The answer to thriving through the financial “meltdown” is in an unlikely place
Every marketer has good reason to be worried about the effects of the current financial “meltdown.” But this could be the best time in years to create dramatic, sustainable growth without huge investments in innovation or marketing.
This current crisis is the result of long-term mistakes, and it probably won’t be an easy fix. Even though the government is certainly going to step in and take some of the immediate pressure off short-term money, there is reason to be conservative about longer-term effects. And that’s exactly what your competitors will be doing: cutting budgets, keeping low, maintaining the status quo.
Every time we have seen a situation like this, we have been able to help a few forward-looking companies make huge jumps in sales, profitability, and market share. And they were able to do it for a fraction of what their competitors were spending to just maintain things the way they were. Because the secret to creating sustainable growth during such times is not in expensive product innovation or other major changes.
The answer to not just surviving it, but also to creating dramatic, sustainable sales and market share growth right now comes from a very unlikely place. And because the need there is so high, you don’t even have to invest all that much to get significant gains.
What most companies have failed to recognize is that the current market share positions of any given product or service category were created more by the lack of competitive pressure than by the presence of it. In every research study we have conducted, there are huge unfulfilled growth opportunities that have been overlooked simply because everyone assumed that they had to do things the way the top guys do it. So almost everyone ends up reinforcing the strengths that the top guys used to become the top guys.
The real secret is to be “disruptive.” But not with product innovation. Disruptive product innovation is far too costly for this kind of environment. Instead, you do it by using the Alpha Model. Understand first of all that in every product or service category most customers feel unfulfilled and under-satisfied… no matter what they have been telling the companies from whom they are buying. These customers are just waiting for someone to figure out how to make them feel better about themselves, when they buy or use a product, and to make them feel that others feel better about them, when they buy or use that product. Time and again, we have discovered that even highly-loyal customers of well-entrenched brands will change their buying habits to a product, service, or company that fulfills these “ego-satisfaction” factors better than their current supplier does.
And it happens faster and for less investment than most companies would ever believe, especially when everyone else is terrified and standing still, as is about to happen in the marketplace. This is indeed probably the best opportunity I have seen in decades for creating dramatic changes in market share for small investment.
This is the secret that made the poorest-earning investment product in America (U.S. Savings Bonds) create double-digit growth, gaining more than $2 million per week in new sales in the late 1990s, when the stock market was averaging three to four times higher earnings for the average investor. It’s the same method that more than doubled per store sales for Subway retailers while reducing discounting, when almost every other competitor offered a better product selection at similar or better prices. It’s the same way we tripled market share for the “worst-tasting” food product in its category, making it the number one brand, …again while reducing discounting, without changing the product formulation, and without spending more than 25% of what any of the top brands were spending on advertising and marketing.
The answer is in understanding and using the Alpha Model to change customer expectations in ways that supersede product performance or quality or price. Customers are vulnerable to competition because so few companies have figured out how to fulfill basic customer ego-satisfaction needs, which are far more important to driving buying decisions and loyalty than are functional product performance or quality. By understanding how customers wish they could bond emotionally to products in your category, you can create growth no matter what is happening to everyone else in the category.
It doesn’t matter what the economy is doing. It doesn’t matter what your competitors are doing. It doesn’t even matter what your retailers or distributors are saying or doing. You can create growth in any economy and leave your competitors wondering what happened to them.
So, instead of worrying about how to just stay where you are, spend the same money you would to maintain the status quo and use it to make yourself the Alpha in your category, using customer ego-satisfaction as the key. Change customer expectations through addressing unmet ego-satisfaction fulfillment using the Alpha Model, and you can drive growth no matter what the rest of the world is doing.