Marketing Profs, March 9, 2011
Find Your $1,000 a Minute Market: How Marketing Creates Product Value
By Olga Taylor and Barbara Bix
How much is masterpiece music performed by an internationally acclaimed virtuoso worth to an audience of a thousand people? .
About $32, according to the Washington Post.
In January 2007, the newspaper conducted an experiment about the influence of context on people's perceptions and priorities—and their ability to "recognize beauty." As part of the experiment, Joshua Bell, one of the world's best violinists, played incognito inside a Washington DC subway station.
During his continuous 45-minute performance, Bell played six pieces by Bach, Shubert, Massenet, and Ponce—some of the most powerful music written for a solo violin. His instrument: a 1713 Stradivarius worth about $3.5 million dollars. Two days prior, Bell had performed at a sold-out concert in Boston, where the tickets averaged $100.
But back in DC, 1,097 people went through the subway station. Only seven stopped and listened for a while. About 27 gave money but continued to walk past the musician. There was no applause at the end, and the total sum collected during the performance was $32.17.
What Is Beauty?
The Washington Post had its story. Headlined "Pearls Before Breakfast," it was filled with descriptions of the musician, the music, the instrument, and even the acoustics of the briefly infamous subway station. The goal was to assure the reader that there was absolutely nothing wrong with the performance.
The article went out of its way to prove that, if there is such a thing as sublime beauty, it was fully present in Bell's music. Yet very few people were interested enough to pay it any attention, let alone money or time.
What Is Value?
Though beauty and its place in our lives are the subject of philosophy and sociology, willingness to pay for or "value" a product or service is the purview of marketing.
In business terms, the drama of a superior product's failing to attract market share is only too familiar:
- Brilliant technology—ahead of its time
- Exquisite restaurant—in the wrong part of town
- Expert professional service—losing deals to a better-known competitor
Philosophers have long debated whether beauty is intrinsic to an object to which it is ascribed. By contrast, marketers agree that value is dictated by customer preferences (demand) and competing alternatives (supply)—not by the product itself.
Value is never "timeless" or "transcendent." It is a product of time, place, social context, and mental attitudes. Sharp fluctuations in stock and real estate values, premium commanded by name brands over generics, and mini-bar vs. supermarket prices are all examples of identical products having different values.
So capital markets are cyclical, and mini bars are a rip-off; but isn't value just good quality at a fair price?
Quality and Price
Too many businesses fail because companies equate value with "quality" and "price." If you had any doubts before, the Joshua Bell experiment should dispel every one of them. In that example, there is a product of uncontested quality, Bell's performance, at a competitive price—free—failing to "sell," with only seven out 1,097 people stopping to listen.
But wait a minute! If quality and price aren't "value," why have sellers pitched and buyers worried over nothing else since the beginning of time?
The Agony of a Salesman
Quality and price are important, but only in front of the right buyer, at the right time and place.
When that is not the case, our message of quality and price falls on deaf ears, much like Bell's beautiful music played to the early-morning subway crowd. In fact, even before he started playing, Bell was aware he was missing a step in reaching out to his audience
"I was stressing a little," he told The Washington Post after the "flopped" performance. "When you play for the ticket holders, you are already validated. I have no sense that I need to be accepted. I'm already accepted. Here, there was this thought: What if they don't like me? What if they resent my presence?"
Start From the Start
Anyone who has ever made a cold call to an unqualified prospect or forced himself or herself into a sales presentation will immediately recognize the feelings described by the world-class musician facing a random crowd.
What do you do to get to a sale? Brace for uncertainty and rejection? Change your product to assure universal appeal?
Be aware of the tendency to work backwards from one unsuccessful solution to the next. In the Joshua Bell example, it would be easy to blame the product for failure to attract customers: Maybe if he just played popular tunes instead of arcane classics....
Next, we like to point the finger at Sales. What if we hired "direct sales force" and trained them to tap commuters on the shoulder and say, "Hey, do you have any idea who is playing over there?"
Then, we realize that advance promotion might help. So we put up signs announcing a free concert by Joshua Bell at 7:51AM on a Friday inside L'Enfant Plaza Station in Washington DC. At that point, we might actually improve our proceeds from $32 to $300, or even $500.
Note that we have already spent money on sales and advertising, but we are still nowhere near the two main limiting factors: time and venue. Why? Because time and venue are a matter of buyer preference.
To establish preference, we first need to know who the likely buyer is. And, so far, we have not asked the right question: Who in America will pay top dollar to listen to a world-class violin performance?
Marketing Must Lay Groundwork for Sales
Behind every sold-out performance is the work of educators, market researchers and strategists, artistic directors, agents, advertisers, and ticket sellers—in short, all those helping Joshua Bell find and reach that middle-aged couple who is willing to pay $100 per seat at the Boston Symphony.
Without them, the man whose talent can command $1,000 a minute walks away with $32 for almost an hour's worth of brilliant performance.
The moral? Let us repeat it once again: Bell by himself is not worth $1,000 a minute.
His work is worth $1,000 a minute only to a carefully primed and self-selected audience at a setting they accept and a time that is convenient to them.
Until his audience is prepared to listen, his skill, his service, his gift of impassioned artistry—no matter how prized elsewhere—has no value to that audience.
Find Your $1,000-a-Minute Market
You don't need to be an international prodigy to run a successful business. What you do need is a marketing scheme that recognizes your best prospects and...
- Adopts a value proposition that speaks to them
- Places products and messages in their path
- Reaches out to them again and again to educate and maintain awareness
- Makes it easy for them to signal when they are ready to buy
- Puts a sales team in front of them
But how can you tell who the best prospects are? And how can you be sure that your marketing messages aren't being shut out in the same way as your sales calls?
Before They listen to You, You Must Listen to Them
Before your marketing team is ready to launch an offensive on the minds and wallets of your chosen targets, they will need some vital information that they can only learn from the buyer's side—those who buy your product and those who use it or otherwise influence the buying decision.
Marketing is 80% asking questions and sifting through responses, and 20% producing and disseminating content. "Getting into the buyer's mind" is the secret to determining who is willing to pay the most for our product—and when, where, how, and why they prefer to buy. Marketers ask questions to deconstruct the buyer's experience: from the moment he has a need we can address, to the handshake that clinches the deal.
But how do you get into someone else's mind?
The "Don't Know" Mind
Seeing the world from another person's point of view is a skill in itself. It takes asking the right questions in the right order and understanding the answers in their proper context.
That, in turn, requires what management consultants call "releasing your agenda" and what Zen Buddhists call "the don't know mind"—the ability of the observer to set aside any preconceived notions, expectations, or desire for a particular outcome.
When speaking with a customer about the value they derive from our product, our goal is not to confirm or reject a preconceived notion. Nor are we striving to "fill the gaps" in our understanding. Rather, what we are after is the whole story from a particular buyer's perspective.
For the best results, ask "open" questions like "Tell me what prompted you to consider a new solution?" or "How did you decide to go with company X?"
Also, stick to the facts and avoid questions that prompt any kind of speculation. Instead, ask your customer to focus on specific events, actions, and feelings that have occurred.
Focus Your Resources
In marketing, the most difficult step is often the first one: selecting a lucrative niche for our products. The urge to chase a broader market and our pet ideas about who values our product (and why) are two of the most common obstacles to discovering our true audience.
Once we know our most valuable prospects, finding out the rest—their preferred time, venue, educational outlets, distribution channels, ad content and placement, and the price they will pay—is a simpler task.
What emerges as a result of our focus on a select group of buyers is a map of their buying process. Marketing works best when it is able to supply relevant information at key decision points. Our goal is to remove obstacles or provide incentives when the buyer gets stalled.
When we have insight into information-gathering and decision-making patterns of our target customers, we can "reverse-engineer" our marketing and sales strategies to fit their behavior.
Speaking of Marketing...
The article in The Washington Post appeared just before the release of Joshua Bell's new CD, The Voice of the Violin. The CD has two of the six pieces described in the story. After reading it, Olga went on Amazon.com and ordered one for herself.