Which P is your company's focus?

In the vast majority of organisations around the world, the focus of the marketing mix can be depicted as follows:

Product - Price - Promotion - Place - People

As you can see, promotion dominates the resources of most marketing departments, followed by price ... with product, place and people taking out a distance third place.

In my opinion, this represents illogical thinking. This implies that it is most effective to heavily promote products that haven't been given the necessary budget to develop, and an unjustifiable amount of time pricing them.

Immutable logic says that the resources allocated to the marketing mix elements should look more like this:

Product - Price - Promotion - Place - People

In summary, promote products that people really want. Then, you can reduce your promotion budget by the word of mouth factor created by great products. And, promote those performance predictors that will flow naturally from the great products.

The most powerful performance predictor of them all (potentially)

So, what is the most powerful performance predictor of them all, and why have I added potentially?

A brand is potentially the most powerful performance predictor of them all. And I say potentially because when branding is executed poorly it has the reverse affect - it becomes a performance detractor.

Branding is commonly misunderstood, even by marketing people. A brand is no more than a promise of performance delivered in advance of actually experiencing the service or using the product. Another helpful explanation is that a brand is the organisation's reputation.

A well developed brand (that is, one which highlights deliberate attributes in a powerful way) willl make perspective customers feel like they have already experienced the service or used the product before they actually have. Clearly, this performance predictor has great potential to fast-forward prospective customers into the future.

Fusing performance predictors into products

Unlike the traditional relationship between product manufacturers and advertising agencies, performance predictors should not be bolted on to a product as an after thought.

Instead, performance predictors should be fused into the products before, or during, development. This will ensure greater alignment and authenticity between the product and associated marketing communications.

For example, if a restaurant wanted to use a celebrity chef to endorse the establishment, it be would be most effective to have that chef involved in the development of the actual menu (i.e. methods, ingredients, etc.) rather than just promoting the restaurant via marketing communications.

Similarly, rather than have the product development team develop the product and hand it to the marketing team to develp a risk-reversal guarantee, why not have the marketing team involved in the product development and the product development team involved in the development of the guarantee?

Consumers shouldn't be able to tell where the product ends and the performance predictors start.

Human-uniqueness Performance Predictors

Every single human being on the planet is unique. Some in big ways, others in small ways. But regardless of the extent of these differences, the fact remains, we are all different.

For this reason, there are performance predictors which will be relevant to some consumers and not to others (in some cases, no others!).

For example, in Kevin Roberts excellent book Lovemarks, he quotes the following comment left by a visitor to the Lovemarks website:

"A tradesman came to my house to give a quote - but when he pulled out his Palm Pilot to check his schedule I knew I would give him the job ... When you come across another Palm Pilot devotee you have found a friend, someone on your wavelength, someone who understands." [Consultant, Australia]

So, for this consumer, the tradesman owning a Palm Pilot was a critical performance predictor. But does this mean that all tradesmen should go out and buy Palm Pilots because they are an important performance predictor? Perhaps, but probably not.

The Palm Pilot was a human-uniqueness performance predictor for this particular person. And the dichotomy here is that there may be other consumers seeking the same performance predictor, but the question for tradesmen to ask is: Are there enough consumers in this category to warrant buying and using a Palm Pilot?

What I am saying is, before running off and implementing every single performance predictor suggested by individual consumers, it would be wise to consider the greater impact this performance predictor may or may not have on your target market.

100% User

Imagine if all your staff (regardless of the size of your organisation) all used your products 100% of the time when requiring a product in your particular category. That would be a powerful performance predictor indeed, would it not?

To ensure even the most skeptical of consumers are impressed by this type of performance predictor, insist that all staff (including yourself), actually pay for the products they use. Don't include your own products as part of their remuneration package.

On the flipside, imagine if a key customer saw one of your executive team, or you as the owner, making a substantial purchase from a competitor. What message does that send? How about, "The owner thinks the competitor's offering is better than her own". Scary thought.

The impact of all staff being 100% users would have a 'sideline benefit' too. The user-feedback generated via the staff could provide many useful insights. With all staff experiencing a customer-perspective and a staff-perspective, their feedback should be at an entirely new level of depth.

A belief in your products is most effectively communicated with '100% staff use', not slick salesmenship.

The different spots of sampling

All leopards have different patterns of spots, as you know. This unique identity helps to tell leopards apart from one and another.

In the world of sampling, each organisation's approach should be similarly unique. This uniqueness should coincide with the type of offering the organisation is making to the marketplace.

For example, an organisation selling 'services' (i.e. intangible products) should offer seminars, white papers, complimentary consultations, first free lessons, published articles (a sample of information) and free guides.

On the other hand, organisations offering 'goods' (i.e. tangible products) should consider offering a sample of the actual goods. This offer could be a taste test, test drive, user trial (i.e. take the goods at no cost and pay later if you want to keep it) or 'first one free'.

In an increasing skeptical world, sampling really is a great way to reduce pre-purchase risk.

Tryvertising and Customer-made

The best way to gain consumer trust is to shift the seller power to the buyer. How?

The most extreme (and most effective) way is for consumers to make their own products and services. Think Subway (make your own sub), Dell (build your own computer) and write-your-own will kits. In these examples, the seller is inviting the consumer into the 'production process' and as a result reducing dependence.

Tryvertising is an intriguing term used to describe sampling as the call to action in advertising. Examples include 'visit your nearest dealer to test drive today' and 'receive your free perfume sample inside this magazine'.

By the way, I came across the terms 'customer-made' and 'tryvertising' in The Truth about Trust in Business which I have recently finished reading. The book supports the position that traditional advertising is losing its effectiveness as consumers are becoming increasingly sceptical.

"In a study conducted by Edelman in 2005, 45% of people surveyed said their most trusted information source was personal contacts, with only 4% trusting advertisements". In summary, consumers are more likely to trust other consumers than organisations.

Small Business Champion Awards

At Destiny Financial Solutions, I am able to put performance predictors into action. This is a video of me accepting the NSW & ACT Small Business Champion Award (Professional Services) for Destiny. And yes, I do need to work more on my celebration dance :-)

How a negative performance predictor almost turned off a prospective staff member

Performance predictors have a positive impact throughout an organisation, not only in marketing circles. Conversely, negative performance predictors can result in negative impacts to an organisation outside of marketing.

Yesterday, we almost lost a prospective staff member due to the sub-standard fit-out and poor external appearance of one of our offices. The prospective staff member was interested in applying for a vacant position within Destiny Financial Solutions, however was intending to withdraw his interest after driving past our office.

It took some convincing to assure him that this office was closing during the week and a new office with an updated fit-out and professional appearance re-opening.

The point is, performance predictors such as office appearance, have a far greater impact than just marketing. Furthermore, what impact are negative performance predictors having on your organisation? Perhaps you don't even know the extent of this problem...

Sampling is universal

Sampling is a very powerful type of performance predictor. There is no better way to 'fast forward a prospective customer into the future' than to actually allow them to experience the product or service first hand.

Last night I was part of an informative teleconference call hosted by Results Coaching Systems. The teleconference itself was a performance predictor for the organisation - professionally conducted, innovative and contained experiential content. However, the closing offer proved to me that sampling is universally possible, even in the case of a highly intangible service like business coaching.

All participants on the call where offered a sample 1.5 hour coaching session with a Results Coach. No cost, no obligation. The message was simple - try out one of our coaches for yourself so you can experience how good we really are.

All that glitters is not gold

As consumers, we are attracted to products and businesses because of the glitter, sizzle and bling. We are driven by emotion first, and logic later.

Whilst presenting a professional image is a performance predictor in its own right, it should not be the only performance predictor your business offers. You might be successful in the short-term, but glitter with no gold is not sustainable.

I agree with Lynn Upshaw, in his book Truth: The New Rules for Marketing in a Skeptical World when he cites "offering only products and services that perform so superbly that they generate their own marketing momentum, above and beyond formal marketing efforts" as an astute tactic.

Increasingly, consumers are scratching the surface to see what is hidden under the glitter. After all, nobody wants to be caught with fools gold.

Replacing the megaphone with a magnet

Is it possible to remove 'promotion' from an organisation's marketing strategy and still operate a profitable enterprise? Effectively stopping all advertising, sales promotions, online marketing, PR and direct marketing. This would be a very bold move to say the least.

It could work.

To pull off this marketing miracle, you would have to develop and continually innovate a great product. You would have to build performance predictors and lead generation into the product, price and distribution channels.

Has it been done before? World-class surgeons have been doing this for years. Their reputations (created by delivering a great product) acts to draw in new clients. They don't advertise or sell or send press releases or direct mail. And theirs' is amongst the most profitable of business models in the world.

Why performance predictors matter

During the process of writing this book, I consulted various colleagues, associates, friends and family. Many provided valuable input which shaped my thinking on the topic. Often the most difficult feedback to receive, but more useful than a vague 'slap on the back', is critical analysis of the concept and its relevance.

After I had explained the concept of performance predictors to an associate he simply asked, "Why do performance predictors matter?" At the time I was taken back, however this powerful question forced me to drive deeper into the concept.

Performance predictors matter because it is unfair for marketers to ask consumers to trust their claims, when they have a vested interest in the consumer buying. In an increasingly distrusting society, performance predictors matter more than ever.

Why marketing rules business

Peter Drucker said, "Because the purpose of business is to create a customer, the business enterprise has two - and only two - basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." He was right.

When you consider that marketing controls the marketing mix, comprised of product, price, promotion and place (distribution), it certainly helps to assert Drucker's viewpoint. Traditionally, the marketing department had spent almost all of its time, effort and resources on promotion. However, the modern marketer has realised the power of product, price and place on creating customers.

Marketing not only rules business, it is the reason for the existence of business. Without marketing, business fails.

The power of performance predictors

The power of performance predictors is derived from the following immutable facts:

• Consumers are sceptical
• Consumers dislike risk
• Consumers want evidence to support claims
• Consumers are jaded from marketing-hype
• Consumers like to buy, not to be 'sold at'
• Promotion should permeate out of the product
• Brands need substance to survive
• Trust is marketing's only objective

Performance predictors mitigate the challenges presented by these facts, and captialise on the opportunities.

Why performance predictors will help you become a better marketer

Performance predictors reduce consumer scepticism.

They achieve this by providing evidence to support claims, reducing pre-purchase risk, getting to the point fast, drawing consumers in rather than pushing products onto them and building trust.

Why is reducing consumer scepticism critical to marketing success, now more than ever?

The answer lies in the early meaning associated with the word scepticism. In Greek philosophy, scepticism was associated with a "suspecion of judgement". Sceptics take the view that the only course of action is to suspend judgment and adopt a position of indifference toward the product.

If all consumers suspend judgement, there will be no products sold. To be successful as a marketer, you must reduce scepticism to allow purchase decisions to occur.

Buying the Intangible

Everyday around the world, people and organisations ask consumers to buy "outcomes" which do not exist. Think about it for a moment - when you go to the hairdresser you are trusting him or her to achieve your desired outcome. But you can't be certain this outcome will be delivered. You are taking a leap of faith.

When offering "intangibles" like haircuts, performance predictors are mission critical to your marketing. Without performance predictors, prospective customers are likely to weigh-up the risks and benefits and not move forward. Honestly, do you blame them?

Aligning performance predictors with market position

Well considered and communicated performance predictors should assist in effectively positioning your product or service.

Occupying the ‘best quality’ position requires the business to produce best quality service, advertise in the best quality publications, associate with best quality strategic alliances and employ best quality staff.

The risk of not aligning performance predictors with your market position is that consumers are less likely to receive your message, because the mismatch will lead to confusion.

Consumer decision making and performance predictors

As a marketer you may be considering spending a part of your budget on ‘testing’ the theory of performance predictors on a sample of your customer base at a focus group. Unfortunately, this is unlikely to provide any meaningful validation of the concept.

Quite frankly, the ego of the focus group participants will get in the way of the truth. They will make comments like, “I select lawyers based on non-subjective factors such as service provision and price, not the number of diplomas on their walls!” But don’t be fooled, this is pride talking.

In reality, it is very rare that a prospective customer acts in a totally rationale manner when making a purchase decision. Emotions cloud our judgement when we are attempting to make a rationale purchase decision.

You are, however, able to test the effectiveness of individual performance predictors in your marketing communications. For example, you may promote one form of guarantee for a specified time, and when the time lapses, change the guarantee. You can then assess the impact of the two guarantees and select the most effective to move forward with on a permanent basis.

Your own performance predictors business

Whilst organisations can improve their marketing results by using performance predictors, there is also an opportunity to start your own performance predictors business.

You may have noticed the following performance predictors:









As consumers become increasingly sceptical, the opportunity to start-up performance predictor businesses increases too. Consumers want evidence of performance.