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Introducing Davidoff’s Law – The “Moore’s Law” of Marketing
In 1965, Gordon Moore, co-founder of Intel, made an observation that has driven the growth of the technology sector since that time. Moore’s Law states that capacity per chip will double every 24 months while the cost of the chip will be reduced by one-half during that same two-year period. Moore’s Law was later amended from 24 months to 18.
When I was interviewed by The Baltimore Sun recently, I was asked what the future held for marketing and communication. That discussion led me to create what I am now calling Davidoff’s Law of Marketing. This new law states that the total amount of information available to people will double approximately every two years. At the same time, the difficulty of getting someone’s attention will double as well.
This means that the challenge of lead generation and starting productive customer conversations will only get more and more difficult as time goes by. So how can you escape the consequences of Davidoff’s Law? Here’s how: THE ONLY WAY TO BREAK THROUGH THE NOISE is to look at everything your company does through the eyes of your ideal customer.
This means you must:
- Clearly understand who your ideal customer is
- Learn everything you can about your ideal customer
- Understand how your ideal customer looks at the world
- Understand how your ideal customer views your company
- Understand, better than your ideal customer, exactly what they worry about
When your message is focused through that lens, you can stand out, break through the growing avalanche of information and begin a conversation that your prospect will actually find compelling.
A Perfect Example of Gratuitous ‘Service’
I’ve been traveling quite a bit recently and have been lucky enough to upgrade to first class on my last couple of excursions. As a first-class passenger, I was treated to what, I guess, is the airlines latest attempt to provide a “VIP” feel.
I got to enter the jetway by walking over a red carpet.
Unless you are an elite member of the airline’s frequent flier program or flying first class, this is a luxury you do not get to experience. Unfortunately, the boarding process got slightly complicated today. It seems the gate agent was having a difficult time making those who were flying coach understand that they could not cross the red carpet. She told them they needed to enter next to the red carpet and this caused some confusion.
Let’s do a quick reality check here.
Note to airlines: Here’s what I want when I fly (and my quick research supports that I am not the only one).
- Board the plan as easily and effortlessly as possible.
- The plane leaves on time.
- The flight is uneventful and not memorable.
- The plan lands on time.
- Exit the plan as easily and effortlessly as possible.
I don’t care what color the carpet is that I cross over. And I object to the fact that airlines (at least United and Northwest) have added to their costs to provide such a gratuitous ‘perk.’ I also object to them making the boarding process more complex. It just shows beyond a doubt that the airlines simply do not understand what their customers want.
It’s not surprising that airlines have no clue what their customers want. And they aren’t the only ones. I see this disconnect in businesses of all kinds all of the time. The focus becomes ‘service’ for the sake of service, instead of actually using service to enhance the customer experience.
If a service improvement does not create value, then you should think twice (or more) before implementing it. I define creating value as doing something someone would be willing to pay more for. That doesn’t necessarily mean that you have to charge more for it, but that you could if you wanted to.
Here’s an example of how you could test a proposed service improvement: Lets say you’re an airline executive and you’re considering creating a special “VIP” lane on the jetway for your top passengers. The only difference between the VIP lane and the other lane is that the top passengers get to walk over a red carpet. Now you need to figure out whether or not you should implement the idea. Simply ask, “Would our customers be willing to pay more to cross over a red carpet?” If the answer is no, then the decision is simple — don’t do it.
Now ask yourself this question about anything else you consider your company’s ‘service difference.’
Marketing As GPS
My speaking schedule requires me to travel regularly to destinations I have never been to before. Travel to an unknown place is obviously more exhausting than traveling to the familiar ones. The most exhausting part of traveling to a new place is commuting to and from the airport. This is where I (and others like me) always get the feeling of being lost without knowing for certain whether or not I am.
Recently, I was in Houston, Texas, driving from a presentation back to the airport. One of the participants gave me very good directions (information) about how to get there. I left my speech feeling confident. That confidence faded quickly as I started worrying that I may have missed a turn or an exit. Mind you, I wasn’t sure whether I missed anything; I was just concerned. Every couple of minutes, I received even more information about where I was in the forms of road and exit signs. Every bit of information that I received further aggravated and confused me. In a moment of exhaustion, I shouted, “I miss my GPS.”
That was the moment I realized the power of Global Positioning Systems (GPS). The power of GPS lies, not in the fact that it tells me where I am, but in the fact that it tells me where I am in relation to where I want to be. That relation provides context, and that context (or how all of the information about where I am impacts me) empowers me and gives me confidence.
Our marketing efforts should be no different. Too often, in an effort to get people to ‘understand’ what their company does, sales and marketing people pile on more and more information in an effort to ‘explain’ things. This information is analogous to the detailed directions and the road signs I saw in Houston. It lacks context. Without context, customers get confused when they are presented with something new and unknown. They have no “GPS” to determine how the information about this new thing relates to their needs (or where they are going). As they attempt to make sense of the information, they latch on to those pieces they are familiar with and tend to disregard the rest. Without a context, prospects, left to figure things out on their own, will see no difference between what you offer and what they’ve seen before. Any value the company could have provided is lost. This serves to commoditize the offering – leading to a vicious cycle of confusion, frustration and, ultimately, compressed margins.
The goal of all communication with clients and prospects should be the creation of knowledge. Knowledge is information understood, specifically, information and how it relates to me and the results that I want. You might say that knowledge exists at the intersection of information and context. Those sellers that give buyers a way of knowing not only where they are but also exactly how far they are from where they want to be, will on the road to accelerating their sales cycle and expanding their profits.
CBS News & Commoditization
CBS gave Katie Couric more than $15 million per year to lure her away from The Today Show, in an effort to make a splash and get CBS Evening News out of the basement. Last week, CBS News announced they would be replacing her current executive produce, Rome Hartman, with Rick Kaplan. In summarizing the challenges evening newscasts have in attracting an audience, Kaplan said:
The three network newscasts, which have been losing audience share for a generation, face much tougher competition now from cable news, the Internet and other new media.
“It was easy then [in the days of Walter Kronkite] to make your program compelling because people had no information until Walter said, ‘Good evening,’ ” Kaplan said. “Today they come armed with an extraordinary amount of information. We all have a responsibility to push these stories ahead.”
This same observation can be made about your salespeople and your marketing. It used to be much easier to be compelling, because your customers and potential customers had no information until they came into contact with you. Today, they have more information than they know what to do with. If you want to go-to-market and avoid commoditization, you must make sure that you are creating value, rather than just providing information.
Want To Create Value? Change Your Focus!
I have two definitions of value that drive everything I do:
- The first is: You create value when you do something that people would be willing to pay for. This is the underlying definition that supports everything I’ve written about creating value in the business development process.
- The second is: Value is created when a problem that would not otherwise be solved is solved. This is the definition that supports the concept that by turning your offering into a ‘prescription drug’, you escape commoditization.
It is the second definition that I wish to highlight here. Too often, sellers make the mistake of looking at the problems their customers face from their own perspective rather than the buyer’s. They assume there is inherent value in their offering and all they have to do is make the prospect see it. This is communicating value, not creating it. They tend to focus on process or product problems. The problem is, buyers have results problems – either results they are failing to get or results they want to improve upon. They could care less about about having a better process or product. When the focus of a conversation with a prospect is strictly about communicating the value of a process or product, commoditization occurs. But when the conversation focuses on the results can be achieved once the process or product problem is solved, that’s when you begin to become valuable in a client’s eyes.
Companies big (such as IBM, GE, Honeywell) and small (Staffing Advisors, TPO, Capital Relocation Services) have realized that they merely delivering an excellent offering does not create value. These companies have discovered that they only create real value when their clients get results!
Remember, your offering is a commodity. It is the results your offering creates that differentiates you. It is your wisdom (your ability to apply the knowledge you have acquired to enable clients to achieve results) that makes people sit up and take notice.
So, stop focusing on your products and start focusing on applying your wisdom to a client’s problems.
What American Airlines Can Teach Us
The airline industry is one of the most commoditized industries in the world. From a marketing perspective, the airlines’ biggest challenge is that they are virtually unable to create demand.
This article by George Will highlights a challenge we should all be aware of and it is worth reading (while it does not deal with commoditzation directly).
Here’s what I found most interesting. Gerard Arpy, American Airlines’ CEO, says, two considerations determine the choices of most air travelers — schedule and price. The Internet has simplified comparing prices over every route, and, he says, a price difference of even $3 will drive people elsewhere, “no matter how strong your brand, or how good your product.”
If you fail to create value IN EVERYTHING YOU DO, the distance between you and an airline is shrinking.
Do You Know What Keeps Your Customers Up At Night?
How much time do you spend within your company talking about what the world looks through your customer’s eyes? Do you spend more time talking about the products or services you peddle than you do trying to discover what your customers worry about? And by worry, I don’t mean what they complain about. I mean what they worry about most. What wakes them up in the middle of the night? Remember, most of the things your customers truly worry about have little to nothing [to do with your offering]. Your job is to connect what you have to offer – legitimately — to what it is that your prospects are actually worried about. This is value creation.
I have written (here, here here, and here) many times about how difficult it is to get people’s attention. I believe it is the single biggest challenge facing every sales force today. How can we create value for people who will not even listen to what we have to say? How do you get a prospect’s attention?value
I’ve ranted in the past against ‘solution selling.’ It’s important to remember that your ‘solution’ is a commodity. There are more choices and alternatives out there than a buyer can handle that will ‘solve’ whatever the problem your offering claims to solve. The sad reality is that the vast majority of ‘solutions’ have far more to do with the seller’s world then the buyer’s.
Frankly, buyers are tired of listening to sellers babble about their solutions anyway. As more and more messages claim great benefits (that never seem to appear), buyers have shut down. ‘Thank you,’ they say to themselves, ‘I’ll figure out what I need without you.’ There are companies, however, that realized that this is not the life most buyers want. It’s just that most buyers feel as though they have no choice.
If, instead of bantering about what it is that you do, you demonstrate you understand what it is your clients worry about, you”ll get their attention and demonstrate your abilities – all at the same time.
Don’t Interrupt – It’s Not Polite
I am a raving fan of a coaching company that I have been a client of for more than eight years. I’ve referred a significant amount of business to them; and I’ve been a reference for many more.
Over the past year, this company has undergone some strategic planning that has focused on increasing their complementary offerings. I know this, not because I am the consultant, but because the frequency with which I’ve been ‘marketed at’ has increased significantly. Phone calls, e-mails, direct mail, even faxes. All offering more stuff for me to buy; or to refer to others.
Today, I got a phone call and an e-mail ‘letting me know’ about some of their upcoming programs. I hate to say this, but it felt a bit like the ‘courtesy calls’ I get from my credit card company.
I’m all for this company increasing its business. I’m happy to help in whatever way I can – BUT DON’T INTERRUPT ME! It’s gotten out of hand, and frankly it is making me less of a fan.
This is a company that I engage with several times a year. There are plenty of opportunities to make me aware of their offerings, ask me for my help, and for referrals. This company has no need to resort to such traditional interruption-oriented methods.
This approach requires more nuance than the traditional approach does. It’s not as easy to track as a campaign that focuses on the number of calls, or e-mails, sent on a particular offering. These traditional approaches rely on myths.
This company is not alone. I’ve noticed an increase in the interruption marketing techniques from organizations that I buy from. It’s a dangerous strategy for a company. Why? The danger is that if you implement interruption marketing tactics to a happy client base, you’ll see immediate results. You’ll think it’s working. However, that success will be at the expense of the ‘trust-equity’ that you have built. Not a worthy trade.
What should you do? The same thing you should do with prospects – always make sure your marketing communication creates value. This does not mean that you should not market to you existing client base – you should. They are your best market. You should just do it with respect.
Solutions, Solutions Everywhere – But No Value To Be Found
I seem to be ranting a lot lately about words and phrases that drive me crazy. Forgive me, but I’m about to add ‘solutions’ to the list. Everybody is out there talking about their “solutions.” The problem is that most of them have no idea what the “problem” is that their solution is supposed to solve.
Let me explain something that is very basic – if there is not a problem, there can be no solution. Period. No questions or discussion. I’d like to request that all salespeople and marketers stop talking to me about how wonderful their solution is. When they talk to me this way, all they do is demonstrate that they clearly have absolutely no understanding of the problems that matter most to me.
Let’s just say, for the moment, that you sell printing ‘solutions.’ Further, let’s say that I am a prospect for your printing ‘solution.’ Let’s go out on a limb and say that I own a business development consulting company and that I both advise clients on marketing implementation and do my own marketing implementation. As a leading provider of printing ‘solutions’, you want my printing business.
Let’s be clear, no matter how bad my current situation may be – I do not (repeat, do not) have a printing problem. No matter how expensive my current printing is or how bad and ugly the current printing may be – I still do not have a printing problem.
I may have a client satisfaction problem. I may have a cost (and, therefore, a gross margin) problem. I may have a time problem or a resource allocation problem. I may have a client acquisition or growth problem. I remind you that I do not have a printing problem. Now, I may talk about my printing as a problem. I may be excited and interested to discuss my dissatisfaction with my current printing ‘solution.’ I may even buy printing from you. However, if you don’t identify, diagnose and discuss my actual (underlying) problem then you are not providing a solution, you are providing a commodity. Don’t confuse the two.
If you go to market with a solution, you better be trained and prepared to demonstrate your understanding of your client’s real problem first. I encourage you to read this about how to begin to make the transition from selling solutions to actually creating value by making client problems go away.
Another Buzzword to Kill
I would like to nominate another buzzword (or sentence to be more specific) for elimination. Here it is:
“We’d really like to do business with you.” (and all it’s variations)
What does that sentence mean? For those who use this, do you think prospects believe it? What else would you say? Besides, why would I care whether you want to do business with me? The question is: do you offer me something compelling that makes me want to do business with you? Value, like beauty, is in the eye of the beholder.
Further, the statement creates absolutely no value and, therefore, extracts value. It’s a time waster, and, worse, it tells you prospects that you don’t actually have anything compelling to say – if you did, you wouldn’t be filling air with such trivial comments.
Let’s stop using words to demonstrate our desire to do business with prospects and, instead, let’s start delivering compelling promises.
Why “Value-Added” Is No Longer Valuable
I propose terminating a popular buzzword – “value added.” Why? Because if you have to say something is ‘value added’, then it probably isn’t adding value at all. “Value” is a lot like “virtue”, and if you have to tell someone you have it, your credibility is already in question. Value is a “show-me,” not a “tell-me.”
What is “value added” anyway? It’s hype. The term is another poor remnant of the industrial age. It’s symptomatic of an offering-oriented salesmanship. It’s a seller’s term.
Think about yourself for a moment. When someone solves a problem for you, is that “value-added” or is it just “valuable”? As I’ve written before value is binary. You either create value, or you extract it. When you understand this, there is no such thing as adding value.
There are two types of value perception- fundamental and total value. In both cases, a buyer is looking to solve a problem. They don’t care whether you are ‘adding value’ or not. They only care about solving their problem. Personally, when someone talks to me about how they add value, my trust level goes down.
Let’s stop using buzzwords and jargon when we have conversations with our clients. Build your offering to solve your client’s problem and let them determine if it’s valuable or not.
When is Free Too Expensive?
A new daily newspaper made its introduction to my neighborhood recently. It’s delivered to my door, it’s free, and I want it to stop. Yesterday, driving into my community, I realized I was not alone. All the other notices had been removed from our community bulletin board to make room for a large posting informing everyone how to have delivery of this paper (to which no one subscribed) stopped. Needless to say, I’ve made the call (though I still need to see how long it will take to get results).
This got me thinking, this ‘free’ daily has become awfully expensive for the members of my community considering all the time and energy they have had to put into dealing with it. As I’ve often written, if you fail to create value, you destroy it. This ‘free’ paper solved no problem for me. But, it has created a problem –our paper recycling storage cans fill up twice as fast as before.
I did not lack information, news or opinion. The new paper has done nothing to position itself as anything that I should pay attention to. Probably the most despicable thing is that the people who publish this newcomer failed to ask for my permission before invading my lawn. Now, I have to spend valuable time to get this unwelcome publication out of my life.
Businesses do this all the time. They fail to determine whether or not they are creating value when they create an encounter with their clients and prospects. In the effort to market themselves, companies increase the costs in time or energy to the very same people they say they are trying to help. Next time you do something with or for your prospects/clients, ask yourself if you are truly creating value – or are you just creating more trash for them to deal with?
How to Structure a Powerful Presentation
When you go-to-market, you must be able to make a compelling presentation to your selected audience. I’d like to share with you the format that I’ve found works for virtually any type of presentation. Before I give you the structure, let me explain some basic rules for any type of business conversation.
1. The conversation/presentation must create value. For more, click here, here, here, here and here.
2. If you want to persuade people, you must first be able to keep their attention – so make sure what you say is compelling.
3. Never, never, never start your presentation with the traditional, “Let me tell you about us,” introduction. There’s nothing else you can do that will make a highly qualified audience tune-out faster.
Now the structure:
Vision – Start your presentation with the ideal vision your audience desires. This will demonstrate that you understand what they are trying to accomplish.
Challenges & Obstacles – You’ve demonstrated that you understand what they want, now it’s time to demonstrate that you understand all the things your audience is dealing with. Lay out as many challenges and obstacles as you wish – just make sure they are genuine. There is nothing that will undermine your credibility faster that making up issues. I know that I’m delivering a good presentation when half of the audience is ready to give up because the challenges I’ve described appear to be too great. What, they think, is the point of even trying?
At this point, you should have your audience’s attention and they will be invested in your presentation. You’ve demonstrated clearly that you understand their situation as well as, or better than, they do. When you’ve accomplished this, you have earned the right to demonstrate how you can solve their problem.
What we do to overcome the challenges and obstacles – Now it’s your turn to talk about how you solve the problem. Here is where you present your solution. At this point you are only communicating your promise, or value proposition. It should be clear, concise and to the point. The next part is where you can expand.
How we do it – Present your process. Why are you the people who can solve the problem? What makes you so special? If you feel the need to present your credentials, this is the time for resumes, client lists, or case studies. (though much of this isn’t necessary). In Part 3 you make a big promise. This is where you tell the audience “how.”
Call to Action – Tell the audience, clearly, what you want them to do. I’ve seen great presentations completely fall apart because the speaker left it to the audience to assume what they were supposed to do. Do you want me to buy something? Tell me to. Do you want me to set an appointment? Schedule a demo? Give you more referrals? Tell me.
That’s it. Five parts to a powerful presentation.
Let me know what you think.
How to Kill Lead Generation In One Easy Step
I have been flooded recently with an extraordinary amount of sales literature, phone calls and e-mails that simply boggle my mind. I’ve said this before and, it appears, I’ll be saying this for sometime:
If you are not creating value, you are extracting value.
It doesn’t matter if you are a salesperson or an executive. Whether you are communicating with a prospect or a client. When you initiate communication that doesn’t mean anything, you add to the cost of doing business with you. You make it less desirable to do business with you.
Companies like Sandler Sales Systems and ‘trainers’ like Tom Hopkins, Zig Ziglar and Brian Tracy tell their followers to find any excuse to send something to a prospect or client. Repetition, they say, is the key to getting attention. They’ll use industrial-age statistics that say it takes at least six exposures (or more) before someone notices you. The key, they say, is to get those contacts as fast as you can.
These meaningless contacts are just another example of industrial-age strategies killing the go-to-market efforts of businesses today. Let me share with you two unsolicited e-mails I received in the last 10 days. I will be deleting the names of the sender and their companies to protect the guilty. In just so happens that both examples relate to advertising.
The first is from a major weekly business publication in my area:
My name is [name withheld], Technology Ad Rep with the [company withheld]. When I read about the Imagine Companies online I thought that it would be a good fit in our paper. Attached is a media kit which outlines our readership. Our paid circulation allows us to audit our readers every year to pass along valuable info to our readers.
The [company withheld] is the only source of late-breaking local business new covering all industries in Maryland. We have a paid readership which ensures that our ads are seen, and a committed readership made up of business professionals.
Our readers are aggressive readers who use the [withheld] every week to improve their business.
We have a new promotion for Technology advertisers which allows you to appear in the paper frequently at a discounted rate.
I would be happy to discuss this option with you in more detail.
This e-mail attempts to demonstrate the special approach the sender has taken by researching my company. However, the e-mail was sent to ‘info@imaginellc.com’. It took away any credibility. More importantly, Imagine is not a technology company. All the e-mail has done here is demonstrate that the sender knows nothing about my company.
“What’s the big deal?” you may ask. “It’s just an e-mail.” So what did the sender lose? Two things. First, had I been a technology company, there is absolutely nothing in the e-mail that is compelling. The sender has further commoditized himself and his company – offering a discount before a conversation even began. Second, the sender has cost himself an opportunity. By wasting time sending meaningless e-mails, this salesperson is able to rationalize to himself (and his managers) that he is ‘prospecting,’ But he is missing the opportunity to make a valuable contact with someone. I manage sales teams for several companies and the first sign I see that indicates there is a clear value creation problem is when I see useless e-mails being sent out in lieu of the salesperson getting out there and meeting people.
My bet is that this salesperson will not be with the company very long (the turnover in media sales is pretty substantial), and the sender has only succeeded in making the job of getting the attention of the proper prospect more difficult for the next person.
A week later, I received this e-mail:
Doug –
I am the Anne Arundel County representative for [company withheld], and recently heard about your business. I was told that I needed to come out and talk to you. I would love the opportunity to share with you information about Baltimore and Washington’s most comprehensive business publication. Looking forward to meeting you.
Have a great weekend.
Regards,
This e-mail has the daily double: communicating no value whatsoever and using deceit. “I was told I needed to come out and talk to you.” Nice. It leaves the impression that someone has referred them to me, without actually lying. In my opinion, however, it’s a lie anyway. Further, what in this e-mail gives me the slightest reason to want to to talk with this person? Here’s the point. Is there a compelling reason for me (or any client or potential client) to meet you or read what you are sending? If there isn’t, save us both the trouble and don’t communicate. If there is a compelling reason – tell me clearly. Don’t beat around the bush, don’t deceive me and don’t insult me . Lay it out. If it’s truly compelling, I’ll respond.
It’s up to you. Do you believe in your offering or not?
Align Your Go-To-Market Model with Your Client’s Value Segment
A theme throughout everything that I write is the need to create value in every aspect of a company’s go-to-market strategy. Several comments that I’ve received to previous posts have made me realize I need to explain more what I mean when I say value. This is a brief version of an article I’ve written before.
People define value in many ways. One of the best ways companies can differentiate themselves is to hone in on the unique value definitions each customer has. However, before you can hone in on a unique value definition effectively, you must understand that there are two value-segments into which your customers fall: fundamental value and total value. Fundamental value focuses exclusively on the product/service itself. Total value focuses on the product/service and potential areas of value beyond the product/service.
A fundamental-value customer would not be interested in the wisdom a salesperson, advisor, or company has developed. Fundamental-value buyers are only interested in the product or service; there is no additional value that can be offered to them. Moreover, fundamental-value buyers often feel they are qualified to discern the differences between options and to understand the implications of their decisions. They are not necessarily qualified to make those decisions, but that does not matter.
Total-value customers are different. They may be open to a company’s wisdom or insights. They may want to hear how they can apply solutions in a different manner. In addition to the value that lies within the product or service, total-value customers are interested in value-added offerings.
You must structure your sales effort so that it matches your customer’s value segment. In other words, you must align your sales model with your customer’s definition of value. When selling to fundamental-value customers, your focus should be on reducing the costs associated with buying. As I said, the maximum value you can provide to this customer is limited to the value that lies within the product or service. The only way to improve the cost/reward equation is to reduce the total cost of purchasing. This does not mean that you need to sell your product at the lowest price. It does mean you need to pay extra special attention to all the costs associated with purchases: hard and soft, direct and indirect. This can impact your sales process by reducing the interaction between salespeople and customers. Sometimes, it may mean eliminating your sales force altogether. Dell is perhaps the greatest practitioner of this concept in manufacturing. Travelocity applies this principle well in the services sector through their sale of airline tickets and vacations.
When dealing with total-value customers the focus should be on maximizing the reward, as well as controlling costs. With these customers you’ll want to focus on a value-added process; you can increase value independent of the product, enabling you to work on both the reward and cost side of the value equation.
No matter how hard you work or how much money you spend on marketing, a misaligned sales model will not work. When a sales organization emerges applies a sales model that does not align with the customer’s value segment failure awaits.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
