How Property In Italy Helps You Grow Your B2B Company
Mark and John ate their lunch and discussed the weather, baseball, and the latest gossip from the business world.
John’s mind was racing, but in a good way. He was starting to feel hopeful for the first time in years. Thinking from the standpoint of his prospects, not trying to serve the entire marketplace, being different, creating value, it all was starting to make sense. He knew his giggler pins were great but began to realize what really was important was what concerned his prospects.
“Come stai?” asked Mark, breaking John's reverie.
John laughed, “Oh no thanks, I already had a seriously large cannoli for dessert, but thanks anyways.”
“OK,” said Mark, “you got me on that one John. But now on to serious matters."
While working with my marketing guy he told me something absolutely amazing I'd never heard in my entire life. Apparently there was an Italian economist who died in 1923 who came up with a theory that could help anyone grow any company (or anything else). It still works today with any company and there are no exceptions. That economist was one Vilfredo Federico Damaso Pareto. Of course I just call him Pareto.”
“Of course you do, I’d expect no less,” said John.
Mark continued, “In 1906 Pareto stated that 80% of the property in Italy was owned by 20% of the population. He also observed that 80% of the peas in his garden were found in 20% of the pea pods. He extended his observations to other countries and noticed this 80/20 form of distribution applied from total economies through many other activities and, of course, in nature. Over time others noticed this and built on his work, which is now known as the 80/20 rule or Pareto Principle.
“So how is this supposed to help me grow my company?” asked John.
“Well if you look at your business records you’ll start to notice the 80/20 rule everywhere. On a negative note you’ll observe that 80% of your complaints will come from 20% of your customers. You’ll soon notice that 80% of your sales are made by 20% of your sales staff. You’ll also see that 80% of your sales will come from 20% of your customers,” said Mark.
John’s became visibly excited, “So if I could get more of these ideal 20% types of customers my business growth would skyrocket. I would spend less time with low value prospects and maximize my income. That would be amazing.”
“That’s right,” said Mark, “and that’s precisely the takeaway you need from the brilliant Italian economist, Pareto. If you want to create dramatic growth in your company you need to carefully consider the ideal types of prospects you are trying to attract. You must use the Pareto Principle to guide your actions and lead you to your best buyers.
“You know John, legend has it when American bank robber Willie Sutton was asked why he robbed banks he said ‘Because that’s where the money is.’ The reason to focus your marketing efforts on best buyers is because that too is ‘…where the money is.’ In fact in any marketplace you can think of there are a minority of best buyers who can transform your business for the better in short order.”
“I totally get this,” said John, “and by focusing my marketing on this smaller group of best buyers I'll be able to save money by reducing my overall marketing spend. This is so obvious. I can’t believe I didn’t think of it before. When I get back to the office I’m going to 80/20 my entire business.”
“Atta boy,” said Mark, “once you buy into the concept of best buyers are there are some additional action steps to follow.”
The most profound change you can make in your business is to apply the 80/20 rule.
If you take the time to study your business you'll quickly see the 80/20 rule almost everywhere.
The 80/20 rule also applies to your personal life.
“I'm all ears, this stuff sounds very exciting,” said John.
"Yes and very profitable too," said Mark.
The first thing you need to do," continued Mark, "is to make a company-wide commitment to aiming and selling high. By this I mean all of your marketing and selling activities need to be directed to best buyers with key executives who understand the importance of the value versus price consideration.
"These executives are willing to assess the true cost, time, and risk in their purchasing decisions. If you want to stop getting beaten up on price and selling low-level purchasing agents you need to make sure your best buyer list targets the C, VP, or senior management level.
“Next, you need to create a list of best buyers using a two-pronged approach. First, use your internal resources. Analyze all of your records to determine the types of companies who consistently make the largest units of purchase, the highest frequency of purchase, or both.
“Then use this best buyer criteria to build lists from the appropriate external resources. Contact any reputable list broker and they can help you create a best buyer list. Look for printed or online top 100 company lists in your target market. Be sure to spend some time on LinkedIn.
"You can also check out association lists or online directories such as data.com, or Hoovers, or well, you get the picture. Be sure when you get your lists together you clean the data by calling to update every record.
“One other thing. When you begin to market to your best buyers never start by trying to sell your products. In fact if you stop selling your products at first you’ll start selling your products at last.”
“Got it, so in order to sell my products I need to not sell my products. Clear as mud. That’s some weird proverb,” said John.
“Hey don’t thank me, thank my marketing guy. He told me this when we were working together. And he was absolutely right. You’ll see. Now let’s order coffee,” said Mark.
It was getting more bizarre by the minute John thought. He truly was wondering what would come next. He didn’t have to wait long.
Education Is Expensive?
“You know Mark you keep talking about your marketing guy. I sure would like to know how you found this mysterious wizard. Did he descend from some far-away mountain kingdom?” asked John.
Mark laughed out loud, “As I mentioned earlier. I found him online. He has a website with a massive amount of educational information for any manufacturing company. The first thing I did was subscribe to get his free marketing system checklist and report. Once I completed the checklist and read the report I scheduled a time for a 25 minute Strategy Session.
As I mentioned earlier, we discussed some of the things you and I have been talking about and how they could be applied in my company. It was very informative and there was no sales pressure. Oh, and he comes from eastern North America and doesn't live in any kind of kingdom.”
“Sounds too good to be true,” said John.
“I know,” said Mark, “but that is what happened. He's an unusual guy my marketing guy, but he sure knows his stuff. He got me on the right track and growing fast. Also guarantees his work. Anyway, I promised I’d outline what my marketing guy told me about not selling my products to sell more of them. So let's get started.”
“Sure thing,” said John, “that has to be one of the strangest thing I’ve ever heard in business.”
Mark continued, “Well as I’ve said, my marketing guy has a different way of looking at the business world and his way works.
"So once I learned about identifying my best buyers and compiling a list I told my marketing guy I was really gung-ho to start flogging my products to them. He told me that would be the biggest mistake I could make.”
“Why’s that?” asked John.
“He told me that spending the majority of my time marketing and selling my products meant I was not leading my prospects but trailing them. This is because they have a lot of decisions to make before they can even consider purchasing products. To put it another way, if they haven’t recognized they have needs and been given help to evaluate options, it’s pointless trying to sell them your products,” said Mark.
“OK, so that’s just plain weird,” said John.
“Bear with me. Perhaps an easier way to look at it is fast-growth businesses revere their prospects instead of their products. They recognize the importance of being pre-emptive in their marketing by proactively and freely educating their prospects.
"This education-based marketing revolves around helping prospects improve the performance in their businesses. This is a great way to build value and differentiate your company. It ties in with what we talked about earlier,” said Mark.
“So what tips did your mysterious marketing guy give you about this education-based marketing approach?” asked John.
“So glad you asked,” said Mark, “he briefly discussed some of the following.”
“First, you must commit to an education-based marketing approach in your company. This means you must produce unbiased educational content. Do not underestimate the work this commitment entails.
“Next, your educational content must meet the needs of your various buying influences, be tightly aligned with the stages in their buying processes, and allow them to make educated buying decisions that reduce risk.”
“OK, I’m with you so far, so how does that tie in with that strange statement about not selling my products at first so I can sell my products at last?” asked John.
Mark continued, “The next tip is to stop selling your products first. He told me the thing to understand is that prospects are drowning in a sea of product information. Remember what I said about how they are being pounded by promotional messages?
Also, as I’m sure you know they can find all kinds of product information by spending five minutes online. The point is the last thing they need is more product information. What they really need is education that helps them sort through the masses of information available online and ultimately helps them make wise purchasing decisions.”
“In other words you sell your free educational information first?” asked John
Mark paused then spoke, “You got it in one. See you’re more than just a pretty face.”
If you stop trying to sell your products first you'll start selling your products at last.
Use education-based marketing to gain positive attention from your prospects who have needs your products and services can fulfill.
By using education-based marketing you'll be able to attract more prospects in the earliest sateges of their buying process. Before they have a chance to ask multiple vendors for quotations.
“Very funny, and also quite true,” said John, “so tell me more about this educational information.”
“Well there are lots of formats you can use but the key is you must make your educational information available online, for free. You can use reports, tip sheets, checklists, interviews, podcasts, videos, or whatever. As long as they're unbiased and truly educational you're good to go. If your materials are even remotely promotional in nature they’ll be viewed as advertising and be ignored. You also could damage your brand. So keep it unbiased,” said Mark.
“Did your mysterious marketing guy give you any other tips?” asked John.
“Yes,” said Mark, “the next thing to consider is how you go about reducing your prospects’ biggest fear. That fear is the career-limiting effect of making a poor purchasing decision. Use your educational content to reduce their purchasing anxiety and show your company is a safe choice. Prove to them you understand them and can help them overcome their challenges and reduce their anxiety.
“Another tip is to create educational content that gets their interest early. Getting them to recognize needs they may not have considered helps them question the status quo. That’s the first critical step and earliest step in any buying process. In effect you can get your company on their radar long before your competitors.
“We also discussed the importance of providing high-value educational content.”
“So what did he tell you about that?” asked John.
“Well first, be certain your educational content adds value to the conversation that is already going on in the heads of your prospects. Make it relevant, interesting, brief, and most importantly, educational. As I mentioned earlier, all of this content needs to be available on your website for free. A significant percentage of your prospects are going online to do their early stage research. If you only have product information on your website you are out of the race.
“Second, be certain your educational content moves your solutions up the corporate ladder,” said Mark.
“What do you mean by up the corporate ladder?” asked John.
Mark continued, “If you want your salespeople to stop being stuck selling low-level purchasing agents and getting beaten up on price your educational content must do two things.
"First, it must be geared to showing prospects how to resolve big problems and maximize value.
“It also must be geared to helping prospects improve their business performance. The easiest way to look at it is this. The higher you go on the corporate ladder the more you find executives thinking about longer time frames, overall value, and how buying a particular type of solution improves the performance in their businesses. I want to stress your content would discuss a type of solution not your company’s solution.”
John interrupted, “Because that would be advertising and my prospects will just tune it out.”
“That’s right, said Mark, now I think it might be time to call it a day. If I can meet you tomorrow for lunch we’ll carry on.”
“OK professor and most learned acolyte of the marketing guy,” said John.
“Tomorrow we’ll discuss what to do with all of these prospects you’ve been educating. It probably won’t surprise you there’s a unique way to do this that really works,” said Mark.
Mark wandered off and John checked his email on his phone. The server presented John with the bill. Oh well, he thought, these lunches were turning out to be the cheapest and most valuable education in the world.
Tomorrow couldn’t come soon enough.