value proposition

Are Sales Discounts Helping or Hurting Your Business?

July 11, 2017 by Jason Tweed Leave a Comment

Are sales discounts hurting your business?

Having a traditional sale, offering your existing products at a discount, can actually be a dangerous habit. Here’s three reasons:

Sales on big-ticket items actually reduce revenue, even if the sale is effective
Sales on most popular items may encourage people to wait until the next sale to purchase more.
Sales are always limited by the value of the item on sale. Deep discounts can drive sale prices below costs.

Alternatives to sales discounts or lowering prices

Increase Value – Rather than discounting 25%, try increasing the value by 25%. Give the customer more of your item, or a freebie contingent on sales.

BOGO – “Buy one, get one” gives people a discount on the second item.

Bundles – If you sell cameras offer a free or discounted tripod. Create bundles on any products that are closely related.

Freemiums – Give something away completely for free that draws people to your store or website.

Coupons – Coupons are another way to offer sale prices without mass advertising. You can limit the exposure of a coupon code.

Free Shipping – Offering free shipping or free delivery is a well-tested method of increasing sales without decreasing sales revenue.

Be creative and create your own deals, bundles or freebies. Experiment and mix it up for your best results.

Talk with our marketing strategy team to plan your entire year. Call us at (215) 253-3737.

Why I Hate the 4P’s of Marketing

July 22, 2016 by Jason Tweed Leave a Comment

Every Marketing 101 class discusses the “4P’s of Marketing” – Product, Price, Promotion and Placement. So why do I hate them? Because, marketing isn’t that simple. I wish it was.

Let’s take a look at each individually.

Product Solution

Products used to be things. Today fewer and fewer products are physical products, and even some physical products are now devices or tools.

Take the proverbial “widget”. A widget is made in a factory. A widget has delivery logistics. A widget has packaging. Widgets are sold wholesale then retail. Some widgets have resale value, and others are commodities.

The problem is today widgets aren’t necessarily a thing. Today’s widget could be service, expertise, information, data, a process, or even entertainment. The definition of Product has changed dramatically in the information age.

A more apt term is Solution. Products today tend to solve a problem, reach an objective, or improve a situation. Furthermore, an individual product could actually be a solution to multiple problems, and may require different marketing techniques.

Price Value Proposition

Price used to be a point of competition. That’s far less true, and completely irrelevant in some situations.

A more apt term is Value Proposition. What is the value of solving a particular problem? What is the value of the result of a process?

Remember, price doesn’t scale, but value can. Today many SaaS (software as a service) solutions have different pricing depending on the value to your organization. An app may be available free, but the paid version may have added features.

Understanding value is far more important than competing on price.

Promotion Messaging

Promotion used to be primarily advertising or sales. Most companies relied on one or the other, but seldom both.

Today I think the term Messaging is more accurate. You want to create a specific message, “My widget solves this problem faster, cheaper, easier and more completely than my competitor.” However, most companies use a huge variety of techniques to send that message. Traditional advertising and direct sales are still popular and powerful. In the age of social media the mysterious “word-of-mouth” or “brand reputation” can be quantified, stimulated, and influenced.

Conversely, a corrupted message can cause a crisis. Social media can negatively influence your product just as quickly as it can enhance your product. For this reason, altering the message rapidly can sometimes be the difference between ultimate success or failure.

Today companies have to have expertise in messaging more so than ever before.

Placement Reach

Placement was a combination of advertising and availability in the past. However in a global marketplace that travels at the speed of light placement is far less important. Furthermore, we’ve even seen situations where products were sold heavily before they even existed through crowdfunding or viral marketing that exceeds current distribution capability.

A more appropriate term is Reach. Reach is a combination of creating the most awareness possible about your product, then having the capability of delivering that product to all. Because products are no longer necessarily physical, they are solutions, worldwide delivery is far more feasible than ever.

Today maximum reach is about 3 billion people, the approximate number with Internet connections. The maximum reach for your product is somewhat less, but it’s no longer limited necessarily by geography.

There’s more to consider with reach. You have to look at huge number of potential media outlets. You have to make sure your message is translating across different languages and cultures. You have to consider regulation and legislation internationally. Physical products may require much more complex logistics. Lastly, because reach can be exponential, you must consider scalability.

So why are they still talking about the 4P’s?

Frankly, Solution, Value Proposition, Messaging, Reach just doesn’t sound very catchy. The 4P’s of your Marketing is easier to sell. Go figure.

The good news for Mediastead is that these far less catchy terms give our clients a strategic marketing advantage over competitors still relying on the 4P’s.

If you want to take a fresh look at your Solutions, Value Prop, Messaging and Reach, Mediastead Strategic Marketing Planning is the solution for you. Call us today to make your business better.

The Five Most Disliked Industries in America

September 24, 2014 by Jason Tweed Leave a Comment

Being Liked in a Disliked Industry

Last month Gallup released the results of a survey asking Americans how they view different business and industry sectors.

Here are the top five most disliked industries:

Oil and Gas (drilling and refining)
Healthcare
Legal
Electric and Gas (utilities)
Pharmaceuticals

The poll also included the Federal Government which ranked worst overall. I chose not to include them in this article, because their revenue is not dependent on popularity.

Perception of Value is key.

One thing all these industries have in common is that they generate huge profits yet we don’t perceive them as contributing value to us individually and/or societally.

In general, energy and utilities have somewhat of an unfair perception by Americans. In the United States we have some of the lowest cost energy providers, and are one of the lesser polluted countries.

Our consumption, however, is massive. Because of this, overall expenditures are huge. Additionally, the fact that Americans must import the majority of their energy needs creates a feeling of insecurity.

The energy industry in general has focused marketing on claims they provide high income jobs, have little environmental impact, and provide low-cost units of fuel. Unfortunately, this is falling on deaf ears. The simple version is that Americans simply don’t believe these claims.

Many of these companies need to realign their thinking, focusing on reliability and value. Additionally, they need to publicly acknowledge the detrimental aspects of their industry and demonstrate a plan to gradually transition to cleaner and more homegrown sources of fuel.

Healthcare and pharmaceuticals also have a perception of value problem.

Overall healthcare costs per capita are more than double the cost of any other country in the world. The United States has a distinct entitlement attitude toward health.

Unfortunately, for healthcare companies, it’s difficult to establish a value on human life. Because of this, both costs and profits have spiraled out of control in the minds of American consumers.

Healthcare companies and healthcare providers as individuals are seen as reaping huge profits. In fact, profit making in health care is a direct result of supply and demand. Americans failed to recognize their insatiable demand for health services.

The healthcare industry needs to focus on value. Additionally, they need to focus on advancements in medicine.

For pharmaceuticals, they need to demonstrate greater emphasis on cure versus treatment. Likely we would support the high cost of medicines if we perceived the massive research costs being spent toward eliminating disease rather than reducing symptoms.

Healthcare suffers from the pass/fail perception of value. If you receive treatment and live, you got what you expect. If you receive treatment and did not live, your expectations failed. The challenge with healthcare companies is they have difficulty demonstrating comparative value. Surveys have shown that people judge hospitals and skilled nursing facilities based on the quality of food, the amenities in the rooms, and the friendliness of staff. Healthcare is being judged on hospitality.

Emphasizing hospitality for your healthcare brand is critical for positive feelings about your organization. Saving lives is important, but that only meets the expectation. Treatment in comfort will exceed the expectation. It’s a difficult challenge because it’s difficult to feel comfortable while undergoing health treatment.

Americans have a love-hate relationship with the legal industry.

We are the most litigious society in the world, yet dislike paying legal fees for facilitating this litigation.

Furthermore, the legal industry markets itself heavily to consumers whom often aren’t paying for services “unless we get money for you”. In fact the legal industry provides a huge percentage of work that ends up generating zero income.

Additionally, most of the mass media marketing is focused on a relatively small, but highly competitive group of malpractice and accident-related cases.

The industry as a whole need to provide emphasis on the less glamorous parts of their industry such as providing the legal representations for class actions, defending on behalf of environmental or consumer damages, and the balance between societal protection and fair defense in our justice system.

Law firms that present anecdotal stories about the value of legal representation will differentiate themselves from the competition.

Legal healthcare and energy companies all provide services we need and can’t live without, yet they are burdened by being able to prove value for a variety of reasons. Keep asking yourself two questions. How can I enhance the overall perception of value for my industry? How can I differentiate myself from my peers by accentuating specific value my company provides?

Hudson Valley Weather

August 14, 2014 by

For three years, Alex Marra, the man behind HudsonValleyWeather.com, painstakingly delivered clear and accurate weather forecasts to his Facebook page. Over the course of those three years, Hudson Valley Weather (HVW) went from 0 to over 40,000 Facebook Fans. Alex knew that it was time to leverage the momentum of his rapidly growing fan base, but didn’t know where to start.

Migrating Facebook fans to website visitors can be tricky. After three years of loyalty, the Weather Guy wanted to generate income without alienating his base.

Balance is an important element in any Web-Centric Marketing strategy, and was an integral part of the initial planning of HudsonValleyWeather.com

How to Monetize Your Facebook Fan Base

Mediastead knew the key to turning fans into dollars was “added value”. Deliver the same quality content for free as always, but create additional content with enough value to motivate readers to visit the website.

Since Husdon Valley Weather’s inception, Alex and his ability to accurately forecast the weather had been the driving force behind its phenomenal growth. The first order of business was to translate what Alex did on Facebook to HVW’s new website, giving Alex a more robust platform to do what he was good at … delivering solid information to an audience that wanted it. The second part to this process, was to reduce the depth of information made available on Facebook, giving HVW’s audience a teaser of the information they would find on the website. This balance allowed HVW’s fan-base to use Facebook as a way to be notified of the newest information available, and then link to the website to continue delving deeper.

For people who wanted to know ‘will it snow?’ everything they needed was delivered by Facebook. For those that wanted to know ‘where, why, and how much?’ had easy access to depth of information.

How much is your Facebook fan base worth?

It’s all about the numbers. Our goal was to exceed 1 million page views in the first 12 months. HudsonValleyWeather.com hit 1 million views in only 59 days!

That traffic and loyalty turned heads of advertisers. We monetized with Google AdSense initially, but as advertisers recognized the value of an avid repeat audience with a distinct local demographic, banks, radio stations and retail outlets began competing for ad space.

These advertisers paid monthly rather than pay-per-view or pay-per-click. This meant that HVW could stabilize revenue and invest in more functionality.

Real time results turns into real revenue

Mediastead helped HVW build National Weather Service feeds to automatically alert readers of dangerous weather.

Live Weather Radar added another powerful feature that would be impossible to deliver via Facebook, and opened more sponsorship opportunities.

Going mobile!

From the beginning HVW knew that their audience was extremely mobile. Facebook, already a solid mobile platform, comprised the majority of the website visitors. Additionally, by the nature of the information, it was even more valuable to people on the go. The weather doesn’t matter sitting in front of your home PC. Weather information is critical to people traveling to work, to socialize, or to recreation venues. The Hudson Valley community in particular has a great love of the outdoors.

Building a dynamic website usable on a mobile platform means that HVW not only has a loyal, local audience, but is one of the few that can deliver advertising messages virtually anywhere.

What Is Your Value Proposition?

April 15, 2014 by Jason Tweed Leave a Comment

What is your Value Proposition? How do you create perception of value? How do you set prices for your products or services?

In the fall of 1990, I learned a lesson that I use to this day. I was a human resources intern in the corporate offices of a regional department store whose primary profit center was jewelry. Today’s lesson was on “How to sell an engagement ring” and was being delivered to veteran salespeople.

The lesson sounded something like this…

“When a man inquires about an engagement ring, ask for the price range in which he is looking.” began the trainer. “Asking it this way encourages them to give you a high and a low number. At this point the shopper’s goal is to find something close to the low end of the price range and your goal is to sell them something near the high end of the range, while still feeling good about the experience.”

The shopper says, “Between $500 and $1000.”

You show the shopper a $500 ring and a $1000 ring. Side-by-side, they are both still quite small. The smaller diamond, perhaps .25 carat, and the bigger diamond, perhaps .50 carat. The shopper can see the value. If they spend twice as much money, they get a diamond twice as big.

Then you show the shopper another ring. Say something like “… or if she’s really special, you could put this on her finger.” Show the customer a $5000 ring.

A $5000 diamond, is five times more expensive, however the diamond itself is perhaps 1.00 carat, about twice as big. Explain how diamonds become exponentially more valuable as they increase in size.

Chances are the customer isn’t going to exceed their budget by 500%, but now they see the value in the $1000 diamond. Now the customer is focused less on price and more on value. The customer sees that, while he believes his girlfriend is exceptional, that a ½ carat diamond is nearly as impressive at a fraction of the cost.

Done properly, the customer should purchase a diamond at the top end of their range and still feel great about the value and the experience. Occasionally, they will even stretch their range a little further. Often the customer who tells you their top price is $1000 can actually afford $1500 or $2000. At this point they want to make sure they are getting maximum value and may ask to see another ring.

How Much Is Something Worth?

Many things are priced based on their function or by supply and demand. Diamonds are unique, however, because their intrinsic value is entirely based on perception.

Diamonds are the most valuable gemstone not because they are rare. Rubies and emeralds are both far more rare than diamonds. Of all gemstones, diamonds are among the greatest in supply. Their hardness gives it some intrinsic value, but also makes the diamond easier to shape. True, diamonds have industrial use, but industrial diamonds are a byproduct of gemstones rather than competing on the supply side.

So why is it that we pay 400% more for diamonds than emeralds, 1000% more than rubies and perhaps 10,000% more than other semi precious stones?

First, diamonds have been attached to two difficult to quantify qualities, love and prestige. They’ve become the stone symbolizing love for a majority of our culture. The largest and rarest diamonds have become symbols of prestige. Even for those individuals who can’t afford extremely valuable diamonds, they likely can afford a tiny bit of the prestige afforded to these gems.

What we learned from this is that true value is far more subjective than we would like to think. Additionally, that value can change by changing the perception. For example, for a single person diamonds have little to no value. For a person in love, their value can be immense. For a person whose relationship is ending, the value of a diamond may plummet to worthlessness.

Your product or service is worth whatever your customers are willing to pay, within a set of parameters. The more you can influence that set of parameters the more pricing power you will have.