Key Takeaways of the book Ready, Fire, Aim
- A product will never be ready from the getgo
- Good enough on the market outperforms perfect when it’s too late
- Let the market guide you through the refining process
Summary of “Ready, Fire, Aim” : A company has four stages of development, each with its own specific challenges; in his book Ready, Fire, Aim, Michael Masterson gives us an overview of each, with his methods, tips and tricks for each stage, so that they can be solved and enable each company to achieve a turnover of 100 million Euros or more.
By Michael Masterson, 2007, 375 pages
The 3 main steps taught in the book Read, Fire, Aim:
- Develop a product well enough to sell it, but don’t make it perfect
- Sell it
- If it sells, refine it.
Chronicle and summary of “Ready, Fire, Aim”:
In the introduction, which is similar to that of La semaine de 4 heures, Michael Masterson tells us that he owns dozens of companies in the United States, the United Kingdom, France, Australia, Germany, Spain, South Africa and India, in a variety of industries, that include vitamin sales, a business newsletter read by hundreds of thousands of people, property management, public relations and health companies…
This isn’t what makes it similar to the introduction in The 4-hour Week. Michael Masterson explains that though he has many business interests, most of his time is taken up with travel and writing. In his opinion the three most important things in life are:
- What you do.
- When you do it.
- With whom you do it.
He has carte blanche on these three aspects: he only does what he wants to do, works when he wants, where he wants, and with whom he wants. That’s what he calls the best job in the world.
It wasn’t always this way: he had several jobs at the start of his career and was told what to do and when to do it. When he became an entrepreneur, he had a wonderful vision that he would have the freedom to work when he wanted to. He quickly realized that was completely wrong: the only freedom it offers you is basically to work twice as hard as you used to do – the thought that you worked too hard for someone fades quickly.
Note: As Michael Gerber says in The Emyth Revisited, it’s this scenario that restricts most entrepreneurs, who create a job for themselves rather than a business – they are one-man orchestras rather than conductors.
Today, it’s different: most days he won’t start work until 4pm, then leaves at 5pm.
“Work” is work you would only do if you get paid for it. For the author of Ready, Fire, Aim, his “work” is to answer his emails.
The object of Ready, Fire, Aim is to provide us with the essential things that Michael Masterson has learned since he started his business empire, but has still been able to maintain a lifestyle and work ratio that is as free as he wants:
- Start a business from scratch and become profitable quickly – usually in less than two years
- Take a business that is flat and turn it around
- Continue to expand a company as annual revenues increase from $1 million to $10 million and then $100 million
- Give others the hard work so that you are free to do the fun things
- Establish yourself as an essential business partner so that you can benefit from a high share of the profits even if you only work part-time
- Use the same successful strategy for all of your companies so that you won’t have to worry about how one of them performs
- Enjoy the best job in the world
Tempted? Use the guide.
Part 1 – Be everything that you want to be
Chapter 1: reach the next level
In Michael Masterson’s opinion, there are 4 main levels of development for a company, each with its own challenges and benefits.
– The first level is the start. Transition from an idea to a company that runs profitably. From zero to 1 million euros.
- Main problem: You’re not really sure what to do.
- Main challenge: Make the first profitable sale.
- And Main opportunity: Reach the minimum number of clients required.
– The second level is the rapid development stage. Increase your company from a 1 million turnover (with generally little or no profit) to one or two million in annual profits. This means the turnover needs to increase from 1 to 10 million.
- Main problem: You only make a small profit or you even lose money.
- Main challenge: Quickly develop a number of other profitable products.
- And Main opportunity: Increase cash flow and become profitable.
– The third level is the teenage stage. Increase your company turnover above 10 million euros (which is difficult for many entrepreneurs) but still generate a profit of 2 to 5 million. Turnover goes from 10 to 50 million.
- Main problem: Your systems are stretched and customers are aware of it.
- Main challenge: turn chaos into order.
- And Main opportunity: learn how to develop useful protocols and manage processes and procedures.
– The fourth level is the growth and development stage. Increase your company’s turnover from 50 to 100 million or even 200 million and more.
- Main problem: Sales slow down and can level off.
- Main challenge: Re-evaluate your entrepreneurial skills.
- And Main opportunity: Get the company to run on its own.
The writer outlined these 4 steps and wrote Ready, Fire, Aim, for a seminar that he organized for 30 entrepreneurs who paid $10,000 each to participate. For the book to help your project succeed, the advice given simply requires you to have faith in its messages and make time to implement them.
Chapter 2: Why the number of employees matters: Different ways to evaluate the 4 levels
Michael Masterson has based the 4 levels of a company’s growth around turnover, because that is the thought process of most entrepreneurs when they consider the growth of their businesses.
His main theory is that each level has its own problems, challenges and opportunities. However, sometimes the main problem you currently have does not correspond to the level you are supposed to be at. Sometimes this can be because turnover is not the most important factor for scale changes. The number of employees is another important factor – scientific studies demonstrate that the effectiveness of a message is inversely proportional to the number of people it should reach. Therefore, Michael has designed his 4 steps with the number of employees in mind (the number of employees is given as an indication, the more relevant thing to consider is the number of managerial levels there are between you and the employees at the very bottom of the organizational chart):
Step one: You and your first 7 employees
In this step, your employees understand exactly what you want as they are directly in touch with you. So, the main problem you face is how to successfully sell your flagship product or service.
Usually, each of the 7 employees has a particular role, so when the company progresses to the second stage, each of them becomes the manager of their department and hires a team to meet their objectives. This makes the first tier of employees managers, and each time a second-tier of employees is hired, the company’s capacity to produce and sell products grows.
Step two: From 7 employees in the first tier to 49 employees in the second tier
When you employ 49 people, those at both the first and second-tier are busy but there’s always more that needs to be done. In general, this is the phase of the business that grows the fastest; which means that you experience problems that you hadn’t beforehand. The systems that you initially set up don’t run as well as they did; due to the number and speed at which you hire new employees, they are not taught or monitored properly.
These kinds of problems are typical for businesses that are about to hire third-tier employees and are reluctant to take the plunge. The reason for this hesitation is simple: the first tier of your employees knows everything you know because they have been with you from the start. Not only do they know their job very well, (you wouldn’t have kept them otherwise) but they also have a deep appreciation of your ideas on how to develop the company.
Your second group of employees is not in direct contact with you, but they hear about you through your first round of employees who, though they may not always agree with your decisions, will communicate your requests to the employees in the second group. Even if their immediate superior sometimes disagrees with your decisions, they recognize that their main concern is, directly or indirectly, to keep you happy.
Third step: From 49 employees in the second draft to 343 employees in the final draft
When you reach the point where your draft of 49 employees is at full capacity, you repeat the process: you enable the business to expand further, by your recognition of the issues and the creation of a new organizational framework, or by giving permission to your managers to solve problems as they usually do: hire more people.
But there’s obviously a huge difference between the third draft and second draft of employees, which is that the third draft of employees report directly to the second draft employees, which creates another level between you and them. When they look above their immediate superior, they see the employees in the first draft, not you.
This disengagement can be good or bad for the company’s growth, but without a doubt, it is always bad for communication. What is lost in the signal-to-noise ratio is the client-focus. Sales continue to grow, but everything else crumbles.
The crucial thing to do now is to increase the focus on customer service and product quality so that they are as important as sales.
Most of your third draft workers probably won’t embrace the changes caused by this new process as it will challenge them to concentrate on something they haven’t had to do since they started to work for you: growth.
If you define a plan that balances growth and quality, both are achievable if you are clever and industrious. If you can do that, your business will eliminate these management problems and reach a new stage of development – it may not be as fast but it will continue to grow.
Fourth step: From the 343 employees in the third draft to unrestricted expansion.
At some point, growth in your third stage will be interrupted, and may even recede. When this occurs, you will try to encourage your first draft of employees, but it will be obvious that they have already done everything you would like them to do. There will be a sense of frustration.
As you aren’t sure of what to do, you may think to bring a consultant on board. However, there’s a valid reason why your company is on a downward trajectory: the way it is structured – how you got it to where it is now – prevents it from being able to go any further.
Many entrepreneurs get stuck at this juncture. But if you get past it, then you can watch your company expand and mature, with significant exponential growth…
Chapter 3: Become a top-level entrepreneur
Ready, Fire, Aim is about the creation and development of multi-million dollar companies; but it also describes how to become a top-level entrepreneur. Companies do not develop and become profitable by accident. In the writer’s opinion, for a company to reach 100 million or even 300 million in turnover; it must be very strong – even extraordinary – in five areas, which will require a magic touch in each, to become a business genius:
- Have fresh and useful ideas for new products.
- Sell your products at a profit.
- Manage the processes and procedures effectively.
- Find excellent employees for the job.
- Ensure that people, procedures, products and promotions all work smoothly together.
To be able to launch a business, you don’t need to know how to create a product or motivate people. You just need to have two basic skills: 1) you need to know how to sell, and 2) you need to be able to start the sales process.
Note: I agree with the author Michael on the relevance of these skills, but I think it’s possible to learn both of them in the set-up process and once the company has been established. In this case, it’s obviously very important to learn them very quickly, especially number 1.
Then you will need to develop 5 skills, which are linked to the 5 areas in which your company will have to excel:
- The skill to have ideas.
- Sell the products.
- Manage systems.
- Hire and manage superstars (in the way Chet Holmes describes in The Ultimate Sales Machine)
- Take action
Michael mentions that he could use a test to find out his strengths and weaknesses, but he thinks it would do more harm than good, because a few years ago he passed a test from Seth Godin’s book If You’re Clueless About Starting Your Own Business and Want to Know More to know “if he was an entrepreneur” and the result was:
It’s risky. You have some traits in common with entrepreneurs, but probably not enough to be a success. If your score for the last 5 questions was 15 or less, the risk is greater still. It’s best to work for someone else.
His score for the last 5 questions was exactly 15. The author’s final advice is that we need to be wary of this kind of test and those things that you don’t know how to do can be learned.
Step 1: Early childhood
Chapter 4: The dominance of sales
Of all the aspects within a company, the one that should be given the highest priority is marketing. The other functions are important, but without marketing, you have no sales and without sales, you have no cash flow to pay for the other aspects of the business.
Therefore, the First Rule of Entrepreneurship is:
Without sales, it is very difficult to run an active business
Until you have made a sale your company is simply a set of unproven ideas; which you have spent money on. Some of these ideas may be good and realistic; and others not: it’s impossible to know until you’ve put it to the test and sold some products.
Basically, entrepreneurs who have just started up, should; from the outset, spend 80% of their time in an attempt to create a market for the products they want to sell. In Michael Masterson’s opinion, most do exactly the opposite: they spend most of their attention, energy, time and money on the set-up of their office, the design of the logo, their business cards, forms that need to be filled out, contracts, or how to improve the product. They think everything they do is essential and necessary to get things started – what they actually achieve is to waste their time on less valuable work.
Actions that involve the company’s appearance and how it runs; (operational activities, image building, accountancy, legal, etc.); are third-level requirements in Step 1 and should be set aside. Product improvement and customer service standards are important tasks, but they will be secondary until a sale has been made.
There are exceptions: if you open a restaurant, you must have a “perfect” product when you open. It’s the same if you make cars. But for the majority of entrepreneurs, all you need is a decent product and good customer service.
Sell, sell and sell again is the number one priority. Yet it is one of the most often overlooked or ignored aspects in business schools or business books. And many people have a negative view of salespeople – if you’re at a drinks party and tell people that you are in sales, they will look at you as if you are covered in pigeon droppings.
But when you start a new business, the sooner you make the first sale, the better your chances of success. So, rather than create a beautiful and very expensive site that costs you thousands of euros, or spend your time on office supplies and business cards design, or wonder if you should buy a new car because you are afraid that the old one will break down when you go to a customer, SELL. And don’t fall into this trap that thousands of entrepreneurs fall into: believe that their product is so great that everyone will fight to buy it when it’s launched. It’s arrogant, and it’s stupid. You won’t know if a product will sell until it is sold.
These are the priorities for the company during Step 1:
- Ensure that the product is ready to be sold, but not necessarily perfect
- Sell it.
- Then, if it sells, improve it.
Chapter 5: Your ideal sales strategy and the four fundamental secrets to selling your new product
As an entrepreneur, you must become the company’s number one salesperson, even if you don’t like it or hate the idea of it. The sale in Step 1 is not optional, it is essential.
So to learn the art of the sell is an obligation, not a choice. But your objective in this area is very specific: all you really want to learn is to sell a particular product – your company’s flagship product, which will lead to new customers – to a market. So you have to become highly specialized in one thing: how to sell your product and how to do it very well.
Based on this basic but crucial concept, you must determine the optimal sales strategy for your company. To do this, answer these four questions:
- Where will I find my customers?
- What’s the first product I will offer them?
- How much will I charge for this product?
- How do I convince them to buy?
To work out your optimal sales strategy you need to answer these four questions, not just some of them. Let’s look at them in detail.
Where will I find my clients?
It may be more difficult to answer this question than you thought. Let’s say you want to start a business that sells a new type of golf ball. There are lots of ways to find your first customers, for example:
- Place them close to the checkouts of specialized stores so that people will notice them whilst they buy other stuff for their next game. If you can negotiate rental for this space it gives you the opportunity to make a lot of sales.
- On the back cover or the inner pages of a golf magazine. There are a huge number of golf magazines, each with different content and subscribers.
- Place an advert on TV whilst they broadcast a golf tournament.
- Buy a mailing list, either to post or email people about your product.
Where to start? When you start a business, generally, you will have a limited budget and you have to select the most efficient way to find your first customers. Each salesperson from the four media outlets we have mentioned will claim their’s is the best value, most effective and will give you the best return.
Michael ‘s advice to resolve this question is simple: do what everyone else does. Michael Masterson loves originality, but when it comes to the answers to these four questions in Step One, he believes that the industry standard is almost always the best. Once you know a bit more about how things work, you can come up with some better alternatives.
To learn about what everyone does, look at all the obvious things and places that your customers generally use. For golf balls, you could go to a newsstand and look at ads in golf magazines, look in the daily papers to see if there are any ads for golf, watch golf tournaments on TV, research golf websites to help identify advertisers and the products they promote.
Then call the marketing managers of all the advertisers you have found (your future competitors). Tell them that you are a marketing student who wants to learn what they do (and you are of course!) and ask if they will give you a “15-minute information interview”. You will be pleasantly surprised by what they tell you, the amount of time they give you, and all the helpful points of interest that you can learn.
This research will provide a map of media locations in the different areas of marketing that are relevant to your market. Not only do you need to know the competitors who advertise but also which products they advertise, how often and, if possible, how much they spend. Obviously, it is essential to find out where they advertise regularly, as their best placements will also be your best placements. And the most beautiful thing about all this information? It can be obtained at no cost.
There is nothing more important in marketing than where you choose to get your message across. A brilliant ad in the wrong place will not bring you any sales. Conversely, a poor ad in the best place will still bring in sales.
Which product will I sell them first?
It’s risky to start a business with only one product. For every media story of a successful entrepreneur who risked everything to launch a single product, there are a dozen others who failed. The media don’t bother with these stories. So as not to get caught in this arrogance trap – as only arrogant people refuse to consider the possibility that their idea may be bad – the savvy entrepreneur is flexible about the specifics of their product idea: if one version doesn’t work, they have many others that could.
Nonetheless, if you want to start a successful business, it certainly helps if you have a great product. You can’t know if a product will be successful until you have tested it – but if your preparation involves tests on various product ideas, rather than just one, your chances of success will increase.
Below are 5 very simple steps to create a successful product:
- Find products that are trendy in your marketplace and sell like hotcakes.
- Assess whether your product idea follows this trend.
- If the answer is yes, you can launch it. If not, follow steps 4 and 5.
- Identify your own ideas for other fashionable products.
- Make improvements on the original concepts with the addition of functions or benefits that they may have lacked.
How much will I charge for this product?
Now that you know where your customers are, and you have a good idea for a product, that will get even better in the near future, and you know is in demand within your marketplace, how do you price it?
Similar to previous phases, your price should match those that already exist within your marketplace. You can try a higher price once you have reached enough sales volume at the regular price. As a rule, a higher price should reduce the number of sales. The question is: by how much? If the increase is significant and the downturn is small, it will increase profitability, fewer customers to manage and, most importantly, more premium customers who will spend money on your products later on. However, if you set your price too high, sales will drop dramatically. If that happens, it’s easy to spot but also easy to fix.
If you sell a product that is lower than the current market price it can trigger a very strong response and generate a large number of customers. The question is: can you afford to sell your product for less than the market price? Usually, the answer is no.
If you can determine your customer’s lifetime value (the revenue they will generate for your company over its lifetime, as Jay Abrahams explains in Getting Everything You can Out of All You’ve Got) you can decide to take on a customer at a loss, with the knowledge that, in the medium and long term, they will be profitable for you.
How will I get them to buy?
Your optimal sales strategy is based on the media you choose, the product you decide to sell; the product price, and how to promote it. The basis of your ad campaign, with the tone and imagery that you choose to employ to sell your product.
The difference between a well-designed or badly designed ad can be double or more; in terms of customer conversion rates, which can make the difference between a company that doubles in size each year; or one that stagnates and dies.
Note : Jay Abrahams discusses this in detail in Getting Everything You can Out of All You’ve Got and shows that the use of a few alternative simple words in an ad can increase the results by 1200% (!):
An insurance company tested these two catchphrases:
- “Car insurance at lower rates if you are a safe driver”
- “How to turn your careful driving into money”
The first catchphrase was 1200% more successful.
The best way to learn how to promote your product is to experiment with different approaches, different catchwords, compare them, choose the best one, then take it as a benchmark and test it against other ideas.
Chapter 6: Understand the copywriter side of sales
As the CEO of your company, the ability to come up with an advert is an important part of your work. But there’s no need to be a specialist in the subject – a copywriter – you just need to know how it’s done and what a successful advertisement looks like.
It doesn’t take long to learn the basics. To write effective advertisements or sales letters and match the best copywriters, there are four marketing concepts you need to learn:
- The difference between wants and needs.
- The difference between use and benefit.
- How to create a Unique Selling Proposition (USP)
- How to sell the USP
Let’s examine these concepts one by one:
The difference between wants and needs
Today, the vast majority of the products and services we buy are desires, not needs. Our needs are really minimal compared to our desires, and include air, water, food, shelter, transportation (sometimes), clothes, and the tools necessary to do our job.
The recognition that you are in the desire business will improve your skills as a marketer and salesman, as it will make you appreciate the need to create this desire in your customer’s heart. People new to marketing mistakenly create ad campaigns that are both logical and rational and simply describe the X reasons why their product is better than that of their competitor. If your product is actually needed, this can work, but if it is bought out of desire, you must stimulate the emotions of your potential customers – the emotions that will help you to sell your product.
The difference between use and benefit
A use is a logical and objective description of a product’s capabilities. A benefit is what it actually provides to the client, and it can be completely irrational, which depends on the client’s beliefs.
To clearly differentiate between uses and benefits, let’s take an example commonly used in sales courses, that of a wooden pencil.
|Is made of wood
|Easy to sharpen
|Has a specific diameter
|Easy to hold
|Comes with graphite insert
|Can create impressive designs
|Has a rubber at one end
|Makes it easy to change things
The list of benefits of this type of pencil is a lot longer. During the sales seminars he ran, Michael Masterson came up with more than 200 different benefits. So don’t limit yourself to the initial benefits you find for your product: search for them in depth.
Note: In Spin Selling Neil Rackham goes even further with the definition of a product’s functions, benefits and advantages.
How to create a Unique Sales Proposal (USP) for your products
You can sell your product when you mention all of its benefits, but the most effective ads highlight only one benefit over all the others.
To increase the odds to sell your product in an already established market; it helps to do one of two things:
- Make it – somehow – better than the competition.
- Make it – somehow – appear to be better than the competition.
The American soda company 7-Up beautifully illustrates the second point. The product – 7-Up, a soft drink – offered no benefit to the customer; its only distinction from other soft fizzy drinks was its lack of colour; which was a bonus for the manufacturer as it reduced costs.
The problem was solved when senior managers asked themselves “How could this be a good thing for customers? They decided that they would sell the product with the claim that it is better because it is different. It was cola without being cola. It not only tasted good but also made people feel more refreshed. So, to attract the attention of the hundreds of millions of Coca-Cola consumers around the world, they positioned the 7-Up as the “Uncola”. They began their “Uncola” ad campaign in 1968, and ten years later annual sales had increased from $87.7 million to $190 million.
Famous advertisement from the early 70s that promoted 7-Up as a different drink that refreshed you: https://youtu.be/JinBKqSCSac
This shows that you can create a difference between your product and your competitors’, but it is advantageous if your product has an additional benefit over that of its competitor.
If you have a good USP it can make the difference between the success and failure of a product launch. A strong USP with a high probability of success meets these three criteria:
- Appears to be unique. The attribute that you choose to promote in your USP does not have to be unique to your product, but it must appear that way.
- The usefulness. The unique feature of your product must be desirable, or nobody will want it.
- Design excellence. If the USP of your product is correct, the chances are it is also very simple. Very few complicated things become fashionable.
For example, a website that promotes a training programme based on the teachings of Confucius and includes articles based on them “The only stimulating website based on the teachings of Confucius”.
Exercise: What does the Unique Life Changing Book Sale Offer? 😉
How to sell the USP
Once you have set up your USP, you must sell it. All successful sales campaigns have 4 components:
1. The big idea
The Big Idea is the main idea to sell our product. The Great Idea should come from the USP, but it’s different from the USP. The USP applies to your product. The Big Idea applies to how you do your marketing. You generally cannot use your USP in your ads. It requires something more dramatic that creates a point of interest.
So look for an idea – something that excites you. That’s where it all begins. For example with the website on Confucius, you can research him, immerse yourself in his work, and come across a quote you like, such as ” The man who speaks well has the power of 5 men “. It’s a concept you like; it can be the Big Idea behind your whole publicity campaign.
2. The big promise
Now you’re all set to collaborate with a professional copywriter who will write your headline. You certainly have the Big Idea – good communication enhances personal authority – but it is not enough: you must have a Big Promise. This will require you to spend time to think about your Big Promise whilst you take into consideration how your Big Idea can contribute to an improvement in the life of your customers.
3. Specific statements
This is the stage where you put on your creative hat and work with your copywriter to find statements to use in your ads – all connected to your Big Idea. For ours, we could consider: “What could a person who quintupled his personal power do? He could potentially increase his income five fold, his chances with women five fold, his chances of promotion five fold, etc.
Brainstorm all these statements and write them down on paper as you go, whether they seem good or not. You can sort it out later. Then make these statements as clear as possible. Instead of saying “Five times your income”, say “Turn €35,000 into €175,000”.
4. Proof of these statements
As far as your copywriter is concerned, his job is finished at this point. He believes that it’s up to you to provide evidence to prove these points. But he’s wrong. You pay him to do the hard work, so insist it’s his obligation to provide real; and meaningful examples of people who have become rich and famous through their ability to communicate and get themselves understood. They should be able to give you historical and anecdotal examples and gather testimonials whenever possible.
When the work is finished, you can ensure that the statements can be separated; between those that have evidence to back them up and those that don’t.
Chapter 7: Secondary priorities – although important – of Step 1 of your company
As we have seen, in the first step, you and your employees should spend 80% of your time on sales. But what about the other 20%? Buy office supplies, create business cards? No, not really. Masterson says there are three very important things to be done:
1 – Have a mentor and be a mentor.
When someone starts a business the biggest issue is ignorance. New entrepreneurs do not know how the business should operate – where to find customers, what price to charge for the product, the number of customers required for the business to be profitable, etc.
The solution to this is to learn. There are two main ways to do this: 1) go to seminars, attend programmes (such as Agir&Réussir) and read books, and 2) talk to people who are in the business and get first-hand advice from them.
You can learn 20 years of experience in 1 year if you regularly contact your peers and mentors and talk to them about all your important marketing and product decisions. To do this, the author of Ready, Fire, Aim recommends:
- Don’t be afraid to ask questions. As a young man, Michael Masterson was always afraid to ask questions because it exposed his ignorance. He preferred to pretend not to have any weaknesses. Don’t follow his lead: ignorance is only a short-term weakness; as long as you ask questions, often your mentors will be happy to answer.
- Have several mentors.
- Ask questions at all levels. As well as your permanent mentors, you can have “temporary” mentors; which will mean that you have to ask your colleagues questions – or former colleagues – and employees. Actually you should ask questions to anyone who has something useful to share.
- Be appreciative and grateful and maintain relationships. The correct and proper way to reward people who spend time with you to help you is to always say thank-you. You can send your mentors an email or a personal note, and a gift now and then will certainly be greatly appreciated!
- Make your decisions and accept your responsibility. The ultimate responsibility for how your company runs and performs is yours. No matter how you choose to follow the advice of your mentors, you always make the final decision.
Once you have some experience, be someone else’s mentor.
2 – Teach your team
When you start, it is much easier to acknowledge that you don’t know everything and tell each person in your team that their job is to do; what you tell them to do, which is all that will be needed to figure out your Optimal Sales Strategy and entice enough qualified people into your business.
Assure them that as soon as your company has reached a certain size – Step 2 – you will give them specific roles, and that a flowchart will be developed to clearly state who does what.
Share everything that you learn with them. This shows the first draft of employees that you have total trust in them.
3 – Define the business objectives
Your first recruits should be motivated by your vision. And your vision should be to build a quality company that keeps the employees excited, grows fast and will improve their quality of life.
The author of Ready, Fire, Aim suggests you shouldn’t focus too much on financial objectives, although he readily accepts that many successful entrepreneurs will not agree with him, and that this can be useful. Rather, he recommends, although the priority of Step 1 is clearly sales, the focus should aim to keep customers happy. He knows that this may seem unclear and a little silly; but he thinks that in the long run, companies focused on customer satisfaction have a better chance of survival; and growth than those focused on profitability for their shareholders, because customers who feel well-treated tend to stay loyal for longer, buy more products and recommend your company to their friends and colleagues.
Chapter 8: A quick review of the problems, challenges and opportunities faced by the entrepreneur in Step 1
If you start a business (or a product) it’s similar to trying to push a stationary train; it takes a lot of energy to get it to budge, but once it moves the increase in speed requires a lot less effort and energy.
To start a business or product takes a lot of hard work and effort. Don’t worry if this outlook frightens you: fear of hard work is natural and sensible. Smart people become entrepreneurs simply because they want an easier life. Michael has never met an entrepreneur that has told him; “I want to start a new business so that I can work until I am sick and not have enough time to see my family.”
But this hard work and effort is essential to get your company or product off the ground. Once it is launched, the rest will be much easier. And your hard work and efforts should go into sales, nothing else. To use a train metaphor, to make it move, it is better to concentrate on the coal supply – sales – so that the steam provides the energy required to make it move, rather than to polish all its pistons – office supplies and other designer brochures – so that it shines like a Christmas tree.
Michael believes that these are the most significant points to take on board for the first step of your company:
- Don’t waste your time on image marketing. And don’t lose yourself in creation of designer brochures; business cards, cool websites or any other type of image marketing material.
- Don’t spend your money on things that your customers don’t see, such as your office, supplies, equipment, etc. Try to ask for them, borrow them or recycle them, if you can. You can upgrade all these things later.
- Don’t be deceived by so-called business experts. Many business experts have never created a single company until they created the one that allowed them to sell their services as a consultant.
- Be proud of your acumen, but don’t be arrogant about the particular ideas you develop about your business. Make sure that you separate your ego from the product or company. Make sure that your ego is committed to the process to create successful companies.
- Ask smart people for advice.
- Never presume to know more than the market. You may have experience and a good instinct; but never risk all your capital on an idea that has not been tested.
- Make sales your company’s number one priority.
- Learn as much as you can about sales and marketing. In your spare time, take courses, chat with experts, sign up for courses, read books.
- Discover your company’s Optimal Sales Strategy – the unique combination of media, price and position in the market; that will deliver your most valued customers.
- Give your marketing team one main objective: to attract a specific number of potential customers.
- If possible, use direct mail or email to discover your Best Sales Strategy. Direct marketing is the best way to test new ideas, as it is quick and affordable.
- To work out a price to test your Optimal Sales Strategy, opt for the lowest. In the long term, your profits will probably come from the sale of products in the high price range; to your best and most loyal customers. But at first your focus needs to be on volume in order to reach the required number of potential customers as quickly as possible.
- Don’t invest a lot in stock until you have discovered your Best Sales Strategy.
The sequel in the next episode 😉 .
Have you read Ready, Fire, Aim (Ready, Fire, Aim)? How do you rate it?
What are the 4 basic principles that every entrepreneur must master as described in Ready, Fire, Aim?
- Identify your target market;
- Rapidly create a product to sell within this market;
- Work out your best sales strategy;
- Sell the product.
Chapter 9: From 1 million to 10 million and more
If you have followed the program put forward in part one of the book, your company is now on the brink of Step 1 and is ready to quickly expand in preparation for Step 2. In Step 1, you learnt many important details to prepare your business for your market sector, such as:
- Locate your core market – where your best customers are to be found.
- Researched the most effective media to reach them.
- Determine the most suitable price for your key product.
Stage 1 sales will slow down when you have reached your market potential with your key product. Initially, sales will be inconsistent while you struggle to discover your Optimal Sales Strategy (OSS). Once you have done so, sales will increase exponentially, then drop off a little while you make adjustments to your Share of Voice (SOV) – find new media, increase or decrease the price, have a new Big Idea for your ad campaign.
This pattern of fast growth and slowdown may continue for a while, whilst any small improvements you attempt will be useless. Generally, the reason is straightforward: your key product, which has got you to this point, has exhausted its potential. Most potential buyers have bought it or decided not to. There are still a few new customers who enter the market and buy your product, but the days of exponential sales are gone.
What can you do about it?
At this point, most entrepreneurs give up on their thoughts of multi-million dollar companies and become more “realistic”, with a reduction in operational expenses, cut their least profitable adverts and settle for a meagre salary and a small company profit. If this scenario persists they continue to cut back. With this in mind, Michael provides statistics that show that 95% of American companies do not exceed a turnover of one million dollars.
In Masterson’s view, these companies are sole trader companies, i.e. they offer their owners a guaranteed job and a salary that they could earn if they worked for someone else. But Masterson thinks that this is better than being employed because the self-employment company gives you independence, but he feels that you need to give yourself the goal of more than just a manager’s wages and aim to be able to dictate your own destiny. You should build a company that gives you the financial clout to free yourself up and allow you to do what you want, whilst it provides the pleasure and thrill to see it blossom into a successful business.
This is achievable, provided you understand that the challenges of Step 2 are different from those you have already faced. The major problem you faced in Step 1 was to discover your Share of Voice (SOV) and then to sell. But what do you do when your key product has reached its full potential and can no longer generate increased sales?
Michael Masterson, with examples of publishing companies he has managed or co-directed over many years, explains that the solution is simple: introduce more, or even lots more, products, to increase sales. It’s a good idea in Step 1 to focus mainly on one key product, and achieve excellent sales figures. But to progress beyond Step 1, you need to create and sell new products designed for the same market. There are two important things to consider:
- Masterson’s opinion is that it’s better to launch a dozen products rather than to focus on the launch of 2 or 3 unique products, simply because it is impossible to know if a product will or not, until it has been launched. As, on average, only one in two or three products is good, and one in five or ten is great, you are far more likely to find the right products if you launch a lot of them, then get rid of those that don’t sell well and concentrate on those that do.
- We must be aware of the difference between front-end and back-end marketing. The first is for potential customers – those who have never bought products from you – and the second is for your current ones. The purpose of the front end is to acquire new customers. The purpose of the back-end is to make a profit. Masterson thinks that most entrepreneurs are not familiar with this concept. With reference to Jay Abrahams’ analysis in Getting Everything You Can Out of All You’ve Got, Michael Masterson explains that you can initially take on customers at a loss if you know that they will make you money in the medium to long term because of what they will buy in the future.
Chapter 10: Innovation – the key to success in the second stage
In his best-seller The Tipping Point: How Little Things Can Make a Big Difference Malcolm Gladwell examines how certain new products create new markets if they capture the lion’s share, such as iPods or Slinkys.
Gladwell explains that most of these products are not revolutionary, but just minor variations of ideas that already existed in the market. He states that innovations in a market relate to an often-used school physics experiment: a teacher fills a glass full to the brim with water. Then he adds a drop of water. Contrary to what students expect, the extra drop remains at the top of the water. The teacher adds more drops, one by one, and they form a volume of water that exceeds the height of the glass. Then, suddenly, one extra drop causes the entire volume of water to collapse and run down the side of the glass.
Gladwell believes that new trends work similarly to this: in any given social context, many people share an opinion about the innovations that are needed. Innovations are developed all around us, and though most are taken up they don’t result in any significant changes.
However, these small innovations are noticed by other innovators who can see the trend, as they would see the volume of water, and understand that at some point soon it will crumble.
From this, Michael Masterson deduces that your goal is not to develop totally new ideas but to identify the start of a trend and develop products that link to this – to the point where you can attract the attention of customers.
But how does this relate to the importance of the development of your own products put forward by the author in the previous chapter? He believes that the problem with something that is a total copy is that they always come too late and that a competitor can simply enter the market with their own product and impact your sales. Despite this, these products are a useful way to generate a significant amount of your company’s profits, based on the front-end (marketing and products for your prospects) and back-end (marketing and products for your customers) principles mentioned in the previous chapter. Let’s see how.
To gain new customers, with the introduction of a fairly ordinary product, is very hard in a competitive market. A switch point (different angle) on innovations is what you need: innovative variations of products that already exist will spark a real frenzy to buy your product within a market. You can make money if you sell these switch point products, but often that’s not where the real profit for your business lies: it’s in all the ordinary products that you then sell to those customers you’ve just acquired.
Anyone who has bought a product from you is much more likely to buy others later because they now value and trust your product, and there’s a better chance that they will buy more expensive products. This means that if there’s a similar product in the market, your customers will choose to buy it from you rather than from the competitor and that the marketing costs to sell these products will be much lower than those you have on the front end.
So to sum up:
- The secret to enter into new markets or rekindle a business that is in decline is to develop groundbreaking products.
- The secret to be able to develop groundbreaking products is to find the latest products in new markets and to find a way to make a similar, yet new and different, product.
- You need switch point products for your front end, but you can make a lot of money if you sell ordinary products, as long as you sell them to your current customers.
But how do you actually create “switch point” products? Masterson believes that the key is to create lots of products: only one in ten will become a “switch point” product. And how do I create lots of product ideas that will interest customers? The key is to brainstorm, with a minimum of 3 people and a maximum of 6 (at the most, 8), and then follow the 8-step formula that he gives in his book. Some important advice he gives is to keep notes of this session (as a month later no one will remember the progression that led to the idea and every small detail counts in the development of an innovative product) and to have a product and sales description written up within a day of the session.
You can also use a great tool called the Magic Product Cube. It called a cube because, like all cubes, it has three dimensions: the first is the price, the second is the type of product, and the third is the Unique Selling Proposition. In terms of golf, this could be:
- Price: you have three price levels, entry-level, mid-range, and high-end
- Type of product: you sell golf clubs, golf balls and golf bags
- USP: you have three golf professionals who have signed contracts to endorse your products: Tiger Woods, Bubba Watson, Joe Bailey.
This gives you 3 golf professionals; each endorses 3 different products, at 3 different price points, i.e. 27 products. You can also add an additional range to each of them; for example, you have an elite range, various golf accessories, and another golf professional. That would be 4 times 4 times 4 times 4 products, i.e. 64!
Chapter 11: Speed – Set up Ready, Fire, Aim in your company
When you combine innovation and speed, the results can be incredible. Michael believes that the level of growth a company can expect in its second stage of development is directly linked to its ability to develop and test new product ideas quickly.
If you hold brainstorm sessions with colleagues, as recommended in the previous chapter, you will come up with lots of ideas for new products if you just do them for one day every two to three months. But you will have to follow this up and see them through, and it takes a lot of time and effort to implement these ideas. Obviously there is a whole host of other things that will keep the pressure on, but by now you should have a team of six key people that you can rely on and to whom you can delegate the essentials.
To succeed as an innovator, you have to be passionate about three things:
- You must like good ideas.
- You have to eradicate apathy. When you work on new ideas, you need to be aware of the time restraints.
- You must appreciate the process. When you bring new ideas from a design concept to implementation, it is often a long and painful process. If you find this to be a bore, you may not commit enough time to it and, as a result, leave too much to chance.
To introduce new products as quickly as possible, a good option is to give it to current customers, free of charge, to test it and ask them for feedback on what they do and don’t like. Not all companies can do this, but if you can, don’t hesitate, because:
- Your current customer base is always your best market. If your new product doesn’t go down well when you give it to your customers free of charge, it definitely won’t sell if you promote elsewhere.
- Because the new product is sent out as a test, free of charge, it does not need to be fully developed. This saves a lot of money.
- A test launch of this kind gives you feedback from your customers before the official launch. This feedback will help you to improve the product.
- This gives the marketing team essential customer feedback about the value of the product.
- Lastly, a customer announcement that you are about to test a new product can create hype that may lead to better sales for the product when it is officially launched.
But the two key concepts for a quick product launch are:
You must be humble enough to appreciate that your customers, for various reasons, will dismiss most of your good ideas. You have to accept failures. And make sure that everyone learns from them, you need to document and make the results available within the company so that each new idea can be compared with the old ones to determine if one of the previous failures can be used to avoid a new one.
The Ready, Fire, Aim strategy
This strategy means what it says: when you have an idea that has the potential to grow your business, test it as soon as you are ready, but don’t try to make it perfect.
In other words: use most of your time, money and resources to make sure that the idea is ready to be tested. All the other things that can be done to make the concept perfect can be carried out after the test, and only if the idea proven to be viable.
Once again, let’s use the 7-Up example, not when this drink was introduced on the market in 1929, but with the use of the Ready, Fire, Aim strategy.
The idea is to sell a cola that has no colour, whilst what currently exists in the market are only coloured colas like Coca-Cola. When you discuss this idea in the brainstorming session, you are aware that the product has two major unknowns:
- Will the market like the taste of the new product?
- Is the market ready for a colourless cola?
To answer these two questions, firstly you need to create a cola with excellent taste and no colour before you do anything else, which can take years and cost a fortune. If you split the innovation into its two essential components and test them separately, you can speed up the process.
The obvious strategy would be to test the colouless aspect first and try to sell it to a marketing test group as quickly as possible and carry out a scientific test to show if you can sell a colourless cola or not. If the answer is no, you will have saved a lot of time, money and resources by the elimination of the need to create an exquisite taste for a drink that doesn’t sell.
If you can create a Ready, Fire, Aim culture in your company it will reduce the time it takes to do just about everything. In turn, this will reduce the cost of failure, increase the chances of success, and reduce the time that is wasted to come up with every good idea. Michael Masterson gives 8 key concepts to speed up the introduction of this strategy:
- Explain key concepts. When you introduce this strategy into your company, you will face resistance to change from within, often from your top executives.
- Support management. Certain parts of your business will take longer to adapt than others.
- To implement all these changes, the key is that your employees will follow your actions, not your words.
- Set parameters. Your employees need to know how quickly you expect them to proceed. Be specific.
- Get people to agree to it. The implementation will only work with the support of your key employees.
- Accelerate gradually. You can’t achieve Step 2 in just a few weeks. If your ultimate goal is to create 50 products and you have only created one in three years, make these 50 products a 3-5 year goal.
- Support the company as it grows. Be open to the idea to hire new people, but be tough if you need to fire the worst ones.
- Stick to the plan. The methodology is Ready, Fire, Aim, and it is explained in detail in the book.
Chapter 12: Get ready
The Ready, Fire, Aim concept is about speed, about the tremendous advantages if you move from an idea to action as quickly as possible. But that doesn’t mean you have to rush and start to do things before you’re ready. It’s Ready, Fire, Aim, not Fire at Will. It requires you to put your gun to your should and point it, not fire it from the hip.
To do so, you need to ask yourself 7 essential questions throughout the process:
1 – Is my idea a good one?
You will never know how good a product is until you have tested it on the market. But it pays to ask yourself this question at the outset – when you brainstorm the idea.
Start with a definition of what good means to you. Is the product good in the sense that it is better than another product? Good in the sense that the market needs it? These are common drivers to help develop new products, but they are not enough. To develop your business you need to sell a lot of products, but each must be sold in certain quantities. Until your product achieves this, the product isn’t right.
So before you launch your product, talk to the people in your marketing team – the 6 or 8 people who will be most involved in the launch – about your sales target. Explain your thoughts, ask for their opinions. If anyone has any doubts about the objective, ask, “Okay, François, if you don’t think the proposed product is good enough to sell 10,000, what can we do to improve it? How can we make it good enough to reach our required numbers?”
2 – Do I feel that this will work?
If you give Michael Masterson the choice between 1) careful analysis of whether a business idea is good enough to be successful in the market and 2) rely on the intuition of someone who has experience within the market, he would always choose the latter.
Intuition is more reliable to anticipate what the future holds than formal analysis because it incorporates years of experience and information learnt from all of the past business deals, most of which cannot be consciously recalled but which all form part of the final business decision process.
You probably already have a feel for what a good product is or isn’t. Don’t ignore it. But heed the advice and guidance of those who have more experience in the launch of new products into the market.
3 – Are my sales objectives realistic?
Your product idea is good. It brings a clear benefit to customers, which you are also aware of. Now you set sales targets. This is when you ask yourself: “Are these objectives realistic?”
If you have done everything the Michael advises, the answer is probably yes. But because company results rarely meet expectations, you should devote some time to work out some “What if I’m wrong?” numbers:
- Calculate how much it will cost to turn your idea into a product. Now double it.
- Calculate how many units will be sold (or how much income it will generate), then divide it by two.
If, after you have doubled your costs and reduced your profits by half, the adventure still seems profitable, fire away. If not, forget it.
4 – Can I test the idea?
Like scientific hypotheses, business ideas can be tested in controlled environments. It’s a standard procedure to test ideas in direct marketing, which is one of the reasons that the Michael believes that every company should engage in direct marketing.
You can’t test all new products on sample groups with direct marketing, but you can for most.
5 – Am I aware of the work that needs to be done?
Before you dive in head first, it pays to compile a shortlist of the main tasks that need to be done. It shouldn’t take more than a few hours to complete this.
6 – Do I have the right people to carry out the tasks?
All big ideas need great people to make them successful. Before you go any further, stop and ask yourself “who can help me?”
First, identify your champion; someone you think has the personality to make the idea a reality. A champion must 1) believe in the idea, 2) have the leadership to put it into practice, 3) have the experience to make smart decisions throughout the project.
Along with this champion, a successful idea may need other talented people to play key roles: who can develop the product? Who can test it on the market? Who can be in charge of operations?
7 – Do I have a plan B?
Sometimes it’s all in place: the idea is good, you feel good about it, the tests work well, and talented people are all involved, and yet the product falls flat on its face the moment you start. Rather than be surprised by such an unlikely event, have a contingency plan.
If you have a plan B in place – a “What to do if it fails” plan, you will be ready for action, should the situation arise.
Chapter 14: Focus on the product
Ready, Fire, Aim does not mean that you are about to produce mediocre products. Quite the opposite, it is one of the most effective ways to create quality products, because less money and time is wasted on functions, mechanisms and details that are irrelevant to your customers. Fewer resources wasted in the get Ready step means more resources for the Aim step.
The Michael advises against the temptation to cut costs by a reduction in the quality of product components, which customers won’t notice: small, imperceptible changes to the product will slowly mount up and you end up with a product that is vastly inferior in quality to the original one.
This is no reason to not consider a reduction in your production costs, but remember that the development of a successful company requires you to build long-term relationships with your customers. Ultimately, how you address the build of your product will depend on how you think it will be received in the marketplace.
The Michael concluded that businessmen – in fact, all humans – are divided into two groups:
- Those who, by nature, feel that the universe is limited and disconnected.
- Those who feel that the universe is interconnected and has no limits.
Person who think the universe is limited and disconnected believe that wealth is also limited and needs to be accumulated and preserved. And those who feel the opposite take wealth as something that will always be accessible, will increase and be spread around.
The first group tends to treat friends and family better than strangers. As a consequence, they are inclined to make their products as cheap to produce as possible: the better their net margin, the better they feel. The second group follows a different approach: they think the best way is to add as much value as possible – and give as generously to a stranger as to their loved ones.
Hoarders follow this Golden Rule:
The less I give to my customers, the more there is for me.
Those who share follow this Golden Rule:
Treat your customers, as you would like to be treated as a customer.
In his 30-year career, Michael Masterson has met more hoarders than sharers. And more importantly, he was a hoarder himself. It was a foolish and destructive experience that left him humiliated. And it cost him a lot of money – he is certain about that.
Now he knows that if he follows the Golden Rule he can earn even more money more easily – if he treats his colleagues, employees, salesmen and customers as he would like to be treated if the roles were reversed. He knows that if he gives more he will get more; and if he shares more, more will be shared with him.
If you want to develop a company that continues to expand; don’t spend your time in an attempt to reduce your production costs. Rather spend that time to ask yourself “how can I make it better?”.
Because you were prepared before you pulled the trigger; you entered the market with a product that you already know to be good. And your customers seem to like it. But because you believe in the Golden Rule, good is not good enough for you. You want your customers to be more than just happy with all the products they buy from you. If they are happy with your products, you will reap the benefits when they buy more. If they are more than happy, they will recommend your products to their friends and colleagues.
To achieve this, you must embark on incremental improvements to your process – improve your products marginally, even if it’s not apparent that your customers are not happy. But remember, profits matter. A profitable business is the best way to ensure that it will supply products of a consistently high quality. Keep in mind that you want to improve your product so that it’s best in a limited market. You don’t want to sell the best watch in the world for 39 €, you want to sell the best watch for 39 € in the world.
Chapter 15: Target marketing, part 1
To achieve Step 1, you need to comprehensively understand how to sell your key product to a particular type of customer. To complete Step 2, you need to broaden your product line – and that means you’ll need to develop your marketing skills.
If you’re not a born salesperson and marketeer, don’t worry; Michael Masterson says he believes there was no one less talented than him; at either, when he started. And you already know the most important things. Simply practice the three steps provided by Michael and one day; people will call you a “marketing genius”; and you will think that you don’t deserve it – but it will be true.
Step 1: Exorcise the demons
Even if you have created a company that has reached or exceeded €1 million in turnover; you may still not be comfortable with the sales process. You may also be afraid to sell. If so, don’t worry: it’s extremely common. But to become a marketing genius, your business needs you to change your attitude towards sales. To achieve this, the author gives three extremely common misconceptions and how to fix them:
- Myth 1: It is fine to sell things to people who need them, such as cereal or milk; but it is wrong to sell things to people who do not need them, such as televisions or sports cars.
- Fact: More than 90% of what people buy is based on desires, not needs.
- Myth 2: It is fine to sell things, as long as you don’t ask for more than they are worth.
- Fact: What does value really mean? It is often said that there is a difference between intrinsic value and perceived value, intrinsic value is value as a commodity; and perceived value is what the product is worth from a psychological point of view. There is some truth to this, but keep in mind that 95% of modern trade is not based on the sale of staple foods, but on things that have been made. And when something has been manufactured, there is room for different levels of quality. And where this occurs, there is room for perceived value. The value in this slight difference in quality is purely subjective.
- Myth 3: It’s good to make things better, but it’s bad to sell them.
- Fact: Yes, that’s correct. If you accept that more than 90% of what people buy is based on desires, not needs, and that 90% of what we pay for any object is based on perceived not intrinsic value; then you can only conclude that the business world is over 90% about what makes people tick; rather than the satisfaction of their basic human needs.
This brings us to the Golden Rule of Marketing Genius:
Treat your neighbour how you would like to be treated.
Or put another way, “Treat your customers as you would like to be treated.”
Stage 2: Increase revenues with three basic approaches
Jay Abraham in Getting Everything You Can Out of All You’ve Got explains that there are only three ways to develop a business:
- Increase the number of customers.
- Increase the average spend for each customer.
- And increase the number of times customers come back and buy
Imagine that you have a thousand customers who on average spend €100 on each purchase; and on average buy twice a year.
This gives us:
1000 x 100 x 2 = €200 000 turnover
What happens if we increase these three factors by just 10%?
1100 x 110 x 2,2 = €266 200 turnover
Turnover increased by 33,1%. And a 25% increase in each of these factors nearly doubles the turnover to €390,625. It’s very straightforward. But the results can be significant.
Stage 3: An intensive course in sales and marketing
The author provides us with 20 lessons and suggests that we take an hour to study them; then revisit them once a month for a year. Here are the titles, with an outline of the issues they raise:
- Your customers do not care about your company or you. They care about themselves.
- Do your marketing messages consider this basic fact?
- A small percentage of your customers give you the majority of your profits.
- Have you pinpointed these big buyers in your database?
- Do you communicate with them differently from other clients?
- Thank them for their support?
- Understand why your customers buy from you.
- Jeffrey J. Fox in his book How to Become CEO states that customers buy for only two reasons: to feel good (about themselves) and to fix a problem.
- Almost every sales transaction is based on a lead generation process.
- Lead generation can be done in many ways; the most effective way is direct marketing.
- If your company doesn’t use direct marketing techniques to generate leads, you will miss out on an important business strategy.
- Learn about multi-channel marketing.
- Each company should use at least 3 or 4 different types of sales and marketing media.
- Follow the Golden Rule of Marketing Genius: treat your customers as you would like to be treated.
- Develop your ability to think about, talk to, and treat your customers as you would like them to think about you, talk to you and treat you.
- Understand the secret of the Four-Legged Stool.
- Every successful marketing campaign has four elements, as seen in the first part of this column: the Big Idea, the Big Benefit, the Big Promise and the Proof. If you ensure that your marketing team includes these 4 elements in each ad or promotion, no need to worry about failures.
- Understand that customer complaints and criticisms are the keys to better sales.
- Less successful entrepreneurs hate customer complaints and criticisms because they take them as a personal criticism.
- More successful businessmen understand that complaints and criticisms are the bricks and mortar for better products and lead to a better sales pitch.
- Ensure a “no-holds-barred” strategy for your products.
- Each sale should provide you with another way to solve a customer’s problem or to fulfil a wish.
- Exploit customer inertia.
- Marketing geniuses are aware that lethargy and indifference are the most common reasons a customer no longer purchases a product.
- If you make all subsequent purchases automatic, you can easily double your company’s revenue.
- Understand the 20/80 rule.
- Apply Pareto’s law to your marketing strategy. Just as 20% of your customers will give you 80% of your income, treat them like VIPs.
- Understand the Unique Selling Proposition for each product.
- When you launch a product, ask yourself: “Is it something that people actually need today? Or does it no longer have any value?”
- It is not good enough just to have a USP. The USP must have value. Make sure that each of your products has a valuable USP, and promote it like crazy.
- Each product line needs its unique brand name.
- Just as each product needs its own USP, each product line needs its own identity.
- Don’t allow your marketing strategy to lose its cutting edge.
- As your business continues to grow, you will notice that many sales and marketing operations continue to function well simply because they have been in place for years. Nobody questions if they are still profitable.
- Recognise the subtle complexities of the heart.
- To create successful marketing campaigns, you have to be in touch with what your customers; really want and the challenges they face.
- On the surface, it may appear as a need for something luxurious but within it may be a concern about embarrassment.
- Reciprocate with your customers.
- In the long run, if you give your customers some freebies it will prove to be the best way to build a long-term and fruitful relationship.
- If you give them something and don’t take anything from them; you install a sense of security and trust with your customers which gives them reassurance.
- Recognise that privacy is the key to enable you to keep a customer for life.
- Familiarity is the basis for sales to flourish. Privacy makes them even easier.
- Always be honest with your customers when you communicate with them. They will appreciate it if you are, and know when you are not.
- Be confident and enthusiastic when you sell.
- Never worry when you make a sales pitch.
- Do not pressurise your customers or make them feel they are being pressured into something they don’t want to do.
- Cold calls and other direct sales methods are inherently weak because they are based on intimidation and make customers feel disconnected from the start.
- If your company relies on these types of sales, you will constantly face all sorts of unwanted problems caused by these sales strategies as long as you’re in business.
- Develop and cultivate a marketing culture that focuses on three emotions.
- Firstly, make sure that customer benefits are at the heart of product development.
- Secondly, train your employees that added value should be at the heart of all sales transactions.
- Lastly, be honest in all communications with your customers.
Chapter 16: Focus on Marketing, Part 2 – Understand the Frenzy to Buy
One of Michael Masterson’s clients owns an international publishing company that has an annual turnover of more than $270 million. His work requires him to travel all over the world. Over the past 15 years, Masterson has made about 50 trips with him. Over this period, he only ever saw him use one bag whilst he travelled; a tatty old bag that was almost worn out and a zip that barely worked. He uses it when he travels first class, and in his 5-star hotels in Paris or Madrid.
The author’s opinion is that his client desperately needs a new bag. But his client doesn’t look at it like that. His viewpoint is that whilst his old tatty bag is still useable; he has no need for a new bag, as he can still put things in it and carry it around. Until that happens he doesn’t need a new one and therefore doesn’t want one.
It’s the complete opposite for Michael Masterson; he wants a new bag almost every time he walks into a shop that sells them. He wants one in black leather, another in brown suede, with lots of sections, another with no pockets. Lined up on the wall in the room next to his study there are 14 bags of all sizes and shapes. It’s obvious that he doesn’t need another bag. However, it’s almost guaranteed that on his next visit to a shop he will want to buy yet another one.
When they travel together they often walk past a luggage or accessory store with bags in the window. Michael Masterson almost always stops to look… and then suggests that they pop in together “just to take a look”. His client usually agrees but with little enthusiasm. This kind of shop has about as much interest for him as a dress shop would have for Masterson. With a huge range of bags to choose from, Masterson has a sense of excitement. But everything that excites him about bags bores his client to death. Within 10 minutes his client had walked off, with his old bag in his hands; whilst Masterson headed to the till to pay for yet another bag to add to his collection.
Question: If you were in the travel bag business, which customer would you prefer? The guy who has a worn-out bag and really needs a new one? Or the guy who has a collection of bags and really doesn’t need a new one?
At a seminar, before he tells this story, Masterson asks this question; and most people answer that they would rather have the first customer because he needs a bag. Once he has told the story he repeats this question. Most say they would like the customer who doesn’t need a bag. They get it.
They get that this isn’t about what the client needs, rather about what they want.
Let us examine the psychological implications of the author’s fondness to possess so many travel bags. Is he mad? Maybe. But he doesn’t feel mad. He feels good about his bags, as some women do about their shoes; or men about their cars, or their books.
When the author goes into a luggage store, he doesn’t act rationally – but neither is he irrational. Somewhere in his mind, he is fully aware that he does not need a new bag. But he also understands that he derives a lot of pleasure in the ownership of these products, and he knows that sometimes – if the store has the right products and the right salespeople – he gets a lot of enjoyment from the moment when he buys something. He recognises and knows that if he goes into a shop like this he likes the experience and will leave the shop with something that he can appreciate and use in the future. That seems pretty rational, doesn’t it?
So, with reference to Maslow’s analysis in his famous pyramid, Michael Masterson tells us that once we have covered our basic needs – food and shelter – the next objective, if we are wise, is to save up in order buy things that we can use in the future, and then everything we spend makes our lives better; which basically means, buy things that we don’t need.
So as mentioned in the previous chapter; you should never feel bad if you sell products to people who don’t really need them.
1) there are very few sales that don’t fall into this category, and
2) people constantly buy things that they don’t need; so if you sell what people want and desire it is a successful way to apply the Golden Rule of a Marketing Genius; treat your customers the way you want to be treated.
What triggers the author’s frenzy to buy an excessive amount of travel bags, which he describes to us? After many years of reflection, he came to the conclusion that three factors stimulate it:
- When you feel that you have more money than you need.
- If you’re vulnerable to well-thought-out sales pitches.
- You enjoy the experience when you buy something.
You can’t really change the first aspect, but the last two are mainly influenced by the way your company advertises its products and how it sells them to its customers.
Book critique of “Ready, Fire, Aim”
Unusually, there is an entire section of the book that I haven’t reviewed: Step 3, Adolescence and Step 4, Maturity (7 chapters in all), simply because I think that if you can navigate your business to the brink of Step 3, you will have had ample opportunity to buy and read this book. The author emphasises the need to hire business-savvy experts for your company to complete step 3, and to be able to identify and solve bottlenecks (similar to what is described in the book The Goal). He then emphasises that step 4 requires you to remove yourself from the workforce and to principally be its main investor and adviser.
When I read this book, as an entrepreneur, it frustrated me: in the opinion of Michael Masterson; I have never made it past the first step in the development of a business. So it’s only on this point that I can speak from experience; and I have only one thing to say: the author’s focus on sales, sales, and then more sales is correct and essential. In this regard, Ready, Fire, Aim illuminated an important point for me: for any new business, the need to find its first customers and complete its first sales should be the first priority, and after these initial sales, I fully agree with the author, the company should spend 80% of its resources and time on sales effort.
The majority of entrepreneurs make the mistake to not give sales the priority they deserve and instead focus on other tasks – set up offices, create and print brochures and business cards, build their website – because of a lack of business knowledge and a fear to get themselves involved in sales.
I did exactly that when I started my business, and I really wish I had read Step 1 of this book, as it would have guided me on how to properly set up my business, in relation to both the goals to set myself, and my daily tasks. Perhaps it would have allowed me, years before I discovered The Emyth Revisited, to understand that, as Masterson cites, “the freedom that entrepreneurship gives you is generally the freedom to work twice as long and twice as hard as you did before” unless you create a business rather than a job. In addition, the focus on the core question “How will I find my customers?” and the approaches and methods provided by the author seem spot on to me.
All round, I would say that the first part is excellent, as is the second: to be able to build a company, you need to sell the key product successfully from the start, then introduce lots of other products, either to those within the current market or in other prospective markets, or to customers that you already have, all seem to be the right approach to me. The author emphasises the importance of the difference between front-end marketing (to prospects) and back-end marketing (to customers) and this seems to me to be an extremely important aspect that can take years to achieve if you haven’t been trained well in sales and marketing techniques – or read the right books.
Also, the Ready, Fire, Aim method as the cornerstone of the book is relevant and practical: it means you don’t question things or try to make them perfect and it enables you to test products at a quicker rate than other competitors within the sector. If you introduce several products, it allows you to accurately identify those that work best, then focus on them to make an improvement and market them more efficiently, with the use of the income that they have generated. It’s brilliant, clear and easy to understand (but not so easy to implement).
And finally, the fact that the author breaks down the growth of a company into 4 steps; each with its own challenges is great; because it provides a blueprint, a guide for all would-be entrepreneurs; who would have little idea of the vision needed to be able to elevate their company turnover up to 100 million Euros or more.
However, the book is not flawless. The first is the author’s stated objective to create lots of companies and to use these 4 steps to achieve a lifestyle of 4-hour week; where, as he says, he works when he wants, where he wants, and with whom he wants, and only does what he wishes to do. Even though he has done this; the small number of businesses that exceed a turnover of 100 million (or even 10 million) compared to the number that start up. And the time he gives to go from step 1 to step 4 (about ten years); appear much more difficult and less likely to me than the computerised methods that are put forward by Tim Ferris. But Masterson’s method is still excellent for the average company.
The second is that, while the first two steps are well detailed; the last two are very simplified and the content of the book probably doesn’t portray the full complexity of these steps. But if you do get through all of it, not only will you have read the book, but, in the course of it; you will also have read many others, and, as a result; you will have competent people around you who are more than able to help you to achieve the best results.
Finally, as in The 4 Hour Week, the author’s ego is apparent in every chapter, because, like Tim Ferris; he constantly uses himself as an example and puts forward his life as the ideal one.
Similarly to Tim Ferris, it would be silly not to pursue it further, because the Ready, Fire, Target method; the emphasis to sell and the breakdown of a company’s growth into 4 steps means that this book is a great reference for any entrepreneur. A must-read.
- Focusses on smart sales with many methods and approaches to implement it
- The Ready, Fire, Aim method helps eliminate procrastination and overconfidence
- Simply written, with numerous examples
- A proper breakdown of a company’s growth in 4 step
- Overall, an excellent guide for any experienced entrepreneur
- The goal of an easy lifestyle without the pressure of work is far more realistic; and achievable with the methods given in The 4 Hour Week rather than those in Ready, Fire, Aim
- Two last steps are a little over-simplified
- The size of the author’s ego may put some readers off
My rating :
Have you read “Ready, Fire, Aim”? How do you rate it?