Good marketing, it has been said, can make selling obsolete. Apple is an excellent example of this phenomenon. When you get to an Apple store, you don’t have to be sold much. You have already sold yourself, but even Apple has to do some selling. First, it has to convince you to go to the store and then subtly sell you when you are there.

Beyond the selling that is required to attract customers, you should also develop personal selling skills. You will need these in many situations, including persuading your teammates to join you, getting potential customers to give you a try, convincing suppliers to ship you raw material and cajoling investors to put up money.

“Everyone lives by selling something.” – Robert Louis Stevenson

The Art of Selling

If selling is an essential part of life, why is it that so many of us are afraid to sell? Are you afraid to sell? The fear of failure and being rejected undoubtedly plays a part.

Many people’s distaste may also come from having been sold something they did not want. The memory of having bought a used car from an old style car dealership may still haunt you. At that dealership, you were exhausted standing in the burning sun on a Saturday afternoon, sweating in your clothes on the hot pavement and most likely arguingwith a particularly persistent car salesman in a polyester suit. You can remember the haggling, with a gnawing certainty, that you were not getting a square deal. The salesperson knew he would never see you again and you just wanted to get it over with and run. This is called transactional selling and can often leave a bad taste.

Zig Ziglar suggests a different approach to selling. “How should you prospect? Display a genuine interest in the other person.” Let us call this relational selling. As the name implies, this philosophy entails developing a relationship.

Let us look at one of its key elements:

1. Relationships are the key to life. Emotional Intelligence – meaning how you deal with people – trumps IQ every single time. Even 10 minutes can appear like eternity if you decide to connect with another person on a human level. In our modern milieu, overrun by social media, we mistake casual interaction for relationships. If anything, there is an even greater need for relationships today because of the overwhelming superficiality. Time and time again, my experience has shown me that people yearn for a meaningful conversation, a deeper connection than the ubiquitous “hey.”

Rich Cardillo is one of the best sales and people’s person I have ever met. When he took over the Colorado sales operations for a large company, one of his first calls was on an irate client. As he entered the room, he noticed pictures of fish and fishing everywhere. Rich, being an avid fisherman himself, found the perfect conversation icebreaker. Yes, the problem was addressed, but it was the personal connection that cemented the relationship. Twenty years later Rich and that client, now retired, still go fishing together every year.

Does the story sound far-fetched? Try it. You will be surprised. Listen to the customer of course, fix the problem quickly, but go further. What if you made all encounters an effort in human understanding rather than an exercise trying to figure out “What can I get out of this as quickly as possible?”

What kind of approach would you like someone to take with you?

We shall look at the other key elements of this in our next post.

Verinder Syal, Author: Discover The Entrepreneur Within

It’s time to turn your attention to how you will communicate with your customers. Promotion embodies both personal and non-personal interactions.

Let’s examine the myriad possibilities moving from the micro to the macro. At the outset you may have a very small budget and may have to start with digital media only. As the business grows and the marketing budget increases, you will be able to utilize other media.

 Electronic Media

Website, Podcast, Webinars, E-mail Blasts, Blogs, Mobile, Video, Facebook, Twitter, Banner Ads, Social Networks.

Mini Media

Brochures, Public Relations, Yellow Pages, Free Seminars, Free Consultations, Mobile, Free Newsletters, T-Shirts/ Pens/ Giveaways, Signs/ Banners, Coupons, Rebates

Personal Selling

Sales force, Hire an Agent, Dealers, Distributors, Telemarketing, Trade Shows

Large Media Advertising

TV, Newspapers, Radio, Magazines, Outdoor Signs, Direct Mail

As you move from micro to macro media the costs increase rapidly, as does the reach. However, be sure to focus on effectiveness. While a Super Bowl ad might do wonders for your ego and social standing, it may not be the most cost effective use of your money. Always focus on what will work with connecting you and your message to your customer.

Small entrepreneurs are better off starting with social media, free promotions and in-person sales calling. In today’s digital age, establishing a strong online business presence is also crucial. Creativity will be a key ingredient of your success as will persistence and resilience. You will be your best marketing program and sales agent.

Sarah Levy, a friend and frequent guest speaker in my classes, has a love for baking and started her business “Sarah’s Candies” in her mom’s kitchen. She called on many nearby stores but her big break-through came when a buyer at Whole Foods decided to try her cookies in a few stores. The rest is, as they say, history. Luck, for some reason, seems to favor those with initiative and a willingness to work hard.

“I am a great believer in luck, and I find the harder I work, the more I have of it.” – Thomas Jefferson

The greatest and purest form of marketing is word of mouth: nothing beats somebody raving about your product and telling others about it. This is called a referral. Word of mouth marketing and the power of customer loyalty is a powerful tool that successful brands use. Companies like Disney, Intuit, American Express and Microsoft use a metric called the Net Promoter Score (NPS) to measure how likely a customer is to recommend a firm or a service to a friend. Higher customer loyalty translates into a higher score, which augurs well for the growth prospects of the business. Companies like Zappos and Warby Parker insure high NPS by focusing on excellent customer service as a way to build brand identity and drive growth. Focus on figuring out how to get referrals. In today’s social media, going viral is the ultimate referral.

Verinder Syal, Author: Discover The Entrepreneur Within

How should you price your product or service? It is normal for entrepreneurs to want to price low to try and get sales to get started. This is understandable and sometimes the best approach at the start. However, you must focus on what the ongoing sustainable price will be.

You have done a lot of research to date. You should have a good idea of your target customer, the problem you are solving, the competitive landscape, the marketing utility you are providing and your “point of difference.”

These are the key components of pricing. While being competitive, do not underestimate the value you are creating. Why are the prices at Whole Foods higher than at other supermarkets? It is because they are perceived to provide premium, higher quality products that satisfy the functional, social, and emotional utilities of their customers better than the competition. Would lower prices lead to more sales? In the short run perhaps, but in the long run it would diminish the value of the brand.

Why is a Mac priced higher than a PC? A Rolex buyer does not want to buy the $100 Rolex that can be found on the streets of New York. They want something different – the “real thing,” the one that gives them an excellent product, social standing and a feeling of “I have made it.”

You should experiment with pricing. But always remember: a low price is rarely the right answer. Only one business – Walmart, McDonald’s, Amazon – can be the low price leader in a category. Find ways to increase value and then price to reflect this higher value.

Verinder Syal, Author: Discover The Entrepreneur Within

A product is generic – carrots, computers, phones. A brand gives the product an identity, a personality, an emotional connection, or even a call to action.

Amazon CEO, Jeff Bezos: “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard thingswell.”

Designer, Tommy Hilfiger: “I knew exactly what I wanted to do. Iwanted to build some kind of lifestyle brand that was preppy and cool.”

Actress, Katherine Hepburn: “My greatest strength is common sense.I’m really a standard brand – like Campbell’s tomato soup or Baker’s chocolate.”

What emotion do you feel when you see Disney’s Mickey Mouse symbol? Do thoughts of childhood, good times or an especially memorable trip come to mind? That is what a great brand does. Here are some more examples:

• The brand name Quaker Oats was created to evoke the simple, true values of the Quaker people.
• ESPN today connotes sports, action, something happening, movement, 24/7.
• Apple has evolved from being a maverick, to a stylish, elegant,easy to use eco-system with just a hint of exclusivity.
• Brands can also be tied to a personality such as Rachael Ray and Emeril LaGasse in cooking and Richard Branson in just about all Virgin products.
• Over time some brands can become synonymous with a category; for example Kleenex and Xerox and perhaps now even Google.

According to Professor Dobie, the cardinal rule to branding is to be different and memorable.

A brand must also look and feel the same way everywhere, in every medium. Branding encompasses positioning, packaging, a name and pricing.

Some rules of thumb for a good brand name are:

• Short (IBM, BMW)
• Distinct (Google, Yahoo, Mustang)
• Sounds good (Zara, Virgin, Disney)
• Suggests a compelling benefit or feature (Facebook, Home Depot, Sunkist Oranges, Spic N’ Span cleaner)
• Breaks the rules (Red Bull)
• Easy to say, to spell and recall (Tide soap, Crest toothpaste)
• But make sure that the name does not mean something bad in another language. (The classic case is the introduction of the Chevy Nova in South America. Nova means “it doesn’t go.” Oops.)

A tagline to the brand will at times become an integral part of the brand. Sometimes it explains the benefit and at other times it captures the image of the brand memorably. Some of the most memorable taglines according to a Forbes article are:

1. BMW: Ultimate Driving Machine
2. Nike: Just Do It
3. American Express: Don’t Leave Home Without It
4. Avis: We Try Harder
5. California Milk Processor Board: Got Milk?
6. Apple: Think Different
7. U.S. Marines: The Few. The Proud. The Marines
8. McDonald’s: You Deserve A Break Today
9. DeBeers: A Diamond Is Forever
10. MasterCard: There Are Some Things Money Can’t Buy. For Everything Else, There’s MasterCard

These are indeed memorable taglines. They capture the benefits and even more importantly the emotional and social benefits of the brands extraordinarily well. Many years ago, when people found out that I was President of the company that owned Rice-A-Roni, they would joyously break out into song: “Rice-A-Roni, the San Francisco Treat.”

Those memories still make me smile. Talk about a tagline.

Finally, you must execute all the elements consistently. Apple does this extraordinarily well. Their products are stylish and appear to work seamlessly together. The packaging has the same feel: sophisticated and understated, providing confidence that everything will just work.

Apple’s website is clean and makes it easy to find what you are looking for. Their stylish stores, with the open glass look, both welcome a person and make it easy for them to buy something. Every channel delivers the same consistent message.

What is your brand and its tagline going to be?

Verinder Syal, Author: Discover The Entrepreneur Within

Developing a positioning statement for your product is as important (well..almost) as developing your product.

Professor Gretchen Dobie believes that a positioning statement must define the following three components:

1. Who is your target customer?
2. What is your product?
3. Why should your target customer buy your “competitive advantage,” meaning your “point of difference?”

Let’s look at a few positioning statements.

For Quaker Oatmeal Squares, Professor Dobie suggests the following:

To Female Heads of Household seeking a wholesome breakfast (Target Market), Quaker Oatmeal Squares is the only wholesome ready-to-eat cereal (The Product) that offers all the traditional benefits you associate with the Quaker Man (Point of Difference).

While studying IKEA in class we arrived at the following positioning statement:

To cost conscious young adults looking to buy furniture (Target Market), Ikea offers inexpensive, good quality, stylish, contemporary, ready-to-assemble furniture (The Product), sold in an engaging, fun and attractive setting (Point of Difference).

In another class we studied the case 4 of a French cookie company Michel et Augustinwhich developed the following positioning statement:

“For young adults who want a sweet indulgent snack (Target Market), Michel et Augustin is a brand of sablé cookies in small packages that provide a tasty snack (The Product) and the invitation to be part of an authentic gourmet adventure unlike everything you know because they are made with natural ingredients by Michel and Augustin, childhood friends with a mission to make the world smile (Point of Difference).”

The last positioning statement is a bit wordier (it is French after all) than we would recommend, but it captures the “bundle of value” of the brand. Don’t you want to eat the cookie right now and join the adventure?

Think about your product and develop your positioning statement keeping the three pointers in mind.

Verinder Syal, Author: Discover The Entrepreneur Within

You have learned that industries can be segmented in many ways. The combination of these attributes creates a bundle of value that positions the product.

In Breakthrough Branding, Catherine Kaputo offers the following definition of Positioning: “a clear benefit or promise of worth that your product can own in the minds of prospects and (one) that is different from that of its competitors.”

Kaputo believes that there are two big motivators in branding:

1. An appeal to benefits and consequences such as going to McDonald’s and being confident that you will get the same thing every time.
2. An appeal to the emotions and desires of people to belong to a certain group or set of ideas, which then becomes an identity. Have you ever been passionate about a sports team? Have you ever donned your favorite band’s t-shirt and felt like you were part of something bigger? If yes, then you’ve already started crafting your own identity.

Ms. Kaputo offers several possible positioning strategies. I have picked five of these to focus on. You may want to read her excellent book and view the entire list and learn much more about marketing.

1. “Own an Attribute – (such a) positioning appeals to the left side of the brain, the rational side that wants clear-cut distinctions about brand benefits and characteristics. For years, Verizon Wireless positioned the brand around having a superior cell signal with its “Test Man” and its breakthrough “Can You Hear Me Now?” advertising campaign. Having a better cell signal was a great attribute to own because it meant more reliable service.
2. “Target a Specific Group – Look at the old “I’m a Mac and you’re a PC” campaign. Who do you identity with? The hip Mac guy or the conservative PC guy? The Mac guy appears on the right and is much younger and dressed in jeans. The PC guy wears nerdy glasses, ill-fitting khakis and a jacket and tie. The campaign appeals to people who aspire to hipness and it helped propel Apple’s share of the computer market, attracting large numbers of former PC owners to make the switch.
3. “Be the First – Being the first in a category is powerful… Jeff Bezos created the first online retail bookstore. It is still number one and has expanded successfully beyond books.
4. “Be the Leader – Bill Gates set out to be the leader in computing with this mission: ‘A computer on every desk and in every home, all running Microsoft software.’ It was a breakthrough branding statement for computing in 1975…when few people had a computer or could even imagine using one in their personal lives.
5. “Align with a Cause – Look at TOMS Shoes: for every pair of its iconic cloth, rubber-soled “alpargatas” shoes sold, TOMS Shoes gives away a pair to someone who needs it.”

Some of the other possibilities include positioning as a maverick (Apple originally, but not now), having a special ingredient (Stevia in Truvia), connecting with a celebrity (Nike and Michael Jordan) and being the low cost leader (Walmart or even Amazon). While some of these examples are not recent, they do explain the concepts well.

Verinder Syal, Author: Discover The Entrepreneur Within

Not surprisingly, the more hands or “touches” that are required in the distribution channel, the greater the costs of distribution become. A retailer, wholesaler or an agent, all add to the cost structure.

There are two main reasons that Walmart is the low cost leader. The first is that its scale allows it to negotiate better prices from vendors. The second reason is that they have optimized their supply chain by examining all aspects of the distribution system and eliminating all unnecessary steps, i.e. “touches.” This allows them to carry lower inventory for shorter periods of time. Both sets of cost savings are then passed on to customers in the form of lower prices.

Let’s look at the Cap’n Crunch example again. Quaker Oats sells a truckload of the cereal to Walmart, which takes delivery of the cereal in its own warehouses and quickly, often within 24 hours, distributes it along with other products to fill a truck, to their own stores. You then buy it from their store.

Contrary to popular belief, most companies like dealing with Walmart because their efficient system is less aggravating. It also allows both Walmart and the producing company to make more money and the customer to benefit from lower prices.

Complexity has a cost. This is why selling directly through the web is simple, efficient and cost effective. All you need is an excellent website and an account with FedEx, UPS and USPS to do a good job.

Using Multiple Channels

A distribution channel allows you to sell to a customer. When you start a business, you may have only one channel, but when it becomes cost effective, you may expand to multiple channels. Below are some well-known examples to give you ideas for your business:

• Domino’s Pizza has two channels – delivery and pick up from the store.

• Apple has three channels– their website, the Apple stores and other retailers such as Amazon and Best Buy.

• The Apple stores have been a rousing success. Not only do they allow the company to sell the product, they more importantly set a tone and relationship with the customer that is crucial. Dell and Gateway, companies that made PCs some years ago, failed in this channel. It will be interesting to see how the Microsoft stores fare. Will they be able to develop a relationship with the customer as Apple has?

• Walmart sells primarily through its stores, but is making a huge effort to expand into e-commerce.

• Amazon’s key channel is its website. They recently announced they would open a retail store in New York.

• Starbucks’ primary channel is its coffee shops, but they also sell through grocery stores and Amazon.

• Warby Parker started online, but ended 2014 with 10 retail stores. They plan to double this by year-end 2015.

• A consulting company is likely to have two channels. Its primary distribution channel will most likely be on-site visits while its secondary channel may include online delivery of content, Skype, or phone conversations.

Expanding distribution channels does allow more points of interaction, but it is expensive. Brick and mortar retail stores are far more expensive than a website. Furthermore, each channel requires additional expertise. Caution is advised when expanding channels.

What does this mean for you? For the starting entrepreneur, costs are a big issue. Start with a channel where you can get the most bang for your buck. You can always add more channels later.

So what channel(s) suits your product/ service the best?

Verinder, Author: Discover The Entrepreneur Within

You have developed a clearer idea of your industry and your potential competitors. It is now time to determine how you will get your product to your customer and what channels of distribution you will use.

There are two main ways in which companies distribute products to customers – direct and indirect.

Direct Channels of Distribution

In the direct channel, a company sells directly to the customer without an intermediary. There are many examples of direct channel distribution such as:·

• Web: Customers buy directly from the website and the product is shipped to them. Examples include Amazon, Apple, virtually all retailers and a host of other companies.
• Web downloads: This is even better and faster. Customers buy and download software, music or movies immediately. iTunes, Microsoft and most software companies offer this option.
• Retail locations: This is the predominant channel for most businesses, including:

o  All restaurants: Chipotle, McDonald’s, KFC, Olive Garden and every coffee shop you have ever been to including Starbucks, Peet’s Coffee and Dunkin Donuts.

o  All retailers: Best Buy, Macy’s, grocery stores, office supply stores, hardware stores, etc.

o  Many services: Doctors, hairdressers, dry cleaners and financial advisors.

• Store pickup: Domino’s and Ikea are prominent examples.
• Home delivery: Pizza places
• Home care: Lawn care, plumbers, electricians and most trade services.
• Farmer’s markets
• Home shopping TV channels
•  Infomercials
• Catalogs
• Vending machines

Indirect Channels of Distribution

In this case intermediaries are utilized to deliver the products to the customers.The retailer is the key gatekeeper in this form of distribution. The retailer does not generally make the product. Rather companies sell their products to retailers who then sell it to customers. Both the manufacturer and the retailer see the customers as their customers.

• Company – Retailer – Consumer

o  P&G sells Crest, Tide and Gillette to Walmart who then sells it to us.

o  Publishers like Random House and Hatchette sell books to Amazon, which in turn sells them to you and me.

• Company – Wholesaler – Retailer – Consumer

o  A retail location can rarely hold a truckload of any one product whether it’s toothpaste, cereal or detergent. In such cases, manufacturers sell their products to wholesalers, who have the capacity to hold large inventories. Retailers then order a combination of products from these wholesalers in truckload quantities. These products are then stocked in the retail stores where consumers can buy them.

o  Let’s follow the story of a box of Cap’n Crunch from its birth to its consumption in your house. The cereal is manufactured at a Quaker Oats’ plant and then shipped to a wholesaler. A retailer like Jewel in Chicago or Vons in Los Angeles will then order a variety of products to fill a truck from such a wholesaler. The truck brings the assortment of the products to the local stores. You then go in and buy a box of Cap’n Crunch and take it home or eat it eagerly on the way back.

• Company – Agent – Wholesaler – Retailer – Consumer

o  Sometimes another step is involved in the distribution process. Specialty products that are smaller in scale will hire an agent to represent them in dealing with the retail trade. Such agents represent many small companies have marketing and retail expertise and help these smaller companies get distribution and product movement. Most stores will have a specialty aisle for such items. If a product is successful, it will often be bought out by a larger company. Vitamin Water, Odwalla and Naked Juice are examples of this phenomenon.

Verinder Syal: Author: Discover The Entrepreneur Within