Robert Bradford, CEO of the Center for Simplified Strategic Planning, explains that what a company thinks its product line means to its customers and what customers think the company means can be two very different things.
Last week I had an interesting discussion with a director of Mary Kay, one of the most successful companies in the cosmetics industry. She wanted to know why it would be important for her sales reps to understand strategy.
Classically, we've just asked sales reps to sell, and nothing else. The ideal salesperson was someone who could sell ice to Eskimos, a kind of glorified snake-oil salesman in a plaid jacket. This approach has done one big thing for American business: it has taught us to expect lies and misdirection from salespeople. Long-term success cannot, however, depend upon this kind of "burn the bridges" mentality. With a "scorched earth" sales strategy, you can maximize your sales in the short run, but there will be no second sale. As the cost of sales has risen, the need for customer retention has made that second sale a mandatory prerequisite for profitability.
The best way to get at the second sale -- or better yet, having a customer for life -- is (and this is not rocket science) to sell the customer what the customer wants to buy. The rocket science comes in when you try to figure out exactly what it is the customer wants to buy. Strategy guru Peter Drucker said it best: "The customer rarely thinks he is buying what you think you are selling." In other words, you are all wrapped up in your company while your customer is all wrapped up in his life, and the amazing thing is that you manage to get any sales at all!
My response to the Mary Kay director was along those lines. I asked, "When customers buy from you, what are they getting?" To which she replied, "Makeup ... no, wait, they are buying beauty." She was on the right track, but we took it a step farther. Beauty, of course, is in the eye of the beholder, so you can't really sell it (and you'd have a lot of returns if you tried). You can, however, sell certain aspects of cosmetic performance. Some people buy cosmetics that promise to make them look more professional. Others want to attract a mate. And teenagers want to look cool and trendy. Those are things Mary Kay can sell -- but each has a very different meaning.
This meaning is the key to efficient sales. In the Mary Kay example, they developed a product line which targeted the high school and college crowd. In marketing this line -- called Velocity -- they emphasized the hipness of the cosmetics. This extended to the packaging, colors, fragrances, and selection of reps, as well as the marketing materials. Interestingly, Mary Kay management did not insist on emphasizing the Mary Kay name -- because they knew that Mary Kay meant something unhip to its target market.
There are six key things to remember about meaning. First, useful meaning is found in the brains of your customers, not in your operation. Second, meaning is a valuable strategic tool only when it is distinctive. Third, for the distinctiveness to last, meaning must require serious commitment and focus. Fourth, meaning must be difficult to copy casually. Fifth, meaning must be driven into your sales, finances and operations so that it won't unravel. Sixth, meaning is difficult to create, and difficult to erase.
Let's look at some examples for each of these to understand why they are important for organizations: