People want tactics but what they really need are strategies

I’ve made two observations lately and noticed a common thread between these two experiences and other similar observations from my own life and with my clients:

Observation #1
: Recently I was at a conference and the speaker was talking about the importance of building a list. The speaker highlighted some of the high level strategies that one should take when building a list – what the purpose was, how to build a rapport and relationship with your list, and how to make offers to the list. As the session wrapped up and the speaker answered questions, the questions that came in were very tactical and hands-on: “Should I use Aweber or should I use Constant Contact?” “What’s the first thing I should say to my list?” “Do you put 2 links or 3 links in the body of each email?”

The speaker presented strategies but the audience as hungry for tactics.

Observation #2: I was doing some research on niche marketing and watched a video by a guy who was really killing it in one specific niche. He gave a bunch of great information and then at the end he talked about how the information he shared works for many niches, not just the one niche he was in. He went on to say that people would contact him regularly about how challenging it is to work in that niche and what they should do in that niche to do a better job. This footnote of the video turned into a bit of a rant because, rightly so, he wanted to give people help in any niche but everyone was focusing on the one niche he was in and was using his model as a niche-specific tactic rather than a niche-agnostic strategy.

Again, the host of the video presented strategies and then addressed all the listeners who were drawing tactics from his video instead.

This, along with other similar observations, make it apparent to me that people want tactics. They want step-by-step hand-holding as they build their business, and they want guidance that they feel is specific for their unique business.

You hear the same frustration in any of Dan Kennedy’s writing: If you pay attention to Dan Kennedy for very long, you’ll hear him rant about people saying “but my business is different!”. He gives strategies that work for all businesses but his audience mistakes these for tactics that won’t work in their business. Dan rightly makes the assertion that no, it’s not different. Every business is fundamentally the same and the same strategies work across the board. But people feel that their business is so different, so unique, so unlike any other business out there, that only very specific, granular tactics will work.

At conferences, in sales letters, in books, in webinars: I consistently see strategies are presented but tactics preferred. Feedback ranges from “I’ve tried this stuff and it doesn’t work” to “I need more hands-on steps.”

There is value in learning tactics because, theoretically, you apply those tactics and get the same results as the person you’re learning from. This seems easier and more straightforward. Compare this with strategies, which are a little higher level and may require some interpretation for a specific market or industry. In spite of that extra step of work, strategies are better. They are more broadly applicable; they have more “variance”.

Perhaps also at play here is the reality that people don’t want to be told how to do something, they want to be told exactly what to do. They’re looking for step-by-step GPS guidance rather than a map to find their own way.

People want tactics but what they really need are strategies – timeless principles that may or may not be applicable to the one business they’re in (but are probably useful regardless of the business).

So, if you share strategies and/or tactics in your business, what does this mean for your business? It could mean any of the following:

  • Create strategies and stick with them. Educate people on why strategies are the better option.
  • Share strategies and demonstrate how some tactics can be derived from these strategies. Be prepared for people to assume that the tactics you share are the ONLY derivation of the strategies.
  • Share tactics only but make sure that you have a well-defined niche who will benefit from your tactics.
  • Create strategies but make them seem like tactics. (A lot of online educators and gurus do this). It’s very powerful.
  • Giveaway your strategies for free but sell your tactics. (A lot of consultants and coaches do this).

Strategies give us the high level principles that govern how to do something. Tactics are the specific step-by-step instructions that tell us exactly what to do in a very specific situation. Smart business owners understand strategies but deploy tactics.

But when you look at your audience of prospective buyers, chances are: they want tactics but need strategies.

The ShamWow business model

There was an article in BusinessInsider recently about the ShamWow guy (Vince Offer) and his “comeback”. The article describes his rise to fame as the guy who pushes the ShamWow product, the Slap Chop, and the Schticky, and then his subsequent fall because of a run-in with an alleged hooker.

If you can look past the tabloid-headline shock of the article, or the “let’s-see-what-he-can-do” introspection at the end of the article, you’ll find some interesting gold buried in this article… specifically about the ShamWow business model. All these quotes are taken from the article…

THE PRODUCT

I’ve got bad news for you: Vince Offer didn’t invent the ShamWow or the Slap Chop, but he’s also not just shilling for some corporate giant either. Rather, he takes a regular product, makes some improvements to its brand, and then brings a certain style to the presentation…

[quote]Like most infomercial producers, Vince didn’t invent the products he’s known for pitching. He found them by scouring flea markets, trademarked better names, and made funnier ads.[/quote]

THE PRESENTATION

Vince Offer started pushing his products at flea markets, honing his sales craft. Later, he moved to an infomercial format and then later to the well-known (and much loved and parodied) commercial format…

[quote]By 2002, broke, Vince was selling the ShamWow and Slap Chop at flea markets… He bought time from 2 a.m. to 4 a.m. on Comedy Central. It made money, he said, and something clicked. With direct TV marketing, he didn’t have to please the gatekeepers of taste to make a sale.[/quote]

[quote]Because Vince owns his products, he can “push the envelope” more than other pitchmen, delivering “schticky” jokes and sexual innuendos with “cocky confidence,” said Kevin Harrington, chairman of infomercial clearing house As Seen On TV, Inc.

While most demonstrators focus on function, “what he tries to come up with are demos that will make you laugh,” said Harrington.[/quote]

Here are his three big commercials.


(I love the arrest reference at about 1:05!)

BRINGING THE PRODUCT TO MARKET

Vince isn’t just pushing some big corporation’s products and then letting that corporation fill the order. He owns the products. That means he’s also doing all the other legwork involved in creating the product and bringing it to market. As the article tells us…

[quote]Infomercial producers have to find a reliable factory, get them a mold or drawings, and hire a fulfillment facility, a telemarketer to take orders and a media buyer to purchase air time. Then there’s packaging, shipping, returns, customer service, an Internet storefront and more.[/quote]

PROFIT POTENTIAL

Vince doesn’t invent his own products. He takes existing products and rebrands them and adds his unique pitch. He’s honed his pitch for years on the flea market circuit and in infomercials. Not surprisingly, that legwrk has paid off…

[quote]He refused to answer questions about how much money he raked in, but the chamois cloths can be bought wholesale in bundles of three for $.50. Vince sold them in packs of eight for $19.95, plus shipping and handling.[/quote]

Even with overhead…

[quote]A product that sells for $20 usually costs $2 to $3 wholesale. After overhead costs, the hope is to squeeze out a $4 to $5 profit.[/quote]

And then there are other distribution channels…

[quote]A producer can also sell a commercial to a distributor, who then can sell the product to a retailer such as Wal-Mart. The per item profits for the producer are smaller, typically up to a $1 commission, but the volume can be massive. In some rare cases, royalties can add up to the millions.[/quote]

THE BUSINESS MODEL

The business model is simple: Find a useful product and add some flavor — better branding and a more effective presentation.

Even though I describe it as simple, it isn’t easy. You need the right product, the right brand, the right presentation, and then the willingness to do the hard work of putting together the distribution. That’s why there aren’t more Vinces selling more Slap Chops.

However, those things are all out there. Good products are being invented all the time. Smart marketers can develop compelling brands. Sales skills can be honed. Distribution channels exist and just need to be contracted.

Don’t expect me to be pushing a clever household product on a 3AM infomercial any time soon but the business model is sound and very compelling.

Creating demand for your product (video by Jeffrey Gitomer)

I love this video by sales expert Jeffrey Gitomer. It inspires me to rethink how I market and sell in my business and in my clients’ businesses.

In this video, Gitomer references National Cash Register founder John Patterson and talks about what he did to create demand for his product. Check out the short video by Jeffrey Gitomer…

That’s a great B2B example but what about B2C? Well, a B2C example is when cereal manufacturers advertise children’s cereal to children. Obviously the children aren’t going to go out and buy Lucky Charms (or whatever) but they will bug their parents to do it. Different market, similar idea, same outcome.

Here is a framework for creating demand for your product or service in the same way that Patterson created demand for his product:

First, make sure you know who your customers are! Use this list of 55 questions to answer about your customer to help you.

Second, identify your customers’ customers (in the case of B2B sales) or your customers’ influencers (in the case of B2C sales). It might help to use the same 55 questions to answer about your customer but use it for these folks.

Third, identify a point of differentiation that you offer that your customers cannot currently offer to their customers. (In the case of B2B, it was a receipt. In the case of B2C, it is the marshmallowy goodness of red hearts, green clovers, blue diamonds and purple horseshoes delivered into a bowl by a leprechaun).

Fourth, find a way to connect with that second tier of people (your customers’ customers or your customers’ influencers) and motivate them to demand the point of differentiation you offer. John Patterson advertised to remind shoppers to ask for a receipt. He didn’t need to sell anything in this advertisement, he was just offering a valuable service.

Fifth… now wait. Wait for your communication to take effect. Wait for the shoppers to start demanding receipts and the children to start demanding Lucky Charms.

Sixth, connect with your actual customer and offer your product or service. Your selling effort is minimized because your customer has already heard from their customers that they desperately want what you have to sell.

NOW IT’S YOUR TURN…

You’ve heard Gitomer introduce the concept, you’ve read my little 6-step framework to help guide you. Now what can you do in your business to create demand?

The idea of something versus the reality: This HUGE problem is like an anchor on your business (but it’s also an opportunity)

I recently posted on Facebook that I wished I liked pesto as much as I like the idea of pesto. Pesto sauce on pasta sounds so good but I’ve never had a pesto I enjoyed; I always leave the table disappointed, regardless of how skilled the chef was who prepared the meal. But I look at pesto recipes and I order it restaurants anyway.

We all have that feeling about different aspects of our lives: We are caught between the idea of something and the thing itself, and those aren’t always the same. Often, the idea is much rosier than the reality.

This reminds me of a saying I heard once that “people don’t want to write a book, they want to have written a book”. There’s a distinction here between the idea of having written a book and the reality of having to write a book. Any author will tell you that it’s a painful process to write a book and people discover that when they try. (By the way, I tried to find the source of the saying but can’t find it; so if you know, please contact me so I can update this blog post).

Many of my real estate investing clients see this when they mentor aspiring real estate investors. People come to them with a desire to learn how to invest but few actually act on it because they perceive a ton of risk and the challenges of navigating through the unknown is so difficult for them that they fail to act. Once again, people like the idea of being real estate investors but they don’t like the reality of real estate investing.

And among novice equity investors we see something similar: People love the idea of being edge-of-the-seat investors who accept risk and are rewarded handsomely but in reality people hate it and they stick their money under a mattress or in a a low-risk, low-return fund. (But there’s tension between the idea and the reality, which is why sometimes some people choose the crappiest investment imaginable because their neighbor’s friend knows someone who made some money in the stock a few years ago — even if those people are usually risk averse. It’s because the idea of being risk-loving is appealing).

Buyer’s remorse might be a related result: We like the idea of owning something more than the reality of actually owning it, which we only discover after having paid for it.

I suspect we also see it in other areas of our lives: Relationships, home ownership, political and religious positions, hobbies, entertainment.

WHY THE DISPARITY?

We see this disparity between the idea of something and the much less enjoyable reality. But why does it happen, and why does it happen so consistently in so many areas of our lives?

I’m just guessing, of course, but I believe we can draw a clue from two of the examples I gave above — the example of writing a book and the example of being a real estate investor.

In both cases, the result (from which we draw our rose-colored ideal) is rewarding. With a book, the end result is that you have “proof” that you are an authority on a topic and it’s packaged into a coherent, nice-looking book worthy of becoming a New York Times bestseller; it’s something you can point to as an enviable accomplishment. With a real estate deal, the end result is that you have an asset that is generating regular monthly rental income while you sit back and light cigars with $100 bills.

But in both cases, the way to get there (from which we realize the harsh reality of the situation) is much more difficult. A book takes a lot of time and effort — time and effort that needs to come from somewhere else in our already-packed schedules — and you’ll be surprised at how hard it is to write 100,000 words on a topic and maintain coherence all the way through. With a real estate deal, the way to get there seems complicated with steps that require financial investment and a bit of sales ability and TON of rejection.

In all cases, the idea is an attractive end-result while the reality is a lot of hard work (or financial expense or time required) to get there.

So people avoid the work or they work around it or try to do half-assed solutions that minimize the work (unfortunately, this can often lead to even less satisfying results).

HOW THIS IS AN OPPORTUNITY FOR YOUR BUSINESS

You can build off of this idea-versus-reality disparity to grow your business in the following ways:

  • Identify the ideas that people have in which the reality is too difficult for them to achieve… and sell a product or service that delivers the dream and allows them to avoid the harsh reality. (This is why there are lots of freelance ghostwriters who are hired out to write books for clients, and it’s why there are so many real estate investing mentors out there who are making big bucks showing other people how to invest).
  • When faced with do-it-yourselfers who think they can ignore or ameliorate their problems rather than pay for a solution, outline the true costs of those decisions as part of your sales funnel in order to illustrate how the DIY option is the challenging reality.
  • When competing against low-priced competition, position your offering as being a fuller solution that completely eliminates all headaches and costs associated with the problem it solves. (In other words, your solution offers a clearer way to get the idea and avoid the reality than your low-cost competitor).
  • After people have bought from you, help them avoid buyer’s remorse by surprising them with additional post-purchase value that helps to ease the reality and elevate the idea.

Now the question is: Are you going to go through the harsh reality of implementing this or are you going to click away from this post, merely in love with the idea of it?

Small business strategy questions: What does your business do? And, What does your business sell?

Recently, I posted a list of 100 Small Business Strategy questions that every entrepreneur should ask themselves from time to time. The very first two questions of the list are…

  1. What does your business do?
  2. What does your business sell?

Those questions are related yet different, and you need to answer them at the same time.

Answering the question “What does your business do?” is describing why people buy from you.

Answering the question “What does your business sell?” is describing what they’re actually getting when they hand over your money.

The product or service they get (which answers your second question) should deliver the benefits they expect (which answers your first question).

The key is being able to articulate who you serve and what problems you solve or needs you fulfill and then how you deliver that solution to your customers.

Create a list to answer each of the questions. In general, your answers to the first question should be different than your answers to the second question, and your list of answers to the first question should be longer than your list of answers to the second question.

Not all of your products or services will necessarily achieve all of the things in the list of your first answer, but collectively they will all provide those things.

EXAMPLES OF THE DIFFERENCE BETWEEN THESE TWO QUESTIONS

Here are some examples. I’m going to show you first what the business sells (the answer to the second question) and then I’m going to show you what the business does (the answer to the first question).

A financial advisor sells portfolio management services. But what they do is provide advice, and a filter for crazy investing ideas, and access to the stock market.

A house painting company sells a paint-your-house service. But what they do is provide convenience, professional experience, time-saving and effort-saving value, high quality paint, and fast application to busy homeowners who don’t want to paint their house themselves.

A bookstore sells books. But what they do is provide an escape, a place to curate all the best books that a book-lover should read, advice and suggestions on reading, and a few minutes of peace and quiet in a fast-paced world.

WHAT HAPPENS IF YOU STRUGGLE WITH FINDING AN ANSWER

The answer to the second question is easy. We all know what we sell. The answer to the first question is much harder because we don’t always know what our business does (or how it’s different from what we sell). This is especially true if you sort of “fell” into your business or inherited from someone else or bought a franchise.
So if you are struggling to answer the question “What does my business do?”, try doing the following:

  • Try listing the benefits of your product or service. It doesn’t always give you a complete answer but it’s a good start.
  • Think about when people buy from you. What was the situation that inspired them to come looking for you?
  • Ask the question “Why do people buy from me?” and “What value do I offer?”
  • Ask your previous customers to tell you why they bought from you. Look at testimonials for hints, as well.
  • Examine your most successful marketing campaigns (or, if you’ve just started your business, examine your competitor’s marketing campaigns) to see what kind of language drove people to buy. What was promised?
  • Use a search engine keyword tool to find what your target market is searching for. (People will sometimes search for the name of the product or service they want, but many people will also search for the solution to their problem… and THAT is the answer you’re looking for.

WHAT TO DO WITH THE ANSWERS

Figuring out what your business does is essential to growing your business.

You’ll write a clearer business plan and increase the likelihood of finding investors because your business will be clearly articulated.

You’ll create more effective marketing campaigns because you’ll be focused on the reason your customers are likely to buy from you.

You’ll even discover new ways to make more money. For example, you can look at the answers to your first questions and figure out ways that you can provide the same benefits with new products or services. That’s why financial advisors often also sell other things besides strictly buying and selling investments for their clients – they also sell insurance or mortgage products, too.

Answering the questions “What does your business do?” and “What does your business sell?” are the first and most important questions any business owner should be able to answer.