As an entrepreneur, there is one biggest mistake marketers make that can cost you millions of dollars, loss of momentum, and lost time. And by the way, if you’re an entrepreneur, a CEO, guess what else you are? You are somewhat a marketer, because at the beginning when you’re building your company, either directly or indirectly, you’re marketing yourself.
The Biggest Mistake: Appeal to Every Single Customer
As a marketer, you don't ever want to have a bipolar personality. See, some brands are all over the place. They're almost like kids that try to please everybody. But the highest form of maturity is when you become independent of the opinion of others. What this means as a CEO is that you need to position yourself, realize who you are, and stick to it. The biggest marketing mistake you can make is to try to appeal to every single customer. You just can't do that. No one has ever done it and become massive..
Four Different Categories You Can Choose as an Entrepreneur
There are really four different categories you can choose to be as an entrepreneur and as a business.
High Quality/Low Cost
With high quality, low cost, Â you have high-quality products at a low cost.
High Quality/High Cost
With high quality, high cost, both quality, and cost of your products are high.
Low Quality/Low Cost
In this case, you have low-quality products that also have a low cost.
Low Quality/High Cost
Lastly, you have low-quality products at a high cost.
Now some people may say, "Pat, can't I just be everywhere?" No, you can't.
For example, Harvard is what? High quality, and high cost. A community college is low quality, low cost. Public education could be high quality and low cost. For instance, some people move to a certain neighborhood because the public schools in that neighborhood are high quality. In that case, you have high quality, and low cost. A private school could be high quality, high cost, or it can be low quality, and high cost.
The Type of Product Doesn't Matter
It doesn't matter what the product is. I can go into different products and each of them fit into one of the four categories.
Let me do a test with you.
Ferrari
Think about it. Which of the four categories do you think Ferrari falls under? Is it low quality, low cost? No. Low quality, high cost? No. It's not low quality, so we know automatically that it is either high cost, high quality or low cost, high quality. We know that Ferrari has a reputation for being high cost, high quality.
Starbucks
At Starbucks you pay $5 for a cappuccino, or Frappuccino. So you have high cost, high quality. Or at least they claim the quality is high. If their quality wasn't that high, they wouldn't be as big as they are so they must have high quality.
Tesla
What do you think Tesla is? Is Tesla very, very expensive? You may say no, because the cost is not really that high. But the quality is high. So Tesla may be high quality, low cost. You can get a Tesla that is high quality for low cost because Elon Musk's goal is to try to produce a product that's a middle America product, with a very, very high quality. That's his goal. He's not trying to be Ferrari.
Wal-Mart
Where's Wal-Mart? Think about Wal-Mart. Do you think that Wal-Mart cares that they're low quality, low cost? Wal-Mart's the biggest company in the world. Wal-Mart doesn't care if you don't like Wal-Mart. Wal-Mart knows they're not going to sell $6,000 Canali suits, and they're okay with that.
You wouldn't go into Wal-Mart and say, "I would like to buy some Ferragamo shoes." If you did, they'd say, "I'm sorry, you want what kind of shoes? We got a Ferrajack shoe for $9.99, but you're not getting Ferragamo shoes here." You're just not going to get Ferragamo or Canali at Wal-Mart. And by the way, they have 2.2 million employees around the world, so do you think they care if you say, "I don't like Wal-Mart"?
Jaguar
Some of you may say, "Why did you put Jaguar here? Because Jaguar is low quality, high cost. Before they became Ford, for many years, everybody made fun of Jaguar. Why? Because Jaguar wanted to be a high-end, luxury car. It looked good, but the quality just wasn't that good. It was very expensive, low quality.
IKEA
What would IKEA be? IKEA would probably be low quality, low cost. They'd like to say they're high quality, low cost, but they're low quality, low cost.
Your Identity As an Entrepreneur
I myself started off with Morgan Stanley Dean Witter. Now listen to this. The clientele you dealt with at Morgan Stanley Dean Witter were who? People that had a net worth of a million dollars and up. So I was dealing with high quality, high cost. Then I went to Trans, and then I started the PHP Agency with our friends. Our goal was to be high quality, low cost. We wanted to provide the highest quality products out there, with the lowest amount of cost that worked for us.
Now once you create an identity, you have a reputation for what your product is. And all of a sudden, if you decide to change it, guess who you throw off? Your existing base of customers. You may think that you'll do a very, very good job if you try to appeal to more people. From a common sense perspective, it makes sense, right? Really?
The Tale of Four Cigarettes
Listen in here for a tale of four cigarettes, and what happened when two of them got a not-so-bright idea.
Your Ideal Customer and Your Biggest Differentiator
I have a question for you. Who is your ideal customer? Are you trying to please everybody? Can you imagine if one day Morgan Stanley said, "Yes, our ideal client is a net-worth of $5 million, with $1 million of investable cash. And oh, by the way, you can also do $50 a month with Morgan Stanley Dean Witter." No way. They'd lose their identity.
Think of how confusing it would be if Wal-Mart made this announcement: "Effective January 1st 2017, Wal-Mart will start selling Ferragamo and Canali suits." What would you say if Wal-Mart said that? Tell me you wouldn't be confused.
And by the way, do you think the customers that go to Neiman Marcus, which is high-quality, high-cost, would go into Wal-Mart to go buy those Canali suits? Do you know how confusing it is? It's very confusing. It's the same thing if Neiman Marcus decided to say, "We're selling $9 shoes, come and get it." That's just not going to happen.
Who Is Your Ideal Customer?
So who is your ideal customer? You've got to ask the question. Do you know it? What is the age bracket? Income range? What do they like? Why do they come to you? Who are you marketing your product to? Once you determine that, stick to it. And then do whatever you can to compete in that space and be the best in that space.
And by the way, there's one other part to keep in mind. Once you decide who your ideal customer is and how to position yourself, know that you will have enemies. You will have opposition. You will have people that say that your ideas are terrible, and that you have no clue what you're doing. But listen. If you can stick to the message long enough, you'll succeed. And if you can't, you'll be like the rest of the entrepreneurs and marketers out there that made the mistake of trying to appeal to everybody, who lost every single thing they had.
The highest form of maturity is when you become independent of other peoples' opinions. When everybody's telling you what to do, stay focused on what and who you want to be, and where your ideal customers are going to be.
If you have any questions or thoughts, leave them on the bottom. And if you haven't yet subscribed to my YouTube channel, click on the button below to subscribe.
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