Systems that Nurture Growth

Last week we discussed Rule number 5 of our Fourteen Rules of Attraction, Reverse people’s risk in changing.

This week we’re discussing number 14, Create Standards and Systems that Nurture Growth.

Many people today are scared. They look toward the future and are worried about the impending changes that are invariably on the horizon. Where will the future take us? Will it be a good year or will it be a very difficult one? Others look toward the future and can’t wait to get there. They see fresh opportunities, new potential relationships and perhaps a more effective or efficient way of achieving their goals. I believe much of this has to do with how we spend our time and with whom we decide to associate.
For example, I’d like to share what I did this weekend. I hopethat it might inspire you to think about the coming new year and how you may use the little time that we have left to prepare to make some changes – – changes for the better!
I had the honor this weekend of being asked by CBS Radio to participate in delivering the 1st Annual Financial Fest at the Hyatt Regency in Anaheim, CA. Joining me as presenters were Doug Fabian, Gabriel Wisdom, and the “Professor” himself Tom Leykis. The event was attended by more than 300 listeners all coming out to learn ways that they can prepare to make 2005 the best year ever in terms of building wealth. Everyone walked away educated, inspired and equipped with a whole new arsenal of financial and business development tools.
Leykis talked from the heart in a way that I have never before heard him speak. He talked about his childhood of nearly abject poverty. He spoke about how wealth as well as poverty begins in the mind and that it is our decision to change our thoughts as a the first step to changing our financial status.
Doug Fabian used a SWOT analysis to help us define out strengths, weaknesses, opportunities and threats in terms of our financial future. He talked about international opportunities, how to achieve a balanced portfolio and discussed ways of anticipating the performance of interest rates and the U.S. Dollar in 2005.

Gabriel talked about various different industries and gave some warning signs for first quarter 2005. He talked about the resiliency of the market and the new tech boom!

One of the things I talked about was Attraction Rule # 14: “Create standards and systems that nurture growth.”In fact, rather than rehashing the talk in writing, our resident whiz kid, Matt Walker, has made it available as part of this Business Update in the form of a video file. I invite you to view it. In short it was a fabulous weekend filled with learning and collaboration. If you didn’t have the chance to attend that’s OK. However I’d like to encourage you to think about what you CAN do to begin to prepare for the new year. I believe we will have access to some tremendous opportunities next year and that yes – – – WE are in control of reaping the reward from these opportunities. Yet how do we do it? A large part of increasing our chances for success has to do with Rule # 14; Creating standards and systems that nurture growth.
Let me take just a moment and break down this most critical rule:
1. Create some standards for yourself this year. These could be investment standards, ethical standards, relationship standards or even marketing standards. Standards give us something to measure ourselves against.
2. Focus on establishing systems of efficiency. There is always a better, faster, cheaper way of accomplishing any task. The more efficient we are the less waste we produce. Less waste means more profit and free time. I don’t know about you but there’s nothing better than time on your hands and money in your pocket!
3. Nurturing is not just for Moms! Webster’s defines nurturing as feeding, educating, nourishing and growing. We need to do this for ourselves. We need to feed good thoughts into our hearts and minds. We need to educate ourselves about the changes in our industry, economy and society. We need to nourish our relationships with those that are potential mentors and advisors. And finally we need to grow in terms of our capabilities. We all must learn new skills. Take a class. Attend a seminar or two. Make a commitment to read one book per month.

The future is dark only if you see it that way. A big part of this is learning to attract the positive. If you want to know more about how to attract what it is you are looking for ask me about my new program, “Attract More Business.” Is available now and we’re starting to get some great reviews.

BACK IN PRIME TIME!
Thanks to you, our loyal listeners and readers, we’re back in prime time! Check out the Small Business Hour every Saturday at 3pm on 97.1FM in Los Angeles. You can still hear us on the internet at www.smallbusinesshour.com.

Risk Reversal Tele-Clinic – Monday, Nov. 22 at 1pm 
We can’t deny that the future holds risk for all of us. How do we deal with risk? More important how can we reverse risk for ourselves and our customers? Due to popular demand I will be giving a Telephone Clinic on Monday, November 22 at 1pm. The title is “Reversing Risk in 2005.” We will only be able to accommodate a limited number of participants for this telephone clinic so act now. Tele-Clinics are held over a standard telephone line during which I present detailed information on ways to improve your business performance. They are a great way to get your specific questions answered directly by me. The cost is only $29. To read more go towww.deoteleclinics.com, and to register, go tohttps://www.sbanetwork.org/learning/signup.asp.
Have a great week!

Supernatural Promotion

If you walk into the wrong nightclub bathroom these days, you might get a scare. It seems that the producers behind the new show “Supernatural” on the WB have sent special mirrors to nightclubs across the country showing a frightening image of a ghost from the TV show. What do pictures of ghosts in a nightclub mirror have to do with TV shows? It seems that in the copycat world of television, the networks are even copying marketing ideas. ABC last year garnered publicity for such marketing stunts as messages in bottles left on a beach to promote “Lost” and for laundry bags used to promote “Desperate Housewives”.

In a recent article in the Los Angeles times, Michael Benson, ABC’s senior vice president for marketing, recently was quoted as saying, “If you do things right, you get higher ‘talk value,’…It’s about creating something that you want to tell your friends about, and show your family members.”

Apparently TV execs are finally paying attention to Rule number 3 of the rules of attraction- “Create an exclusive community of super-users”. By gaining hardcore audiences from the start, these viewers will actually go out and evangelize the show for them- which is far more powerful than typical advertising ever could ever be. How to Create a Buzz Marketing Program
If you want to create buzz, you have to know your customer and how you are reaching them. It is easier to create buzz than you may think. Good buzz begins with a positive customer experience. There is no substitute for exceptional performance. 

First – Ask yourself the following: 
1. From whom do your customers learn about your products? 
2. What do people say when they recommend your products? 
3. In what invisible networks are your products discussed? 
4. What kind of information spreads through the networks fastest?
5. “How can you get people to experience your product or service without them making a big commitment? 
6. How can you giveaway a small piece of your product or service so that people will start talking about it?”

Second – Try to change your thinking from: 
1. “I need to get this sale,” to “How can I get this prospect to talk about my product or service?” 
2. Don’t focus on under-promising but rather over-delivering. 
3. Don’t be afraid to give a little away. By employing these evangelical marketing techniques, you can transform ordinary customers into devotees that spread your message for you.  Have a great week, and let me know what buzz marketing efforts you have employed in your business! -Mark Deo

Suicide by Marketing

Traditional sales and marketing is suicide in today’s business environment!

Why? Because traditional media isn’t just LESS effective it actually pushes more customers AWAY than it attracts. In fact traditional methods tend to alienate target customers more than ever before.

Don’t Take My Word for It 
Check out what a recent McKinsey & Company study revealed about traditional TV advertising:

“TV advertising expenditures will be only one-third as effective in 2010 as they were in 1990.” 

Briggs and Stuart, in their new book, “What Sticks: Why Most Advertising Fails” asserts that 37 percent of all advertising is wasted.

These are amazing statistics. They reveal how the world of marketing has gone through a radical evolution and most are still UNAWARE of this. They are STILL pouring millions of dollars into ineffective forms of marketing in which they have no chance of succeeding.

What does it mean to you? 
Imagine spending thousands or even millions of dollars on radio, TV, outdoor or print advertising, only to discover that you hadn’t gained even ONE additional customer from that expense let alone reap a return from your investment. That’s enough to ruin your day or your career!

This is precisely what is happening today. Every form of traditional media is in crisis. Radio stations, TV networks, newspapers and magazines are suffering from a double digit drop in business. They are lamenting the glory days of advertising when marketers waited on line, cash in hand for a “premium ad position” in order to tout their message. It was a volume game. The more you advertised, the more you sold. NO longer!

More Choice, Less Time
Today customers have more choices than ever before and they have far less time to MAKE these choices! What’s worse is that customers basically IGNORE most traditional advertising. It is all but invisible. Instead they listen to their friends, associates, the grapevine and the more “alternative” forms of media. 

This is why viral marketing is so powerful today. The most successful marketers are adept at creating a buzz. They align themselves with influencers or “sneezers” as some people refer to them. Then they “inoculate” the sneezers with their message or buzz and watch the word spread. The trick is to create a buzz that is pure and honest not salesy or promiscuous. Then to get that buzz to spread in a smooth and persistent way so it is amplified and creates what Malcolm Gladwell calls the Tipping Point. This is the point where every person in your target audience simply MUST have your product or service – like the iPod or UGG Boots.

Sneeze on Me!
Just as there was a formula for the successful direct marketing of the past, there is also a formula for creating a “buzz virus.” 

I have created a 10 minute audio file on this topic and I’d be happy to forward a link to you if you are interested. It takes you step-by-step through creating a buzz virus, discusses the pitfalls and I give some examples of companies that have done so in a powerful way. If this interests you just send me an email that reads…

“NO MORE SUICIDE”

Have a great week!

Shark Proof Marketing

Be honest now… If this “new” economy has you feeling like a wide-eyed harp seal that’s being circled by blood-thirsty sharks, raise your right fin.

  • Unemployment is up
  • Spending is down
  • Production is falling
  • Profits and stock prices are depressed
  • Payrolls are being slashed
  • Consumers everywhere are hunkering down.

The sharks are circling and there’s blood in the water!Well call me Chief Brody, but this just may be the best time to grow your business or start a new one. Think about it, everyone else is bobbing around in the water trying not to look tasty. It’s the perfect time to swim out there and take a bite out of the shark.Everything in our world – from marketing to technology to commerce – is changing faster than ever. Yet most companies are clueless about what is causing the change, how it might affect them, or what to do about it.Successful businesses hate change. People with secure jobs hate change. Market leaders hate change. But we upstarts and entrepreneurs LOVE change. As small companies, we are in the BEST position not only survive but also thrive in an economic downturn. Small companies like yours and mine can CHANGE and change fast. We can modify our business model, diversify our client and customer base, test new markets and react quickly when economic winds shift.But how do we create change on a shoestring budget?Even more important how do we minimize our risk while cruising through these turbulent waters. In other words, how do we take a bite out of the shark without getting bitten first? I would like to offer a few ideas that I think will go a long way to “Shark-proofing” your business over the coming months.The suggestions below are just a sample of what we offer in our “All Day Workshops.” At these unique workshops you will learn how to avoid the negative effects of this economic downturn. This is not based on theory or blind optimism. It’s based on the real world strategies, techniques and success stories that I’ve gathered from dozens of small businesses.During the workshop I will help you to adapt them to your business so that you can turn this recession into a time of unparalleled opportunity. Here are some of the strategies that we will cover:Pricing Strategies
When the economy grows sluggish and revenues begin to taper off, the first inclination may be to cut prices. For those selling non-commodities or even luxury products, such a move can do more harm than good. Even if sales do rise enough to offset the slimmer profit margins, a business that drops its prices risks cheapening its image. Boston Chicken found this out several years ago. The chain was riding high on a reputation for moderately-priced quality food when it began offering bargain meals. Rather than expanding its market, the move nearly erased the distinction between Boston Chicken and fast food, which alienated some customers and caused revenues to plummet. Instead of cutting prices for all customers, focus on rewarding the most loyal – the ones that will support you through the tough times. For example, during a recession you can mail targeted discount coupons, introduce a frequent-buyer program, send handwritten thank-you notes, or host a customer appreciation party.Added Value 
Persuading customers to buy premium products or services at premium prices is a fundamental challenge, a task that becomes even more difficult during hard economic times. The solution is to add value. What exactly does that mean? “Added Value” means selling the selection of products, the quality of products, educating the customer, offering add-ons or a repackaging of the product or service. Added value can best be described as content or features that make the essence of the product being offered better than an existing version of the product or other products of this type. A good example today is the re-released of movies on DVD. In many cases, the added value to the consumer is the addition of new material or features that weren’t possible using videotape formats. This is appealing to consumers who want to feel they are getting a better value. We will show you how to adapt this strategy to nearly ANY product or service.Recession Planning 
Today, entrepreneurs face so many daily challenges that planning for the future may seem like a luxury. But running a small business without a recession plan is like buying an Oklahoma trailer home without twister insurance. If you’re a small business and your financial resources are moderately limited…you have to prepare a plan, period. Those of you that have been my clients for several years know that we always are proactively planning for the best but also have a contingency plan for the worse scenario. Even as we lament the demise of the current economic expansion, it is important to remember that recessions, like expansions, have a limited life span. Bad things, too, must come to an end. It’s important to plan for that too. At the seminar I will show you how utilize a powerful cash planning strategy that will literally ELIMINATE your financial risk.Out-Marketing the Competition 
Plan an aggressive new business marketing campaign. This strategy has two parts to it. The first part, which seems blatantly obvious, is that when things are slow, you increase the percentage of your time spent on marketing and prospecting for new business. For instance, if you usually devote 10 percent of your time and energy to marketing and sales when things are fairly busy, you might increase this to 25 percent when things are slow. During a lull in business, you need to make this extra effort to attract clients, build relationships and explore new opportunities. The second part of the strategy may not be so obvious. To prevent a lull in business from ever happening in the first place, you should market consistently and aggressively all year long, every week–not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of new business leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now. For small businesses and start-ups I recommend developing consistent marketing communications that are cost effective and produce measurable results. In the workshop we will look at the types of marketing that work best during a recession.Reactivate Dormant Accounts 
Stay in contact with clients that you are no longer working with. The quickest and easiest way to do this is to sit down with your list of past clients or customers, call them, say hello, and see what’s going on. Don’t make this a hard sell call. Tell them, “Hi, it’s Jane. I’m calling just to check in and see how you’re doing, since it’s been a few months since we last spoke.” You don’t have to ask for work directly, but when you end the conversation, you might say something like, “Well, it’s been good talking with you. Keep in touch, and if there’s anything I can ever help you with, don’t hesitate to give me a call.” This lets them know you are interested in working with them again without putting the pressure on them to give you an order right then and there. You can also send a letter, perhaps calling their attention to a recent article about their business or industry. This accomplishes essentially the same goal to reconnect with the client and remind them of your existence, products, services, and availability. On average, expect one order or assignment for every 10 calls you make. But never say, “I’m not busy and need work right now or “Things are slow here.” This is a terrible approach. First, the client or customer feels pressure, feels he has to come up with an “excuse” why they haven’t given you an order lately. This is uncomfortable-and awkward for both of you. Second, it makes you seem desperate, and you do not want to seem hungry or needy. In fact, a key goal of all of these strategies is to make it clear that your purpose is to serve the client better and more efficiently, not fill a gap in your slow work schedule.Create Demand for your Product or Services Help existing clients or customers create new assignments or sales for you. Usually, my clients come to me with assignments they want me to handle for them. But often times I recognize a need in their business that requires attention. If I’m really doing my job as a consultant then I may be more attentive to their business needs than they are. At that point I’m providing exceptional service to the customer as well as creating demand for my services. Many times I will recommend strategies that they can employ that will result in an increase in their profitability and/or market share. Naturally they will ask me to implement them which also improves my business. As we’ve discussed “change” is imminent in this environment. Get ahead of the curve by getting more involved with your customers. Market yourself and explain how you can contribute rather than waiting for something to happen. In the workshop we look at 10 ways to create demand.Build a Cash Reserve 
We have all heard the expression “save some for a rainy day.” But what happens when a rainy day turns into a rainy year, or two? Many entrepreneurs and small business owners will be facing this situation in the coming months. The best way to prepare is to set aside cash during more prosperous times. There’s a real benefit to having a long-term business plan that deals with the kind of cash requirements you’ll need in case of a business downturn. For some, building a cash reserve may come at the expense of swifter business expansion. But the alternatives taking out a loan, dipping into personal net worth, or shutting the doors are far less palatable. We will look at methods of building cash reserves and financing continued operations without going into debt.Be Positive 
The most important thing about a slow period is not to be depressed by it. If you are depressed, prospects can sense your desperation and fear, and it has a negative effect on your dealings with them. Remember that everybody in business has slow times; those who say they never do are liars. You are talented and successful. The lull is temporary. Things will improve. Don’t despair, and don’t give up. It is possible to have 2, 3, even 4 or more slow months and get through it. If you follow the strategies that we’ve discussed, you can turn things around and become busy and profitable once again.Also give yourself every opportunity for success this year. Check out our web site for our next Entrepreneurial Workshop and get pre-registered. If nothing else I guarantee that it will be a great way to start the year with a positive first step.Those of you that have attended any of my classes know that they are energy packed and you walk out motivated and cranked-up! You DO NOT have to be the victim of a “slowing economy,” an “economic downturn,” or what the media calls a “recession.”

Running A Better Business!

In this week’s business update:

Interview More Effectively
One of the biggest challenges for entrepreneurs today is attracting team members that match with our organizational culture. Interviewing more effectively can help to eliminate the mismatches. Today job applicants are doing more pre-interview preparation than ever before. They have rehearsed the best answers to the most typical questions. As leaders we need to ask better, more revealing questions like… “Tell me about a situation that occurred at your previous job when there was a conflict. How did you handle this?” By understanding how someone handles conflict we can gauge how they might match with our company culture.
Making Advertising Work
One of the biggest complaints I hear from business owners today is that advertising just doesn’t work the way it used to. Why? Primarily because everyone is saying the same thing. Both print and broadcast media are filled with the same old promises. Most ads, even those developed by agencies, focus on selling benefits or pushing solutions. Few ads focus on the problems that customers are having. Do you think that customers are more interested in YOUR solutions or THEIR problems? Check out the award wining ad at right that shows a smashed frog with the headline, “For those with an eye for assembly.” The ad is for the company Tamiya Assembly Toys. Tamiya specializes toys that are easy to assemble without breaking. These toys really are simple. Even I was able to assemble their solar powered car for my nephew. Get the idea? Check out our Attract More Business program for dozens of examples of how to apply a “problem-oriented” ad campaign to your business.

Attract More by Giving a Little
Here’s a company that has taken Rule # 4 of the Rules of Attraction (Giving away information without selling) to the max. What’s our most valuable commodity? That’s right, TIME! Now an organization has figured out how to automatically download the programs that you like directly onto your portable MP3 player without you doing a thing! Hey, that’s a time saver. Here’s what is best about it… It’s FREE! iPodder has teamed with companies like Warner Bros, Microsoft, Oracle, ABC, NBC, Business Week, NASA, and even Paris Hilton to produce Podcasts. For a small fee, you can even brand the broadcast as your own. Check out iPodder at: www.ipodder.com and think about what you can give away to make yourself more attractive. You can also sign-up for the Podcast of our nationally syndicated radio show, Small Business Radio at:http://www.sbanetwork.org/radio

Full Day Workshop
Learn how to implement the Rules of Attraction in your business. Register before July 20th for my Monrovia workshop and before August 15th for my Long Beach Workshop to receive a FREE bonus ticket and bring a friend or business associate at no additional charge. The pre-registration cost of this event is just $299, a savings of $200 from the event cost of $499 at the door. Once one of my associates contacts you, if you mention that you are a business update subscriber, I’ll even throw in a free telecoaching follow-up session so that you can get the most out of the event. That’s a total value of $1148 available now for just $299. Go to:http://www.sbanetwork.org/classes/upcoming_classes.asp to pre-register now!

Rule #2: Strategic Rejection Makes Us More Attractive.

How could a thing like rejection possibly make us more attractive?

Some readers are likely thinking, “Oh boy, Deo’s really gone off the deep end this time.” But it’s true. The more people we REJECT, the more attractive we become to that small, discrete little market.
Consider this: What is the fastest growing franchise chain in the United States? McDonalds, Burger King, Starbucks? Not even close.
Try: Curves.
From humble beginnings barely a decade ago, fitness center Curves International has expanded to nearly 9,000 locations. To put that growth into context, consider that it took McDonald’s and Subway 25 years to open 6,000 franchise locations. Curves needed just seven.
How could this be? What is the secret of such exponential growth?
Strategic Rejection
If you’re a body builder you definitely will not want to go to Curves. In fact if you’re a man, I doubt you would be caught dead in Curves. Curves targets the soccer mom. Designed to appeal to an older, female demographic, Curves is a fitness center that differs greatly from other gyms. Instead of 50,000 square feet of saunas, pools and fancy equipment, a typical Curves franchise occupies 1,200 square feet and has 10 to 12 machines. It is simple and affordable for Mom.
Curves has effectively applied rules number one (Become a bigger fish in a smaller pond) and two (Strategic rejection makes us more attractive) of the Rules of Attraction. Together these rules have created breakthrough performance for the company. They have rejected the largest segment of the fitness market and thereby become a big fish in a small pond. In our Attract More Business program we look at how by targeting a very specific audience and rejecting others we make ourselves far more attractive. In fact we analyze some of the ads from Curves and see precisely how they and other companies have done this.
Oddly enough when we reject the larger segment of the market we end up being more important to our target audience and the result is a product or service that performs exceptionally well when stacked-up against the competition. When we are on a mission to add more business at all costs, however, regardless of how these new prospects match with our target profile, we risk devaluating our market position and reduce our competitive worth.
I have seen many occasions where management, in pursuit of meeting ever exceeding numbers, will oblige and make the requisite changes to land a new customer, ANY new customer. If you fast forward into the future and continue this behavior, you will end up with a company that has a great number of new customers but also a support nightmare (i.e.: too many different versions of a product which makes it difficult to maintain and support from a development and customer service perspective). In addition, you end up constantly delaying the next release of your product or service as precious resources get sucked away. You also have lots of features that the market does not want. You cease to be exclusively important to ANYONE. You become a “jack-of-all-trades” important to no-one. Finally, the profitability for each customer goes down significantly as you add new features just to close deals.
In the long run, having too many of the wrong customers can kill your business. The more experienced and disciplined strategy is to identify the “gap” in the marketplace (the need which is not being met) then developing a solution that so perfectly fits this need that it would be ridiculous to even consider any other solution. This is precisely what companies like Curves are doing. While they are incredibly important to the working, mature mother, they are ultimately useless to the average health-enthusiast, bodybuilder.
This does not simply apply to service-based businesses. It works the same way for industrial or consumer products as well.
Think about the iPod. It is probably the hottest consumer electronics product on the market today. Yet it has terrible features and ultimately (like many other niche-oriented, Apple products) alienates the majority of the marketplace. Consider this: If you don’t care about low battery life, aren’t fond of jogging, have ample disposable income, don’t need to record/encode music portably, and want to purchase music downloads ONLY from the iTunes Music Store, then the iPod is the best the way to go. Is it me or isn’t iPod REJECTING most buyers? Then why are they doing so great? While not ideal for some, it’s still hands down the best-designed MP3 player in the world.
Now who’s your niche audience? How can you reject the majority of customers, only to become so perfectly geared to that exclusive market that they would be idiots not to buy from you?
Interested in applying this technique to your business? Check out our latest workshop:

Attract More Business One Day Workshops 
By popular demand, we are now offering the Attract More Business one day workshop. This full day workshop incorporates content from our “Attract More Business” learning program and 8 week class. The workshop will be held from 9am to 5pm on June 11, 2005 in Long Beach, CAand August 25, 2005 in Pasadena, CA. Attendees of the workshop are eligible for 2 follow up 30 minute coaching sessions. As a special bonus when you attend the Attract More Business one day workshop, you will receive our audio CD on “Branding in the 21st Century.”Sign-up at: Attract More Business One Day Workshop.

Reversing Risk

One day a father decided to go shopping for his daughter’s birthday present. Melissa was to be nine in just a few days and she wanted a puppy – a Cocker Spaniel to be exact. Well, when the center of your universe wants a puppy there’s only one thing to do – get her a puppy!

So the man visited a local pet shop. Cruising the isle of the sad, penned, baby beasts, the man spotted the most adorable Cocker Spaniel imaginable. Consulting the salesperson he asked the price of the puppy.”That cute little one there is $150,” the salesperson replied.
“Wow, that’s some serious change for a dog,” the father said.
“If you get her today, I can give you a 10% discount,” the salesperson countered.The father thought for a moment. “What if she can’t handle a dog yet? What if he’s disobedient? What if…”Being a smart shopper the father thought he owed it to himself to visit at least one other pet store. He drove up the road and stopped at another pet shop. Low and behold if he didn’t find the absolute twin of the Cocker Spaniel he saw at the previous store. Maybe this one’s a bit less, he thought.Once again questioning the clerk, “How much for this little guy?”
“Oh yes,” answered the salesperson. “That little one there is $200.”
“What?” the father exploded. “Two hundred dollars, why so much? At the pet shop just down the street the exact same puppy is selling for $150. That’s nearly a third less! Why such a difference?”
“I understand how you feel,” the salesperson replied. “You see, this is a very special puppy.”
“How so?” asked the father.
“You see,” said the salesperson. “This is probably the only Cocker Spaniel that you will find that is guaranteed to satisfy your daughter Melissa or he’s FREE!”
“What do you mean?” asked the father.Then the salesperson told the father, “Take this puppy home with you today and pay me nothing. In fact I REFUSE to take even a penny from you until you and Melissa tell me that you are both totally satisfied with this puppy. In fact let’s talk again in two weeks. If you are NOT totally satisfied that this is the puppy and the ONLY puppy for you guys then I will take him back and you won’t owe me a dime. To go a step further I will pack this puppy up for you tonight in a special ribbon-wrapped cage with two weeks free puppy chow, a food dish, water bowl and special chew toy.”Which puppy do you think the father bought?Why?Reversing Risk
If you guessed the more expensive puppy with the guarantee, then you are correct. But why spend more for the same puppy? Because that father was not merely buying a puppy, he was buying a guarantee of birthday joy for his little daughter. Saving $50 was less important to him than running the risk that he or his daughter would be unhappy with the puppy.Why then are you still trying to compete based on price? Don’t you know that your customers are just like that father? They are looking for the supplier that understands their motives. They are looking for the supplier with the best competitive edge.Having a competitive edge doesn’t mean having a lower price. On the contrary, having a competitive edge means that you have developed a way to make it easier for the customer to say YES to your product or service rather than NO. How? By removing or significantly lowering their risk.RISK is the primary obstacle to making a purchase decision. Think about the last time you changed your mind when considering a purchase. Wasn’t it because the risk seemed to outweigh the reward? What if the product or service DIDN’T perform as advertised? Could you afford to take that chance? What if that chance was eliminated?Everybody can come up with some way to reverse the customer’s risk. What ultimate results are your client’s looking for from your product or service? If you can guarantee these either in part or in whole, then you have successfully come up with a powerful risk reversal offer.Example 1:
I have a client that manufacturer’s computer components. They pride themselves in their less than 0.15% error rate. This high accuracy rate really set them apart from their competition. But their competitors were grabbing-up market share because they were always under-pricing and out-bidding my client. The components they made would sell for just a few dollars but if they failed within the warranty period, the manufacturer would have to repair or replace the entire computer. My client was so confident of their component accuracy they began offering a guarantee that if one of their components caused the failure of a manufacturer’s computer within the warranty period then they would pay for the repair or replacement of the ENTIRE computer. The guarantee allowed my client to regain their market leadership as well as reduce the replacement and repair cost for their manufacturing clients. It also improved customer satisfaction for the manufacturer and allowed THEM to claim a failure rate on their computers.Example 2:
When visitors go to my web site, www.smallbusinesshour.com they find a very compelling offer. First, they can sample all kinds of articles and information on small business marketing and management improvement for FREE. Without spending any money at all they can learn valuable information, which may help them market their products or manage their business more effectively. Second, they can sign up to receive my 100-page Small Biz Success E-Manual, which provides even more information and heaps on more value. Finally when they decide to make a purchase of a book, tape, or learning program they receive a no questions asked, 100% money back guarantee. If they are unsatisfied in any way with their purchase within the first 30 days I will give them back every penny of the purchase price. I have yet to have any customer ask for a refundWhen we reverse risk everybody wins:

  1. It’s a way to improve the level of service for our customers.
  2. It holds our organization more accountable to peak performance.
  3. It heaps on more and more value.
  4. It adds to a more quantifiable return-on-investment for our clients.
  5. It gives us the ability to more easily overcome the price objection.
  6. It makes our solution unique and credible in an already crowded marketplace.

Think about ways that you can apply this “risk reversal” strategy to your business. I assure you every type of business can. If you need a little help in finding out how this can apply to your business, send me an email, or request my SPECIAL REPORT on “Risk Reversal.” If applied, the concepts presented in this report are guaranteed to help you overcome the price objection within 30 days!

Reverse Their Risk

Last week we discussed Rule number 3 of our Fourteen Rules of Attraction, The problem is more important than the solution. This week we will examine Rule number 5, Reverse people’s risk in changing.

Often times the reason prospects are hesitant to change suppliers or service powders is because of the inherent risk in changing. Their concern is that if they make a change in favor of your solution, their situation not only may not improve, but also may even become worse. The goal is to reverse their risk so that they feel comfortable making a change. Most importantly we must create a way for them to feel that any “risk” involved in changing is eliminated. There are a few ways that we can do this: 

Guarantees
The more compelling the guarantee, the less risk your customer will perceive. It is important to understand that while you may be offering a strong guarantee, it doesn’t mean that all of your customers will take you up on it. In fact, studies have shown that less that 2%, of all clients cash in on the very guarantee that motivated their buying decision. You probably already have a strong guarantee that you’re not promoting.

Sample Guarantee
Let me tell you about a client that we’ve worked with that has developed an astounding service guarantee. The company is Pelican Products. Their claim: “You break it. We replace it. Forever.” This is not marketing hype. The company manufactures cases and flashlights that are virtually indestructible. The product is sold to the military, law enforcement, fire, and emergency agencies. This guarantee is unmatched in their industry and their competitors are stymied by their inability to match this offer. Even more amazing, Pelican tells me their return rate is less than 1%! How do they do this? By innovating the guarantee right into the product. How big is the market for industrial cases and flashlights? The company will do almost $100,000,000 this year. It helps to have a powerful guarantee.

Results Oriented Guarantee
Providing a guarantee of specific results is the most powerful type of guarantee. This might include a guarantee of timely performance, error free operation, asset depreciation, or financial value. The more specific the benefits or results, the less risk will be perceived. This requires citing some evidence so that prospects can understand precisely how the guarantee ensures the results. Here are a few examples:

A very common guarantee is: “Either you’re completely satisfied or we’ll give you your money back”. The reason this type of guarantee is so popular is that very few people take advantage of it. It’s more inconvenient and time consuming for people to request their money back than it is for them to suck it up and move on. Often times people will be hesitant to admit to themselves that they are dissatisfied with the purchase. Their egos get in the way. If they request their money back, they are admitting to themselves and others that they made a mistake in making the purchase. This kind of guarantee is often constructed using very powerful language such as: 

I’m so convinced that you’ll be absolutely delighted with your purchase, that I’m prepared to give you an ironclad 120 day, totally outrageous take it or leave it guarantee.”

This type of compelling language and commitment often is enough to reverse the inherent risk for the buyer.

Non- Results Oriented Guarantee
Examples of these type of guarantees are “hassle free”, “personal guarantee”, “guaranteed customer satisfaction” and “conditional guarantees” (if you do this, we’ll do that). These type of guarantees are not as strong as “results-based” guarantees, as we discussed above. “Results-based” guarantees therefore do a much better job of reversing risk. I strongly suggest that you make your guarantee based on specific results.

Giveaways
Giveaways are very effective ways to reduce risk and to overcome procrastination. By giving away part of our solution, we build credibility with the buyer and allow them to try out our solution. This leverages two powerful forces in the marketing process. The first is utilizing the word FREE. While it may be overused, the word “free” still carries a powerful effect over those that hear it. The second is when we give something to someone, they automatically feel obligated to give something back. This is human nature. 

Examples of Giveaways
I have seen countless examples of this in action:

  • The auto repair center that gives away free oil changes- these are valued at $69 each, but by giving these away they get an armful of new customers that purchase several thousand dollars in services each year.
  • Consultants or professionals that offer a free introductory assessment.
  • Software companies that offer free trial ware or “shareware”.

Combination Strategies
While guarantees help to reverse risk and giveaways overcome procrastination, imagine how powerful both techniques can be when combined. 

Here is a great example of a guarantee and a giveaway in the same offer for a search engine marketing company:

Join our search engine optimization newsletter and you’re automatically entered in a drawing for a Gold Search Engine Optimization Package valued at over $2,999. We’re giving away one Gold search engine marketing package every month! We guarantee first page ranking on several major search engines. Click here to request a first page ranking proposal.

Regardless of the type of guarantee you often, every product or service should incorporate a risk reversal strategy into their marketing campaign. We spend considerably more time on this in our Attract More Business program, Tele-clinics and in our one-on-one Tele-coaching. Think about how you can reverse the customers risk in changing. Reversing Risk TeleClinicTo help you put the concepts discussed in this article into action, we will be holding a Reversing Risk TeleClinic on Monday, November 22nd at 1 PM.  To register, go to:https://www.sbanetwork.org/learning/signup.asp 
Special news for our Southern California Readers!
Can’t get enough advice on reversing risk?  Be sure to stop by the FM Talk Financial Fest on November 13th.  I will be speaking on the subject of reversing risk in business.  Go to the KLSX website for more details.  You can also see Tom Leykis speak on amassing personal wealth, Doug Fabian speaking about investing through mutual funds, and Gabriel Wisdom sharing his thoughts on the stock market.  If you stop by, please say hi to Matt and Myself. Also be sure to listen for the Small Business Tip of the Day on 97.1 FM KLSX, on Mondays, Wednesdays, and Fridays during the 8 O’clock hour of the Conway and Steckler show.  If you’re out of the listening area, we will soon be posting these segments on our website for everyone to enjoy.   Have a great week! I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com 

Mark Deo

Passion Play

Do what you love and you will be successful.

We’ve all heard that before. But you have to admit there are a few exceptions to this rule. For example, what if, the thing that you love is offensive to some people? In that case you may not be all that successful. You will be relegated to serving a very small and select market. But this leaves you without the broad appeal that brings in the big bucks.So how can we leverage “doing what we love” to create success, satisfaction and even wealth?Few, I think would argue the fact that actor-producer-director Mel Gibson has accomplished this with his movie, “The Passion of the Christ.”There’s no doubt that this film is on its way to being a blockbuster. But how could this be? Here’s a movie that depicts the final 12 hours of Jesus Christ’s life in excruciating detail. It is first off, politically incorrect (Christians are less popular than the gay community today), filled with more blood and gore than all Freddy Kruger flicks combined, and scripted in ancient Latin and Aramaic. Not exactly the formula for successful filmmaking.Yet “Passion” opened in over 3,000 theaters, an unusually large release for a religious film with English subtitles and the sparsest of plots. Advance ticket sales hit $10 million and in the first weekend generated over $30 million in sales.You’ve got to wonder with all this gratuitous violence, no dialog or characters to speak of, no advertising and NOT A STAR in sight, how Gibson ended up selling this movie?Regardless of our religious beliefs, there’s no doubt that Mel was passionate about telling this story. He was clearly doing what he loved in making this film. And he was employing that “remarkable marketing” that we talk about all the time in on our weekly radio show, in our classes, seminars, and in our weekly Business Updates. With everything against him he created something exceptional, new, interesting, compelling, worth noticing and worth talking about. He actually built the marketing right into the product itself.Newsweek said of the film, “when all’s said and done he’s made what may be the most watched Passion Pay of all time. Putting his money where his mouth was, Gibson invested $20 million of his own cash in a film so divisive that no Hollywood studio would touch it.”Tom Peters said in his book, “The Pursuit of Wow,” that the only products or services of the future will be those that are created by passionate people. Gibson used the hive mentality to create sneezers (the Christian community) to develop something virus-worthy. He didn’t create an ad campaign catering to the masses. That would be trying to swim upstream. He went with the flow. He previewed the movie to evangelical media and church leaders.Focusing on this small, self-contained hive market was very smart marketing indeed. There’s no better organized subgroup. This was the market segment most influential, most profitable and most likely to sneeze. And sneeze they did – all over each other. Think about it, these religious groups have their own radio stations, TV networks, publications and web sites.Not long after this, Churches from coast to coast reserved entire theaters for opening. According to People magazine, The National Association of Evangelicals, which represents more than 50 denominations and 43,000 congregations, even helped sell tickets on their web sites. The religious community embraced the film as “the best outreach opportunity in 2,000 years,” according to the Rev. Rob Schenck, President of the National Clergy Council. Pope John Paul II seeing the movie said, “It is as it was.” Billy Graham was so moved that he wept and called it a film “equal to a lifetime of sermons.”Now how would you like to enjoy these kinds of accolades for your business, product or service? I would not for a moment reduce Mr. Gibson’s work to one that is aimed only to generate profit or business success. On the contrary, I believe that the film is enjoying the success it is particularly because of his passion and focus on making a product that is a tool for evangelism as opposed to one that needs to be marketed.What about if we could apply these principals to our business? The good news is that we can. Here’s my advice:1. Identify the smallest most influential market that you can possibly find – a powerful, smooth subgroup that will have interest in what you have to offer. 2. Create a premium product or service that is so impressive and compelling and offer it ONLY to this group. 3. Figure out a way to give them a small taste of the product. Do so in advance of everyone else. 4. Empower the leaders of this group to make claims and statements to their community regarding the product that you have created. 5. Build your marketing right into your product or service rather than tagging it on as an afterthought. 6. Inject your own passion in what you do. Do it because you believe it. And if you don’t believe it, don’t do it! 7. Do what you love. Love what you do. Let it show no matter what anyone thinks!Our thanks, Mel. Bet you never thought you’d be giving us a marketing lesson along with the Gospel?I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.comMark Deo

Luxury or Necessity

In this difficult economic environment it is becoming more important that we fully understand the needs of our customer. In fact it is critical that we begin to see things from our customer’s viewpoint now, more than ever.

Unfortunately today many marketers are looking closer at their income statement than at their customers. Many are concluding that because they offer a more “optional,” high-ticket product, they are in fact offering what will be perceived by the consumer as a luxury purchase. This perception is the result of fear. This kind of fear is very dangerous to any industry. It has caused many marketers to cut back on their advertising, reduce their marketing expenditure, and even begin to slash the price of their products and services in the marketplace. These kinds of actions only result in lessening the value of our products and services in the eye of the customer. It makes the statement to the consumer that WE OURSELVES do not place a high value of the services we offer.

Webster’s defines luxury as “something that is not necessary.” Think of the telephone. A decade or two ago it was not uncommon to meet someone who did not have a telephone. Now it is unimaginable. Cell phones, pagers and Internet connections are becoming the same way. What were once luxury items are now necessities of life.

Itamar Simonson of Stanford University’s Graduate School of Business and Ran Kivetz of Columbia University surveyed 3,100 consumers about their attitudes on luxury purchases. The researchers asked participants to rate themselves in terms of how guilty they felt about purchasing luxury items in general. They found that more than 62% of the respondents felt guilt over purchasing luxury items. “Most people need to justify luxuries,” Simonson said. Their findings suggest that people believe luxury purchases should be “earned.” Is this the category that you want your products and services to occupy? Are we deciding for our customers, “what is necessary?”

It’s very important that we do not position our products or services as luxury purchases. They need to be marketed as very necessary solutions to very real problems. People purchase your product or service because they seek solutions to their problems. The more that we can demonstrate our connection to the customers needs, the more valuable we will be to the customer.