Monthly Archives: January 2018

How to Understand Reciprocity

Reciprocity underlies any transaction in the marketplace.  It helps us understand the basics of what it is that makes an exchange fair.

The Exchange

Let’s start by thinking about an exchange.  Let’s say I have £100.  I will generally be willing to exchange the £100 for something that is worth more than £100 to me.  If you have the thing I want, we will have a deal so long as the thing is worth less to you than £100.

If that happens, both parties benefit from the exchange.  Buyer’s remorse is where the customer has regrets because they are not convinced of the value of their purchase.  The vendor can do a lot to counter remorse but that’s another story.

Note though, fair exchange is something we can do a lot to realise.   But let’s focus on what upsets the balance, eg someone who gives so much the recipient gives up trying to reciprocate.  As a vendor you should aim to deliver what is possible for you given the price you’re charging.

Alternatively, you may find customers who spoil the balance by making unreasonable demands.

So, it is important to describe your offer in writing so you can agree what is in it and what is not available or available at a higher price.

How do You Serve Others?

1. Have you designed packages for different prices? How do you present them to prospects?
2. What do you do to reassure your clients so they do not suffer buyer’s remorse?
3. In what ways do your packages enhance the status of those who buy them?

Reciprocity and Status Roles

The issue at stake is: who is in charge?  There are three options: you are as the vendor, your customer is or else the deal is mutual.  A lot of this is about how it feels but there are things you can do arrive at the deal you want.

Usually, we want a mutual relationship.  To get there you need to remember personal status and ask whether this deal will enhance or maintain it.  You can ask similar questions of your prospect.  Both of you benefit mutually if you see your status enhanced.  Obviously this is a delicate matter for the British (and maybe everyone).  To mention status is likely to stop a deal.  But it is possible to convey status advantages without being blatant.

The big advantage in a mutual relationship, where client and coach enhance each other’s status, is trust grows between them and possibly leads to several exchanges.

Following this twenty-first post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below.  You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.  Most weeks you receive an email with helpful news or pointers to how you can tackle these questions.

How to Promote Self-Actualisation

Words like self-actualisation leave me cold.  But it is the second of Bain’s life changing elements and so I’ll have a go.

What is it?

Self-actualisation is about personal accomplishment or improvement according to Bain.  So, it is about learning a new skill or honing an existing skill.

You may be approached by someone who is clear about where they are going but needs help to get there.

Say, you’re a piano teacher and someone approaches you who wants to be a concert pianist (or perhaps you approach them!).  Your task is to help them play the piano better.  It is not to question their goal of being a concert pianist.  You might of course assess their skills and give them feedback.  That feedback might be they will never be good enough to be a concert pianist.  Presumably that would mark the end of your relationship.

Some piano teachers provide hope, strategic direction as well as the coaching that results in self-actualisation.

Value for the Client

This is easy.  The client seeks out the person best placed to help them meet their goals.  This is their primary motivation.  If they don’t know what they want they can’t accomplish anything.

You as a coach may offer to provide hope and self-actualisation but they are different values.  No coach can specialise in everything and so once a client decides, they re-assess coaching needs because they may need specialist help their first coach can’t provide.  Similarly where self-actualisation leads to reappraisal, the existing piano teacher may not be the best option.

How to Get There

Self-actualisation is more focused than provision of hope.  It is about learning new skills or polishing old skills with a goal in mind.  It is support for someone as they find their way forward along the road they have chosen.

Your Offer

If you teach a skill, bear in mind the reason someone chooses to work with you is important.  They have some goal in mind and it is important to know what it is.

As a coach you help your client get what they need to meet their goals with your support.  You cannot guide them if you do not know their goal.

This is the fourth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

• Social impact Self-transcendence
• Life Changing Provide hope, Self-Actualisation

Next: Motivation + 2 more

• Emotional 10

• Functional 14

Using Testimonials: Getting Others to Communicate Your Value

There are several ways to approach getting support from other people.   Far and away the most common is using testimonials.

Using Testimonials and Other Ways to Win Support

One reason testimonials are common is they are easiest to find.  They are supportive words from people the reader has not heard of.   They are an opportunity for people who have used your service and benefited from it to share their experience with your next generation of clients.

Other forms of support are celebrity focused.  You ask someone with an established reputation to risk it to support you.  Normally, you would seek this support for a substantial piece of work, eg a book.

Blurbs are the celebrity quotes you see on the back or inside front cover from.  They are like testimonials because celebrities give them voluntarily on request.  Also, like testimonials, few people actually read them.  The names are what counts.

You pay for endorsements and so their impact can be reduced, although they may have a greater impact subconsciously.  A further approach is a license, where you use your contact’s brand to aid your sales, possibly with a return based on revenue for the external brand.

These three are specialist and for many businesses rarely encountered.  It is worth bearing them in mind should you be in a position to benefit from them.  They need to be approached in a different way to testimonials.

Questions to Ask Yourself

1. Is your offer worth a testimonial? What do you need to change to make it worthy?
2. What would your ideal testimonials say? This may vary if you have several offers.
3. How do you use testimonials to help tell your story?

Questions to Ask Others

Broadly two types of testimonial work.  Remember your client may have difficulty knowing what to say or write and so may appreciate guidelines.

The first type is to describe a change.  Before I did this I was … and now I am able to …

The second type provides detail of what the client has learned from your business.

You are the curator of your testimonials.  Make sure they are helpful and work out how to make them available in a way that helps your business.

Following this twentieth post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below.  You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.  Most weeks you receive an email with helpful news or pointers to how you can tackle these questions.

Does Your Offer Provide Hope?

There are several ways the value you offer through coaching or consultancy can be life changing.  This first one is where you provide hope.

What Does it Mean to Provide Hope?

According to Bain, when you provide hope, you offer something to be optimistic about.  So, a business that provides dietary supplements offers hope for a healthier body.

It is worth looking a little closer.  Hope is a theological word and has a specific meaning.  It is often grouped with faith and love; the three great virtues.

So, what is it?  It’s common to see hope as a pietistic belief in heaven; that everything will somehow pan out for the best.  Hope is more active than simply “hoping for the best”.

I think of it this way:

• Faith is the way we perceive the world around us (not belief in a specific doctrinal system)
• Hope is the steps we take towards a better future for ourselves and others
• Love are the specific actions we take in response to the needs of others.

So, hope is strategic; commitment to a course of action.  There is some risk involved. We cannot know our course of action will be successful unless we set out.

Hope is the entrepreneurial virtue!

Value for the Client

It is hard to generalise but the basic idea is to help the client find a route to something they need.  The implication is something is at stake.

If you help your clients acquire a new skill, for example, you do not provide hope unless that skill is on route to a life change the client needs.  Indeed the client might approach you because they have hope!

How to Get There

So, you provide hope when you teach not only a skill but also help the client work out how to use the skill to reach a life-changing goal.

Hope is not an instant return on investment.  It is a change to the way the client approaches the world.  They may need to change the way they perceive the world as well as find the path they need to make the change they need.

Your Offer

So, don’t claim this value unless you offer the opportunity for real change in your client’s life.  It may involve helping the client acquire new skills but simply teaching a skill is not in itself a way to provide hope.

I coach in marketing and some of my clients have changed what they offer as a result of my coaching because they see a new opportunity.  Sometimes this amounts to a completely new direction and that is when I know I have provided hope.

Neither I nor my client can be certain their new road will be successful but making that decision to try the road is a sign of hope.

This is the third of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

• Social impact Self-transcendence
• Life Changing Provide hope

next Self-Actualisation

+ 3 more elements

• Emotional 10 elements

• Functional 14 elements

How to Use Pricing to Market Your Business

Marketing Through Pricing

Prices are integral to marketing because they represent the value you attach to your offers.  If you under-price your offers, what does that say to your market?  Even you don’t rate your own offer.

Having said that, there are many reasons people do not buy.  They may genuinely not have the money or they don’t trust you or your offer.

For these reasons, it is worth having a range of offers so that people can try you at a lower price first.  If you offer two high-end options and they decline them both, you can try one of your low-end offers.

Or you can market your low-end offers and then offer an upgrade.

What About Your Prices?

1. What do your prices say about how much you rate your own offers?
2. Do you have a range of high-end and low-end offers?
3. How do you manage your selling, so that you get a sale as often as possible?

Pricing Your Market

Never cut prices.  Take every opportunity to increase prices.  If you sell at higher prices, you need fewer customers and so you have more time to deliver better service.

You get feedback from marketing that helps you decide when it is a good time to increase prices.  Increasing demand is one good indicator.  Increase prices and some prospects fall away, leaving you with those who can afford it and believe your prices are worth it.

But don’t forget prices show the degree to which you value your own offer.  Is it possible, your low prices are deterring new customers?  It’s counter-intuitive but a possibility.

Following this nineteenth post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below.  You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.  Most weeks you receive an email with helpful news or pointers to how you can tackle these questions.

How Self-Transcendence Enhances Value

This first Element of Value is key to the others.  Self-transcendence is the only Social Impact Element and the only one where businesses pass value to others or society in general.

What is Self-Transcendence?

The problem is social impact is a mutual benefit, and the term “self-transcendence” returns focus to the self.

Mutuality is important and easily lost where a business donates to a charitable cause; a limited approach to social impact that has two important downsides:

1. This one-way approach to charity means business has no skin in the game. They take little interest in how effective their donation is.  They may be interested in the immediate impact of their giving, the outputs.  “We equipped x schools with y desks.”  But what are the outcomes? Is the business committed to social change or does it just want to look good?
2. There is no harm in looking good. A business can point to the good it does, the real change for the better it commits to and benefit from its work for transformation through its marketing.  Arm’s length giving does not do this. Agreeing with a charity for mutual benefit is likely to be good for both parties.

Self-transcendence implies mutual benefit.  When a business passes value to others and society in general it benefits because because prospects see how it benefits others.  This is a business that contributes to well-being beyond its immediate customers.  In a sustainable economy, the costs to the business are balanced by the benefits it receives when prospects perceive it as a beneficial and therefore welcome presence in the economy.

Value for the Client

If self-transcendence is important to your client, what is its value to them?

Let’s consider two kinds of client.

The first is someone in business for social transformation.  They want to help people and see change in the world around them.  They need financial success to meet their aim.  This implies they seek mutual benefit.  For these clients, selling their services is likely to be an issue; is it ethical?  Their vision is a strength and perhaps a barrier to realistic business practice.

The second sees no social impact from their work.  Yet, social impact is real for all businesses as people are unlikely to buy if social impact is negative.  So, knowing the social impact of your business is no disadvantage.  It opens up new dimensions to marketing.  It may be possible to enhance social impact through increased awareness and so increase income.

Social impact offers all businesses strategic direction.  It does not have to be charitable.  Improving management in a specific industry might be social impact, for example.

How to get there.

A good question to ask is: “What social impact do we have?”  Something that flows naturally from your business is likely to be more satisfying than charitable giving tacked on to assuage guilt and look good.

If your focus is on building the business and balancing books, perhaps you have not taken time to look at the impact the business has and build on that as integral to its future.  A clear transformational role, tempered by financial reality can set the strategic direction for a business.

We’ll see over the next weeks there are other things you can build on for strategic direction.  But this one is on top for a reason.  It sets the strategic context in which all businesses work.   If a business cannot articulate the value it offers to society, it is likely to lose direction.  It is not that it has no value to society but the business-owner is unaware of the impact of their own business.

Your offer

Businesses that offer a bit more and invite customers to take part in social change have a competitive edge.  Not everyone is drawn to the same thing but the point is to find those customers that are and build on their commitment to your social aims.

So, the challenge is to work out how to offer social transformation through your business.  This may be easier for coaches or consultants who can point to direct changes they cause through their work.  For businesses that offer products there are options from negative, eg mitigating environmental impact, through to the positive good using the product does beyond the immediate customer, through to activities the business takes part in as  part of its mission.

This is the second of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

How to Build a Better Marketing Plan

The reason business plans don’t work is they are self-centred.  They attempt to persuade others of the effectiveness of your idea and so depend upon defending your idea.  This post shows you how to think of planning in a different way to build a better marketing plan.

Three Principles

Understand three principles to underpin your approach to marketing.

The first is empathy.  We’ve covered why your business thrives on empathy in earlier posts.  You must see the world through your market’s eyes.  They need to know you understand not only the problem but also them.

Then a second principle is humility.  This implies a collaborative approach to marketing, where you work with others.  This is not about forcing your way into your market’s lives.  It is about an invitation to explore together.

Finally, your plan needs a healthy dose of effectiveness.  You must show you deliver on your promises; your approach works for your market.

Five Point Plan

1. What do you know to be true about your market?  What is impossible to argue against because reliable informationit backs it up?
2. The assumptions you make. These play the role of hypotheses in science and must be testable.  “I can’t say for certain this is true but I know how to test it.”
3. What are you going to do should your current assumptions prove to be false?
4. Who is on your team and what skills and insights do they bring to your business?
5. How much will it cost in time and money?

Making it Real

The biggest challenge any marketer has is to take their idea into the world.  The problem is subconscious resistance to selling and marketing in general; fear of asking for money.

If I hesitate and don’t put my idea out there, should I fail it will be a private failure and I won’t lose face.  If I don’t put my idea out there I will certainly fail.  And I will fail and look foolish if I do put my idea out there.  I may have to look foolish several times before something works and so vindicates my efforts.

Not prepared?  So, why are you in business?

Your marketing plan is a foundation.  It offers a solid reason why you are in the market and some fall-back positions for when your first efforts fail.  You may need to revise it several times but more wisdom informs each revision.

One last thing.  You can waste a lot of time tinkering with your offer.  Focus on your marketing and get some customers.  You will meet the promises you make for them even if your offer is not ready.  Keeping promises is always easier than making them.

Following this eighteenth post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below.  You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.  Most weeks you receive an email with helpful news or pointers to how you can tackle these questions.

Elements of Value

This post introduces a new sequence about Elements of Value.  It is based on Maslow’s hierarchy of needs; a version I have mentioned in passing, see What do People Want that introduces Elements of Value.

Setting Your Price

Setting your price is an art.  Too high and people don’t believe it reflects the value of your offer and too low, you don’t cover your costs.

There are other things to consider besides cost and value.  For example, you may introduce low price offers to prove your value, establish your reputation, etc.  There are pros and cons to all of these.

However, in this post I focus on costs and value to the customer.  Generally customer bears their costs unless you choose to meet them.  Value, if you show it in advance, tends to support increases in your price.

Remember though, there are no set rules.

What are Costs?

Costs to the customer can massively exceed the price.   There are several ways this might work.  For example, you offer a course and ask your customer to purchase a text-book.  You don’t have to do this, eg you could offer a copy of the book as a bonus.  You might choose to supply essential texts and leave it for the customer to decide about supporting texts.

If you supply the text-book, you add its price to your costs.  This expense may be so low compared with your profit on the deal, it makes little difference financially.  But presented as a bonus it adds value to your offer.

Other costs are harder to assuage.  If you are a coach or consultant, your customer will need to invest time in preparation for meetings.  Your prospect must understand their contribution to your effectiveness in advance.  Your customer’s time is valuable and a few hours’ work can add to the overall cost.  You reduce this by ensuring preparatory work is relevant, provide support, etc.

If you are alert to the costs to the customer, you can manage them together and show how they contribute to the value of the offer.

What is Value?

So, the costs, whether borne by you or your client tend to hold prices down.  Your prospect compares perceived costs with perceived value.  They are unlikely to buy if costs outweigh value.

It is not a good idea to hide the costs to the client.  The costs to the client are the contribution they make to the success of your joint enterprise.

Let’s say the cost to the client is 3 hours’ work a week.  This work is essential and so the client must know about it before they buy your offer.  If they are aware and do not do the work, then you can discuss what you can do together given they have already acknowledged the need for the work.

The temptation might be to reflect these costs in your prices.  However, this is not a good idea for several reasons.  If you cut your prices, you need more clients and these take up more time, reducing the value of your support because you have to spread it more thinly.  Worse though, the costs to your clients are likely to increase with the value of your offer.  A higher value offer makes greater demands on your client.  If you cut prices for every increase in value, you have no incentive to develop high-end offers!

The solution is to increase the value to your clients.  If the perceived value is worth the effort, they are likely to opt for your offer.  If they want it enough, they will find the money.

Elements of Value

If you follow the link to the Elements of Value, you see 30 suggestions.  One of them is making money.  That leaves 29 other elements.

You can offer more than one Element of Value and some will be easier for you than others.  Bain offers 4 levels of value and from lowest to highest, here they are:

As this is based on Maslow’s triangle, the idea is you need to meet needs at a lower level before you move to the next.  So, you need to meet some of functional needs before you start on the emotional.  And so on.

Perhaps you need to offer value at all four levels to make a high value offer.  This suggests a belt and braces approach to life.  Get the foundations in place and build the higher values on the foundations.

However, this conceals a disadvantage.  It lacks vision.  If you have no sense of the social impact you intend, how can you know which foundational value you need?  Many people know the changes they want to see and need to work out the values they need from lower down the triangle.

This is why my listing of the 4 levels is upside-down.    It is possible to build a business, see where it takes you and then decide upon social impact.  But many people set out with a vision and must back-fill the other values they need to meet that vision.

This is why over the next 30 weeks I shall start with social impact and work down the triangle, exploring each level in turn.  Starting from the top suggests a strategic approach.  It is for those who know the change they want to see and seek the other values they need to get to their goal.

Two Final Points

First, it is possible to start lower down.  Life changing goals are fine and may provide the strategic goal you need.  Once you meet this goal, you may find a social impact goal appears naturally.

And for those who worry about making a profit, remember: if you want to help more people, you need to be financially successful.  This is about becoming successful enough to carry out your social impact goals.

This is the first of 31 posts about Elements of Value.  Make sure you don’t miss any by signing up for the offer below.  Access previous posts in this sequence below:

Do You Market Needs or Dreams?

Have you ever been locked out of your house?  You need help?  Did you pay to meet needs or dreams?

Needs or Dreams?

If you are a coach, which are you most likely to supply – solutions to needs or to dreams?

Needs are well-defined issues, where we know exactly what we want.  Sometimes we think about needs and wants.  However, this is not exactly the distinction I want to make here.  The thing that discriminates between needs and dreams is that needs are precise.  The prospect has a very good idea of what they want.  They may be unclear about details but these are likely to be non-essential.

Dreams are more diffuse.  The prospect may have a general idea life could be better with some change but they are not entirely clear exactly what they want.  They need help to define the problem and sometimes this may be all they need.  Think about how difficult it is to remember a dream on waking; our need for coaching may be just as hard to pin down.

Which Do You Market?

1. Does your business meet clearly defined needs or do your prospects need help to understand their problem?
2. Recall a time when you needed help to define a problem. How did you know you needed help?  Consider how the help you received increased your understanding of the problem.
3. How do you help clients understand their problems?

Features and Desires

Where someone’s need is urgent, they are usually very clear.  So, if they seek a hotel and there are two to choose from, they take interest in their features.  When the lights go out at 10pm, I seek an electrician who comes out at night (and I pay more for this feature).

If you offer solutions to dreams, you work more in the realm of feelings and images.  You help people understand what they want and offer them solutions to whatever stands in their way.

You need to decide which business you are in.  There is nothing more frustrating than arguing on the doorstep with a locksmith who wants to be sure you really want to get into your house!

Following this seventeenth post to encourage coaches to reflect on relational marketing, take this opportunity to sign up below.  You get a weekly round-up of my posts and a pdf about how to make sure you are charging what your business is worth.  Most weeks you receive an email with helpful news or pointers to how you can tackle these questions.

Moving from Theory to Praxis

The fifth movement for Intentional Business Development concerns the actions we take.  Many people spend time theorising and fail to act.  Others act without reflection on what they do.  Praxis is a balanced action reflection approach.

Learning and Discipleship

In religious traditions, students are called disciples.  The call to discipleship is a call to learning.  The same is just as important in business.

In business coaching means much the same thing.  Few operate at their best if they are not guided by those with more experience.  It’s not that the coach or mentor knows all the answers.  In fact, avoid those who claim to do so.  The best coaches know what to do when they don’t know the answer.

It’s all very well having a technical solution to a particular problem but knowing how to tackle the intractable problem is far more valuable.  These problems lead to new solutions that move everyone forward.

We Do Not Learn from Experience

We do not learn from experience, we learn from reflection upon experience and from passing on what we learn to others.

Many business people, myself included, have experienced being unable to launch something because they believe it is not good enough.  Let’s look at it this way.

Two business people have an offer that is 30% of the best it could be.  One launches it and the other delays a launch to spend more time improving it and gets it to 80%.  Who does best?

Actually, it is almost certainly the one who launches first.  You know if you don’t launch, you will earn nothing.  So, even if the offer is a bit rubbish the one who launches early may get a few clients.

But you might object – the other when they do launch, might do better with a better product.  But how likely is that in practice?  What if 100% is possible only with feedback?  The one who launches early may have a poorer product but they have the big advantage of feedback.

Maybe most of the feedback will be negative but that’s OK; it is all valuable information.  The one who launches can still work on their offer and chances are with feedback they’ll make more progress than the one who doesn’t.

Early Adopters

Ah yes, but what if someone buys the inferior product?  You have a number of options.  You could charge a low-priced early adopter fee.  This may be a little risky, if you label the offer somehow inferior.

But perhaps a better option is to make sure the early adopters do not fail.  Make sure you meet their expectations.  This way you not only avoid bad publicity but also learn in detail what the early adopters want from the offer.

If you reflect on experience, the chances are you will have a better offer that sells better too!

Lifelong Learning

In business, we learn all the time.  The best learning comes from launching offers.  This is how we learn and tweak our offers so they become excellent.

Intentional Business Development emerges from this stance.  When we have an end in sight and ready to put in the work to perfect it, we commit to lifelong learning.

You can improve most offers.  In need of improvement is their natural state.  It isn’t about bending to every whim of every customer but seeing how simple tweaks lead to improvements that appeal to prospects across the board.

It is about entering a pact with your customers so together you seek the best solutions.  Your client won’t want the same thing as you do but working together you can tread the same road and learn together for mutual benefit.

This is the sixth and final post in a short sequence about intentional business development.  It’s all a part of Market Together.  Sign up below so you don’t miss a post and visit my new website by following the link.