If you were awesome once, you can’t help but be awesome again, right?
Dan and Chip Heath (of Made to Stick) say no. In this interesting article, Success Can Make You Stupid, the Heath boys show how many of Hollywood’s movie successes are self-fulfilling prophecies — based on established links of trust between directors, producers, actors, key grips, and theater chains. Their premise is this: People who have worked together and found success once will be more likely do another project with those people, spending more money and marketing more diligently, thus creating the self-fulfilling prophecy of a successful movie. (Without explicitly stating it, they are asserting that if the same amount of money and time and effort were put into other movies, they would be as successful).
It’s an interesting idea, and very accurate and it’s a phenomenon that happens in business, too. Chip and Dan remind us that it happens in HR all the time, where the star performers are TOLD they are star performers (and better enabled) and thus become star performers. But it happens elsewhere, too: Strategic initiatives, new products and services, marketing systems, you name it.
In other words, if you decide some aspect of your business is going to be successful and you invest in it (either investing in it more than other aspects of your business or to the exclusion of other initiatives) it will very likely become successful.
We see it in the stock market, too: A stock that everyone is talking about becomes a stock that everyone buys. And when more and more buyers buy a stock, the stock goes up in price… and people talk about it more and buy it more.
So, how can you use this concept to your benefit? It comes down to deciding to focus on one element of your business as the key opportunity that will make your business more successful. Then focus on it. Spend money on it. Work on it. Build it.
I call myself a “business writer” because it encompasses both copywriting and technical writing. But I have bumped into a lot of people recently who don’t really know what I do: This month, while working with some clients for whom I’m doing copywriting, I was asked what a technical writer was; and, while working with a client for whom I’m doing technical writing, I was asked what a copywriter was. I confess that I’ve spent so long doing both that I was a little taken aback that people hadn’t heard of the other.
So here’s a definition — my definition, maybe not an “official, definitive, industry-approved” definition of what I do every day:
As a copywriter, I develop external content — content for clients that sells their products or services to their customers. I write web copy, press releases, articles, blogs, etc. Copy that sells.
As a technical writer, I develop internal content — content for clients that sells their strategic initiatives to an internal audience. I write instruction and training manuals, knowledge center content, policy and procedure best practices guidelines, etc.
In both cases, it’s content that sells… it just happens to sell to different audiences and possesses different characteristics: Copywriting often relies on sales language to create an emotional connection with the reader and get them to spend money. Technical writing relies on “how-to” (and a little bit of spin) to explain why the reader should do something and then get them to do it.
In spite of the differences, though, there are similarities: Both sell. Both emphasize benefits of “buying into” whatever the document is selling. Both have an audience who is (hopefully) going to act because of what they’ve read.
If you think of it in terms of the sales funnel, copywriting helps to move the customer along the sales funnel to the point of (and beyond) the sale. Meanwhile, technical writing helps staff, vendors, and other partners (“internal stakeholders”) to operate in a way that helps the organization achieve its aim (which is usually related to the sales funnel!).
What does this mean for prospective clients? If you need me to do some writing, you don’t have to differentiate. That’s why I call myself a “business writer”. I write for your business, regardless of whether you know what you need or not. But I do differentiate the copywriting and technical writing for those who know what they are looking for and want to know if I can deliver it.
I read a great article written last year by Adrian Kingsley-Hughes in ZDNet.com called “The Price Factor” that talked about the problem of falling computer prices.
It’s a problem because computer companies risked it all for marketshare to the point where profit margins are razor thin.
And, as Kingsley-Hughes points out, consumers don’t know any better because they don’t understand the relationship between price and value of the computer they bought. He humorously points out how intelligent consumers will buy the cheapest computer possible but expect it to be a supercomputer when they get it out of the box.
THERE’S A DEEPER ISSUE
Computer manufacturers have not done themselves any favors with this low-cost provider mentality. But the real problem, in my opinion, is the price-to-value ratio that customers perceive.
If they buy a $1,000 computer or a $5,000 computer, can they tell the difference? Only the savvier, educated consumer would but most wouldn’t. Maybe down the road the average consumer will discover the difference but early on in the sales funnel they certainly wouldn’t. A computer is a mysterious device to most people and price isn’t clearly linked to value prior to the purchase. It’s not really linked to value until long after the product has been paid for.
And it’s true for other products and services as well: When the value is unclear, customers will measure with price because that’s all they can measure by. The result is likely to be an unhappy customer… no matter what price they paid. (Mabye they found a place to buy it cheaper or because the service isn’t very good, etc.).
However, when value is clear, they can make a more educated purchase decision. But this leads to the next problem: Business owners who understand the importance of highlighting value can end up spending too much time on features and end up commoditizing their product. Their menu of products or services works like a dial: Customers who want to spend less can dial down the service and receive less; customers who want to spend more can dial up the service and receive more.
A perfect example is going on right now in the Smartphone industry. Smartphones are highly commoditized — in hardware features and service features, and the resulting prices. In the midst of this price-war, Apple’s iPhone is happily a higher-end phone that is in such demand there are waiting lists for it.
While most phones are commoditized, Apple has clearly and cleverly established charge-what-it-wants dominance because of the value people associate with the iPhone.
HOW CAN IT BE FIXED?
First, educate your customers so that they know that your prices aren’t arbitrary. Help them to understand that your products and services are priced higher because they have a higher value. Bring clarity to what goes into your products or services. However, be mindful that you don’t commoditize your prices. There is a relationship between price and value but it shouldn’t be a strict apples-to-apples ratio. Avoid pricing your products so that they pay X for a widget and X+1 for a widget with one extra feature.
Next, focus on the value of the benefits (not the value of the features) and make your price an expression of that value.
Then, make sure that you recognize and position the value of the product or service in relation to the price all the way along your sales funnel, not just as a quick obstacle the prospect needs to overcome before they become customers. Think about your price-to-value ratio as an ongoing element throughout your sales funnel — something you highlight in every stage.
Seth Godin in a panel discussion for American Express talks about YouTube… but his insight spreads to other aspects of the web as well. Good thoughts about content development and social media!