Customer Manufacturing Update )
Creating Competitive Advantage Through Marketing/Sales Process Improvement

May 2009
in this issue
  • Six Weapons of Influence
  • Let's quit spending money on marketing
  • Why are newspapers failing?
  • Price reduction
  • Closing Thoughts
  • Dear Mitchell,

    Here is your May Customer Manufacturing Update. Influence is this month's topic. How do you get people to say yes? And when they do, what was behind it? The nature of influence is where we venture in this Update.

    If you have friends or colleagues who would appreciate receiving this Update, feel free to forward a copy to them using the "Forward e-mail" link at the bottom of the page.

    Six Weapons of Influence

    People often say yes or agree with your requests "automatically" out of mindless compliance. In other words, they are frequently willing to say yes without thinking first. Some people are better than others at getting people to do what they need and want. What makes them more persuasive?

    In this month's white paper, we look at the six weapons of influence and how you can use them to your advantage by understanding how and why they work.

    Let's quit spending money on marketing

    A lot is being written these days on how to justify Marketing expenses in this difficult economy. Advice comes from many quarters on the dos and don'ts of what you should promise or where you should look to make sure that your Marketing expenses are kept at an appropriate level in these tough times, and that you can deliver on those expenses. No matter the advice, it is all wrong.

    Why? Simple. It presumes Marketing is an expense. That's where the thinking goes awry. Expenses should always be minimized in every legal way possible. So if Marketing is truly an expense, let's drive it to zero as soon as possible. But, the flaw in that argument is that Marketing is an expense. If it is not an expense, then what is it the financially-oriented among you may be wondering?

    Well, what is R&D? Most companies describe R&D as an investment. In some cases it can even be placed on the balance sheet as an asset, but even when it can't, it is still considered by many to be an investment. Perhaps that is why a recent study by the Industrial Research Institute found that half the companies in their survey planned to increase R&D this year, while half expected to cut it, leaving the net at about even. The justification for increasing R&D is that the companies want to be ready when the customer starts buying again.

    If Marketing was viewed as an investment rather than as an expense, the same argument could well be made for Marketing, and many companies would be increasing their Marketing investment rather than discussing how to reduce Marketing expense.

    As a profession, Marketers have laughed at the old saw that "Half the money I spend on advertising is wasted, and if I knew which half I would quit spending it." Two problems with that old saw:

    1. It equates Marketing to Advertising which is so limiting in terms of the contribution that a true Marketing investment could make as to be beyond unfortunate
    2. It includes the word "spend" rather than invest.
    Much of the money companies invest in R&D is wasted in that the results are not what were expected, but value is still achieved.

    For Marketing to become an investment its true value and purpose must be exercised and practitioners, whether at the Strategic Marketing end or the Marketing Communications end, must focus on making appropriate investments in what they do rather than trying to justify a "spend." What are your business goals and what investment do you need to make in all aspects of Marketing to achieve those goals?

    Why are newspapers failing?

    The Seattle Post Intelligencer announced recently the end of their print edition. This continues the decline of print newspapers that many people believe is tied to fewer people reading print papers. While it is probably and provable true that fewer people read print newspapers, that is a red-herring as to why newspapers get smaller each day and some become "invisible" such as the 150 year old Denver paper that ceased altogether or this Seattle paper that is now on-line only.

    The real reason newspapers are shrinking is the decline of advertising which has declined MUCH faster than the decline in readership. Why is that? Because too many people believe that "half the money they spend on advertising is wasted." Newspapers having had a local monopoly for all practical purposes have (like the Yellow Pages) resisted any attempt to help their advertising customers make sure the paper provided value for the advertising dollar invested.

    Advertisers found that they could buy "local" ads via the Internet and that many Internet models have trackability and accountability built in. This compares to what many advertisers found to be a "hope" based advertising model offered by the newspaper. They skewed local ads to the Internet and reduced ads placed in the newspaper. This reduced advertising creates a spiral of death for the paper because, as ads drop, content drops, which reduces the value of the paper to the remaining readers who then defect and the paper's relevancy becomes less and less.

    What's the solution? Newspapers need to demonstrate value and prove it. Since they have unsold space maybe its time (way past time) that they offer advertisers some form of contingency based (pay per click anyone) fee structure. If the ad "works" the paper makes money. If the ad does not work, the advertiser needs to change the ad, or lose the space, or pay more for it. (Google pay per click positioning model anyone?)

    There are still millions of people who prefer to read a local paper physically. However, lack of advertisers is the problem not lack of readers. It's time newspapers recognize that advertisers still advertise, they are just less likely to hope they don't waste half their money.

    Price reduction

    On Friday May 1 our book, Value Acceleration, hit #1 Industrial Marketing book on amazon.com. As a result amazon has lowered the price of our book. (We guess their pricing strategy creates higher discounts for higher sales.)

    If you don't have a copy we highly recommend it (and you're surprised). You can save some money buying on amazon at the new price. Alternatively, you can buy it directly from us and we will include a free copy of a bonus chapter and Reading Guide. From us it's $20 which includes the bonus items and free shipping in the US.

    Closing Thoughts

    We appreciate any feedback you can provide to help us make sure these Updates give you value each month. Feel free to respond to this e-mail with any comments or suggestions for future topics or ways we can make these Customer Manufacturing Updates more valuable to you.

    Thank you for your interest, and if we can provide any additional assistance in sales, marketing, strategy, or innovation to help you increase your sales, let us know.

    Our mission is to help you improve the performance of your System to Manufacture Customers.

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