the experience you’re giving to the client is worth this 100% of money (or even better), so you do everything necessary to make sure they’re completely happy. Otherwise the likelihood of getting equal future business for an equal price or even better business for a better (i.e. higher) price will drop. But if you agree to do the job for 80% of your asking price, your client still demands 100% satisfaction, which is now less likely to happen because you are less motivated — which again results in further price droppings in future business because word of mouth will not work in your favour.

Of course there is always someone who will do it for less. But how can you grow a business by doing more for less? The answer to market pressure is not to work more for less, trying to keep the margins, because you have no scope for investments. This is the circle that killed the classic industry years ago. And this is also what kills start-ups in their first years (not exclusively though, but it’s a huge factor). The question is this: How much would you have to pay if you were to replace yourself? With what you’re charging now, could you do that? While maintaining the same level of quality of customer experience?

You can win more business (over time) by not taking every business (in the short run). Creating a remarkable customer experience is more important than ever. Underpromise and overdeliver. Also point out results you can’t guarantee. A Personal Trainer can only guarantee for her input (training plans, diet plans, motivating the client), but not for the actual results. These vary upon the commitment of the client. This applies in other fields as well, but with different cirumstances (never forget: the client is always right).

One final word about re-negotiating: Don’t.