Due to the virus crisis, everyone has to look at an online business model of some sorts. I am one of them. The product that I have to sell online has been proven to be (very) difficult. The feedback I got so far doesn’t surprise me. 8 out of 10 didn’t think it would work. But, those 8 people also didn’t have better solutions.
What is a formula of having a successful online business model then?
Throughout the experiments I did in the past several years, there are some very important conditions that need to happen.
- The understanding that your product is not for everyone. Minimum Viable Audience is a key. Once you gain this understanding, you have to find out how your product can solve their problems.
- The trust from your customers. If a company has a good brand positioning, they get a head start. But many don’t. Your chance then rely on the existing customers.
- How you tell your stories
- The understanding that success will not happen overnight. But the business cannot wait forever too.
- The need to have a friendly sales process. Very few customers are ready to buy on spot. How can we accommodate the after-first-sales-interaction communications?
Of course we do need to have a user friendly website. However, without the above conditions, there is no chance of success in my case.
This is the framework I am working with.
I would say 70% to 80% of companies in the world use direct marketing approach. By direct marketing, I mean everything opposite to brand marketing i.e. sell products to people as quick as possible.
Nothing is wrong with the above concept. However, the direct marketing approach suffers from 2 challenges:
- Target market: it looks like those companies know their target market. But, their customer base is normally broad, very broad. It could almost be everyone.
- Quick results: they want quick results. Life is too short so management cannot wait.
The consequence of the direct marketing approach are several.
- You (marketing department) have to stick to this approach almost forever. Changing it to the brand marketing will take time and you won’t get ‘quick’ results. Management wouldn’t allow you to do that.
- You (companies) will always look for cost saving / cutting. You are competing on prices, always on prices.
- You (companies) cannot get out of a discount game.
- You (companies) have to rely on some individual sales staff i.e. 80:20 rule – 20% of sales staff generate 80% of sales revenue.
- You (companies) will eventually disappear. The company is not built to last.
If you (marketing) have a brand marketing mindset but you work in a direct marketing company, you would be frustrated. If you have better options, you should leave. If you don’t have other options, you may have to give up trying to push for branding. It would never happen.
I haven’t followed much of economic updates for a while. It’s hard to catch up as so many things have changed. You also forget a lot of theories and terms when you don’t feed your brain about certain topics for a long time.
But, I came across a short article last week that what Federal Reserve (Fed – the US Central Bank) is doing for this virus crisis is worth noting. The economic crisis brought to us by Covid-19 virus is different to the crisis over a decade ago. In GFC, the crisis was mainly in the financial sector. But this time, it impacts everyone, all sectors got frozen.
The main weapon that Fed has and always uses is to manage its Fed fund rate. However, as the rate went as low as 0.25%, the impact wouldn’t be hopeful. What Jerome Powell and his team did (that is considered creative) are at least 2 major things:
- The situation has been very bad to the point that investors didn’t even buy the super safe treasury securities. When Fed jumped in to buy, it gave confidence to other investors to buy as well. As a result, the overall interest rates of all debt types drop giving opportunities for every company – big and small – to access cheaper debts to fund their operations.
- Fed is not supposed to provide loans directly to businesses. Fed got an OK from Treasury Department to extend the range of eligible borrowers. It then rolled out rolling out the Main Street Lending Program for companies with fewer than 10,000 employees; and backing the Small Business Administration’s Paycheck Protection Program, which is for companies with fewer than 500 employees.
Jerome Powell is the first Fed Chair who doesn’t have a degree in economics. However, he has proven to understand market and corporate finance more than many economists.
Have you heard about pragmatic marketing? It is a sophisticated marketing approach that a product creation process continually adapts itself based on customer’s feedback.
The process is the marketing strategy is tested and re-adapted to ensure that the relevant of the customers to the customer’s expectations are met. It involves a series of product adaptations to ensure that the final product satisfy the target market.
It’s not a new concept as it still bases on the basic marketing principle. The concept is more like an agile project management approach but adapts to customer’s feedback.
I just read a story of Joe Girard. He holds the Guinness World Record for being the greatest salesman in the world. He sold 13,001 cars at the Chevrolet dealership between 1963 and 1978.
What is his secret? Ironically, the secret of his success was based on the 2 marketing concepts:
- Positive marketing: Joe sent cards to his customers every month. He didn’t put sale or discount messages in any of his cards. He simply sent a message that he liked his customers.
- Stay top of mind: He had more than 13,000 customers in his list. They received his cards every month. When they thought about buying new cars, his name of course came up first. Most of his sales came from repeated customers.
I am a firm believer that the sales and marketing process is the same process. You have to create demand before the actual sales process can start. The demand creation process could take time and it’s an ongoing process. You cannot stop.
It is interesting to know that the greatest salesman applied marketing approach seamlessly and successfully.
A leader is one who knows the way, goes the way, and shows the way.John C. Maxwell
Successful leaders require the following traits:
- Emotional intelligence
The above traits are learning skills. They require constant practices.
I am in another journey of reading another book by Simon Sinek. The book is about finite and infinite games and mindsets. And it occurs to me that having a goal of being the best is not necessarily a good mindset to have. It is a finite thinking. Why? To be the best, you set up a restrictive framework to yourself. You have to compare with something to know your progress to be ‘the best’. Once to achieve it, you will either have to look for a new target, a new comparison or risk being complacent.
To be better on the contrary is an infinite mindset. The goal of being better is to keep playing in an infinite game. You don’t have a finished line and you have to keep improving.
No one can be the best forever. You don’t even know that you are actually the best. If you have to compare with someone, the best person you should compare with is your yesterday’s self. And, you will be better everyday.
Most surveys agreed on one think that the demand for people to travel will bounce back, quite quickly. However, the situation will not be the same. Here is my prediction of the consumer demand for tourism.
- People really look forward to travel again. I think the demand will be strong from September this year.
- From a purchasing power perspective, there are 2 scenarios:
- Consumers with income: They will try to take leave and go.
- Consumers without income: this group can be split further to
- Family: They will not travel for at least the next 12 months until they sort out their income source situation.
- Single / young people: I think many of them will travel. They will use their saving and will think about what to do after they return home.
- There will be a lot of discounted deals from May to the end of the year.
- Cancellation policies for hotels, airlines, and travel agencies will be very flexible this year.
- The big trend will be domestic travels. Drive to destinations will be super popular. Anything to do with the drive-to travel will do well.
- International travels will rebound from Q2 next year.
- Business travel demand will drop because many companies are now familiar with video calls.
I work in corporate marketing. And, as much as I hate to admit, I am unable to answer all these questions. Even I have the answers, I cannot put them in practice.
There are at least 3 types of corporate marketers. The first one is the marketers that lure potential customers through their doors begging to be sold. The second type fulfills more of a public relations role, drafting drab public communications. And, the last type puts together dazzling presentations that leave you in awe but communicate absolutely nothing of importance to a prospective customer.
All of the above marketers would find it hard to answer all of the below 7 bible marketing questions:
- What do you make? Do you have a clear idea of what product you make?
- What does it do for your customers? It’s all about your product benefits, not its features.
- What is the change you seek to make with your product? How can your product help make a difference to customer’s life?
- Who is it for? Who would benefit the most? I cannot enforce this concept at all. We always go after quantity over quality.
- What basic desires does your product satisfy? Security, adventure, freedom, etc. What is it?
- Why should people believe you?
- Why should they buy from you, not other alternatives out there?
How many questions can you answer?
I didn’t come up with this statement but I agree. I never believe in work-life balance. But, I also don’t think that people who believe in this mantra are losers.
People who believe in work-life balance because they don’t like what they do. Most people burnout because they chase the wrong goals – probably money and status. I feel proud of every solution I come up to help people. I then move on to the next things.
What I choose to do is I choose an “integrated lifestyle”. I choose to do things I enjoy throughout the day. Those activities could be a mix of work and family. It doesn’t have to be that I only spend times with my family during weekends, with no work. I wake up early to study and work while my family is sleeping. I don’t enjoy everything I do at work. But I try to do the work I don’t enjoy as quick as possible.
Fulfilment is the right word for your productivity life. It’s a true source of happiness.
And, remember this…
Practices once a week aren’t habits at all. They are obligations. Jeff Goins