KEY RESOURCES FOR DEVELOPING YOUR COMPANY ’ S 7 STRATA
ROBERT H . BLOOM AND DAVE CONTI : “ The Inside Advantage : The Strategy That Unlocks the Hidden Growth in Your Business ”
RICK KASH AND DAVID CALHOUN : “ How Companies Win : Profiting From Demand-Driven Business Models No Matter What Business You ’ re In ”
JIM COLLINS : “ Turning Goals Into Results : The Power of Catalytic Mechanisms ” in the Harvard Business Review
FRANCES FREI AND ANNE MORRISS : “ Uncommon Service : How to Win by Putting Customers at the Core of Your Business ”
MICHAEL E . PORTER : “ What Is Strategy ?” in the Harvard Business Review
VERNE HARNISH : “ The X-Factor ” in Fortune Magazine
JIM COLLINS : “ The Hedgehog Concept in Good to Great : Why Some Companies Make the Leap ... And Others Don ’ t ”
SANDBOX AND
2 BRAND PROMISES
There are four key decisions to make on the second stratum :
1 . Who / where are your ( juicy red ) core customers ?
2 . What are you really selling them ? 3 . What are your three Brand Promises ?
4 . What methods do you use to measure whether you ’ re keeping those promises ? ( We call these the Kept Promise Indicators , a play on the standard definition of KPIs .)
Who / Where : This is the customer from whom the business can mine the most profit over time .
Kash and Calhoun , authors of “ How Companies Win ,” further suggest that there is a niche within any industry that represents no more than 10 % of the total customers but holds a disproportionate percentage of the profit , termed “ profit pools .” For instance , in the dog food industry , Kash ’ s team segmented the market based on the relationship between an owner and their dog ( vs . the size of the dog ) and found a group of owners they labeled “ performance fuelers .” These are owners who are active — biking , hiking , jogging , and running — and want their dog with them . Though they represent only 7 % of all dog owners , they account for more than 25 % of the profitability in dog food purchases . The key is finding that same niche in your industry and owning it through a highly focused product or service offering .
What : The primary mistake companies make in describing what they sell is focusing on the benefits and features . All sales are emotional , initiated through the heart and then justified logically by the head . That ’ s why established brands play on people ’ s fear of purchasing from a new entity in the marketplace .
Brand Promises : Most companies have three main Brand Promises , with one promise that leads the list . The key is to define the company ’ s Brand Promises quantitatively , so they can be measured and monitored .
KPIs ( Kept Promise Indicators ): A promise has no weight if you don ’ t keep it , resulting in lost customers and negative word-of-mouth publicity . Thus , it ’ s critical that you know how to measure whether you ’ re keeping your promises every day .
BRAND PROMISE
3 GUARANTEE ( CATA- LYTIC MECHANISM )
It needs to hurt to break a promise ; otherwise , it ’ s too easy to let the moment pass . The Brand Promise Guarantee also reduces customers ’ fear of buying from you . Professional service firms might offer “ short pay ” guarantees , giving the client an option to pay whatever they think is reasonable , if there are issues . Though 99 % of clients won ’ t spend less , the existence of the guarantee gives them the confidence to do business with the service firm and encourages customers to share their concerns .
4 ONE-PHRASE STRATEGY ( KEY TO
MAKING MONEY )
It ’ s critical to identify your One- PHRASE Strategy . This phrase represents the key lever in your business model that drives profitability and helps you choose which customer desires to meet and which ones to ignore .
Great brands don ’ t try to please everyone . They focus on being the absolute best at meeting the needs / wants of a small but fanatical group of customers and then dare to be the absolute worst at everything else . In turn , competitors who are striving to be the best in everything for everyone actually achieve greatness in nothing and end up being average players in the industry .
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