Category : Marketing

A Uniquely Effective Positioning Tactic You May Not Have Considered

My last blog post, about positioning, was titled Stand for Something. This blog is about a potentially effective way to position your product or service that you might not have thought about.

A former client of mine was struggling with how to position their flagship product, a multi-hundred thousand-dollar system used in memory manufacturing.

For all intents and purposes, the client’s system was identical to the competitor’s system. Consequently, the client found themselves in a price war for every order because they couldn’t explain why their system was better—on paper, it seemed pretty comparable.

But during the analysis, we learned about one critical component of these systems: a (mostly) hand-made part that weighs more than a ton. No one keeps this part in stock because it a) is massive and b) rarely fails.

But when it does fail, production grinds to a halt. There is no workaround, and the lead time for replacement is approximately 90 days. All that downtime means a loss of hundreds of thousands of dollars, or even millions of dollars.

Unfortunately (for them), the competitor’s product had experienced two such failures over ten years. My client’s product, on the other hand, had never experienced this type of failure.

As you can imagine, this little bit of knowledge was worth a great deal to my client—and my client’s customers. Once we started incorporating this fact into the sales process, my client was able to raise prices by more than 15%, all of which went directly to the client’s bottom line.

When you’re figuring out your positioning, you can and should consider all the good things your product or service does. But it’s also important to consider all the bad things it can help your customers avoid. Sometimes, plain old “peace of mind” is worth a great deal in real dollars and cents.

Next time, I’ll provide some suggestions for effectively positioning various types of analytical equipment.

Stand for Something!

What comes to mind when you hear the word “branding”? A logo? A color? A catchphrase?

What should come to mind is a specific, unique position—something the product or service represents, or stands for.

Branding is the single best way to eliminate competition because, when it’s done well, you become a category of one. (There are lots of places to buy shoes, for example, but only one Zappos.)

A brand can be built around low prices, as Walmart and Ikea have done. But most high-tech companies would be better served to focus on something else…performance, yield improvement, durability, exceptional customer service. What do you do really well?

Trying to be all things to all people—“We offer the best quality at the lowest prices!”—is foolhardy. Frankly, it defies belief. How could you legitimately be great at everything? It’s a claim that invites well-deserved skepticism.

To build a strong brand, you need to thoroughly understand—and communicate—your unique strengths. Now, I’m not going to pretend that this is easy. It’s much easier to hire someone to design a snazzy logo or write a witty catchphrase. But a meaningful, resonant brand is worth its weight in gold. And it pays dividends for as long as you’re in business.

Over the next few weeks, we’ll delve deeper into branding and positioning, so stay tuned.

The Value of Versioning

Customers like having choices. That’s why manufacturers of cars, computers, phones, and just about everything else offer multiple versions of products, at different prices, with different levels of value. This works because not all customers perceive value the same way, nor are they willing to pay the same price.

There are three basic kinds of buyers:

  1. Price buyers: Price is always their #1 decision criteria.
  2. Value buyers: They are openly willing to pay more for more value.
  3. Poker players: They are willing to pay for value but won’t admit it. (Most customers are poker players.)

To attract all three types of buyers, many businesses offer three well-defined and profitable versions of a product at different prices, with more bells and whistles added at each price point. This ensures that customers get what they’re willing to pay for, but not too much more. If they want more, they can move up to the next version.

The beauty of versions is that they guide the customer toward the product he or she is willing to pay for. This makes everything that follows easier because you’ve addressed price and specs up front, at the beginning of the sales process. (By the end of the sales process, you’ve invested too much time, money, and emotion to walk away, even if it’s in your best interest to do so.)

It’s human nature to want the best version at the lowest price, so it’s the salesperson’s job to figure out what is most important to the customer and steer the customer toward the best fit. Price, performance, payment terms, credit, warranty, field support, product and process improvement, and delivery can all be versioned.

You might be thinking, “Versions wouldn’t work for us because our customers give us the spec they want us to meet, and we respond to that spec.” While that may be true to some extent, remember that a spec is usually a wish list, not a list of must-haves. Again, it’s up to the salesperson to figure out which specs matter and which don’t, and to negotiate and quote the appropriate price.

I’ve used versions to ensure that customers like Intel, Micron, Texas Instruments, and TSMC get what they’re willing to pay for, so I know it can be done. I once used versions to negotiate a $50M service contract with Intel that included a 20% price increase over the previous year.

It’s important to remember that no sales strategy or tactic works in all circumstances all the time. What I’m suggesting is that you try versioning a few times and see what happens. If you do it right and stick with it, your profit will improve. And isn’t that why we’re all in business in the first place?

What Good Marketing Is…and Isn’t

There’s a reason brochures, slide decks, and other marketing materials are called “collateral”: They’re secondary.

While thoughtful design and presentation are always useful, they take a back seat to what marketing is really designed to do, which is to add value to a business by directly increasing revenue and profitability.

Good marketing doesn’t require slick design—some of the most effective marketing can literally be scrawled on the back of a used envelope, if it convinces customers of the unique value of your products or services.

Here are some things all effective marketers do:

They specify and quantify the unique value their products and services deliver to customers in terms of how much money customers earn (and/or save) by purchasing them. If that value isn’t clear—or, worse still, doesn’t actually exist—they redesign their offerings with value in mind.

“Redesigning” doesn’t necessarily mean reconfiguring hardware. It means changing the “product,” which I define as the results customers receive. Different specifications, guarantees, delivery, payment terms, reliability, durability, and field support are just a few of the many ways to differentiate the same exact hardware into different products—at different price points.

If you find yourself competing on price more often than you’d like, I suggest you examine, specify, and quantify the unique value of your product or service. Then, offer different versions of that value at different prices. Doing this one thing can transform your sales.

They develop specific strategies to sell more products at higher prices. The strategies include objectives and timing, but more importantly, answer the question “How will we do it?” Details on customers, products, positioning, pricing, promotion, people, and the actions that need to happen—and when—are understood by everyone involved.

Note that this also includes making sure that all salespeople are clear on which team they’re on—that is to say, your company’s. Too often, salespeople cut special deals with customers that undercut not just your profits, but the relationships that exist within your company as a whole.

They compete where they can win. They know their products aren’t right for every customer and every opportunity, so they focus on offering the best solutions to specific problems, and creating a “better future” for customers who don’t have obvious problems.

They identify what good and bad business looks like, and save their company money and time that would be wasted chasing customers and opportunities they can’t win. Doing more and more business with a big but unprofitable (or low-profit) customer is a sure way to tank both morale and revenues.

They price their products based on customer value and position that value as an investment instead of a cost. It’s a lot easier to sell a product and a price when you can tell the customer something like: “For every dollar you pay me, you’ll get three in return.” Then, they back up that claim with strong business cases, data, and guarantees. Guarantees are a great way to close business and not terribly risky if you’re selling something effective and reliable (you are, aren’t you?).

They don’t make their customers think too hard. In conversations, pitches, and presentations, they provide easy-to-understand reasons why customers should buy, and the results customers get in return. They don’t get into jargon or micro details that customers really don’t care about.

They create demand by speaking and writing about how their products and services have helped customers improve their business results. They know that customers are much more interested in how you can help them earn or save money than they are in your new hex-head screw. They don’t want products or services, per se—they have a problem they want solved. Always be focused on how you can help them solve that problem.

They make it easy for first-time customers to buy by reducing the risk most customers feel when they’re about to buy a new product from a new supplier.

Like it or not, customers perceive risk in changing what they’re used to buying and doing. They will even tolerate big, expensive problems for years if the solution to those problems has too much risk attached to it. (Remember that old saw about people preferring the devil they know to the devil they don’t know—there’s a lot of truth in it, even though this sort of thinking isn’t logical.)

You can come up with all kinds of logical arguments in terms of why the customer should buy from you. However, if the customer perceives an unknown risk (and the customer always does) in buying, and you don’t address that risk early in the sales cycle, you will have a harder time selling.

You can reduce risk in a number of ways with small trial purchases, strong guarantees, and the right kind of proof that you can succeed.

They’re honest with themselves, their salespeople, and their customers.

A lot of what passes for marketing is little more than sketchy, exaggerated claims.

Your salespeople and customers aren’t idiots. People hate being misled or lied to. It’s off-putting and greatly reduces your credibility. Nothing establishes your credibility more firmly than being able to honestly say things like the following:

  • This is what we do well, and here is the proof behind that claim.
  • We’re not the best partner for you if you want to do x, y, or z. You may want to try [competitor product service or internal solution] instead.
  • We achieved that level of performance only once, but we’re working to duplicate the results.
  • Based on what you’ve said about the size of your budget, I don’t think we’re the right fit for your needs.
  • We offer a full guarantee for two years. If you’re not happy with the performance during that time, we’ll give you 100% of your money back.

If you remember nothing else about marketing, simply focusing on a) honesty and b) value will put you leaps and bounds ahead of most of your competitors—with or without a stack of glossy brochures.

What Sales Really Needs (But Rarely Gets) From Marketing

Contrary to what you might think, your company is not really selling a product or service.

You’re selling a solution to a problem. Something that will make your customers’ lives easier. Something that will make (or save) them money. Something that will slash time, complexity, or hassle.

If you’re in marketing, your most important job—bar none—is to convey this true value to your sales people so they can sell your offerings effectively.

A good value proposition does three things:

  • Explains how your company, product, or service solves customers’ problems or improves their business results.
  • Details the quantified or qualified benefits your customers receive, such as the amount of money they earn or save, or the value of the risk that is reduced by buying your products or services.
  • Provides a compelling response to the question, “Why should I buy from you and not from your competitors? (Note: Anything along the lines of “Because our competitors are stupid/lazy/untrustworthy” is not the sort of answer we’re looking for here!)

While most of us can exhaustively detail our product specifications until the cows come home, product specs are not where the true value lies—even if your product is amazing.

If you need help developing a compelling value proposition, start by thinking about the following questions:

  1. Why do customers buy our products and services?
  2. What unique value do we provide that others don’t?
  3. Which customers want that value? Why do they want it, and how much will they pay for it?
  4. Are our prices set relative to the value customers receive? (e.g., you give me one dollar and I’ll give you three in return over one, two or three years.)
  5. What are the circumstances under which we can provide the most value?
  6. How do we deliver value?
  7. What do we do differently from our competitors?
  8. Is our value sustainable? In other words, can we continue to deliver it? Can our competitors copy it?
  9. How much money do we help customers earn or save, under what circumstances, and over what periods of time? How do we calculate it?
  10. Do we have sales presentations and tools that clearly demonstrate how we help customers earn and save money?
  11. How much risk do we reduce, and how much is that risk reduction worth to a customer?
  12. Why do we lose business? What are the most common reasons? (It’s almost never price, despite what buyers may tell you.) What can we do about those reasons?
  13. What proof do we have that supports the claims we make? Do we have case studies, customer testimonials or references, data, or repeat business we can point to?
  14. Can we demonstrate our unique value to customers before they buy?
  15. Can we guarantee the results we claim to deliver?
  16. What are the biggest risks (both actual and perceived) customers take when they purchase from us?

If you’re not happy with how your salespeople are selling your product or service, give them a rock-solid value proposition to sell instead—because this is truly what your customers are looking (and, in fact, eager) to buy.

The Management Myth That Can Cost You Millions

There’s a common misconception out there that salespeople are a self-led bunch who need little or no active management from above. Nothing could be further from the truth! These employees, like all others, need to be actively developed and trained in order to achieve their full potential.

Additionally, because these folks are so crucial to your bottom line, how well (or poorly) you manage them has a direct impact on your revenue and profitability.

Well-managed employees are productive, loyal, engaged, and high-achieving. Poorly managed employees, on the other hand, tend to slip through the cracks into mediocrity—and those with true star potential tend to leave for other workplaces (a key competitor of yours, perhaps?) where their talents are better appreciated and nurtured.

You may think you don’t have time to play an active role in the management of these employees, but the truth is that you simply can’t afford not to.

With that in mind, here are 10 things you can do to ensure your sales organization functions at the highest possible level:

  1. Continually look for ways to improve the way work is done, eliminate tasks that shouldn’t be done at all, and prioritize the rest so salespeople know exactly what they should be working on now, and what they can postpone until later. There’s a lot of overwhelm out there, and in the vast majority of cases it’s caused by managers who continue to delegate work to their employees without any guidance regarding what is most crucial to focus on right now. This means that it falls on you to prioritize objectives and tasks—which can be both difficult and time-consuming. Ducking this responsibility, however, will only backfire in the long run.


  1. Regularly recruit potential candidates from inside and outside the company, whether a job opening exists or not. The best sales executives don’t need to frantically start recruiting when an employee gives notice or is fired because they already know numerous qualified replacements who are lined up and eager to take the job. You’ve probably heard the acronym ABC—Always Be Closing. Smart managers know they need to ABR, too—Always Be Recruiting.


  1. Start grooming one or more successors for your job. This enables your subordinates to assume more responsibility in the company without disrupting their current responsibilities. It’s also a vital part of smart succession planning in the event you are suddenly unable to continue doing your job.


  1. Continually solicit feedback from employees on how satisfied they are, and on what you can do to help them. Subjects like compensation, job satisfaction, career growth, and workload should be openly and honestly discussed on a regular basis. Assuming the conversation is respectful, no topic should be out of bounds. Highly involved managers are rarely surprised when an employee resigns, and this type of foresight enables you to wish the departing employee well and let him or her know the door is always open for a possible return someday. Hands-off managers tend to respond to departures with hostility and defensiveness.


  1. Regularly review your employees’ workload and priorities. This means calling the shots on hard decisions (such as “work on this, and don’t work on this”) when employees ask for help. Effective managers don’t parrot useless platitudes at employees—like “you have to work smarter” or “you need to manage your time better”—without providing any details on how to actually do these things.


  1. Run interference and fight for your people when needed. When employees need help, smart managers don’t make excuses or postpone difficult discussions. They get involved and get things done.


  1. Get out in the field, work with employees, talk to customers, and help both with their problems. You’ll know exactly what each salesperson needs to improve and can provide the coaching and training to make it happen.


  1. Stand up to belligerent customers who yell at and threaten your salespeople. You don’t remove salespeople from an account simply because the customer wants to deal with a weak salesperson who will offer him lower prices. You know, in the long run, that your loyalties lie with your team. The customer is not always right.


  1. Avoid micromanagement. You never want to be in a “Continuous Sampling Loop” with your people, interrupting them every few hours or days to find out what they’re working on so they can show management that they’re “on top of things.” Give them the autonomy and tools to do their jobs well and then stay the heck out of their way.


  1. Be just as concerned about the careers of your people as you are about your own career. You should be working on a career path with each employee that helps him or her professionally develop to the fullest. And remember that there’s never any shame in hiring people smarter than you—the very best managers strive to do just that.

Why Group Emails Can Be Your Secret Negotiations Weapon

It’s to your advantage to deal with actual product users rather than professional purchasers, whenever possible. This can be tricky, as purchasing employees try to ensure that all or most communications go through purchasing. But there are ways around this.

I always recommend that my clients use email to document every conversation with purchasing, and then send that email to everyone involved in the negotiation at both the seller and buyer companies.

As a best practice, send a well-written, fact-filled email once a week (or more often, if warranted) to all the key people involved in the negotiation. This can include:

  • customer executives
  • users of your products
  • your own management team

These emails should document any agreements and commitments made by both sides during the previous week and may contain everything from direct quotes from purchasing people to slips in the product delivery schedule (due to negotiations that never seem to end).

You might also include any threats made by purchasing representatives.

Shedding some daylight on the threats, pressure, name-calling, outrageous demands, etc. by purchasing tends to reduce this bad behavior.

If purchasing balks at the idea of these emails (and they will), I tell my clients to respond matter-of-factly that management insists on keeping everyone informed and up to date, with all relevant details fully documented. Doing this will also motivate all parties to behave with civility and honesty, and to keep the rhetoric to a minimum.

Even if you are fortunate enough to be dealing with professional, courteous, well-behaved purchasing people (lucky you!), it’s still very helpful to have this kind of real-time reporting and documentation going on. Written records are your friend.

One of the biggest wastes of marketing and sales resources is time and money spent pursuing the wrong customers and the wrong opportunities.

Do you ever wish your marketing and sales people would capture more profitable business: the kind that adds the requisite profitability and results in happier customers? Well, they can, if they:

  1. Define your company’s best prospects: companies that not only need your products and services, but can afford to pay for them as well
  2. Define the prospects that aren’t and may never be a match for your services and products because they can’t or won’t pay for them, and don’t need the unique attributes that make your products special
  3. Devote far more time and money pursuing the best prospects, and little or no time and money pursuing the worst prospects

Unfortunately, many companies have a hard time distinguishing between good and bad business. They believe that every prospect can be a customer, given enough sales time, presentations, and wining and dining, and that “giving up” on any prospect is like admitting defeat. This is a costly belief.

Any sale that will require significant effort, money and time to win should have to successfully pass through a number of “good business” filters, a few of which are listed here:

  1. What changes are driving the need to buy anything at all, let alone your product?
  2. Why is the prospect interested in your product or service? The real reasons, not some general, made up B.S. like “we want to go in a different direction”. The answer to this question is particularly important when dealing with a prospect that has been using “Brand X” for years and may only want a quote from you to use as leverage against Brand X to get a lower price.
  3. Is the opportunity really funded? If so, how much money has been approved, by whom, when is the money available to spend, and is the funding contingent on anything?
  4. Can the prospect really afford what you’re selling? A prospect that claims to have a budget of only $2M to buy a piece of equipment that typically sells for $3M is doing one of the following:
  • Pulling an old-school negotiating trick (“let’s throw an outrageous figure out there as an anchor and see how the sales person reacts”)
  • Demonstrating that he really can’t afford your product
  • Trying to establish that price is and will be the most important criteria when dealing with this prospect

No amount of negotiating is likely to close a gap this big, and the time and effort involved aren’t worth it. The best response to the prospects’ budget statement above isn’t “great, let us see what we can do to get you a better price”. No, the correct answer should be something along the lines of “this product is worth considerably more than $2M. If you’re only able to spend that amount, we won’t be able to work with you on this project. If you can increase your budget to $3M, we’re ready to talk with you further”.

Every minute your people spend chasing bad business represents lost money and time that you can never recover. Even worse, those minutes represent lost opportunities to pursue better business.

Use your experience to determine who your best prospects are, and then apply all of your marketing and sales effort toward making those prospects your customers. In addition to making more money, you’ll enjoy more satisfying customer relationships in the process.

Trade Shows: Wrong Answers and Appearances

I recently attended a large capital equipment trade show in Chicago. As I walked around and spoke with people in the booths, two things struck me as items you might want to look into before your next trade show.

The first is that very few people I spoke with were able to provide a satisfactory answer to a very basic question: “What is it about your company and products that separate you from your competitors?”

The most frequent answer I heard was something along the lines of “I would have to say our quality”. I would then ask what it was that made their quality better, and frequently heard “We build most of our equipment in-house”. Well, it turns out that the vast majority of the companies in this industry build most of their equipment in house. So, my next questions were “How much better is your quality?” and then, “How does that quality transfer into better performance or results for your customers?”

Only a handful of people, in the more than 100 booths I visited, were able to give answers that were even somewhat precise and backed by some kind of evidence.

This is sad, and points to a very real need for the marketing people in these companies to clearly articulate compelling and well-supported reasons to buy specific products from their companies. Those reasons almost always exist; you just have to find them and then work to define, quantify and support them. This work needs to be done, and marketing needs to do it.

The second item that struck me was how casual and tired many of the booth-dwellers appeared. Some had apparently borrowed clothing from people half or twice their size. Others were sitting and playing with their computers, pads and phones, not even bothering to look up when a person wandered into their booth and stared at a machine. I saw one guy sitting on a platform and leaning back against the machine his company was paying to exhibit at the show. His eyelids at half-mast, I decided not to disturb him. I’m sure potential customers felt the same way I did.

Now, I know from experience that as a show heads into its third day, the energy and enthusiasm of booth-dwellers and show-goers tends to wane. But always remember that the people who staff your booth at a trade show are the face of your company. The way they look, their level of enthusiasm, their knowledge about your products and company, and the way they engage visitors to your booth are all extremely important.

So, before your next trade show, put some thought into the marketing messages you want your people to convey to your prospects. Make sure the messages are clear, really differentiate you from your competitors, and are backed up by customer testimonials and performance data. And to address the fatigue issue, consider rotating some fresh faces into your booth every day.  You’ll increase the odds that your people will successfully engage visitors who could turn into prospects and then into customers who buy your products. Which is the main reason why you invest your money to exhibit at a trade show in the first place.

Email Marketing: A critical part of your marketing mix

What comes to mind when you hear the term “Email Marketing”? If you’re like a lot of people, the next word you think of is Spam. Or perhaps you think of it as the stuff you see in your in box each morning that you delete without reading. Maybe you’ve tried Email Marketing once or twice without success, or maybe you haven’t tried it because you don’t think it would work for your company, products or industry.

With the exception of companies that can count their customers on two hands, I believe that Email Marketing, combined with a professional, content-rich web site, should be a part of every company’s marketing mix. Following are the reasons why:

Your customers are online and use email nearly every day

Customers around the world are now experienced with educating themselves on just about any subject, investigating potential options, and purchasing products and services on line. If you have or can build a solid, online reputation for sending timely, content-rich, and helpful emails to customers, those customers will not only allow you to send those emails, they will look forward to receiving them, and in some cases, will visit your web site, ask for more information, ask to set up a meeting with you, or even purchase what you’re offering.

Emails are opened more frequently than you might think

According to a number of published studies, and my own experience, open rates for email marketing efforts range from 5 – 20%. However, those open rates are for unsolicited email. If you already have a relationship with a customer and that person allows you to send emails to his or her in box, open rates will almost certainly be higher. And once the email is opened, your well-written and convincing content can encourage the reader to learn more and take action.

Email gets your message across quickly and consistently

Let’s say, for example that you manufacture capital equipment and that you have an installed base of 500 units of various configurations working in 50 manufacturing facilities around the world. You have just developed a hardware upgrade that can dramatically increase the productivity and output of 20% of the units in the installed base. The upgrade costs $25,000 to build, but it’s worth at least $200,000 in increased profit per year to each customer.  You’ve decided to price the upgrade at $100,000 per unit.

Even the world’s greatest field sales force would have a tough time reaching all the customers who could potentially buy this upgrade in a timely manner, let alone with the same exact message. So what is the best way to inform each of your customers about the upgrade, explain how it will help them, convince them that it’s worth $100,000, and do it quickly and consistently?  I would suggest that sending a detailed email to all of the customers involved in making or influencing purchasing decisions is the most effective first step you can take.

Email is more than affordable; it’s cheap

Effective email marketing campaigns can be done with very little money, relative to the cost of using virtually any other method to reach customers. Although the costs of developing the content of each message will vary, the act of sending the information can be done for between one and two cents per email.

Email can help you reach out to those difficult-to-visit but very profitable customers

Almost every business has a number of highly-profitable customers who happen to be located in places that are difficult and expensive to get to, and therefore, can’t be supported with frequent face-to-face visits.  Using email can help to keep these customers informed and aware of not only new products and services, but also of any new information you have regarding your existing products and services.

While nothing can adequately replace in-person contact, email can help you establish and maintain an ongoing conversation with your customers and prospects, and might even spare you from ever hearing the dreaded “we purchased from your competitor because we hadn’t heard from you and didn’t think you cared”.

So, if you haven’t started communicating with your customers and prospects with email marketing yet, I have just one question: What are you waiting for?

Copyright © 2018 Red Chasm, All Rights Reserved