Powershift Marketing - Section 1 (1st Gear)

Copyright © 2009 DENNETT CONSULTING GROUP ¦ Issue 1 - 2010 ¦ 1ST GEAR - GETTING OFF THE LINE

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101 WAYS TO SHIFT YOUR BUSINESS INTO HIGH GEAR

1ST GEAR - GETTING OFF THE LINE THE PRINCIPLES OF POWERSHIFTING

In this section I explore the core principles behind POWERSHIFT MARKETING and the changes in mindset and marketing focus that will be required to shift your company into high gear. I also review the basic building blocks needed to create a sound marketing effort.

Chapter 1 - The Power of Change 2

Chapter 2 - The Power of Your Beliefs 4

Chapter 3 - The Power of Speed 8

Chapter 4 - The Power of a Satisfied Customer 10

Chapter 5 - The Five P’s of Marketing 11

Chapter 6 - Use PowerShift Math… 1+2+3 = 10 13

Chapter 7 - Know Your Business - Inside and Out 15

Chapter 8 - Use Market Research 18

Chapter 9 - Embrace Psychographics 22

Chapter 10 - Understand Branding 24

Chapter 11- Create An Action Plan 26


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Chapter 1 - The Power of Change

“If your customers reach the future before you,

they’ll leave you behind.”

FAITH POPCORN, FUTURIST AND AUTHOR

The above quote from futurist Faith Popcorn has been one of my favorites for years. It sums up what I’ve observed in working with many companies. Here’s another one of my favorite quotes:

“They had been in business for twenty years and had one full year of experience.”

Brian Buffini’s Turning Point Seminar

Starting out, most firms have a clear vision of what they want to provide their customers and how they are going to do it. But then a strange spell falls over them.

As soon as they have a certain level of success, for some unknown reason, they stop listening to their customers. They start believing their own news releases.

The business landscape is filled with examples of firms that have been slow in changing to meet the needs of their current customers.

How could Polaroid, whose founder Dr. Land invented instant photography with his pioneering Polaroid Land Camera Model 95 in 1948 ($5 million in sales in its first year), totally miss the emerging world of digital photography?

Still clinging to its outdated product line while rushing to introduce a handful of digital products, the company missed the digital revolution so badly that by 2005 they had to be rescued from financial disaster by the PetersGroup Worldwide.

Even Kodak, a name synonymous with photography since 1888 when George Eastman placed the first camera in the hands of consumers, dragged their feet into digital photography. While they are credited with creating the first digital camera, they couldn’t let go of the past, and they are still playing catch up in today’s digital world.

A phone company notorious for poor service, US West (a.k.a. “US Worst”), originally was a profitable “Baby Bell” created by the antitrust breakup of AT&T. But they became so out of touch with their customers that by the late 90s they were forced to sell their last profitable business (the Yellow Pages) and became part of Qwest in 2000.

POWERSHIFT PRINCIPLES

The four core principles of POWERSHIFT MARKETING are straightforward:

1. Embrace Change - Change is the only constant in this world. Your company’s ability to be profitable is directly related to your skill at recognizing change.

2. Focus on Customers - You must know where your customer is going in order to respond quickly, so you can use all your resources to meet your customer’s needs first.

3. Leverage Every Dollar - Since ads cost the same - whether or not they work - the best way to generate more return on your investment (ROI) is to create more powerful advertising.


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4. Take Action Daily - You can’t afford to stay in one place in a constantly changing world. You can stay ahead of your customers and your competition by taking small actions every day. Most companies (or people) don’t fail or succeed because they do one thing right or wrong. They succeed because they do dozens of things right, every day.

POWERSHIFT TIP 1-1

TAKE ACTION EVERY DAY.

If every day you do just one thing that impacts

your marketing, in only a few months, you will have made dozens of changes that will have a positive impact on your business.


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Chapter 2 - The Power of Your Beliefs

It is no surprise that people’s beliefs shape their behavior. What is surprising is that most people don’t work at changing beliefs that hold them back.

My POWERSHIFT MARKETING approach and tips are based on four core beliefs:

1. Your past does NOT define your future. 2. Only FEAR stops your success. 3. Working HARD is not enough. 4. WRITE it down, to get it done.

YOUR PAST DOESN’T DEFINE YOU

If you’ve read Napoleon Hill’s Think & Grow Rich, the original self-help book of the 50s, listened to Tony Robbins’ motivational programs, including his original Personal Power tapes, or read the book The Seven Habits of Highly Effective People (1989) by Steven Covey, this won’t be a new concept to you.

Why do we hire people based on past performances (resumes)? Why do we start planning sessions by reviewing our past? It’s because we believe our past reveals future success. Wrong.

LIFE LESSON - I did well in college and when I headed for the U.S. Navy Officer Candidate School, I thought I would continue this same success. The moment they handed a journalism graduate a slide rule, however, I knew I was in trouble. I finished close to the bottom of my class. Over the next two years I was a terrible naval officer. I was the classic square peg in a round hole. With my self esteem at an all time low, my past now gave me a very different script for the future. Fortunately, my first civilian job as head of public relations for the California Credit Union League was successful. Since then I have constantly questioned the idea that past success defines future success.

You should be asking potential employees how comfortable they are learning new things. Start planning sessions by asking about people’s aspirations and dreams. Ask questions like, “What would your future look like if you didn’t have a past?”

POWERSHIFT TIP 1-2 WHAT YOU WILL LEARN

IS MORE IMPORTANT THAN WHAT YOU KNOW.

Your past does not define you. Don’t ever believe that past success will lead

to future success.

Remember, if your marketing was successful in the past, there’s no assurance it will work in the future. If your marketing was unsuccessful in the past, you might be able to tweak an old idea and make it a future winner.

FEAR CAN STOP SUCCESS

Master motivator Tony Robbins believes that fear is one of the core reasons we don’t succeed in life. The fear theme is common in many motivational books. We don’t try a new idea, make a commitment to goals, or change because we fear failure or success. In my workshops I tell attendees that when evaluating ideas you must mind shift away from fear.

POWERSHIFT TIP 1-3 FEAR STOPS SUCCESS.

Only fear stops you from success. Learn to evaluate marketing ideas as

if you didn’t have any fear.


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As you explore the tips in this book, try to look at them without fear. If you had no fear, what would you do? Also remember, what you are afraid of is never as bad as what you imagine.

LIFE LESSON - In 1980 I was presenting the frequent flyer idea to a room full of fearful airline executives. Airline deregulation had occurred and we were losing a million dollars a day. We needed a fresh marketing idea. We had one, but executives either feared it would work and we couldn’t afford it, or they feared it wouldn’t work and we would spend millions on a bad idea. My job was to convince them to evaluate the idea on its own merit.

Did it make sense for an airline to reward their best customers, so traditional selection criteria like price and schedule became less important? Of course it did!

If fear was removed from the process, I was convinced that these executives could open their minds to the possibility of this new idea.

POWERSHIFT TIP 1-4 ACTIVITY AND PRODUCTIVITY

ARE NOT EQUAL.

Real productivity is driven by everyone in your company taking ownership in your marketing

effort. You must empower everyone to give their best effort for success.

WORKING HARD IS NOT ENOUGH

Have you ever seen a fly trying to get out of a closed window? It tries the same strategy over and over again. It keeps flying, harder and harder, into the window.

Many businesses approach the marketplace the same way. If something isn’t working, the answer is simple - fly harder!

We like to think that activity and productivity are equal. They are not. That’s one of the prime tips expressed in Spencer Johnson’s bestseller Who Moved My Cheese?

Instead of working harder, as they say, try to work smarter. That means you need the collective power of everyone, especially employees who serve your customers.

If something isn’t working, the best approach is to empower everyone to find a solution. As the founder of McDonald’s, Ray Kroc, was reported as saying, “All of us are better than some of us.”

One of the best tools I’ve found for getting everyone focused on a problem and a solution is to hold stand up meetings.

POWERSHIFT TIP 1-5 USE STAND UP MEETINGS

TO KEEP PEOPLE FOCUSED.

Empower everyone to participate in problem solving by having frequent

and short meetings.

No chairs means more focus, more action, and less talk. Stand up meetings can be a great tool for focusing your team on results.


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LIFE LESSON - When I worked for Western Airlines (which merged with Delta Air Lines in 1987), we were losing a million dollars a day within a few years of airline deregulation. Every day we would all gather in a conference room to document our failures. What did we do wrong yesterday that made us lose money? We almost never spent any time planning our successes. These meetings were pointless. An airline has a perishable product. If you don’t fill a seat to Hawaii on Monday, you can’t add that seat on Tuesday. It’s gone. So, what was the purpose of looking back? I guess it was to make all of us feel totally disheartened.

Eventually we started holding short stand up meetings to explore ways to make money - to plan success, not to document failure. These new meetings worked.

Every day these brief meetings (they lasted less than 30 minutes) focused on little things we could do to improve revenue and operations the very next day. Within 90 days we started making money again.

POWERSHIFT TIP 1-6 HAVE WRITTEN GOALS

AND SHARE THEM.

Your goals must be clear, specific and measurable, and be shared with

everyone in the organization.

WRITE IT DOWN TO GET IT DONE

In Mark McCormack’s book What They Don’t Teach You at Harvard Business School, he shared the results of a 1979 study of Harvard MBA students. The students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?"

Only three percent of the graduates said they had, 13% had goals but hadn’t written them down, and a whopping 84% had no specific goals at all. Ten years later, these students were interviewed again.

The 13% who had goals, but didn’t write them down, were earning twice as much as the 84% percent who had no goals at all.

The three percent who had written goals were earning ten times as much as the other 97% put together.

Money isn’t the only score card in life. But it’s clear that having written goals makes a big difference in achieving whatever you call success.

Many companies simply don't have clear, measurable marketing goals. Why? Some don’t realize the importance of goals. Others fear goals because they are afraid they won’t achieve them (the fear factor again). But most simply don't know how to set goals.

Be careful not to set goals that are too general. Your goals must be clear, written, specific, and measurable.

Make a habit of daily goal setting and planning, for the rest of your life. Focus on the things you want, rather than the things you don't want.

Resolve to be a goal-seeking organization, moving constantly toward the things that

are important to your company.

Also, remember that everything in life is created twice. Once in your mind, then again in the real world.

World-renowned gymnast Bart Connor, who was a member of the gold-medal-winning USA team at the 1984 Summer Olympic Games, was asked how he was able to score a perfect 10 on the parallel bars, a feat that had never been accomplished.


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Did he study his past performances? No, since there had never been a perfect 10 before. Did he study videos of other top gymnasts? No, again, no one had ever accomplished the feat. So, how did he do it?

He said he simply visualized himself doing a perfect 10. Ask any top ranked athlete how they reach for the impossible, and almost all will say that visualization is a critical tool for peak performance.

POWERSHIFT TIP 1-7 VISUALIZING IS CRITICAL TO

REACHING SUCCESS.

Everything is created twice. Creating a positive mental image of where you’re going is critical to

reaching your destination.

POWERSHIFT TIP 1-8

WRITE GOALS IN THE PAST TENSE.

Visualize and write your goals as if you have

already accomplished them.

This is a wonderful mental exercise for setting goals from Brian Buffini’s Turning Point Retreat, using the powerful tool of visualization. When you write your goals, write them as if you have already accomplished them.

“Our profits grew 20% last year, and we were able to hand out substantial bonuses to everyone.”

“Our marketing research helped us identify 25 new major accounts.”

Imagine a scenario in which you have already achieved your goals. Be specific and try to include as much detail as possible.

What does it feel like handing out bonuses to your employees instead of pink slips?

See the smiles on their faces as they mentally “spend” those bonus checks. (You will have done your part to stimulate the U.S. economy!) Savor the delicious taste

of the punch and cake at the employee appreciation party. Relish the congratulatory handshakes from colleagues. Feel

the warm embrace of your loved ones as you walk in the door and announce that there will be a family vacation this year! Watch your retirement portfolio growing. Take pride in the security of being able to provide health care and other benefits for your employees as well as your family.


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Chapter 3 - The Power of Speed

Do you think the world is changing fast? Are new products and competitors coming at you at a record pace? Are your customers (and what they want) constantly changing? Well, you’re not crazy. The world and your customers are changing faster than they did in the past.

THE WORLD IS SPEEDING UP

Social researchers tell us that our world is changing so fast that we are outliving our value systems. Things we believed in as children are no longer true. This “collapse of time” is causing us to be less grounded, less secure. In a time when we should be more willing to embrace change within our business, many of us fear change even more.

How does this fear show up in our society? People tend to surround themselves with only like minded individuals who agree with their world view. People live in “gated communities” where they can protect themselves from outsiders (and their beliefs). People listen to talk radio because it supports their view of the world.

What does this have to do with your marketing? Plenty. The speed of change, and our response to it, impacts your business in three ways:

1. Change is offering dramatic opportunities for new products that deliver traditional services in new ways.

Since the mid-1980s the music CD (developed by Philips and Sony Corporations in 1979) has been the prime way people listen to music. Not any longer. Apple’s iPod was launched on October 23, 2001 and the music industry has seen CD sales plunge. As of September 2007, the iPod had sold more than 150 million units, and digital recording devices and online downloading have made the CD almost obsolete for anyone under 30.

Online video sharing wasn’t even an option for most consumers five years ago. Then in February 2005, three former PayPal employees created YouTube. Twenty-one months later, Google Inc. acquired it for 1.65 billion dollars. Today (2009), YouTube consumes as much bandwidth as the entire Internet did in 2000.

2. Change is dramatically decreasing the lifespan of most products and services, demanding that you become more customer focused.

Just look at two titans of American business: General Motors and Intel. Founded in 1908, General Motors was the world’s largest automobile maker for nearly 100 years. They built their business by re-creating the same product every 20 years or so. The product looked different (add tail fins, delete tail fins, add chrome, take away chrome), but the basic platform stayed the same for decades. Because of this, GM became more focused on creating a management system that maintained the status quo rather than one willing to explore what their consumers wanted in the future.

Founded in 1968, Intel Corporation is the world's largest semiconductor company. The company invented the microprocessor “engine” found in most personal computers. But Intel has been constantly re-engineering their product to be faster and faster to meet competition. A typical Intel chip has a product life (from creation to becoming obsolete) of less than 20 months.

A product for 20 years vs. a product for 20 months. Is it any wonder that the auto industry simply can’t deal with today’s consumer? Change has made traditional business thinking less relevant.


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Peter Drucker, who died in 2005, was a respected business consultant for 40 years. Drucker described four key skills to good management: Plan, Organize, Control, and Communicate.

But how important are these skills in a fast changing world? Is a large, formal, controlled organization nimble enough to react to a fast changing environment?

POWERSHIFT TIP 1-9 THE WINDOW OF OPPORTUNITY

FOR SUCCESS IS SHRINKING.

In a constantly changing world, the faster you make a decision and act on it, the better off

your business will be.

Bill Gates in his Business @ the Speed of Thought is just one of many that are now telling us that speed is more important than organization and control. His book asks you to get more out of technology, so you can respond quicker to your customers, adapt to changing business demands, and prosper.

3. In a constantly changing world, the window of opportunity for marketing success is constantly shrinking. You have little time to correct a problem. You have to have it right the first time. This requires that you use all the tools you can in order to make decisions faster, and this takes the talents of everyone in your organization.

Today more and more companies are embracing the power of speed. Internet guru Andrew Hyde’s Startup Weekend, founded in 1997, is a wonderful example of speed in action.

Participants decide what they want to tackle over the weekend, and within 52 hours they come out with several developed companies or projects. The weekend is known for its innovative thinking and unique facilitation techniques. Go online to learn more about it. Nothing prevents you from running a Startup Weekend with your own employees.


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Chapter 4 – The Power of a Satisfied Customer

Obviously, anyone who created America’s first frequent flyer program (June 1980) would believe that rewarding and supporting your customer is critical.

I’ve always found it curious that companies are willing to spend more money attracting a new customer than keeping a current customer satisfied. Most companies simply don’t place enough value on having satisfied customers.

When I am invited into a company to help them with their marketing efforts, the first question I usually ask is, “What assets do you have that make your company strong?”

The first answer is usually “our employees” or “our product.” I also hear “great facilities” or “commitment to excellence.” Rarely do I hear “our customers.” I almost never hear “our satisfied customers.”

Every business has customers. But the only real business asset you have is a satisfied customer.

Great employees, wonderful facilities, a top rated product or service, or your company’s commitment to excellence: these mean nothing if you don’t have a satisfied customer.

POWERSHIFT TIP 1-10 A SATISFIED CUSTOMER

IS YOUR ONLY REAL BUSINESS ASSET.

Successful marketing begins and ends by creating customer loyalty with

customer-centered service.

Successful marketing begins and ends with a satisfied customer. A satisfied customer will recommend you. A satisfied customer will come back more often. A satisfied customer will buy and spend more. It’s that simple.


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Chapter 5 - The Five P’s of Marketing

(UPDATED JULY, 2010) - Most business owners think of marketing as simply promoting their product or service. But promotion is just one of the Ps of marketing.

If you have ever taken a marketing class or read a marketing book, you may be aware of the concept of the “P’s” of the marketing mix. The original four P’s (Product, Price, Place and Promotion) were defined in 1960 by Jerome McCarthy in his book Basic Marketing. A Managerial Approach (it is still in print). Since then, there has been much debate about how many P’s make up the marketing mix.

In 1987, V.C. Judd proposed adding People to make it five P’s. It wasn’t long before authors Booms and Bitner (1980) suggested adding 3 P’s (People, Process and Physical Evidence) to make this model work better for service industries.

In 1986, Dr. Kotler of Northwestern University added Political Power and Public Opinion to his definition of the marketing mix.

Professor Kotler believes that political power and public opinion are also important P’s. Dr. Kotler was the first recipient of the American Marketing Association’s (AMA) “Distinguished Marketing Educator Award” (1985).

By the 1990s relationship marketing (RM) was the hot topic, so J. Baumgarner suggested expanding the list to 15 P’s. Now some critics have rejected the whole concept of marketing “P’s”, proposing an alternative framework for marketing.

In my opinion, while this debate may be worthwhile in academic circles, it really doesn’t matter how many P’s there are. What matters is that you understand that there is a marketing mix, and that you need to control all the P’s to have a powerful marketing effort.

POWERSHIFT TIP 1-11

THE FIVE P’S OF MARKETING MUST BE PART OF YOUR

MARKETING PLAN.

Successful marketing requires that you have a plan for the five P’s of marketing: product, price,

place, promotion, and people.

I believe that most small businesses need to focus on five Ps:

1) Product - Everything in marketing begins with your product or service. Have you created a product or service that meets a consumer need? Can you deliver it consistently? Product decisions include: appearance, packaging, service, and warranties (standing behind your product or service).

2) Price - Once you have a product or service that meets a consumer need, you need to price it. Pricing must reflect your need for a profit and the pricing that is already in the marketplace. Pricing decisions will include setting your list price, discounts, financing, and other options such as leasing.

3) Promotion - You have a good product or service, you’ve priced it to make a profit, now you’re ready to promote it. This involves communicating and selling to your potential consumers. You could spend a lot of money here, so a break-even analysis must be performed. The traditional “promotional mix” involved advertising, personal selling, public relations and a variety of sales promotion activities. I believe that Kotler’s political power and public opinion are also elements of promotion.


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4) People - How will your product or service be presented to the public? This is all customer service. How do you want your workers to appear to your customers? People decisions will include service levels, staff appearance, and attitudes.

5) Place - How are you going to get your product to your consumer? What will be your prime channels of distribution? Place involves decisions about market coverage, channel selection (Internet, retail, etc.), and levels of service.

If you want to shift your company into high gear, you must address all the Ps. In subsequent chapters, I’ll look at each in more depth.

Want to study a company that has all the P’s down to a science? Just drive into a Les Schwab tire dealership (www.lesschwab.com).

http://www.lesschwab.com


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Chapter 6 - Use PowerShift Math… 1+2+3 = 10

A few years ago (2006) I read a Google Small Business Survey that asked small business owners what kept them up at night. The number one answer: 47% said getting more customers.

I hear this concern often from my clients. But this shouldn’t be your only priority. While more customers are important, the real key to success demands three steps:

1. Getting more customers,

2. Getting them to spend more money, and

3. Getting them to come back more often.

I call this POWERSHIFT Math. If you increase your customer base by 5%, your business will simply increase 5%.

But if you can also get your current customers to spend 10% more and you can get them to come back 20% more often, then your business will grow exponentially - in other words, you’ll grow a lot more than 5%. That’s why I believe a satisfied customer is your only business asset.

POWERSHIFT TIP 1-12 MORE CUSTOMERS WON’T

MAKE YOU A MARKET LEADER.

You need to make sure that you get your current customers to spend more on

every visit, and visit more often.

There is no better example of the use of POWERSHIFT Math than COSTCO, the warehouse discount store. I love COSTCO because they really have taken Tip 1-12 and run with it.

Going back to the five P’s of marketing, COSTCO tries constantly to get more customers (Promotion) with wonderful products (Product), great pricing (Price), superior customer service (People), and convenient locations (Place) with plenty of parking.

Now comes the magic of POWERSHIFT Math. COSTCO also works at getting you to spend more money (average transaction) by packaging things in larger quantities.

Eight rolls of bathroom tissue will work, but you can only find packs of 24, so you buy more than you need right now (I mean, heck, it’s a good price and product, and you will eventually use it).

Next, COSTCO changes their specials all the time. So, if you find something you think is cool, it might not be there the next time you visit, so you have to buy it now.

Also, by changing their specials, they get you to come back more often to see what deals they have this week. Have you ever noticed how things you love keep going off the shelves? It’s by design.

So the next time you say you want more customers, make sure you are doing the math… that you are also getting your customers to spend more and come back more often.

The best way to do this? Simply have a brief brainstorming meeting with your frontline staff. You will be amazed at how many ideas they can generate. Make it a stand up meeting and it will work even better.


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POWERSHIFT TIP 1-13

USE BRAINSTORMING TO CREATE NEW IDEAS.

The most powerful brainstorming

sessions require both red and green light sessions.

Just a brief word about brainstorming. A lot of companies think they use brainstorming as a problem-solving tool, but most don’t understand the key to brainstorming. The critical step in brainstorming is getting people less emotionally attached to their ideas. You can only do this through a two-part process.

GREEN LIGHT

The first step is to hold a green light session: a 30-40 minute, rapid fire session where you just generate ideas. Don’t allow participants to put down ideas (“We tried this and it didn’t work.”). Assign someone to be a traffic cop and tell them to stop any comment that even slightly judges or evaluates the idea.

RED LIGHT

The second half of the session is a red light period where you evaluate the ideas. Now you can be brutally honest about all the ideas. You can also combine ideas. The goal: select the best ideas without any attachment as to who came up with the idea.

You might want to consider hiring a facilitator to come in for a few hours to run one of your first brainstorming sessions until you and your staff get the process down.


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Chapter 7 - Know Your Business – Inside and Out

Brian Buffini, founder of a successful real estate industry training company (Buffini & Company), has a great saying he uses in his seminars:

MOST PEOPLE WORK IN THEIR BUSINESS,

NOT ON THEIR BUSINESS.

I’ve heard this idea expressed dozens of times and in different ways, but I think Brian presented this principle the best. Most of us get so busy dealing with day-to-day challenges we don’t take the time to think about where we’re going!

POWERSHIFT TIP 1-14 SPEND TIME EVERY WEEK

WORKING ON YOUR BUSINESS.

Spend 10% of your time every week working on your business. It’s more important

to know where you are going, than where you are.

In my workshops, I challenge attendees to spend time every day working ON THEIR BUSINESS. Research (2008) shows that most people spend 50 hours a week at work. I tell attendees that everyone should spend at least 10% of their time planning where they’re going, instead of working to get there.

Can you find five hours a week? Most people can if they use their time wisely. Master salesman and legendary motivational speaker Zig Ziglar has long promoted using commuting time (to and from work) to listen to audio material on business trends and ideas.

Instead of having lunch out, eat at your desk occasionally and keep up with trade journals and business publications to discover trends that will impact your business.

SWOT YOUR WAY TO SUCCESS

A key part of working on your business is making sure you understand its strengths and weaknesses. One of the most common tools for this is to conduct a SWOT analysis.

While this may sound like a police action, SWOT simply stands for: Strengths, Weaknesses, Opportunities and Threats. Each subject forms a box on a grid.

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

Strengths and weaknesses are internal, focusing on what your business can do (what you can control).

Threats and opportunities are external, focusing on the conditions of the outside world.

POWERSHIFT TIP 1-15 CONDUCT AN ANNUAL

SWOT ANALYSIS OF YOUR BUSINESS.

A SWOT analysis challenges you to look beyond your company walls to determine what opportunities are available to you

and how to capitalize on your strengths.

The primary purpose of the SWOT analysis is to identify and assign factors, positive and negative, into one of the four categories.

Some experts suggest that you first consider outlining the external opportunities and threats before analyzing strengths and weaknesses.


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Strengths

Strengths describe the positive tangible and intangible attributes internal to your organization. They are within your control. What do you do well? What resources do you have? What advantages do you have over your competition?

You may want to evaluate your strengths by area, such as marketing, finance, manufacturing, and your organizational structure. Strengths include the positive attributes of the people involved in the business, including their knowledge, background, education, credentials, contacts, reputation, or the skills they bring.

Strengths also include tangible assets such as available capital, equipment, credit, established customers, existing channels of distribution, copyrighted materials, patents, information and processing systems, and other valuable resources within the business.

Weaknesses

Weaknesses are factors that are within your control and detract from your ability to obtain or maintain a competitive edge. Which areas might you be able to improve?

Weaknesses might include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, or the poor location of your business. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your marketing objectives.

Opportunities

Opportunities focus on external factors, like markets or the environment from which you hope to benefit. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your

business, or the ability to offer greater value that will create a demand for your services.

If it is relevant, place timeframes around the opportunities. Does it represent an ongoing opportunity, or is it a window of opportunity? How critical is your timing?

Opportunities are external to your business. If you have identified "opportunities" that are internal to the organization and within your control, you will want to classify them as strengths.

Threats

Threats include factors beyond your control that could place your marketing strategy at risk. These are also external. You have no control over them, but you may benefit by having plans to address them.

Competition – existing or potential – is always a threat. Other threats may include governmental regulations, economic downturns, a shift in consumer behavior, or the introduction of technology that may make your products, equipment, or services obsolete. What situations might threaten your marketing efforts?

Get your worst fears on the table. A part of this list may be speculative in nature and still add value to your SWOT analysis.

The better you are at identifying potential threats, the more likely you are to be proactive and respond to them first. You will be looking back at these threats when you consider your contingency plans.


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The Implications

Internal strengths and weaknesses compared to the external opportunities and threats provide insight into the condition and potential of your business.

How can you use the strengths to better take advantage of opportunities and minimize the threats that may come about?

How can weaknesses be minimized or eliminated?

The true value of the SWOT analysis is in bringing this information together to assess the most promising opportunities and the most crucial issues.

POWERSHIFT TIP 1-16 CONSTANTLY LOOK FOR

NEW BUSINESS OPPORTUNITIES.

Use SWOT as a tool to train yourself to constantly look for new growth opportunities

based on meeting your customer’s needs better than others.

One of the services that my company specializes in is facilitating brainstorming sessions and SWOT analyses. I’ve found that an outside source can be much more effective in generating broad employee participation.


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Chapter 8 - Use Market Research

It’s surprising to me how few small businesses use market research. I’m not talking about the big-budget studies that major corporations conduct. I’m talking about simply asking customers what they want or finding out if there is a market for a product BEFORE creating it.

POWERSHIFT TIP 1-17 INVEST IN MARKET RESEARCH NOW.

Research provides information you can use to make smart decisions about your

business, so your revenue increases. Your ROI (Return On Investment) on research often far exceeds the cost

of the research.

Conducting market research involves collecting information. This “data” can be collected through a host of low-cost ways, and the method you choose depends on what you are hoping to discover or better understand about your market.

WHY USE RESEARCH?

Researching your market helps you understand your customers, your competitors, and the environment in which you operate. It's an ongoing process that involves using data, not your gut instincts, to drive decision making in your business. Proper market research helps you:

Determine how to correctly target your marketing campaigns;

Identify opportunities in the marketplace;

Determine what you are doing wrong as well as what you are doing right;

Identify your customers' specific needs;

Uncover problems with your business that may not have surfaced otherwise;

Evaluate your success with measurable data.

SECONDARY RESEARCH

Even though its name may imply otherwise, secondary research is where market research usually begins. Secondary research is conducted by looking at existing research to find out:

Who makes up your target market,

What the needs of your market are, and

The size of the potential market.

Secondary research is less expensive than primary research. It's often free and is more readily available than you may think. Secondary research can be internal, like sales reports or internal market analyses. But most of it will be external, including:

Web-based directories and resources

Nonprofit agencies

Government agencies, such as http://www.fedstats.com

which provides access to 70 government sites with valid stats and information

Back issues of magazines and newspapers at the library or online

One of the great benefits of Internet search engines (like Google and Yahoo/Bing) is that you can easily conduct this type of research on your own.

http://www.fedstats


19 - 1ST GEAR (2011)

As Thomas L. Friedman states in his 2008 bestseller The World Is Flat: A Brief History of the Twenty-First Century, “Never before in the history of the planet have so many people - on their own - had the ability to find so much information about so many things and about so many other people."

Friedman states that Google is "now processing roughly one billion searches per day, up from 150 million just three years ago."

POWERSHIFT TIP 1-18 USE THE INTERNET

TO RESEARCH BUSINESS OPPORTUNITIES TODAY.

Savvy businesses are using Internet search engines to conduct instant secondary research

to discover new market opportunities and find marketing ideas every day.

The key is to simply get in the habit of constantly “working on your business” by using Internet searches to explore your opportunities.

It is important that you use knowledge gained through secondary research prior to launching any primary research study.

PRIMARY RESEARCH

Primary research is conducted to get direct information on your market, to answer specific questions you might have, or to address specific areas of focus. It costs more and often takes longer to conduct than secondary research, but it gives conclusive results. Primary research is either qualitative or quantitative.

Qualitative research includes studies on smaller groups of people, like one-on-one consumer interviews or focus groups. It's meant to give you direction, to get an answer to a particular concern or question - not to make predictions.

Quantitative research includes studies that result in a large amount of data-like surveys. This type of research is statistically valid and can be used to make predictions.

USING SURVEYS

Surveys are a type of quantitative research that aims to collect information from a specific group. Surveys can be administered via e-mail, snail mail, or phone, and usually target customers or potential customers.

There are four steps to developing a survey: identifying your audience, writing the survey, conducting the survey, and analyzing the data collected.

When you write the survey, keep the questions simple, and be very specific. Also, including a reward for completing the survey - a promotional product or coupon of some sort - is a good way to increase participation.

Survey prices will range depending on a number of factors, including whether you purchase a mailing list, who designs the questions for the survey, what data collection system you use, and how you want the results analyzed.

Costs are also dependent on the incidence rate, or the number of surveys that need to be sent (or calls that need to be made) in order to get a response. For example, if you send 100 surveys out and 10 people respond, your incidence rate is 10 percent.

Phone

National phone surveys (2009) can cost anywhere from $5,000-$15,000. You can expect to pay an average of $60 per completed interview call (person surveyed).

The Dennett Consulting Group is currently quoting (2009) around $35 per completed interview call.


20 - 1ST GEAR (2011)

Mail

National surveys via snail mail will run close to the price of phone interviews, usually about $5,000-$7,000 (for 200 responses).

The Dennett Consulting Group is currently quoting (2009) around $25 per response depending on the size of the survey.

Email

Email surveys are becoming more popular because their costs are lower - about $3,000-$5,000 if conducted by a national firm.

In the past few years, dozens of free Internet survey services have launched. Two of the better known are www.surveymonkey.com

and www.zoomerang.com. It’s now very easy to add a survey to a monthly online newsletter. However, a word of caution. Using email for surveys limits your population to those with Internet access (currently about 70% of the U.S.). You will also only reach people that do not have sophisticated firewalls or spam filters.

Finally, many people are very reluctant to take online surveys, since spammers use fake surveys as a tool to gather names.

The Dennett Consulting Group is currently quoting (2009) around $15 per response depending on the size of the Internet survey.

One of the growing trends is to create online research panels. This is a group of people that have agreed in advance to be part of a survey.

For years national survey firms have used pre-selected panels for mailed surveys. Now they are expanding this tool online due to costs.

POWERSHIFT TIP 1-19

BE CAREFUL IN COMPARING RESEARCH DATA FROM

DIFFERENT STUDIES.

Every form of data collection has some limitations, so be careful in comparing studies

that use different collection methods.

Although it is possible to conduct a survey completely in-house, your best bet would be to outsource the data collection and analysis to a research firm that conducts surveys as part of their business.

USING FOCUS GROUPS

Are you developing a new product? Embarking on an advertising campaign? Interested in assessing what someone “thinks” about some issue, product or service? Here's where focus groups (qualitative research) can help.

POWERSHIFT TIP 1-20 USE FOCUS GROUPS.

Using focus groups can be an inexpensive way to develop new products, define ad

themes, or explore customer service issues.

Focus groups are typically composed of about 10 pre-screened people that meet criteria you specify. They are assembled in one room - either on your site or offsite - to discuss and react to a specific topic relevant to your business or cause.

http://www.surveymonkey.com

http://www.zoomerang.com


21 - 1ST GEAR (2011)

The discussion is guided by a moderator. You can either hire an outside person or assign the role to someone in your organization (but keep in mind that he or she can't participate beyond moderating).

Focus groups are helpful because the participants can be asked about the reasoning behind their opinions, and conversations can be generated around a particular topic -- giving you what's known as "rich data" as opposed to, for example, the finite answers you get from survey questions.

It's best to hold at least two sessions in order to arrive at any sound conclusions.

Focus Group Costs

Focus groups can range from $4,000-6,000 per session (2009 costs) if you hire a national company. Since it's recommended that you hold at least two sessions, that price can be a little hefty for a small business.

The Dennett Consulting Group is currently charging $2,750 per session. But you can outsource selected aspects (facility, moderator, recruiting, and script) to reduce costs to $1,500 per session for some projects.

Participants may need to be compensated for their time. For a two-hour session, you can expect to pay $25-50 per person, $50-100 each for professional level individuals, and $100-$150 each for business executives.


22 - 1ST GEAR (2011)

Chapter 9 - Embrace Psychographics

When I was going to college in the late 60s, marketing was all about “mass marketing.” This was the heyday of television advertising where you could reach millions of people with the same message.

In the era of mass communications we simply defined the people we wanted to reach by demographics (age, income, education). If someone was a certain age, made a specific amount of money, and had the same educational level, we thought they would want the same product or service. We then created advertising to appeal to this audience.

But over the past four decades something happened to these well-defined audiences. Old people started showing up at rock ‘n roll concerts. Even the performers began to look a little elderly (Mick Jagger and Paul McCartney turned 65 in 2009.).

Staid CEO’s started buying Harleys. Generation X kids started listening to their grandparents’ Tony Bennett records. Something seemed wrong with our marketing world. Actually nothing was wrong; we simply discovered that you can’t define people solely by demographics.

How people perceive themselves and their lifestyle choices determines what they will buy and what products they use. This is called psychographics: exploring the personal reasons people want a product or service.

POWERSHIFT TIP 1-21 EMBRACE PSYCHOGRAPHICS.

Demographics are less important today. People’s lifestyle choices and self-perception

(how they think of themselves) determine what products and services

they buy and use.

If you don’t understand psychographics you can be blindsided easily. A great example is marketing to retirees.

Traditional demographic marketing says that when someone reaches 65 with a comfortable income they will want their money in CD’s, bonds, and other long-term, secure investments.

But now 60 is the new 50, and a large number of retirees are investing in second homes, vacation clubs, and giant RV’s. They are staying away from those traditional “senior” investments.

A best-selling book that touches on psychographics is The Millionaire Next Door: the Surprising Secrets of America's Wealthy by Thomas J. Stanley, PhD and William D. Danko, PhD. It explores the idea that you might not recognize today’s millionaire because they don’t all drive big Cadillacs or live in a McMansion. Millionaires could drive pickups and live next door.

LIFE LESSON - I used this idea when I was asked by a major destination resort to discover why their real estate sales weren’t meeting projections.

When I met with their sales management team I learned that they thought all wealthy buyers were similar. They stated that these consumers usually acted the same way and bought the same things. I told them to walk through their golf course parking lot and look at cars. Given the high cost of their green fees, the sales team thought they would see luxury cars like Lexus, Mercedes Benz and Cadillac. Actually they noticed more pickup trucks.

Now, a leather-trimmed pickup can cost more than a Lexus, and that’s the point. If you think that all pickup drivers are blue collar, you’re thinking demographics.


23 - 1ST GEAR (2011)

Oregon’s renowned Bandon Dunes Golf Course is a great example of psychographic marketing. The developers wanted to create a world-class golf experience for hardcore male golfers, regardless of their age, income, education or where they lived.

They created a product that would appeal to the lifestyle dream of male golfers. They didn’t care about local golfers or even the visitor market.

The result: Bandon Dunes courses have become the “dream” for golfers worldwide. They charge a premium, even in November when the weather is worse than the rest of the year.

When developing your marketing programs, define your prime audience based on lifestyle. What do they like to do? How do they spend their money? Then develop a program that will appeal to these people regardless of demographics (age, income, education, or geography).


24 - 1ST GEAR (2011)

Chapter 10 - Understand Branding

Today, companies spend millions to build a “brand.” But what is a brand? A brand is the consumer’s perception of your product or service. Small businesses often ignore branding as a core marketing strategy because they can’t afford a pure branding campaign (like the “big guys” - Nike, Coke, etc.).

It is essential, however, that you understand your business or service has a brand (i.e. what people think of you) and to compete you need to build your brand all the time. Your brand is not driven by a catchy slogan or memorable ad campaign, but by what you do.

As part of building a brand, you must create a Positioning Statement if you are going to be successful in brand marketing.

POSITIONING VS. MISSION

It has become very popular to create “vision” and “values” statements to support a company’s “mission” statement. While these are valuable management tools, they are very different than positioning.

Mission, value and vision statements state why you want to be in business and what you want to deliver to your customer. You are talking to yourself.

A positioning statement is you talking to your consumer. It states why people should do business with you. A positioning defines what “position” your brand will occupy in someone’s mind. What do you want people to think about your brand?

Creating a Positioning Statement

Marketing experts and authors Al Ries and Jack Trout coined the word "positioning" in the 1970s to describe the process of "putting your company into the mind of your prospect."

Successful branding strategies always begin with a clearly stated positioning statement:

A brief written description of the customer benefits offered and the

"value" position to be occupied that makes your brand clear and

promotable.

POWERSHIFT TIP 1-22 A POSITIONING STATEMENT

IS CRITICAL TO YOUR MARKETING STRATEGY.

A positioning statement should form the basis for all decision making

throughout your company.

A good positioning statement should form the basis for all decision making. While it may seem odd to spend time developing one simple statement, everything you do from service enhancements and new products to personnel decisions, training and advertising will be more successful if everyone is working toward the same "positioning" in the consumer's mind.

Ries and Trout recommend using an eight-step process in developing a positioning statement.

1. Review the influences important to your positioning (your location, competition, and consumer habits).

2. Review the attributes customers use to differentiate your service/product. What’s important to your customer?

3. Review and understand the positions of your major competitors.


25 - 1ST GEAR (2011)

Once you have reviewed this information, then you:

4. Select a position based on the above information.

5. Develop a preliminary positioning statement. It should be short and from the customer's perspective.

6. Compare your positioning statement with your income goals. Perform a quick reality check to see that what you have in mind will be supported by your business strategy.

7. Review your proposed position to look for ways your competitors might respond and identify any weaknesses.

8. Test your position to make sure you can effectively communicate it.

The last two steps, 7 and 8, can either take place at your initial meeting or be handled by staff as part of a follow up process.


26 - 1ST GEAR (2011)

Chapter 11 - Create an Action Plan

Just like you need a formal business plan, you must also have a formal marketing plan.

The basic key to a successful plan is making it actionable (rather than leave it to collect dust on your bookshelf). It should be a short, concise plan that provides you with a blueprint for marketing action.

Focus, Focus, Focus

If I could mention one reason why marketing fails, it would be a lack of focus. Some firms chase one opportunity after another, changing services or products along the way. They end up not being anything to anyone. A written plan forces you to focus. It becomes a touchstone for all your efforts.

POWERSHIFT TIP 1-23 HAVE A WRITTEN

MARKETING PLAN.

A written plan forces everyone in your company to focus on common

goals and a shared vision.

Pick a Format, Any Format

There are numerous marketing plan formats. Google the keyword marketing plan

and you will come up with hundreds of options.

Regardless of the format you use, keep your plan simple and direct, and review it monthly. It doesn’t have to be long; 10 pages or less can be adequate.

The following is the marketing plan format I recommend most often to my clients.

MARKETING PLAN FORMAT

Table of Contents

I. Situation Analysis II. Problems and Opportunities III. Positioning and Target Markets IV. Marketing Goals and Objectives V. Marketing Strategies and Tactics VI. Budget and Timeline

I. SITUATION ANALYSIS

This should be a short statement of the current status of your company so readers of your plan will need no background information to evaluate and understand the recommendations made in the plan.

II. PROBLEMS AND OPPORTUNITIES

This is developed from your SWOT analysis (See Chapter 7). It’s a short list of the biggest marketing problems (challenges) and opportunities (advantages) that you face. In most cases these are external problems and opportunities over which you have no direct control.

III. POSITIONING/TARGET MARKETS

Positioning Statement: Present your positioning statement. Remember, this is not an ad slogan or themeline. It’s how you want to be positioned in the mind of your potential customer. This statement (See Chapter 10) should form the basis for decision making throughout your company.


27 - 1ST GEAR (2011)

Target Markets: This section outlines the target markets (audiences) your marketing plan is designed to reach and influence. It should highlight both demographics (age, income, location) and psychographics (See Chapter 5) of your potential customer.

IV. GOALS AND OBJECTIVES

This section outlines what you want to accomplish with your plan. Marketing goals and objectives must be brief and measurable.

Just making a statement that your goal is to “increase revenue” won’t work. How can you measure your success? The goal must be measurable, such as, “increase revenue by 10%.” V. STRATEGIES AND TACTICS

This section outlines broad strategies, supported by specific tactics (actions) that you plan to use to execute your strategies.

SAMPLE

Strategy #1 - Increase “top of mind” awareness with a brand campaign that presents Knife River Material as the leading contractor in Southern Oregon.

TACTIC:

Use 10-second television spots, supported by weekday radio spots featuring live reports from job sites throughout Southern Oregon to show how Knife River handles all sizes of jobs. VI. BUDGET AND TIMELINE

In a spreadsheet format, outline the budget and when expenses will come due.


28 - 1ST GEAR (2011)

POWERSHIFT TIPS - RECAP 1ST GEAR - GETTING UP TO SPEED

POWERSHIFT TIP 1-1

TAKE ACTION EVERY DAY.

If every day you do just one thing that impacts your marketing, in only a few months, you will have made dozens of changes that will have a positive impact on your business.

POWERSHIFT TIP 1-2 WHAT YOU WILL LEARN

IS MORE IMPORTANT THAN WHAT YOU KNOW.

Your past does not define you. Don’t ever believe that past success will lead

to future success.

POWERSHIFT TIP 1-3 FEAR STOPS SUCCESS.

Only fear stops you from success. Learn to evaluate marketing ideas as

if you didn’t have any fear.

POWERSHIFT TIP 1-4 ACTIVITY AND PRODUCTIVITY

ARE NOT EQUAL.

Real productivity is driven by everyone in your company taking ownership in your marketing

effort. You must empower everyone to give their best effort for success.

POWERSHIFT TIP 1-5

USE STAND UP MEETINGS TO KEEP PEOPLE FOCUSED.

Empower everyone to participate in problem solving by having frequent

and short meetings.

POWERSHIFT TIP 1-6 HAVE WRITTEN GOALS

AND SHARE THEM.

Your goals must be clear, specific and measurable, and be shared with

everyone in the organization.

POWERSHIFT TIP 1-7 VISUALIZING IS CRITICAL TO

REACHING SUCCESS.

Everything is created twice. Creating a positive mental image of where you’re going is critical to

reaching your destination.

POWERSHIFT TIP 1-8 WRITE GOALS IN THE

PAST TENSE.

Visualize and write your goals as if you have already accomplished them.


29 - 1ST GEAR (2011)

POWERSHIFT TIP 1-9

THE WINDOW OF OPPORTUNITY FOR SUCCESS IS SHRINKING.

In a constantly changing world, the faster you make a decision and act on it, the better off

your business will be.

POWERSHIFT TIP 1-10 A SATISFIED CUSTOMER

IS YOUR ONLY REAL BUSINESS ASSET.

Successful marketing begins and ends by creating customer loyalty with

customer-centered service.

POWERSHIFT TIP 1-11 THE FIVE P’S OF MARKETING

MUST BE PART OF YOUR MARKETING PLAN.

Successful marketing requires that you have a plan for the 5 P’s of marketing: product, price,

place, promotion, and people.

POWERSHIFT TIP 1-12 MORE CUSTOMERS WON’T

MAKE YOU A MARKET LEADER.

You need to make sure that you get your current customers to spend more on

every visit, and visit more often.

POWERSHIFT TIP 1-13

USE BRAINSTORMING TO CREATE NEW IDEAS.

The most powerful brainstorming

sessions require both red and green light sessions.

POWERSHIFT TIP 1-14 SPEND TIME EVERY WEEK

WORKING ON YOUR BUSINESS.

Spend 10% of your time every week working on your business. It’s more important

to know where you are going, than where you are.

POWERSHIFT TIP 1-15 CONDUCT AN ANNUAL

SWOT ANALYSIS OF YOUR BUSINESS.

A SWOT analysis challenges you to look beyond your company walls to determine what opportunities are available to you

and how to capitalize on your strengths.

POWERSHIFT TIP 1-16 CONSTANTLY LOOK FOR

NEW BUSINESS OPPORTUNITIES.

Use SWOT as a tool to train yourself to constantly look for new growth opportunities

based on meeting your customer’s needs better than others.


30 - 1ST GEAR (2011)

POWERSHIFT TIP 1-17

INVEST IN MARKET RESEARCH NOW.

Research provides information you can use to make smart decisions about your

business, so your revenue increases. Your ROI (Return On Investment) on research often far exceeds the cost

of the research.

POWERSHIFT TIP 1-18 USE THE INTERNET

TO RESEARCH BUSINESS OPPORTUNITIES TODAY.

Savvy businesses are using Internet search engines to conduct instant secondary research

to discover new market opportunities and find marketing ideas every day.

POWERSHIFT TIP 1-19 BE CAREFUL IN COMPARING

RESEARCH DATA FROM DIFFERENT STUDIES.

Every form of data collection has some limitations, so be careful in comparing studies

that use different collection methods.

POWERSHIFT TIP 1-20 USE FOCUS GROUPS.

Using focus groups can be an inexpensive way to develop new products, define ad

themes, or explore customer service issues.

POWERSHIFT TIP 1-21

EMBRACE PSYCHOGRAPHICS.

Demographics are less important today.

People’s lifestyle choices and self-perception (how they think of themselves)

determine what products and services they buy and use.

POWERSHIFT TIP 1-22 A POSITIONING STATEMENT

IS CRITICAL TO YOUR MARKETING STRATEGY.

A positioning statement should form the basis for all decision making

throughout your company.

POWERSHIFT TIP 1-23 HAVE A WRITTEN

MARKETING PLAN.

A written plan forces everyone in your company to focus on common

goals and a shared vision.

Powershift Marketing - Section 1 (1st Gear)

Documents

power of change

st gear

digital camera

high gear

powershift principles

change change

profitable business

digital revolution