As the old saying goes “business is what, if you don’t have, you go out of!” As Michael Masterson said in “Ready, Fire, Aim”, your primary concern has to be making sales.
Without sales, you don’t have a business. But it starts with your offer which in turn leads to a sale.
An Offer is a way of communicating the value of your product or service to a potential customer. A good offer is one that focuses on what people want, and NOT on what people need. If you wish to create a good sign-up offer, produce something people desire. To make a profit, you must satisfy your customers.
There are two related issues here:
• Understanding what drives their desire
• The outcome – the results the customer will gain if they accept your offer.
Their desire is driven by more than just features and benefits. Sure, the benefits are what the features will do for the customer, but you must dig deeper.
But there is more to benefits than straight forward ‘cause’ and ‘effect’. Robert Imbriale (Motivational Marketing) suggests that there are in fact at least two levels of benefits. Direct benefits are what people usually talk about. You go on a diet, and if you maintain some discipline, you lose weight. Cause and effect.
Let’s take this a step further. You need to drill down to the key desire that will have the greatest emotional impact on the buyer - the indirect benefits. It comes down to emotional factors, how they will feel having used your product or service.
Losing weight is the direct benefit, but what is the subsequent effect of having done so? Now that is where things get interesting, because the ‘indirect benefits’ can take a number of different paths. You may:
• just feel good about yourself again, and that’s not a bad situation to be in;
• have more energy, more get up and go;
• take up a recreation again;
• get work done more promptly and as a result, be able to spend more time with your family;
• be more attractive to your partner;
and so on.
Did you notice that all these indirect benefits are about how you feel, rather than something strictly measurable like the weight you have lost? Because they are about how you feel, you tend to judge them in emotional terms.
So many advertisements today endeavour to tap our emotions. They ask us to put ourselves in the situation being promoted. And they often show us with pictures – ‘before’ and ‘after’ = the transformation. Very clever, because most people make decisions for emotional reasons, although they justify them in more logical terms (I’ve lost 5 kilos!).
You might set a target of losing 5 kilos, but underneath that there are “feelings” such as those above. It will be those feelings (emotions) that are most likely to lead your prospect to take up your offer.
The benefit part of the value equation is not simple, but you need to understand it to ‘balance the equation’ when making an offer to your prospective customers.
For most people, the top reason that someone will chose to buy a product or service is that it will do what they want it to do.
It’s the Transformation - the before and after evolution that your customer will go through after using your product or service.
Every offer boils down to a transformation. Regardless of what you’re selling, it starts with a before picture, which is less than ideal in some way. Then your offer intervenes, and that takes people to the after picture…
The transformation is the core of your Offer. Your prospect probably won’t tell you why they want to lose 5 kilos. That is why you have to dig down.
Stop selling your product and start selling your outcome. It’s not earth shattering, but it is easy to forget. We get so wrapped up in the great stuff we have to offer, we forget it’s really all about the prospect and what they want.
So be very clear about the outcome you’re trying to create for your prospect. Try rewording your offering in outcome terms, not product or service terms. Make it compelling.
You need to get inside the mind of your prospect, and understand their discontent, and to be able to show you understand it.
Now obviously, you can’t do this for each individual out there. That is why market segments are important; niches with similar problems and desires to change. And the niche has to be big enough for you to prosper – see my blog post “Does your marketing tail stretch to the sea?”
Value arises because the direct and indirect benefits your product offers solves a problem for your customer for a price they are willing to pay to gain those benefits.
Too high a price, then the benefits will not be seen to offer value, and the customer won’t buy, or at least, they won’t buy from you. Instead they may well go to a competitor who offers a superior value as perceived by the customer.
The greater the benefits in terms of the problem they solve for the customer, the more the customer will be willing to pay to obtain those benefits.
Too low a price will offer increased value to the customer, but at the expense of your profits.
The difficulty in getting the balance right is that very often the assessment the customer makes is likely to be carried out in their mind – at the emotional level. It is a perceived value, and each customer will form their own perceptions, but to be compelling you must reach down to that emotional driver.
When clients approach me for coaching, so often, they are not getting the clients they need, the right clients. Eight times out of ten this comes down to not knowing what is working, and how to develop compelling offers for their customers.
For more than 30 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand how to use the 80-20 rule to determine their most profitable customers, and to determine the offer to bring them on board.
If you would like to discuss with me how you might do that, book a Strategy Consult here.
© Copyright 2018 Adam Gordon, The Profits Leak Detective
Some profit losses are pretty obvious - so you fix them.
BUT, what if you don't know profits are leaking, cash out the door?
Possible leaks could be anywhere.
Are there some clues or symptoms that are tell-tales?