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!

Simplicity Is The New Sophistication - Part 1

Have you ever walked down the street in New York City? It is breathtaking. Thousands of people walk along the widewalks, dressed and looking so differently and even speaking different languages. The wide boulevards are crammed with buses and taxi cabs. The air smells of exhaust, grime, food and perfume from passersby. All around you tall buildings touch the sky. Giant billboards displaying expensive watches and attractive models vie for your attention. Near Times Square, they mesmerize with blinking lights and glowing digital screens. It's Broadway, Wall Street, Greenwich Village, Chinatown, Little Italy! New York envelopes and draws you into its bigger-than-life. Nothing else is quite like it.

New York is also a metaphor for modern life. It is big, bold, complex, everywhere and overwhelming. You can't escape it - not for long - and it forces your total engagement.

In a New York City world, what kind of advertising stands out and captures people's attention? Is it the audacious, flashy, in-your-face billboards of Times Square, ever trying to outdo what came before? Perhaps. Many people think so and much marketing rolls down that noisy path. But let me ask you this: In an overstimulated and overwhelmed society, do people want more of the same? Or do they really crave the exact opposite of the New York City world? Something that settles and pulls them back into balance.

You can make a strong case for the latter - for advertising that is simple instead of complex and soothing instead of overbearing. Here is another way to put it: Simplicity is the new sophistication and serenity is the new excitement. If your products and marketing reflect these values, they will be different and stand out, and people will be drawn to them, like bees to honey, because they offer a welcome respite from the New York City world!

To Make a Point, Tell a Story

Think of one or two presentations you recently heard. What do you remember about them? Here are some things you probably do not remember: lists of bulleted items, flashy slides or catchphrases like "seamless" and "paradigm shift". Assuming you were awake, what you probably remember is a story. Maybe the presenter shared a personal experience or an interesting customer anecdote. Somehow that embedded in your mind and became what you took away.

Isn't it funny that the ways we are "supposed" to present (i.e. slides, bullets) no longer have the intended impact. Perhaps these tools have become cliche - worn out from overuse. But a good story never becomes cliche. People relate to stories. They connect with our life experiences.

So if you want to make a point, tell a story.

The 80/20 Rule Applies to Marketing

I am a big fan of efficiency. Not all the time, mind you. If I am hiking in the Sawtooth Mountains or having a drink with friends, I just want to enjoy the moment. But when it comes to solving a business problem, I want achieve it with as little time, effort and expense as possible. Life is too short to do otherwise.

That is why I like the 80/20 rule. Also known as the Pareto principle, this rule of thumb states that 80% of the outcome is due to 20% of the causes. It is one of those statistical patterns that generally holds true in life, whether you're talking about science, business, athletics or anything else. For instance, I bet 80% of your business revenue comes from 20% of your customers, plus or minus a few percent. Take a look - you'll see!

The 80/20 rule also means that a precious few marketing activities can have a major impact on your sales growth. You don't have to do everything, nor should you. Better to focus on those precious few - those 20% activities - that will yield the best return on your marketing investment. That is the most efficient solution to the challenge of marketing and business growth.

The question is - what are the precious few marketing activities for your business?

Drive Your Message Home

As depicted in this graphic, you can use the four vehicles of influence to drive your message home. By "home", I mean to your target audience. If you have a business, this might be a market segment or set of potential customers. It could be a community or organization if you are an advocate for a cause. It could be the whole country if you are running for president. Or it could be your spouse or a friend if you just want to change their mind about something. In other words, this is about influencing the world.

The previous two posts (here and here) described the four vehicles of influence: (1) experiences, (2) relationships, (3) stories and art and (4) facts and reason. All of them affect people's perceptions and behavior. When used effectively together, they are a powerful force indeed:

1. Fire on all cylinders - Engage all four vehicles in communicating your message. For instance, if you have the exclusive authorized Volkswagen auto repair shop for a city, you might include pictures of happy Jettas and Beetles in your ads (3), say how your services are trustworthy because of your authorized status (4), provide great services (1) and spend a few minutes getting to know your clients and talking "shop" when they visit (2). Now that is firing on all four cylinders!
   
   
2. Align message with vehicles - All four vehicles of influence should communicate the same message consistently. For instance, if a bakery advertises that it sells only moist, chewy bread baked fresh daily, but some loaves on the shelf are obviously old and stale, then the facts claimed (4) do not match the customer's experience (1). It would be better not to make the "baked-fresh" claim or not to sell day-old bread.
   
   
3. Take a balanced approach - If you are strong with some vehicles but less so with others, try to build up the weaker link. In looking at my own business, I think there are good marketing and educational materials (3 & 4), but I need to spend more time networking and getting to know people in the community (2). So I am focusing there.
   
   
4. Repeat - Communication is not a one-time event but a continuous process. It takes a steady flow of communication for people to "get" your message, accept it and remember it. So continue to engage all four vehicles. This is like an engine that fires on all four cylinders - again and again and again - propelling a car forward.
   

With these tactics in hand, you are ready to influence people and drive your message home!

EXPERIENCES Also Influence People

In the previous post, I discussed three modes and means of influencing people. The idea was to pinpoint the basic vehicles of influence. Well, I missed one: EXPERIENCE. Life experiences, especially very positive or negative ones, influence our perceptions and behavior greatly.

When I was about 8 years old, a sample bottle of Pert shampoo appeared in the mailbox. It was green and gooey and claimed to have shampoo and conditioner in one. I tried it (why not?) and liked it. It was better than whatever I was using at the time. So I continued to use Pert shampoo for the next 10 or 15 years - not because of what I read or heard about it, but because of the experience of the free sample. It left an impression and influenced my behavior.

So now we have a total of four modes and means of influencing people:

1) Experience
2) Relationships
3) Stories and art
4) Facts and reason

In the next post, I'll make practical suggestions about applying the four modes and means.