Book Notes – Selling the Invisible

Some notes from reading Selling the Invisible again.

Getting Started

The core of service marketing is the service itself. Attracting people to a flawed service will gradually kill the service. A better service will make marketing more profitable (less churn, so lower CPA).

Assume your service is bad. It can’t hurt and will force you to improve.

Let clients set the standards. Do your customers think your “slick” new design is good? A/B test. User test. Use Analytics. Talk to users.

Industry standards are not a reflection of what the customer expects if they’ve had exceptional service elsewhere.

The Butterfly Effect – tiny cause; huge effect. Tiny details can make a huge difference.

Mistakes are opportunities. Make up for them.

If its hard to write an ad, the product is flawed.

Don’t just think better – think different. Is the current way really working? Can we radically improve service?

Always start at zero. “Is this viable anymore?”. “Is this what the world wants?”.

Products have three stages of life:

1. MVP – Product Driven: Delivers unique benefits so customers accept it for what it is (or don’t even know what could be better about it).
2. Differentiation – Desire Driven: Customers ask for more and companies differentiate on these choices.
3. Surprise – Possibility Driven: Go beyond what customers thought they needed or what they could have ever imagined.

Don’t just create what the market wants or needs; create what it would love.

Surveying and Research

People won’t tell you what you’re doing wrong. Ask.

Anonymous feedback is always more candid.

High satisfaction scores can be used in marketing material. Low scores point at places to improve.

Keeps the business in contact with customers. They feel like you’re paying attention. Puts you higher in their mental stack.

Written surveys can be misleading. You interpret based on your understanding, not the respondent’s. e.g. “Quality” could be many things. Always try for oral if possible, unless you’re confident that you can interpret the answers.

• Can be more conversational
• Can go off script to get deeper insights
• People say more (5:2 vs written)
• Better response rates
• Voice tone can reveal feelings

Never ask “what don’t you like?”. It admits they’ve made a bad choice in choosing your service.

Focus groups don’t.

• Groupthink
• Alter leader
• Gap between what people say and what people do
• Not effective for sensitive topics
• Views get distorted in an artificial environment

You’re selling to individuals, so talk to individuals.

Marketing is not a Department

One weak link (either at the top or the bottom) can tarnish an entire service. Can have great product, price, talent, advertising, but the service trumps all.

Look at business processes end-to-end and beyond.

Much of what passes for brilliant insight is reporting what everyone in that company could see, if only they could still see clearly.

Sometimes you need a fresh pair of eyes. Ask for help.

Every act of communication is a marketing act.

• Answering the phone
• Message at the end of an invoice

Opportunities for growth often lie outside your current industry. Think of your skills.

What are your clients really buying?

• Product?
• An experience?
• Service?
• A relationship?

If you’re selling a service, you’re selling a relationship.

Satisfy people, not clients.

Service companies are often battling to create a market, rather than dominate an existing one.

Prospects have three options:

• You
• DIY
• Do nothing

Win without a fight – “Go where they ain’t”. Compete in a narrower vertical.

Easy to be content and get caught out by early adopters of technology.

Study every point of contact. What are you doing to make a phenomenal impression at every point?

Talent is just the entry fee. Personable > Professional.

Planning

You can’t predict the future, so plan for several possible futures.

1. Accept the limitations of planning. No substitute for real use and iteration.
2. Don’t value planning for the result. The greatest value is in the process.
3. Don’t plan your future; plan your people. Smart people that fit the broad vision will figure it out.

Tactics > Strategy

Build → Measure → Learn

You can learn from tactics but can’t from strategy. First tactic you try can change your entire plan.

Marginal tactics executed passionately almost always outperform brilliant tactics executed marginally.

Today’s good idea will almost always beat tomorrow’s better one.

Act like a shark; keep moving.

• Not moving rarely causes immediate pain, so encourages even more waiting.
• Action-oriented people leave and it becomes too late and difficult to get moving again.

Think dumb. Good ideas often sound stupid at first.

Mistrust facts:

• Research about human behaviour is at best some well supported general observations.
• Research and planning is an imprecise art, not a precise science.

Focus groups focus only on today. Planning is about tomorrow.

In planning, beware of what you think you remember – we remember badly.

We over generalise experience when we infer results. You might end up abandoning a tactic that was 90% right.

On answers of which people are 100% certain, they are right only 85% of the time. (Overconfidence bias)

Best is not the best

1. Very good
2. Good
3. Best
4. Not good
5. Awful

Best gets complicated. Harder to agree on. Harder to achieve. More sacrifice to get there. Will the customer really benefit? Will they care?

Any idea might fail. Keep learning from it.

Expert: Someone with lots of data and experience. Data can often support opposing conclusions. Experience is unique. Lessons don’t necessarily map to experiences. No answers – only informed opinions.

People in authority are not necessarily better at decision making.

In planning, people do not struggle to reach conclusions – they struggle to set their premises. Broad planning is easy; the detail and execution is difficult.

People do not go to fast-food restaurants to satisfy a desire for something delicious. They go for something fast, cheap and palatable that satisfies their hunger.

How Prospects Think

Appeal only to reason and you may have no appeal at all. People don’t decide only on logical arguments.

• Familiarity
• Relationship
• Recency effect
• “Good enough” (service has the least negatives)
• Anchoring principle
• Last impression

Anchoring principle: People make decisions and judgements based on their first impression. Identify what those were and polish them.

People choose familiarity because there’s less risk of making a bad decision, even if a competitor might be better quality.

Build quality, but also minimise risk.

Showing “negatives” can help to build trust.

The more similar the services, the more important the differences. Accentuate the trivial.

Positioning and Focus

1. Position yourself in the customer’s mind
2. Position should be one simple message
3. Position must set you apart from competitors
4. Sacrifice – cannot be all things to all people

Relentlessly focus on 2. Own the position.

Narrowing your position can broaden your appeal.

Position yourself as the best at the hardest task in your industry. Gives confidence that you’ll be good at the “easier” tasks. (Lesser Logic)

You can only try to influence your position – customers put you there.

Leverage the position you already have, even if its not the best position.

Position statement: Where you want to be

• Who are you?
• What business are you in?
• For whom do you provide service?
• What need do you fulfil?
• Against whom are you competing?
• What’s different from those competitors?
• So what’s the benefit? Why choose you?

Given our position, will people believe our positioning statement? Make small steps to change.

Bold dreams and goals. Realistic positioning statement.

Choose a position that will reposition your competitors; then move a step back towards the middle to cinch the sale.

Pricing

Increase price → Increase perceived value.

Good value can be perceived as second rate.

Aim for 15-20% of customers resisting price. Don’t be in the middle.

Avoid being the low cost option:

• Harsh supplier relationships bring bad word of mouth and no loyalty.
• Hard to motivate employees.
• Someone else will out-cheap you.
• Companies that differentiate perform better in all areas.
• Nothing unique about pricing.
• Customers can always find cheaper – DIY or go without.

Charge for the value of your skills, not your time.

Value is not a position – every service promises value.

You must provide value, otherwise you’ll eventually fail.

Naming and Branding

Monograms are not memorable:

• No spirit
• No attitude
• No message
• No promise
• No warmth
• No humanity

Wearing Michael Jordan shoes will not make you like Mike.

No funny names.

No generic names. Generic names encourage generic business.

Never choose a name that describes something that a customer expects from a service (e.g. Creative Designs Ltd).

Distinctive names can be more memorable. Naming after yourself can breed popularity and trust. (Contradiction here, but I see what he means).

Good name = more information per inch (e.g. NameLab).

Case Study: FedEx

• Federal
  • More specialised term for National or Nationwide, so service sounds special.
  • Sounds authoritative.
  • Doesn’t come to mind as quickly, so more memorable.
• Express
  • Connotes “rapid mail delivery” (based on other names of the time).
  • Service will be faster than conventional mail
• Colours
  • Red and Blue are like the government colours, only richer. Implies that the service will be better than the “official” service.

A brand is hard to beat. Can charge up to 40% more than store-branded products for equal quality. Brands own 93% of the market.

A brand is also a warranty.

• A promise that the product will live up to its name.
• Closest thing to a guarantee that the customer won’t need the warranty.
• Even harder for services because you often can’t provide a warranty.

A service is a promise. Building a brand builds trust in your promise.

Integrity is the heart of a brand.

• Most desirable services are those that keep their promises.
• Value of a brand rises or falls with each demonstration of integrity.
• Can be faster, cheaper, better, but still lose if integrity is poor.
• Invest in and preach integrity.

People will remember brand associated with a positive story. Might forget the name of an unknown company.

Brands convert more as there’s less perceived risk. Non-branded services have to spend more time on sales process to win confidence. Using this advantage to make selling easier, cheaper and faster increases gulf between non-branded competitors.

A brand can matter more than the individuals behind it.

A brand itself is worth money.

Brands are a shortcut in a customer’s decision making process.

Brand names work best when they cannot be confused with any other company.

Building a brand takes persistence and imagination.

Communicating and Selling

Marketing communications should make services more tangible.

Lots of implicit trust in products:

• Sugar – sweet
• Aspirin – soothing

Lots of distrust in services:

• Builders – late
• Mechanics – charge too much

Make the service visible. Make the prospect comfortable.

Your first competitor is indifference. Marketing often talks up the company, but people won’t care. Talk about what you will do for the customer.

One simple message. Always. (Cocktail Party Effect)

Grocery list problem: Easy to forget most important items and remember items that don’t really matter. Saying many things usually communicates nothing.

Don’t use adjectives – use stories. People are interested in other people.

Attack the stereotype. The first weakness is the stereotype your prospect has about you.

Don’t just say its good – prove its good. Specific, concrete, vivid and familiar examples.

Create evidence of your quality, then communicate it.

Customers don’t just want technical excellence – they want a relationship.

Telling people you’re the very best can be off-putting.

• They don’t need it.
• They don’t believe it.
• It sounds expensive.
• It sounds intimidating.

People value “comfortable”. Be “positively good”.

People hear what they see. Visuals are “clues” about an invisible service.

• Mismatched imagery and text
• Bad office; bad firm

Watch what you show.

Most people’s perception of quality is unsophisticated.

Ancillary things impact the perceived quality of the core product.

• Restaurant core product: Food
• Ancillary: Building, atmosphere, furniture, smell, staff, music, prices, lighting, location, etc…

Building a brand means repeating yourself visually as well as in message.

Metaphors can help prospects understand complex products and services.

Words can change people’s perception of reality.

Advertise alongside publicity. Increases the impact and can help get more.

Make your service easy to buy. Spend 50% on the advert and 50% on the reply form.

The most compelling selling message is “I understand what you need”. “I have a great product” is about you, not your customer.

Mission statements should be kept private.

• They’re about the future.
• Customers care about the present.
• Competitors care about your future plans.

Every mission statement should be followed with a statement of measurable objectives. It should cause behaviour change in a few weeks.

Sell hope. Sell happiness.

Nurturing and Keeping Clients

Clients are doing you a favour by choosing you.

You are always in debt to the client.

Assume the relationship balance sheet is worse than it appears.

Don’t raise expectations you can’t meet. Disappointed people will usually tell several others about it. Hype that you can’t deliver destroys your credibility. Manage expectations.

Clients have risked a lot by choosing you. Thank them.

Most clients know what bad is, but it can be hard for them to see success. Make sure the client knows about your successes.

Out of sight is out of mind. Stay present in the customer’s mind to remind them of the good service you provided.

Quick Fixes

• Sweat the tiny stuff
• Make a great first impression
• Be fast
• Make every client happy every day
• To fix your messengers, fix your message
• Risk yourself
• Get out there; let opportunity hit you

Summing Up

Service businesses succeed by getting all your ducks in line.

Brands are still massively important.

Improve your service, but also ensure clients perceive the improvements.

Reasons for choosing a service are not always logical.