COMMODITY. The only thing that holds back most companies from success is the lack of courage in the executive suite. Instead of boldly blazing new trails and anticipating the future, most executives play not to lose.
There are two ways to fight the fear that comes with change:
1. Focus on SERVING OTHERS: The most effective way to gain the courage to change is to focus on SERVING others. The soul of heroic acts, be they storming the beaches of Normandy, discovering a life-saving drug, or defending your children from harm, is sacrificing oneself for others. When you are on the right side of “RIGHT,” you will have the courage necessary to win over those who are WRONG.
2. Evoke the only emotion more powerful than fear—GREED: If your organization or banker lacks a soul that can become truly committed to serving others, then evoke greed. When the opportunity for financial gain exceeds the fear of failure, then you will win support from even the most heartless of financial plunderers.
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SCIENTIFIC
ADVICE
PLAN PATIENCE INTO YOUR MARKETING PLANNING TO ENSURE THAT YOU HAVE THE ENERGY TO ENDURE THE JOURNEY TO BIG SUCCESS
Research indicates that it takes thirteen months of research and development to make a 20 percent change in a product, it takes 20 months for a 40 percent change, and 41 months for a 100 percent change.
Research also indicates you need to have PATIENCE with your introductory marketing plan when you’re introducing a new product or service that represents a GENUINE REVOLUTION.
This advice comes from a long-term study of thirty-one mega innovations such as automobiles, color TVs, camcorders, compact disc players, cellular phones, direct broadcast satellite TV, and home VCRs. On average, it took six years before volume grew rapidly. Volume in the early years was pathetic. In fact, just before the takeoff point, only 1.7 percent of customers had made a purchase of items that today are multi-billion-dollar industries.
Really big ideas take time to educate the marketplace and to gain customer trust. It’s possible that with a huge advertising budget you can break the cycle of history. However, the probabilities are clearly against you.
The CEO of one of America’s largest companies told me that he has come to the same conclusion. The more UNIQUE the company’s new product or service, the more it spreads its marketing dollars over a longer period of time. “It’s been hard, but we’re learning patience,” he says. “We now lower our initial volume objectives and spread our marketing investment over as much as four years instead of focusing on twelve to eighteen months.”
The message is simple: If you wish to CHANGE THE WORLD—you need PATIENCE with your development and marketing of your BIG IDEA.
PRACTICAL IDEAS
Be Prepared to Survive on Low Volume Levels: There is a good chance that volume will be a fraction of what you anticipate. Plan how you will make adjustments if the initial volume is smaller and growth is slower than expected. In the calm before introduction, you have significantly greater ability to develop smart and effective contingency plans.
Win in Niche Markets to Reduce Discouragement: Focus your sales and marketing efforts in the first few years on niche markets where the point of Meaningful difference you are delivering is most highly valued. These markets will be less price-sensitive to your initial high cost. And by staying focused on a market where you can “win,” you will reduce the chances for emotional wreckage and discouragement caused by your mega-meaningfully different idea taking time to generate major volume. The Iams Company initially sold its premium pet foods exclusively through veterinarians, a market it could defend and compete in. Its success was so great that Procter & Gamble paid more than $2 billion for the company. P&G then used its marketing muscle to take the brand into mass-market distribution.
Be Cautious with Early Investments and Forecasts: When your company’s development investment has been big, the tendency is to be aggressive with early investments and forecasts. Be cautious. Set up a conservative introductory sales and marketing program that you can clearly “win” at. Then separately, conduct investment tests in smaller markets to validate that a bigger investment will deliver a favorable return.
Reassure Customers of Your Staying Power: Reinforce the long-term viability of your company and offering. Research on customers’ perceptions of major innovations finds that beyond key benefits, customers are also concerned about long-term viability. Reinforce that your new product, service, or company is here to stay.
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SCIENTIFIC
ADVICE
TWICE AS MANY NEW PRODUCTS OR SERVICES FAIL BECAUSE OF A BAD IDEA AS BECAUSE OF A POOR MARKETING PROGRAM OR POOR PRODUCT/SERVICE PERFORMANCE
New products and services are a three-legged stool consisting of the idea, the product/service, and the marketing program. Mathematically, the three have a direct and multiplicative impact on success.
No matter how great your offering’s performance and marketing plan, without an idea that makes a Meaningful difference to customers, few if any will bother to purchase it.
No matter how great your idea and marketing program, no one will make a repeat purchase without a great product, and you will fail.
No matter how great your idea and product performance, no one will know to purchase or be able to purchase your product without a marketing plan that generates awareness and distribution.
Tracking forty-eight new products from entry into the marketplace, a study found that on average they generated 58 percent awareness. Of those aware, 9 percent actually purchased, and of those who purchased, some 38 percent made a repeat purchase. If we subtract each of these results from the theoretical 100 percent that could have been achieved, we find that the idea is the largest source of lost customers.
42 percent did not become aware of the offering—a failure of the marketing plan.
62 percent who tried the product didn’t make a repurchase—a failure of the product performance.
91 percent of those who were aware didn’t make a purchase—a failure of the IDEA.
NET: Bad Ideas are a 2.2 times greater source of failure than marketing plan and a 1.5 times greater source of failure than the product performance.
When your volume is low versus expectations, look first at improving your core idea. The meaningful benefit difference offered by your brand is the single largest source of lost customers.
PRACTICAL IDEAS
It’s the Idea, Stupid: Step back and ask yourself what meaningful difference you offer to customers. A classic mistake is to take one idea and spend 99 percent of your money, time, and energy optimizing marketing efficiencies through reviewing media buys, sales-force coverage, or mail-order list selection. At best, you can realize a net efficiency improvement of maybe 2 percent to 5 percent. A smarter strategy is to focus on the message itself. When small-business owners spend a full eight hours improving their marketing MESSAGE, they realize as much as a 10 percent
