It’s easy to get lured into the promise of market automation where an AI robot is going to cold query, engage and close a database of customers. And you don’t need to do anything other than pay for some fancy software. Instant sales, what business wouldn’t find that enticing? Problem is, we customers aren’t robot offer recipients analyzing price vs deliverables to identify and accept the best offer. We’re people who are motivated by value, not price, and we make decisions based on emotions, not facts.
Let’s dig into both of those, then talk about why building an email list remains one of the best ways to market any business.
VALUE VERSUS PRICE
If there’s one trap that consistently trips up entrepreneurs it’s the inability to understand the difference between price and value. To focus on price is to fall into the commodity trap. I know all about it and even co-wrote the business book Let Go To Grow about avoiding commoditization in your segment.
The problem is that if you have a widget and price it at $X then another firm can come in and sell that exact same product at $X-1 and take all your business. If you’re offering a specific value proposition, however, then price becomes immaterial. Or at least a minor consideration rather than the only criterion used by customers to make a purchase / no purchase decision.
Think about food. It’s almost impossible to compare two plates from competing restaurants, but I bet that you decide on restaurants based on the quality and cuisine, not the price of a plate of food. Indeed, it’s almost always a really bad idea to just choose the very cheapest food on the market because to fulfill that promise, the purveyor is inevitably trading quality for price. In other words, the cheapest cuts of meat, b-grade vegetables, poorly trained [and therefore less expensive] staff, a low-rent facility, and worse. Sound appetizing?
That same concept holds true for so many different business segments, however. You can paint houses without being the cheapest bid, landscape a yard without undercutting your competitors, and entice people to sign up for a subscription even if you’re not the low price leader in your segment.
It’s just a matter of rethinking how you pitch and present your business, how you quantify your value proposition. It’s not “cheapest Thai food in town” it’s “best Thai food in town” “in a lovely, authentic Thai setting” and even perhaps “Voted most romantic restaurant in Portland four years in a row!”. With that in mind, are you going to worry that their curry is $13 rather than $9 like the dive down the road?
EMOTIONAL DECISION MAKING
This is the other common mistake that entrepreneurs make, particularly (yes, sorry) male entrepreneurs. They believe that decisions are made based on cold, hard facts. A grid of features comparing your product to your competitors? There’s no better way to sell a product or service, right? Wrong. Whether your consumer is male, female, or other, people like to believe that they make decisions based on facts and data, but science shows that we actually decide based on emotions.
You can test this: Think of a brand you love and a brand you dislike, distrust or think is deceptive. Now, if both companies offered the same product – even at the same price – would you tend to purchase from a company you liked? What if you were neutral but a trusted friend related a horror story of one vendor really messing up their supply chain or IT infrastructure or, conversely, a glowing endorsement of a company that went above and beyond, over-delivered and has proven a great part of the team?
We all have emotional relationships with companies, products and services and sometimes we might not even be able to pin down exactly why that’s the case. Maybe your parents were judgmental and you inherited their opinions in subtle ways. Or you went to business school and a favorite professor had worked at a particular company and still extolled their virtues and innovation.
The point being that as an entrepreneur you need to be able to think about the emotional relationship that your customers have with your company and your product line. That’s one reason why customer retention and loyalty are so hugely important. Master the fine art of delivering happiness to your customers and being truly appreciative of their business and you’ll not only lower churn (as we MBA types say) but raise word of mouth too. It’s not a product to sell, it’s a relationship to nurture.
ARE YOU BUILDING A MAILING LIST?
And so the question: Are you building a mailing list? Are you using it in smart and engaging ways? Done right, your email list makes it easy to create that all important relationship with your customers. From offers for your most loyal customers (they invited you into their inbox, after all) to insight into you, your team, your development process and even previews and promotions, a well done email message is something people will receive with enthusiasm.
Send along a generic message that’s just a toneless promotion for the latest product, however, and people will click or tap on that “spam” button so quickly it’ll make your marketing campaign spin. Since you are now savvy to the fact that people want to have a relationship with your company, why wouldn’t you continue to nurture that with every message sent?
Finally, as an exercise, look through your own inbox and ask yourself which email newsletters and mass mailings are well done, engaging, and make you think favorably about the company versus which do you delete without even opening them?