10 common marketing mistakes small businesses make all the time

Most people don’t go into business for themselves because they like marketing. But if you want to stay in business, you need to develop a competency at it. Here are some of the most common mistakes I see as small businesses go to market.

  1. Sending the wrong message: You can go broke trying to saturate the market with messages about what you want to sell. You make money by offering what the target market wants to buy. It’s not always the same thing. For instance, you may think you’re selling commercial snowplowing service, but is that what your customers want? Or are they buying liability protection and legal compliance? Thinking about it that way might change the way you describe your service.
  2. Doing just one thing: In an environment saturated with marketing messages, you’ll rarely succeed by looking for the one technique that works like magic. Such silver bullets are rare. Instead, good marketing means doing some of everything – advertising, social media, promotion, community relations, etc. – and then optimizing these activities over time to deliver the results you need without overspending time or money.
  3. Not budgeting: If you wait until you have the money for marketing, you may never get there. Businesses need to market all the time. By building a reasonable marketing expense into your budget, you’ll know how much you can afford to spend and you’ll have a good basis for measuring results and fine-tuning your activities over time.
  4. Skimping on design: I’ve seen people try to save a couple hundred dollars on a $10,000 advertising program by having a friend or relative put together the creative. If your logo, ad, website or direct mailer looks amateurish or misses the mark, the only thing a large budget will do is make you look bad to a lot more people.
  5. Mixing business and pleasure: Your company Facebook page is an extension of your business. It should be separate from your personal page. And if employees feel it’s OK to use the company page to post pet pictures or – heaven forbid – their political opinions, you are losing customers already. Business strategy should govern what gets posted to your social media feeds, and direct access to those feeds should be limited to one or two people who clearly understand your vision.
  6. Impatience and inconsistency: Any given activity needs to be cultivated and given time to work. Your target market needs to be trained to look for your communications and respond to them, and this takes time. If a marketing activity isn’t working, you need to replace it. But pulling the plug too soon wastes time and money. When you start a program, get some expert input to decide on some realistic objectives and a reasonable time frame to meet them. Then see it through.
  7. Copying the competition: If your marketing consists of doing whatever you see competitors doing, the best you can hope for is to do a little worse than them. It’s good to have healthy respect for other businesses like yours and pay attention to how they market. But nobody ever looks comfortable in someone else’s clothes. So if you aspire to your own success, develop and stick to a game plan that’s right for you, rather than the people you compete against.
  8. Competing on price: There is only room for one lowest-price provider. Unless you’re willing to take the thinnest profit margin while serving the most difficult customers, communicate some other reason people should buy from you. Then it’s enough that they know your prices are competitive.
  9. Going without a website: No matter what business you’re in, a website is as important as a phone number. It’s the difference, for example, between being a gutter specialist or just some guy with a ladder. Many people won’t even do business with a company unless they can preview it online. Even a simple, low-cost website makes you easier to find and says you’re fully invested in the business.
  10. Making a big splash rather than a steady drip: You can spend your entire budget in a day. But what about all the people who were home sick? Or traveling? Or just too busy to tune in to your message? Small businesses generally don’t have the cash flow for a giant media blitz, but they can afford to reach a well-targeted audience day in and day out. Such a campaign has the side benefit of delivering a few customers at a time, rather than bringing in more than you can handle all on the same day.

Image courtesy of  Scott Chan/FreeDigitalPhotos.net  

Mowing down price objections in advertising sales

You won’t close many advertising deals without being asked to cut your price. But doing so takes away from revenue, sales commission and profitability – and that’s the best case.

More likely, it will make the deal harder to close – creating more obstacles and potentially sending your prospect into the arms of the competition.

That’s because most price objections aren’t really about price; they’re about uncertainty. It’s similar to when someone says he’s too busy to meet with you. It’s not that he doesn’t have time; it’s that your meeting isn’t important enough for him to push something else – work, lunch or leisure – off the to-do list. Your job is to get that meeting anyway, and many salespeople will do it by pestering the prospect until he or she finally gives in.

What good can ever come from a relationship built this way?

When someone says the price is too high, that really means, “I don’t understand why I would pay that much for what you offer.” Lowering your rate is the “be a pest” solution; you may as well say, “You’re right – even I think it’s too expensive. So would you pay this much?” The lower you go, the less value your product has in the mind of the prospect.

Or you can make it your job to help him see why your product is worth the price. This is harder. Prospects don’t always put much thought into why they’re uncomfortable; they just know they aren’t at “yes” and price is the easiest way to express it.

So you need to bring along the prospect on an examination of the value of advertising and specifically your product. It’s real work, but when done well, it results in a higher closing percentage, higher rates and better customer relationships.

Discuss price early

A salesperson’s instinct is to hold off on price conversations until the end of the sales process. But price negotiations are, by definition, adversarial: One side’s gain is the other side’s loss. So this strategy sets up the very last moment of the deal – when everyone should be feeling warm and fuzzy – to be its most contentious.

Putting price on the table early makes the rest of the conversation more comfortable.

I have a specific way of doing this, saying something like: “Businesses in your category generally go with a quarter-page ad, which costs $210 a month – or just over $2,500 a year – if you follow the best practice of running every month.”

Each part of that statement has a purpose:

  1. Suggesting an appropriate ad format establishes familiarity and expertise in working with your prospect’s peers. Be realistic; don’t suggest a large ad for a business that ought to be running a small one.
  2. Providing both a monthly and annual number creates a realistic benchmark of what a reasonable advertising program costs while letting your prospect digest the impact on cash flow.
  3. Asserting the need for frequency starts negotiations with an ad program that’s most likely to really work.

This early in the sales process, a prospect will usually withhold any meaningful reaction to the number – but it allows time for him to process any initial sticker shock.

If a prospect does push back you can address it directly by saying: “Without getting too far ahead of ourselves, do you have a specific number in mind for what this is worth?” (If you are a student of sales tactics, this is not intended as a trial close; this probing and should not lead to a protracted discussion of price at this time.)

Your prospect has three possible answers – any of which will provide useful insight:

  1. An unreasonable response. “Give it to me for a dollar and I’ll sign right now.” You’ve learned you aren’t being taken seriously yet. You have to spend time building trust and educating – probably over several interactions – before you’re likely to close a deal.
  2. A specific response. “I was thinking more like $160.” This is a sign the prospect is educated, has a budget in mind, and is sincere about wanting to buy – from you or someone else. You’ll want to emphasize the value of your publication and the professionalism you bring to the transaction – all while trying to find out where else he’s looking and leaning. (Don’t assume your competition is necessarily another publication like yours; it could cable TV, card packs, Angie’s List or some other media.)
  3. No response. If the prospect admits he doesn’t really know how much your service is worth, then the initial price objection is probably either a reflexive response to sticker shock or a sign he really doesn’t have enough money. Engage in conversation to find out more about his level of experience with advertising.

Once you’ve gotten through this part, you can set price aside and proceed with the usual steps of the sales process:

  • Understand the client’s desires/motivation for advertising
  • Educate about your product
  • Create a direct connection between his desires and your product

Understanding the objection

When it’s really time to close, the prospect may again push back on price. This still probably means something other than “I won’t buy unless you cut the price.” You’ll need to probe to figure it out. Some possibilities:

I don’t believe in your product: There might be a disconnect between what you’ve told him and what he already believes. Perhaps he doesn’t see people reading it around town, or has heard others complain about lack of results.

I don’t understand it: The prospect might be unfamiliar or uncomfortable with how his spending is going to deliver a meaningful return.

My competitors don’t seem to advertise in your product: This is difficult to overcome and is one of the few occasions I’ll offer a judicious price discount, saying something like: “I know we’re perfect for Realtors but I need a real market leader to show them the way. If you have the courage to be the first, I might be able to arrange some kind of discount as long as you commit to a full year.”

Only an idiot pays retail for advertising: The people who are most responsible for this attitude are the people who sell ads. The prospect assumes that you’re like every other ad rep he’s dealt with: Afraid to lose the deal, not very knowledgeable about your own business, and more interested in getting his money than delivering on his objectives.

So prove you’re different: Explain why your published rates are worth paying, and let the prospect think about it by “closing” him on a promise to talk to you the next time you’re in the area. Then leave. Nothing will give this prospect more respect for you than a demonstration that you believe in yourself and your product enough to walk away for now.

One publication is as good as the next: Nobody expects a Mercedes Benz to cost the same as a Ford. When someone insists you meet the lowest price of some other advertising outlet, he is overlooking all the engineering that’s gone into making your publication successful. Respond by educating him about what makes your publication better for advertisers.

I want to make sure I’m not overpaying: Sometimes, the prospect merely wants to make sure he’s not paying more than necessary. You can provide all the reassurance he needs by saying, unapologetically, “For the program you want, this is the best price I can offer.”

Explaining why your rates aren’t flexible

The most useful tool in dealing with price objections is the sincere knowledge that your rates are correct. If you have any doubt about this, you’ll find some way to broadcast it.

Armed with that confidence, here are some constructive responses to persistent price objections:

  • Our rates are based on our cost of doing business, and they are competitive. I can’t cut them further.
  • Holding all customers to our published rates gives you confidence that you’re getting a fair deal. There are no secrets or magic words to get a better price. Nobody gets a better deal than I’m offering you.
  • Our customer list is no secret; we publish it every month and place 9,600 copies of it around the community. Why don’t you call some of them and ask if they are paying the published rate.
  • The more ads you buy, the lower your rate will be, and the better your program will work. It’s that simple.
  • Our best rate is reserved for our best customers, and I’ll tell you exactly how you can get it: Buy a 24x program and pay your bills on time. I guarantee you will have the lowest rate anyone ever pays – and an ad program people will notice.

Finally, for the hard case

Some people simply won’t budge until they’ve seen you bleed. If you’re really confident that’s what is happening, don’t just reduce your rate. Instead, insist on a deal where you both get something you want. Like: “I’m not able to do anything on the rate for a 6x package. But if you agree to buy 9, I might be able to get permission to slide you down to our 12x rate. If I can do that, do we have a deal?”

And yes, that is a trial close: Don’t give away anything until the prospect promises it will be enough to seal the deal.

Image courtesy of Jesadaphorn/FreeDigitalPhotos.net

 

A single metric to compare different publications

You’ve received quotes for advertising from two publications or websites; one wants to charge $150 and the other $350. How do you know which is the better deal?

Creating an apples-for-apples comparison between different publications is difficult because it involves so many variables.

The most common calculation for this job is cost-per-thousand (CPM), which measures the amount of money it takes to reach 1,000 people. You can use it for any medium – broadcast, print and online. (But it won’t hold up if you try to compare one medium against another).

Here’s the formula:

CPM = Rate/(Circulation x .001).

So if an ad costs $250 and the publication’s distribution is 8,000 copies, the CPM is $250/8, or $31.25.

It’s a simple calculation, and it lets you compare the rates of different publications with different circulation sizes.

But it has limitations.

For instance, it only works when comparing rates in the same media channel – print v. print or online v. online. That’s because the economics to produce different media – and the results they generate – are so different. Even when using it to compare two similar offers, be aware of these complications:

Ad size: CPM for a half-page ad will be higher than for a quarter page ad in the same publication.

Frequency. The more ads you buy, the lower the price will be for each. That means a single publication will have a different CPM for every ad unit and every frequency rate. The Heights Observer, which offers a pretty typical rate structure, has 60 different CPMs depending on the size of the ad and the number of insertions you buy.

Page size: Move vexing, a quarter-page ad in one publication (The Wall Street Journal, for instance) may be much larger than a quarter-page ad in another (i.e. Reader’s Digest).

That’s why it’s helpful to take CPM a step further – CPM per square inch (CPM/i²).  It’s the cost you pay for each square inch of space to reach 1,000 people. Here’s the formula:

CPM/(height x width)

This will get you closer to that apples-for-apples comparison between different publications. It’s still not perfect. The bigger the differences between two publications, the less relevant CPM/i² will be. But in such cases, it may be the only tangible link for comparing  disparate ad products.

So what’s the best way to use CPM and CPM/i² to make advertising decisions efficient and painless?

Step 1: Decide which publications you’re interested in, based on who they reach and how you feel they’ll work for you. Then look up or request their rates.

Step 2: After getting past the sticker shock, decide how much you want to spend per week, month or year. (Plan to advertise consistently over an extended period. It works best when treated as a long-term investment.)

Step 3: Select ad units in each publication that fit within your price range. Include any extra charges for color. If you can afford a full-page ad in one publication but only a small ad in another, that’s OK. CPM/i² should become a smaller part of your decision but it’s still instructive in your evaluation.

Step 4: Using the same frequency rate (i.e. if you use the 12x rate in one publication, use the closest thing to a 12x rate in every publication), calculate CPM/i².

Now you can evaluate the pricing with confidence, knowing this is as close as you’ll get to an apples-for-apples comparison.

In the end, CPM/i² is only one metric; it should never be the your only consideration. Such factors as a publication’s acceptance among readers, the relevance of its content and its customer-friendliness are at least as important.

Your gut may have to take you the rest of the way.  But you’ll know there is at least some science behind the decision.

Image courtesy of Suvro Datta/FreeDigitalPhotos.net

 

The need for local news

I think Seth Godin is brilliant and I love his blog. But he misses a pretty big point in this post:

Understanding local media

Essentially, he is saying that newspapers must now serve communities of special interests. (Right so far.)

But then he largely dismisses the special interest of a community based on geography.

Here’s the problem: Seth Godin’s brilliance is based on being outside the box. He is a wonder when it comes to seeing things from a different perspective and ignoring the comfort zone.

But when it comes to going home at night, most people want – no, demand – to be in the comfort zone; inside the box. They want to go to bed knowing the things that really matter are working well. Things like safety and recreation and family and comfort.

There are, of course, different ways to achieve that. One, for example, is to live in a gated community where people of different economic, ethnic or racial background have trouble getting in, and where a well-paid management company takes care of the rest.

But another is to live in a community more like mine, with sidewalks and shops and some level of interdependence among its members. Such a community is organic and only works when fragile balances are tended. Which, of course, means that its members feel invested in knowing what’s going on.

Most of our urban areas are surrounded by places like this. And in such places, people DO care about their neighborhoods. Local newspapers that truly foster a sense of this kind of community will continue to thrive in exactly the way Godin specifies. And they’ll do so by being more important than the newspapers that serve the distributed communities he describes. Because, unlike those newspapers – which serve the special interests that make us different – the local newspaper serves the thing that makes us all the same: The basic human yearning to live in groups.

Advertising 101: Frequency v. size v. color

If money were easy to come by, every ad would run in every issue as a full page. But a buck is hard to make and compromises are a fact of life.

So what’s more important: running a big ad or running an ad often?

Advertising – any advertising, whether print, online or broadcast – works best through repetition. Look at it this way: You know that if you send a direct mail piece or a mass e-mail, only a small percentage of recipients will actually open it.

Advertising offers better percentages, but the concept is the same; 10,000 people may read a publication, but only some of them will notice any given ad.

Conventional wisdom in the media industry says it takes 7 impressions to attract a reader’s attention. I’ve never actually seen any research to support this. But I think I know where it comes from. I’ve been involved with research at various magazines over the years that indicated 10% to 20% of readers were able to positively identify whether a specific ad ran in the most recent issue. Larger ads generally increased reader recall.

From that you can conclude an ad needs to run 5-10 times before everyone in the publication’s circulation can be assumed to have noticed it.

(A statistician could find about a dozen things wrong with this statement. And the research will vary widely depending on the publication, its audience, the number of pages and advertisements it contains, and a host of other factors. So please take it in the general spirit intended).

But just because people see your ad doesn’t mean they are currently interested in what you’re selling.

For instance, regardless of how large your ad is, you’re not likely to sell carpet to someone who’s renting an apartment month-to-month.

The more times an ad runs, the greater the number of people who have a chance to see it. Those who will be interested in your product or service are always a subset of that number.

But when that person buys a house and starts thinking about upgrading the floors, you want him to have noticed your ad in the past; you want him to go looking for your ad in the publication’s current issue.

Therefore, successful advertising isn’t just about getting noticed. It’s about 3 things:

  1. Getting noticed
  2. Being remembered
  3. Being there at the right time

That’s why I recommend frequency as the higher priority in advertising. Frequency is a factor in all three things while size is only a factor in No. 1. I’d confidently predict better results over time for someone who runs a smaller ad in every issue than a larger ad sporadically.

Further, spending too much on an ad can harm its chances of success. How?

If you sell houses for a living, a single commission can pay for a year’s worth of large ads. Selling a home is a big deal involving big money, and a big ad to discuss it seems reasonable.

But if you sell haircuts or ice cream cones your ad needs to attract a lot of customers just to cover its cost. The larger the ad, the better it has to perform just to pay for itself.

If you run a hair salon, how many strangers on the street would you have to approach and talk to before one of them says, “I was just thinking of getting my hair done and I’m not satisfied with my current stylist. I’ll head over there right now.” Would it be 100? 200?

Run through the math: If a publication has 10,000 readers, perhaps 1,000 of them (1 in 10) will take note of your ad the first time it runs. If 1 in 200 decides at this particular moment to abandon her old hair salon and try yours, that means it would be unrealistic to expect more than 5 people to walk through the door as a result of the ad. What is a reasonable amount to spend for those 5 people? And because this is an inexact science, what’s a reasonable amount to spend if the first time the ad runs, it’s only 1? Or none? (As in the bottom of the pyramid in the graphic above.)

So be realistic about how much business the ad is going to bring in – especially in the first few months – and don’t sign up for more than you can afford to spend out of existing cash flow. And expect the results to improve gradually over time, until a steady flow of people tells you they’ve noticed your ad.

There are moments when these rules of thumb may not apply. For instance, if you’re promoting an event or have some other short-term message, then it’s most important that your ad gets noticed right away by as many people as possible. That’s when you want to buy a large ad and negotiate (or pay for) the best positioning you can get.

Color too plays a role. Spending extra as needed for color will help get your ad noticed – though it has a lesser impact than size. Also, color probably has more impact on the way your message is perceived than on whether it’s noticed at all.

The small business owners who tend to be happiest with their advertising are those who buy a smallish ad, spend time developing its look and its message, and then commit to running it month after month, year after year.

Advertising works. It’s not so much an expense as an investment. So invest wisely and consistently. Do it in a way that you can afford to give it time to work. If you do, it will make your business better. 

Your business card is not an ad

Work boots are like soccer shoes in the sense that they both provide a protective covering for your feet. But if you play soccer or work in a steel plant, they are anything but interchangeable.

Your marketing materials are purpose built in the same way. A brochure isn’t interchangeable with a frequent buyer’s card any more than work boots are interchangeable with soccer cleats.

People who run their own small businesses are hard-working and busy. They typically seek to leverage time and money by applying one solution to as many problems as possible.

Many publications take advantage of that tendency by creating ads that are the same size as a standard business card. Business owners don’t have to think or spend to design an ad, and the publication gets a quick signature on a contract.

But just because it’s cheap and easy doesn’t mean it’s smart. In fact, it’s usually a waste of money. Business cards and advertisements are simply designed for different work.

The job of business cards is to make it easy for people to reach you. And that’s all they do. They work because you hand them out to people who have already expressed an interest in being able to contact you.

On the other hand, the job of an advertisement is to help people decide if they’re interested in what you do. It has to tell people what you do – and why you do it better or differently than others. It has to provide some call to action. It also may need to include a coupon or special offer of some kind to allow you to track results. And, of course, it must include at least a few critical bits of contact information.

If you plan to advertise, spend time thinking about how your ad must differ from your business card in order to really sell your product or service. If you’re not able to make that commitment, then find another way to invest in your business.

Because running a business card as an ad probably won’t generate results. But it will indicate that you ‘re someone who thinks it’s a good idea to play soccer in work boots.

Image courtesy of Luigi Diamanti/FreeDigitalPhotos.net

The economics behind the media meltdown

What really happened that caused traditional media to shrink so much over the past decade – and why are so many still struggling to come back?
That’s the subject of this presentation, which I’ve given several times over the past few years.

 

Why the media meltdown from Bob Rosenbaum

Names make news (2.0)

reading paper_graur razvan ionut_freedigitalphotosTwo years out of college, as a young reporter for a business weekly in Upstate New York, I met the crusty old publisher of the Pacific Business News – a business journal in Honolulu. I didn’t like him much. I was idealistic and ready to change the world. I was living in the snow belt and learning how businesses work. I was reporting on Michael Milken (a Master of the Universe, the junk-bond king, deal-maker supreme) and leveraged buyouts. I was writing about how empires were made, how old cities were rebuilt, how capitalism made the world turn.

This old guy, meanwhile, was living in paradise and frustratingly pragmatic. Standing before a room full of wide-eyed people like me, he was asked to dispense some advice to us young guns. After something like 50 years in business, you know what he came up with?
“Names make news,” he said. That was it.
To look at his newspaper was to understand how this pedestrian philosophy played out in the real world. While it has been updated over the past 25 years to get ahead of changing times, the product I saw that day was gray and cheap. Articles were short, reading as if written by flacks and hacks. Every person’s name that was mentioned – there were a lot of them – was bold-faced. Some articles seemed concocted for the specific purpose of highlighting a large roster of names.
I was unimpressed. I promptly forgot that old publisher’s name and promised myself I’d forget his tired old advice too.
What I discounted was his experience. He’d been running the same publication for something like 50 years. It’s possible, I now realize, he had learned and discarded many other truths along the way – distilling his success into one rule of thumb that fostered success for his product in his market at his time.
Names make news.
I never did manage to forget that advice. While it’s not the only rule I’ve lived by over the years, I’ve had many occasions to apply it, and it has never failed me.
It came back in a rush this morning when Seth Godin’s most recent blog post came through my e-mail. Seth is a marketing guru; he dispenses more good advice in a week than many of us dispense in a lifetime.
Seth’s advice on the subject doesn’t come across like that of a crusty old publisher marking time in Hawaii. It’s contemporary, directed at social media marketers, online journalists, bloggers – would-be masters of the new digital universe.
But it’s equally concise and to the point. When people look at photo albums, he says, they go directly to pictures of themselves.
He writes:
Knowing that, the question is: how often are you featuring the photo, name, needs or wants of your customers where everyone (or at least the person you’re catering to) can see them?
So listen up Internet 2.0ers. Your self-indulgent rants, your complex business models, your highly-designed user experiences are all well and good. But as media change, some things don’t. Names make news. They always have and they always will.

Image courtesy of graur razvan ionut; FreeDigitalPhotos.net

Make sure value-added really adds value

Value-added is the currency of the new economy. The idea is this: You do business by giving people what they pay for, but you gain and retain customers by adding a little something extra on top.

When the Eat ‘n Park restaurant chain gives each child a free Smiley cookie after dinner, that’s value-added. When UPS and FedEx provide tracking numbers so you can follow the progress of your package, that’s value added.

But beware of providing value-added that fails to add value. That can actually harm your business.

Here’s an example from the business-to-business world: On behalf of a client, I recently placed some small advertisements with a local media outlet. Ever since, I have received a weekly e-mail letting me know that my online customer profile has been established and that if I fill it out I will receive a free listing in some under-explained and over-complicated online system. They call it value-added; I call it extra work with dubious benefit for which I won’t be paid. But ignoring it leaves me with the inescapable knowledge that maybe – though not likely – I am shorting my client on some meaningful opportunity.

Here’s another, from the business-to-consumer world: The pharmacy placed four automated calls to my house the other day.

One was important; it directed my daughter to call the store about a question on a prescription she had transferred from another location. Over the next few hours she called several times and nobody ever answered the phone. In the end, she drove to the store and waited in a long line to speak to the overwhelmed pharmacist.

While she was there, I asked her to pick up another family member’s prescription that had been submitted electronically the previous day by the doctor. Not only wasn’t that prescription ready, nobody in the pharmacy could find any evidence it had ever come in. But 20 minutes after my daughter got back home, another robo-call arrived to announce the prescription was ready.

That phone call was intended to be value-added, but instead, it emphasized that the pharmacy is understaffed and has flawed processes – resulting in the inconvenience of another trip to the store.

By the time I returned home, there were yet two more calls – “courtesy” reminders that it was time to refill some maintenance medications.

I never asked for these reminders. In my household, we have a better reminder system: When the pill bottle is close to empty, it’s time to reorder. But the pharmacy decided its calls would add value, and opted us in to receive them.

I’m sure there is a way to change the settings for these automated calls. But why should that be my job? I didn’t ask for all this value-added in the first place. Aside from the momentary pharmaceutical chaos in my household, we’re basically healthy and view our business with the drug store as a transactional necessity.

This, of course, is what the pharmacy corporation hopes to change. By offering all this value-added service, it hopes to turn our transactions into a relationship.

It’s having the opposite effect; rather than figuring out how to change my preferences, I simply seethe in the background while the answering machine records each call.

The lesson is this: If you’re going to offer value added, make sure it really adds value. Otherwise you’re just spending money on something that actually harms your business.

Wants vs. needs? You’re selling both

Seth Godin, one of the best marketing bloggers I follow, says wants and needs are often confused. He writes:

That pays off for any marketer that has persuaded his market that they need what he sells. It backfires when those ‘needs’ are seen for what they actually are–luxuries.

I agree with Godin in both his point and his brevity. But in being admirably concise, he omits a noteworthy nuance. People are more eager to buy things they want than things they need. They’ll go to great lengths to pay the lowest price possible for actual needs – stuff like medicine, groceries, industrial consumables. But they’ll happily spend more on things they want – think wine, golf clubs, a redecorated office.

The point? While Seth Godin is correct that you’ll improve sales by persuading people you can fill a need, you’ll lubricate the sales process and increase pricing margins by convincing people that your product is also something they want.

As evidence, consider:

  • Dell v. Apple
  • Toyota Yaris v. Mini Cooper
  • Emerson audio equipment v. Bose

There’s a lesson for your marketing in that knowledge too.