Stop Selling Products and Services
“Any fool can make soap. It takes a genius to sell soap.”
—MR. GAMBLE OF PROCTOR & GAMBLE
A short preface … when I wrote the first version of this chapter for the first edition of this book, published in 2009, even I didn’t foresee the rapidly accelerating, expansive wave of fundamental disinterest in things. In stuff. The most functional, basic products are no longer sold successfully based on functionality—phones are a great example. I have, in very recent years, become acutely aware that it is the poorly compensated, poorly skilled salesman, marketer, or copywriter who defaults to: Product/Service, Features/Benefits, Proposition/Price when selling. People, particularly the affluent, were losing interest in these tried-and-true approaches to selling when I first wrote this chapter. They have lost all tolerance for it now. Today’s luxury automobile is defined by its state-of-the-art technology, and sold by these features—not by its functionality as a car. Even a simple refrigerator is far from that. The highest priced models are digital, with giant iPads on their doors; they play videos. They respond to voice commands. They order whatever they are out of from Amazon. Water cannot be just water. It must be infused. It must have a story. It needs to convey status. The more affluent the consumer, the more capable they are of indulging these “significance impulses,” and the more they should be encouraged in doing so.
There is an inside joke in the acting profession about the lowliest of walk-on extras, in a crowd in the background of the scene, there to wave and yell excitedly on cue. He disrupts the shoot, leaping from the crowd to confront the director with “But what’s my ‘motivation’?” This is today’s consumer. For even the most mundane of purchases, they are asking, “But what’s my ‘motivation’?”
A cloth bag is not worth $4,000.00 without the Gucci® logo, or some other designer’s logo.
You may feel that it is not worth $4,000.00 with the logo,7 either. But that reveals you remain hung up on what a product is, instead of what it symbolizes and represents, what status it confers on its owner, what emotional reactions it evokes, how it feels to purchase and own it, how others important to its owner feel about it.
Few things are intrinsically worth their price. We have all accepted that a diamond engagement ring priced at least equal to two months’ salary is a requirement. But the diamond may be far, far, far more artificially inflated from its actual cost of materials than that Gucci® cloth bag. Diamonds are, in essence, polished dirt.
A Great Ad Campaign Can Last Forever
While most businesspeople think of De Beers’s dominance in the diamond industry as a result of controlling supply, truth is, it is more the result of creating and manipulating demand, thanks to brilliant advertising delivering a consistent theme for half a century.
Finding rocks is easy. Selling rocks, tough. In the last 50 years, only two markets have opened up for stones. You wear them on your fingers when in love; you put them over the head of a loved one after death. The second was mastered by the Rock of Ages Corporation. The first by De Beers and its holding company, a near monopoly. The product itself—diamonds—was a loser. If you apply ordinary supply and demand, every diamond dug diminishes the value of those already dug because, in fact, diamonds are forever. Further, they are plentiful. De Beers recognized the problem with its mundane commodity, so it took the radical move of ignoring inherent value altogether. Instead the company made the product ritualistic and metaphoric, its purchase mandatory without practical purpose. This required the use of advertising to create demand where there was none, and no reason for any. This defies, of course, one of the oldest, most tired business axioms: find a need and fill it.
Before the first ad ever appeared, some of the most extensive market research in advertising history was conducted, including direct questioning of thousands of men and women. The researchers determined that women had to be convinced that the diamond was the ritualized representation of love, commitment, and marriage. For women, the “diamond is forever” positioning began in advertising in 1914 and has continued unchanged to this day. And, to solve the forever problem, De Beers created the 10th anniversary ring, 25th anniversary ring, and similar products.
The researchers also determined that men had to be helped past confusion about how to buy this polished rock. For men, the industry’s voodoo about carat weight, color, clarity, and so forth was created to provide logic where there was none. Men wanted to know what it was worth. Since it was arguably worth nothing, a logic had to be invented to assign worth to it. But in the cleverest of all gambits, a simpler shortcut for buying decisions was also created, stating the price in the frame of the buyer’s own wages: “How can you make two months’ salary last forever?” Today, the two-months-salary-rule is widely accepted by the public.
In truth, what De Beers did for diamonds, anyone can do for anything.
You’re aware there are wines that sell for hundreds of dollars per bottle. But there is a Samuel Adams beer that sells for $140.00 per bottle. How can beer be worth such a price? You may answer: It can’t. Or answer: Why not?
To make a giant income marketing to the affluent, you must erase your own deeply ingrained insistence at connecting price to worth and worth to function.
A business associate told me how her neighbors paid a local architect $67,000.00 to draw up plans for a new house to be built on their beachfront lot. She found an architect to do what she judged to be identical work—if not better—for her new house to be built on her beachfront lot, paying just $7,000.00. And she questioned her neighbors’ sanity at failing to shop around, at paying such an outrageously inflated fee. She was proud of her bargain. But, contrary to protestations of the psychiatric community, there is abundant evidence that, in our society, insanity is subjective. My kudos go to the architect commanding his $67,000.00 fee. In all probability, he secured it for things other than a tube of blueprints. My associate may very well be correct in judging her $7,000.00 blueprints just as good as the ones delivered for $67,000.00. But her $7,000.00 ones didn’t come with the pride, status validation, bragging rights, and other emotional benefits her neighbors derived from searching out and hiring the biggest name, purportedly the most sought-after architect in the tri-state area, an architect, in fact, who had done the plans for a famous celebrity’s new beach house and who had three homes he’d designed featured in Town & Country magazine.
Dan Kennedy’s #6 No B.S. Key to the Vault
Marketing to values is more powerful than the marketing of products.
On closer examination, this little story reveals even more. It shows two people’s very different values, and why what I call marketing to values is so much more important and powerful than is the marketing of products. My business associate is a woman who, her whole life, has competed with men, has made herself successful in a field difficult for women, has fought being taken for granted as a blonde beauty, and prides herself on her mental toughness, shrewdness, and won’t-take-no-for-an-answer-ism. One of her highest and most important personal values is that “nobody pulls the wool over my eyes.” Her neighbor is the second, younger wife of a wealthy doctor from a wealthy family—but she came from a poor family, grew up on the wrong side of the tracks, and, in her first marriage, lived a blue-collar life. Her beauty got her the trophy wife position, but she found herself thought of and gossiped about as a classless bimbo rather than accepted into the rich wives’ sorority. She has been a relentless social climber ever since, by donating to charities, sponsoring charity balls, patronizing the hairstylist, the cosmetic surgeon, the personal trainer, and being seen in the most current designer fashions, in an orchestrated effort to force her husband’s peers’ wives to accept her into their circle. One of her most treasured values is their acceptance or their envy. In reality, neither her payment of $67,000.00 to her architect nor my friend’s payment of her negotiated $7,000.00 to her architect had much to do with the comparative intrinsic or actual value of the work reflected in the two sets of blueprints.
Another way to look at this, as a marketer, is a choice between selling things with ham-handed, brute force, typically against resistance, or selling aspirations and emotional fulfillments with finesse, typically with little resistance. Which seems like it might be more pleasurable? More profitable?
The Value and Price Pyramid
The Pyramid shown here is based largely on information from Bain Capital. Their research asserts that the more elements provided and the higher up the pyramid the elements are drawn from, the greater the price elasticity, greater the consumer enthusiasm (translating to retention and referrals), and the greater the company’s sustained revenue growth. I have made slight adjustments specific to the more affluent consumers.
