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What Business Are You In? - Part 2

There is a famous Warren Buffett line that goes something like this -  'Price is what you pay. Value is what you get.' Now he was talking about investments and business valuations, but the theme applies.

Customers are always willing to spend more if they see the value of your product or service. The benefit of creating a good brand that clients can bond with is, it will usually lead to a better long term business with repeat customers. Your clients want to identify with your brand. It also helps them to recommend it to other people. When clients become fans, then they want to tell others about what they found.

If you are only competing on price, then you are just a commodity with no real identity. For customers to have a more emotional connection to your business, they need to identify with your brand.

Now you need to understand your brand also. You also need to understand your customers and how they use your product. This gets to the part of defining 'what business you are in'.

In September I wrote a blog challenging business owners to really think about their business to help better define their brand and priorities.

You can read the previous blog here: http://www.1100kfnx.com/index.php?/blog/article/kfnx_blog5/

Guy Kawasaki (venture capitalist, and former Apple employee) gave a great talk about the lessons he learned from Steve Jobs. One of the core lessons was about brand and value. He drew a 2x2 Matrix with a graph of value of product vs. how one differs from the competition. 

Here is the summary:

  Marketing boils down to providing unique value.  (See:  2×2 martix)

  • Valuable + Not Unique = You’ll compete on price.
  • Not Valuable + Unique = You’ll own a non-existent market.
  • Not Valuable + Not Unique = Doh!
  • Valuable + Unique = $$$

The goal is to be in the upper right corner, valuable and unique. This is where all the great companies (Apple, Starbucks, etc.) reside. Their brand separate them from the competition and allows them to charge more.

You can see and read more about that here:

http://createyournextcustomer.com/2011/11/14/guy-kawasakis-lessons-learned-from-steve-jobs/

Now before you say that Starbucks just sells coffee and I can get that anywhere, usually for a lesser price. Starbucks sells customer service. It is the experience of going to Starbucks that is the brand. Notice that many Starbucks customers hang out at Starbucks.

Starbucks has set up their stores for the business man to get his work done while enjoying the coffee he loves. The environment (seating, charging stations, and Wi-Fi) is conducive to what he or she needs to get done. Have you noticed how many business' now copy Starbucks store layout. Companies offer free Wi-Fi so customers stay longer.

You can change your marketing, improve your brand and make your business stand out in the crowd.

Answer, what is the value of your brand? and then your will answer, what is the value of your product. Then you will have more long term customers who are willing to spend more. Success in business is directly related to the value you offer.

 

For more blogs and helpful information on business and marketing go to:

http://www.1100kfnx.com/index.php?/blog/





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