What’s your reason?

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You need to give people a reason not just to buy your products, but to buy into your brand.

Bernadette Jiwa, The Fortune Cookie Principle

I’ve got a quick question.

Why should I buy from you?

Better yet, why should I cross the street to buy from you when I could slip into your competitor’s store that’s right here?

Do you have a good answer?

I sure hope so, because if not, neither do your customers.

And that’s costing you sales.

I hope you’re paying close attention, because this is a fundamental principle of marketing:

If your customers don’t have a connection with your brand—if you don’t give them a reason to cross the street and buy from you—they won’t buy from you.

Take Tesla, for example.

Automobile manufacturing is a highly globalized industry, which means there’s a lot of competition—especially in the luxury car market.

So, how did a startup from California convince people to pay $100,000 for a sedan that was full of kinks and problems when they could’ve purchased a working sedan from an established competitor for a fraction of the cost?

(Actually, I think a better question would be: how did a startup convince people to pay to reserve a spot in line so that they could pay even more at a later date?)

Tesla gave people a reason.

It offered something its competitors didn’t: a chance to change the world.

When people buy a Tesla, they aren’t buying it because of its features or functions (though, it is a very impressive car on that front). They’re buying it because of the image and the lifestyle it promotes—a Tesla shows the world that the owner cares about the environment and the future.

That’s the reason car shoppers leave the traditional dealership to check out the Tesla showroom across the street.

So, before you start marketing and advertising your business just like everybody else, step back and think about the unique reason someone should buy from you. Then, pour your heart and soul into strengthening that reason by molding your branding, sales, product development, and company culture around it.

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Friday book review: Scientific Advertising

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Format: Kindle

Average Amazon Rating: 4/5 stars

My Rating: 5/5 stars

Your object in all advertising is to buy new customers at a price which pays a profit.

– Excerpt from the book.

I love all things advertising, which is why I couldn’t resist when Scientific Advertising popped up on Amazon for $0.99.

Who knew you could buy so much information for under a dollar?

This book is jam-packed with advertising advice and principles that have withstood the test of time (along with some that haven’t).

But the book isn’t just informative.

No siree.

It’s also short and easy to read.

Just like his advertisements, Claude gets straight to the point. In 76 pages, he explains what most modern advertising textbooks can’t in 300 plus.

What makes this book so great, however, is not the principles, writing style, or length, but the fact that everything is based on evidence and experience. Claude doesn’t just tell you what he thinks is true—he tells you what he knows to be true from his own testing and research (something we could all use in this day-and-age of opinions and “alternative facts”).

Though the book does contain a handful of spelling and grammatical errors (I don’t know if this was oversight by the publisher, or if the mistakes were Claude’s), they do not distract from the core content.

To say this book is a must-read for advertisers, marketers, or entrepreneurs is an understatement. If you haven’t already, get yourself a copy—you won’t regret it.

Click here to read my Amazon review.

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The purpose of advertising.

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The only purpose of advertising is to make sales.

Claude C Hopkins Scientific Advertising

Want to know what drives me crazy?

When I ask people what their goal for a specific ad campaign is and they respond with something along the lines of, “I just want to get my name out there.”

If this is what you think advertising is for, I have an alternative solution for wasting your money that is much more effective (and fun)—all you need is gasoline, a longbow, an arrow, some cloth, and a match:

Withdraw, in cash (preferably 20s), the money you were going to spend on your advertising campaign from your bank and pile it up in your backyard.

After you’ve created a sturdy pile, very carefully douse it with gasoline (or lighter fluid). Once you’ve determined that the pile of cash is sufficiently drenched, slowly back away from the pile.

Upon reaching a safe distance, pull an arrow out of your quiver, wrap the tip of the arrow with cloth, gently light it with a match, and fire it (no pun intended) into the pile of cash with your finest longbow.

Watch as your hard earned money magically turns to embers right before your eyes!

Alright, enough with the theatrics.

My main point is this:

The goal of every ad campaign you run and every ad you create should be to drive revenue.

Otherwise, you’re just wasting money and time.

As a small business owner you have a limited marketing budget. Do you really want to blow it on something that’s not going to generate a traceable return?

Leave the “brand building” to the multi-billion dollar corporations who have more money than they know what to do with.

You focus on performing marketing and advertising activities that drive results.

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The rate of innovation.

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To succeed in the long term, a business must innovate and improve at least as fast as its most effective competitor.

Charles Koch, Good Profit

Most small business owners know that they must innovate if they want to stay alive.

What they don’t know is how quickly they must innovate to stay competitive.

Unfortunately there is no standard rate of innovation.

There’s no guideline that says your product or service must add X features every X years to remain competitive.

Why?

Because the rate of innovation for a business is dependent on market demands and industry trends.

The rate of innovation in the locomotive industry—where higher capital investments and longer feedback loops lead to drawn out iteration cycles—is miles apart from the rate of innovation in the CRM software industry, where near-instantaneous feedback loops allow for quick iterations.

So, if there’s no hard and fast rate of innovation that you need to stick to, how do you know how quickly you need to innovate?

Though it’s tempting to say you should always try to innovate as possible, the truth is that innovation for the sake of innovation doesn’t necessarily put you in a better position than not innovating at all. In fact, you have to be careful or you might just innovate yourself right out of the market (see New Coke).

As Charles points out, if you want to remain competitive, you have to innovate at the same pace as your most effective competitor.

If you want to develop a competitive advantage, you have to innovate faster than your most effective competitor.

My guess is you don’t just want to compete, you want to be so far ahead of your competitors that they need a telescope to spot you.

So, it looks like the million dollar question is:

How do you innovate faster than your most effective competitor?

Unfortunately, I have bad news for you my friend: I don’t have the answer.

But I do have some pointers that might help.

First, you need to accept the fact that your product or service is always a work in progress. Never believe that you have the perfect product or service—it may be ideal for your customers now, but consumer wants and market conditions can shift faster than a Senator can flip-flop on a hot-button issue.

Second, you need to shorten your feedback loops. The faster you can collect feedback and information about the products or services that you sell, the faster you can implement improvements and make innovations.

Finally, you need use the information you’ve collected from your customers along with your market knowledge and expertise to stay on top of industry trends. If you can reasonably forecast where the industry is headed, you can get a jump start on developing the product or service will be the most valuable down the road. Just don’t try to predict too far into the future. Remember, Microsoft invented a tablet computer nearly 10 years before the iPad was released, but Apple was the company able to capitalize on the technology as they entered the market at a time when consumers were a little more receptive to the idea.

What are you waiting for?

Get out there and innovate before your competitors do!

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Friday book review: A Random Walk Down Wall Street

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Format: Paperback

Average Amazon Rating: 4.5/5 stars

My Rating: 5/5 stars

I’ve heard a lot of mixed reviews of A Random Walk Down Wall Street from a lot of different people, which is why I immediately snatched it off the shelf at my local thrift store when I saw it on sale for $2.00.

I’m very glad I did.

This is the best book on investing that I’ve ever read.

(PS: This book was also the inspiration for my fun investment idea.)

My endorsement of an investment book might not mean much, but I do have a rudimentary understanding of the stock market. In fact, my first job after college, I worked as a stock broker.

To become a stock broker I had to study for and pass a very difficult test to obtain a Series 7 license.

To pass the test I had to learn an uncomfortable amount about how capital and debt markets work, and how the many different asset classes can be used to balance a portfolio.

Needless to say, the whole experience was quite overwhelming for a “marketing guy” like me.

However, looking back, I can honestly say that being a stock broker was a blessing in disguise for a young college graduate just starting out in his career. The whole experience helped me learn the fundamentals of saving, finance, and investing, which has helped me get on the right path to financial independence.

That being said, I could have learned almost all of it the easy way if I had just ponied up the money to buy this book.

No, this book does not scratch the surface of what you need to know in order to pass the Series 7 test.

But it does cover all of the important, useful stuff.

He explains the difference between technical and fundamental analysis, he gives you a brief history of the world’s most infamous bubbles, he explains the field of behavioral finance and how it impacts your investment choices, he shows you how to allocate the assets in your portfolio according to your age and goals, and he even provides a primer on derivatives.

When I finished reading this book, I told just about everyone I know to pick up a copy.

You should too.

Click here to read my Amazon review.

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No post today.

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This is a PSA that I will not be posting on Mad Man Thoughts today.

I know what you’re thinking: “Richard, isn’t this a post?”

The answer to that is: “It sure is.”

I guess what I meant to say is I will not be posting anything educational/informative/useful today.

Now, I know what some of you are thinking: “Richard, do you ever post anything educational/informative/useful?”

The answer to that is: “I try.”

But I digress.

I’m not posting today because sometime this afternoon, SpinSucks will be publishing an article I wrote.

I’ll post the link here when it goes live.

In the meantime, enjoy your day and look for my book review tomorrow.

Update:

Here is the link to the article.

Fun investment expirement.

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I’m thinking of putting together a mock portfolio of assets to see if I can beat the S&P 500.

I wouldn’t put any real money on the line, I just want to see if I’ve learned anything from the books I’ve been reading about finance and valuation.

Here’s my (very rough) plan:

  1. I’d set a time frame (i.e. the beginning of Q2 2018 [4/1/2017] to the beginning of Q2 2019 [4/1/2019]).
  2. I’d set a fictitious dollar amount to be invested (i.e. $1,000,000.00).
  3. I’d select a handful of stocks based on certain valuation techniques.
  4. After finalizing my picks, I’d put together my portfolio and post it on this site.
  5. To keep things easy and realistic, I wouldn’t “sell” or “purchase” any additional stocks once my portfolio is finalized.
  6. I’d post a comparison at the end of every quarter, then at the end of the specified time frame I’ll post the final results.

What do you think?

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How dominant brands are built.

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Relationships with brands, like personal relationships, are built over time through a series of positive experiences.

Dr. Barbara E. Kahn, Global Brand Power

Do you think Coca-Cola became a household name—and one of the most valuable brands in the world—overnight?

No way.

It took decades of under-promising and over-delivering for Coca-Cola to establish a customer base that would follow it to the grave.

So, why do you think that your brand is any different?

Dominant brands aren’t built through advertising or public relations.

Dominant brands are built through consistency and trust—just like relationships.

Think about it this way, would you put your wallet into the hands of a person who randomly walked up to you on the street and told you they were trustworthy?

Probably not.

Would you trust your best friend of 10 years with your wallet?

Probably.

Why?

Because you’ve undoubtedly gotten to know them quite well over the past 10 years.

You know what to expect from them. You know how they’re going to behave. You know they aren’t going to take your money and run.

The same rules apply to brands.

Customers aren’t going to give money to your business just because you proclaim to offer the best products or services money can buy.

Nope.

Before they hand over their wallets without hesitation, you’re going to have to build a relationship with them—you need to prove that you are who you say you are.

How do you do that?

By providing them with a consistent, positive experience every time they come into contact with your brand.

They should feel warm and fuzzy after interacting with your business.

Yes, it takes time and patience to establish a rapport and build trust with your customers. But if you do it right and see it through, the relationship customers develop with your brand will pay untold dividends down the road.

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Friday book review: The Fortune Cookie Principle

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Format: Kindle

Average Amazon Rating: 4.5/5 stars

My Rating: 4/5 stars

Brand storytelling is about standing for something and striving for excellence in everything your business does.

– Excerpt from the book.

I picked up The Fortune Cookie Principle for two main reasons:

  1. It had been recommended to me by several of my colleagues who work in marketing and advertising.
  2. It popped up on sale on BookBub one day at a price I couldn’t refuse.

I had high hopes for this book and I was not disappointed. It was full of advice for building a successful business, not just a successful brand.

This book emphasizes that it takes a little more than 4Ps to build a buzzing empire.

Although I was initially put on-tilt by the way the information within the book was presented, I actually ended up enjoying Ms. Jiwa’s writing style. At the beginning of every chapter, she presents a specific business/branding principle, then she supports her argument by providing examples of startups and small businesses who used the specific principle to succeed.

I would have given this book five stars, however, there were some things I didn’t like.

First, it was a little repetitive. A lot of the principles were connected to each other, so duplication was inevitable. However, I felt Ms. Jiwa did an excellent job only repeating herself when necessary.

Second, some of the startup and small business examples she used to support her talking points felt like reaching—they didn’t quite drive home the value of the principle she was trying to present.

Overall, however, I thought The Fortune Cookie Principle was an excellent read and I would recommend it to all the entrepreneurs and small business owners out there trying to establish their brand identity and company culture.

Click here to read my Amazon review.

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Yours isn’t the only point of view.

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We see the world, not as it is, but as we are—or, as we are conditioned to see it.

Stephen Covey The 7 Habits of Highly Effective People

Don’t you hate it when you explain yourself over and over again, but your customer still doesn’t get it?

It’s frustrating.

The whole experience makes you want to grab your customer by the shoulders, shake them, and yell, “How are you not getting this?!”

Here’s the thing, you’re not the only one who’s frustrated in that situation.

Nope.

Your customer is too. Probably even more than you.

You see, they want to understand—just as much as you do—how your products or services can help them.

The problem is, as Jack Johnson would say, there are complications in the strings between the cans.

That is, there’s a gap in the line of communication.

Guess who’s responsible for bridging that gap?

I’ll give you a hint: It’s not the customer.

(Seriously, if you think for one minute that your customer is going to go out of their way to understand your products, services, business, or value proposition, you’re in for a bumpy ride.)

The answer is, you are responsible for bridging the communication gap.

Make no mistake, my friend, this is a task that is much easier said than done.

So, how do you do it?

Well, one approach is to try explaining your message differently—perhaps by highlighting various features of your business or products/services— until your customer gets it or you both become so annoyed that you decide never to speak again.

I don’t recommend this option.

Another method you can use is to take a step back, put yourself in your customer’s shoes, and try to see things from their point of view. Then, once you understand their position, you can tailor your message accordingly.

This is the option I recommend.

A problem that a lot of salespeople and small business owners (myself included) make when pitching is they communicate as if the person on the other side of the table has the same level of understanding—and wants the same thing—that they do.

This is a surefire way to lose a sale.

Here’s an example that will help add a little perspective to this idea:

Imagine you’re a lemon distributor who sells lemons to independent lemonade stands.

One day, you get called into a sales meeting with Ava, the owner of a neighborhood lemonade stand.

Ava’s lemonade stand is relatively new. However, due to the high quality of the lemonade Ava makes, she’s been able to carve out a niche and establish a competitive advantage. Because demand is so high, Ava is looking to open another lemonade stand on a corner a few blocks away.

Currently, Ava grows her own lemons. In fact, she recently performed some calculations and she determined that she grows enough lemons to supply both her current lemonade stand and her newly proposed location. However, she’s agreed to meet with you so she can test the water and explore her options.

So, you go into the meeting and you give your pitch. You know that Ava’s business is built around high quality lemonade, so you make that the focal point of your presentation. You tell Ava that your company sells the highest quality lemons on the market.

After you’re done, Ava thinks for a minute and tells you that she’s not interested because she already grows enough high quality lemons to satisfy demand.

Here’s where you have to make a choice.

Your first option is to list the other attributes of your products or business and hope something sticks.

For example, you could tell her that you have lower prices, same-day delivery, or some kind of guarantee.

However, this is unlikely to change her mind. From where Ava’s sitting, none of those features matter.

Ava grows her own lemons, so she probably won’t be sold on price. She can move her lemons from her backyard to her lemonade stand in minutes, so same-day delivery is irrelevant. She knows her lemons are already high quality, so a guarantee does nothing for her.

Unfortunately, this is the route that many salespeople and small business owners like to take.

Your second option for approaching this situation is to put yourself in Ava’s shoes and try to see things from her perspective.

How much does Ava know about your business? What about the industry as a whole? Where am I failing to communicate my value?

Your business model is pretty straight forward. You source lemons from multiple lemon farms and then you sell them, in bulk, to independent lemonade stands.

Given your sales pitch and simple business model, Ava probably understands your business pretty well.

When it comes to the industry as whole, however, Ava’s understanding may be a little fuzzy. Ava’s business is new and it’s completely vertically integrated, which means she has never worked with lemon distributors before.

She doesn’t quite understand the value of having a lemon supplier when she’s perfectly capable of growing enough lemons herself.

Looks like you’ve found the gap. Now it’s time to start building a bridge.

You’ve been trying to sell Ava on your capabilities because you assumed she knew as much about the lemonade stand industry as you do.

After standing in Ava’s shoes, you realized that your goal isn’t to convince Ava that your company is better than your competitors’—your goal is to convince Ava that partnering with a lemonade distributor is better for her business than growing lemons herself.

Equipping yourself with this new perspective, you could say something along the lines of:

Ava, you said you had calculated that you could grow enough lemons to satisfy demand at both stands. However, do you have a back-up plan in case demand spikes or—heaven forbid—something happens to your lemon crops?

From my experience in the lemon industry, lemonade stands typically keep a back-up supplier on hand just in case. After all, the last thing you want is a shortage—not only does it make you lose out on potential revenue, it also tends to make customers unhappy.

I’m not trying to replace your lemon farm, I’m trying to enhance it. I just want you to have options so that you never find yourself in the midst of a lemon crisis.

Voilà! By taking a step back and looking at things from Ava’s perspective, you were able to bridge the gap and effectively communicate the value that you bring to the table.

Give it a whirl next time you’re in a sales meeting that starts heading south—it could turn a hard no into an enthusiastic yes!

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