Selected reading on persuasion

Syllabus

Marketing to the masses?
Here's why you shouldn't

Flip the Funnel suggests marketers focus on "the few"
Edited from Advertising Age, March 23, 2010

Some simple questions are stupid. And some are just annoying.
But every once in a while a simple question makes one re-evaluate everything. Joseph Jaffe asks one such question in his new book
Flip the Funnel, a must read for anyone interested in selling anything
to anyone anywhere.

Jaffe, who is president of Crayon, has taken a look at that most basic
of marketing concepts -- the process by which we funnel everyone in the universe down to the handful who will purchase our product/service -- and asks, "What the hell are we doing?"

That is, why do we spend all of our time with people who
a) don't know about us, or more importantly
b) don't care about us ( why are we trying to make them care?)

Jaffe thinks that's nuts because it's not only outmoded,
it's actually doing us harm.

His solution? Instead of spending millions trying to funnel the universe down to a handful, we should focus on that handful and use our creativity to figure out how to make the most of them.

Why? Because it's more efficient, it's more effective and it's more profitable.

One might call this simple customer service,

and although Mr. Jaffe uses the term, it's not really what he's talking about.

Customer service today is often little more than a place where customers complain and where companies tell them they have no reason to complain.

If you think that's the way to make the most of your customers, watch the YouTube video "United Breaks Guitars." No, Mr. Jaffe actually means something that is, in a sense, revealed by that viral phenomenon.

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If the customer has that much public power—in addition to the enormous private power they have to actually buy or not buy your product or service— why wouldn't you want to start by focusing on them, instead of ending with them as some sort of byproduct?

This changes how marketers spend money, it changes where marketers spend money, and it changes even the structures of corporations and the job responsibilities of employees within those structures.

Because what Mr. Jaffe is saying is that a successful business today isn't built on the idea of one transaction per customer.

It's built on the idea that the relationship doesn't end when the cash register closes. It's built on the idea of multiple transactions from multiple customers.

But how many companies operate that way?

I mean, you're a customer, right? When was the last time you felt a company treated you like they really wanted you to come back again? When they did, did you come back? When they didn't, did you not?

Steve asks: What did you get from this, as it relates to your organization? Send him your experience; he'll post it on the class support website as extra credit..

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Pareto’s Law at work

Vilfredo Pareto was an Italian economist who made a famous observation in 1906: 20% of the population in Italy owns 80% of the property.

In the early 1940’s, it was referred to as the
80/20 principle:20% of your customers will account for 80% of your sales, or 20% of your efforts will net 80% of your results.

Example: Grocer Stew Leonard ’s is one of the most profitable grocery store per square foot.

It stocks the best selling 20% of items. Instead of 10 varieties, it carries 1-2 of the leading brands.

It saves space by merchandising less and can then buys deeper into the selected product
to get the benefit of preferred pricing.

When we flip the 80-20 principle: 80% of your traditional marketing efforts will net you
20% of the results.

Are advertisers really receiving one dollar's worth of return for every 4 that they spend?

The traditional view of marketing is that it’s mainly about the process of acquiring new customers.

Have marketers become so preoccupied with generating awareness that they've forgotten their most important asset: current customers?

Perhaps they need to determine the 20% of traditional marketing that's generating a strong ROI; then put the other 80% to work by focusing on current customers?

Flipping the funnel is when ten things end up with one focus instead of the other way around.
Run all the ideas through the funnel and see which of them line up with your goals.

Copyright 2010 | Steve Toms
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