Archive for May, 2009
Most painful marketing mistakes — Part 5 "complacency"
May 8th
Success does not breed success. Success breeds lethargy.
The people and companies I admire most are the ones who have had the guts to re-invent themselves IN THE MIDST OF SUCCESS.
About 10 years ago, there was a small Wal-Mart store a couple miles from my home. The parking lot was packed at almost any time of day. I was shocked when they announced they were building a new store five miles away and closing the original store. Of course the new store was a five times larger, with more parking, more services and yes, it was packed any time of day.
Think of this boldness — would you close a store that was wildly successful if you didn’t have to? Wal-Mart has the vision to constantly re-invent itself. It built a new store to put itself out of business! They didn’t have a competitor brash enough to take themselves on so they attacked themselves.
My favorite example of re-invention is Apple and the breathtaking innovation occurring with its iPod and iTunes format. The product was successful, but the real story is how it sustained that success by innovating so furiously that no competitor could keep up.
We can learn some valuable lessons from these examples and apply them to the everyday reality of the small business owner. How are you fighting complacency and the lethargy induced by success? This is the time to take a fine-tooth comb to your business processes and look for re-invention opportunities.
Ten questions toward re-invention
Here are some questions to help you kick-start your re-invention process. If you spend some time on the answers you will certainly develop insights to improve your competitive advantage.
Here are some questions to help you kick-start your re-invention process. If you spend some time on the answers you will certainly develop insights to improve your competitive advantage.
1. How have your customer’s needs changed during this economic downturn and what do you need to do to respond aggressively?
2. What are your industry’s best practices in lean manufacturing, accounting and marketing? How fast can you adopt these practices and create new customer value?
3. If your competitor knew your company’s biggest vulnerabilities, what would it do? What can you do to protect my flanks before this happens?
4. What new technology might disrupt your business model? How do you put it to use before somebody else does?
5. What is the rate of innovation in your marketplace? What would be the implication if you invested and doubled that rate?
6. Have you made any changes to the way you market and advertise to capitalize on cost-effective media channels?
7. Has technology and supply-chain efficiencies opened up new doors in global markets? Is there a new way to work with suppliers that can provide competitive advantage?
8. Do I have the right human skill sets in my company to compete today?
9. How do you measure success? Is it still the right measure?
10. Do you have a handle on which operations are making you the most profits? How has your product mix and profitability changed and how is it likely to change? How can it be re-invigorated?
Though difficult, a leader has no choice but to unseat complacency. You must find a way to move to that better idea or technology, even if it threatens your base business.
Security gone too far
May 8th
Hey Google — Are you kidding me? Am I supposed to be able to read this? Seriously?
Most painful marketing mistakes — Part 4 "No value proposition"
May 7th
Painful marketing blunder number 4: No unique value proposition. The pain factor on this one is VERY HIGH because you’re probably going to spend a boatload of money before you discover that you’re failing.
To illustrate my point, let me take you back, back, back in time to the heyday of Kmart. Here was a company that predated Target and Wal-Mart but lost the retail leadership position it enjoyed because it lacked a clear value proposition.
Kmart pioneered the idea of everyday low prices but could not keep up with Wal-Mart’s dominant global supply chain technology. So it abandoned that idea and tried to sign on designers and celebrities to provide exclusive clothes and home products to compete with Target. This confused its core customers (seniors who wanted to find the latest in polyester) and loyal Target customers wouldn’t be caught dead in a Kmart.
So, it spent a fortune on bigger, newer stores (remember Super Kmart?) that were Target-like but still selling crap that nobody wanted … at prices higher than Wal-Mart.
The company’s last gasp was to leverage the chain’s iconic “blue light specials.” In the 1990s, it created “Mr. Bluelight” (pictured). The company said, “Mr. Bluelight does not just represent a sale or clearance anymore. With Mr. Bluelight, we are making the shopping experience fun. We know there are more people than ever today who see shopping as an escape and a reward, and we are giving them the entertainment and excitement they seek.”
What??? The best thing they had going for them was the blue-light clearance and now they are abandoning it for yet another value proposition: Kmart is FUN and EXCITING? My gentle readers, how’s that for creating a clear value prop for consumers!!
LESSONS LEARNED
So what can we learn from Kmart’s demise? If you’re starting a business, you must conduct upfront research to find your clear points of differentiation – what makes you UNIQUE in the marketplace? Why do customers should buy from you? The prospect’s unmet need your company will satisfy? Once you have that strategy, you need to stick to it with a laser-focus.
So what can we learn from Kmart’s demise? If you’re starting a business, you must conduct upfront research to find your clear points of differentiation – what makes you UNIQUE in the marketplace? Why do customers should buy from you? The prospect’s unmet need your company will satisfy? Once you have that strategy, you need to stick to it with a laser-focus.
If you have an established business, your unique value proposition should be already well-understood – at least your customers understand it or you probably would not be in business! Still, you need to constantly check your strategy, adjust, re-invent yourself and defend your position, like Wal-Mart.
I see many people getting into business who think they can take on existing businesses and simply convince prospects they have a better product or service. They announce to the world, “We might not be first, but we’re going to be better.” That might be true, but if you’re late, and you have to battle well-established competitors, bring a bundle of cash baby! Was Kmart really going to challenge a Wal-Mart that was rolling in cash? Never! A well-managed company is going to defend its marketshare ferociously until you are broke. So, once you have your niche, DOMINATE it.
CAN YOU ‘SPLAIN IT?
Another pitfall is having a great value proposition but not being able to explain it simply. Can you explain what you sell and why you sell it in 30 seconds? Sometimes that can be excruciatingly difficult, especially if it’s a new category or a new technology that requires education. The biggest marketing successes come with simple, but powerful explanations of the product offering.
Here was Wal-Mart’s value proposition: “Everyday low prices. Always.” Compare that to Kmart’s: “Home of the blue light special.” Wal-Mart had a clear point of differentiation and could tell the story in four words, and later ONE word, “Always.”
This economic recession is an excellent time to re-evaluate the relevance of your value proposition. Your customer needs are probably changing. Make sure you are innovating to stay aligned with the new unmet needs that are being created all the time.
The coolest website I have ever seen
May 7th
You will not be sorry you explored this website. This takes creativity and web navigation into a whole new dimension. This site was brought to my attention by B2B marketer and author John Bottom of London. http://www.bio-bak.nl/
Welcome to {grow}
You’re in marketing for one reason: Grow.
Grow your company, reputation, customers, impact, profits. Grow yourself. This is a community that will help. It will stretch your mind, connect you to fascinating people, and provide some fun along the way. I am so glad you’re here.
-Mark SchaeferFollow Mark
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