🔒Business myths that get companies into trouble

We're going to plug holes in a few concepts that are alluring, but usually not true and can be very expensive.

Myth 1 — We differentiate on service. Everybody differentiates on service, or at least they say they do. And if everyone claims it, then in the mind of the customer no one owns it. Service is just too generic a term for something that is individual to each customer.

One customer considers good service to be extended hours, while another cares less about the hours you are open. They do everything online, and good service to them is an easy-to-use website that offers complete functionality.

If you want to differentiate on service, change the word. Instead of service, you differentiate on people, or listening, or empathy. Service comes from how a customer perceives they are treated, and how they are treated is totally dependent on your people, not on a policy.

Invest in your people. Differentiation on service then becomes possible because your people focus on each customer instead of a policy that may or may not be applicable.

Myth 2 — Everyone is a potential customer. Everyone breathes, eats and sleeps. Everyone does not potentially buy any product or service, anywhere, anytime. The myth of marketing to the masses is long gone.

Unfocused advertising or mass mailings will cost much and produce little. Think about how much junk mail you throw out each day. You throw it out because it is not applicable or important to you.

Instead, focus on your actual customers and understand why they do business with you. Who are they? What is important to them? Are these the types of customers I want going forward?

Don't be lured by the myth of a broad market potential. Say no to large, yet unfocused opportunity. Instead, focus on clearly defined markets where actual customers and potential customers exist. This is where you will find sales opportunities and greater returns on your marketing investments.

Myth 3 — Variations on a theme work. You have a product that is highly successful with a targeted group of customers. You are buoyed by your success, and want to capitalize on it. Why not take that brand identity and apply it to another product, or another market?

Stop now! Line extension and market extension thinking usually ends up just diluting the original perception of the brand and confusing the customer. Avoid these kinds of variations on a theme. They inevitably cost money and reduce the power of the brand.

Exceptions exist. One is where market research validates that the altered or extended product is different enough to satisfy additional needs. The second is where another market has similar enough needs to see value in the product. With these exceptions you are extending a well-earned position into viable new areas of opportunity.

Myth 4 — If we build it, they will come. This worked for Kevin Costner in “Field of Dreams.” It does not work for companies. Truly differentiated and winning positions in the marketplace start from the customer's point of view. They do not start from the product point of view.

Make sure that any new product or service you want to offer meets a pre-existing need in the marketplace. Then put the engineers and design people to work and build the best product or service possible to meet that need. You don't have to hope customers come to what you've made. They are already waiting for your solution.

Myths are often alluring because they usually promise a quick or simple solution. But if something seems too good to be true, it usually is too good to be true. Differentiate on specifics, not generic terms. Be disciplined and find the right customers. Respect the position and uniqueness the customer assigns to you. And offer things customers deem important, not something you consider important. 

Ken Cook is the co-founder of How to Who and co-author of “How to WHO: Selling Personified,” a book and program on building business through relationships. Learn more at www.howtowho.com.