How’d you get here? – Commercial Search Engines and SEO Optimization – Spinach Helpful Tip of the Week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

We throw around the term SEO, SEO optimization and Search Engines all of the time, so for a quick second let’s take a look at commercial search engines.  These are the tools that allow our customers to find out about us, or if we aren’t optimized find nothing at all or about someone else.  But we also need to understand what they are saying, how they are saying it and where they are asking about us.

Why is this important, well if you haven’t you need to read the postmortem on the Mars Climate Orbiter probe so you’ll understand. Here’s a little note about it from an article on NewScientist.com, ‘In September 1999, its $125 million Mars Climate Orbiter probe was destroyed because its attitude-control system used imperial units but its navigation software used metric units. As a result, it was 100 kilometres too close to Mars when it tried to enter orbit around the planet.‘ The result, well let’s say it wasn’t exactly like parking too close to the curb and rubbing your car’s tires.

So let’s make sure we are all using the same measurements and language,  Wikipedia defines a search engine as follows:

A web search engine is a software system that is designed to search for information on the World Wide Web. The search results are generally presented in a line of results often referred to as search engine results pages (SERPs). The information may be a mix of web pages, images, and other types of files. Some search engines also mine data available in databases or open directories. Unlike web directories, which are maintained only by human editors, search engines also maintain real-time information by running an algorithm on a web crawler.      
Stacy Adams

So we have a little better understanding of the what, now let’s look at the why.

Search engines are the primary method of navigation for most Internet users

Simple huh, this is how our customers find us on the world wide web.  But it’s a lot more than that, this is how our customers tell us who & what they are thinking when they are looking for a solution that aligns with what we offer! We need to understand the tools they’re using, how they’re using them and what they’re inputting into those tools to find the solutions they want.

Sales and Marketing leaders can’t rely upon their own perceived reality based upon the arcane motto, ‘it’s how we have always done it’ the paradigm of a dying business.

This always makes me laugh and think about a family friend who see’s reality through a totally different lens than the rest of the world. We call it ‘Mona’s World’! and the joke  around our house when something happens, is it ‘Mona’s World‘ or was it what really happened.  Sorry, but if your asking yourself who Mona is in your circle of friends then your probably Mona – Sorry!

You might think you know what your customers think of your product or company, and thereby what they will be typing into a search engine program to find you. But, until you confirm and make sure what they really think and how they are trying to find you or your competitors then you can’t be sure.

I was reviewing a great primer The Beginners Guide to SEO’ provided by Moz.com .  Here’s a quick excerpt from the Moz.com SEO guide:

The majority of web traffic is driven by the major commercial search engines, Google, Bing, and Yahoo!. Although social media and other types of traffic can generate visits to your website, search engines are the primary method of navigation for most Internet users. This is true whether your site provides content, services, products, information, or just about anything else. SEO - Search Engines - MOZ - Golden Ratio Marketing

Search engines are unique in that they provide targeted traffic—people looking for what you offer. Search engines are the roadways that make this happen. If search engines cannot find your site, or add your content to their databases, you miss out on incredible opportunities to drive traffic to your site.

Search queries—the words that users type into the search box—carry extraordinary value. Experience has shown that search engine traffic can make (or break) an organization’s success. Targeted traffic to a website can provide publicity, revenue, and exposure like no other channel of marketing. Investing in SEO can have an exceptional rate of return compared to other types of marketing and promotion.

HatCountry.com Women's Mens Kids Western Wear and Hats!So don’t be Mona, understand the reality of where to start and where your customers are coming from and where they are trying to get to.  Hope you enjoyed your Spinach Helpful Tip of the Week, please let me know about any Mona experiences in your sales or marketing

What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall

1-800-PetMeds Free Shipping $49 Plow & Hearth Lucky Tiger Shaving

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Happy Memorial Day Everyone!

As we draw nearer to Memorial Day – Memorial Day is observed in the United States every year on the last Monday of May. It was formerly known as Decoration Day and commemorates all of our brave men and women who have died in military service for the United States.  To all of those we owe a debt to we offer our humble thanks!

Many people will visit cemeteries and place flags and flowers to recognize fallen family members and friends. Others will visit state and national memorials on Memorial Day and it is traditionally seen as the start of the summer season.

https://www.timeanddate.com/holidays/us/memorial-day

Happy Memorial day everyone! Enjoy and be sure to give thanks!

 

Chris Marshall

The Power of Laughter – Thanks for the smile

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

Well today your friend needs to tell you a joke! Why because studies have shown that a good laugh can:

Lower Your Blood Pressure –

Boosts the immune system –

so bring on the Whoopi Cushions and enjoy this fun and informative article by Eric C author of MakeItUltra™ – thanks Eric

Here is an excerpt:

“Something which has never occurred since time immemorial; a young woman did not fart in her husband’s lap.” ~Unknown 1900 BC

The worlds oldest recorded joke dates back to 1900 BC. This joke proves that toilet humor has been around for a very long time along with mankind’s need to laugh. We live in a world where we are constantly bombarded with the serious side of life. We have 24 hour news stations, Twitter, Instagram, Snapchat and other forms of social media that can overload the senses. In today’s stress filled society, finding humor in life and learning to laugh at ourselves is important. Research shows that laughter is not only good for the soul but is beneficial for health!

for the entire article click the link below:

Source: The Power of Laughter
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What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshal
Alibris: Books, Music, & Movies PetSmart
PMP Online Training by Edureka

‘Our 30 second elevator speech explaining our Social Media/Promotion strategy’ – Spinach Helpful Tip of the Week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

Someone asked me for a quick 30 second elevator brief explaining how Golden Ratio Marketing would define our Social Media/Promotion basic strategy – I did it in less than 5 we base ours recommendations on Awareness, Engagement and Activation:

A strategy providing guidance for implementation of the optimum mix of organic and paid tools driving Awareness, Engagement and Activation across Social and Digital platforms to deliver results.Social and Digital Platforms

Standard industry recommendations:

  • Owned Content – 30%

  • Content you Curated – 60%

  • Calls To Action (paid) – 10%

Now this mix is going to change based upon where you product is in it’s life-cycle and  what & where you competition is in their products life-cycle.  Depending on whether our consumers are B2B or B2C we’re going to capture a lot of this information from our syndicated retail sales data sources (Nielsen, IRI, SPINS, etc.) where you can look at your cross channel point-of-sale reporting and  data points combined with your retail outlet reports for a clear snapshot looking at historical data.  So our Sales Leadership should have a solid starting point of potential and opportunity.
HearthSong - Shop By Age
Now the Marketing team will need to work through and confirm (if we don’t already know) our buyer persona and buyers journey target demographics for B2C customers, and firmographics for B2B customers, secure information from our Marketing Technology stack and confirm what other data collection and analytical tools we will be utilizing, whether in-house or contract service (SSI, Toluna,  DataFox, Survata, etc.).

We’ll need to take into consideration how our target consumers/customers  are accessing their media, is it via digital, print, radio and/or television so we can plan how we can implement a simple Announcement/Awareness – Engagement – Activation strategy.A Three Phase Social Digital Media Plan

As we’ve said before this is what it is all about – taking your Market analysis – using your dashboards and information from your Marketing Technology stack and testing your outcomes and deliverable’s with a vendor who can provide gamification, shelf tests, heat maps, drag / drops, flip books, 3D views and more mobile-friendly surveys.   Now it is time for the proverbial ‘rubber to meet the road‘ and implement your Phase 1 ~ 2 ~ 3 and win the race:

What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall

Lucky Tiger Shaving Stacy Adams 1-800-PetMeds Free Shipping $49

‘Now What? – What do we do when we catch the car?’ – Spinach Helpful Tip of the Week!

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

In an earlier installment we explored Socratic Questioning methods that you should utilize for Questioning Inferences and ConclusionsAs we work through the different tools in our Marketing Technology stack that are supposed to deliver the information and data from which Sales & Marketing Leaders derive their inspiration. Once we have the inspiration do we have another ‘buggy whip’ or a race car?

‘Now what? What do you do now?DOGCATCHESCAR, you’ve caught the proverbial car, you have captured all the raw data, sifted information, screened your dashboards, and put every charts imaginable in your PowerPoint presentation.  As Sales and Marketing Leaders you’ve accessed your syndicated retail sales data from Nielsen, IRI and SPINS data, now you know what has happened historically.  You’ve caught the car, now it’s critical to learn from your real time marketing research.  It’s time to incorporate marketing analytics so you have a better understanding what is important.

You must understand the difference between making marketing & advertising decisions and selling based upon the historical dashboard data and information captured in our syndicated retail sales data versus marketing analytical tools.  It’s really quite simple – syndicated retail sales data looks at what happened ~ it does not have any idea what caused the outcomes or what could influence them. Tat’s where I, as a consumer of the tools hold the key – now is where we align our syndicated retail sales data with our buyers persona’s.  You’ve caught the car – now, it’s time to confirm what to do with the car!

What to do with all of your data analytics and in-house tools from your Marketing Technology stack and determine what is going to work with your confirmed buyer persona’s.

Using contracted services from vendors such as SSI,  a premier global provider of data solutions and technology for consumer and business-to-business survey research (as they define themselves on their website).Lucky Tiger Shaving

SSI Analytics logo - Golden Ratio Marketing
Let’s take a look at an industry leaders like SSI:

Background:

SSI’s website states:  Currently celebrating 40 years providing research and sampling science knowledge  they offer their customers assurance that their outcomes are valid based upon unbiased data.

  • Options including single or multiple modes of contact and data collection, and single or dual frames
  • Gamification, shelf tests, heat maps, drag / drops, flip books, 3D views and more mobile-friendly surveys
  • Fast, easy surveys give respondents a positive experience, encourages taking part in future research

We’ve used our Socratic questioning to ensure there is no bias or fault in the data we are using – questions focused on inferences and conclusions:

  • How did you reach that conclusion?
  • Could you explain your reasoning?
  • Is there an alternative, plausible conclusion?
  • Given all the facts, what is the best possible conclusion?

Now that we’ve taken the data, we’ve manipulated it and we’ve converted it into information ~ Now it’s time to develop our marketing programs and deliver customizable solutions that are going to grow our brand.

Here is where your in house marketing department, your agency and contracted services work together to provide enhanced marketing, memorable product experiences for your buyer persona’s and promotional support through real-time social & digital marketing in the correct channels they are on combined with dedicated onsite customer engagements to promote sales and grow your brand. Programs that are based upon sound research and analysis, that are monitored, evaluated and tweaked/updated to optimize their outcomes.

PetSmart That’s what it is all about – taking your Market analysis – your buyer persona’s – using your dashboards and information from your Marketing Technology stack test your outcomes and deliverable’s with a vendor like SSI providing gamification, shelf tests, heat maps, drag / drops, flip books, 3D views and more mobile-friendly surveys.   Now it is time for the proverbial rubber to meet the road and win the race:

  • Enhance brand awareness
  • Build Brand image awareness
  • Facilitate Product trial and usage
  • Rebate and Coupon support at point of sale
  • Sales support with the optimum tools

Our goal is to drive sales and grow our B2B and B2C business. To make sure that we achieve our goals we have to follow the old sage advice of those who came before us and plan the work, and work the plan. Today we have better and more effective tools to plan the work, and when developing our Marketing Plans, determining the 4 P’s of Product, Price, Promotion and Place we are testing and confirming the data and information we already have with our customers using gamification (Using game-like elements to make surveys and mobile app experiences more appealing and engaging to users. – definition by SSI ), shelf tests (virtual store cloud source testing) and others tools to validate our 4 Ps ~ product, packaging, pricing and placement.   That’s how we tell each other if we have spinach in our teeth.

What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall

Florsheim Plow & Hearth

‘Say What?’ – Questioning Inferences and Conclusions – our next installment utilizing Socratic Questions for Sales & Marketing Leaders – Spinach Helpful tip of the week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

Socratic Questioning as part of your day to day for Sales & MSocrates - Golden Ratio Marketing - Sales Leadershiparketing Leaders 

In this our fifth installment we’ll continue to explore Socratic Questioning methods you should utilize for Questioning Inferences and Conclusions: All thought requires the making of inferences, the drawing of conclusions, the creation of meaning. Assume that you do not fully understand a thought until you understand the inferences that have shaped it.
Let’s visit Merriam-Webster and take a look:

Definition of inference

  1. the act or process of inferring (see infer): such as a:  the act of passing from one proposition, statement, or judgment considered as true to another whose truth is believed to follow from that of the former  b:  the act of passing from statistical sample data to generalizations (as of the value of population parameters) usually with calculated degrees of certainty

  2. something that is inferred; especially :  a conclusion or opinion that is formed because of known facts or evidence

  3. the premises and conclusion of a process of inferring

Questions that focus on inferences and conclusions in thinking include:

  • How did you reach that conclusion?
  • Could you explain your reasoning?
  • Is there an alternative, plausible conclusion?
  • Given all the facts, what is the best possible conclusion?

Let me offer a real world application around SEO and more specific Keyword Research function looking across some of the tools like Raven Tools , Moz, SEMrush,  and Keyword Discovery to name a few – when a vendor, SEO expert, or member of your Digital Marketing team ply’s you with wonderful graphics and rems of data, be sure to ask where do they get the keyword data, and what is the time-frame captured in their report systems (some are 12 months, 30 days….) which tools are being used in your Market Technology stack.

Click to play –

Keyword Tools for Research - Golden Ratio Marketing

You want to make sure that they understand how they arrived at their conclusion so that you can have confidence in their inference!

  • How did you arrive/determine that your SEO content aligns with with what your buyer persona’s are looking for?
  • Does your long tail key words resonant with your identified buyer persona’s?

What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall

Plow & Hearth Florsheim

PetSmart

“Hitting the Bull’s-eye every time – not just the target” Targeting and Segmentation – Spinach Helpful Tip of the Week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

In Part 1 – Hitting the Bull’s-eye every time we discusseReady - Fire - Aim - Arrows-Missing-Target - Golden Ratio Marketing - Demos 2 God Steven Coats’ article ‘Ready, Fire, Aim!’ in International Leadership Associates in 2005. We discussed the importance of not going to either extreme, from sticking your head in the sand or suffering from ‘analysis paralysis, to ‘damn the torpedoes full speed ahead’. Instead to become a Ready-Aim-Fire high performing Market-Driven Organization you need to be somewhere in the middle, Steven Coats shared in his article:

As you might suspect, the best answer lies somewhere in the middle. Even in our overworked, no time for anything world, it is unconscionable to take a position that there is no time to think. On the other hand, it is just as ruinous to get caught up in endless analysis, thus deferring or avoiding decisions that must be made quickly. The best decisions are made with an appropriate balance of thinking and action.  So we begin by classifying our customers and discerning their perceived values relative to our offer.

No matter what type of organization you are leading, it doesn’t matter if you are focused on services, B2B, B2C or a nonprofit organization it’s critical to bring all sides of the organization together during the discussion, analogies and adopting and utilizing similar terminology helps breaks down barriers. How do we simplify the classification process, when there are so many different ways to go as a company?

The ready-aim-fire traditional approach works best in more mature markets’ – Martin Zwilling

For example, you may find key customers in a specific geography, revenue size (current and potential), a certain business model, a particular business orientation or other characteristics that your organization will take into consideration when developing specific contracting strategies and marketing programs to allocate resources towards. Plow & Hearth

How will you define non-users, key customers, potential customers and market sizes for market growth strategies? But, I’m getting ahead of myself first let’s talk about how a Market-Driven Process begins to classify their customers. In the organization the members of the Marketing Department have all sat through Marketing 101 where they learned to classify products as Stars, Cash Cows, Dogs and Question Marks/Problem Child regarding their perceived value and position in their life cycle.
So let’s keep this simple, let’s classifying our customers and see how they would align or fall if we used these same category titles.   The Boston Consulting Group Matrix1

Boston Consulting Group - Golden Ratio Marketing

Star – Important Customer with high market share and whose business is growing. These customers fall in the upper right quadrant and represent the most potential for sales growth, margins and profits. Gaining their additional business may or may not require us to limit our margins and profits that is yet to be determined. These customers could include Key Opinion Leaders, they could be located in new geographical markets, they could be new or growing organizations, there are a number of reasons for customers to fall in this category. As a Market-Driven Organization these are the customers we feel our offering has value for and they’re capable once we have gained alignment of performing.

Cash Cows – Key Customers whose business represents the majority of our sales and profits, these customers are at the highest risk for competitive activity, these are the customers that keep our doors open, fund our research and should be top of mind for all new offerings. Remember, their feedback is critical to a Market-Driven Organizations success. These are the customers that everyone else wants to take away from us, they are our performing customers. As a Market-Driven Organization this is the sweet spot, these are the customers that perceive value in our offering, are aligned and as we say ‘make the cash register ring’.

Dogs – Customers whose business represents limited profits with very low margins, these customers are sometimes referred to as transactional customers. A customer that does not value our offering and the cost to gain more business will offer limited margins and profits for our business, their goals as organization do not align with our value offering. As a Market-Driven Organization these customers can still have value, we have to look at their effects on our economy of scale, what volumes they offer and what effect does their business have across the organization, manufacturing, purchasing, human resources (man power) and how their volume affects our ability to negotiate and price for Stars and Cash Cows.

Question Mark/Problem Child – these are sometime referred to as late adopters, or these can be low potential customers that have limited potential, or they can be customers that are under performing. These customers have low market share and low market growth. These customers can eat up resources including marketing funds, sales team attention; we have to understand how they discern the value of our offering.
In the last few Spinach Helpful Tips we’ve been discussing the first few steps in the Market-Driven Process, ‘information gathering’ then using our Marketing Technology stack to convert Information into Data, and Data into Insights. We touched upon testing those insights with war games and customer feedback then turning them into Action to fuel your Organizations Market-Driven Process.
PetSmart

We’ve gotten ‘Ready’ with research and information gathering, and now we are ready ‘Fire’. It’s almost time to take action and allocate resources, so let’s begin to analyze our information, compare and prioritize our different customer segments. It’s time to sit down discuss and decide where we’re focusing on strategy and taking ‘Aim’ at the right opportunities. The importance of targeting and segmentation and how we allocate resources will determine whether we’re optimizing our ROI and in today’s environment keeping your ‘jobs’. Steven Coats shared later in his article:

Breakthrough strategies seldom just show up on your desk. They come from a lot of thinking, debating and analyzing them from a number of different perspectives. And then they are validated and strengthened with testing, experimenting, prototyping and other necessary actions. As a leader, you must encourage both innovative thinking and hands-on experimentation if you expect to keep up with your competition.

Here’s where the proverbial rubber meets the road as we begin to align what we do with what our customers need and value. As an organization have we sat down and categorized our customers based upon their potential value and how do you accomplish that? Have we taken the time to determine the customers perceived values relative to what your organization offers?

Q: How does your organization’s classify customers?

Q: Have you selected your target segments as part of your Market-Driven Process?

As we go through the process please provide your insights and thoughts so we have a more robust dialogue and don’t walk around with spinach in our teeth.

What is a ‘Spinach helpful tip’?Popeye Spinach

Have you ever walked around with something in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it. Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall
Lucky Tiger Shaving

Building brands and driving product sales. Why engaging customers at the point of sale is key!! – Spinach Helpful Tip of the Week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!

We constantly discuss how to create awareness, stimulate interest,
sales-funnel-chartdevelop desire pushing customers to make a decision and take action – so we engage and activate B2B and B2C customers.  So now what do you need to do? You have to ask for the business! Remember what Wayne Gretzky said, “You miss a 100% of the shots you don’t take!” Too often marketing and business focus on chasing the car, but what do you do when you actually catch the car??

The human interaction and having someone standing in front of the customer asking for the business is invaluable. Well actually it’s not invaluable, we can actually put a dollar figure on it. In an article written by Joe Pinsker in The Atlantic he expanded upon the value of  asking for the business, “Retailers, too, have their own reasons to love sampling, from the financial (samples have boosted sales in some cases by as much as 2,000 percent) to the behavioral (they can sway people to habitually buy things that they never used to purchase).

Samples have boosted sales in some cases by as much as 2,000 percent

Stop focusing all of your time and resources on how we’re going to get customers i1-800-PetMeds Pet Supplies Free Shipping $49nto our sales funnel, and let’s start focusing part of our time and resources on Customer Engagement and driving sales in store at the point of sale.  Looking at how in store In Store Demonstrations - Golden Ratio Marketingdemonstrations are defined by Golden Ratio Marketing and their subsidiary Demos 2 Go, ‘Customer Engagements bring your product to life! – utilize our talented, sales-oriented Customer Engagement Specialists for your live in-store product demonstrations. Build your brand awareness and promote customer trial and purchase.

Results provided by Golden Ratio Marketing through from in store demonstrations performed by their subsidiary Demos 2 Go has shown increases of point of sale in store purchases of 400% without coupons.

Increases of point of sale in store purchases of 400% without coupons.  

What’s your organization doing to drive sales at the point of sale, if you want more information and would like to know what options are available let us know.

Click Here to request a free no obligation evaluation

What is a ‘Spinach helpful tip’? Have you ever walked around with somethingPopeye Spinach in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall

Lucky Tiger Shaving Plow & Hearth Florsheim

‘The Price is Right! Or is It?’ – Spinach Helpful Tip of the Week

‘What is a ‘Spinach helpful tip’? – When a friend tells you what you don’t know – especially when you don’t know it!The Price is Right - Golden Ratio Marketing

The Price is Right! Or is it? does your brand and/or product support it’s pricing strategy? In today’s fast pace, competitive environment organizations are faced with new entrants cropping up and falling out every day. Planning and reacting in this type of maelstrom compounds the importance of creating valuable 360 degree communication across your team. Using your Marketing Technology stack, taking full advantage of your social media platforms, open two way communications between your customer service, sales and inside sales teams is critical. Our markets are crowded and messaging can be confusing for our customers don’t loose the value message of your brand.

Winning strategies anticipate rather than react to market threats and opportunities!

One of most important things you have to cultivate and protect is your brand’s value message. One way to permanently devalue and damage your brand is when the ‘Price is Wrong!’  How often has your Executive team or Sales Leadership made an uninformed decisions with their pricing strategies wreaking havoc with a brand.
Lucky Tiger Shaving
In the 1990 book Market-Driven Strategy & The Market-Driven Organization by George S. Day. The importance of information gathering as the first step can’t be under estimated. Day wrote, “Distinctive capabilities in market sensing, market relating, and anticipatory strategic thinking. This means market-driven firms are better educated about their markets and better able to form close relationships with valued customers.

The clarity of their strategic thinking helps them devise winning strategies that anticipate rather than react to market threats and opportunities.”

When an organization adopts and lives the Market-Driven Process the information and market intelligence they gather and evaluate allows them to develop ‘winning strategies that anticipate rather than react to market threats and opportunities’ and nowhere is this more important than pricing decisions.  In his white paper ‘The Price is right! Or is It?’ Philip Otley a Senior Partner at Prophet, a strategic brand and marketing consultancy discusses commonly an accepted financial ‘rule of thumb’ leader’s pull out of their pockets when they’re looking at managing their P&L’s and working with their  financials:

The commonly accepted rule of thumb across many sectors is that a one percent reduction in operating costs will create a three percent improvement on the bottom line. A one percent improvement in realized price, however, is likely to create a 10 percent or better increase on the bottom line. 

Far Side - Deer in the headlights - Golden Ratio Marketing.png

As Forest Gump would say, ‘I’m not a smart man, but I know what improving the bottom line is!’ and a 10:1 difference that’s as good as a bowl of Bubba Gump Shrimp Gumbo on a cold day.  Why would an Executive Team be hasty regarding pricing decisions?
Otley goes on to speak about the cause, and I would say when executives and Sales leaders get that proverbial ‘deer-in-the-headlights’ look right before they dart out in front of the competition driving a big diesel rig:


Despite this, short-term trading pressures often create a temptation to compete on price to get needed performance bumps. But the cumulative effect of discount can be severe: Pricing is a very clear signal around the value of the exchange and the value that the company wishes to place on the brand.

Philip Otley refers to organizations regarding their maturity and sophistication in relation to how they manage their pricing.  For our discussion we will define maturity and sophistication by the adoption and implementation of Market-Driven Process. Otley went on to outline the following pricing strategies that non Market-Driven Organizations follow:

At the least sophisticated end is cost-based pricing: “It costs us $XX to make thiPlow & Hearths product, so $XX plus 30% is our price.” A surprising number of businesses still use variations of this approach, which doesn’t reflect the nature of demand or value of the product. It just reflects the input cost and a notional “rent” factor.

Here we have an organization that is not utilizing the Market-Driven Process as George S. Day shared in his article ‘What does it mean to be Market-Drive?’ ~ “… being market-driven is about having the guidance systems and discipline to make sound strategic choices and implement them consistently and thoroughly.” This is never more apparent that when an organization looking at pricing decisions.

Otley continues in his article looking at organizations further along the maturity curve and describe, ‘competitive-based pricing’:

“If all my competitors are charging $XX, so will I.” New Market entrants might charge $XX minus a few percentage points. Those that believe their product or service is somewhat stronger than competitors will add a slight premium to their pricing. Probably the majority of organizations across industries follow this path, with price-matching widespread.

Remember, the Market-Driven Process and Market-Driven Organizations needs to leverage existing in-house and external data to better understand customer and product lifecycles and purchasing habits that will then trigger promotional/marketing programs and contract initiatives that move customers and adapt with them through the customer lifecycle, reducing attrition and driving long-term customer relationships.
HearthSong
Here is where we find alignment with Otley as he writes:

At the pinnacle of the curve are those businesses which are sophisticated in their pricing practices because of two particular areas of focus. First, they develop a high level of understanding of their market segments, not just in terms of their demographics, but, more importantly in terms of their behaviors. That, in turn, informs their ongoing measurement of customers’ responses to pricing moves, and how they’re influenced by any numbers of factors- competitor moves, advertising, or promotional campaigns and the state of the overall economy among them.

As we go through the process of defining a Market-Driven Organization please provide your insights and thoughts so we have a more robust dialogue and don’t walk around with spinach in our teeth.

Q: Where is your organization on the maturity curve and pricing sophistication?

Q: How does your organization take advantage of competitors who are not mature on the curve?

Q: What are some of the long-term implications for organizations that don’t use the Market-Driven Process and implement knee jerk pricing reactions?

What is a ‘Spinach helpful tip’? Have you ever walked around with soPopeye Spinachmething in your teeth, and no one tells you. A real friend takes you to the side and tells you. It may be embarrassing at first but not as bad as finding out at the end of the day when it is too late to do anything about it.  Especially if you are trying to create a positive brand image and lead your organization to success!

Best regards,

Chris A. Marshall
Stacy AdamsPlow & Hearth