What is Driving Your Revenue?

Be the OnlyEver wonder why you’re not making more money or having a bigger impact? When you market something, ultimately there are two barriers keeping you from the results you want. You either don’t actually have the value to offer, and/or you don’t adequately communicate that value.

A Deceptively Simple Value Formula

We all think we provide value to customers, but do we really? In most cases we have to think this is the case, lest getting out of bed in the morning would be brutal.

If we really do have value to offer, is that value being communicated?

If you have value and communicate it, how is it possible that you’re not making it rain? If those two conditions are being met, you’d be going to fewer marketing conferences and would be hearing more people say, “Shut up and take my money!”

The formula for driving revenue is thus simple: create actual value and communicate it. Is that an oversimplification? Nope. The reality is that the deceptively simple formula forces some tough soul-searching and often brutally honest analysis about your business and how it is performing.

Not to worry, we’re going to review a few tips and tricks that might help you break through some common challenges that businesses face when defining their value proposition.

Is The Value Really There?

When selling, we tend to talk about things that are important to us, not what’s important to the customer. Countless businesses refer to themselves as the “premier” or “full-service” provider, but what does any of that really mean? Is that offering a clear value to the customer, or is it more about your own ego and brand identity? If you really could make a difference, you wouldn’t need to rely on superfluous language or boasts about being the best.

Here’s a fun challenge. Can you communicate in 25 words or less why your customer’s world is better with you in it? If people read that pitch and aren’t convinced or compelled, then your return rates on any campaign are going to be lower. Marketing in general will be a tougher chore. Nail this pitch, and your sales will increase. If the value is there, customers will pay for it.

Time Isn’t Money

Imagine the next time you attend an event you demand a $100 cover charge because you spent a lot of time preparing for the event. Time is money! Right?

Time invested is a generally horrible way to communicate value, since inherently you’re being rewarded for taking longer to do something than it may take someone else. Customers don’t care about your time. Customers demand results.

What if we increased our imaginary cover charge to $200, but instead of touting the time spent on the presentation we promised that the presentation itself would include a guide for creating a passive-income business together that will generate $500/mo for you?.

This new scenario is a no-brainer, right? That’s because the value is no longer about time, but now it’s a transaction where the offering is considered more valuable than the money traded to obtain it. The next time you consider bragging about your time spent, think about the results.

Speak Like A Goldfish

Humans now have an attention span literally shorter than that of a goldfish. We can hold onto a coherent thought for 7 seconds compared to a goldfish’s superior ability to focus for 9 seconds, or 12.5% longer. Yeah, let that fact sink in for a moment.

Despite this, when we talk we assume that people are paying attention to us. We know what we’re talking about, and thus we have “the curse of knowledge,” and think more is better to showcase our expertise and communicate value.

But if something is so great and beneficial, should it need so much explanation?

We also use industry jargon because we believe it increases the perception of expertise. In fact, just the opposite is true. In expert witness trials, everyone is seen as an expert, but it’s the communication that makes the difference. As Einstein famously said, “If you can’t explain it simply, you don’t understand it well enough.”

Make The Complex Simple

So how do you make the complex simple so that others clearly see the value and even evangelize for you? And how do you do that so effectively that it happens every time?

After all, if you get 9 of 10 people to advocate for you, that sounds great. Except you’ve lost 10% of your market. So how do you go simpler, and more memorable? How do you craft a message so that you can explain it to your grandmother and three weeks later she can explain it to her friends?

Craft A Message That Resonates

We tend to think in terms of pictures, not words. Telling customers you will “help them be more successful” is too limited. Saying “we are premier” just begs the question, who isn’t? Even the all-too-common description of “full-service” falls apart at the first request for something a company doesn’t offer. Not to mention that a jack-of-all-trades is usually a master of none.

Humans are much more likely to remember body language and tone over words. Often, it’s not what we say but how we say it.

It’s also true that what we don’t say can become more important than what we do. A popular adage in jazz is that the notes that aren’t played are the ones that really matter. A musician has to consider all possibilities, and reject anything that doesn’t improve the art. The same goes for business.

Sometimes we cram so much information into our messaging and just keep talking. Yet the more we talk, the less customers hear. You can say very little in many words, or much in few.

History’s greatest speeches are almost uniformly short. Lincoln’s monumental Gettysburg Address is only 272 words.

Shift Your Sales Perspective

For most cases, the number of customers needed to go from current to “game change” isn’t all that many. So rather than trying to resonate with every potential customer, what if instead the focus shifts to resonating powerfully with a just a few?

A narrower focus means you can focus on the difference you’re making, not the money you want to make. Consider the difference between “just two more clients would be amazing” and “We can only take on two more clients before we hit deliverability issues, let’s talk about a potential fit.”

The latter represents a subtle but powerful shift in perspective towards acknowledging scarcity which increases demand.

Limit Your Availability

Thinking about your product in terms of limited supply should also affect how you actually communicate your value to potential customers.

If you’re desperately beating down every door and begging for attention, what does that say about your product? What does it say about you?

Don’t be afraid to limit your availability. If you are too available, you are not too valuable to pass up.

We expect successful people to be busy. So don’t give the impression that you’re just watching the phone waiting for a return call.

Imagine talking to POTUS in the Oval Office and saying, “I don’t want to keep you, I know you’re busy leading the Free World and everything” but hearing in reply: “Me? Nah, I’ve got all day!”

So rather than try and mass market which will inevitably water down the value you can provide, define the fewest number of people that you can serve well and crush it.. These customers will tell their friends and evangelize for you, and so on. If they don’t, it’s back to the drawing board to determine how to better align your value proposition with the true pain points of your customers.

Find The Real Pain

Most businesses frame their product benefits in terms of saving a company money or helping it generate more revenue. But is that generic aim really the true pain point of the customer?

Consider the famous axiom leveraged by IBM: “Nobody ever got fired for buying IBM equipment.”

In that case, the customer is more concerned about maintaining employment than risking it on an even potentially superior product without brand recognition. The fear, uncertainty, and doubt (FUD) tactic so effectively deployed by IBM made competition almost impossible.

Or consider Revlon. As its founder Charles Revson put it, “In the factory we make cosmetics. In the store we sell hope.”

Understanding what you’re selling—and the “pain” it truly addresses—affects everything from what you sell, who sells it, and how.

Communicate Significance

We are created to be significant. You may know you and your product matters, but no one else does. So how do you communicate true, lasting significance?

What matters is how your audience receives your message. In other words, the goal isn’t just to communicate a message, but to have it remembered.

What do your most vivid memories rely on? Scents, sights, sounds, feelings. Emotions. What is the emotion left with customers after they hear your pitch?

Emotion Drives Action

Logic makes us think, but emotions make us act. Who can forget the Sarah McLachlan SPCA commercial, the one that makes even the toughest among us cry like babies? That single, heartbreaking ad helped the SPCA raise over $30 million dollars.

We like to think we are logical, reasoned thinkers, but often our emotions are what drive our decision making. When we can’t quite explain why we made a decision to purchase one comparable product to another, we often attribute it to our “gut.” The gut is really just our head reaching for logic and coming up short, covering for the role emotion plays in the decision making process.

We may say a restaurant has a nice “atmosphere,” or we like someone because they are “funny.” Or say we just “like” one brand over a pretty much identical other brand. These preferences are based on emotion, not logic.

Identify The Special Sauce

It’s an excellent sign when people can’t explain why they like your product. That indicates a real emotional connection. Real certifiable brand loyalty! Of course, in that ambiguity lies the challenge of discovering just what is triggering that emotional response. What is that special sauce?

If you listen to customers closely enough, they will tell you how to run your business. Finding that “secret sauce” is a difficult, ongoing process that involves asking customers lots of open-ended questions. Here are some example questions:

  • What is it specifically that you like about us, what really resonates with you?
  • If we increased our prices by 50%, would you stay with us? Why?
  • What would make you recommend us to 10 of your friends?
  • What is the one thing we could do to exceed your expectations?

Surveys are also useful, but it’s important to be careful with followups. The appeal of Revlon is not that it’s “priced right,” or whatever a customer may select to try and explain a preference. Their products give people hope. But this gets at a deep emotional driver that may be a mystery to most, so it’s unlikely that feedback is going to be given when asked.

Be smart about your interpretation of the data you get back. Discovering that level of insight takes really getting to know your customers. It’s not a quick survey, feedback request, or lunch. It’s about setting up your organization to constantly reflect on what customers say.

Never Compete On Sameness

When every brand has access to a Youtube channel, podcasts, and every other means to tell their story to the whole world, how do you differentiate?

Over 90% of CEOs when asked will say they are definitely differentiated from the competition. Ask their customers, and 8% will agree. What customers know and CEOs forget is just how interchangeable service providers really are. A misstep with a price increase or a competitor taking your customer to lunch can be all it takes to lose a customer.

Be The Only

Communicating to customers that “We’re the same as everyone else, just better” is a tough argument to make. Rather than argue better sameness, instead create space with “onlies.”

Declare proudly, “We are the ONLY business type that does this thing.”

That question may take some serious soul-searching and thought, but the exercise will leave you with a clearer picture of who you are, what you’re offering, and why you’re the “only” outfit that can deliver that value. Just remember that in order to have any chance of communicating your value, you must first understand it.

Get Going With Your Daily Gut Check

If you’re looking at starting a new business or product line, often the hardest part of getting started is just getting started. In entrepreneurship, action beats all. So here’s a few questions that all entrepreneurs should ask themselves (and honestly answer) everyday:

What did I do today to develop revenue or increase value to ensure customer loyalty?
If you’re not in some way increasing sales or creating additional value that keep customers happy and can even warrant prices increases, your business has no engine.

What did I do today to develop myself?
As Peter Drucker famously said, “The bottlenecks are always at the top.” You’re paid not for what you do, but what you get others to do. If you want to advance your business, you have to grow as a leader.

What did I do today to develop others?
This isn’t an annual strategic retreat in the woods, or a strategy report that gets shelved, but an everyday necessity. Investing in your team sets you up to answer the biggest question of them all: How to matter to customers. If your company disappeared off the face of the Earth, would anyone notice, let alone care? If not, how do you make them care? Or, how do you increase the bond so they’d care more?

 

Create Value + Communicate Value = Success

About Your Author

Christopher C. Hanks is the Director of the Coles College of Business Entrepreneurship Program at Kennesaw State University, where he acts as an advocate for entrepreneurship.

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