If you find yourself in a fair fight, you didn’t plan your mission properly – Colonel David Hackworth
In the most saturated time in history you better know how to cut through the noise and be heard.
Attention has become the scarce resource of the information economy. – Wired Magazine
I want you to imagine yourself strolling through a hot sunny day in a Bangkok market.
I would not blame you if you lost yourself in the color, noise, frantic pace and spectacle of this busy place of trade. It is easy to forget these markets are just like any place of commerce, where goods and services are exchanged for monetary compensation. Walking through the market and using your extremely receptive business mind, something just seems a bit off to you.
As you walk past the fifth consecutive fruit stall, each of them offering bananas for 20 Baht you quickly realize what is wrong. You notice that the strategy these fruit merchants are using is virtually non-existent. The strategy they are using is like playing Russian roulette, it is based on pure chance. These merchants are playing a game of luck when it comes to their business.
Each store would simply hope and pray that the client would stop right in front of their stall. None of them do anything unique or special to attract a client. It is astonishing how these vendors were virtually identical to each other; they sell the same fruit; they sell it for the same price; they arrange everything the same as each other; they yell and scream in the same way too.
If you didn’t know any better, you would assume that every store was part of the same franchise. This is near identical to how most industries and markets actually operate outside of Bangkok as well.
The latest studies from Microsoft show that the attention span for humans is now 8 seconds; the attention span of a gold fish is 9.
Remember the average person receives over 30,000 commercial or advertising messages every day.
The battle for people’s attention let alone their money is incredibly intense and becoming more difficult every day. The client has too many options and noise to effectively deal with. With thousands of messages a day clamoring for their attention, clients struggle to answer the question of “Whom do I trust?”.
Seth Godin illustrates how people now think in today’s markets. Imagine you were born and raised from a large inner city family. One day you decide to take a break and travel to the outer reaches of the land for some camping. You are driving along a highway in the middle of farmland; you look to the side and several cows catch your eye. Being from the city the appearance of cows is truly something that is worth looking at. You look at them in amazement.
As seconds turn into minutes; as minutes turn into hours you are still on the same long highway. You must have seen thousands of cows by now and they no longer amaze you. The cows become less and less interesting and eye catching. The only thing that could possibly give you a sense of amazement again is if you saw a purple cow.
Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. – Michael porter, world renowned expert of business strategy
Just like the analogy of the purple cow, companies must realize that their consumers have been desensitized to them. The only way to grab their attention is to be unique, to be a purple cow in a farm full of brown cows.
Human attention might be one of the most restrictive limitations to the promise of the internet. – Mitchell Wade, Rand Corporation
In this attention deficit world, you better stop relying on Simon says as your main strategy and be ready to start differentiating yourself.
I want to ask you this. In today’s attention deficit economy where there are competitors bombarding markets and over saturating them, are you just another generic voice?
It was only a few decades ago that most utilities were regulated by monopolies making it easy for a consumer to choose. It was like going to the market for bananas and having only one banana shop. Now the marketplace has been inundated with hundreds of banana vendors screaming at you. If you want to pick something like health insurance, a new phone plan, power company, shoes and even a cup of coffee you are inundated with a barrage of options.
“Should I kill myself, or have a cup of coffee?” – Albert Camus, philosopher.
His quote perfectly illustrates how we have an abundance of choices in our lives and it is increasing every day.
The science and countless experiments prove that having too much choice causes people to feel overwhelmed and make the wrong choice. In the award winning book ‘The Paradox of Choice’ by Barry Schwartz he proves that people make the best choices when there are fewer choices presented to them.
In 2000, psychologists Sheena Iyengar and Mark Lepper published an incredibly insightful study showing how too many choices negatively affects a buying decision. At an upscale food market there was a stall that sold Jam. As a way to entice shoppers they offered samples of 24 different varieties of gourmet jam. Those who sampled the spreads received a coupon for $1 off any jam.
After an adequate sample size, they wanted to test to see if they could increase the number of purchases. To do this they decided to reduce the number of samples available to the public. Instead of offering 24 varieties they offered 6 varieties to taste. They tabulated the results and it provided some stark contrasts.
When they offered 24 varieties to taste, more shoppers came to the store and tasted. Now here is where it gets interesting; when they only offered 6 varieties more people actually purchased. Ten times more people purchased when there were less choices compared to when there was 24.
These experiments have been duplicated many times over with similar results. Each show that excessive choice can produce “choice paralysis” which leads to inaction.
Often times a consumer would rather choose nothing than have to choose something. Remember our brains are always trying to be lazy; it does not want to have to think too much and use up the body’s energy. Making no decision uses far less energy than having to make a decision between many options. Thus we must make the choice for consumers as easy as possible.
So how do we do this?
We do this by being different; by being unique; by standing out.
If you do thorough competitive analysis you will see that most companies are all generic in the eyes of the consumer; thus being different presents you with a huge opportunity.
I want you to imagine a market that has 20 different competitors. To the prospective client they have a choice between 20 different companies that all offer similar services. The amount of energy required to evaluate all these companies is too much for most people. When was the last time you looked at every single company in a market before you made a decision? If you are unique then you instantly make it easier for your client. Now when the client looks at the market they only see two choices; they see you and the rest. You have effectively made their choice have two variables instead of twenty, making it far easier for them to choose you.
Now the question is; are you different?
What is the one thing that makes you a better choice than everyone else? It is not enough to be different, but it has to be in a way that helps your prospects.
A word of warning; if your differentiation is based on price you will struggle in the future.
Remember there can only be one company that has the lowest price in a market.
There are those that compete on price and there are those that compete on uniqueness and value. Companies that compete on price may have some success for a very small window of time before they go bankrupt. It is a dangerous game that you should not play because in any given market and any given time there can only be one company that is the cheapest.
Companies may fool themselves into believing they are far different from their competitors but could they pass the lounge room test?
The Lounge room test
Imagine you are in a lounge room with:
1. Your perfect target client
2. Your top five competitors
Each competitor has thirty seconds to pitch the consumer and win them over.
What would they say?
What would you say?
Would it be compelling for the client to choose you?
Guess what; a majority of the time it won’t be. Too many companies spout out generic slogans such as “we are the best” or “the trusted company”.
Do you believe those phrases would really compel your ideal client to pick you?
It is so easy to fool yourself into saying that your company attracts the attention of the market; but imagine the lounge room test and see what happens. I want you to really visualize that lounge room; really imagine having your competitors right in front of you; imagine exactly what kind of impact your words would make relative to your competitors.
In today’s economy being better or great is not enough you MUST be unique.
Companies cannot be all things to all people; you must be able to articulate what you are trying to be and what clients you serve.
Being different is better than being better – Tom Petters
The Harvard Business Review reports, there is a 370% greater chance of profitable success for a new product or service offerings that are unique versus just being copycat offerings.
Unique Selling Proposition
The thirty second pitch in the lounge room test is what a majority of the business world calls a USP (Unique Selling Proposition). You may have even heard it as value proposition or statement of value.
Whatever you want to call it, the idea is the same. It is a few words or sentences that communicate the most desired, crystal-clear outcome the prospect wants. It shows the prospect how you can deliver the result they want on a deep consumer benefit level.
“The road to everything you desire is through your USP. You can write an okay headline without knowing your USP, but it will never be a killer headline. You can make a lot of money without knowing your USP, too…but for every dollar you earn, you’re probably leaving ten on the table.” – John Carlton, legendary Copywriting
Now many companies confuse this with their purpose or vision. It is far more granular and specific than your purpose. A ‘USP’ directly and tangibly articulates the precise deliverables as it pertains to your client in their present situation. There is no room for esoteric notions; It is not egocentric; it must be purely client centric.
A great USP comes about from great competitor, internal business and most importantly client analysis.
As a USP is reliant on both external and internal factors, it is most useful for specific products and services. Your USP may change as the market changes, as your clients become more sophisticated, as your competition varies or your company innovates. It is a lucid and dynamic articulation of what makes your company, service or product stand out.
It is the perfect articulation of your current competitive advantage.
“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.” – Warren Buffett
It is astonishing to find that when you do even the most superficial competitive analysis even in hyper saturated markets you will find most competitors are all the same generic dribble. It is like the fruit merchants in Bangkok all standing side by side offering the same thing. In a world where consumers aren’t even paying attention, if you can be the red boat in a sea of blue, consumers will be compelled to listen to you.
Remember the latest studies from Microsoft shows that the attention span for humans now is 8 seconds; the attention span of a gold fish is 9.
When was the last time you spent hours to research every single company in a market when you made a purchasing decision? Not often I bet. Don’t worry I don’t do it either. Most people have better things to do in their life than to cross examine hundreds of different companies to buy their next tooth paste.
In a world of ever decreasing attention spans it is incredibly naïve for companies to believe that consumers will take the time to research and know everything there is to know about a company.
As Richard Dawkins contends; the only person that has a 100% of their DNA is themselves; we are on a cellular level predisposed to be egocentric; humans will always care more about themselves than others. Companies must ensure that their message is not only clear; client benefit driven but it must also be unique so it can grab the attention of the person.
Every market is filled with an exceeding amount of generic competition and the more identical your services are too others the more important your differences become. With meaningful differences hard to find prospects will find even use trivial differences to make their ultimate choice.
My advice, then, is when you think strategy, think about decommoditizing. Try desperately to make products and services distinctive and customers stick to you like glue. – Jack Welch.
You must constantly ask what is the primary consumer benefit that differentiates you over everyone else?
Remember you only need one, you don’t need to be everything to everyone. Dominos has a notorious reputation for bad taste however their USP is entirely about speed.
If a prospect can immediately see what makes you unique over your competitors, they will have no choice but to go with you.
What is the one unique factor about your product or service that makes your prospects think “wow, I must have this”?
In a room full of your top competitors with only one client available, what would you say to grab that person’s attention?
A majority of businesses cannot articulate this and they wonder why they are struggling. It is so easy to say why you are so special in a room by yourself. The lounge room test is a very humbling experience for most companies.
When we look at most businesses, they toss around the same slogans of “we are the best” “we are the freshest”.
Try using those sentences in the lounge room test and see where that gets you. If your USP does not evoke a real visceral reaction, then it has not done its job.
In a crowded marketplace, fitting in is failing – Seth Godin.
Having this clarity will make your USP dialed into to your perfect target client.
USP’s can come from any aspect that the client values in your target segment.
Let’s take a look at a few examples.
Zappos – We have the best return policy ever
Macy’s – You can bring back any item whether it’s a week or a decade from now for a refund, even if it has holes in it
Walmart – Always low prices (A word of warning: history has shown that most companies that compete on price eventually go bankrupt. This book is aimed to de-commoditize your company in an economy that is trying to marginalize it every day. The last thing I want you to do is play the price war game because that is not how you are going to win)
M&Ms — The milk chocolate melts in your mouth, not in your hand.
What is the one pet peeve of all chocolate lovers? The dirty hands they get afterwards. This is another example of truly understanding the client beyond demographics.
Avis – We’re number two. We try harder.
This is absolutely genius. For many years Avis lagged behind Hertz in the number two spot and were facing financial turmoil. Hiring the famous advertising agency ‘Doyle Dane Bernhach’, Avis decided to do an image makeover and implemented a new campaign that saved the company. The “We try harder” campaign skyrocketed their market share from 11% to 35% in the subsequent years.
So much for the old taglines of “we are the best”.
Here is a secret that most companies completely miss; most consumers don’t care about the best. When was the last time you went to the best restaurant, best doctor, best karaoke bar, best anything really?
This is another instance where companies must let go of their own egotistical realities and understand what markets really want.
Domino’s Pizza – You get fresh, hot pizza delivered to your door in 30 minutes or less or it’s free.
Tom Monaghan’s deep insight into the minds of the consumer was the backbone of a multi-billion dollar pizza franchise that didn’t even pretend to care about taste.
FedEx Corporation – When it absolutely, positively has to be there overnight.
FedEx no longer uses this slogan, but while it lasted it was perhaps the perfect example of a great USP.
Let me tell you the story of how Fed Ex first started because it is another example of great client focus.
Fed Ex was not an instant success during its inception in 1971.
The original Fed Ex’s strategy was to take on Emery Air by selling a better service at a cheaper price. They had three services lined up against Emery at cheaper prices;
· Priority 1 which was overnight shipping
· Priority 2; two-day shipping
· Priority 3; three-day shipping.
In the first two years FedEx lost $29 million ($303 million adjusted for inflation in 2016).
With such rapid losses Fed Ex turned its attention to understanding their client instead of playing copycat. They refocused the company around a new strategy.
They dropped priority 2 entirely. Priority 3 was renamed ‘standard air service’ and they emphasized and focused on Priority 1 – overnight shipping.
They stopped competing on price and their whole company adopted the USP of “when it absolutely, positively has to be there overnight”.
FedEx dominated the market and after being the giant for over forty years, Emery went out of business. This was a true case of David vs Goliath, where David used the power of client focus to triumph.
“If you don’t have a competitive advantage, don’t compete.” -Jack Welch, Former CEO of GE.
If you cannot find a unique distinction between you and the competition, then you better either fix your service fast or sell the company as soon as you can before you go bankrupt.
More often than not a vast majority of companies can find their unique position in a market even if it is not obvious.
When you truly do your due diligence with market research and internal analysis you will gain tremendous insights. You may realize many factors in your business that you and your markets take for granted. This idea is illustrated in the famous turnaround story of Schlitz Brewing Company.
During the 1920’s all the brewing companies were marketing beer the same way; screaming and shouting generic slogans along the lines of “the purest beer”. Some companies even took out full page ads with the word “PURE” in big bold letters.
In the early 1920s, Schlitz Brewing Company was the number five brand in the American beer market and was on a fast decline. They were running well behind many of the companies and were on the verge of ruin. In an attempt to survive they hired legendary copywriter Claude Hopkins to help them.
Before Claude Hopkins would take on clients he believed in truly understanding the entire landscape of the situation. The first thing Claude did was tour the facility where the beer was brewed.
On the tour he was shown plate-glass rooms where beer was dripping over pipes. Inquiring as to why they did this, Hopkins was informed that those rooms were filled with filtered air, so the beer could be cooled without impurities.
Next, he was taken to towering structures filled with white-wood pulp that proved to be a superior filtering process for the brew. Claude was informed that every pump, pipe and filter was cleaned several times a day to ensure strict purity. Every bottle that housed the final brew was sterilized four times.
The brewery was situated on top of Lake Michigan which would have provided a more than acceptable source of water, however it was not used. As the tour continued Hopkins was taken to the 4,000-foot-deep artesian wells that dug into the ground in order to reach the purest water available. At last he was taken to the laboratory and shown the mother yeast cell that was the result of over 1,200 experiments to bring out the flavor.
When Hopkins asked why Schlitz didn’t tell their clients about all of this maniacal attention to purity and quality, the Schlitz management team responded with “Every beer company does this.”
Hopkins smiled and replied “But others have never told this story; the first one to tell the public about this process will gain a big advantage.”
Within months of the “new” story, Schlitz went from 5th place in the market to 1st. Every other company that tried to do the same as Schlitz were branded as second rate imitators and copy cats.
Following this great story virtually every industry outside of brewing has copied this concept for their own use.
From every automotive company displaying how they manufacture; shoe companies showing how they work their leather and even Apple showing how elegantly a Mac is made.
You may not be able to use this specific method for a USP in your own market but rest assured there is something just as powerful if you dig hard enough.
Remember it is not about finding a catchy slogan or something that sounds fancy, it is about creating a deep meaningful reaction from your perfect client. In most cases you won’t be able to define your USP in one day for each of your products or divisions because it requires deep analysis and thought. You have to have completed thorough client intelligence, competitor and internal analysis to really understand the deepest desires of your market. When your company does find a USP for their products and divisions rest assured it will drastically improve your position in the eyes of your market.
The company that can perfectly articulate what makes them unique, what makes them different from the rest of the world will be the company that has no competition and win.
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