Remember Steve Martin’s, “Let’s Get Small”? That was a funny skit but it taught me a lot about marketing. The first time I saw it was in the early 70’s when I myself was in college taking marketing classes to supplement my core science courses. Little did I know that marketing, not science would become my primary field of study. 

Think Small
Target marketing is the process of choosing smaller market segments at which to focus your efforts. It is the process of locating specific groups of prospects that share a common description and needs. Target marketing is a “vertical approach” to increasing your influence and market share. The brands with the most highly focused target audience are usually the most successful. 

Rules in selecting a target audience 
Choose one target audience first. Work on penetrating that audience for one year before moving on. You cannot be everything to everyone. 
Choose your target audience based on their revenue needs and budget capabilities.
The tighter your focus, the more often you can provide them with relevant information, and the more that this information will be beneficial.
Choose your target audience based on you own interests.
Choose the type of people with which you like to do business.
Quality is far more important than quantity.

Be Picky
Experienced marketers know that if you reject the kind of business that you do not want, you will automatically become more attractive to those that are part of your vertical strategy. This also gives you the ability to become an expert in your business as it relates to THEIR business. Let’s face it, every business is competitive. Because of this, entrepreneurs might often find themselves chasing any business they can get. I talk about this at length in my “Attract More Business” program:

1. Understanding the marketplace
2. Benchmarking
3. Competitive Intelligence

By fully understanding the competitive landscape and how our product, service, and company fits into it, we can find a specialized need in the marketplace that our product EXCLUSIVELY satisfies. For this reason, we should only accept business that matches the profile of the type of customer we want to deal with.
 Examples:

1. I know a financial consultant that works ONLY with teachers. Now that might sound ridiculous. Teachers, however, have very specialized financial needs. They exclusively qualify for special tax treatment and a larger share of their assets can be sheltered. Additionally, teachers typically have at least two sources of income: teaching and summer jobs or a side business. This requires specialized knowledge and advice. This person has become an EXPERT in the area of financial consulting for teachers.
2. Even the IRS has entered into the world of specialization. They just announced their, “Market Segment Specialization Program” which focuses on developing highly trained examiners for each particular market segment. A market segment may be an industry such as construction or entertainment, a profession like attorneys or real estate agents or an issue like passive activity losses. An integral part of the approach used is the development and publication of Audit Techniques Guides. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology, and other information to assist examiners in performing examinations. Oh goody, just what we need tax cops with practical industry knowledge!
3. Professionals such as doctors and lawyers have been specialists for years. Today you would be hard-pressed to find a doctor that claims to know how to treat all types of illnesses. In fact, I have become somewhat irritated in trying to get an answer on health issues from just one doctor. It seems today that even the specialists end up referring you to a specialist.

Research WorksDo some research to understand the vertical market that you select. There are some tremendous resources for this today:

• Vertical industry publications or trade magazines
• The Lifestyles Market Analyst
• FIND/SVP – Nexus/Lexus
• The Internet
• Hoover’s

An added bonus to this strategy is that in your research, you will likely come across many prospects that fit your profile. 

Example:
In the early 90’s my consulting firm made the decision that we were going to specialize in specific areas. One of the first areas we selected was the cosmetic surgery field. We had a hunch that this would be a profitable area to focus and so we launched an exhaustive research effort to learn everything we could about cosmetic surgery. We purchased several research studies for just a few hundred dollars. I remember the agency we purchased them from told me that I was one of only 12 people that had purchased the 2600 page study. This gave us an inordinate amount of information about the history of the industry, where it was heading, the most popular forms of surgery, technological advancements, changes in the demographics and psychographics of patients electing surgery, practice management issues, insurance and managed care issues and the potential reduction in the associated costs that were predicted,. 

Additionally, we interviewed 30 different physicians and learned about their perceptions. We even talked to the president of the American Medical Association and invited him on our Small Business Hour radio show. I want to stress, although they would have been great customers, we did NOT pitch ANY of these doctors. With all the information that we gained we were able to write several articles quoting all kinds of statistics about the future of various forms of cosmetic surgery. We were able to speak intelligently on every area of this field. We became MORE knowledgeable in marketing and managing a cosmetic surgery practice than any plastic surgeon. Because of months worth of research and a few hundred dollars, we were soon viewed as the EXPERTS in cosmetic surgery practice management and marketing. We were asked to attend an upcoming medical conference in Sacramento where I gave a speech on the future of cosmetic surgery. It was unbelievable. I was being treated like some expert and I couldn’t even spell liposuction 60 days prior. We gave seminars on practice management and marketing. We were asked to be editorial contributors to the industries trade publication. We were even asked to do a radio show by the massive pharmaceutical companies Pfizer and Merck, which we did for 18 months on CBS radio. All this happened well before the TV rage of “Extreme Makeover, “Nip Tuck,” and all of reality show follow-ups. 

As you can imagine, we were able to easily attract some of the most successful, well financed, and well respected cosmetic surgery clients in the industry in just a few short months. In fact, they begged us to take them on as a client! Companies like Sword Medical Center, Cedars Sinai Hospital, Plastico, Boston Medical, and Cosmetic and Laser Surgery all came to us. No cold calls, no mailings, no fancy brochures. We were able to secure a strong position in the market as the leaders in cosmetic surgery consulting. Can you do the same? YES, YES and YES!

Think about your own business: 
Who are the best clients for your business? Why?
What makes them good prospects?
What are some potential target markets that match with these profiles? Why?

Thinking small is the key to big success. The smaller, more tightly confined your marketplace is the better your chances are for success. Locate the smallest pond that you can find. Then figure out how to become the biggest fish in that pond.

McDonalds has granola, Arby’s has yogurt, and even Jack-in-the-Box has fresh fruit. What the hell is going on here? All this healthy eating is making me sick!

Burger King introduced the “Have it Your Way Healthy Options,” McDonald’s launched their ”Balanced, Active Lifestyles Initiative” and even the Cookie Monster is crumbling to a healthy diet with Sesame Street’s “A Cookie is Sometimes Food.”

Let’s admit it, there’s nothing tastier than fast food! Americans have always loved digging into a bucket of chicken, chomping on a Big Mac or downing a Whopper. Then how did the food pyramid ever find its way into the drive-thru? 

I guess it’s because consumers have demanded a healthier diet from fast food operators, right? Wrong. 

Oh, then it’s because our government is forcing fast food operators to be more responsible for planning healthy menus, right? Wrong again!

Ok, then it must be that serving healthier food is more profitable? Not quite!

No one has imposed any “solution” on these operators. Nor should they in my opinion, this is a FREE enterprise system.

Let me introduce you to Morgan Spurlock, a little man who intimidated a multi-billion dollar industry to change their entire business strategy with his award winning documentary, Super Size Me. I loved the movie, the marketing, and the message and you will too. As one critic said; “It will wipe the smile right off your Happy Meal.”

How did he do it? He used the second Rule of Attraction. He focused on the “problem.” In fact he BECAME the problem. As a result, fast food operators were FORCED to make a change. 

What did he do? He decided to eat ONLY at McDonalds for 30 days to see what would happen to his body. No problem there. Right? Wrong yet again! He almost killed himself. He gained 30 pounds, his blood pressure jumped, his cholesterol went through the roof, lipids and liver enzymes were at all-time danger levels and he developed NASH, (non-alcoholic, steototic hepatitis). Nice job Morgan!

How successful do you think he would have been if he had gone to McDonalds with a solution to the problem? Or lobbied congress or written letters to the FDA? Or created a study of the positive effects of changing their menu to healthy alternatives? Not very! They wouldn’t have given him the time of day. 

The first rule of attraction is to become a bigger fish in a smaller pond. In order to accomplish this we need to understand the problems and challenges of those we are attempting to influence Rule #2: The problem is more important than the solution.

Too often marketers make broad assumptions when communicating their message to clients. This happens in both the selling interaction (face-to-face and on the phone) as well as the marketing interaction (with ads, brochures and web sites.) This is a natural tendency since as marketers we know far more about our products and services than our customers. In many cases we may know what the customer needs more than they do themselves. The danger, however, is that customers don’t care about the benefits and solutions that our companies offer. Let me repeat that: CUSTOMERS DON’T CARE ABOUT OUR BENEFITS AND SOLUTIONS!

I can imagine people everywhere are reading this right now saying that I’m crazy. Traditional sales and marketing methods teach that we should elaborate on our features and benefits, and prospects will see how they can be helped by our solutions, and they will logically decide to buy. This assumption is the root of why most sales and marketing attempts fall on deaf ears. People today make buying decisions more emotionally than ever before. Our prospects and customers care FAR more about their problems than they ever will about our solutions! 

Do you think there would have been ANYTHING Morgan could have shown those fast food industry execs that would have convinced them to change? Not until some pain was inflicted. “There is no change without pain,” I like to say.

This is why it is important that we speak to our prospects and customers in terms of their problems! By doing so, they become uncomfortable with the status-quo and our solutions become much more palatable. This is not so much a logical choice, but rather based on their emotional reaction to the fact that we actually have taken the time to understand their problems. The solutions we offer then become the natural choice to help solve those problems.

All marketers like to believe they have a unique solution. They are confident that they are different from the competition. When you get right down to it, however, most marketing says the exact SAME thing. It talks about what the company, product, or service DOES. At best, it may promise some generic group of benefits in which buyers MAY be interested. Even the best marketing materials (web sites, brochure, flyers, ads, radio or TV spots, promotions, interactive CDs or videos) attempt to communicate to the customer why their product, service or company is better than the competition. Few focus on the problems that the customer is having. This is at the core of the attraction mindset.

Interested in LEARNING how to focus on the problems your customers face? Check out our latest workshop:

Attract More Business One Day Workshops 
By popular demand, we are now offering the Attract More Business one day workshop. This full day workshop incorporates content from our “Attract More Business” learning program and 8 week class. The workshop will be held from 9am to 5pm on June 11, 2005 in Long Beach, CA and August 25, 2005 in Pasadena, CA. Attendees of the workshop are eligible for 2 follow up 30 minute coaching sessions. As a special bonus when you attend the Attract More Business one day workshop, you will receive our audio CD on “Branding in the 21st Century.”Sign-up at: Attract More Business One Day Workshop.

This current economy offers advantages to small business that we may not see for quite a while. 

Advantages? What planet am I living on, you might ask. Unemployment is up. The stock market is tumbling and all we seem to be hearing lately is more gloom and doom. 

I’m talking about advantages that allow you to set yourself apart from the competition like never before. While everyone else is crying the blues you can be taking positive, decisive action. Here’s the kind of simple actions that get you results in this difficult economy:

Create Revenue
In most environments today, particularly business-to-business, the demand is for more sales. That’s what clients want to hear. If you have a legitimate, credible story as to how you can help a company generate revenue, management will clear the calendar with great haste to hear what you have to say. This message is a particularly strong door opener for consultants and service providers. What’s your revenue improvement story?

Don’t cut marketing
Particularly advertising support. It’s the first thing that most companies do in an economic downturn because it is the easiest course of action. But all it does is concede the playing field to the competition. Statistics clearly show that marketers who increase their spending during a recession experience sustainable long-term gains in market share and profitability. Think about how you can beat your competition in reaching your target market more effectively?

Market to your base
Revisit your loyal customers, the ones you have probably taken for granted and ignored as of late. Now is the time to consider instituting a workable system that will help you identify and nurture that loyal base by maintaining an ongoing communication channel with them. What are you currently doing to stay in touch with your customers? 

Start sponsoring
In times of stress, consumers gravitate to the familiar. Your job is to be there as a touch point. That means event promotion, cross-promotion, cause marketing, all of the in-the-trenches, one-on-one, hard-working marketing labor that many companies forsake for the ease of an advertisement or commercial. It’s not a matter of either/or, but both. How can you be creative in sponsoring network marketing and event promotions?

Try something new
Consider test markets, new products/ service introductions and any new revenue stream that got put on the back burner when times were flush. If the old revenue streams are drying up, where is the risk in experimenting? Remember, no guts, no glory. How will you “dare to be different” this year?

Think vertical
For small businesses in particular, understanding and mining a vertical segment makes good sense. 
Dig in and dig deep. Capitalize on the credibility that you have built up and sell it aggressively, particularly through referral and word of mouth. Don’t be afraid to leap frog from segment to segment when you think you have a translatable story to tell. What new markets can you penetrate? How can you make your solution more important to that selective client base?

Client retention is key
The importance of “the relationship” with the customer never diminishes. For most small businesses, developing and exploiting the relationship is the one major advantage they have over the big players who don’t have the time and energy for it in the first place. This boils down to added value. Customers crave it but don’t get enough of it. When was the last time you gave serious thought to providing a value-added premium in customer transactions? 

Be the “Terminator” of new business
Now is the time to undertake that aggressive, long-term new business program. Segment the prospects; maintain a disciplined follow-up program (contact management system, direct mail, telemarketing, e-newsletters); and remember that it is a process of consistent and persistent approach and attack. Don’t hesitate to contact prospects out of the blue with an idea as to how you can legitimately impact their business. In focus groups, prospective buyers quite often remark on how little they get called on or approached with a legitimate, new perspective about their business. How can you adopt this strategy?

Don’t forget self-promotion
When times are tight, most small businesses tend to give up on self-promotion. Now more than ever we should be super-aggressive about telling the world how good we are by seeking high-visibility clients, taking on select pro bono assignments, hitting the speech circuit and chasing “ink.” The best line on the subject comes from Kevin Roberts of Saatchi & Saatchi: “Consumers don’t stop buying when economies go through down cycles. They look harder for value.” 

The job of the survival marketer in 2002 will be to identify that value, proclaim it loudly and go after the thinning customer herd where others show fear and give up. In this economy so many customers are having reservations about getting a good value on whatever product or service they are buying.

The Top 10 Ways NOT to Attract New Clients

They say marketing has a bad name. But I maintain that NOT marketing has a much worse name. If you’re an entrepreneur or small business owner interested in attracting new clients, are you still committing any of the 10 deadly sins listed below?

10. Make sure nobody can really understand what business you’re in. Use buzz-words and industry jargon. Never share the results of what you do or mention how you’ve helped your clients. Make people really work to figure out how you can help them.

9. Talk only about features and processes in your marketing materials. Don’t include any benefits or case studies of successful clients you’ve worked with. Throw in lots of impressive industry jargon and don’t worry about professional design or paper. Using 20# copy paper is fine.

8. Put up a quick-and-dirty website with most of the pages still under construction. Make sure to design it yourself and make it look as amateurish as possible. Of course, obscure navigation, huge graphics files and pages that lead nowhere will keep ’em coming back.

7. Forget about spell check and proofreading. People don’t care about typos or if you spell their name wrong. Whip out every e-mail as fast as you possibly can. And never put a signature line on your email, let alone a subject line that means anything.

6. Don’t ever network. Make sure nobody ever gets to meet you in person and learn who you are and what you can do for them. And if you do happen to show up at a networking event, make sure to sit in a corner with a beer and lots of hors D’oeuvres, away from pesky prospective clients.

5. Don’t write any articles or do any talks demonstrating to the world that you’re an expert and really know your stuff. Make sure to keep all of that a big secret. Also never share one bit of your expertise with anyone unless they pay you first.

4. Don’t ask questions when meeting with a new prospective client. Just give them a long, detailed presentation on all the technical aspects of your work. If they don’t understand you, they probably wouldn’t be a good client anyway.

3. Do substandard work as long as you think you can get away with it. Strive for mediocrity and make sure your clients pay for it through the nose. Why should you work so hard when they end up making so much money from your expertise?

2. Don’t return phone calls – ever. Just wait for them to call you back. If they really need your assistance, they’ll keep trying until they catch you in. And when they do reach you, make sure to sound impatient and too busy to help them.

1. Disappear. One you’ve completed a project, make sure they never hear from you again. Heck if they really need you, they’ll call. But don’t make it too easy by ever giving them your business card or putting your name in the yellow pages. You don’t want to look like you’re begging. Have some dignity, for goodness sake!

If any of these symptoms are present in your business, its time to think about making some core changes to your marketing effort. At the Small Business Advisory Network we like to say that we influence decisions, improve performance and inspire change. That’s what our consulting, workshops, web site, weekly articles and The Small Business Hour Radio Show are all about.

You may have seen a recent commercial on TV in which men in lab coats stand before a table that has national brands of both french fries and ketchup on it. They sample the ketchup alone, and conclude that it is good. They then sample a french fry and conclude it is good. Then they try the two together, and determine that it is better than either one. This commercial is a very effective example of alliance marketing hard at work. 

Instead of a ketchup company going it alone and promoting their product or a french fry maker buying all the air time themselves, they have combined efforts to present the idea that while their products are good on their own, they are better when eaten together. This is the classic case of the whole being greater than the sum of its parts.

I can hear people out there now saying, “Sure, it works if you’re Heinz Ketchup and have a multi-million dollar ad budget, but I’m just a small business! I don’t have tens of millions of dollars to risk on just getting people hooked on other products when they should be spending their money on my product instead!”

For those doubters I’m going to have to invoke two of my Rules of Attraction to show how alliance and affiliate marketing can help a small business even more than a larger one:

Rule #10 – Collaborate rather than compete

Rule #4 – Give information away without selling

Collaborate Rather Than Compete
Instead of viewing other products and services as competitors, look for ways in which you can join efforts to help each other’s business. I do a number of seminars every year with the Christopher Howard Companies, and he is a frequent guest on my radio show. Some may say or are competitors. I teach people how to be more successful and so does Chris. So why help out a competitor? Because Chris is more of a complementor than he is a competitor. While we both target the same audience we teach completely different Methods of success. Chris works on the subconscious and I work on the conscious. Working together we are able to reach a greater market as a whole entity than either one of us could reach independently. In addition my methods are more powerful when coupled with Chris’s technologies and his are more powerful when coupled with mine.

You can find collaborators in your industry that you can team with to create a collective solution that attracts a larger audience than any one element could effectively attract on their own. If you make luggage, find someone that makes luggage carts, if you repair cars, team with car rental services, if you sell musical instruments, find a rehearsal studio bands can use and work together to cross promote. Always be on the lookout for ways in which you can work with other entities, rather than ways in which you can compete with them.

Give information away without selling
I’m going to use an example now that I’m sure you never thought you’d see from Mark Deo- while most of my readers have probably never listened to anything from Death Row Records, they are one of the most successful record companies in history, known strictly for their hardcore “gangsta” rap artists. Why bring them up? They also had some brilliant marketing techniques that helped launch the careers of artists that have since sold hundreds of millions of records. How did they do this? By giving away information without selling! With each album they released by an established artist, they included elements in a few songs that featured a new performer. Some songs on their CDs don’t even have the person on the CD cover in them for more than a few seconds! What they have done is given the fans of one performer a free taste of another they are likely to enjoy as well.

When you go to the dentist, do you get a free toothbrush? I bet it’s a specific brand that that dentist is getting for free to provide you with a positive impression of this brand. This leads to you possibly buying many more of them in the future, based upon the lended credibility and positive overall impression you get about this item. How can you do this in your small business? Do you have free samples of collaborative products and services you can bundle with yours that make your solution more attractive?

How to Make It All Work
Perhaps you’re thinking, “that sounds like a good idea, but how do I get started?”

That’s where my attraction workshop comes in. At the workshop I will take you step-by-step through developing an attraction-based affiliate plan. We will work on crafting your affiliate and alliance strategy. This will include:

• Brainstorm partner potentials (in places you never dreamed)
• How to get the best partners to “come to you” without even chasing them
• What to say and why it works nearly “every” time!
• Use guarantees and risk reversal to your benefit
• How to structure the alliance to ensure that both parties benefit
• Integrate alliance efforts into your overall marketing plan
• Use an alliance to look ten times bigger than you already are
• Use affiliates to overcome price objections
• Numerous case studies and the “in class” examples of success stories

Pre-registration is now available on-line at:http://www.sbanetwork.org/classes/upcoming_classes.asp. 

Register before July 15th for my Monrovia workshop and before August 15th for my Long Beach Workshop and receive a FREE bonus ticket and bring a friend or business associate. The pre-registration cost of this event is just $299, a savings of $200 from the event cost of $499 at the door. Once one of my associates contacts you, if you mention that you are a business update subscriber, I’ll even throw in a free telecoaching follow-up session so that you can get the most out of the event. That’s a total value of $1148 available now for just $299. Go to:http://www.sbanetwork.org/classes/upcoming_classes.asp to pre-register now!

Two heads are better than one. This is the phrase that comes to mind when I think of collaborative business relationships. There are several types that we see today. These include affiliates, alliances and joint ventures. This is such an overlooked yet incredibly powerful area of business growth that I thought I would give you just a preview of what we will be working on in our upcoming one day workshop on August 6th in Monrovia. I believe the best types of collaboration are those that both reduce costs while creating an additional income stream.

The Joint Venture
A Joint Venture is where two or more businesses share resources to create profitable new income opportunities, which otherwise would be too costly for only one of the businesses to achieve on their own. This structure can be found anywhere, any many industries seem to be practicing this type of collaboration today. One example is the Wal-Mart Super Center. When you walk into a Wal-Mart Super Center you see clothes, furniture, groceries, electronics, movies, etc. Imagine, with all the all different categories what it takes to merchandise this store. In reality, Wal-Mart’s products are merchandised through a joint venture with the many manufacturers of the products they sell. In the end both Wal-Mart and the manufacturers are profiting. Various brands can showcase their products and sell them, and Wal-Mart earns a portion of the sale for allowing them the use of their storefronts. They also save money on the need for specialized labor and merchandising costs. Wal-Mart knows how to outsource. This is truly a ‘win-win’ collaborative relationship. 

Business within a Business
Even more creative is the store within a store concept that is cropping-up. We are starting to see various outlet type stores operating inside of a larger retailer. Just today I was in a local grocery store and I saw a video arcade, a Bank of America, a hair salon, and a Starbucks all in one grocery store! Think about how much sense this makes: Parents come to the grocery store to shop, and they leave their kids to play video games and pick them up when they are finished. They can do their banking, get their hair cut, have a coffee or a snack. This lowers costs, provides rental income, increases convenience and creates a better customer experience. With all of the changes taking place in our society we are seeing the emergence of creative alliance, affiliate and even cooperative competitive associations. The way collaboration is being used in business today is literally smashing the traditional concept of supplier, vendor and competitive relationships. The line between partner, competitor and supplier is blurring. In order to be more attractive we all must find ways of using Rule # 10 more effectively. We must collaborate rather than compete. Think about what you can do to create collaborative relationships that lower costs while increasing income.

Full Day Workshop
One of the things we will be working on in the full day Attract More Business Workshop is marketing collaboration. Attendees will learn how to build affiliates, alliances, joint ventures and how to develop collaborative relationships. Register for the August 6th workshop by this Friday, July 29th and receive a FREE bonus ticket for a friend or business associate at no additional charge. The pre-registration cost of this event is just $299, a savings of $200 from the event cost of $499 at the door. If you mention that you are a business update subscriber, I’ll even throw in a free telecoaching follow-up session so that you can get the most out of the event. That’s a total value of $1148 available now for just $299. Go to:http://www.sbanetwork.org/classes/upcoming_classes.asp to pre-register now!

“A little to the right. Okay. Good. Take a step back. No not that far. Yea 

right there. Now smile. Say cheese!”

Click – Whrrr – Rip.

That was the sound of my Polaroid Swinger camera. It was the summer of 1968 
and I had just captured my best friends on film hamming it up at the beach.

I loved my new instant camera. It was like magic. In just a few minutes I’d 
have captured the memories of the best summer of my life (I’ll be it in 
black and white).

I had bugged my Dad about getting me this camera for weeks. When I had seen 
one of my buddies take my picture and it developed before my very eyes in 
seconds I was amazed.

I never heard of the company – Polaroid. I never saw a commercial. I never 
saw in ad in the paper. I just knew my coolest friends had this camera and, 
spoiled kid that I was, I needed one too. In fact if I had seen an ad on TV 
or in a magazine, I probably would have paid little attention to it. No 
price concession or glitzy promotion would have incited me to run out and 
buy the product. Yet the influence of my friends was a powerful motivator. 
Just seeing them leading a “happening” as we called it in those days 
(remember it was the sixties) was enough to get me to beg my Dad for that 
camera

The success of the Polaroid Swinger was not based on some clever marketing 
campaign. It was based on getting people to take pictures of their friends 
and share the fun of seeing them develop. The more this happened, the more 
successful the product became. Polaroid had unwittingly created a powerful 
marketing machine that would allow the “good news” of their product’s 
benefits to spread like wildfire. And they did this without hiring a big 
shot agency or even spending one dollar on advertising. Rather than the 
marketer advertising to the customer, they created an environment where 
customers could market to each other, and far more effectively than Madison 
Avenue.

Hotmail did the same thing in 1999. They not only figured out how to get 
people talking about their product so they didn’t have to advertise, they 
created a product that when used WAS an advertisement. And they figured out 
how to make it free. As a reward they were able to reach the same number of 
users in one year, which took radio 38 years and TV 13 years.

As marketers we expect people listen to us yet we hardly give them a good 
reason to do so. The institution of marketing has evolved into one where we 
sell or advertise by interrupting people. And consumers are getting fed up 
with it.

Think about yourself. Do you not look for ways to avoid marketing messages? 
What happens when a TV commercial interrupts your favorite show? If you’re 
like most people, you get up to get a snack. Think of how many times you see 
an advertising message for something that you need before you take action. 
And that’s for something that you NEED!

As I’ve said many times, traditional marketing just doesn’t work anymore. 
And it’s not just me that says so. The father of traditional marketing, Mr. 
Madison Avenue himself, the Bill Bernbach agreed. Just before his death, 
twenty years ago, he was asked about the future of advertising. He said, “We 
must realize that we cannot sell a man who isn’t listening. The future of 
advertising is word-of-mouth. Dullness won’t sell your product, but neither 
will irrelevant brilliance.” Ultimately we must give people a reason to 
listen. We must show respect for them rather than interrupt them.

My mentor, author of “Unleashing the Idea Virus” and recent guest on my 
radio show, Seth Godin, says that, “marketers can no longer survive by interrupting 
strangers with messages that they don’t want to hear about products that 
they aren’t interested in ways that annoy them.” Almost 100 years ago Dale 
Carnegie said we have to “earn the right” to get peoples attention.

Whether you are a business owner, marketing executive, salesperson or 
advertising professional I would like you to consider the following:

• How you can “earn the right” to get people’s attention?
• What can you do to get your customers to talk to other customers about your product or service?
• How can you stop marketing AT people and get them to market to each other?
• What reason can you give them to listen to what you have to say?

Strategic Alliances

The number of strategic alliances in the U.S. is surging. More than 20,000 new alliances were formed in just the last 4 years, compared with 5100 between 1980 and 1987 and 750 during the 1970s according to Keeley, Kuenn & Reid (a Chicago based law firm with government relations affiliates in Washington, D.C.).

Nearly 6 percent of the revenue generated from the top 1000 U.S. firms now comes from alliances, a fourfold increase since 1987. Alliances generally achieve a higher return on investment (17%) than U.S. industry in general (11%). The higher return is a direct result of leveraging partners’ resources and assets, requiring lower investment to produce greater incremental returns. Alliances also showed a greater success rate (60%) than outright acquisitions (50% success) or venture capital arrangements (25% success). 

Types of Alliances
There are many types of strategic alliances. Basic types include: 
Licensing technology or intellectual property 
Joint research and product development 
Cross-purchase agreements 
Manufacturing arrangements 
Sales/marketing arrangements

I will primarily be dealing with the sales and marketing type of alliance in this presentation and how we can build complementary relationships that inspire collaboration, joint selling, host/beneficiary agreements, mutual marketing and endorsements.

Think Compliments
Let’s take a look at the type of alliances that you may be able to build for your small business and how they might be structured. 

The best way to determine the type of organizations with which you should be building alliances is to evaluate where each partner may compliment the other. A compliment is one product or service that makes any other product or service more attractive. 

The classic example of compliments are computer hardware and software. Faster hardware prompts people to upgrade. Powerful software motivates people to buy faster hardware. Just look at Windows and Pentium chips. Compliments is about finding a way to make the pie BIGGER rather than fighting over how to slice up a tiny Scooter Pie. 

So how do we identify competitors and complimentors?

A player is a complimentor if customers value your product MORE when they have the other player’s product than when they have your product alone. Example: Oscar Meyer Hot Dogs and Guldens Mustard

A player is competitor if customers value your product LESS when they have the other player’s product than when they have your product alone. Example: Coca-Cola and Pepsi -Cola

As we mentioned above some of the classic examples are: Disney and McDonalds, Universal and Burger King, Sears and Allstate, Visa and Airlines, Perfume Makers and Department stores and do on.

How to Select an Alliance Partner 
These collaborative strategies can transform your business, help you capture greater market share, improve your profitability, or even help you start a new business and reduce your financial risk in this difficult economy. They are just NICE IDEAS until we put them into action.

1. Develop a profile of potential partners.
2. Identify at least five non-competitive partners that you can collaborate with and create a pre-approach plan.
3. Pick only the very best people in each area. 
4. Be very selective Do NOT compromise on values or philosophy.
5. Ensure that there is mutual benefit. A one sided relationship will only breed resentment and contempt.

How to Put Alliance and Affiliate Programs into Action
Some of the specific things that you can do to make alliances more effective:

• Informational Alliance Marketing 
  Write a newsletter that can be branded as coming from the partner. This allows each partner access to the other’s sphere of influence. It is important that valuable information is communicated in the newsletter. If this is merely a sales pitch it will not be nearly as effective.
• Train Affiliates
  Write a sales training manual- something that has the questions to ask prospects, and fact/benefit charts. This is a great way of preparing partners with the information necessary to endorse your product or service. The more prepared your partners are the more effective they will be positioning your product or service for the customer. I might even suggest holding some formal training sessions hosted by one partner for the others. Each partner could take turns being the trainer. This creates continuity and rapport as well as mutual education.
• Create an Ideation Session
  About 15 years ago I had the great fortune of working with the American Express Company as a consultant specifically retained to provide soft enhancements for their retail credit card services. We held what we called “ideation sessions.” These were brainstorming meetings where we came up with all kinds of wild ideas and discussed their merit. I traveled to N.Y. two or three times per month for nearly a year and we would hold up in what was once World Trade Tower One and kick around all kinds of programs. We finally stumbled upon the “Buyers Assurance Program” which became the “Big Daddy” of all credit card enhancements. It essentially doubled the warranty of any product purchased with an American Express Card. We thought, “let’s outsource EVERYTHING!” We found an insurance company to carry the risk, a national service provider to handle exchanges and repairs, a customer service company to handle the telephone calls and a mail center to handle the response. Everyone got a little piece of the pie and AMEX just skimmed the cream off the top. Sometimes it is the process of discovery which is most valuable in alliance and affiliate marketing. Great ideas often need the right environment and enough time to be born. How about getting your partners together and letting the sparks fly. Maybe you’ll create a hybrid solution, a revolutionary product or new service.
• Mutual Marketing Affiliations
  You can also provide ad designs that partners can brand as their own. In this way you will create an effective ad, then let any affiliate stamp their logo on it and run it in selected media. This is similar to the co-op advertising concept but broadens the appeal for both partners. It also helps both partners get a bigger bang for their advertising dollar. We often see this in automobile business. Auto manufacturers create fabulous advertising for dealers to use. Dealers then “tag” their name to these print ads, TV commercials and radio spots and they run them in their local area. The exceptional production quality adds credibility to the message and ad effectiveness soars. Think about how you could do this in your business. Could you benefit from tagging your affiliates to your ads? How about the reverse?
• Seamless Strategies
  Create exclusive offers that are smooth and seamless for your partner’s clients. These can be offered in a variety of forms. Take for example Quick Book’s resource site. If you want to order checks or envelopes you can do it seamlessly on the Quick Books web site. But you never even realize that you are actually purchasing from another company until the shipment arrives. This may be a bit misleading but I for one was happy to know that the checks and envelopes I purchased were compatible with Quick Books and it was fast, easy and cheap. I’ll probably do it again when I run out. How could you apply this to your business?
• Web Alliances
  This brings up another strategy which is applicable to what we like to call host/beneficiary relationships. This is particularly effective for Internet media. How about actually building websites for affiliates? This is a very powerful way to ensure that your host’s clients are locked into your solution. We can essentially build a captive audience on the web yet branded as the host’s site. Visitors are not at all aware that you are the beneficiary of their purchases. In fact they are not even aware that they are on another web site since it looks the same as the host site. This is similar to the Quickbooks example but as the beneficiary you make the investment in building a web site for the host. 
• Free Goods
  Create a free introductory sample only for your partner’s clients. These can be marketed via brick and mortar as well as on the Internet. The free sample is a great way to introduce your product or service to what would otherwise be a lost prospect. This is made even more valuable by the fact that the person receiving the free goods has a predisposition to be interested in your product or service by the relationship with your affiliate.
• Super Referrers
  How about using the affiliate strategy to build a network of “Super Referrers?” I know a plastic surgeon that helped to recruit the most powerful potential influencers in her community into supper referrers. She asked the local day spa, massage therapist, nail solon, beauty center, cosmetics retailer and more to donate samples and discount coupons. Then she partnered with a gift basket company and created a beautiful gift basket including all kinds of free samples donated by her new partners. She then gave this basket to all of her new patients. Of course they were thrilled since the basket and it’s contents was massive and was valued at over $1000! The patients couldn’t wait to visit all of the partners and use their coupons. This obviously helped the doctor’s partner’s increase their business but it also helped the doctor to ensure that all of her partners exclusively refer to her. Everyone wins!
• Targeted Discounts
  Offer a discount coupon to a special subgroup of your partner’s clients in order to gain access to a highly targeted audience. HP and Staples office supplies has successfully run this type of program where Staple gives a $50 gift certificate to every customers but it can ONLY be used by Teachers. The hope of course is that these folks will give their coupons to teachers.
• Symbiosis
  Every kid has seen the movie Finding Nemo. Yet few realize the fantastic marketing message that it contains. You see, Nemo is a clown fish. Clown fish depend upon the sea anemone to protect them. While the anemone is deadly to all other sea life, the clown fish is resistant to it’s venom. On the other hand the beautiful colors of the clown fish attract sea life for anemone to sting and devour. The clown fish gets the leftovers. Many companies have adopted this type of symbiotic relationship. Have you walked into the grocery store lately and been surprised to see a Starbucks or a branch of the post office or your bank’s ATM machines sitting between the canned goods and the paper towel aisles? These are also symbiotic relationships. Who can you symbiotically partner with?

There are many other things that we can do to create powerful alliance programs. I hope this has at least inspired you to think creatively.