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MarketingWork$
Integrate
Risk Lowering Strategies
People, on average, don't want the lowest price.
You can verify this fact by noticing that not everyone drives
a Ford Festiva or a Hyundai. Did you know that in a given
supermarket, Coke and Pepsi combined outsell the store brand
cola by a margin of about 12 to 1? And unlike cars, there
just isn't that much difference between Coke and Big K Cola.
People don't want low price...they want low risk. Let me tell
you what I mean. Let's say you're taking a road trip and you
want to eat lunch. You come to an exit in the middle of nowhere
with a Bob's Burger Barn on the right side and a McDonald's
on the left side. Where do you go? You drive back over to
the other side of the freeway to get to the McDonald's. Why?
Because even if you don't like McDonald's, at least you know
what to expect. It's very low risk.
What about store brand soft drinks? They might be really good!
They could be terrible! I don't know! Who cares, it's only
85 cents more to get the national brand. And I know I like
the national brand. Who knows what the off-brand tastes like...and
besides, what if my friends laugh at me? Come on, what's this
Hy-Top Lemon Lime Soda? Where's the Sprite? Sprite! What a
bargain at only 85 cents more. Let me let you in on a little
secret. You're more likely to be the Bob's Burger Barn of
your industry than the McDonald's. Now, don't take that as
an insult. You might actually be much better - that is, have
a better inside reality - than the McDonald's in your industry,
but here's the point...the customer doesn't know. It's a high-risk
situation for him to try you out. And for all of you out there
reading this and thinking, "Hey Rich, you got this one
wrong, we are the recognized leader in our industry. We are
the McDonald's." All I have to say! is "Apparently
not. If so, then do you already have all the business you
want or is there more to be had?" There's always somebody
out there who thinks that one of your competitors is better
than you are - and it could be any of the three types of competitors:
direct, indirect, inertia. What's interesting is most businesses,
just like Bob's Burger Barn, figure that they ought to get
their fair share of business just by sticking their sign up
on the road with the combo meal specials on the marquee.
Not
too long ago, I was in the market for a new phone system for
the corporate office. I did my research and found a company
that sold a product I felt comfortable with - and even though
it cost what seemed to be a lot of money for a phone system,
it was still within our budget. If you've ever bought a sophisticated
business phone system, you know it's not something you just
order out of a catalog. There's a fair amount of planning
that goes into getting everything squared away and ready to
install.
I
went through this process of negotiating, evaluating, planning...and
finally had just about all the details worked out and was
ready to go ahead with the purchase. Right at that point,
I had a guy with another company call me and ask me if he
could give me a quote on a phone system. One of our account
reps had helped this guy with some advertising and when he
found out we were buying a phone system, he insisted that
we should at least let him give us a bid. Hey, he'd spent
money with us so we ought to give him a shot, right? I'd never
met the guy, but agreed to let him stop by and introduce himself.
When he got to my office, I was shocked. I thought I had the
missing identical twin of Rodney Dangerfield standing in front
of me. He had the same goofy look on his face as Rodney, plus
the wide collar Hawaiian shirt and gold chain necklace to
complete the look. He looked like he was late for a gig in
a sleazy lounge in Vegas. I thought, "Wow, this guy sells
phone systems?" ! He told me that he appreciated the
chance to bid on the phone system and that if he couldn't
beat the other company's price by at least 30%, I shouldn't
even consider doing business with him. Out of politeness,
I consented to his faxing me a proposal the next day. The
next day he faxed a quote for a different brand and sure enough,
it was about 30% less than the original vendor's. So who do
you think I ended up buying the phone from? The Rodney Dangerfield
look-alike? Not on your life. I went with the original system
that cost 30% more - or in this case, several thousands more.
Why?
The risk was too high. Don't you wonder about a system that's
30% less expensive than what everyone else is selling? Wouldn't
that make you a little nervous? Do you really want something
as critical as your business telephone system to be supplied
by some weirdo selling off-brand stuff? Of course not.
Now,
I'm not saying you are a weirdo selling off-brand stuff. I'm
telling you this story to make a point about people's aversion
to risk. But realize this...because of the confidence gap,
any time a customer does business with you - particularly
for the first time - there is a certain amount of risk involved.
In your business and in your advertising, the best way to
lower the risk...is to lower the risk.
We
worked with a client one time that sold a non-insurance health
benefit card that would allow a person to receive substantial
discounts on dental, vision, and prescription services. You're
probably familiar with this type of product. They sold the
card for something like $13 a month or $150 for the year.
And hardly anyone bought it. The sales agents complained and
complained about how nobody wanted to buy this lousy card.
Their advertisements got almost no response. Well, that lousy
card was actually a really good deal if people would use it.
They could save $300 to $800 a year depending on their use.
But think about it...how excited would you be to listen to
some guy try to sell you some lousy health benefit card for
15 minutes? Well, we tried and tried and tried to convince
them to give the card away so that it could be used FREE for
30 days...from the first time it was used. There's no way
a guy could save less than $25 or $30 when he used it and
he could ev! en potentially save over a hundred dollars on
the very first use. Either way, he'd more than pay for the
card for at least a couple of months if he'd just use the
FREE trial. They resisted and came up with all the reasons
why financially it wouldn't work and they couldn't do it.
People
who can solve problems get paid really well. And people who
recite over and over all the reasons why things won't work
are generally broke. Shortly after that company quit the business,
I saw that one of their competitors was indeed giving away
the card free for a month, so I called them and snooped around
a little and found out they were selling tens of thousands
of new cards a month. It was low risk.
Consider
the process someone goes through when hiring us as consultants
to improve their marketing results. We know paying thousands
of dollars and spending months of time and energy on your
business is an extremely high-risk proposition. We would never
just walk into someone's office and say "hire us, we're
good." Instead, we lower the risk substantially. In our
initial mailers and advertisements, we only ask a prospect
to make one commitment: Request a free audio program. They
don't even necessarily have to call in and talk to a person.
They can just e-mail or fax a request. When they listen to
the CDs, we then ask them to make another relatively low risk
commitment - assuming they liked what they heard on the free
programs - attend a one day seminar. And at the seminar, we
go through hundreds of examples of marketing to let a prospect
see that we really do know what we're talking about. At that
point, hopefully, a prospect has enough information to draw
the conclusion ! that hiring us would be a smart move. But
it all starts with a low risk offer to request a free audio
program.
So
now, let's evaluate your situation: First, put yourself in
your prospect's shoes - a prospect who's never even heard
of you - and take a quick look at your advertisements. What
is the risk in calling you? What's the risk in doing business
with you? Are they afraid that if you find out their name
and phone number you'll send salesmen calling all the time?
What can you do to lower the risk? Is there some way you can
get the prospect to experience your product or service before
he has to commit to buy? Can you guarantee or give a warranty
for the work? Can you guarantee it for even longer than you
do now? Is there more information you can give him ahead of
time to help him make an intelligent decision? Can you give
him guidelines as to what to look out for when buying in your
industry...regardless of whether he buys from you or not?
Can you lead him to a website? The point is this: lowering
the risk factor is an absolute MUST if you want to en! gender
confidence with your prospects. And if you can solve the risk
factor, you'll get paid really well for it.
This Newsletter was brought to you by...
MarketingWork$
(407)895-4390
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WHAT
CAN WE DO FOR YOUR BUSINESS? To find out more about our 4
hour seminars or 12 hour MasterMind workshops, call 407-895-4390.
To
receive our audio cd, Monopolize Your Marketplace, please
call 407-895-4390 or email your name and business information
to: jkowatch@y2marketing.com.
Judy
Kowatch
15 N Lawsona Blvd
Orlando, Fl 32801
407-895-4390
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