Category Archives for "Analysis"

0 Price and Profitability

Pricing Causes

Marketing need not result in a sale, where a sale is a financial transaction.  So, do causes have nothing to do with price and profitability?

There are a few things to bear in mind:

If there is a financial transaction then the same rules apply as for products and services.

Pricing Products and Services

Pricing products is not the same as pricing services. If you are selling a product, it is likely there are similar products on the market and their pricing is likely to impact yours. If you have a unique product, you may be able to charge what you like, at least until someone comes up with something similar or an improvement!

Services usually have more freedom to find their own price. The main thing here is not to charge by the hour. Be clear about the benefits and charge for them. The main constraint may be your reputation but do not let modesty restrict your prices.

Remember if you provide a service, the number of hours you devote to each client is limited. This means you will be able to provide the service to a limited number of clients over a given time period. So, if you need to raise £2500 per month you can do this by increasing the number of clients or increasing your prices. The former means more work for you and so at some point will hit a limit.

Products and services can be combined and either or both can be combined with causes.

Profitability

The questions in the circuit questionnaire perhaps do not do justice to profitability but here they are with my comments.

How much does it cost you to make the product / provide the service?

First, the cost to you to provide the product or service is important, especially if your price is below the cost. However, the important thing is the benefit from the product or service and this may have little relation to the cost.

Another point to consider is time may be as important as the cost. A coach may have low costs but time may be a major constraint. Is it possible to reduce time per client whilst increasing the benefit? If the benefit increases, so can the price!

How big are profit margins?

Profit margins the difference between costs and the price per unit. However, where time is crucial, you need to calculate how many clients you can manage and work out how much you need to charge to meet your needs. Products could have low margins but that may be OK if you can sell lots of them.

What other ways might there be of providing this product / service at different price points to suit different types of customers? Let’s get creative!

This is a good idea up to a point but there is also the need to have confidence in your marketing. If you have a good product or service, well marketed, it is possible potential customers will find the money, even if it seems steep at first hearing. This will work if you are confident your offer will return something of greater value than their initial outlay.

In summary, your pricing depends on the value of your offer and your confidence in that value. You need both!

0 Just How Important are Features?

Products and Services

We’re often told it is benefits that sell a product or service. Nevertheless, it is easy to forget and try to market a product or service’s features. Usually, prospects are not interested because they do not know they need those features. So, just how important are features?

Features are elements of the design of a product or service. If you sell your product or service with through its benefits, there comes a point where your prospective client or customer will ask: exactly how are you going to deliver on your promised benefits?  This is where features come into play.

Features can make a product or service special but it is important not to overdo it. For example, if you are selling a coaching service, you might offer two sessions per month. It might be tempting to think three or four sessions would be more attractive. It might but remember there is a limit to the workload your client can take on. You don’t want to overload your client and it is also more work for you!

Types of Feature

Your clients or customers need to know what they will receive for their money. An attractive list of features presented at the right time, ie once the prospective client or customer has understood the benefits, can go a long way towards making the sale. So, your features might include:

Pricing

Pricing is a special case. It is a feature but you may not need to include it if it is likely to vary according to the needs of the client. You may also wish to include incentives, such as discounts, which you can introduce as you get to know your prospective customer.  Prices can also include variations dependent on the payment method.

Be clear why your features are special and what they offer that other similar products or services don’t.

Causes

Causes are different because usually the beneficiary is a third-party. So, the benefits are not primarily for the supporter. If someone is going to donate, however, they will want to know where the money is going and how it will be used.

Therefore these features are of two kinds. Some will relate to the delivery of the benefit to the beneficiaries. Or if the cause is a campaign, how the campaign is to be carried out and what support can be contributed to the campaign.

The other type is features for the supporter or donor. These might be things like reports, access to information, training for direct action, etc.

So, sign up for our direct action workshop, £20! The benefit is two-fold, the person who pays attends a workshop and the resulting direct action may bring about beneficial changes. Similarly, the features will be two-fold. The person who pays gets a workshop (and possibly lunch!) and perhaps joined up because a feature of the workshop is that the direct action is non-violent.

Remember this three-way structure of benefits and features. We normally consider a transaction as two-way. A business sells something to a customer who needs it. However, it is likely in almost all transactions, there are third-parties, those who have a stake in the transaction.

Implicit Causes

Where there is a cause, the beneficiaries are likely to be obvious. In a natural disaster, the beneficiaries are the main point. For some causes there are beneficiaries but they are not readily identifiable, eg climate change impacts everyone’s life, a general benefit.

But a transaction between a wholesaler and retailer for example, includes the retailer’s customers. These customers clearly have a stake in the transaction and where they have expectations of the products, in terms of quality or environmental impact, there may be a cause in there too.

And consider any commercial transaction where there is no cause articulated, there still may be hidden causes, such as additives to foods or environmental impact. The customers may not articulate interest in this aspect but it can have implications for their wealth and well-being.

The point is maybe the features of any product or service includes an implicit cause and that is the well-being of stakeholders. We see this already in some products, eg “this cosmetic was not tested on animals” is a feature of the product and relates to a particular cause that concerns some of its users.

Clearly this is a complex area and requires further exploration.

0 The Golden Triangle

Don’t confuse the Golden Triangle with The Value Triangle, which poses a question for potential customers about their priorities. The Golden Triangle is a question for you, about your priorities.

Imagine three intersecting circles. In each you list your answers to three questions,  What:

The overlap between your answers is the Golden Triangle!

Enjoyment

One big advantage of being self-employed is you can choose what you do. Although you are free to choose, there will be constraints. The Golden Triangle helps you find out what is possible within those constraints.

If you are in paid work, you are likely to be doing some things you do not enjoy, possibly things your employer does not enjoy either!

There will always be things you have to do that you do not enjoy. Tax returns spring to mind,  (If you do enjoy doing your tax returns, try phoning the UK tax office and you’ll soon change your mind!)

But if your main work is something you enjoy, then you will have the energy, the incentive to get on with it.

Capacity

However, being enthusiastic is not the same as being good at something. Sometimes you need to practice and enthusiasm may carry you some of the way. Writing is a good example of a skill you might enjoy but still requires practice to develop a readable style.

You need to be aware of how good you are at your main business activity because this will have implications for your confidence and even such basic things as your prices.

Market

Finally, your biggest constraint is finding your market and offering something it needs. It pays to develop your marketing alongside any product service or cause you develop.

Using the Golden Triangle

It is a good idea to do this exercise early on so you can design your offer to meet these three criteria or at least get as close to them as you can. One approach is to take each of your offers or potential offers and ask the three questions of it.

Do I enjoy doing this? Am I good at doing this? Do others appreciate this? If you have a lot of options, you may be able to rank them according to these criteria.

Finally, it is worth underlining why enjoyment is importance , particularly if you are self-employed. Taking pleasure in your work will help carry you through more difficult times. Obviously, sometimes you need to do things you don’t enjoy so much. But if overall you take little pleasure in what you do, perhaps you need to review what you are doing.

Also, remember you may find an activity you didn’t expect becomes enjoyable as you become proficient and learn more about it. So, don’t allow experience of current enjoyment cloud your ability to find something else equally enjoyable and possibly better business!

Do you enjoy your work? How did you find work you enjoy?

0 Origin Stories for Products Services and Causes

A few weeks ago I published the post your business story and most of it applies to origin stories for products services and causes.

I argued why your business story is likely to need less prominence than your personal story.  The same applies to origin stories for specific products services and causes. Unless they have some unique origin, the story of you slogging away for months is not likely to be gripping. This is not to say the story should be omitted, it may answer questions potential customers are asking. So, how you write the story and the way you present it is important.

Origin stories for causes are more likely to be interesting and so may need more prominence. Causes need to be promoted to people who are not aware of them and will not gain personal benefit from supporting them. So, a good story may be an excellent way to capture their attention and gain their support.

If you happen to have a good story, the same is true for products and services. Remember the story does not have to be long. A couple of sentences may be all you need to get it across. There’s no problem telling longer stories; a good story will hold your site visitors’ attention. Remember you can use audio or video as well as written copy.

Three Useful Questions

Here are three questions that might help you find an origin story for each product, service or cause. Try writing your answers; take as many words as you need and then edit them and be ruthless!

Your offer’s origin story may be an important part of your sales funnel.  On the awareness ladder, it is at step four, where you differentiate your product service or cause from other solutions in the market.

It’s always interesting to share examples and so if you know any compelling origin stories, share them in the comments.

0 Unique Causes Products and Services

Causes

Causes are not usually unique in the same way as products or services. Usually, a cause presents itself to people who promote it. People rarely choose a cause because it is unique.  Just as a cause will present itself and demand a response, so will a unique product or service.

Unique causes are a headache because they may not have a market. Where a cause is unpopular, the challenge is to find supporters. They may not be aware of the cause or even hostile to it.

An unpopular cause will need promotion to find its market. You don’t choose the cause because it is unpopular but identify the need and seek to make it popular.  In this sense a unique cause can be more difficult to market than a unique product or service.

Products and Services

With products and services, the usual route is to find something that’s potentially popular and market it. There are a number of commodity-types that sell well, eg money, health, sex, sport; but it is harder to be unique with these. You’ll notice the environment is not in this list, so perhaps something that benefits the environment needs additional attributes from the more popular categories. Solar panels may for some people be popular because they are good for the environment but they also save money on fuel bills. It can be argued protecting the environment is good for health, although this is a more general advantage and less likely to impact on the life of any particular person.

The main advantage of a unique offer, is it is a clear signal to your particular market that your offer is for them. People need to know you are speaking to them because what you are offering is for them.

You may be willing to sell to anybody but in reality most people are not interested. Be clear how your offer is unique and people to whom it appeals are more likely to listen.

Competition and Collaboration

Your competitors will be helpful here. Those who sell something similar may have found your market and so you may be able to find a similar group for your offer or adjust your offer to something different for the same group.

Competitors will also give you some idea of where there is a market. Your offer may be unique but if it does not have a market, you have a problem; either your market does not exist or else you have not found your market. It is not always easy to know whether a new idea has a market.

Some people argue it is better to compete in established markets and sometimes this is true. Competitors may be aware their market is bigger than they can manage and if so, there may be opportunities for collaboration. If you have something that might appeal to a competitor’s market, it may be possible to collaborate.

Collaboration is another topic but it is important to remember businesses generally help each other out. Cut-throat competition is a media myth. Often new businesses who have not discovered the myth, come across as dubious sales people. If you have a unique idea, your task is to market it and part of that is finding the help you need to turn it into something people want to buy.

This post is one of series about the products, services and causes element of the circuit questionnaire.

0 Formats of Products Services and Causes

Whilst the formats of your products services and causes might seem obvious, it is always worth consideration. So, what is a format?

If you’re selling a course, you have various options. You can

People who make one purchase are likely to make repeated purchases and the same applies in principle to causes. However, people complain about pushy causes and so it is better to aim to build relationships, so customers can choose to stay in contact. Building an online relationship is a real possibility, with no equivalent before the Internet.

Someone who donates should choose their degree of future involvement. An occasional email update is maybe all they need. Others may seek active engagement and so it is worth having options for them.  You might not call them customers but the same ethical issues apply as for business customers; they need to be able to unsubscribe from your lists, for example.

How do your formats of products services and causes influence the way you manage your offers?

0 Delivery of Products Services and Causes

This is my first post about the second element in the circuit questionnaire, Products and Services.  This element’s first question asks whether you deliver products or services or combine both. I would add causes to the mix. Many organisations combine two or all three of products services and causes. So you need to understand what they are and how they combine.

Products

A product is a thing you purchase. It might be a consumer product such as a car or a television set or something more ephemeral like food or soap.

Two Types of Product

Material products, manufactured or crafted by hand, were the foundation of the industrial revolution. The digital revolution has modified them in significant ways.

The second type is digital products, such as applications or online courses. These did not exist a few years ago and for some people have become a significant source of income. Their big advantage is they can be downloaded once created at any time and in any part of the world. However, it is not as straightforward as that because they still need marketing, which is usually the hardest part of selling a product.

Products with Services

Products often combine with services. Walk into most department stores and you almost always thread your way through a maze of make-up counters. Here is a product with a closely related service. Do you buy the product with the service as a bonus, buy the service with the product as a bonus or buy a package that includes both?

Products with Causes

Products combine with causes too. Solar panels are a product but also a cause. Some governments encourage renewable energy and so offer incentives to invest in solar power. Other governments withdraw these incentives.

Services

A service is work done for you in exchange for payment. There are two kinds of service.

The first is a task performed for you. Hairdressers or cleaners are examples.

The other type of service is coaching or consultancy. This can deliver a completed task (expert consultancy) or help with a task (coaching or non-directive consultancy). These services do not always need the physical presence of the service deliverer and so can be delivered online.

Services with Products

Someone might visit your home to help apply make-up and sell you make-up as well as the service. Equipment may come with a service that helps you install and maintain it. Sometimes this service is an essential part of the package.

Services with Causes

Plenty of consultancy/coaching businesses offer support to people who want to be more effective campaigners, for example health or spirituality consultancies are usually inspired by a cause. Sometimes the cause is so integral to their offer, they may not even think of it as a cause.

Causes

Causes are offers that aim to change the world in some way. The invitation is to join the cause; it may include payment for a product or service but may not involve a financial exchange of any type. A financial exchange may be a donation, where you receive little in return beyond an acknowledgement.

Causes with Products

The cause may be peripheral, for example where someone sells make-up that is not tested on animals; they choose how much prominence they give to this and can make it a major selling point. Another example is solar panels sold to cut the customer’s carbon footprint. There are other reasons to buy solar panels but climate change is a major incentive for some customers.

Causes with Services

Combined with services, a cause may be a primary incentive: “I’ll show you how to apply the best make-up not tested on animals”, may appeal to people concerned about animal testing. The person offering this service could be forceful, lecturing customers on the ethics of animal testing and encouraging them to sign up to the cause. Others may simply state in the small print they use make-up not tested on animals.

Why are Causes Important?

Causes are more important than some marketers realise. Whilst some businesses may be cautious promoting a cause because it might put off some customers, the fact is causes permeate the marketplace.

With climate change, for example, the market is very lucrative, especially with government incentives. Solar panels, insulation, efficient boilers and other appliances, electric cars, bicycles; the list is likely to be very long.

Political campaigners soon realise they can sell products and services for their campaign to be successful. The money might go directly to the cause or a small business might fund its owner to devote time to promoting their cause as well as their product or service.

However, some businesses start solely to generate income. Purists might argue this is the usual reason for starting a business and a cause will only get in the way. However, many business-owners have ethical values. Someone selling make-up may soon realise there are several associated causes, for example what does “natural” mean? The Body Shop certainly turned natural make-up into a cause and in the early days recycled its bottles. (Maybe it still does but these days it does not make such a big thing of it.)

Many businesses discover an ethical dimension and embrace it. It makes sense to share your customers’ values; listen to their concerns and try to meet them. You might be a cynical manipulative capitalist but people find embracing a cause is natural and increases their offer’s credibility.

It becomes more complex where large corporations take on causes and impose their values on their workers. But for most small businesses the cause makes complete sense as a part of their offer.

0 Your Unique Perspective

In this final post about the branding element of the circuit questionnaire, I shall summarise what I understand about branding in a local economy context, with reference to my business.

My Unique Perspective

My plan is to offer a community development approach to online work. This is particularly for businesses or community organisations with a role in their local economy.  My focus is on the human issues facing organisations working online. This has become possible in recent years because the technical side of website design has become much easier. It is no longer about implementing complex technical procedures. It is about knowing which ones to carry out and how to use them effectively. The skills are about handling human relationships, organisation theory, understanding the local economy, writing copy and not so much about programming machines.

My perspective is from years of working locally and experience of the conflict endemic in organisations. The same conflicts apply when working online. Ignoring conflict and focusing solely on the technical side of things may result in a website. It will not do its job if the organisation is not able to support the website.

I still find conflict difficult and frankly do not believe anyone who claims otherwise. It is often easier to see clearly what is happening in organisations where there is no emotional investment. We often find, when we are close to an organisation, emotions get in the way of clear analysis. I have seen people driven to nervous breakdowns by conflict. Under these circumstances it is impossible to play a constructive role.

My story on my website is an example of the experience many people have and need to deal with when they are in the thick of it or recovering confidence following it.  It shows the outcomes of conflict are rarely victory or defeat and the emotional aftermath can last for years.

Organisational Perspectives

However, this is not the only issue organisations face when working online. Where there is emotional investment in a particular approach, people need support questioning whether their approach is still best. Their approach may consume much time and effort. It can be difficult to tear it down and start over. The demands of running a modern website and social media might uncover policy limitations. Online work opens up new possibilities, not visible to an organisation too closely identified with past policy.

Of course this can be threatening and so conversations about changes to an organisation’s approach need to take place in a safe space. Non-directive consultancy can provide that space not only because it is confidential but also control is firmly in the hands of the consultor.

Once the consultor has decided a new course of action they will need help to implement it, eg getting support for the new actions from the rest of the organisation. Perhaps the new course of action will have implications for online work and at that stage it may be possible to work together with a consultant on online and in-person solutions.

So, that is my unique perspective. What’s yours?

0 Brand Names in the Local Economy

Like many people I am sceptical about brand names. To my mind, the associations are with big corporations that use brand names as a substitute for personal, reliable service.

Of course, there is no reason local personal service has to be more reliable than established brands. A large corporation can afford to employ staff to handle complaints. A small local business may lack capacity to handle complaints.

I recently had a dispute with an established company. They made a mistake by ignoring my instructions; instructions they had requested. I complained and they offered to pay to recover from their mistake. I engaged a local service to attempt to set things right and the established company paid up promptly to cover the costs. As it happened the recovery process simply demonstrated their error was not recoverable but they did not haggle over the payment.

They could afford to be generous once they established they were at fault. They misinformed me from the start. In the shop, they told me I had a choice but their servicing department did not in fact respond to customer instructions. They need to decide whether they respond to customer instructions and if they do not make sure their workers understand their policy.  They believe they misinformed me in the shop, whilst my view is what they said in the shop made sense and they need  to review their policy.

You will note I have not mentioned the brand. Suffice it to say it is well-known and as their response to my complaint was positive I’m not going to denounce them, even though I do not agree with their policy. Their brand name is valuable to them and they ultimately act to protect it and the £200 they spent helping me recover from their error was presumably worth it. If I ever recommend their services to anyone I will also suggest they take certain precautions.

Brand Names and Local Businesses

So, does branding have any relevance to local businesses? Here are a few thoughts.

The corporations view brand names as their intellectual property. Brand names can be bought and sold. The biggest companies may own many brand names and if a local business is especially successful it might sell its name to a bigger company.

I use two terms that might in time become brand names. “Community Web Consultant” and “Community Development Online”. It is also possible my name might become associated with my services and so become a brand name.  It is hard to see how I can decide if or when any of these will happen.  The best I can do is recognise when it is happening.

Between them my two potential brand names convey something of what I offer, although not the entire story. I use a niche statement on my site for a clearer explanation of what I offer.

It is difficult to see how someone can know what to expect from my services solely from my brand names. Established brands might have names that do not give anything away about their products. Most people have an idea what Kelloggs or Adidas sell, even though these brand names do not give anything away!

My brand names will most likely be close enough to my activities in the foreseeable future. If I wake up one morning with a new idea that’s completely different to what I’m doing now, then I’m likely to find a new brand name!

Overall I’m not convinced brand names are all that important for small enterprises. They need to be used in the context of an overall marketing campaign.

Examples from the Voluntary Sector

Voluntary sector organisations have brand names; they are not restricted to commercial concerns.  A good name is a valuable asset for many large charities, for example.  Many actually seek better branding by changing their names, for example the Council for Voluntary Services changed its name to Voluntary Action a couple of decades ago.  The new name is easier to remember and so the change was probably worth any loss of recognition at the time of the change.

One final example is a well-established local voluntary sector organisation, based in Sheffield although its reach is global. Its name is its brand and those who know it generally hold the organisation in great affection. Its name is a very positive asset.

However its marketing is very poor, it lacks an effective marketing strategy and uses old technologies, poorly executed. I am confident that when it closes, as it will if it continues on its current course, its name will still be held in great affection.

Brand names can be helpful as a part of a marketing strategy but on their own they are not the be all and end all of marketing.

This is part of a sequence building upon the circuit questionnaire, the element about branding.

4 Setting a Goal

The key to marketing is being clear about what you offer. Why? Because if you’re not clear, how are you going to communicate with your customers?  Your potential customers, supporters or members will respond to a clear message.  So, setting a goal can help you convey exactly what you are offering visitors to your business and / or website.

From time to time you will have marketing campaigns and so you need to be clear about your goals.  This applies equally to marketing products or services for sale and to marketing a cause.

Your goal isn’t always to sell as many widgets as possible in the shortest possible time. You need to be clear about the following, when setting a goal:

Some Possible Goals

One approach is to interview potential clients and find out what products or services they need. So, here are some possible goals you may set as a result. Do note you will set different goals from time to time, as circumstances develop:

I’m sure you can add to this list. The main thing is to work on one goal at a time or at least, if you have several goals, make sure you don’t put them all on your home page!  Website visitors respond to clear messages and clear requests.

This post is part of a series based on the circuit questionnaire, the branding element.