What is the one thing you want to know?

If you could answer one question in these tough times…

I was on an afternoon hike today with Ron Worth, president of Flashcut CNC, a company that makes electronic controls for manufacturing equipment. I asked Ron this question: “In these tough economic times, what is one thing you want to know that you don’t know?”

Without hesitation, Ron answered, “How to motivate people to buy for a reason other than price.”

Amen, Ron. Thank you for not saying, “When will the Dow hit 10,000 again?” or “Will Obama’s stimulus package work?” or “How much cost do I need to cut out of my business to survive?” Ron hit on a key issue that drives my thinking about dealing with this economic mess: The surest route out of trouble for your business is for your customers to buy from you, not for you to cut costs or wait for macroeconomic trends to turn around.

So, what’s the answer to Ron’s question?

Someone will give you a disproportionate share of their business if they believe that you are different, in a very meaningful way, from other options. So, what are the ways you can differentiate yourself in this crazy economy?

The oldest (and most tired) trick in the book for differentiating your company is advertising and other marketing promotional efforts. Don’t rely on these too heavily.

Why? Want some proof? How many ads can you remember from the Super Bowl, just a few weeks ago, and, more importantly, how many of those ads helped you create compelling, motivating, differentiating beliefs of the companies behind the ads? And exactly how many of them influenced your purchasing decisions?

The next worst way to differentiate yourself is with price. Sure, it drives sales, but the only thing sustainable about a price-oriented message is, “Hey, we’re cheap, and we might always be cheap!” If that’s the story you want to tell, then, hey, go ahead and tell it. But my guess is that most of you won’t want to tell that story.

What’s the next best (worst) way to differentiate? Here it is: “Our product is the best.” “Our product is new and improved.” “Nobody offers the service we do.” Yawn. Guess what? In today’s “land of plenty,” your customers believe that whatever you sell can be purchased elsewhere. (If you think you truly have a unique product, ask yourself this question: Will it be unique two years from now?)

Here’s the answer to Ron’s question: The best way to differentiate your company in tough times is not by advertising, pricing, product or service. It is by creating strong, sustainable, meaningful “We” relationships with your customers.

Relationships are your best differentiators at all times, but they especially are in this marketplace.

Why?

Here’s a hint, in the form of a question: Who do your customers care about more, you or themselves?

I’ll bet none of you answered, “My customers care more about me than themselves,” unless you are the executive director of the American Cancer Society. Your customers care much more about themselves than they care about you!

So, if your customers care more about themselves than they care about you, what do you want them thinking about, you or their connection to you?

It’s almost a “duh” that most people never really explore. If you want your customers to think that you are different, don’t focus on what makes you unique, focus on what makes your relationship to the customer unique.

I began writing We: The Ideal Customer Relationship three and a half years ago, and I’ve been completely immersed in this concept of relationship-as-differentiator ever since. I really believe in it, and I hope you will too. Doing so, however, requires you to completely turn on its head your lifelong-perspectives on marketing and sales. Your marketing and sales messages shouldn’t be about you, they should be about your customer’s relationship with you.

Let’s look at the points I made above in a “Differentiation Ladder,” illustrating successively better ways to differentiate your company:

Differentiation Ladder Graphic
Download The Differentiation Ladder (Adobe PDF)

Now, I ask you to notice something very important: As you go up this ladder, your ability to differentiate your company in your customer’s mind increases, and the return on investment also increases.

Think about this…

Advertising and other marketing communications are really expensive and really inefficient. They don’t work most of the time! (Example: You send out 1,000 brochures and get two phone calls.)

Price promotions are really expensive, and often have a terrible return on investment. Yes, you generate sales, but often give up most of your margin.

Product and service enhancements are really expensive. Yes, they are necessary, but the investments can be large, and the chances of success are often very low. Think of all of the failed new products, or product/service enhancements that are barely noticed by customers.

Relationship-building costs money, but not nearly as much as you might think. Does it really cost any more for you to have a relationship-building encounter with a customer than it does to have a relationship-eroding transaction with that same customer? (For more on encounters and transactions, see Chapter 2 in We: The Ideal Customer Relationship or my free ebook, Encounters, available at www.yastrow.com)

And, more importantly, the return on relationship-building efforts is more certain and more lucrativethan the less-effective differentiation efforts lower on the differentiation ladder.

So, Ron and everyone else, if you want to motivate people to buy in this economic meltdown, focus on your relationship with them, not your promotional messages, price promotions or product features. In these times, your customers are very concerned about themselves, so why not focus your messages on something that includes them, their relationship with you?

Take Notice

In today’s frenzied marketplace, many companies are desperately trying new ways to get customers to buy. As you notice these efforts, rank their effectiveness by the Differentiation Ladder. Do any make it to the top? As people try to sell to you, are you more motivated by differentiation efforts higher up the ladder?

How do you compare?

How is your company trying to differentiate itself in this economic upheaval? Are you trapped at the bottom of the ladder, trying to advertise your way out of this, cutting prices in an attempt to cut through the clutter of all of the other adverisers? Or, are you focusing on customer-relationship building? Assess everything your company is doing to deal with this economic disruption, by seeing where your actions fall on The Differentiation Ladder. Be honest with yourselves. Be self-aware.

Try this

After assessing where your actions fall on the differentiation ladder, have a tough, intense, soul-searching discussion about shifting your resources and attention higher up the differentiation ladder. Here’s an example: Let’s say you’re planning to print a new brochure and mail it to 5,000 prospective and past customers. What if you took the money you’ve budgeted for this brochure mailing and focused it on relationship-building efforts with 100 customers? Now, the numbers in my example may not exactly apply to you, so feel free to change them, but the point holds.

Or, look at the price decreases you’ve offered recently. Could that money have been spent– and margins protected– by focusing on relationship-building encounters with customers? Remember, the effect of a price decrease isn’t just today; it’s often hard to get prices back up to previous levels.

Everyone is chasing fewer dollars these days, as customers cut back on spending, Getting your share of those limited dollars depends on how well you get customers to think “I can’t get it anywhere else” when they think of you. The higher up The Differentiation Ladder the reasons for “I can’t get it anywhere else” are, the higher your return on investment.

When it comes to The Differentiation Ladder– Aim High!

Steve Yastrow

Tagged with:
Posted in Invent Your Future, Newsletters, We relationships
2 comments on “What is the one thing you want to know?
  1. Paul Hebert says:

    Great post Steve. It is really amazing how often companies try to market themselves based on their “similarities” to others rather than their differences – Toyota’s new ads take advantage of that concept very well. In addition, too often the company forgets that the buyer (consumer) defines the product and the reason for purchase.

    I have found that most companies aren’t truly honest about what makes them different. They find distinctions between themselves and their “competitors” but no real differences. This is especially true as you move up the executive ladder – they usually have less knowledge of what really makes their product (or service) different.

    One thing you have to give social media credit for is we now have a really easy way to find out what the customer really values – and leverage that – versus guessing or using focus groups that provide limited real new knowledge.

    Again, nice write up – thanks!

  2. Thanks Paul. One way to describe what you say: Companies focus on what makes them different, not what differentiates them.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Subscribe to the Blog
Email:  

On Steve's Mind
Get Steve's newsletter featuring his ideas and practical advice delivered to your email inbox.
* = required field
Latest Tweets
Testimonials
Jennifer Whelan
“Steve’s workshops helped bring out what is best at Acuative. His insights were fresh and long-lasting—we continue to use his tools and approach years later.”

Jennifer Whelan

Vice President of Marketing, Acuative
Jennifer Whelan
Our work with Yastrow and Company yielded the best long-term value of any consulting engagement we’ve ever had. As we grow and expand internationally, Acuative continues to depend on the branding approach and marketing tools Steve and his team developed. Yastrow and Company genuinely partnered with us, were exceptionally responsive and remain committed to our success.

Jennifer Whelan

Vice President of Marketing, Acuative
Chris Miller
I rarely book speakers more than once. But I’ve used Steve four times! Steve has our association’s interest at heart and works tirelessly to deliver customized programs. He always ranks highly with our affiliates because he is outcome-focused, fast-paced and highly engaging. Anyone looking for insight and understanding into marketing, branding and sales should book Steve!

Chris Miller

Executive Director, Professional Systems Network International
roma-maxwell
Rancho La Puerta has enjoyed continued success because of the work we did with Yastrow and Company. Together, we implemented business strategies that have contributed to our success. Steve and his team truly believe in our brand. I highly recommend Yastrow and Company to any business that needs help building the bottom line.

Roma Maxwell

Director of Sales and Marketing, Rancho La Puerta
Kathleen Phillips
Not only is Steve's content sound, but the energy he displays in delivering it will knock your socks off.

Kathleen Phillips

Ernst & Young, Chicago, IL
David Sank
I highly recommend Yastrow and Company to any business that is intent on enhancing their customer experience. Prior to working with Steve, we were communicating various messages to customers. Steve and his team helped us achieve a cohesive brand message that we as a company live daily. Steve is an incredible listener and learned the nuances of our business rapidly. I can’t imagine anyone Yastrow and Company couldn’t help.

David Sank

President and CEO, Calico Cottage
roma-maxwell
I give Steve two thumbs up—five thumbs up, if I had that many!

Roma Maxwell

Roma Maxwell, Director of Sales and Marketing, Rancho La Puerta
roma-maxwell
Rancho La Puerta has enjoyed continued success because of the work we did with Yastrow and Company. Together, we implemented business strategies that have contributed to our success. Steve and his team truly believe in our brand, and our experience with them was empowering, fun and a great learning opportunity. I highly recommend Yastrow and Company to any business that needs help building the bottom line

Roma Maxwell

Roma Maxwell, Director of Sales and Marketing, Rancho La Puerta
Tom Peters
When Steve Yastrow writes, I pay close attention.

Tom Peters

Founder, Tom Peters Company
Alex von Bidder
In these high pressure times of bite-size communications we all hunger to be listened to and cared for individually. Our customers know great hospitality, the kind that is not about selling but treating their needs as our highest priority. Steve Yastrow’s teachings are applicable to any business that values long-standing success based on personal relationships.

Alex von Bidder

Managing Partner, The Four Seasons Restaurant, New York
Craig Dwight
Steve’s approach to integrating all customer contacts into a comprehensive marketing message is a must in today’s information age. We have partnered with Steve to develop our integrated and comprehensive marketing message, and as a result of his excellent work, his new book is required reading for all of our employees.

Craig Dwight

Chairman & CEO, Horizon Bancorp
Alex von Bidder
Steve Yastrow's teachings are applicable to any business that values long-standing success based on personal relationships.

Alex von Bidder

Managing Partner, The Four Seasons Restaurant, New York
jim-evans
Yastrow and Company introduced Brand Harmony and their Be the Brand concept to our team at Jenny Craig.  I believe these new ideas contributed in helping us triple the company's revenue during my years as CEO.

Jim Evans

former President and CEO, Jenny Craig
Rhoda Olsen
Steve Yastrow has clearly described the emotional reality of customer relationships and their impact on profitable business growth.

Rhoda Olsen

President, Great Clips for Hair
Marc Allen
We are absolutely better off after engaging Yastrow and Company. They helped us look at our business from our clients’ perspective, resulting in a cultural shift throughout our organization. These changes have made a big impact - we’ve gained new clients and strengthened relationships with existing clients. The investment was well worth it.

Marc Allen

Vice President of Sales, AMD Industries
jim-winter
Steve put together a program that produced spectacular results, and the quality of our communication and customer satisfaction is vastly improved. I’ve been in business for 40 years, and Steve’s the first consultant that I’ve gotten my money’s worth from. We’re going to continue to work with Steve and the bright, energetic people that are on his team.

Jim Winter

COO, Dimension Design
Ward Alles
Steve Yastrow knows his stuff. That's why our management team has read all of his books. And that's why we've had him as a keynote speaker at both client and employee events. From creating brand alignment, to selling more effectively, to providing top-notch customer service, Steve offers words of wisdom based on real-life experiences. He always engages his audiences with questions, interactive exercises and great storytelling that keep you coming back for more. Read Steve's books. Then book Steve. You'll be glad you did.

Ward Alles

CEO, Core Creative
Doug Ducey
In one morning, Steve re-energized the way we look at marketing. The only question we had at the end of the session was, ‘When can we get him back?'

Doug Ducey

CEO & Chairman, Cold Stone Creamery, Governor of Arizona
Chris Tucker
Steve is a creative and collaborative speaker who communicates his ideas clearly and concisely. He immediately understood our business needs and provided a better perspective on how our customers see us as a company. I have referred Steve to our customers in the past and I will continue to do so. He’s intuitive and has a unique way of looking at business. Steve has the experience to turn a project into something extremely valuable for any organization. I strongly recommend working with Yastrow and Company.

Chris Tucker

Director of Business Development, MBX Systems
Ditch the Pitch is a great read-- interesting, fun, and easy to follow. And I’ve already seen the concepts work. Just yesterday, I called a client and had a conversation that was 95% about the client, as the book suggests. At the end of the call, he sent a new matter my way. I ditched the pitch and it resulted in new business.

Attorney

Chicago, IL
american-licorice-logo
We have seen huge benefits from Steve's input. Steve is unlike any other consultant I've ever worked with. He takes a genuine, deep-seated interest in our business. He is intuitive and able to identify problem issues quickly. We wouldn't be as far along in acheiving of our long-term growth strategy if we hadn't actively and aggressively pursued Steve's Brand Harmony.

Michael MacDonald

Executive VP Sales and Marketing, American Licorice Co.
Mike Depatie
Steve Yastrow is at the forefront of the next evolution in marketing. We have implemented many of his innovative ideas... and have seen very positive results.

Mike Depatie

CEO, Kimpton Hotels and Restaurants