Differentiation by Specialisation – What You Need to Know

There are a number of reasons for considering specialisation: the world and life is becoming more complex; it is difficult to be all things to all people ; on balance, a specialist will make more money than a generalist on an per job or hourly basis; the perceived value of your services is heightened; keeping abreast of developments in an area of speciality is easier than over a broad general area; you will develop mastery and expertise you may not have otherwise and in time can charge a premium for your services  which a customer will feel offers him more value for money than a similar service from a generalist.

Be cautious of choosing a specialty that is too narrow. It would have been so much easier to simply be “the best value made to order timber heirloom rocking horse makers in Australia”, but it is not always possible to make a living doing just one thing as the work may be  too seasonal. Rocking horse makers traditionally do sixty percent of their turnover in the last three months of the year and struggle for the other nine months. Restoration work helped smooth out seasonality, but classes effectively eliminated all seasonality issues for us.

In the early to mid “naughties”, our business could have become victim to the cyclical swings created by housing booms with their subsequent interest rate rises and ensuing petrol price rises. These major economic changes decimated discretionary incomes among new yuppie parents who were 50% of our customer base. Fortunately, we relocated to a property which opened the door to being able to offer classes. The classes attracted dominantly baby boomer grandparents whose discretionary income is minimally affected by these factors.

The fact is that the rocking horse market is very small.  If we had taken the track of geographical specialisation in New South Wales alone, we would have starved. Happily our early foray into web marketing in 1998 effectively positioned us for national and international customers for all aspects of the business.

After you have examined the make up of your customers ask yourself, what work do I spend the most time doing? Is this work profitable and how profitable is it compared to other work? What work do I enjoy most doing?

We spent a large amount of time doing restoration work. It was the least profitable aspect of the business – but for a rocking horse specialist, if you make, they expect you to restore as well. A significant part of reputation and word or mouth came from restoration work. How could we remain the specialists in rocking horses if we could and would subcontract out the restoration work?

There were two possible solutions. One was to continue to offer a restoration service. We would still receive, evaluate, price and get paid for the restoration. With the customers knowledge we would  subcontract out the work, pay the contractor, keep a spotters or handling fee and have the horse at our place to be collected by the customer– all while maintaining quality control.

The other solution was to restore only valuable old English rocking horses (5-10) per year and provide a restoration advisory service for Australian rocking horses. We could still provide restoration kits and accessories, but produce an instructional DVD which would include common repairs, preparation, painting and fit out instruction from go to whoa.

We chose the first option which allowed us to spend more time doing the more enjoyable and profitable aspects of: teaching rocking horse making; providing mail order kits, accessories, plans, books and DVD’s and made to order and commissions of rocking horses at a higher price point.

Differentiate, Deliver, Over-Deliver, Keep on Delivering

The Unique Selling Proposition USP

This old marketing gem asks you to answer the question, “Why should a customer do business with me instead of my competitors?”

There are two major benefits in developing a USP. First, it clearly differentiates your business in the eyes of your current and potential customers or clients. Second, it focuses your and/or team on delivering the promise of the USP, helping to improve your internal performance.

The USP may be used repetitively in your marketing literature to build the customer’s or client’s identification of your company with your product or service. So many products have generic selling features that often the only way they feel they can differentiate themselves is on price.

The Extra Value Position EVP

You can differentiate your product by your Extra Value Position. The EVP is the service relationship that wraps around your physical product. In my previous rocking horse making/class business we placed a lot of emphasis on service and relationship factors such as providing telephone support when folk got stuck somewhere in the process of making or restoring their own horse. We strove to make sure that we provided a friendly, relaxed and fun atmosphere in the classes and that they are happy with their final results.

We exceeded the customer’s expectation with every contact. Our professional, friendly and helpful phone manner was a constant, even if it meant referring them to another supplier.

We provided additional information on accommodation, restaurants, tourist attractions, maps etc in the booking pack. They didn’t expect this, but the information provided took the fear of the unknown out of travelling to an area they are not familiar with and plants the seed that a few days extra stay in the area either side of their class might be fun.

On graduating from their class, we provided a graduation photo, framed diploma, silkscreen apron, embroidered cap and a goodies bag – all of which were completely unexpected. Some folk handed the cap and apron back after the graduation photo thinking they were just for the photo – the “something for nothing” takes them completely by surprise. Rewards (unexpected or otherwise), plus great service will build loyalty.

The students have expressed that they expected (and would have been happy with) sandwiches on an outdoor setting for the lunches. We exceed the expectation by having a three course catered lunch in the house, sitting up to a nicely set table with all the trimmings. While it seems a simple thing, inviting our students into our home to eat with us said to them “I consider you a friend and value your company”. It exceeded their expectation and built a relationship.

Ensuring customer satisfaction and loyalty will give you a competitive edge. We ensured customer satisfaction in our classes by taking care to read their emotional state at the morning/afternoon teas and resolving any concerns they have at that time. We also conducted a satisfaction survey at the end of each class so they can express anonymously their feedback on the experience. The satisfaction survey lets us measure and compare their expectations against the actual experience and correct as necessary.

To survive in business today, you not only need to differentiate, but you need to deliver, over deliver and keep on delivering. With social media, news travels fast and bad news travels faster than ever – so you must keep on delivering on your brand promise everyday – long after the initial purchase.

The Harder You Work the Luckier You Get?

It was not possible to make a living just selling finished rocking horses, the market simply wasn’t and isn’t big enough. If you make, people expect you to be able to restore and a large part of a rocking horse maker’s reputation is built on restorations.

People get a kick out of being able to meet the man who made or restored their horse and in many cases they asked to have the grandchild or child’s photo taken with the maker.

The work hours in the beginning were 10 hours a day 7 days a week in the off season and 16 hours a day in the lead up to Christmas.  A decade later it was still 10 hours a day 7 days a week and 16 hours a day in the lead up to Christmas.

The horses were made with hand power tools and a carving disk, not a large and expensive copy carving machine. This means three things: no two horses are exactly the same, there is not a great deal of competition given the physical stresses and long hours and there was always a limited production capacity.

Before our partnership the business made about 100 horses per year and several dozen restorations. Per year, together we made about 200 horses, did 75 restorations and made another 50 as we taught students at our catered 3-Day Power-Carved Rocking Horse Making Classes. We also sold plans, accessories, carving aids and kits by mail order.

While this diversity of activity helped with the seasonality of the business it also suited the gentle shift created by the baby boomer’s access to money and leisure time. They were into classes, DIY, cultural exploration and education . My working life at the time was made so much more pleasurable sharing it with appreciative, like-minded individuals such as those.

 

The Birth of A Shoestring Marketer

In setting to work to generate as much free publicity as possible for the rocking horse business, I focused on the unusual nature of the occupation and skill-set required.  I began by pitching local press and relevant magazines. A rash of local newspaper articles ensued, plus profiles in Australian Country Collections, Rick Rutherford’s Country, The Land, Sydney’s Child, Australian Country Style, Australian Woodworker, Australiasian Toymaker and Retirement Living.

Once I had some success and a taste of free exposure, I got brave and began pitching suitable TV shows. Appearances on “Our House”, “Totally Wild”, “Burke’s Backyard”,  “The Morning Shift”,  “Sydney Weekender” and “Huey’s Cooking Adventures” came in fairly quick succession. There is very much a snowball effect in media. Once one journalist/producer judges you ‘worthy’ to do a story on, you show that story to the next one and they tend to follow. It’s works like a ‘media testimonial.’

When we restored the Westmead Children’s Hospital 126 year old rocking horse for free, this brought a new round of articles in the Telegraph, Parramatta Advertiser and others.

The story of our treechange, senior’s tours, the property itself, the small business angle and particularly the classes as the ultimate hobby holiday for baby boomers added to the variety of attractive angles for the media. How many angles has your product got?

Being bound to the workshop most every day meant my partner listened to a lot of radio.  He would call into to talk back shows and the Saturday morning “Woodies” show when the topic was relevant to what he did. It was surprising how many people told us they heard him on the radio at some unusual hour. All this as a result of a spontaneous share on talk back radio.

The seniors and special interest group tours were great public relations for the business and consumed much less time than say having 20 individual visits. Over a two hour tour groups of 15-50 persons could visit the workshop and learn about old horses and construction techniques of new horses, visit the B&B, pram collection and hobby farm and enjoy an old fashioned morning tea for $15 per person.

We developed an annual open day to be held at our property in October. It had lots of stall holders from the region with the theme “Handmade Homegrown”. This capitalised on pre-Christmas rocking horse ordering habits, impulse buying and provided another opportunity to promote class bookings for the following year.

The year we had Huey cooking at Rocking Horse Lodge we had 105 people on our waitlist for classes for the coming year and got 7 subsequent TV appearances from the filming that was done!

In a later blog I will talk about the pitching process for press, magazines and TV.

 

 

Direct Mail Postcard – So Retro, So Trendy, So Purple Cow!

For the first couple of years in business, we used a full colour, full bleed photo business card with black print reverse. I needed to make the business card work harder for the money I was spending on it and felt I could not get across all that I needed to say about our business on a tiny card. I wanted it to be a glossy DL promotional brochure but simply did not have the money for such a piece.

I decided to upgrade to a custom colour postcard which was not that much more expense. The postcard has so much going for it. It has greater visual impact than a business card; I could fit so much more on it; it would not be lost or thrown away as readily. As the photos were attractive and unusual, it was more likely to get attached to the fridge at home as a ‘wish list’ reminder.

My first postcard had one full bleed photo of six rocking horses, the final form of the postcard was still full bleed, but with five photos and told the whole story of our business to my satisfaction. I used them for a quick response for telephone enquiries, especially for older customers who were not computer literate and still had a need to see and hold something from you before they felt comfortable enough about your product to act.

I never went anywhere without the postcards. I carried about twenty-five in my handbag and the in the dashboard of the van.  I gave them to people who were reading the promotional sticker on the side of the van in shopping centre car parks and streets all over Australia. I passed them out the window of the van to a mum crossing an intersection with three children under five in tow while I was waiting for the lights to change.

The additional benefits of the postcard are that no envelope is required; the address is handwritten which is a more personal touch; it promotes your product as it goes through the postal service; and if we were in the US it would be several cents cheaper to post than a normal letter. Some people would ask, “Can I keep this?” when I handed it to them. They didn’t expect even a colour postcard for free!

Some people would argue that a better size and layout advertising piece for our business would be a portrait design DL card or DL folded brochure that sits in neatly in a DL perspex or rotating wire brochure holder. Our postcard sits sideways in those holders and is shorter than the DL pieces in a brochure stand. This is another advantage of the postcard – it sticks out from the crowd – a ‘purple cow’ if you will.

And guess what? Now direct mail is making a comeback! Just think how cool it is to get something in the post now that everything from, bank statements, invoices, utility bills, school fees, child care fees, loyalty card statements are all online. Getting a postcard in the mail is so retro, its positively trendy.

A Winning Image Harmonises With Your Customer’s World

AerialViewRockingHorseLodgeXmas2007Creating the right image to build credibility in your market is important because people will form an impression from the first meeting.  What you wear, your grooming, your vehicle, your place of work, your marketing materials and affiliations – the trappings of image, need to work for you and not against you. While you want to present success you do not want to do it to excess. If it is found out that certain things in your image arsenal were put in place simply to impress, you destroy your credibility.

What is important for a positive impression and what do you want to convey about your business? In our business the majority of customers came to our home. We used to live on a five acre block in a small 55 year old red brick spec home with the workshop in detached shedding near to the house. We were on a main road directly beside traffic lights with awkward access. The sheds were functional and the grounds tidy, but we didn’t look like Australia’s largest makers and restorers of rocking horses.

While I knew I presented a winning image of our business over the telephone and on the internet, at times I could see trepidation and disappointment in the faces, particularly of the well-to-do customers, who came drop off their restorations or pick up their finished rocking horses. I put this down to the property not matching up to their image expectations which had been effectively created through other channels.

By a little real estate serendipity  we were able to change our place of work to an impressive, 10 year old home with large colourbond shed on 10 acres with 300 metres of road frontage on a busy arterial with easy access. When people arrived at this new place of work  the image created both over the phone and on the internet as Australia’s largest makers, restorers and teachers of rocking horses matched the reality they found.

While you may not be in a position to change your place of work as we did, you need to know it has the potential to make a world of difference to your image, credibility and may in some circumstances bring in more business and publicity.

We had more attention from ad agency photographers, prop masters, TV, magazines and press in 18 months at our new location than the five years at our previous location. I did market our previous location, but it could never have received the sustained interest that this one has.

There is another subtlety in our image that I was keen to cultivate to prospective customers and class students. While I wanted to convey a successful image, I also want to convey that our classes and rocking horses were good value for money and we were down to earth, practical, approachable and not precious about what we did. These values are important to most people but especially baby boomers considering taking a three day class and spending potentially thousands of dollars with you.

I did not produce a fancy, full colour brochure to promote our classes, tours or accessories range. I printed on demand a black and white version from my laser printer on different coloured paper stock. The showroom was tidy and functional but I didn’t obsess about the dust, as it was part of the charm that we were “a working rocking horse makers”. My work is was sometimes dirty and messy and I did not fuss about my workshop clothes – racing in to change when customers arrived. We had a well maintained white Mercedes commercial van as our only vehicle which denoted quality and practicality without being excessive.

I put “image resources” into my phone manner, website, colour postcard, the class booking pack, keeping the property & vehicle well maintained and providing high quality meals and refreshments to classes and groups.

The best way to ascertain what kind of image you should cultivate is to observe your current customers and how they dress, what standard of car they drive, what accessories they sport, what hobbies they have and what clubs or groups they are members of. Build an image that harmonises with their’s without overdoing it. Your goal is to eliminate any possible negative barriers to doing business with them.

Shoestring Marketing – The 7 P’s

Shoestring Marketing is the common name for a style of marketing which could also be described as: “More-Brains-than-Bucks” Marketing; “More-Sweat-than-Silver” Marketing; “More-Chutzpah*-than-Cash” Marketing or “More-Drive-than-Dosh” Marketing. You get the idea.

My form of Shoestring Marketing developed from the pressure point of having no cash for marketing and advertising to grow the business. I knew that unless I made our business very successful, I would never be able to reach my goals.

My goals were and are probably much like your own – to give the children the best education we could afford, live in a nice house in a rural region, eliminate commuting and working long hours for someone else; to pass our working lives doing what we love and our winter years in pleasurable pursuits such as travel & culture, enjoying good food, a few decadences and meeting interesting people. In short – the “good life” or as it’s now called a “treechange lifestyle”

I had big dreams and no way to realise them unless I did something radical. The appeal of Shoestring Marketing for the treechanger is that it is based on smart and low cost marketing so that you can realise your goals and sustain the lifestyle that you crave.

*Chutzpah – Yiddish word meaning “cheeky”, “bold” or “audacious. “Ch” sound pronounced “H” rolling and guttural, deep from the throat.

Prerequisites to being a Great Shoestring Marketer

There are seven prerequisites to being a great shoestring marketer and conveniently, they all start with “P”. The following definitions of the seven ”P’s” relate specifically the characteristics of successful shoestring marketers:

Poverty Mentality – means you proactively avoid spending on the traditional marketing avenues – that is: paid for advertising in the press, radio, TV, magazines, commercial trade shows, lavish printed materials, $50,000 websites etc.

 

 

Poise – means self-assurance, self-possession, self-confidence, self-belief, self-reliance, aplomb. Marketing your business is your responsibility. No one else will do it for you. You will need all the “poise” you can muster to move forward and take the inevitable knocks and disappointments – and the aplomb to handle the successes and the self-belief to handle the disappointments appropriately.

Passion – My personal favourite of the seven ‘P’s  means fervor, excitement, enthusiasm and zeal. I can’t teach you this one, you either feel this way about your business and your dreams or you don’t. If you don’t, change your business or find a new dream you can be passionate about.

 

Professionalism – means to be dedicated, committed, savvy on how to approach customers, suppliers and media in a way they respond to, expert on every aspect of your business, thorough in your approach and follow up and emotionally appropriate when dealing with them all.

 

Persistence –  means to be determined, dogged, diligent and just a teensy bit pushy but in a nice way..

 

 

 

A Powerful Pitch – This means you’ve done your homework and you know the hot buttons and appeal of your business to your target market  and can put the correct spin on it to interest different media on the different angles.

 

 

Persuasiveness – expressive and articulate in getting your ideas across. The natural result of the successful application of the above six “P’s”  is that you will in fact be very persuasive.

The Perils of ‘Oily Rag’ Thinking

Positive Marketing Momentum

It is largely unknown or not understood by the new small business person that marketing momentum used positively means that over time you will need to spend less and less on your marketing program.

Marketing has its own momentum. If you stop marketing for two, three or six months, you will have a corresponding soft patch or trough in business sales and enquiries further down the track. How much further down the track and how much effect is largely to do with the location and type of business you have. But ultimately your business will die a slow and agonising death. There is no such thing as a business staying the same – same is death. A business is either growing or it is dying.

Negative Marketing Momentum

For the rocking horse business a stop of all marketing activity for a period of 2-3 weeks would result in a noticeable downturn in business in 2-3 month’s time. Telephone and web enquiries dropped off gradually to a trickle.  Reduced enquiries, reduced business, reduced income and so it goes.

When times get tough, it is instinctive for many small businesses, (and many large businesses) who rely exclusively on paying for their promotion and marketing, to radically curtail or stop spending on marketing and substitute it with  – you guessed it –  nothing. They then wonder why business continues to slow. Their attitude is “Whew! We survived that month with no marketing expenditure, maybe I can get through the next month.” It continues until you are flattened financially with no hope of regaining any momentum because your own and/or your staff’s morale is in tatters on the floor. One of the most important prerequisites to being a good Shoestring Marketer and business person is self-belief – see the 7 P’s of Shoestring Marketing and Poise, so morale is big deal.

When there is an economic downturn, do not assume that “better” economic times are around the corner and you can run the business on the smell of an oily rag until it picks up. In the last few years the economy has slowed, and slowed, and slowed. It slows, then it slows some more and you’re still in “oily rag” mode, working impossible hours making less money. You don’t have the energy, time or inclination to work “on” the business because you’re so buried “in” the business. It’s a recipe for self-destruction.

Managing Supply & Demand through Marketing Momentum

Rule 1 – Never stop marketing. If you have a business, you should always be doing some from of marketing. You may wish to vary the type and intensity of marketing when your  efforts have been so effective that demand outstrips your ability supply and you risk disappointing or annoying potential customers with long waiting periods or inferior product.

Waiting lists or back orders can be great for your entrepreneurial ego, but no good for your business long term as they threaten your business credibility. Part of being a good shoestring marketer and business person is about matching demand and supply in an acceptable time frame to your customers. When we had more demand than we could supply, we slowed things with a careful combination of price increase and reduction in marketing activity, but we continued to take up and pursue any free exposure opportunities that presented themselves on our laps.

Tell Me You Love Me in Words and Pictures

word and picturesTestimonials from satisfied customers, put your prospective customers at ease. They give reassurance that your work has pleased others. When your customers pass on your name to others as in “word of mouth” this is a verbal testimonial. A written testimonial from a happy customer costs nothing other than your time asking for it.

Testimonials can be used in a portfolio of information about your product to prospective customers, they can used as support material, framed in the reception area of your business and excerpts can be used in your marketing collateral and as call outs on your website or blog.

Online, LinkedIn calls testimonials ‘recommendations’. As a matter of routine, you should ask connections you have done business for to provide you with a recommendation.

A testimonial letter can be on the customers letter head; can be short or long, hand written, typed, a You Tube clip, an online entry. As long as it makes prospective customers feel good about using your product or service, it’s a testimonial. Some organisations call these “praise or love letters”.

A bed and breakfast would keep a guest book with provision for comments from guests and this becomes their “brag book”. The comments that showcase the elements of their serivce that they are most proud of and best illustrate their unique offerings can be used as call outs on each page of their website or blog.

Letters from industry peers or celebrity endorsement can be useful in the right circumstances. I never forget receiving an information kit to exhibit at a Baby Boomer Expo which had a letter of Prime Ministerial endorsement from our Prime Minister of teh time, John Howard! Can you get Prime Ministerial endorsement for what you do?

I organised endorsement of my parent’s 50th wedding anniversary milestone from the Governor General, the Prime Minister, the State Premier and Local Member’s offices. I hate to admit it, but it’s not too difficult to organise – it just takes a little planning…and were my parents, family members and the guests impressed? You bet!

Positive publicity which you receive in the form of a radio or TV interview, write up in the local or metro newspapers, profile or interview for a magazine is great exposure for leads and your credibility, but the benefits are relatively short lived. You need to preserve it and incorporate it into your online and offline marketing efforts.

I kept a running list in reverse chronological order of all the media exposure our small business received since 1989 on the news page of our website.  I  laminated originals of the story for my permanent file, I photocopied or did colour reprints of selected pieces for prospective customers depending on what part of the business I was trying to pitch and to whom.

When Huey came to cook at Rocking Horse Lodge for our Open Weekend – he accidently dropped a wooden spoon in the grass which my daughter later found. At the end of the sojourn as is the custom,  Mr Moon, Huey’s culinary assistant, presented me with ‘the blue tea towel’. (Washed of course!) I was then able to have suitably mounted  – the spoon, the cover story in the local paper and the tea towel in a box frame and hung in the workshop in a high profile location. This provided mountains of credibility when the tour groups visited.

Across how many mediums can you promote how and why your customers love you and the feathers in your credibility cap?