The Gilman Company Blog

What other problems do your customers have?

Isn't it frustrating? You product or service is great. It's going to solve a lot of problems, move your potential clients forward, make them more happy, improve their lives, save them tons of money, and no one can be more convincing or charming than you, but....

At least address the issues that are surrounding the problem that you're trying to solve for your clients, for your buyers.

How most offers work:

1. Here's the stuff
2. Here's why it's better than the stuff other people are selling and why you need it
3. Here's how much
4. Wanna buy?

Talk to your clients or customers about what they need, the unique problems they have and sort those issues out. Anyway, you're an expert in your industry, right?

Ask a question.

Got info?

You: Nothing says disenchantment quite like sitting across the table from a business person that didn't even bother to Google me or my company.

A deal breaking element of direct sales is information about your customer. A critical element of direct sales is personalization.

How do you achieve the type of personalization that comes with a sale? You learn about your customer. In that process of learning, you will begin to understand the qualities of your products or services that are most appealing to your customer. In that process, you will also learn about the needs of your customer. In that process, you will learn whether or not this customer will be a good one. You will learn how to improve your product or service. You will learn how not to waste your time.

Ask a question or get a FREE Gilman consultation.

How to select the cost of an extended warranty

You've decided that an extended warranty is a great product to add to your catalog. Wonderful. Now, how do you decide the macroeconomics of an extended warranty?

Two issues here, perceived value and cost.

Perceived Value
One way to think about the pricing of an extended warranty is to understand what an extended warranty is to the consumer. What you're selling is a type of insurance on the consumer's investment in your product. So, how much would the average purchaser of your product be willing to pay to guarantee that product will be usable for a period of time which is longer than the basic manufacturer's warranty, say, one year from the date of purchase? Depending on the nature of the product, 10-20% of the advertised cost of a product could be a good place to start.

Cost
Along with perceived value, how much it will cost your company to make good on your extended warranty program will mean the difference between a successful program and a crashing business failure. Exploring an extended warranty program is a great way to reel in quality control issues and think about advancing design concepts that limit mechanical failure or wear and tear issues that may be characterized as mechanical failure.

Note: There are many pitfalls in the world of warranties. A good approach to a warranty program will require a thorough analysis of development costs, pricing, margins, customer service costs, logistics costs, customer satisfaction, distribution channels, sales channels and others issues.

Get a Gilman consultation.

Looking for Dumb People?

Is there money to made by marketing services to people who don't know any better? Certainly!

There are countless examples of services that no one needs, but that customers line up to pay for. In fact, many of these services make realizing the desired outcome more difficult (not to mention more expensive). So, how do you sell something that no one needs or necessarily wants? Focus on a false sense of fear and offer to "handle everything."

The anecdote: A notice from Company X, which I have never heard of, explaining my obligation to update a legitimate administrative legal matter. Clearly, my time had come. I paraphrase: "So many horrible things can happen to you if you don't address this matter. Luckily, we can handle everything for you. Just pay X to us and we'll take care of it."

There's nothing exciting, inspiring or genuinely likable about a business model that relies on ignorance.

How to Make it Better vs. How to Make it

Rethinking an existing system, product or process from the ground up can be especially enlightening if this product or system has been in place for some time. Rather than trying to to discover a way or ways to make something better, complete an exercise in developing that same thing from the ground up based on current technology or the latest innovations.

What's the point? Technology and innovation move quickly. Chances are, an "old faithful" system or product could have been drastically improved upon a long time ago. By letting a product or system go without innovation, you could be dealing with a substantial amount of easily achieved and unrealized value. Also, a commitment to innovation will mean your transition to improving systems, products or processes will be less disruptive to your enterprise.

Get a Gilman consultation.

Pricing Strategies: Branding

What happens to Coca-Cola when you take the brand away, when it can't be called or referred to as Coca-Cola anymore? Really. What happens? You're not left with much. You can't sell 20 ounces of carbonated water, sugar and vanilla extract for $1.50 anymore.

Once upon a time there were "brandless" grocery products. Remember those? A white label aluminum can with plain blue letters that read "COLA." Those aren't around anymore. The power of "brand" was just too strong for truly generic products to exist in every product category. Now, in many cases, for many grocery products, we're left with the odd little term "generic brand." Even generic is a brand now.

Back down memory lane. Recall, just a short time ago, when entire buisness models were based on brand. Brand development, brand statement, brand value, etc. Just about everything in a business model can be discussed in terms of "brand." Why is brand so important? It's important because at the core of brand lies "value." If the folks at Pepsi or Coca-Cola had one last dollar to spend, it would be spent on maintaining the brand.

The bottom line. If you're starting from scratch, and unknown brand is better than no branding at all. If you're already branded, the trick is to increase the value of the brand, such that you can charge a premium for the product or products associated with that brand.

Look for other "Pricing Strategies" posts here.

Get a Gilman consultation.

The First Time is the Hardest

 Some business firsts of notoriety.

1. You've decided to leverage social networking sites like Facebook, Twitter or Squidoo to expand your online presence.

2. You're developing or expanding to a new product category for your business.

3. You're knocking on the door of an all-new associate or business partner.

5. You're going to establish a corporate blog.

6. Your going to make the leap to a start-up.

7. Or, God forbid, you're finally getting a website.

Whatever first it is, it goes without saying, that the first time is the hardest. You can expect whatever your doing for the first time in business to take more resources, things like your time, money and your resolve, just to name a few. What you don't want to think is something like this: "If this is what having a website is like, it's not worth the trouble." Or, "expanding my sporting goods line to include clothing is a bear of a project." Getting started is the hardest part.

Bonus tip: Plan your "first" strategically based on market conditions and your company's position. Also, understand that normal operations of your "first" will be much easier than getting it started was.

Get a Gilman consultation.

Apple Diversifies: Pass the Chips

Apple's recent moves to beef up its own chip development segment shows a very important corporate strategic move. There are many ways to look at this move, one of which is Apple's ability to build on its current success while other technology companies are still trimming the fat.

Obviously, the more control you have over your products and the fundamental elements that make up your products, the more you have to leverage in your market. Now, you may not be Steve Jobs, but there are still many companies that are weathering the economic downturn successfully and how those companies leverage their unique positions to advance during the downturn is important.

Another angle to this is expansive thinking from a product perspective. If you're selling clothing based on your designs, you may not know anything about manufacturing, but that doesn't mean that if you're doing well, you shouldn't consider controlling your own manufacturing, since manufacturing is a critical element of the clothing business. Apple made its way designing functionally compelling and visually appealing technology products, not by making the chips at the heart if Apple products.

By controlling product categories or services related to your core business, your core business gains a competitive advantage. One last example here. eBay and PayPal. Credit card processing is not auctioneering. However, long ago, eBay saw an opportunity to streamline its core product, auctions, by acquiring a payment processing company that made it's service easy for eBay shoppers and sellers to use. EBay tried to do the same with Skype, given that communication between buyers and sellers on eBay was another angle. Here, eBay couldn't successfully integrate Skype into it's core business, so that one failed. Stray too far from your core business and experience the pitfalls.

Diversify your product model...

Get a Gilman consultation.

Ritz-Carlton Fishes For New Customers: Capitalzing on Romance

How's this for an incentive to look at Ritz-Carlton Hotels for your wedding: a free wedding and a free three-night stay in the Caribbean and Mexico? All you have to do is book at least 25 rooms, something that a good amount of couples will do either way for a destination wedding. Why not get a free wedding and room while your at it?

This is a great example of connecting a product or service to an industry that has the same values and recognizes the same ideas. Here, it's romance, so why not expand the enterprise by focusing on the wedding industry, which is perfectly aligned and an idea like "Free" when it comes to weddings is especially compelling.

What ideas do your products and services embrace and what can you do to align with potential customers who embrace the same ideas? Next, how can you incentivize them to act.

Get a Gilman consultation.

Reducing Product Usage Costs

Does your product or service have ancillary costs, costs that your customers have to absorb just to use your product or service? The answer is probably yes. Whether it's the expense of time or a monetary expense, what can you do to limit that cost and how can you effectively market that added value?

A way to get to these usage cost reductions is assuming usage itself. Your product might meet one distinctive need, but will be be put to use in various ways, perhaps in an infinite variety of ways. What are the most likely suspects here?

This is where the "packaged deal" might come in. The packaged deal meets ancillary costs most of the time, but it doesn't work well as a product or it can't be marketed well as a product, right?

Get a Gilman consultation.