In 1960, Harvard marketing professor Theodore Levitt published "Marketing Myopia," one of the most popular Harvard Business Review articles ever. Almost sixty years later, Levitt's ideas have stayed fresh and convincing despite the fact that most companies don't follow them.
Levitt claimed that businesses are preoccupied with own growth, focusing on their products instead of carefully gauging the needs and wants of their customers. Levitt believed this myopic view would cause businesses to fail. And that turned out to be the case when Kodak went into bankruptcy in 2012 as it failed to identify the shift to digital cameras, and when Nokia had to be sold to Microsoft as it failed to identify the shift to smartphones.
Isaac Mostovicz is founder of Janus Thinking, a think tank focusing on the psychology of luxury, marketing, management, and leadership. He is also actively involved in the diamond industry, devising and executing creative marketing programs in the U.S. and Asia.
According to Isaac, if you follow these 8 tips, you'll get the most out of your sales and marketing efforts -- leading to long-term success for your business.
1. Don't sell a solution -- try to find out what the problem is.
Your product is a solution to the needs and wants of your customers. But, do you actually know how your solution satisfies the needs of your customers? Beware of that one solution that might satisfy several needs -- you'll end up not solving anyone's needs. Each product or service you offer must provide a solution to a specific need. If you want to offer a solution you will first need to discover the customers' wants.
2. Identify your competition.
Your competition is not only those companies that offer similar solutions or products as your own. Your competition includes all those companies that can satisfy the needs of your customers. Airlines don't compete only with one another. They compete with all other means of transportation -- and when no physical presence is really necessary, they compete with inexpensive or even free online video conference tools as well.
3. Identify your markets.
A market is the agglomeration of all products and services that answer one particular need. Since your customers have various needs, you act in a set of markets and each has its own set of competitors. If you don't map your markets in detail, you are playing the casino or lottery without knowing what the odds really are.
4. Price war.
This is the cardinal sin of companies. The ultimate role of a company is to survive profitably, and how can you survive if you are cutting your margins too thin? It's simple: You can't. If people buy your competitors' products over the ones you offer, it means that their solution is more appealing. Go and find out why.
5. There is no "best price" -- Part 1.
Contrary to what many think, Henry Ford sold his legendary Model T at just $500 because he calculated that this price would allow millions to purchase his car. The rest -- the assembly line and mass production came as a result, not vice versa. When pricing, find out first what the price should be by asking your customers and then focus on modifying your costs accordingly.
6. There is no "best price" -- Part 2.
Your product costs you the same regardless to whom you sell it to. However, people pay differently according to the needs that your product satisfies. You might have the same product on the same shelf -- but with two different price points -- because they aim to two different markets. All you need is to clearly identify which product is aimed to which market.
We interpret by comparison and contrasting. That's why we tend to think that something that's more expensive is better. Even when you are still unaware of the various needs of your customers, try to offer two price points. Justify the higher price by saying, "My customers find this offer better." You'll be surprised at the success of this tactic.
7. There is no "best price" -- Part 3.
Managers think in absolute terms. However, how do you know when the offer is cheap or expensive? You don't! The only way is to compare offers. $10 might be cheap when the alternative costs $15 and expensive when the other offer is $5. However, it is your job to decide what you are compared to. If the alternative to a First Class airline ticket is a video conference, any price you charge for the video service is cheap.
8. Marketing and not selling.
Selling focuses on the seller. Many coaches teach tricks to sell, promising to teach you how to sell refrigerators to Eskimos. Marketing focuses on the customer's needs. What happens when they don't need? Don't try to push and convince. Instead, ask them what you should do. What is wrong with your offer? Who might buy such an offer and why? Don't stop at a "no." They might not buy from you but will give you valuable information on the way you should go.
As Theodore Levitt said, "Experience comes from what we have done. Wisdom comes from what we have done badly." And wisdom is not that bad.