This is where the old rule kicks in: “You can’t help someone overcome themselves.” Fear of change is perhaps the biggest hurdle for a company on the cusp of needing critical change.  And the cost of avoiding or ignoring that need for change is often the loss of the entire business and all the influence that company once had in the lives of people.

Let’s face it.  It is far easier for a successful company with a strong foreseeable future to ponder making critical changes, yet they are the ones who need it the least.  It is the company that really needs change that resists it the most.  It often avoids discussing minor indicators of needed change, because it is assumed that the issues will be solved on their own.  That is one of the top reasons many companies that were successful for many years fail with seemingly unexpected speed.

What is the root cause? Typically, it is because they were unwilling to make the early decisions that would have made it unnecessary to make critical changes now.  It’s like steering a vehicle – minor changes easily correct the course before a major correction would be needed.  Need for critical change typically doesn’t come catastrophically.  It creeps up in ways that could have been solved in small steps, if recognized as they were happening.  Most companies don’t have the tools or even the will to see those small, creeping changes that were required.

To spot these needs early, a company needs to have a consistent means of spotting them.  That means they have to be looking purposely for them and reacting early in ways that can be further adjusted as needed.

What tools would you need for that? Well, here’s a list of four tools you have readily available:

1. The first and foremost is your employees.  If you make it OK for them to tell you what they are seeing and hearing, good employees will be glad to do that… and provide potential solutions at the same time.  They also have to be given the opportunity to have contact with people who are buying your products and services, so they can see what is really being experienced by the people who keep your doors open.  Make sure every employee from top to bottom understands how critical it is to ask the questions, “Is this right?” and “Could this be done better?”
2. Secondly, your customers.  I’m always surprised at how many companies insulate themselves from the customer.  They assume that their salespersons and distributors are giving them an accurate view of how customers feels and what they think.  That is a deadly mistake.  Distributors and salespersons are perhaps the least unbiased and most willing to see what they wish to see in a conversation with a customer.  Just think about the last time your distributors and salespersons told you your prices were too high, when you know there are more expensive options out there.  Find ways to use the resource of your customers.  In fact, instead of a “human resources” department, which seems to minimize the value of employees, perhaps every company should institute a “customer resources” department that goes beyond market research or “customer insights” that only seem to prove management’s hypotheses and instead actually record customer experiences and how those customers are internalizing the implications of them.  You might discover that your customers are trying to tell you something that you aren’t hearing.
3. Thirdly, competitors. What people are buying from competitors and why they are buying those things is critically important to understanding your potential.  Start by ignoring “price” as any kind of sales driver.  It’s not why people buy.  But rather understand what someone is buying from a competitor that they are not buying from you… and by that I mean the “experience” or “satisfaction” or “significance” they are buying, not just the “thing.”  These are keys to what people are actually spending money on that may open the door to insights on a potential new future for you.  For instance, when you discover that someone is buying from a competitor at a much higher price point, because they feel more secure about the company selling that product or service, you have a hint about what people really want to buy.  You may discover that the reason they feel more secure is that the company has done a great job of portraying themselves as being the most knowledgable in that field in a way that you don’t.
4. Finally, your brain. Your brain knows when it hears warning signals.  Subtle things that you push aside, because you can’t explain them well, are often the early warnings of needed change.  Yet I all too often see people ignore those warning signals, because they don’t wish to address them or are unsure of themselves.  People who work with dogs know that dogs have the ability to sense very subtle indicators that convey important information about a person’s or other animal’s intent.  Actually, people have much of that same ability… we just choose to ignore those signals because we can’t link them rationally.  Start choosing to chase down those tiny indicators.  Learn to ask someone a clarifying question, if there is anything they say that has any indication of deeper meaning or intent.  This is by far the greatest tool in market research that is grossly under-utilized.  But it is something that you and every one of your employees can begin to learn to use in order to spot small needed changes before they become catastrophic problems.

I think there is little sadder than a company that is walking boldly to its death.  The company I met with is on that path.  Don’t let your company follow them.

What kinds of tools do you use to spot those subtle indicators?  How do you share those with each other to collaborate on possible solutions?  I would love to hear your experiences.

The laziness of most businesses just trying to do what got them by five years ago is killing them. Here’s why: the secret to prosperity is helping fulfill people’s aspirations AND satisfy their functional needs at the same time.  That is the core element of entrepreneurship.  You have to understand what people need to have “fixed” or “solved” but, in order to bypass competitors, you have to also understand what they really, emotionally aspire to experience.

Modern entrepreneurship is the willingness to look past current or recent strategies that worked, and identify unmet needs and aspirations, so you can address them and create a new customer following.

But the biggest problem is that personal aspirations change over time. You change them as you do a better and better job, and your competitors can have the same effect, if you aren’t careful. You have to constantly be “driving” new expectations for your customer base and making yourself the only place they can get those expectations fulfilled.  This is at the core of being an “Alpha” entrepreneur.

I was talking with a GM at a high-end car dealership the other day.  He was complaining that, due to the changes in the marketplace, many more dealers of “lesser” automobiles are offering similar customer service and customer experience to what they have traditionally offered exclusively.  This dealership has tried to capitalize upon what worked for them five years ago, and it is no longer working.  It’s no longer a key differentiator.  Now they need to find a new way to drive higher customer expectations that will make them once again THE place to go for the car ownership experience their customers aspire to have.

Look. Apple isn’t the last standing high-profile Alpha company just because they offer stuff that works better.  The real secret behind Apple’s success is driving ever higher customer expectations that are based upon what they discovered were people’s experiential aspirations.  That’s a complex way of saying, they make stuff that works better and increasingly make the experience so much better that people love buying and using their products.  The result has been that people buy lots of Apple’s “stuff” at prices significantly higher than competitors’ attempts to copy them.  And then they convince their friends to do the same thing.

The same principle works for smaller businesses. There is a fitness club near me that has only one location, but it has become an Alpha influencer nationally in their industry.  The reason is that they not only have more than 15,000 members in this smaller metro market, but they also are able to keep those members for decades, not just months (as is the norm in the fitness club industry).  The way they do it is by providing and encouraging social interaction amongst club members, demonstrating that each individual member is really cared about, AND by constantly providing members with personal incentives to reach ever higher goals for themselves.  This isn’t just a place to go get fit; it’s a place to meet, socialize, feel a lot better about yourself, and fulfill personal aspirations.  And they are continually creating new ways to accomplish that.  No one can compete with them, even though their prices are higher than competitors’.

Can your company become more entrepreneurial in the way these two companies have?  Absolutely.  Any company can follow the principle of identifying and fulfilling customer aspirations.  All it takes is a belief that you can do it, a willingness to look outside of your own walls and outside of what competitors are doing,  and a desire that will push you through the naysayers within your company who think yesterday’s strategies are good enough.

Go back to what made your company initially successful. Make yourself more entrepreneurial and start thriving no matter what the economy is doing.

Got a story of your own?  I’d love to hear it.

Why? Because traditional pricing strategy works off of a belief that you can’t get what your product or service is really worth.  The basic assumptions behind almost all pricing strategy are that 1) you must react to competition with your pricing, 2) you must “buy” initial customers and then make them loyal, or 3) you must anticipate that you will have to lower your prices in the future.

With the Alpha model, none of those assumptions are true. In fact, those traditional assumptions force you into a self-defeating model that decreases your profitability and make you vulnerable to even further profit decreases in the future.

The basic traditional approaches to pricing strategy are:

1. lowering price in reaction to competition (long-term or short-term),
2. start high then lower,
3. start low then raise,
4. change your prices over time as your product becomes less competitive.

Notice a trend?  They all involve lowering your prices. That means the actual value of your product is being paid to someone else… not you.  (Unless, of course, you were silly enough to allow the value of your product to decrease out of neglect, and then you are getting exactly what you deserve.)

Imagine instead being able to charge 25% to 100% more than your nearest competitor can charge for essentially the same product or service.  Your customers are so excited about what they experience that they bring you new customers who are also willing to pay your price to get what you offer.  And then imagine further that, as your competitors slowly react (non-Alphas rarely understand what it is you are doing that is working), you just keep increasing customer expectations.  And you do that with things that cost you less than the expensive discount promotions your competitors use to draw customers away from you.  That’s the result of using the Alpha model.

The key difference is that you are not selling a product or service.  You are selling answers to people’s deep-seated aspirations and emotional desires.  You are overcoming their silent fears (the unstated ones your competitors have never heard their customers reveal).  You are fulfilling their need for satisfaction and significance.  You are making them feel better about themselves, their control over the world around them, and the way they believe other people perceive them.

An example? Do you really think an Apple computer is “worth” two to three times the cost of a PC?  Is the iPhone worth more than an Android?  From a basic technology or functionality standpoint, possibly not.  But millions of people do, and they have made Apple one of the few large Alpha companies left.

Apple is an Alpha, because they provide such a feeling of well-being and control and such an experience of personal satisfaction and significance that most people don’t care what the product costs.  Mercedes Benz used to do the same thing, until they started “competing” in the marketplace.  Mercedes, like Apple, was able to avoid price battles, because they provided the satisfaction and significance that customers would pay almost anything to get.

WalMart is an Alpha for the same reason.  (No, I have not forgotten that they market themselves as the “low-price” option).  WalMart is actually not the lowest priced provider, but it does successfully convince more than half of all Americans that it is the smartest place to buy what it sells… so most people don’t even comparison shop them.

What most people refer to as “pricing strategy” is not strategy at all. Strategy is not about reacting. Tactics are.  Pricing strategy should be about creating such value that you can continually experiment with just how high you can price your product and still have people recommend you to their friends.

With pricing tactics, the issue is always how high or low can you go and still survive to beat your competitors.  With the Alpha model guiding pricing strategy, everyone else wastes their resources trying to figure out how low they can go to survive against you.

In the end, the Alpha (who satisfies customer needs best) has the resources to do more.  The competitors (who don’t satisfy customer needs as well) have less.

Sounds like survival of the fittest to me.  What about you?

The Alpha lesson in the last presidential election was that Obama won simply because he was the only candidate with a vision.  Only insiders knew what it really was (and, as we have discovered, most people would not have liked it if they did understand it), but that didn’t matter, because his competitor had none.

So, here we go again.

Look… in case any candidates are reading this, here’s what an Alpha really looks like:

An Alpha has a positive vision that redefines what things can look like in the future. That’s true in business AND in politics.  It is a vision that people want to follow, because it encapsulates what people aspire to be or to be part of.  And the Alpha is confidently willing to share that vision. He doesn’t have to tear down anyone else, because his vision carries him.

Question: How did Ronald Reagan, an actor then governor of California, become the president who turned around a dying America in the midst of a double-digit inflation recession where gasoline was being rationed and you bought something the moment you decided you might need it, because you probably could not afford it a year from then?

Answer: He had a vision for what America could be that was both inspiring and empowering, and he shared that unashamedly with America.

He wasn’t vicious in his campaign.  He did call out liars, but he generated his following by leading with a vision, not by attacking.

Right now, only Ron Paul consistently returns to his vision and confidently states it no matter what animosity he faces.  That is undoubtedly his greatest strength and the source of his popularity.  He can’t win, because his foreign policy stance will undoubtedly derail his chances for president.  But until there is another candidate willing to stand upon a truly conservative vision, he will continue to pull significant numbers.

So what would an Alpha candidate do right now? Alpha rule #2:  Stop “competing.”  Competition is not leading.  People want to follow someone who knows the path to where they want to go.  Stop slamming each other and start defining a path to prosperity and success.  Then state it with confidence.  Details are not all that important, as Obama proved resoundingly.  People want to know that the destination is a place they want to arrive.  Describe that destination with clarity, and, if it is the place they want to be, people will want to go along.

There has never been an opportunity like this to clearly define the difference between a path of socialism and real capitalism (not the socialistic version of capitalism that we have seen over the past four decades where a select few – including our elected officials – take what they can get and leave behind the people who actually created that wealth).

Now is the time.  Both Rush Limbaugh and Glenn Beck have repeatedly noted that all it takes is clarity and confidence.

So, is there a real Alpha out there?

Reagan did it.  Can any of these candidates?  Please?

Wes Ball is author of The Alpha Factor.  He is also president and founder of The Ball Group, a strategic innovation and new market development company who works with large and mid-sized companies to create self-sustaining growth.  You can reach Wes at w.ball@ballgroup.com.

Last year, hundreds of aspiring Alphas told me how they were able to use the Alpha model to discover how to make themselves the competitor that everyone else feared.

I look forward to hearing how you accomplish the same thing.

Happy New Alpha Year!

Wes Ball, President

“Go Ahead… Dominate Your World.”

The answer is in “concept” innovation, and the results are typically greater than product improvement innovation… both short-term and long-term.  Here’s why…

Concept innovation is innovating the concept of what people are buying so they aspire to own or use your product or service. In Alpha terminology, it is redefining your category in terms of a higher level of personal experience or fulfillment a customer can get buying from you.  That means, they feel better about themselves and they believe others also see them as better than they were before they purchased or used your product.

To some, this may sound too superficial, because they are limited in their experience of such “innovation” as being clever phrases or pandering to base human desires (sex, material wealth, power, etc).  Successful concept innovation, however, is much, much deeper than that, and its ramifications go to the core emotional and functional needs a person desires to fulfill.

As I cover in The Alpha Factor (Westlyn Publishing, 2008), the most influential brands in the world have this trait in common.  The real secret to their success is and has been in their concept innovation.  They are not all the largest in their respective categories, but they are the most profitable and the most influential in driving and managing customer decisions.

For instance, Apple was using this principle for decades before it finally became the Alpha in the personal computing industry, driving competitors to follow their lead in technological innovation and customer experience.  To own an Apple made you part of a cult of passionate “believers.”  Apple owners were evangelists for the experience of owning an Apple product.  That made customers of non-Apple products envious to the point that an anti-Apple movement even started amongst persons who perceived themselves as more technologically savvy and who could manipulate the weaknesses of DOS-based PC products.

Apple remains my favorite Alpha company, because it still completely “owns” the customer experience people aspire to receive… and they do it in a way that allows them to ask far more for their product than competitors can demand.

Ben and Jerry’s ice cream is another.  Although no longer the Alpha they were even a decade ago, Ben and Jerry’s ice cream accomplished much the same thing.  Yes, they innovated by adding more “stuff” to their ice cream, but that product improvement was only successful because they created a new concept for ice cream eating that people aspired to experience.  For instance, my research in the ice cream category back in the mid- and late 1990s showed that 80+% of persons who claimed they “only” bought whatever ice cream was on sale actually regularly purchased Ben and Jerry’s ice cream for themselves.  They just hid it from the rest of the family.  That’s an immense level of influence created, and it is why almost every other ice cream brand began to copy B&J’s product approach.

On a smaller level, I worked with a small regional bank that was already doing a great job with customer service.  They had among the most competitive rates around. They only had two branches, so they could not compete with “regular” banks on convenience – the most common criteria for picking a bank.  The concept innovation we discovered would be most successful for them was to change the focus of what they sold from bank services to “personal financial success.”  We created a “Personal Success” club.  We defined services that would make this bank the go-to bank for almost anything that would help their target audience feel that they could take charge of their personal financial future.

The result was more than $1 million in new deposits in the first week and dramatic growth in number of customers defining the bank as their “primary” bank.  The bank only had to do a small amount of internal work to pay off the concept so that customers actually felt that the inherent promise of the concept was fulfilled.  But the results were more than almost any new product development process could have generated for them.  Best of all, they did not even have to open one additional branch to accomplish that growth.

Although I have facilitated plenty of new product innovation, seldom have I seen that investment pay off as well or as quickly as concept innovation consistently does.

Concept innovation doesn’t cost much to accomplish.  But the return on investment is immense, if it uses the Alpha model to innovate to fulfill a person’s experiential needs, as well as his practical product function needs.

I know many companies have tried some version of “concept innovation.”  Some with success.  Some without.

Have you seen this work?  Or have you seen it fail, and, if so, why do you think it failed?  I would love to hear your experiences.

Wes Ball is president and founder of The Ball Group, a strategic innovation and new market development company.  He is also author of The Alpha Factor – a revolutionary new look at what really creates self-sustaining success and market dominance. He can be reached at www.ballgroup.com or www.thealphafactor.com.

The problem is that too many small businesses are trying to act like big businesses, so they effectively kill their ability to grow right now.

Here’s what big businesses are doing that every small business should avoid…

1.  Frightening their employees

Go into any larger corporation and you will find terrified employees. They are barely productive and (even worse) they are fearful of suggesting anything that might not meet with immediate approval from their managers.  And, if you are over 50 years old and not on the “fast-track” to the top, you know the laser targeting system is seeking you out.  Most wonder what day it will be when they find they have been terminated or “eased out” for nothing they have done other than to make someone higher up unhappy.

Small and medium-sized businesses have the advantage of being able to encourage and nurture employees in ways larger businesses have long forgotten.  They can be more flexible in how they work with employees.  They can say encouraging things to employees that larger companies would be terrified to say to theirs (for fear that the employee will start to demand more).  Also, because managers in smaller companies are more visible to top management, they can be held more responsible for encouraging employees to perform better than in large corporations where mid-level managers are often allowed to create their own hidden “kingdoms.”

2.  Playing games with their employees’ money

There is a rule in life:  Don’t mess with people’s money. You can get away with a lot of things, but playing games with people’s income stream is not one of them.  Even if the employee doesn’t rebel immediately, you will pay the price sooner or later.

All too many larger companies are finding ways of redistributing costs to employees or otherwise lowering effective income.  Historically, one of the few benefits of working for a larger company was a reliable income stream.  That has disappeared in large part.  From what I have seen, there is even less security of a reliable income stream at a larger company than in a mid-sized company these days.

Smaller companies should never fall into the trap of trying to make up for lack of company marketing by taking it out of the pockets of employees… especially by basing changes upon anything other than performance. 

Most people would rather work for a smaller company with a friendlier work environment, more contact with upper management, and more trust that their performance will earn them the rewards they deserve. Don’t give up that advantage.

3.  Not investing in building market influence

Big businesses (for the most part) are not investing in increasing their market influence right now.  Most CEOs are so focused upon keeping costs under control to create attractive short-term bottom line results for shareholders that they are not even thinking about expanding their market influence efforts.

In most markets, small and medium-sized business thrives only with regular, creative marketing and influence-building. In tough times, that is even more true.  The advantage is that people have money, and those people want to spend it with businesses who will cater to their self-satisfaction and personal significance (two critical parts of the “Alpha Factor” model).

Those with a lot of money are looking for ways to spend it, because more and more are fearful that coming inflation will take away their buying power.

Those with little money are a bit more fearful, but they are still willing to spend (and spend much more) for things they need from businesses who make them feel good about themselves and make them feel that other people feel good about them, as well.

While smaller companies are still dependent upon the vagaries of the marketplace, they actually have far more means to increase revenues during tough times than larger businesses do.  They are closer to the customer, so they have more opportunities to increase their influence.

Conclusion:

Small businesses can grow significantly during tough times like these. What makes that happen is 1) encouraging and nurturing employees, 2) helping employees see the path to some level of reliability in their income stream, and 3) investing wisely and creatively in influence-building activities, products or services, and marketing.

Question:

What have you seen done by small and medium-sized businesses recently that has helped them increase their influence in the marketplace?

Wes Ball in author of “The Alpha Factor – a revolutionary new look at what really creates self-sustaining success.” He has helped companies ranging in size from the Fortune 100 to small local businesses create dramatic, sustainable growth without discounting.  He is also founder of The Alpha Business Academy which is specifically designed to help small and medium-sized businesses grow dramatically even during this tough economy. Wes can be reached by email at w.ball@ballgroup.com.

Many persons watching us wonder how we can do that.  It looks as though we are selling essentially the same thing as most of our competitors, yet we get between 50% and 100% more for it.  So, here’s the secret…

We are working our tails off to get there.  We have made sure we understand exactly what people REALLY want to buy in our category (not the “things” they want to buy, but rather the “experience” they want before, during, and after the sale), and we have made sure we are not only providing those things, but also helping them discover how critical it is for their own personal satisfaction and fulfillment that they get nothing less than that.

Sound familiar?  It should.  It’s the Alpha model.

Has this been easy?  Absolutely not.  The most difficult thing has been getting everyone on the team to understand and buy into this model.  Actual delivery and communications have been been relatively easy.  Getting everyone to understand that this is not about them, but rather about the customer’s experience, has been the real battle.

What makes this even better is that this company is in what most people consider to be a “commodity” industry.  Actually, most companies are… not because what they sell is actually a commodity, but rather because they and all of their competitors have allowed purchasers to believe that it is.  They have allowed people to believe that it’s easy to deliver what you deliver and that what everyone in your category sells is essentially the same.

That is never true.  At the core level, the real defining difference between you and your competitors has to be you.  If they buy from anyone else, they don’t get YOU.  That can (and should) mean not just you individually, but your company, your installers, your service people, your telephone people, your customer service reps, your salespersons, your packaging,… everything and everyone in your company.  Why? Because each has been created or trained to represent the pinnacle of what can be had by buying something in your category.

When someone buys from your company, the should be buying something they never thought they would be able to get:

1. freedom from worry about they quality of the product, its installation, training to use it, and/or its performance,
2. comfort in knowing that if anything goes wrong (or if you don’t achieve expected results), you will be there to make it absolutely right, and
3. fulfillment in knowing that others will wonder how they were smart enough to find the best possible option out of all the not quite good enough options.

It’s not the economy that’s holding you back.  It’s you and how you run your company and approach the marketplace.  If you aren’t using the Alpha model to sell in this economy, then you are losing thousands or millions of dollars every day.

Special Limited-time Offer

If that’s you and you are tired of blaming the economy or price-sensitive customers on your poor performance, here’s a special offer:  give me a call or email me, and I will personally send you a free article on how you can turn that around in the next 60 days. No charge.  No commitment.  Just real, immediately usable answers that will change the way you run your business (or sell customers) so that you can be selling at higher prices, getting more completely satisfied customers, and reaping greater profits than ever before.

I’ve hidden this offer deep in this post, because I only want to help people who are willing to work for it.  It’s never easy to become the Alpha, but this special article will allow you to understand how to immediately put your company on the track to becoming an Alpha.  Contact me today, because I have only printed a limited quantity of this special article.  Once they run out, I won’t reprint it again.

Wes Ball is president of The Ball Group.  He is also author of The Alpha Factor, available here or through on-line bookstores.  Wes speaks around the country to large groups of business owners and managers who want to start growing their sales and profit sustainably without discounting or promotion… no matter what the economy is doing.  You can reach Wes at 717.627.0405 or through his email at w.ball@ballgroup.com.

Financial incentives are the best motivator for behavior you want the least, such as self-serving attitudes, destructive greed, and internal competition that demotivates other employees. If you want an employee who has low loyalty, makes other employees distrust each other (and the company), and will try to leverage you continually for more money for doing less work, then financial incentives are great.  The truth is that employees who work for you despite a lack of special financial incentives that are designed to motivate specific behavior are more loyal, more focused upon the good of the company overall, and more supportive of other employees.  In short, they are great team players… something that almost every company says they want to hire.

So, what motivates the type of employee you want better than money?  Sadly, they are the very things that most companies are loath to give: trust, empowerment, and appreciation.

Ask almost any corporate employee what they hate the most about their job (and would desperately like to change jobs to get), and they will most often answer with things like, “trust, personal empowerment, and appreciation for work well done.”  Interestingly, despite this overwhelming unmet need, if asked what they want the most, they will most often answer, “more money.”

Why the disconnect between what they say they want and what they would change jobs to get?  It’s something I have seen in market research thousands of times.  People will say they want something that is far different from what they would give almost anything to get, because they don’t think they can get it or they don’t believe the person asking would give it to them.  So they answer with something they believe the questioner will understand and accept.

As an employer, I have always been amazed to discover that the employees that have provided the lowest return on investment have typically been those demanding the most money and the most financial incentives for things that will grow the company.  The best employees have typically been ones who want a chance to prove themselves and who are less concerned about short-term financial incentives than long-term growth potential.

My advice:  Forget the financial incentives except as “appreciation.”  Focus upon making employees feel more trusted by including top performing ones in strategic planning and other long-range planning activities or problem-solving.  Invest in employees who show potential or who demonstrate the “right” attitudes” with training and by giving them special opportunities to prove themselves.

You will find that everyone on your team is more motivated and more more focused upon the things you really need from employees.

If you have examples of this at work in your company, I would love to hear about them.  It’s about time that corporate managers realize that negative motivation and weak financial incentives won’t work, but showing more respect, trust, and appreciation to employees will.

Wes Ball is the author of The Alpha Factor.  Although he spent the last 20+ years growing companies ranging from the Fortune 100 to small local companies, he is focusing almost exclusively upon medium-sized businesses who he believes have the most potential to rejuvenate our economy and to become tomorrow’s market leaders.  You can reach Wes at 717.799.3395 or w.ball@ballgroup.com.