Okay, we’re gonna be honest with you, most of these mistakes are related to marketing (what can you expect, we’re a marketing consultancy). But if you
Okay, we’re gonna be honest with you, most of these mistakes are related to marketing (what can you expect, we’re a marketing consultancy). But if your focus is not on marketing, don’t let that fool you into thinking that these mistakes don’t apply to you. The principles remain the same and can be applied throughout your brand and business. We’ve tried our best to stay clear of the usual rubbish tips everyone seems to give. Tips like“Focus on strategy” and “It’s all about Leadership”. You probably already know all of that. So, the 3 critical mistakes we’ve decided to focus on are:
"In a crowded marketplace fitting in is a failure; in a busy marketplace not standing out is the same as being invisible." Seth Godin
Differentiation is the act of standing out. Let’s face it, there are probably hundreds, if not thousands, of businesses that offer the same thing as you. That’s just looking at direct competition, we haven’t even started thinking about indirect competitors. So naturally, your customers have loads of options to choose from. The question we need to ask is: "Why would they choose you?" The key is standing out in “The Sea of Sameness”. The goal here is to move away from being an option, to being the only option in the mind of your customer. The mistake we want to address here is not that businesses don’t try to be different but that they simply fail at it. The usual trend is that a business’s idea of differentiation is so subtle and over-inflated that it becomes only a little insignificant change. Or, on the other hand, the points of differentiation might be significant enough, but nobody actually gives a damn about them. If your business has fallen prey to ineffective differentiation, it means that you are indistinguishable from your competition. It places you and your competition on the same level and at that point, the customer is only looking at which option is cheaper.
To secure your position in the mind of your customer and successfully stand out from your competition, you need to:
Cost per Acquisition is a monetary metric which meansit’s measured in a dollar amount. It measures the amount of money a business spends to acquire a new customer. On the flip side, Brand Equity could be defined as the value attached to a product because ofthe brand's perception. An easy example of this is the iPhone. An iPhone is valued more highly simply becauseit is an Apple Product. People have attached a certain value and perception to the brand name.
Don't get me wrong, both of these metrics are essential in the success and growth of your business. But there is often a tendency to favour Cost per Acquisition (because it is easier to measure). The trouble comes in when 90% of our business decisions are solely based on Cost per Acquisition (CPA). In that case, we leave no room to build brand equity.
A great example of a brand equity focus is GaryVaynerchuk. Gary owns a digital agency called Vaynermedia, which he runs. His rise to fame has been largely built off the free content that he posts on social media. From a strictly CPA point of view that doesn't make any sense. One could say that his time might be better spent running ads that convert audience members into leads whom he can then sell to. But that would completely overlook the amount of fame/brand equity Gary has built up through his content. His focus is on Brand Equity, meaning that he gives his best advice for free (advice that other businesses would pay a premium for) and expects no direct transaction or conversion from it.
"I'm building for the long term cause I think it's about brand. So many of you are in it for the quick sale and you're going to be forgotten. I build trust by giving away all my content for free and then every three years or so I write a book and ask if you're interested to buy it. Gary Vaynerchuk
This is really a long term vs. short term conversation. Both are equally important. If you only plan for the long term, your business will fail before it has a chance to build sufficient brand equity. If you only cater for the short term, you risk being forgotten and becoming irrelevant in a couple of years.
"You should quit if you're on a dead-end path. You should quit if you're facing a cliff. You should quit if the project you're working on has a dip that is not worth the reward in the end. Quitting the projects that don't go anywhere is essential if you want to stake out the right ones." Seth Godin
We have all fallen into this trap. Whether it was a business idea, a product or service we wanted to develop, our website or even what social media channels to be on. As humans, we have a cognitive bias, a tendency to avoid inconsistency. This is just a fancy way of saying that we are reluctant to change. When we decide on something, subconsciously we want to stay consistent with what that choice was. The implications of this bias can be catastrophic especially in business.
An extreme case of this is the case of Robert Campeau. Campeau was a prominent property developer in The 1980s. He was looking to acquire several retail stores for malls that he planned to build across the US. In 1987, after a heated and aggressive bidding war with Macy's, he ended up buying Bloomingdale's (a luxury department store in the USA) for about $600 million more than it was worth. Campeau was forced to declare bankruptcy soon after that.
That is an extreme case and surely, we would have acted more rationally if the decision was in our hands, right? We would like to think so, yet this same behaviour can be seen in our businesses to this day. The mistake we make is that we fall in love with an idea and commit to it fully before ever testing it. We romanticise the means to the end (idea) instead of focusing on the end goal. We rob ourselves of the freedom to experiment by over-committing to an idea. This means that instead of giving ourselves room to fail, we set ourselves up for a painful crash landing.
How can you avoid this?