increase market share Archives by Mark Murnahan

What 40 Years Have Taught Me About Marketing

I turned forty today. I’m happy about it, too. It doesn’t really feel like forty quite yet, but I’ve done it! I have lived long enough to have some well-earned gray hair, and a good amount of wisdom that comes with it. For such a young guy, of course.

My forty years have come with a lot of lessons. Having spent well over half of those years as a marketing professional and business owner, I’ve learned a lot about marketing. I’ve shared large volumes of my experiences here on the Internet, and I feel great to say that I’ve helped a lot of people with that experience.

One of the things I learned about marketing is the value of brevity. Keep it short. Keep it easy. Don’t get too confusing with all of your wordiness. I learned it, and then I threw it out the window for the purpose of this blog. Brevity matters when you are selling something, but I am not. If you can embrace some blatant verbosity today, I’ll reward you with some valuable real life marketing lessons.

Did you get that? It’s my birthday, but I’m trying to give you a gift. I guess that’s lesson one. When you give more, you receive more, and it’s an important principle of marketing. It’s a principle that is far beyond most people’s patience threshold, but to the ones who get it, it is invaluable.

I’ve shared a lot of helpful principles and practices of marketing on this blog. Much of it comes directly from things I learned through decades in the marketing profession. I feel good about that, and I know I’ve made an impact. I’ve helped a lot of people reach their goals, both business and personal. I plan to continue that work, but in a different way.

The Announcement That Changed My Life: Sayonara Mediocrity

At forty years old, I decided it is time to change things up. I intended to be fully retired by now, and a few years ago, I was actually well-prepared for it. I had plans to race cars full time, and my work was going to focus only on things I love. My bank is not as big as it used to be after somebody screwed up the world’s economy, so I’m still working. That should not keep me from pursuing the work I love, so I’m doing it … I’m making one of those scary changes I’ve encouraged so many others to make.

As I announced a few weeks ago, I stopped taking new clients (of course, that is unless somebody with really big goals and a ginormous budget comes calling). It’s very liberating. Now I feel even more free than ever if I need to call somebody out for being an apathetic bonehead. I’m also inspired to believe that if I tell you something, you’ll feel confident there is not an underhanded agenda just to sucker you out of your hard-earned money.

A challenging fact of marketing is that the best marketing consultants will never receive as much benefit as the client. It’s why many independent marketing consultants have their own products or services to market, outside of the marketing industry. The best marketers know that marketing is an investment rather than wasted money, and that if they build their own business, they will always be paid far more than by boosting a client’s return on investment.

Sometimes clients will find themselves skeptical about who receives the greatest benefits, but it is the client and not the marketing consultant. I explained this in an article titled “Find Good SEO: Why Good SEO Don’t Seek Your Business“. Being regularly at odds with that inherent negativity and skepticism in the market is why I’m changing things up and creating some significant career moves. No, it’s not because I’m not good at it … I’m just ready to move on to something more positive and inspiring.

Today, more than ever, I hope you will listen up and take some good direction. Give this gritty old marketing guy a chance to help shape your perceptions and understanding of marketing. I serve some pretty good food for thought about marketing, and many easily actionable tasks that you can put to use in minutes. In fact, here are six ways to improve search engine ranking in under one hour. There’s one caveat: they are only useful if you use them.

I have no reason nor desire to lie to you or mislead you, and I cannot recall a time when I intentionally misled anybody about marketing. So slow down and stop worrying about the next thing to click.

Velocity is Great in a Market, But Sometimes You Must Slow Down

Rushing around the Internet looking for the next bit of marketing enlightenment is not where you really want to find yourself in another 15 minutes or half hour … or three months … or next year. That’s what everybody else is doing, and if you think searching the web and looking for the next bottle to rub and hoping a genie will pop out is a better option, you’re likely to get pretty average results.

Settle down and look for the greater benefits. A mathematical fact of the online marketing space is that an average result is abysmal. It’s true! Most companies really stink at reaching an online market, and never get much out of it. I find that it is very often because they don’t slow down – breathe – get some oxygen in their brains and pay attention. They don’t pay attention to their market, and they don’t pay attention to things that can help them to reach their market more effectively. They are often all mouth and no ears, and rushing too hard to get things right that they get it all wrong. That’s them, and I hope you will make the choice to not be one of them.

Honesty in Marketing: It’s Not All Evil!

Marketing is often viewed with a sizable dose of skepticism. If somebody will gain from it, there is a frequent perception that somebody also loses. It’s not true, but this skeptical belief often hurts people in their own marketing, based on how they view marketing as a whole. If I am introduced to something as a result of marketing, and I trade my money because I wanted it, did somebody automatically lose? I got the thing I wanted, and the company marketing to me got what they wanted.

Yes, there are a lot of dirty scoundrels who will lie to you about marketing, but in the big picture, dishonest companies just don’t make it very long. It reminds me of a principle I implemented to create one of my most successful business endeavors, and it was a single word. It came to me when I asked my wife and business partner to summarize what made us stand out from the crowd, and what made us better than the competition. She said “It’s easy, Mark. It all comes down to a single word … Integrity.” That moment will never leave me, and it has provided me a great amount of success.

Marketing Wisdom: It Only Appears Simple

Even today it feels strange and almost surreal to say that I’ve been in marketing for 25 years … but I have. I was raised into marketing, and I was sitting in boardrooms offering my opinions from the time I was a teenager. I started my first company when I was so young that my mother had to sign the legal papers … for years.

It took a long time to make good sense of it all, in business. In fact, I still utterly stink at some points in business, but the part I do understand is marketing. I know from many years of running successful (and some not so successful) businesses that marketing will make or break a company. They don’t make it easy to understand, either. Even in the best universities, they often talk about a lot of theories and concepts, but where the fork meets the food, it takes some stomach-churning hard work to see real success. I know, because I’ve done that, and if you ask me, or any of my peers who have earned anything more than six-digits per year, you will find very few of them who came by it with simplicity.

Stop buying into people’s notions that it is simple. If it was really so simple, it probably wouldn’t be very profitable.

TAM, SAM, SOM, ROI, SEO, SMM, and PECKERs

There are enough acronyms and industry buzz phrases to bring my lunch back to the top of my throat. Some of those acronyms really matter, such as TAM (Total Available Market), SAM (Served Available Market), SOM (Serviceable Obtainable Market), ROI (Return On Investment), and many others. These matter in huge ways, but they are very frequently misunderstood or overlooked because of shortsightedness, which often comes from a frightened accountant who knows little about marketing or how the company actually gets the money to pay their salary.

In small businesses, it is often because, although the person in charge was good enough in their field to start a company, they were not good enough at business to understand that being good at a trade does not mean being good in business. Being good in business means knowing where your weaknesses are, and knowing how to fill those gaps with people who are as good or better at their field of knowledge than you. That’s right, the best business leaders learn to effectively delegate what is out of their league. It’s why I don’t handle my own bookkeeping, and why people in other trades are usually let down when they try their hand at marketing.

Other marketing acronyms are beaten to death, like SEO (search engine optimization) and SMM (social media marketing). These buzz phrases are so popular these days that dishonest people use them to fool companies. In online marketing, they talk about building more website links, but they throw out good ideas of why somebody would actually want to link to their website … and they often hold the absurd notion that more links is always a good thing. The really misinformed marketers will lead you to believe that social media marketing is all about networking and socializing.

This kind of shortsighted and misinformed thinking is why I created my very own acronym for 2012, and I welcome you to read why I’m very proud to call myself a “PECKER” (Profit Engineer and Competition Killer with Extraordinary Resources).

Advertising is Only a Very Small Part of Marketing

I find that a lot of people imagine marketing to mean advertising what they offer for sale. This is only a small part of what makes up marketing. Marketing addresses many other things, including a whole lot of math, creativity, strategy, and so much more. An easy example is to look at anything you have for sale, and answer the question of why you priced it at the level you have. Is it because of its cost to produce? Did you leave it up to the competition to decide your price? Did you ever actually do the research to know what it’s worth – and not just that – to the right audience? Did you get that research just right, or is it really so impossible that you made some costly mistakes by using guesswork instead of basing it on the right factors?

The ways that marketing influences a business are far too numerous to list in a single blog. I hope you’ll think about some of those things you may have overlooked. I welcome you to my blog archive to help get the wheels turning. There are hundreds of articles there, and I think you’ll find them very useful if you slow down.

Throw Out Your Sandwich and Make a New One

I hear a lot of people regurgitating the last thing they heard or read about marketing, and how fresh the latest idea is. I guess maybe it was fresh sometime before it hit a squillion blogs, but now it’s like a day-old tuna sandwich sitting out in the sun.

Great marketing is seldom a matter of seeking the latest and greatest thing. Following trends is important, but following them too closely that you follow the mistakes is often a train wreck in the making. The things that work are not just following what everybody else fervently exclaims will work. Great marketing requires research, testing, and discovering what works – really works – for your company, and being the one all of those trend-talkers are talking about. It is not about tweeting, Facebooking, Flabunctuating … or whatever the next big trend is.

I’ve written volumes about social media, including hundreds of thousands of words, and even a book. I marvel at how many people think it is something new. Did you think social media is new? It’s how I met my wife, well over a decade ago … and many close friends years before that. Social media helped me to grow several of my companies quite abundantly, too, but social media is not a unicorn net or a leprechaun trap.

One of its greatest uses is to listen and learn about what makes your market tick … and then use that information. Many people are too short-sighted to take things to a new level of analysis, and understand what to do with a good analysis. Most are unwilling or unable to dig deep into their creativity and find ways to make their brand stick out like a sexy model passing out free bacon sandwiches and all expense paid trips to “Available-Sexy-Model-and-Free-Bacon-Sandwichville”.

I witness many scared companies making scared decisions, but I’ve watched a lot more scared companies fail than I care to count … and that’s because they don’t count. The ones that count are the ones willing and fearless enough to do what it takes to be more like you want your company to be. Not like the bottle-rubbing, instant-enlightenment-seeking, one shot wonder at the competitor down the street – like you – or at least your vision of you. So stop being scared! Go out on a limb. That’s how people succeed in the real world of business.

Fear of Failure Destroys Marketing Efforts

I know the extreme power of fear. I have witnessed it throughout my career, and I’ve even allowed myself to be a casualty of fear at times. There is nothing easy about making the kind of commitment it requires to be successful. This goes for anything you really want in your life, whether it’s a spouse, a family, a new home, a new car, or an improved bottom line in your business. It takes a leap, but it doesn’t have to be simply on faith.

If you think about your marketing as a foundation of your company, which it really is, you will find yourself on a much stronger path. I know, it’s easy to try and argue the point. The accountants think accounting is the foundation, the attorneys think the legal structure makes the foundation, and the people who created the company think it’s all about the product or service … but that’s really not true.

Businesses simply do not work without being marketed. Even in the most obscure and complex examples you can throw out there, the biggest factor between success and failure of two equal companies really does come down to how well they are marketed.

I Believe You Could Do Better With Your Marketing

How could I put this any more clearly? You can do better! Failure to control your fear impulses and continuing to worry about what will not work is a fast track to failure. Try thinking more along the lines of what you stand to gain, instead of cowering to the fear of what you stand to lose. Then consider what you continue to lose effortlessly because you’re waiting. There is a steep cost of missed business opportunities. In fact, it is often the worst scenario of all. Getting out of your easy chair to face your fears is a huge factor in success, and I know it from experience.

I turned ideas into millions of dollars within only a short time after completing my 8th grade education. It didn’t take an MBA, or however you spell those fancy degrees hanging on the “smart guy’s” wall. It took research, creativity, and a good supplier of balls. I said balls, and you can call me a bad marketer for that … but if you want to know about selling balls – or selling anything else – read this article to get your thinking up and bouncing: “SEO, Social Media, and Marketing Balls”

Stop worrying about the cost of marketing done right, and start focusing on the positive outcome if you do. There are plenty of chickens out there, and I hope you aren’t one of them … and if you are, I hope you’ll make a commitment to change it.

Some Personal Lessons I Learned About Marketing

When I consider why I advocate for people to take their marketing more seriously and stop waiting for “something” to change, I look inward at how it has changed my life. I imagine the things that would never have happened without marketing, and I’ll give you a glimpse.

I dropped out of school at age 15 to start my first company. That could have gone quite miserably without good marketing.
I retired (the first time) at age 25. Without good marketing and having guts, that would have sucked for the average 15 year old dropout.
I met my wife in 2000 by using good marketing skills … online … with social media. Without that, I would not have the three wonderful kids I enjoy so much today.
I learned to competitively control automobiles at over 170 miles per hour (270+ KPH). It took a lot of marketing to own a race team. It is what I wanted, and because of good marketing, I made it happen.
I learned that making everybody happy is not required. Making the right ones happy is a whole lot more productive.
I learned that without climbing out on a limb and having the courage to embrace the immense value of marketing, I would have very few of the things that bring me joy and sustenance today.
I learned that sharing what I know feels very good, but even better when people will use it to improve their own lives.
I learned a whole lot more, but that’s why I have an archive, and that’s why this blog is not finished yet. Please subscribe if you want to keep learning with me.

I have no intention of explaining all that I have learned about marketing in a single blog article. That would be impossible. I hope that you will be willing to take a good look and accept some useful tips from a guy who has been around the block. I hope you will bookmark my blog archive and keep coming back to feed your brain with some useful marketing advice. I also hope you will subscribe for more to come soon. Don’t miss the point that it will make a lot more difference to your business than it will mine.

I also welcome you to get to know me. I’m a very approachable guy who loves the field of marketing, and I’m always delighted to be helpful.

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“Everybody” is Not Your Target Market!

Even Ma and Pa Kettle Demand Good Targeting

Even Ma and Pa Kettle Demand Targeting

I spoke with a friend recently who said that his target market is “everybody”. He didn’t just say it, but he actually meant it, and even defended it. What’s astonishing to me is that he actually fancies himself an Internet marketing professional.

Now, I’m not calling my friend an idiot. There are a lot of great rocket scientists, school teachers, surgeons, firemen, and others who do not understand marketing. We cannot all know everything, and the fine details of marketing are certainly not something everybody wants or needs to understand.

My friend is in the business of building websites, but this applies to any company, of any size, in any industry.

His belief was that since “anybody” may need a website, that he didn’t want to miss any of them by segmenting his market. In his mind, I guess he just didn’t want to leave anybody out. So, he is running Google ads directed at a massive audience.

I am a marketing professional, so you can probably imagine my head exploding at this point, right? I tried to suggest targeting specific segments which had historically been good customers to him. I tried to suggest taking a careful eye toward A/B testing to discover the audience with the highest response rate. I was shot down with every point I tried to make. I guess he was feeling generous with his ad budget, but he turned me down when I suggested he just drop it in the mail to me as a gift. I mean, he is wasting money either way … why not?

Maybe you never heard this before, or maybe you just shook your head in disbelief when you heard it, but I have an extremely valuable message for you. If you believe, like my friend, that your marketing should be directed to everybody, I hope you will accept this small piece of valuable advice.

Market Segmentation is Essential to Success in Marketing

There is a basic principle of marketing that is a cornerstone of success, and that is “Everybody” is Not a Target. Not now, not ever, and not for any company of any size, in any industry! Whether it is Pepsi Cola, McDonald’s, or any other product or service, market segmentation is a foundation-level component to success of any marketing campaign. Even if you are selling water or air, there is always a good, better, and best market segment for your offering.

Perhaps I should clarify that when I say “success in marketing”, I mean return on investment (ROI). Optimal return on investment is where we measure success in marketing. There is a reason people invest in marketing, and it is to earn a higher return. If you have a positive return on investment, but it could have been a higher return, you have still wasted money. You have forgone the best alternative, which is called “opportunity cost“, and that cost is very steep!

If you are trying to market to anybody or everybody, you are missing the portion of that “everybody” who will become your most valuable assets. You will waste huge amounts of marketing resources by trying to reach an unsegmented market. Those marketing resources are precious! They include two of the most important components of business: time and money. So why would anybody waste these?

Let’s just assume for a moment that there is actually something which includes a market potential of anybody or everybody. Doesn’t it make more sense to reach the ones who are more likely to become a customer? Doesn’t it make sense to reach the ones who have a better reason to buy, or who are more appropriate for your offering? What about targeting the market of people who are actively in the market for what you offer?

There are enough reasons to segment your market to fill textbooks, but here is just one to consider: If you target the right market segment, it is far more likely to find customers who will become brand loyal and tell all of their friends.

In the case of this individual, shouldn’t he target something, rather than everything? What about new companies, companies that just changed names, merged, or are under new management? What about the people who need a website more than grandma does? If you sell $599 “economy websites”, would it make sense to spend money to reach people who need a $250,000 website … or the other way around?

I tried to use common sense to explain the importance of targeting a segment. I explained that McDonald’s knows to focus on specific targets, and if there was ever a company who could sell something to everybody, they are in the running. They target kids. They target busy people on their lunch break. They target single moms who worked all day and just can’t tolerate another dirty dish. Is it possible that they grew so large with a worldwide recognition just by marketing to everybody? No, it may look like that on the surface, but it is absolutely not the case!

If you are marketing to an audience of “everybody”, your message will suffer. It will not resonate with the person seeking to buy. It will become boring. It will also cost many times more money and effort to achieve the same result.

Are you targeting the right people, or do you still want to sell office furniture to retired people? They may buy, but the results will not be as favorable.

If you have read my blog before, you have likely noticed that my message often addresses the huge importance of targeting a market rather than shooting into the wild. I am going to add a few related links below just to make the point clear. Each of them has a message of the importance of targeting and its huge impact on return on investment.

Please share your thoughts on this topic. It may help somebody else, or it may help you!

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How To Sell Paper Clips: A Closer Look at Marketing

Think about paper clips for a moment. They are about the most basic thing you will find in your desk drawer. When you consider your marketing, try to imagine selling paper clips. You probably do not think much about what brand you are buying when you need to replenish your paper clip supply. This is likely true of your product or service, too. Unless people have a good reason to remember you, it will be a lot harder to grow your paper clip market share and to become more prosperous.

If you challenged multiple companies with a truckload of paper clips to sell, somebody would sell out sooner than the rest. One would almost surely hit their stride and empty that truckload of paper clips before the others, and there must be a reason.

A basic essential of marketing is to get people to talk about you in a positive way. When other people talk about your brand, it is far more valuable than when you talk about your brand. This is proven every day, and in many markets. Just think about the ones you remember and why you remember them.

In order to emphasize the point, I have created this short video to show you how to sell more paper clips. I hope that you will enjoy it.

Addendum: After comments from Jim Rudnick at Canuck SEO (JVRudnick) both below and on social networks, I picked up the phone to call and thank him. We chatted and he told me of a remarkable story about a man who traded a paper clip for a house. If you doubt the value of good marketing and how to build value in something as simple as a paper clip, you should see the story of Tyler Wright.Thanks for sharing, Jim!

Market Research Tip: Jumbo Jets and Jelly Beans

Shoppers lie. It happens all the time that they say they want one thing, but the truth is actually quite different. This happens because most shoppers feel a bit insecure about their purchases. Just picture yourself walking into an auto dealership to understand this better. You probably make up reasons to say “no” before you even drive on the lot. It is how consumers “protect themselves”, and it is rooted in cynicism. People want to buy things on their terms, and not the seller’s terms, and if that means they have to lie, they will often lie.

I am not going to call everybody a liar. No, I am not going to do that. What I will say is that during the purchase process, there are often things which are not exactly as they seem. This begins in the very earliest steps to a purchase, and it is the marketer’s job to overcome those smokescreens. We do this in many ways, including fact-finding about our market to better understand the ideal customer and how to meet their objectives. We perform careful propensity modeling to determine exactly who to target. Then we create a strong call-to-action to entice customers to take action now, before they can dream up another lie to help excuse themselves from committing to the purchase.

It should not be surprising that much of this process is made far more difficult by trying to market to the wrong people. A lot of marketing efforts miss the target miserably by skipping the research and trying to sell to people who are only marginally interested in the offering.

NOTE: When I say “take action” I mean for the customer to get what they want … what they came for. After all, when a prospective customer comes out of hiding, there is a reason. They want what you offer.

The purchase of anything from jelly beans to jumbo jets has two sides; one side who wants the sale, and the other side who wants the sale. They ultimately both want the sale! Marketers often neglect this, and place themselves in a very defensive role as if the customer holds all the cards. Something important to remember is that the customer also wants what the seller has to offer, often much more than they will let on. After all, they are ready to trade their money for it. You just have to suit their objectives and help them to buy on their terms. The best way to do this begins long before you ever even encounter the customer. The best answer is to know who the buyer is, and to know their terms.

Stop Marketing Jumbo Jets to Jelly Bean Customers

I have taught many people how to market and sell things, both online and offline. I have been in the marketing field for over 20 years, and I have seen a lot in that time. I have seen about every smokescreen that a customer can hide behind. There is a common saying that “buyers are liars”. It sounds ugly, but it really just means that until you uncover the customer’s real objectives, they will often be less than forthright about their purchase decision making. It may sound like a “lie”, but it is actually just to cover up deeper objectives, and a prospective customer’s attempt to feel secure while getting what they want. You see, if they tell you the whole truth, then you have too much power (in their mind), and they become “vulnerable”. The common fear is that if they open themselves up to your influence, they may end up coming to you asking for a bag of jelly beans and leaving with a jumbo jet. Of course, if that is the case, it really means they actually wanted a jumbo jet, but they were afraid to admit it and afraid of the sacrifice. It also means that the seller was reaching out to the wrong audience instead of discovering the people who are asking for jumbo jets. When you reach the right market, much cynicism is averted.

Marketers who understand what customers really want are the marketers who earn happy customers and become very successful. Effective marketers do the necessary discovery work to find out who the customers are and what they really want. This helps us to understand how to reach the right people, define the marketing approach, and thus improve response rates.

If a given group has a propensity to purchase jumbo jets, effective market research will uncover the facts. Market research helps to determine the most effective means to reach the target audience, and the right marketing message to implement. In my work, I find a lot of people trying to sell jumbo jets to jelly bean customers, simply because they never took the initiative to understand who the customer really is and what the customer wants and needs.

Wasteful Marketing Efforts

Many people will take the approach of simply seeking more audience. We all want more audience, but as a sole effort, that can lead to a whole lot of waste. Marketing duck hunting to vegetarians may reach a lot of people, but it will not produce desired results.

Other people will focus too much on a stronger call to action. A strong call to action is good, but again, this alone often leads to more waste. Offering a huge discount on lipstick will probably not bring the greatest results at a gun show.

Another huge waste I see in many marketing efforts is to assume that markets are less defined online than that of vegetarians and gun shows. The fact is that marketing online provides much greater definition to market segmentation. I encounter many people who think of the Internet as a place to market to the whole world, but take little or no care to define their market and understand the best ways to reach the right segments.

These are extreme accounts of wasteful marketing, but I see much more subtle mistakes being made every day. A better option is to know who to reach and what they want. Put yourself in their shoes and research your industry from their standpoint. This is not easy, and it is not natural for most business people. It is also why there are people who specialize in the field of marketing.

Wasteful marketing efforts will cause you to constantly be at odds with the prospective customer and they will seldom come over to your side to see the benefits of doing business with you.

How Do You Bring the Customer to Your Side?

The first step to winning customers is to know your market and why they want what you have. If you can realize the objectives of your market, you can bring the customers to your side so they can see it from both perspectives. Then they can see your vision of how your product or service will benefit them. If they want a jumbo jet, you will be the one who sells it to them.

Market research and gaining an understanding of the customer is a huge missing piece in many marketing campaigns. I have been shocked countless times to find that for many companies, market research is a confusing task that just seems like wasted effort. You can believe me or not, but it is the most important piece of all. Market research allows you to know what people want and what they will respond to. It is what tells you who to reach and the message to reach them with. Without proper market research, you may as well advertise jumbo jets for sale in your local candy store. If you keep trying to sell jumbo jets to jelly bean shoppers, you will waste a lot of time and expense.

Take your market research seriously.

Unless I am mistaken, you want to know how to earn more business by having more effective marketing reach. That is what I sell. You did not come here for jelly beans.

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Turning Away Business as a Useful Business Tactic

Turning away business from a customer with a fist full of money and a desire to buy what you sell may seem like a bad business tactic. For many people, turning away a customer is viewed as a tragedy, but in some cases it can produce great benefit. In fact, there are many instances where this tactic can be extremely profitable. I know, it sounds crazy, but let me explain. First, I want to be clear that this is a tactic versus strategy, so don’t start trying to make a bunch of money turning people away just yet.

Examine, for a moment, a couple of reasons it can be important to turn away business, and how it may benefit your business to do so. Face it, not all customers are great customers. There are bad customers in every business … yes, I said every business. Even if you own a coin operated vending machine company and never have to face the customer, there is such a thing as a bad one. There are ways to turn away business that are tactful and useful, and sometimes we just have to learn when it is right to say “no” to the customer.

What brought me to write about this today was that I recently expressed selectiveness to a friend who is in need of marketing services. It is not a matter of arrogance at all, but in my line of work, there are very good reasons I absolutely must turn away business. I only have a limited amount of time to render my services, and if I am spending time working with people who do not pay well, have a bad product offering, or are difficult to work with, I may as well stay in bed. Working with a client for the money alone would be miserable to me, and likely to them as well. Mine is an extreme case, but in every service industry role where time, creativity, and knowledge are the product, it is very important to seek the right customers and stop wasting time with the ones who hold us back. Turning away business can be a painful transition for those unfamiliar with the concept, but it can save a lot of grief.

Opportunity Cost
(economics) The cost of an opportunity forgone (and the loss of the benefits that could be received from that opportunity); the most valuable forgone alternative.

When you are striving to be profitable, you must consider opportunity cost. That is the cost of opportunities that you will miss by taking on each customer. Any time you take on a new customer, there is a loss of potential opportunities elsewhere that could slip by because you are too busy.

In good and proper business transactions we can see that the customer is just as fortunate to make a purchase as the seller is to sell their product or service. If you focus on a better value proposition, competition really does not affect you as much. I have created many instances where a client raises their prices because their offering is worth more than they realized, and they were able to qualify it in their marketing message and quantify it in their business volume. This is the way it is supposed to be, after all. If somebody is willing to trade their hard-earned dollars, the seller clearly has something they want or need. If it is something with a limited supply and a sufficient demand, turning away business is sometimes not just the best option, but rather the only option. That is basic supply and demand, but there are still other reasons to turn away business.

The Arrogance of Purchasers

As purchasers, we often do not see things clearly and we become arrogant with our spending. There is always somebody else out there willing to sell things as if they are a commodity even when they are not. These sellers will offer something that is inferior, and price it low enough to capture the business of those who cannot understand the value difference. What this seller often misses out on is longevity and sustainable profitability. They do not understand the notion of turning away business for any reason, and the value it represents. This sort of selling as a commodity affects most businesses at some point (either internally or externally), and it is important to address it in your marketplace. In service industries, especially, it is a tragic end for many companies to fall into the trap of selling as if they are a commodity just to keep doing business … profitable or not.

Commodity
A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. the same no matter who produces it.

A valuable lesson for both buyers and sellers is to recognize when something is not a commodity. Seeking qualitative differences is important to good purchasing, and conveying these differences is an essential of good marketing.

Overcoming Commodity Selling

I write what I know, so I am using examples from experience in my own companies to illustrate my point. Perhaps if you see that I live by my own advice, you can at least view it as sincere. When I consider people selling something as a commodity that is indeed not a commodity, it is easy to find examples. Let’s take web hosting as an example (the service that keeps websites up and running). I have been in the web hosting business as a wholesale web host selling to hosting resellers for a decade. Is it the same thing anywhere you go? Well, without a long drawn out explanation, I can say that it clearly is not a commodity. My company’s web hosting prices reflect the millions of dollars invested in higher quality equipment and network architecture that sets us apart. We turn away a lot of business, and thank goodness, because it allows us to keep the quality standards extremely high for the customers who want something better.

Is SEO a Commodity?

Another absolute case of a non-commodity that is often sold as such is marketing and search engine optimization (SEO) services. I see people every day who sell dreadfully ineffective but cheap marketing and SEO services. Tragically, I find many people in the marketing and SEO field who will drop their prices to try and compete as if they offer a commodity. In my line of work as a marketing consultant and enterprise SEO, it is pretty clear to me that my clients receive more quantitative benefit from the transaction than I do. Maybe you have a similar case of providing great value as well, and if so, it is best to recognize it. Sure, I get to earn a good living, but the dollars the client gets in return far exceed what I am paid. It kind of makes me like a money duplicating machine to clients. Would it make sense for me to take on every project that comes my way? Of course not, and especially considering that much of my profit is derived from performance-based contingency SEO. So I refuse to sell it as a commodity, which is why I turn down the vast majority of potential clients who approach me. It is stupid? Some may say “yes”, but my clients are fortunate for it, and my reputation has become valuable because of this.

Do You Want Cake or Do You Want Cake?

I also see the benefit to turning away business very clearly in another of the companies my wife and I own and operate, in the cake and confectionery business. It is a very busy time of year for cakes. There are a lot of weddings, anniversaries, and graduations this time of year, in addition to the constant baby showers, birthdays, company parties, and etcetera. Designer wedding cakes and custom gourmet cupcakes require a lot of time, creativity, and skill. If we tried to take on every customer, it would degrade the product for all customers. So we turn away business to keep quality standards high. This makes it better for business on both sides, the customer and the company.

If you are not selling a commodity, it is unwise to try and compete as if you do. There will always be somebody willing to cut their own business throat to beat you out of a sale just to drive revenue. Discovering and conveying your value proposition is essential. Sometimes that means that you will need to start turning away business.

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