Is the Tide Turning?

The following article was on the front page of the Wall Street Journal today (August 6, 2009):

TIDE TURNS ‘BASIC’ FOR P&G IN SLUMP

By Ellen Byron

DALLAS—Procter and Gamble Co., under assault by penny-pinching consumers, has quietly rolled out a version of Tide detergent that the company freely admits isn’t “new and improved.”

The product, Tide Basic, is currently for sale in about 100 stores throughout the South. It lacks some of the cleaning capabilities of the iconic brand—and costs about 20% less. Its very existence is one of the most telling signs to date of how the sour U. S. economy is forcing mass marketers to shift course…

The article goes on to state how Tide powder has dropped 9% in market share since 2007 (from 34% to 30%) and Tide liquid has dropped 19% (from 31% to 26%).

As I read the article, I could not help but be struck by how much this parallels the four major brands I work with closely. All four of them have a broad and rich product lineup with some truly amazing high-end models.  All four of them offer their dealers a strong menu of dealer growth and enrichment programs. And all four of them have, until recently, put their gross margin eggs in the high end of their product line up. Read more…

All Things Being Equal, Price Wins

That famous sales maxim has been around about as long as people have been selling things. And it really has a lot of truth in it.

Consider two sales scenarios— in one, a customer is trying to decide between two purchases. In the customer’s eyes (and that is the operative phrase), both offers look alike. Both do the same things for the customer, both have the same basic features and benefit clusters. So which one will the customer probably choose? The one that costs less. After all, if both offers are identical (except for the price), the only differentiator IS the price.

In the second case, there are again two offers on the table, but one is clearly far and away much better than the other. Yes, it costs more, but it clearly does much more for the customer than the cheaper offer. How will the customer choose now? She will probably opt for the offer with the better benefit cluster, even though it costs more.

(I am not saying that price is never an issue in a sale. It is always an issue. But it is not always the issue. In the second scenario, if the better offer costs ten times as much as the cheaper one, the customer may not have selected it.)

So in sales, our mission is to create inequalities so that competing offers are viewed in a disadvantageous light. Then, if our price is higher (and maybe up to 30% higher), the customer will still select our offer over the cheaper offers.

So how do we differentiate ourselves in a meaningful way? I am not

suggesting you wear striped slacks, a plaid jacket, and a chartreuse Polo shirt, but I am suggesting that you come across in a different way so that your offer is not framed in the same old boring frame every other sales hack uses. Read more…

Don’t Neglect That 401-K… In Your Business!

Many of you are being negligent.  You are neglecting the 401-K… in your business.  A 401-K is a retirement investment allowed by tax law that helps you build up funds for retirement.  And although technically your business is not a real 401-K, if handled right, it can pay off much better than any 401-K put together by all the financial gurus of all the investment houses!

To see why this is important, consider this table. It shows the life expectancy of adults in the United States: Read more…

How much profit is “enough?”

“Profit” is not a four-letter word.

“Loss” is.

Having said that, the question is one I hear a lot and is not easy to answer.  I could glibly toss out a number like 16% or 23%, but so what?  Percentages are not what you put into your bank account—dollars are.

So I always advise people who ask me this question to take some time when they can sit for two or three hours (minimum) undisturbed, in a peaceful setting, with no phones or interruptions—say, a beach at sunset (with a favorite beverage in hand), or in a mountain meadow, or a forest glade, or on the back of a horse—whatever it is that brings you peace and joy and lets you relax.  If you have a significant other in your life, they should be there too.  Then ask yourself the following questions: Read more…

Am I Normal?

We’ve all seen them—those little plywood cutouts at theme parks, where a character has his hand held out and says, “You must be this tall to ride this ride.”

I often get a version of that in my contractor workshops during breaks—many times a contractor comes to me and says some variant of, “Am I normal?”  There seems to be so much of this thinking in our trade that I thought I’d devote a blog to it. Read more…

“Ooohs!” and “Aaaahs!” at the Grand Canyon

I returned Sunday night from the Grand Canyon where I spent 8 days at the North Rim Lodge with about 16 other astronomers showing the guests of the lodge and park the wonders of the night sky with our telescopes, which were set up on the Lodge’s veranda. Read more…

Name Your Price

As promised in the prior two blog posts, I want to discuss in this post a new approach to sales that may help you get through these unprecedented financial times (especially now that the Supreme Court has shredded credit protection law).

What would happen if you told your customers that if they needed a new system, they could name their price and you would build a system for them that met their budget? Do you think they would find that worth looking into? Better yet, would it tick off your competitors? (A good sign you are doing something right!) Read more…

This Changes Everything

The landscape is littered with the debris of once-great corporations.

Two-thirds of the American automotive industry is now in Chapter 11 reorganization. (One of those cases is, as of this afternoon, pending a decision by the Supreme Court on whether or not shafting the protected creditors is legal. I hope the courts rule in favor of the bond-holders and not cave in to the pressure by the Administration to pay back their union cronies with a fat slice of GM and Chrysler. To approve the Administration’s plan would be to forever smash the rules of bankruptcy that have protected American investors to this point. If the Court upholds the Administration, watch American investing dry up as venture capitalists find safer places to invest-and that includes foreign investors.) Meanwhile, the President promises to “save or create” (how can you ever tell the difference in these two????) 600,000 jobs over the next 100 days-at a time when the economy is losing 600,000 jobs A WEEK. Big deal.

The sea has changed, and probably changed forever. Read more…

A New Approach To Selling?

Lately, I have become somewhat irritated (annoyed, peeved, irked, disenchanted, tired, bored) by the car insurance commercials on television.  One of them features a little gecko with a cute Australian brogue, while another has a pile of money with big eyes on it, and the third has a ditzy gal named Flo acting like a ding bat in an insurance store.

Don’t get me wrong. I am not knocking their products. I am sure the insurance offered by the folks who came up with the gecko (or the stack of money) and Flo have good insurance. I am just getting sick of their stupid ads.

But those ads do work, don’t they!  You know precisely which companies I am talking about, don’t you!

Then as I pondered the latest spiel by Flo, I got to thinking. Flo’s company is now offering customers the option to name their price and they then build a policy around that price.

Shazzam! What an idea. Let the customer name the price, then give the customer what his price will buy.  (There must be times, I assume, where the price a customer would name would not buy her enough coverage, so she may need to reset her price level to get the protection she wants- but once she is on their website, she probably ends up buying from them, doesn’t she?)

So that got me thinking.  What if we sold air conditioning that way?  Let the customer set their price up front and then showed them what we could build for that money?

How many times have you gone through an elaborate and intense sales process only to set your price and then be told by the customer, “Well, we need to get some more bids.” (This is a polite way of saying, “Hey, clown, you’re out of our price league!”) Or, “Let us think about it. We’ll call you back in a day or two.” (Which often turns into… like never.)

So I am going to put together what a “Name Your Price” sales call might be like and will post it here as soon as I get it done (hopefully by the middle of next week). Check back soon to see what I come up with!

How to Haggle With A Contractor???

I subscribe to Money magazine. The June 2009 issue had an article that almost made me leap out of my easy chair when I read its title (the title of this blog post). What I read made me feel even more incredulous at how some contractors approach their trades!

The premise of the article was that the publishers solicited advice from various contractors (painters, plumbers, electricians, flooring specialists, cabinet makers, etc.) to help homeowners haggle with contractors so they can “cut costs, not corners.”

The first two “experts” advised customers to get multiple bids (at least three) so you’ll know the market price range for the job. And let them all know you’re getting three (or 10) bids, to keep them all honest. Read more…