Marketing

Customer Persona
Customer Persona Jonathan Poland

A customer persona is a fictional character that represents a specific type of customer that an organization is targeting with its marketing and sales efforts. These personas are typically based on real data and research about the target audience, and they can help organizations to better understand their customers’ needs, preferences, and behavior. By creating customer personas, organizations can tailor their marketing and sales strategies to be more effective and relevant to the specific customers they are trying to reach. Customer personas can be designed to represent ideal customers, realistic customers, edge cases, or even negative personas that illustrate the types of customers who are unlikely to have a positive experience with the organization. By using customer personas, organizations can better align their efforts to meet the needs of their target customers and ultimately drive more sales and revenue.

A customer persona is a fictional character that represents a specific type of customer that an organization is targeting with its marketing and sales efforts. Here are a few examples of customer personas that an organization might create:

  1. The Busy Professional: This persona might be a successful businessperson who is always on the go and has little time to shop for themselves. They are looking for high-quality, convenient products that can save them time and make their busy lives easier.
  2. The Conscious Consumer: This persona is someone who cares about the environment and the impact of their purchasing decisions on the planet. They are looking for eco-friendly products that are sustainably sourced and produced.
  3. The Tech-Savvy Millennial: This persona is someone who is always up-to-date on the latest technology and loves to try new gadgets and apps. They are looking for innovative products that make their lives more efficient and enjoyable.
  4. The Budget-Conscious Shopper: This persona is someone who is looking for the best deals and is always looking for ways to save money on their purchases. They are looking for value-priced products that are high-quality and affordable.

Final Offer
Final Offer Jonathan Poland

A final offer, also known as a best and final offer, is a negotiation tactic in which a party submits an offer on a take-it-or-leave-it basis. This means that the offer is presented as the final offer that will be made or accepted, and no further negotiation will take place. Final offers are often used in situations where the parties have reached an impasse and are unable to come to an agreement through further negotiation. By presenting a final offer, the party is attempting to put pressure on the other party to accept the offer, or risk losing the opportunity to reach a deal. Final offers can be effective in resolving negotiations, but they can also create tension and may not be suitable in all situations. The following are illustrative examples.

Goods & Services

A customer offers $500 for an antique. The sales person claims there is no way their manager would approve a price that low. The sales person requests the customer think about it and submit a final offer closer to $3500 before the item is sold to another customer. This puts the customer in a corner as the sales person is suggesting they will only accept one more bid that needs to be much higher.

Assets

Multiple buyers have submitted bids for a home. The seller requests all buyers to submit a best and final offer within three days. This prevents an incremental bidding war where each of the buyers can discover exactly how high the other bidders are willing to go. When each bidder is only allowed to make one more bid, they may bid high as they have great uncertainty about how high the competition will bid. This may work to the sellers advantage if they are confident the buyers are motivated to win the bid. Otherwise, bidders may simply resubmit their most recent bid as final.

Employment

An employer offers a candidate a salary of $90,000 despite a recent salary history of $140,000. The candidate claims they will not accept a salary under $140,000. The human resources representative claims it is very unlikely this would be approved as it is out of the range for the position. They ask the candidate to submit a final offer for the lowest salary they would accept. The candidate submits $140,000 as they feel the employer is bluffing and is willing to match their previous salary. This bid indicates the candidate will have to walk away from the offer if their salary demand is not met.

Agreements

Trade agreement negotiations hit a sticking point on the tariff rate for information technology services. One side claims a proposed rate of 25% is untenable and asks the other side to come back with a final proposal closer to 0% if they are serious about closing the deal.

Upselling
Upselling Jonathan Poland

Upselling is a sales technique that involves encouraging customers to purchase higher-priced, add-ons, or upgraded versions of products or services that they are already interested in. It is a common tactic used by salespeople, particularly in industries such as retail, hospitality, and travel.

Upselling can be effective for several reasons. First, it allows businesses to increase their revenue by selling more expensive or upgraded products or services. Second, it can improve customer satisfaction by offering customers additional value or features that they might not have considered otherwise. Third, it can help businesses differentiate their products or services from those of their competitors.

However, upselling can also have drawbacks. If done improperly, it can be perceived as pushy or manipulative, which can damage customer relationships and hurt the business’s reputation. Additionally, upselling can be risky if it involves selling products or services that customers do not need or want. In these cases, customers may be dissatisfied with their purchase and may be less likely to return to the business in the future.

Overall, upselling is a common sales technique that can be effective for increasing revenue and improving customer satisfaction, but it should be used carefully to avoid damaging customer relationships.

Premium Versions
Offering premium versions of products such as flower arrangements that are sold at several levels of quality.

Options
Optional features such as a catalog of options for a car.

Customization
Allowing a customer to customize the design or look of a product such as color.

Services
Services such as support or professional services. For example, software may be sold with consulting services. This allows the vendor to establish a close relationship with the customer that may lead to extensive future business.

Risk
Risk related products such as an extended warranted or insurance.

Financing
Offers to finance a purchase with a credit product.

Complementary Items
Cross-selling items that complement the product. For example, offering wifi access plans with mobile devices.

Popular Items
Offering popular items that aren’t necessarily complementary to the product. For example, an ecommerce site may suggest a best selling book as an add-on for a purchase of strawberry jam.

Priority Items
In many cases, upselling is focused on selling items that are a strategic priority for the seller. For example, a store credit card may be difficult to upsell but may be the priority as it allows a firm to establish a long term relationship with the customer.

Decoy Effect
Decoy Effect Jonathan Poland

The decoy effect is a cognitive bias that occurs when people make choices based on the relative attractiveness of options. When faced with a list of options, the presence of an obviously inferior option, known as a “decoy,” can influence people’s decisions. For example, a marketer may include a decoy option in a price list to make the other options appear more appealing. This can lead to a higher conversion rate, as customers compare the options and choose the better deal, feeling more confident about their decision.

The decoy effect is a well-known phenomenon in psychology and marketing, and it has been studied extensively. Research has shown that the decoy effect can be highly effective in influencing people’s choices, even when they are aware of it. This is because the human brain is wired to make decisions based on relative comparisons, rather than absolute values.

Overall, the decoy effect is a powerful tool that can be used to influence people’s decisions. By including a decoy option in a list of choices, marketers can make the other options appear more attractive and increase the likelihood of a sale.

Here are a few examples of the decoy effect in action:

  • A restaurant offers three meal options: a budget-friendly meal, a premium meal, and a decoy meal that is more expensive than the premium meal but offers fewer options and less value. Customers are more likely to choose the premium meal because it appears like a better deal compared to the decoy meal.
  • A clothing store offers three shirt options: a basic shirt, a premium shirt, and a decoy shirt that is more expensive than the premium shirt but offers fewer features and lower quality. Customers are more likely to choose the premium shirt because it appears like a better deal compared to the decoy shirt.
  • A travel website offers three vacation packages: a budget-friendly package, a premium package, and a decoy package that is more expensive than the premium package but offers fewer amenities and less convenience. Customers are more likely to choose the premium package because it appears like a better deal compared to the decoy package.

These are just a few examples of how the decoy effect can be used to influence people’s choices. The specific use of the decoy effect will depend on the context and the goals of the person using it.

Marketing Theories
Marketing Theories Jonathan Poland

Marketing is the process of identifying customer needs and developing strategies to meet those needs. This involves conducting market research, developing products and services, building a brand, setting prices, promoting the business, and distributing products to customers.

Marketing theories are principles and ideas that guide these activities, and they are often based on research and data. Some marketing theories are commonly used in the field, while others may be considered more unusual or specialized. Overall, marketing theories help businesses understand how to effectively reach and engage with their customers.

The following is a list of marketing theories…

Above The Line
Active Silence
Added Value
Attention Economics
Bargaining Power
BATNA
Behavioral Targeting
Below The Line
Benchmark Price
Bespoke
Bliss Point
Bogey
Brand Awareness
Brand Culture
Brand Recognition
Bricks And Clicks
Buyer Persona
Call To Action
Channel Conflict
Choice Architecture
Club Theory
Competitive Market
Competitive Parity
Complementary Goods
Complex Sales
Cross-Selling
Customer Journey
Decoy Effect
Economies Of Scale
Economies Of Scope
Experience Economy
Fear Of Missing Out
First-Mover Advantage
Hard Selling
Inferior Good
Long Tail
Market Position
Market Price
Market Saturation
Mere Exposure Effect
Message Framing
Nudge Theory
Peak Experiences
Penetration Pricing
Perfect Competition
Predatory Pricing
Premiumisation
Price Discrimination
Price Points
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Product Diffusion
Puffery
Relative Price
Retargeting
Sales Objections
Scarcity Marketing
Selling Points
Sensory Analysis
Serviceable Available Market
Six Degrees Of Separation
Soft Selling
Sticky Prices
Substitution Price
Target Audience
Target Market
Through The Line
Top Of Mind
Visual Merchandising

Marketing Costs
Marketing Costs Jonathan Poland

Marketing costs are expenses that are related to promoting and selling products or services to customers. These costs can include advertising, sales commissions, pricing strategies, and distribution expenses. The amount of money that a company spends on marketing can vary, but mature firms typically allocate between 4% and 24% of their total budget to marketing efforts. Startups may spend more or less on marketing depending on their stage of development and business strategy. Here are some examples.

Marketing Overhead

The all-in fixed costs of your marketing and sales teams including things like salary and rent for office space.

Advertising

Paying to reach an audience with a message in broadcast, digital and print media.

Sales Incentives

Performance based pay for salespeople.

Partner Commissions

Sales commissions paid out to partners.

Sponsorships

The cost of sponsoring media influencers, events and other entities such as sports teams.

Promotions

The cost of promotional activities such as a product launch event.

Media Production

The cost of producing marketing media such as a television commercial or social media post.

Consulting Fees

Fees for consulting and other services provided by marketing, creative and advertising agencies.

Marketing Locations

The cost of marketing locations such as a product showroom.

Events

Costs related to holding or attending events such as an industry conference.

Marketing Technology

Expenses for marketing related technology including hardware, software and services. For example, the monthly license fees for a marketing or sales automation platform.

Design & Development

The costs of designing and developing unique marketing technology or media such as a website.

Business Travel

Travel costs related to any marketing or sales activity.

Training

The cost of training marketing and sales teams.

Branding

Costs related to branding such as redesigning a logo.

Merchandising

The costs of displaying merchandise including things like promotional in-store displays.

Distribution

Distribution can be viewed as marketing or operations. For example, a book seller may view the costs of warehousing their products with a sales partner as a marketing cost.

Public Relations

The costs of public relations including crisis communications may be viewed as a marketing cost or as a general corporate cost.

Menu Costs

Menu costs are costs related to changing prices such as the signs required for a price promotion.

Promotional Items

The cost of promotional items such as a cup with your logo on it.

Direct Mail

The cost of direct mail campaigns such as a catalog you send to customers.

Marketing Collateral

The cost of developing and creating promotional knowledge artifacts and media that are used in marketing and sales such as a product brochure or industry white paper.

Selling Costs

Any expenses that are directly attributable to selling to a customer including things like travel.

Entertainment & Gifts

The cost of entertaining and giving small gifts to clients. This is a tax sensitive area such that these costs are at risk of being viewed as invalid or excessive. It is also a compliance intensive area particularly where a customer is a government e.g. the Foreign Corrupt Practices Act.

Customer Acquisition Cost

Customer acquisition cost is the total marketing and sales cost attributable to a customer. This may be calculated for all customers or for individual accounts. It can also be examined for different segments.

Message Framing
Message Framing Jonathan Poland

Message framing is the way in which information and communications are constructed and presented. The way a message is framed can have a significant impact on how it is received and understood by its intended audience. For example, a message that is framed in a way that considers the needs and desires of the audience may generate a more positive response than a message that is demanding and insistent.

Message framing can involve the use of emotion, logic, ethics, or other factors to create a context for the message. This can help to engage the audience and make the message more persuasive and effective. For example, a message that focuses on the core motivations of the audience, such as their fears, hopes, or desires, may be more effective than a message that is purely logical or factual.

Message framing is a critical aspect of communication and can play a key role in determining the success or failure of a message. By carefully considering the framing of a message, it is possible to increase the likelihood that it will be well-received and have the desired impact.

Insisting
We must buy a dog!

Social
All the other kids at school have a dog.

Logical
I read that kids with dogs get better grades at school.

Emotional
This dog is so cute, how can you say no?

Ethics
She is a rescue dog, do you know how many dogs need homes?

Anticipating Objections
I promise to walk her and clean up if she makes a mess.

Considering others needs
The dog will keep you company when I go off to college.

Bias for Action
Bias for Action Jonathan Poland

Bias for action is a mindset or approach that emphasizes the importance of taking action quickly, without extensive thought or planning. This approach is based on the idea that speed is a key advantage in business, and that regular action can help build strengths and drive learning. Those who advocate for a bias for action often argue that poor decisions can be quickly reversed, so there is no need to spend a lot of time deliberating or planning.

The bias for action approach is often associated with entrepreneurship and startup culture, where speed and agility are valued. It is also sometimes seen as a way to overcome the fear of making mistakes or failing, by encouraging people to take action and learn from their experiences.

However, some critics argue that a bias for action can lead to rash decision making and inadequate planning, which can result in mistakes or problems that are difficult to undo. In some cases, a more deliberate and thoughtful approach may be necessary in order to avoid potential pitfalls and ensure that decisions are well-informed and aligned with long-term goals.

Bias for Action vs Mediocrity

Bias for action can be beneficial for organizations in which employees tend to seek reasons not to act, rather than pushing the business forward with urgency. In these environments, a bias for action can help to foster a culture of action and drive progress, leading to better outcomes and increased competitiveness.

For example, if a team is spending a lot of time in meetings planning meetings, or developing plans to develop plans, they may be at risk of falling behind competitors who are embracing a bias for action. In this case, a bias for action can help to break the cycle of inaction and indecision, and encourage employees to take more decisive and effective action.

Overall, a bias for action can be a valuable tool for organizations that want to improve their agility and responsiveness, and to stay ahead of the competition. By fostering a culture of action and encouraging employees to take bold and decisive steps, organizations can position themselves for success and growth.

Bias for Action & Sales

In some professions, a bias for action is necessary in order to be successful. This tends to be the case in professions where actions have little potential for risk but significant potential for reward, such as sales.

In the world of sales, success often depends on the ability to take action quickly and decisively. This can involve identifying potential customers, making contact, building relationships, and closing deals. By acting quickly and confidently, salespeople can take advantage of opportunities and drive results.

At the same time, sales can also be a high-stress and high-pressure profession, where it is important to balance the need for action with the need for careful consideration and planning. By striking the right balance between action and reflection, salespeople can maximize their chances of success and avoid making costly mistakes.

Bias for Action & Risk

Bias for action is not always a productive approach in professions or activities that involve highly competitive risk-taking and strategy, such as investing. In these contexts, acting quickly without sufficient thought or planning can lead to poor decision making and suboptimal outcomes.

For example, investors may have a tendency to act impulsively when the price of a stock goes up or down, based on a bias for action. However, economic theories such as the efficient market hypothesis suggest that stock price movements reflect the underlying earnings potential of the security relative to the rest of the market. As a result, switching in and out of stocks based on short-term price movements is unlikely to produce a reward, and can instead incur transaction costs that reduce overall returns.

In general, a bias for action may be appropriate in some situations, but it is not always the most effective approach. In highly competitive and complex environments, a more deliberate and thoughtful approach may be necessary in order to make well-informed decisions and maximize the chances of success.

Concept Selling
Concept Selling Jonathan Poland

Concept selling is a approach to marketing and sales that involves framing unique selling propositions as a story that customers can easily relate to, rather than focusing on technical details. This approach is designed to help customers better understand and connect with a product, service, or asset, and to make the sales pitch more compelling and persuasive.

Concept selling involves using storytelling and imagery to create an engaging and relatable narrative that presents the product or service in a way that resonates with the customer. This can include highlighting the benefits and features of the product, as well as showing how it solves specific problems or meets specific needs. By creating a compelling concept that connects with the customer’s values and aspirations, concept selling can help increase the likelihood of making a sale.

Concept selling is often used in marketing and advertising, as well as in sales pitches and presentations. It can be effective for a wide range of products and services, and can be adapted to different audiences and markets. By using concept selling to create a compelling narrative, it is possible to engage and persuade customers in a more effective and memorable way. The following are some examples.

Specifications
As opposed to saying “this apartment is 45 square meters” a real estate agent might say it’s “a small efficient space that’s perfect for students and young professionals.”

Capabilities
A software salesperson doesn’t pitch an integration adapter they pitch the ability to access your enterprise data from mobile.

Design
An aircraft salesperson doesn’t go into engineering details about an aircraft’s wings but states they are 2x stronger than a previous model and mentions interesting sounding materials such as quartz-fibre reinforced plastic.

Functions
A chair salesperson doesn’t tell an office manager about all the position settings available in an ergonomic chair. Instead they explain how the chair reduces costly repetitive strain injuries.

Performance
A salesperson doesn’t explain the high availability features of cloud-based software but simply mention that the platform was down for less than 4 minutes last year.

Risk
A fleet automobile salesperson shows a customer a crash test video alongside that of a competitor to show why their model is safer.

Quality
A mattress salesperson describes the quality testing process for a mattress that simulates a person jumping up and down 70,000 times on the product.

Status
A cosmetics salesperson mentions a celebrity who was in the shop and purchased the same item a customer is considering.

Culture
A green tea salesperson tells a colorful historical story about the terroir of their tea. For example, a story about how historical crop burning practices resulted in a large amount of soil carbon on the plantation.

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Fair Competition Jonathan Poland

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Drip Marketing Jonathan Poland

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Advertising Objectives Jonathan Poland

Advertising Objectives

Advertising objectives are the specific goals that an advertising message or campaign aims to achieve. These objectives can be used…

Conformance Quality Jonathan Poland

Conformance Quality

Conformance quality refers to the production of products and delivery of services that meet specified standards or requirements. It is…

Brand Metrics Jonathan Poland

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Management Principles Jonathan Poland

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Cultural Norms Jonathan Poland

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A cultural norm is a shared belief or behavior that is considered to be acceptable or appropriate within a particular…

A/B Testing Jonathan Poland

A/B Testing

A/B testing, also known as split testing or experimentation, is a statistical method used to compare two versions of a…

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