The One-Minute Marketer

THE ONE-MINUTE MARKETER

by Mike Manes

A Baton Rouge Business Report last spring included this item: 'Snail mail: If you’re using the U.S. Postal Service’s Priority Mail, you might be wasting money. The Wall Street Journal reports this morning that the typical Priority Mail shipment takes longer to reach its destination than first-class deliveries. The cost of first class is 34 cents — the cost of the cheapest Priority Mail is $3.50. What’s more, Priority Mail rates are set to increase an average of 13.5% on June 30. According to The Journal, Priority Mail misses its three-day target delivery 33% of the time, compared with a 19% failure rate for first-class mail.'

Being lazy, cynical and the ultimate critic of government bureaucracies, here was my softball right over the plate. I determined not to miss this chance to knock it out of the park. Reread the U.S. mail story, then ask yourself, 'What’s wrong with this picture?'

The Postal Service developed without competition in a manual world. Today it competes in a global economy against such significant challengers as Fed Ex, UPS, e-mail, fax, and instant messaging.

10 LESSONS:

1. Marketing means satisfying the wants and needs of your customers and prospects profitably.
2. The market process must answer these short-term questions:

• Who’s your customer (segmented to a niche of one)?
• What do they want and need?
• What product/service can you offer to fill this need?
• At what price will your product or service sell?
• How can you deliver the product/service profitably at this price?

1. Over the long term, you must consistently meet or exceed the expectations of the customer by under-promising and over-delivering. Over promising and under delivering will ensure failure.
2. Competitors don’t enter markets dominated by efficient, effective organizations. They seek opportunities/markets that are 'fat' with excess profits and operating with systems that can easily be improved and made (more) profitable through innovation, market awareness, responsiveness, technology, and administrative efficiencies.

Keeping prices low reduces competition. Raising prices invites competition. If the Postal Service had used its dominant position to lower costs and improve services, some of its competitors might never have appeared.

As Einstein said, 'a problem can’t be solved with the same thinking that created it.' To compete in today’s market, the Postal Service must innovate.

3. In the vernacular of the bayou, don’t let your alligator mouth overload your tadpole tail (see # 3 above).
4. Every organization (such as the Postal Service) can excel in some form or fashion — even if only by providing a good, bad example.
5. In today’s world, consumers are in charge and competition drives the marketplace. Consumers don’t care about your problems (or those of any manufacturer/distributor, such as the Postal Service).
6. As Peter Drucker so eloquently states, the future will be driven by price-driven costing, not cost-driven pricing. In the past, an organization could add up its costs and then set a profit level to charge a given price. Manufacturers and distributors dominated this cost-driven pricing model, selling to consumers with limited sophistication and access to information.

Today, the consumer rules (see # 7 above). Sophisticated buyers with Internet access can shop from unlimited sources in a global economy. The result: a market based on price-driven costing, in which there’s a price consumers will pay for every product or service and the manufacturer/distributor must offer if it wants to stay in business. In this environment, the consumer doesn’t care if the price is below the manufacturers’/distributors’ cost.

Yesterday’s market was a process (adding up costs) that led to a result (price). Tomorrow’s world will be a result (the price the market will pay) that will require innovations of process. To meet the market’s price (which will usually be below traditional costs) manufacturers and distributors will have to change the way they do business.

7. Competition is good for consumers because it drives marketplace excellence. If a high wire artist performs over a net, you’ll see a good performance. Remove the net and you’ll see a great performance. By removing the 'net,' competition weeds out the inferior and average performers.
8. If you want to compete, don’t whine — deliver excellence!

The Postal Service has two options: innovate to deliver excellence or hire an auditing firm to eliminate inefficiency. There’s no way they can stay in business while charging $3.50 for a service that’s available from the same source for 34¢ — and misses its own deadlines one out of three times.