By the authors of Knowledge Leadership
The ThomasGroup
KL@TG: You were a four-sport, four-year letterman in high school. As you now reflect back on the evolution of your personal life and professional career, what have proven to be the most valuable lessons learned from your involvement with competitive sports?
HB: Sports teach the role of a healthy body in a rich life, and can transform you into an athlete for life, which is a good idea.
Sports teach that hard work pays -- not in direct proportion to the effort, but in strong correlation.
Sports teach grace under pressure, and I think they're what gave me the quality that people have often mentioned in job reviews: he's calm during the storms.
Sports taught me a special lesson. My freshman team went winless in basketball -- winless. Two years later we finished fourth in the state, the first state tournament our school had ever attended. When I was a sophomore, my football team won one game, and that was a 7-0 win over a team that went winless that season. The next year we finished tenth in the state. So I learned that while success can be fleeting, failure can be, too.
KL@TG: What seem to be the most common misconceptions about "selling"? How do you explain them?
HB: That it's backslapping, arm twisting and myth spinning. And it's the examples of bad salespeople that created that stereotype. Great salespeople are so good at it you don't know they're doing it, and there's no stereotype you can draw of them.
KL@TG: What do all peak performers in sales share in common?
HB: Resilience, integrity, and a genuine conviction that what they're offering can improve someone's life in some way.
KL@TG: During Q&A sessions after your formal presentations and probably during the workshops and seminars you conduct, which questions are most frequently asked, and what is your response to each?
HB: I conclude with a remark, "Take the road that runs along the cliff, the one without guard rails." People most often tell me how much that meant to them, personally or professionally. Sometimes when they say it, I can see that their eyes are damp. The broad category of questions you hear most often are about branding. People know it's important, but aren't certain how to build their own, and it's an area of great weakness among businesses. Not one business in ten understands branding and manages its brand well.
KL@TG: Warren Buffett is reported to have suggested something to the effect that price is what you charge, and value is what people think it's worth. Your own opinion?
HB: He's almost right, but he's neglecting the fact that price tends to enhance most people's perception of quality and therefore value. Most women think L'Oreal is worth more because it costs more, just as credit card users switched from Diners Club to American Express when AmEx nudged its yearly fee just above their rivals. And people who can barely afford them go to Wal-Mart and buy Kitchen Aids.
You cannot separate price and perceived value as easily as that quote suggests.
KL@TG: Now please shift your attention to a few of your books. First, The Invisible Touch, in which you identify what you characterize as "the four keys to modern marketing." It was published in 2001. What were the "keys" then, and have you since changed your thoughts about them?
HB: Price still matters, but consumers are getting more information now than they did even six years ago. They're able to shop more shrewdly. But for services, people do not compare as often because they can't, and because services are harder to commoditize. All haircuts, for example, are different, and if you want a nice one, you assume it may cost more.
Brand matters even more, because products are becoming more commoditized and our options continue to proliferate, making it harder to choose among seemingly similar products and services. Just go to the store today and decide you're going to switch toothpastes. Try to compare all your options; you'll feel overloaded. Ultimately, you'll tend to migrate to the one whose brand message somehow gives them an advantage.
Packaging matters, and we're seeing design play a growing role in our economy.
Look at how Target has made cheap chic by enlisting the architect/designer Michael Graves; look at what Oreck has done in vacuum cleaners, a category that seemed so mature it appeared exhausted -- the new design has changed that industry.
And look at what Apple did with the iPod. You open your iPod box, and you're taken back to childhood Christmases, because it's wrapped like a wonderful gift. It's an mp3 player, for heaven's sake -- but the design has turned it into a lust object and the virtual name for the entire category.
And relationship matters deeply, not least of all because it has been somewhat neglected. You can go to college and business school and never learn anything about how to relate effectively to others. Indeed, your education easily can mislead you into deciding that all that matters is knowledge and technical prowess, and that the ability to relate well to others is for salespeople or store clerks, perhaps.
KL@TG: A related question. Have you also changed since then your thoughts about what "the invisible touch" is and why it is important?
HB: The only change in my feelings is that they've grown in intensity. Business is personal, business is relationships, and mastering our relationship with ourselves and others is pivotal to success.
KL@TG: You develop this core concept in greater depth in the next book. What is required when attempting to "sell the invisible" -- especially to those whose purchase decisions are based almost entirely on price?
HB: You don't want customers who buy solely on price, unless you're convinced that you can seize and hold the low-cost, low-price position in your market -- and that's hard. A dozen companies tried, and then WalMart came along, literally killed the category, and drove those companies into Chapter 11. There's always someone that can sell something for less.
Not that many customers buy purely on price. If they did, WalMart, Penneys and others wouldn't have tried so hard to move up the perceived quality and style chain. And in fact, WalMart is under huge pressure now because they feel they have to move upscale, but the customers won't let them because the WalMart brand does not embrace higher quality/higher price products.
WalMart has learned that they have customers who feel forced to buy solely on price, but also that they have another segment that can afford far more but loves to seek out deals, and yet another segment that is price-sensitive but brand-inclined, meaning that they will pay more for a brand they trust.
Unfortunately for WalMart, it's not clear they will buy the more upscale brands at WalMart; the WalMart brand dilutes the perceived quality, so what do consumers do? They go buy the identical product at a different store.
So WalMart has learned that the pure price buyer is a smaller segment than some assumed, partly because almost every person is aspirational. We want a little more, something better -- for ourselves and others. So you see people of limited incomes sometimes splurging on Godiva chocolates.
But the key to selling anything intangible, like service, is to make its qualities visible, or at least apparent, through your pricing, branding, messaging and packaging.
With thanks to the Thomas Group, part two will appear in the next Invisible Ink.
But of course it's intriguing: it's in The New Yorker.
In the May 28 issue, Wisdom of Crowds author James Surowecki revealed some interesting information about a favorite topic of ours, complexity.
His article focuses on "feature creep," that clever expression for the tendency of product manufacturers to constantly add features. The article points out that these mysterious added features -- Microsoft Word 2003 featured 31 toolbars and more than 1,500 commands, as one famous example -- not only cost consumers time, but also cost businesses money.
A study by Philips Electronics recently concluded that product returns cost U.S. businesses a hundred billion dollars a year -- yet in half the cases, the products have nothing wrong with them. Consumers just couldn't figure out how to use them.
Now, you might assume that these consumers would have devoted some time to learning about the product before returning it. But they didn't. On average, they took just 20 minutes before giving up.
Several months ago I held up an iPod Shuffle to an audience and asked how many owned one. Perhaps two dozen hands among the 250 people went up; today, the number would be three dozen, based on the phenomenal success of Apple's ingenious device. I then asked, "Do you know what you can do with this thing?"
"You can turn it on and off. You can turn the volume up or down. You can skip to the next song or to the previous one. That's it. That's all this thing does -- and it sells like the wheel did when it first came out, and for the same reason. All the wheel did was roll, and all this does is play songs at different volumes."
"What does this tell us about what consumers want?"
Simplify, simplify.
Thank You's
A special thanks to our name testers for their overtime last month.
Thanks to recent inquirers from exotic places: Paris, Slovenia, Jordan, and Malaysia. (We hope to get to all four.)
Kibbles and Bits
Can we declare a moratorium on the expression "your own personal"? Can an item that is "your own" not be "personal"?
Stanford confirms that Michelle Wie will enroll this fall. Too bad she's not a five-star wide receiver. After her 88 last Thursday at Annika Sorenstam's tournament, perhaps she should consider the switch.
The Next Big O Has a Big Q Factor:
Looking for someone who will be a great endorser, but is underpriced right now? Future Portland Trailblazer Greg Oden, the game's next great center. Remarkably witty and affable despite his grave, gotta-be-at-least 40 appearance. (I recently suggested to The Onion a story about Oden celebrating his 19th birthday this January: "Oden Says 19th Birthday 'My Best Ever.'" Ohio State star center Greg Oden said last Monday's birthday was "my best 19th birthday ever, better than my fifth 16th birthday party 13 years ago.")
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Harry Beckwith is the Director of Beckwith Partners, an internationally regarded branding
and marketing firm. His classic trilogy on marketing a service -- Selling the Invisible,
The Invisible Touch, and What Clients Love -- has sold over 900,000 copies
in 22 translations, and the first book has been named one of the ten best business and
management books of all time. He has been a keynote speaker for 14 Fortune 200 annual sales meetings and the National Speakers' Association convention, and has made presentations in Europe, South America and Asia. He is cited regularly in |
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national media including CNN,
The Wall Street Journal, Business Week, Entrepreneur,
Crain's New York Business and numerous
American, European and Asian newspapers. A Phi Beta Kappa graduate of Stanford University, Harry resides in Minneapolis with his wife Christine Clifford Beckwith. He is the father of six children. Beckwith Partners' clients include Wells Fargo, Fidelity Investments, Microsoft and Target as well as many venture-capitalized startups worldwide. |
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E-mail questions and comments for Harry Beckwith to invisble@bitstream.net.