USP

All’s Fair When Avoiding Price Wars

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As a soldier, what main characteristic did David possess that allowed him to defeat Goliath, who was bigger, stronger and more heavily armed?

Most people will say that it was his agility or speed. Just moments before the battle, David decided against suiting up with King Saul’s armor to maintain his mobility.

More important than these things, though, was his willingness and ability to choose the terms of the fight. Even though he was very confident in his physical strength (he’d beaten wild lions and bears in the past), he picked up stones and decided to take out the giant from a distance. I’m inclined to believe David would still have been victorious over Goliath in hand-to-hand combat, but there was no need for that.

He took a weapon he was skilled with and slew the Philistine champion before the fight even began.

When your small businesses square off against entrenched competitors… ones that are bigger, stronger, better-known and better-equipped than you… you can learn a few things from the young warrior David.

Setting up Battles Where Your Victory Is Inevitable

There is a strong temptation for look at your potential customer base and think, “If I drop my prices, more people will buy from me. That’s what everyone else is doing.” In most businesses, special offers mean discounted prices. Every conceivable holiday is an excuse to offer a sale. And some of your big competitors spend thousands or even millions of dollars broadcasting these discounts.

How can you compete with that?

Make no mistake: low prices are attractive. There will always be a market for cheapness. That’s probably the biggest reason why a huge percentage of startups open their doors with plans to become the low-cost provider for the customers they’d like to serve.

But unless you have the buying power of Walmart or its equivalent in your industry, that’s a tough fight to win.

Take a page out of David’s book. Pick your battles strategically. What do you offer that’s better than everyone else who is competing for the customers you want?

Your lunch menu is healthier than McDonald’s.

Your plumbing work is guaranteed for twice as long as anyone else in town.

Your T-shirt brand has been worn by more rock musicians in concert than any other brand this year.

Force The Comparison

In general, you don’t want a potential customer to be able to make an “apples to apples” comparison between your product or service and that of the guy who insists on cutting his prices to the bone. All other things being equal, the customer will buy the less expensive option.

You can’t allow other things to be equal.

It’s essential that you create some differentiator that forces the consumer to make an “apples to orange” comparison.

Your marketing and your sales people force the comparison between your product and the competition at the point of differentiation.

“Look how healthy our lunch menu is!”

“No one guarantees their pipework for as long as we do.”

“If you’ve been to any concerts this year, you’ve noticed how popular our brand is with your favorite rock stars.”

Juxta-position your product in a way that appears unique, especially if your product or service is seen as a commodity.

Create Your Own Category

Have you ever noticed how many different choices are available for chicken eggs at your local grocery store? There are probably dozen options (yes, I thought that was funny).

What’s really interesting is the price difference between some of the choices. For example, your “average” large eggs sell for $1.79/dozen at this particular store. Eggland’s Best Vegetarian eggs normally sell for $3.79/dozen. That’s more than double the price of your “commodity” eggs.

egglands price wars

How does that happen?

Eggland’s Best has capitalized on a key differentiator. This type of egg is in a distinct category: cage-free, vegetarian brown chicken egg.

This destroys the “apples to apples” comparison and forces the customer to consider whether it’s more important for them to save a couple bucks or treat himself to this special kind of egg.

Dutch Farms (the Goliath in this example) probably sells a lot more eggs at the much lower price. But Eggland’s Best (David) is carving out a nice corner of the market to dominate.

Can you think of a way to create a special category for what you sell? 

3 Alternatives to Competing on Price

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price war

How often do we see businesses small and large making the claim that they offer “the best value in town”?

And why is it that people assume that such a statement means that “best value” is the lowest price?

In the strictest sense, value has nothing to do with price.

A $100 bill is valued at $100 no matter how many hours you worked to get it.

On the other hand, an icy cool glass of lemonade is more valuable to a man mowing the lawn in the summer than one sitting on a bus stop in the middle of winter, even if it costs $2 in both cases.

Being the “low price leader” doesn’t (necessarily) mean your customers are getting the best value; it just means they’re paying less than they are anywhere else.

That usually makes you the lowest paid provider in your field.

I don’t know about you, but that’s not a position I’m in a hurry to occupy.

Avoid Price Wars at Any Cost

Price is not the true battlefield – or if nothing else, it’s not the one you want to fight on.

As a fun illustration, I’d like to point you to the legendary Elwood City snow shoveling war between Arthur Read and Buster Bunny.

The entire video is enjoyable, but the business-related part really starts about five minutes in, with key takeaways at about 7:20 and 8:20.

~ “He’d be crazy to compete with me at this price.”

~ “You won’t make any money that way.”

You might put a hurting on the other guy, but you’ll probably cause irreparable damage to your own business in the process, just like Arthur and Buster did.

Your customers will get used to your bottom-basement pricing and your willingness to undercut the competition.

And even if you put the other guy out of business, what happens when a new competitor comes on the scene? It’s a perpetual race for the bottom.

What’s the Alternative?

The temptation to set your prices low is strong.

You constantly hear about people shopping at Walmart because they’re cheaper than pretty much every other store. Everyone seems to be running discount sales.

Besides, you might be thinking, what’s so special about product? There are half a dozen other vendors in my zip code alone doing the same thing as me. What’s unique about shoveling snow? Plumbing? Accounting?

Consider starting here:

1) Make bolder promises – and back them up. Most of your competitors advertise like cowards. They’re too scared to make big promises. They would rather “under-promise and over-deliver,” which is marketing suicide these days.

What’s the biggest promise you can honestly make? Wrap that up with a dominant emotion your audience is feeling and/or a powerful (true) story and shout it from the rooftops.

The gutsy promise “30 minutes or it’s free” put Domino’s on the map, even though there’s nothing special or particularly valuable about their pizza.

Never promise more than you can deliver, but don’t shoot yourself in the foot by under-promising either.

2) Develop a secret sauce. Even in a commoditized field, like plumbing or snow shoveling, there’s no reason you have to play by the rules everyone else abides by.

What’s stopping you from going the extra mile to provide an outstanding, memorable customer experience?

Ask your customers, or listen to other people talk about your field. What do they hate most?

What do they wish would happen that never does?

As a plumber, wouldn’t a butt-crack free guarantee be a welcome distinction?

Add on-time service and the promise to clean up all the mess before you leave, and you’ve got a major competitive advantage. People will pay more for that.

Babiators, a company that sells sunglasses for children offers the following, remarkable guarantee:

USP guarantee

As a father of four rambunctious kids, this is the sort of promise that captures my attention and makes me feel stupid for wasting my money anyplace else.

3) Work on your Unique Value Relationship. It’s really difficult to reduce relationships down to dollar amounts. Haven’t we all paid more to buy from someone we like or admire?

Haven’t we all decided to support businesses we know, even if the cost was a little higher?

When you treat you customers like people, not walking wallets, you have the potential to build relationships that remove price from the equation completely.

When they know, like and trust you, you win. When they identify themselves with your product, service or brand, when they see themselves as part of your tribe, paying less to work with outsiders isn’t even an option.

Just ask the next person you see with an iPhone 5.

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Be sure to check out the follow-up to this article, The Wife-Approved Pricing Strategy.

Juxta-Positioning

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Positioning is establishing your identity in the mind of your audience. Your positioning can be bad or good, strong or weak.

The best kind of positioning is when you can “own” a word or concept. Google IS online search. Kleenex equals facial tissue. Volvo is synonymous with automotive safety.

Sometimes, it can be appropriate to position your company, product or service relative to an established brand. Juxtapositioning, as it were.

There are countless ways to juxtapose your business, product or service with competitors. Here are 5 of the most common:

  1. Us vs. Them – offering uniqueness of a company or product over against a competitor
  2. Before & After – demonstrating a unique end result
  3. True or False – exposing the uniqueness of reality over common perception
  4. Exotic vs. Commonplace – uniqueness of origin, philosophy or perspective
  5. Ancient vs. Modern – discovering the uniqueness of ideas from a forgotten era

When your unique value proposition (UVP) is strong, but demonstrably different than the leaders in your field, Us vs. Them juxtapositioning is appropriate.

Slow Lube Lansing Positioning

As an example, take this photo from an auto shop in Lansing, IL (one of Chicago’s south suburbs). While Jiffy Lube and others offer 10 minute oil changes, emphasizing speed, this shop takes the opposite approach — a “slow lube.” It makes you wonder: what are the other guys really doing to you car? What are they missing or messing up? The contrast is stark.

Why try to compete with the other shops on speed? Quality and “proper service” aren’t even on their radar.

Before and After is simple, right? Think exercise machines and acne medication. Demonstrate how the future can be better and brighter with your product or service.

Where misconceptions are hurting people in the market, or just keeping them from buying from you, become a mythbuster. Remember those commercials sharing the “truth” about how corn syrup is as safe as sugar? That’s full-fledged True or False juxtapositioning at work:

Exotic vs. Commonplace can be best seen in the way we Westerners love products from the East, from green tea to yoga. The opposite is also true. People from around the world clamor to get their hands on American products and brands.

People get bored. We associate the familiar with the results and experiences we already have. To have a new experience or better results, exotic products hold special appeal.

Ancient vs. Modern plays on the notion that we’ve traded something significant from the past to make way for the electronically-enhanced artificial present. Technology, as much as we love it, seems to have trumped wisdom. Instead of reaching out to touch someone, we have touchscreen phones and tablets.

There’s a longing for “the good ol’ days.” (I reckon there has been ever since Adam and Eve.)

Titles including “The ancient art of…” or “long-lost secrets of …” have a mysterious attractive quality. They help sell millions of books, courses, classes and products every year.

The-Ancient-Art-of-Tea Positioning

How can you use these juxtapositioning techniques to strengthen your place in the market?

 

What Marketing is All About

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“You’ve gotta come and see this!” my wife exclaimed as she ran into my office (which is any room with no kids in it at the time) last night.

“What is it?” I was curious what had made her so excited in the middle of the night.

“Just watch,” she said, unpausing the DVR. She played the commercial for the 2014 Honda Odyssey.

Normally she doesn’t get excited about commercials, but this one had her head spinning. “Honey, I need that van!” kept rolling off her lips for the rest of the night.

Honda is really onto something here.

What Makes This a Great Commercial?

There’s nothing particularly brilliant about the special effects. It’s not thigh-slappingly funny. But it got the only thing that truly matters right.

It showcases the built-in vacuum.

The commercial is brilliant because it highlights a brilliant move Honda made when they designed this car.

honda-odyssey-2014-built-in-vacuumimage via theshoppingmama.com

Maybe they hired a mind reader, or maybe they just asked van drivers what they wanted in a new van. However they came up with the idea, they’re now offering something that moms and dads (the ideal customers for vehicles like this) have been wishing they’d had for years.

That’s what marketing is all about folks. Finding out what people want and helping them get their hands on it.

Honda’s the first car manufacturer to offer this innovation (if I can call it that), but they won’t be alone for long. Their unique selling proposition won’t be unique for long.

What do they need to do to keep the advantage?

P.S. Are you having trouble crafting your own rock-solid USP? You should consider this.

Raise the Bar on Your Value Proposition

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What is Rolex’s unique value proposition (UVP), really?

What do they do that no other watchmaker does? Do they make the world’s most accurate timepieces? The most durable? Nope. The most aesthetically pleasing? I’d give that a “no,” but I guess that one is debatable. Do they offer special features that can’t be found in other watches? Not really.

So what is it that makes Rolex so special? If we think about that for a moment, we may gain insights that will immediately impact the way we run and market our businesses.

Two Unique Conversations

apple vs. samsung marketing war

I’ve long been an advocate of finding your uniqueness. If you’ve been reading my stuff for any length of time, you’ve heard this conversation on numerous occasions. But my thinking about how uniqueness works out in the real world is evolving. Two conversations have really sparked my changing perspective.

My first inspiration came during a conversation with a brilliant marketer, my good pal Chuck McKay. He was explaining to me how there’s really no way for products to be truly unique anymore — at least not for more than a few months. Companies that create technological advancements that customers get excited enough to pay for usually see copycats coming up right behind them almost immediately.

Exhibit A: The multi-billion dollar global battle, Apple vs. Samsung.

Jack Welch said that “If you don’t have a competitive advantage, don’t compete.” So what do you do in an environment where your advantages can be ripped off so quickly?

Well, the force that creates loyal, enthusiastic customers (ones who don’t make price the the primary factor in their buying decisions) for companies like Apple, Rolex and Harley-Davidson can work just as well for you.

Boiling It All Down

You may point to the way that strong brand positioning is propelling companies like Rolex forward, and you’d be correct. But what really lies behind this branding thing? More importantly, how can you use it to build of loyalty and top of mind awareness like a Nike.

The second conversation I mentioned earlier was more of a conversation I had in my own mind after reading an article written by Kimanzi Constable. When you boil it all down, business is about relationships and experiences. Branding is about relationships and experiences, both real and imagined.

unique relationship as value proposition

Have you ever seen images of fans at a Michael Jackson concert? People went bananas! Security personnel and paramedics were always on hand to handle people who whipped themselves into a frenzy and often passed out.

Good music was only part of the cause. You can bet these folks didn’t pass out every time a Michael Jackson song came on the radio. But at the concert, perfectly rational, even-keeled people became emotional, delirious fanatics . Their relationship with Michael may not have been personal, but it was very real.

Your favorite musicians may have a similar effect on you. Music creates powerful emotional experiences and, in a way, we have vicarious relationships with musicians (and other fans) through the art they perform.

Those experiences and relationships are where true uniqueness can be found. Even in a commodity business where unique value propositions are hard to come by, you can create unique experiences with customers. Just like famous musicians, you may never see them face to face, but the unique relationships you forge can be very real.

Years ago, I had a manager who told me that “every man should own a Rolex.” Rolex represents success, refinement and even masculinity for those who own them and those who desire them. This is the unique relationship Rolex has with its customers. The brand is capable of providing them with a highly-esteemed status symbol, one that draws both admiration and jealousy, in a way no other timepiece can quite replicate. The brand is an extension of the owner’s self-image, the self he wants to portray to others. He will gladly pay thousands of dollars to accomplish that.

Building Your Unique Value Relationship

Even if you have an established USP/UVP, you should start to think about your marketing and branding in terms of relationships instead of propositions. There are countless ways to build your unique value relationship (UVR). Since it is unique to each individual, I can’t tell you the best way for you to put everything together. But here are some principles to get you started.

1) Make and keep bold promises. Inspire, excite and challenge potential or existing customers. Most of your competitors will never do anything to shake people up and make them take special notice. They’re too busy playing it safe.

2) Provide remarkable customer service. Treat the customer like royalty (note how royalty and loyalty rhyme, at least in English). Give ridiculous guarantees and take away as much of the risk as possible from your customers. Make it easy to buy, easy to ask questions and get answers. Go further than your competitors are willing to go to take care of your customers’ needs. Live the Golden Rule. Don’t just say you care–prove it.

3) Stand for something. Or against something. Be a hero, an advocate. Champion the cause of your audience. Few things build and strengthen relationships like a shared goal or a common enemy.

4) Create an exclusive clique. Starbucks initiates customers into a whole new world of coffee enjoyment. I worked there for years, so I’ve seen the effect firsthand. These people are forever ruined to Folgers. But it’s more about being a member of an elite class of coffee connoisseurs than the quality of the drink. I had plenty of people tell me that Dunkin Donut’s brew tastes just as good.

If there’s anything in the world that’s a commodity, it’s coffee. Starbucks still found a way to become unique. It’s all in the experience.

5) Make the most of your location. Be THE neighborhood auto body shop. Or accountant. Claim your territory and dominate it. To steal a popular slogan, like a good neighbor, you should be there.

I believe the only way to free your business permanently from the commoditization rat race (a.k.a. the economy of today and tomorrow) is to develop and maintain a uniquely valuable relationship with people you can truly help. That is something no competitor can rip-off or destroy.

Go get started. Today.

Self-Defense Against Business Hijackers

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Do you own the patent on your product, service or process? If not, you are in danger of being “knocked off” by a competitor at some point. Chances are that they’ll charge less than you for what appears to be a similar offering.

In my January newsletter, I said

“…there’s really no way for products to be truly unique anymore — at least not for more than a few months. Companies that create technological advancements that customers will pay for usually see copycats coming up right behind them.

“So what do you do in an environment where your advantages can be ripped off so quickly?”

Have you seen those SodaStream commercials on the air recently? Seems like a cool product, right? As someone who knows very little about such things, I also thought it was pretty much a one-of-a-kind product.

Well, earlier this month, I saw knock-off Cuisinart version merchandised right next to the “name brand”…on the SodaStream-branded shelf display (complete with SodaStream video playing on a loop) — for $30 less. In a national retail chain.

I wish I could find the picture I snapped.

SodaStream spends $18 million/year in advertising (according to the most recent figure I could find), including buying for premium shelf space and an in-store video player, only to have Cuisinart undercut them on price and hijack customers at the moment of decision.

How do you think customers will react when they see a competitive product, which could be just as good, for nearly a quarter cheaper?

More importantly, can you see how this applies to your own business? Are you facing competitors who charge less than you? Does their mere existence cost you sales?

How can you protect yourself? Here are a few thoughts.

1) Have better, more resonant marketing. When potential customers form an emotional or mental bond with your product, service or more often your brand, they often look for you — not the other guy– when they’re ready to buy.

2) Offer an insane guarantee and/or service after the sale. Think LifeLock. They offer a $1 million guarantee if identity thieves get their hands on your information. (They’re a good example of strong marketing, too. Remember the commercial where the CEO broadcast his social security number?)

Service after the sale can set you apart from all of your peers. It’s a terrific way neutralize the fear that kills so many sales. When customers buy from anyone else, they’ll be all alone, trying to figure out how to set up, maintain and get the most from their purchase. You can make life easy for them by being there for them.

3) Does your product carry prestige, recognition or affiliation with some desirable group? Compare diamonds and moissanite. They look alike; some will even say that moissanite looks better than diamonds. But everyone knows which is a more desirable symbol.

4) Offer a bundle or bonus. The added value can make all the difference when it’s time to buy. Another idea would be to link your offering with a related product that would complement the purchase. Again, you’re making the consumers life better and easier than it would be if they dealt with the competition.

5) Create implicit doubt in the quality of the competitive service. Be sure to do this carefully and with class.

You could say something like this: “Plumbers at Acme are the only ones certified by the Illinois Board of Health for contamination-free work in residential and commercial buildings.” That means anyone else could be leaving dangerous germs all around your house. How much more would homeowners be willing to pay to protect their family’s safety?

Don’t attack anyone when you’re using a tactic like this, and always be 100% honest.

If you need some help crafting and implementing your own uniqueness, USP Made Easy may be exactly what you’re looking for.

 

Joe Sugarman, Drayton Bird and Me

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A couple weeks ago, I had the great pleasure of speaking at length with Joey Bushnell about copywriting, marketing and finding ways to get your business through tough economies like the one we’re facing right now.

There are two reasons this interview was special:

1) You know it’s hard for me to stop talking once I get started. Joey gave me a full hour to speak my mind.

2) This chat follows interviews with some of the greats in our industry: Joe Sugarman, Bob Bly, Drayton Bird, Ted Nicholas, Chris Marlow and others. I was humbled to be named among these legends.

During the call, we cover

  • why unique selling propositions (USP) can be bad for your brand – and what you should replace them with
  • 4 ways many businesses are sabotaging their own marketing
  • the reason most people struggle to persuade others and plenty more.

Check out the interview, Compelling Marketing Messages, over on Joey’s Web Marketing Inner Circle site.

It’s free to listen to. You don’t have to give your email address or anything, and there’s nothing for sale. Just sit back and see how much you can learn.

Enjoy!

In Case You Missed It: USPs and More

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Yesterday, I had the distinct privilege and wonderful pleasure of being interviewed by Yasmin Razaq for her Explode Biz Profits event.

We talked about:
– how recessions are good and USPs are bad
– possibly the dumbest advertising sign I’ve ever seen
– two foundational principles for writing copy that people will respond to, and
– how to keep your messages out of email jail.

I also shared how you can get my ebook Stealth Selling gratis.

Go check out the replay at http://businessmarketinggirl.com/explodebizprofitsreplays/. I’m not sure how long Yasmin will keep this page open, so if you have any interest at all, don’t wait too long.

Update: If you’re interested in hearing the recording of this hour-long interview, I’ve got it right here. If you’re interested in getting a copy of my book, send me an email and we might be able to arrange something.

A note on Unique Selling Propositions
Theodore Levitt said that selling focuses on satisfying the needs of the business, whereas marketing works to satisfy the needs of the customer.

With that in mind, the USP is inherently focused on the company, product or service itself. Even a benefit-rich USP can be off-base.

Feature-focused USP: “Our product is awesome. It’s made from the strongest steel ever produced.”
Benefit-focused USP: “Our product is awesome. It’s more durable than other products, so they don’t have to be replaced as frequently, saving time and money.”

Sounds good, right? But even the benefit-driven USP can be improved upon. These are selling points, rooted in the needs of the one who needs to make the sale. What if you moved into the realm of marketing defined by Levitt?

Unique Value Proposition: “Our customers are awesome. They save time, money and headache by using with the most durable product available. It works more reliably, for longer periods of time and with fewer replacements needed.”

The wording is purposefully corny, but you see the difference, don’t you? It may seem like a tiny distinction, but even the tiniest change in perception and approach can create a big change in results. A slight edge makes all the difference in the world.

Don’t make your audience dig for the value they’ll get from you. Sure, they might be able to figure it out by your statements about how great your product is. But why not make what’s in it for them obvious?

Are You Sabotaging Your Own Marketing?

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On Thursday, I have the privilege of participating in Yasmin Razaq’s Explode Biz Profits teleseminar event.

Every day this week, business growth and marketing experts will be sharing their best insights into attracting more customers and clients, strengthening your personal or business brand and improving your overall profitability.

I’ll be talking about “5 Ways Businesses Sabotage Their Own Marketing.” Some of the topics we’ll get into are:

  • the mistake most businesses make when creating their online and offline marketing materials — actually, I’ll probably talk about at least 3 big ones
  • how recessions can be good things if you know how to weather the storm, and
  • the truth about Unique Selling Propositions (almost everyone I work with gets this wrong)

Go over to http://www.businessmarketinggirl.com/explodebizprofits/ to find out more about this week’s sessions. Plenty of good content is on the way. If you see anything that might help make your business better, register and attend the talks that appeal to you.

Each speaker will also be giving away a special freebie after the call.

Why not take a look right now? As I mentioned,  I’ll be live at 12 noon Eastern on Thursday, March 29th.

I’d love for you to get your hands on this high-quality content.

**UPDATE**

Listen to the interview here.

Edging Out the Competition

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Thousands of new businesses will open in the coming months. There will be really good ones, really bad ones and everything in between.

What can you do to outmaneuver your ever-expanding number of competitors?

How will you establish your uniqueness in the market?

What makes you more attractive to your chosen audience? How can you build on that foundation?

A.) Do you have a specialty? A very sharply-defined expertise or niche? You may or may know this, but specialists tend to be able to charge higher fees than generalists in any given field. Think brain surgeons versus general practitioners.

It’s also easier to get noticed and establish yourself as an authority in a small corner of any industry, rather than compete with everyone else.

B.) Do you possess a rare certification? Have you worked with a famous client who got outstanding results? Do you have a pile of testimonials from clients who will sing your praises?

If any of those distinctions apply to you, put that information in the foreground.

C.) What activities are you doing that others are not doing? Where are you available that your peers can’t reach? What can you add to your repertoire to take the strategic advantage?

D.) What are you willing to do that none of your colleagues has the guts to try? What ways can you think of to differentiate yourself from the pack?

E.) What special ways are you touching and helping people? Society? The world?

F.) Is there an unusual guarantee that you offer to your clients? Specific results you basically promise that they will experience?

Don’t take for granted that would-be clients know these things. Tell them!

If others make the same claims about themselves truthfully, you have some more work to do to find your unique value proposition (UVP).

If your peers could make the same statements, but don’t, you can preempt them and take ownership of those claims. Be the first, and everyone else becomes a copy-cat.

What is the biggest, boldest claim about your services that you can honestly make? Say it!

The idea that you should “under-promise and over-deliver” is another myth that can cause considerable damage if you believe it. There is no question about over-delivering – you should always do that. The problem lies in under-promising.

Under-promising can be suicidal for your business. Imagine a dentist who advertises “Your teeth will probably be fairly clean when I’m finished,” because he wants to under-promise. Who would ever set up an appointment with that dentist? No one will find out how amazing the final delivery is; they will visit the dentist who guarantees that his patients’ teeth will be sparkling white and healthy.

That only makes sense. Under-promising sets a low expectation, which makes the over-delivery all the more pronounced. The hope is to surprise and delight the customer. But, weak promises will keep a customer from ever considering the purchase.

Make the strongest claims you can make. Otherwise you end up blending in with the competition. A reliable way to secure a steady flow of the type of clients you want to work with is to be great at something (the very best if at all possible) and make sure as many people in your target audience know about it.