Consumer Goods Vs. Professional Services

professional-services-consumer-goods-different-unique-marketing-strategy-contentMany marketers and business managers insist on lumping professional services into the same category as consumer goods when it comes to “selling”.  Maybe simplifying it in that way makes it easier for the next “GURU” to sell their magic bullets.  Ever heard this:  “If you do this (their idea) in ANY industry, you will be successful!”?   Sorry to deflate anyone’s balloon, but it’s simply not true.  There’s a HUGE difference between marketing and sales of consumer goods (often categorized as wants) and professional services (often recognized as needs).    Here are couple of scenarios that may help explain the difference:

Scenario #1:  Consumer Goods—The Auto Dealership

Would you agree that most people need a car to get back and forth to work?  Is that the only criteria people consider when buying a car?  If it were, everyone would be driving the same kind of car—one with an engine, 4 wheels, seat belts and airbags, etc…Just the basics and no more. We know that’s not how it really works, right?  People usually have their heart set on a SPECIFIC car:  A car that differentiates them from everyone else.  And they tend to buy from whatever dealer will give them the best price on that car they want.  A close friend may even be a sales rep, but if the dealership insists on a price that is perceived to be out of line, the customer has no problem going elsewhere to get the car they WANT.  Even if it means their friend doesn’t get the sale.

Scenario #2:  Professional Services—The Dentist’s Office

A patient visits their dentist’s office for a cleaning, but this isn’t a routine appointment:  The X-ray identified an infected root that would soon reach a nerve ending.  They are going to NEED a root canal.    Does this patient WANT a root canal?  Absolutely not,  but NOT having one results in more pain than the procedure itself.  Two key items of note:  They aren’t likely to price-shop the procedure.  They aren’t likely to seek help on their own. Instead, they’ll most likely get it done by the professional their dentist trusts enough to refer them (and they know is quite liberal with the use of anesthesia!)

Wants Versus Needs and Incentive Plans

Most sales representatives work on commission.  This is certainly true for the auto industry.  It’s no secret that the goal of every business is to make money.  Where the chasm seems to be widening is in the actual FUNCTION of every business:  The acquisition and maintenance of customers.  Where the problem lies is in the priority of these two facets of business.  In some cases, they seem to be reversed.  It’s certainly why some professional service providers are getting so much attention these days.  Let’s revisit the two stories again to explain why this  is significant.

The Auto Dealership Revisited

When a customer WANTS a vehicle of a specific year, make, model, color, feature/accessory list, etc, they don’t care who they buy it from as long as that car makes it to their garage.  The car they want may be very unique, but in most cases it’s still categorized as a commodity.  They don’t necessarily need to trust the person or organization they are working with to buy that car…all that matters is that they get what they WANT.  They also don’t care how much the person that completes the purchase agreement with them earns in commission.  Again, they WANT that car. Anything else is irrelevant.

Back to the Dentist’s Office

Similar to the auto dealership experience, it’s likely that a patient isn’t going to care how much the root canal costs, especially if they have dental coverage.  However, let’s say the dentist and the oral surgeon are part of a larger organization, and at the head is a CEO.  One day, the CEO says: “We’re not doing enough root canals…You need to do more or else we’re going to have to cut out that part of the business.”  One way to solve the problem is for the dentist and the oral surgeon to get together and come up with a way to diagnose and refer more root canals. Another way is for the oral surgeon to just do an additional one while the customer is under anesthesia, then bill them for it.

Question:  IS EITHER SOLUTION ETHICAL?

(You really don’t NEED an answer to that, right?)   

 

The difference between wants and needs is huge, but the one constant across ALL industries is the same:  

FUNCTION PRECEDES GOALS EVERY TIME.  THE ACQUISITION, MAINTENANCE, AND RETENTION OF CUSTOMERS IS WHAT ENABLES BUSINESS GOALS TO BE ACHIEVED.   

 

What drives YOUR decisions?  

Tribe Defined: An American Songwriter

tribe-community-concert-venue-marketing-countryUnless you’re a member of his tribe, I’m not sure how many people even know who Todd Snider is.  I certainly didn’t until getting introduced to his music about 10 years ago.  I was a captive audience:  My friend was playing HIS music, in HIS car, on a 7-hour road trip to Memphis where HE was running a benefit marathon for St. Jude’s Children’s Hospital.  Let’s say there wasn’t a lot of room for negotiation.  

My friend literally had every one of Snider’s albums on his i-Pod.  Initially I was skeptical, but after about the third song, I was thoroughly entertained.  Why?  Because between many of his songs,  Todd Snider told a story that transitioned into the next track.  Not random, pointless stories, either.  These stories were HILARIOUS.  By the end of the weekend, I was a BIG fan.

A few months later, my friend called to say that Todd Snider was doing a concert in the area and asked if I’d like to go along.  Of course, I said: “Heck yeah!”  The concert was in Cedar Rapids, at a small venue in a place called Czech Village.  (Czech Village is the place that was severely damaged a couple of years later by the flood of 2008.)  The venue seated about 250. When we walked in, we were instructed to “grab a chair”—a metal folding chair—and take it into the auditorium.  Unique, right?  Audience members could sit wherever they wanted in front of the stage, but it wasn’t disorganized…all chairs ended up in straight rows, just like a normal theater.

When Todd Snider came onstage, the crowd roared.  The crazy thing was: They began engaging in conversation with him like he was in each of their living rooms.  I’d never experienced anything quite like it in my life.  He asked them:  “What do you want to hear tonight?”  The crowd responded with a variety of requests, but when he heard the one that correlated with his agenda, he started his performance.  After each song, he again engaged his audience with another story or random conversation.  When he was singing, the audience sang along, oftentimes as loud or louder (and in tune) with him.  $65 a ticket for a community concert, and it was one of the most memorable experiences I’ve ever had in my life.  Which is why I’ve seen Todd Snider two more times since then.

Many of you are likely thinking:  “What does this story about an obscure folk musician have to do with marketing?”  It has EVERYTHING to do with marketing, particularly the challenges CONTENT marketing is facing today.  Here are four big ways:

1. Of the concerts I’ve attended, most of the venues seated LESS THAN 500 people.  This means he prefers to play in more intimate settings. This enables him to know his community as well as they know him.

2. People travel for MILES to see him in concert.  By miles, I mean from MULTIPLE STATES AWAY, sometimes as many as 8-10 hour drives. This is a tribe of LOYAL followers.   

3.  People relate to him intimately through his music, which is totally transparent. When the audience participates in the experience, it becomes far more memorable for everyone.   

4.  Community members INTRODUCE outsiders to join the party. Since his music isn’t played on the radio, XM, or Sirius satellite, the only means of discovery is personal introduction. Serving/entertaining the TRIBE is more important, more rewarding, and less costly than trying to serve the masses.

How has all of this worked out for Mr. Snider?  Not being on the radio, not playing to sold-out 30,000+-seat venues, and not landing a “mainstream” record deal CAN’T be lucrative, right?

Wrong.
In Cedar Rapids, he pulled up in a customized Prevost tour bus.  According to Wikipedia, he has an estimated net worth of over $2.5 million.  Perhaps that doesn’t SOUND impressive, but there’s a hidden benefit to how he has gotten there and what he does every day:  Todd Snider serves a very SPECIFIC TRIBE OF FOLLOWERS.  He’s not focused on people that don’t like him or who have never been introduced to him through the tribe.

Like it or not, HE is WHO he is, and few performers I’ve ever seen have done it better.

Scaling IoT, AI, and CX

marketing-internet-of-things-ai-scale

There’s a huge degree of inconsistency in the marketing world. Traditional leadership is beginning to see trouble on the horizon.  Instead of opening the windows, they are battening down the hatches.  Check out most corporate leadership profiles on LinkedIn and you will see either nothing at all or 500+ connections, very few of which are OUTSIDE their own organization.  This is a statement, is it not? Unfortunately, the message is: “We don’t know what to do or how to do it.”

Several recent Twitter chats and LinkedIn conversations have turned focus on the Internet of Things, Artificial Intelligence, Customer Experience, and Value Propositions.  At the same time, posts about new, up-and-coming social media platforms are diminishing in frequency.  The other day I took a step back (while taking a few steps forward on the treadmill.) “What is the impetus for this transition?”  Why have the conversations about social platforms evolved to IoT and AI?

People are settling into micro-communities (tribes) of other individuals who share complementary worldviews.  In other words, they are at parties with the people they get along with. As a result, the content shock Mark W. Schaefer refers to in his book “The Content Code” is a condition that is intensifying daily, causing random marketing messages designed to get the attention of potential buyers to fade, even get tuned out, because members of those communities are fitting themselves with earbuds.  They are only listening for the messages THEY wish to hear. It’s happening, folks, but where is all of this headed?

A few months back, I consulted a local programming team about designing a Tinder-like professional services matching app.  (No, no , NO…not THAT KIND of professional services!)  The idea was to provide a way for consumers to identify and connect with providers who were more compatible to their worldviews than those who have historically been randomly assigned by lead distribution systems utilized by most organizations.  I’m glad I didn’t waste the four grand…. I think search is going to do this automatically in the near future.  If you’ve got a second, I’ll be happy to explain how what we already have available is possibly going to evolve in a manner that will fulfill this vision, and change marketing forever in the process.

Three months ago, I listened to a “Nobody Likes It Cold” podcast which featured Drew D’Agostino, creator of CrystalKnows.com.  You can catch it here.  Two days later, I subscribed to the platform.  If you are unfamiliar with what Crystal does, you really need to log on and see for yourself.  Allow me to use it as an analogy for how the next few months may very well be a defining period in marketing history.

Crystal has integrated DISC to assess compatibility between individuals, then provides e-mail/communication templates through LI, FB, Twitter, GMail, and Outlook to boost the effectiveness of the exchanges.  It also provides the degree of compatibility between two people.  For example, it told me last week that a person I was considering interacting with shared only a 16% compatibility rating with me, going on to state that we would “have difficulty getting along.”  I didn’t pursue communications with that person.

Now let’s take this Crystal example one step further:  Have you ever used LinkedIn search?  If so, you know that when you search an organization, you also get a list of people, sometimes 1st, 2nd and 3rd-degree connections, inside that organization, right?  (When you look at the screen, the main search page features the company, but there is also a box to the right side of the screen that lists the number of connections you have on the inside.)   Until Crystal arrived on the scene, there was no way of determining the compatibility between the people in those results and the individual searching for information.  But wait:  It gets better…

Monitoring IBM and others in recent Tweet chats indicates an uptick in the development and integration of AI and IoT on the immediate horizon.  I asked a few good influencer friends this week if it was possible for search to utilize AI to assess the overwhelming amount of consumer data in a way that segments individuals into infinite categories (rather than just the 6 or 8 most organizations seem to believe exist). If so, was it then possible to add in an element of IoT, such as wearables, to acquire physiological responses to situations before, during and after the buying process. Finally, if this could actually happen, would the search THEN be able to match that consumer to not only a brand but a rep based on compatibility of worldviews, emotional and physiological support factors in a way that maximizes the customer experience through this matching process?  Let’s just say I wasn’t told “no”.


Let’s recap, shall we?

First start with LinkedIn search.

Next add Crystal.

Finally, integrate AI and IoT.

Voila!  Customers are matched by search to relevant brands and reps based on ORGANIC content (as Google has been leaning toward for a few years).

Here’s the kicker:  Reps and brands who have been inactive or who are doing it wrong are deemed irrelevant…   Or worse…

Invisible.