Is Your Marketing Message
All startups fall into one of three categories: those which sell products, those which sell services, and hybrids which sell both.
These distinctions may not seem all that important at first. But in fact they make a profound difference in how you design your marketing strategy.
To put it simply, a service company is unlikely to succeed if it markets itself the same way that a retail company does. And vice versa.
Let's begin by looking at the retail marketing model. It's the approach which is most widely understood.
Marketing to the Price-Conscious Consumer
Building a profitable business by selling goods has become notably more difficult in recent years. Thanks largely to WalMart, Amazon, and their kin, today's shoppers are more cost-conscious than ever. These giant super-retailers have conditioned buyers to look for — and expect — discounted prices. Not just when shopping at WalMart and Amazon. But everywhere.
To meet this expectation, business owners must settle for lower profit margins. They usually have no other choice. Thus, to succeed in a business that sells goods, you can never take your eye off of two essentials, namely, keeping your prices competitive and controlling costs to protect margins.
Highlighting Your Pricing Message
Moreover, in your marketing you must be up-front with your pricing. This is particularly true if your offerings are available either on line or at other outlets nearby. When people can buy the same product at multiple places, it becomes a commodity. The only thing which distinguishes a commodity in your store from the same commodity elsewhere is the price.
Consequently, the first concern of your potential customers (and sometimes their only concern) is your price and how it stacks up against your competition. Once they believe that your prices are competitive, other factors enter their buying decision. In deciding whether to buy from you or from someone else, they may consider the convenience of your location, any unique benefits which you provide, the ease of doing business with you, your return policy, etc.
But typically customers do not turn to these other buying considerations until they first know that your prices are competitive.
Positioning Your Pricing Message
I'm not saying that pricing should dominate your marketing message, although sometimes it may need to. Newspaper ads for grocery stores are one example of a marketing message which is almost exclusively about price.
In most cases, however, your message will probably need to build around something other than price alone. You may want to emphasize things like the breadth of your selection, the quality of your products, or your customer service.
Yet, whatever else you achieve with your marketing message, you cannot ignore pricing. This does not mean that you must cite specific costs for individual items. But as a minimum your advertising must convey the message that your prices are attractive to cost-conscious customers.
Adjusting the Message When You Market Services
Now let's contrast marketing goods to marketing services. Startups in the service arena make a common mistake. Because they know that consumers are price-conscious, they believe that their primary selling point is their fee. But that's not the case.
People do not shop for services the same way that they shop for commodities. Whereas the uppermost question for retail customers is about price, the uppermost question for service customers is about your ability to perform. Pricing, while still a consideration, is very much a secondary issue. What these customers want to know is whether you can deliver the service reliably, in a timely manner, and with professional quality.
In a word, people shopping for services are looking for a provider who is credible and trustworthy. As a result, when you market services, testimonials from satisfied customers are far more vital than when you are marketing goods. So, too, is supplying a list of widely-known or highly-respected clients.
Giving Your Message a Professional Feel
Equally important, service-type businesses must pay very close attention to how they package and brand themselves. Since they are trying to quickly evoke an aura of credibility and trustworthiness, their marketing must have the look and feel that people associate with genuine professionalism.
Web sites should exude this look and feel, as should business cards, letterheads, marketing brochures, media ads — in short, anything that touches potential customers as they are making a decision to buy.
The need for professional packaging also extends to the way that service providers package themselves personally. They need to dress and carry themselves in a way that communicates professional presence and confidence. And if their office is a regular place for meeting clients, this space must likewise have a professional appearance.
I constantly see encore entrepreneurs ignoring these packaging issues. They believe that customers will be so attracted to what they offer that packaging their business professionally is a secondary issue. Or even a needless expense.
Then there are those startups which are operating on a shoe string. The easily convince themselves that they can't afford the quality of materials and packaging that go into a professional appearance. The truth is, they can't afford not to create this appearance.
Positioning the Pricing Discussion
When you're marketing services, moreover price enters the conversation much later than when you're selling goods. Your goal in marketing a service is to get people so excited about doing business with you that price is a secondary consideration.
As we noted earlier, many service-based startups view price as their primary selling-point. Successful service providers will tell you otherwise. Services are sold first and foremost on your ability to perform professionally, not on your price.
This point is so crucial that I'm going to devote the next issue to discussing it at greater length. In that feature article I will lay out the rationale for postponing the pricing conversation and give you some strategies for doing so.
In the meantime, make a critical evaluation of your current marketing materials. Is their message structured primarily around the price question? Or the professional performance question? Most importantly ask whether your marketing message aligns strategically with the kind of business you're building.
This article first appeared in Encore Entrepreneur inbox magazine on January 28, 2015.