The Precious Few

I once sat down with an energetic, younger chiropractor who was anxious to grow his practice. I asked how he brought in clients, and he showed me an impressive list of about 20 marketing activities. Even better, he tracked the exact percentage of client visits that came from each source. He knew what percentage came from referrals, print ads, radio ads and so forth. This was a businessman who took his marketing seriously.

As you might expect, more than 80% of his office visits came from the top 3 or 4 sources, which included repeat visits from existing clients, client referrals and the office sign that was posted on a busy boulevard. He asked for my impression of his overall marketing effort. I suggested the smartest thing he could do is focus. If radio ads brought in only 0.8% of client visits, why bother? Spend that money instead on one of the top 4 activities that clearly are working and bringing in many clients. For instance, institute a referral program to encourage more of it. Call on clients that have not visited in a while and find out why. In other words, focus your resources on the precious few activities that yield the best return on investment.

By the doubtful expression on his face, I don't think he liked the idea for fear of losing potential clients from the other sources. But a better question might have been how many clients was he losing by not focusing on the most profitable activities? By way of analogy, if a person could put money in a bank account that yielded 5% interest or another with 20%, which is better?

In a previous post, I wrote about focusing on the precious few (a.k.a. the 80/20 rule or Pareto principle). This idea applies to marketing, yes, but also to business and life in general. What a relief that we don't have do to everything! Life is already busy and complicated. It is enough to focus on the precious few things that really make the difference.

To a Bright and Great 2008

'Tis the season when winter's coolness fully arrives, the days are short and everyone looks to the holidays for a little warmth and cheer. It is also the time when we look back wistfully at the passing of another year. Wow, there it is and there it went! The changing of the calendar year feels significant, like a bell tower that rings out the grander cadence of life.

But this is also the time to look forward to the year ahead. Some like to make plans and New Year's resolutions. More power to them! Others like myself just want to put on sunglasses as we face forward, because it's going to be a bright 2008. Have a truly great new year!

Marketing on the Razor's Edge

While at the grocery store, I tried to find a general-purpose toothpaste, a box that said something like "Regular Mint Toothpaste." But there was nothing like that on the shelf. All the toothpastes were specialized! Each had a label proclaiming some unique benefit:

• Extra Whitening
• Luminous
• Breath Strips
• Tartar Control
• Anti Cavity
• Pro Health
• Sensitive

The Crest brand alone had umpteen different varieties. Then it occurred to me that the toothpaste manufacturers understand an important marketing concept:

The more focused and specific a value proposition, the better chance of selling.

By offering a variety of specialized formulations, the manufacturers sell more product in the end. While all customers want to brush their teeth, some also think, "I wish my teeth were whiter," or, "My breath could be fresher." They get hooked by these special formulations, and the sales add up. Now it appears the manufacturers don't even bother to offer a general-purpose toothpaste. It might require more work and cost to market so many varieties, but the strategy works.

I find the temptation is to think, "I want a catch-all product and message because I don't want to miss any customers." But actually the reverse is true: You will miss customers if your value proposition is not specific enough. It is not possible to be all things to all people, and the modern marketplace rewards specialization.

In short, meeting a specific need through a focused product and message is always an easier sell. Call it marketing on the razor's edge. Or in this case, the toothpaste's bottle.

P.S. Tip of the hat to Lance Teel at S1 for raising this issue with me recently.

Simplicity Is The New Sophistication - Part 2

As an illustration of simplicity, visit the web sites of Yahoo and Google. Both are Internet search engines with additional services like news, maps and e-mail. Their revenue comes from selling advertising for the millions of eyeballs attracted to their web sites. However, the look and feel of their home pages are very different:

• Yahoo has 3 advertisements, about 80 links and numerous graphics.
• Google has no advertisements, 17 tersely-labeled links and no graphics except their logo. It is mostly white space.

Which search engine is easier to understand and use? I think most people would say Google. Which attracts more Internet traffic? Google, many times over. If you look at its market cap (the total value of all Google's stock), it is $212 billion or 6 times more than Yahoo. Google is more successful than Yahoo, by any measure. A simple and clean presentation may not be the only reason, but it is clearly working for it.

Another example would be a car or home stereo compared to an Apple iPod. Both are music players. The stereo has a full panel of dials, buttons, knobs and levers, though most people do not bother to learn what all of them do. The iPod, on the other hand, features its trademark round disk with a button in the middle. It has pleasing lines and a minimalist, intuitive interface. The iPod has become a virtual fashion accessory. Here again, simplicity works.

In our modern, complex world, the challenge for all of us is to be simple - in our products, marketing and even way of life. Simplicity does not mean dumbing things down or making them boring. Not at all! You can have simplicity with color, excitement and pizzaz.

Simplicity is distilling ideas to their essence and portraying them in a clear, straightforward manner. It is being easy on the eyes, ears and mind. It is concentrated communication. No noise, clutter and frills. Simplicity is the new sophistication!