Money Can't Buy You Love

Mark Twain once complained, "I was seldom able to see an opportunity until it had ceased to be one." Sound familiar? If it doesn't, you haven't been in the home-building business long enough.

How often has a competitor implemented a program you had already thought about, put aside, and swore you'd get to later? I'm sure you've experienced at least the "thought about" and "put aside" part of the question.

If all you had to do was worry about the sales or the marketing side of your business, it might be different. But that's not the case. You've got double that amount of things to do. And most marketers have to worry about position, process and promotion ideas, too.

Add today's market realities to all of your possible marketing alternatives and it's easy to see that you are facing the challenge of your life. And that challenge is all about choosing which strategy is best and then deciding when to use it.

It seems that no matter how hard you try, marketing comes down to one, very easy question: Which of your marketing programs and alternatives will boost your sales and your profitability most?

Up to now, marketers have rallied around a universal answer to my question: discounts. That's both good and bad. In other words, offering discounts can be everything from the right answer to the wrong answer to the safe answer to the quick answer. It's just deciding which answer that's the tough part.

I don't want you to get the wrong idea. I'm not saying that discounts are bad. My problem starts when things stop. Good marketing and good selling stop for a subtle, almost sinister reason. The discount becomes the marketing and sales program rather than a tool that supports these programs. And when that happens, discounts race out of control and end up being deeper than they have to be. If we look at the relationship between sales, marketing and discounts, I think you'll see what I mean.

To begin, I want you to think about the purpose of all of your programs. Why do you create and implement good marketing programs, train your sales people to be better than your competitor's people and bother with all of your various discount and incentive programs? In all cases, it's to make more sales. Now here's the tough question. If you want more sales, why quit doing the things that help you most? Why do you quit selling and marketing and expect your discount to be your competitive advantage?

After all, how hard is it for a competitor to match your price and eliminate your advantage?

Philip Kotler, author of "Marketing Management," discusses discounts in a very unusual way. "Low price alone is not enough to build a competitive advantage. A measure of quality must be present so that customers feel that they are buying on value, not price alone," he says.

Value is always a comparison. It's the relationship between what a customer wants compared to what they have to pay. Think about your typical customers. If they don't perceive that they're getting enough of what they want, it doesn't matter what your price is — they aren't going to buy. And this means one thing: you need to do something to raise value.

There are a few ways to raise your customer's perception of your value. You can either lower your price, raise their perception of what they're getting or a little of both.

But that's just the beginning; there's still another part of value building. What do you need to do to influence your customer's perception of what they are getting?

As before, the answer is easier than it might seem. The easiest way to influence a customer's perception of what they are getting is to show them how you are different.

To be a good marketer, you must first figure out how you're different than your competition. Harry Beckwith, author of "Selling the Invisible," knows how important this is, especially when you're dealing with a "me too" industry like home building. Beckwith explains differences from the customer's point of view: "People have a strong need to justify their decisions so they look for differences to make that happen."

Michael Porter, author of "Competitive Advantage," is big on differentiation too. He believes a company can't develop a strategy unless it has strong points of difference. In fact, he believes that differences are the key to building value. Value starts with deciding how you are different from your competitors.

So no matter whether it's built into your product or it's something you have to dig around to find, you have to figure out what makes you stand out. And once you know, there's only one thing left to do: market the heck out of it.

Remember, your customers want a discount. But more than that they need a way to understand the value you provide, especially when big discounts cloud value and make any decision more confusing than it should be. So quit marketing the discount and keep building the value.

Your sales department is killing you and you just don't know it — or maybe don't want to know it. It's not your associates; it's your sales training that's costing you sales. Your associates aren't being trained to sell what today's buyer is buying or even wants.

In today's market, your customer wants one thing more than anything else: they want to make a great decision. You are no longer selling homes or communities or lifestyles. In today's market, your product has changed. Beginning now, you're selling "great decisions."

There's a gap between today's sellers and today's buyers, and you can blame it on discounts. Discounts started the problem, and discounts are still fueling the problem. Do a little snooping, and I think you'll discover what I mean. Money can't buy you love.

The instant associates receive word of discount pricing they change. It's almost as if they're suddenly possessed. They stop selling value and they start selling the discount. The discount suddenly becomes the product.

As I said before, today's customers are interested in making great decisions. And great incentives don't make decisions great. Great decisions happen when customers see some sort of difference between you and your competition.

So don't replace your sales and marketing programs with discounts, because if you do, you might find yourself like Mark Twain — with an opportunity you didn't recognize until it ceased to be one.