4 Principles of Marketing Strategy | Brian Tracy

Hi everyone, it's Felicia here, checking in with you on day two of the Total Business Mastery seminar. Did you know that there are four principles of marketing strategy? I didn't either. Watch this brand new footage where Brian explains exactly what they are and how you will become more successful once you start using them.

Oh, yes. Sometimes I ask my business clients, I say, who sets your prices? Sometimes I have a whole room full of business owners. Who sets your prices, by the way? Who determines your market share and who determines your profit levels? And who determines how fast you grow? And who determines the future of your business? I do. I do. We do. No, you don't. Your competitors do. Your competition determines everything. Your competition determines your level of sales, the prices you charge and how much money you make. I've done a lot of work on military strategy. And one of the great principles I learned in military strategy is that no strategy can be made independent of the enemy. In other words, you can't sit there and plan military strategy ignoring who your enemy is and where they are and how big they are and what their plans and intentions are. So no strategy in business can be made without thinking about your competition. And who are they and what do they do and why do people buy from them and how can I get them to buy from me? And how will they react if I get their customers? Who? There's volumes of books in the libraries on this and I've got them all. There's one book called Competitive Analysis, it's this Big by Michael porter. It's about 6, 800 pages. And it's all on things that you have to think about to position against competition. Big stuff. You can get PhDs in marketing focused on competitive analysis. So the four principles of marketing strategy are these. Number one is your decisions in these four areas. Whoops. Your decisions in these four areas determine the success or failure of your business. The first is specialization. Specialization is determining where you are going to specialize, which we'll talk about in your product or service. And I'll talk about this. I'll define it a little bit better. The second is differentiation. Differentiation is really the key to business. They say that all business strategy is differentiation strategy. Competitive advantage is how it is that you are different and better than your competitors. Because human beings in the marketplace, customers always want to know, why should I buy from you rather than from someone else? And you'd better give me a better reason than your competitor does or I'll buy from your competitor. And it's not personal, it's just I want to get the Very best deal. As a customer, I want to get the highest quality for the lowest price. You tell me why I should buy from you, why you are giving me the highest quality, the lowest price. And if your answer is better than that of your competitors, I'll buy from you. And if it's not, I won't. And it's not personal, no emotion involved. We get emotionally involved because it's our business. So differentiation is the key, is how and why and where are you different. Segmentation means looking at your market and saying who are the specific customers in the market who value, value my area of differentiation and who will pay more for my area of specialization than anybody else. So in other words, in every marketplace, and they say that all market now, all marketing today is segmentation, is segmenting and identifying those customers who are most likely to buy from you the fastest. And finally, there's concentration. Once you have determined your very best market segment for what you do really well, what you do is you focus all your energies on them. So let's look at this. Specialization says this is the product, service, customer market or area of technology where you focus all your efforts. We also say in specialization, it can be a product or service, it can be a particular customer that you want to serve, or it can be a particular market area that you want to work in. I'll give you an example. McDonald's. McDonald's customer is people who want to eat quickly and they want cleanliness, efficiency, value, price, and pleasant surroundings. And so what they will do is they will offer every product that they possibly can for people who want to eat quickly, whether it's a salad or whether it's a shake or whether it's a type of coffee or whether it's. In other words, they're constantly looking for other products that they can offer to that customer who wants. Who's in that market segment which wants to eat quickly and efficiently. And they trust, they test continually. Very clear about that. So the next one is, look at that. Okay? And so, and so differentiation is your competitive advantage, which you've heard me talk about, but you'll never hear me talk about too much. Because if you can identify and, or create a competitive advantage and convey it to your customers, the dam will break. You can make more sales and more money in a year with a clear competitive advantage to your customers than you might make in a lifetime if your competitive advantage is unclear. So number two, it's your area of excellence or superiority. It's something that you do better than anybody else. And I sometimes joke, why Is your product or service better? And they say, quality service, quality service, quality service. We give quality service. And people don't understand that. That is only an answer if your competitors offer zero quality and zero service. In other words, other than that, it's not an answer. If you person says, well, you should buy from us because of our quality and service. They're saying, I do not have the slightest idea why anybody should buy from me. I'm a complete idiot and I'm a danger to my company and probably to my whole. So it's interesting. When Steve Jobs looked at the BlackBerry, looked at all the cell phones that were out there, and he sent out with his engineers and he said, I want a phone that you can activate with one button. They said, it's impossible. All these other phones have all these other buttons you turn off and on. He said, I want a phone that you can activate with one button. And he kept sending them back and sending them back until they finally came with the one button. You activate it, put in your code, and bam, you have all your apps and you're ready to go. The game is on one button. It's never been done before in history. Can't be done, can't be done, can't be done, can't be done. I want it done. And there's the phone. I said, cell phones today should not be so darn complicated to start up, use, get around, and so on. I had a BlackBerry. And to get an app on a BlackBerry, which has far fewer than Apple, it's almost like you need an act of Congress to get a damn app. I mean, you know what I'm talking about. They're so hard. And you go to BlackBerry and I go to Apple, which my family and my staff got me into. Within half an hour, I had 30 apps loaded. I mean, it's unbelievable. You're loading them one at a time. Whoa. And now you can float the whole world and stuff that's on there for apps, just the free apps blow your mind, much less the paid apps. And now you have 486,000 apps. Think about that. But they make it easy. So Apple says, you come to us and it's easy. You can access everybody, anything, anywhere. And then they come up with the Apple II and they put that video model on it, whereas you can actually hold it up and you can talk by video to anybody anywhere in the world who has an Apple with the same facility. It's the most amazing damn thing. I mean, you look at it, it's almost like a kid how can this be so what is yours? And if you don't have it, you can't compete. But if you do have it, you sell 50 million sets and become the highest valued company in the world in five years. If you can be really clear about an area of excellence that people want and will pay for your unique selling proposition, what is it? And this is called your usp. Your USP is the one thing that you offer that no other competitor offers in the whole world. It's unique. What do we know about the word unique? Is it cannot be modified. It's the only adjective that cannot be modified. You can have more and you can have greater and you can have greatest, but you cannot have more unique or uniquer or less unique or unique. Est. You have only one word, unique. Each person here is unique. You are not uniquer. You are not the unique. Est, you are unique because there's only one of you in the entire world. So therefore, what is your unique selling proposition? I've worked with people have spent hours to identify this. And when they finally identified it, their business went up 500%. And in the next 12 months, they could not believe it. They went from struggling to living in a big home, driving a Cadillac or a Mercedes because they finally found it. And that all of your advertising, all of your promotion, all of your work is focused on conveying that USP to your customers, getting it to them so that they are clear what it is. And if it's what customers want and value and will pay for, they will line up around the street. Remember when they brought out the iPad because of the iPhone? Nobody really knew it was in the iPad, except it was going to be like a whole broad screen. It's going to have everything that a computer had. They line up around the streets by the hundreds to lay $500 down. $500. I don't know about you, but I think $500 is a lot of money, wouldn't you say? $500? These are poor people with flip flops and sandals and tractor caps. Well, they have to put their $500 down to get this because they didn't know what it was. But it's going to be like, it's going to be like an ipod, an iPhone, with a bigger screen, plus all kinds of other capabilities. Wow. And you know what they did? They sold 25 million of them in less than a year. 25 million of them. And they totally changed the book retailing industry. The book retailing industry, like a ship that turned over, went from basically hardcover books in bookstores, it flipped. Now 51 to 55% of all books are being purchased as ebooks. And the reason is because of the iPad. Because iPad owners are readers and they buy an average of 2 to 300 books in the first year. And the whole market flipped. And Borders, one of the biggest and oldest bookstores in America, went bankrupt all in less than a year when the iPad was introduced. Can you imagine? I mean, we're living in pretty turbulent times, wouldn't you imagine? A company that spent decades building was bankrupt nationwide within a year with the advent of one new technology. So what is your unique selling proposition? Theirs is convenience. You can get everything, get everything fast, everything convenient, more convenient than anyone else. Everybody tries to compete with the I phone or the iPad. Can't do it. The Nook. Can't do it. Hewlett Packard got into it with their tablet and just quit. They just can't do it. Now who is it? Not Samsung, but the Korean company is trying to compete and so on. But they have a unique selling proposition. So my question is what is yours? And I'm going to ask you to answer that. What is yours? What is it that you offer that nobody else offers? Now here is an insight. If you're offering something that everybody else sells, let's say you're a real estate agent. What's your unique selling proposition as a real estate agent? If every other real estate agent with 100 miles has same unlimited access to the. Yeah, the MLS. What is your USB? What can it be? What could it be? What should it be? Come on. Jeez. Well, the answer is yourself. Because you, the product is all the same. You don't even control the product. You even control the marketing. Everybody else can have it. So what makes top realtors? I work with top realtors. The average realtor makes about 25,000 a year. I work with entire room full of realtors. Average income is $833,000 a year on straight commission selling. And they all started off with nothing. And they're now at the top of their field. And some of them make several million selling homes. What's the difference? Personality, Personality, preparation, punctuality, friendliness, warmth, follow up notes, phone calls, contact. In other words, they make a supreme effort to build a really high quality relationship with a home buyer or home seller so that that person will never think of going anywhere else. I know because I worked with some of these people in buying and selling my homes and I would never buy or, or sell, buy or through anybody else but these people because they are so good at what they do. And every one of them started off on the street, knocking on doors and dialing for dollars and made a decision that their unique selling proposition was going to be themselves. And you, as an independent business owner, can make that decision as well. Make the decision that I'm going to take such good care of my customers. My customers would never go anywhere else. I don't have to give them blandishments or discounts. I don't. I'm going to take such good care of them that they will eagerly come back to me. So number four is where are you or could you be the best? Where are you or could you be the best? And this is the great question, because everybody here has the ability to be the best at something everybody here has the ability to be the best at something that people will eagerly pay for and tell their friends about. And your job is to figure out what it is. Your job is to figure out what it is and then do continuous and never ending improvement until finally people say, you know, you're the best. You are really good at what you do. You are really good. Look at Lady Gaga. I saw her at the Grammy Awards as well. I don't know anything about Lady Gaga. I've never listened to a Lady Gaga song. She came absolutely from out of nowhere. She's 25 years old. She's one of the top 10 tweeted people in the history of the world. And she made last year $60 million. And where was she singing in nightclubs or bars five years ago? And she's an incredible entertainer. And there ain't nobody like Lady Gaga. You know what I'm talking about? Unbelievable. Why? She knew what she had. And she goes to the extreme with her dress and her appearance and everything else. And she wraps it around a good voice and just literally has taken over the world of pop music. So segmentation is. Who are those customers who most appreciate your area of superiority? Who are your very best customers? You see, your best customers are really easy to sell to. They'll buy and buy again. They're happy, they like you, they come back, they bring their friends, they give you recommendations and testimonials. Whereas your worst customers, your customers from hell, you have to literally break your back to sell them anything. They complain all the time. They don't pay. When they do pay, their checks bounce. They can stand back and bounce it to you like a basketball. So who are they? What are their demographics? What are their psychographics? The demographics are things that you can observe from the outside. Age, income, education, family, Formation. Psychographics are what motivates them. And this is where the future is in your business. And every person has psychographics and they have a key psychographic. I'll tell you this in a second. How would you describe your perfect customer? I do this, by the way. I said, imagine that you were at a social or business gathering and you're networking and someone came up to you and said, look, I know a lot of people in this community. How would you describe your perfect customer? Don't tell me what your product or service is. I don't want to hear. Just tell me who would your perfect customer be in terms of their wants, needs, age, education, income, position. And so you would have to describe your perfect customer without mentioning your product or service at all. The person would not even know what you sold. You describe the customer, this is what this person is. This is what they are. Give you an example. IBM at one time had 80% of the world computing market. 80%. Then they made some mistakes and now they have much less. But they had 80%. They had so much that the federal government tried to break them up for about 20, for 13 years. They brought antitrust suits against IBM just like they tried to break up Microsoft. They finally Reagan came into power. They started in 1970 and 1983 was brought to Reagan's attention. They said the federal government has been pursuing IBM in 50 million 100 million dollar lawsuits for 13 years. And what did they come up with? People buy IBM because they really like IBM and IBM treats them really well. They said, well, if they can't come up with something on IBM, they have to drop the lawsuit. And they said we can't come up with anything. The customer antitrust is supposed to be in favor of protecting customers. IBM's customers love them worldwide. Then drop the suit. They dropped the suit after 13 years. They did the same thing with Microsoft. They harassed them and harassed them and harassed them because they weren't giving enough political contributions. That was the major reason they weren't giving enough political contributions. Finally, after years they had to say, why do people buy Microsoft? Because they like the product. The product is good and it's cheap and it's flexible and everything. So here's. So how would you describe your perfect customer? This point I was making with IBM is IBM realized that when they first started selling the 360 mainframe in 1964, the customer was really the president of the company making a major strategic decision. Are we going to put everything in our company on computers? Because everything was paper at that time. And so they would have to make their presentations to the senior executives of the company and work out all the numbers and so on. But as computers became more and more popular and they started to have PCs and desktops and so on, the whole decision making shifted to the purchasing manager of the large companies. And so they had to focus and change all of their marketing. So it focuses on purchasing managers. And they learned more about how purchasing managers think and walk and talk and eat and breathe and communicate and where they're educated and the size of their family and their income and their psychographics and demographics. And they focused all of their effort on purchasing managers and became the biggest selling company in the world, 80% of the world market, because they knew their customer. I hope I'm making a point here. Many people, you say, describe your customer to me without mentioning your product or service. They go, huh? Well, somebody wants it, duh. All right, so demographics. Here are the. Here are the key demographics. And by the way, if you don't know these, find out what we do. You know how we find out. Do surveys. Ask your customers, Offer them a prize if they'll fill in the blanks. Age, gender, that's important. Income, how much did they earn? Education, how well educated are they? Occupation, what sort of work do they do, Location, where do they live, and so on. And family status. Those are the main demographic features. And you've got to be very clear, because if you change the demographics of your customer, you change your total marketing approach, your selling approach, your packaging, your product, your service, your people and everything else. Now your psychographics are even more important, and this is really neat. What are their goals and ambitions? Because remember, people are motivated to buy because you offer to help them achieve a goal that they have. Or what are their wants and needs and motivations? They are motivated to buy because they have a need for what you're selling. And what are their hopes and dreams and aspirations? Where do they want to be in the future? And can your product or service help them get there? And four, what are their fears or doubts or worries? Here's one of the great breakthrough discoveries for me in the last few years is there's always one reason why people will buy from you. There's one major reason, and you have to find out what it is and convince the prospect that you can give them that benefit. There's always one major fear that will hold them back. There's always one major doubt that holds them back from buying. And you must find out what that is and alleviate it. You've got to do both in every sale. What's the major reason? How does Brendan alleviate the fear of making a mistake of going to his program? How does he do that? Yes, not only that, not only the entire fees refundable. He'll pay your airfare and your hotel. And he does, by the way, he'll pay your airfare and hotel for coming just to not waste your time because he's so confident in the value of his program. So in other words, he's making it a risk free thing for you to do. What is the biggest risk that you have with Brendan's terms and conditions that you really like it and won't want your money back. And you'll be out the money that you have paid because you really enjoyed it, because you got your money's worth. Geez, that's a real tough downside. Number five is what is the problem to be solved is? We call this ptbs. Ptbs. Ptbs. Problem to be solved. Problem to be solved. Problem to be solved. People buy your product or service because they've got a problem to be solved. Like a parrot. Problem to be solved. Problem to be solved. Problem to be solved. And a goal unachieved is a problem unsolved. A need unsatisfied is a problem unsolved. A pain not taken away is a problem unsolved. This is the focus of your business. What is the problem that you solve for your customers when they use your product or service? And you must know that with crystalline clarity. You know, like that in the movie with Tom. But was it, was it not A Perfect Gentleman? You know the movie I'm talking about with, with Tom Cruise and. Yeah. Not Risky Business with Jack. Jack, yeah. What does he say when he says, do you understand what I'm saying? And he looks into the camera, he says, crystal, that is my. Is what I'm saying crystal clear? He says, it's crystal. Well, you must be crystal when you're clear. When you're thinking about what it is you do for your customer and all your advertising, all your promotion, all your business is based around conveying that crystal to your customers so they understand Crystal. You know how a cafe advertises on the side of the freeway or the highway, you're going down the road, you see a great big. It doesn't say mom and Pop's Best selling Meatloaf and family cook food and come and visit us sometime. It says a big sign. It says hungry question mark. And the next one says, turn at the next exit for the best food. On the highway. In other words, they first of all get your attention. Because if you're hungry, what happens? Hungry, you'll see that reciprocal, your reticular activating system will see that. You see that word hungry now it's got your attention. The next sign is turn here for food. You want food, turn now. Real simple. So concentration is the fourth part. Concentration is where you focus your time, money and resources. Remember the old saying, 50% of my advertising is wasted, but I don't know which 50% it is. Well, maybe 80%. 90% of advertising and promotional dollars are wasted. And if you can just increase the efficiency of your advertising by focusing your message with greater clarity on your best customers, you can get five and ten times the response per dollar of advertising that you were getting before. So what are the best possible ways to contact your ideal customer? And this is moving very quickly today. It's shifting all the time. Second of all, what are the best possible media for you to use? Most of you use the Internet exhaustively. But the Internet is only one method of communication and it's still small relative to all the other forms of advertising and promotion. I have a friend who does $35 million a year with radio ads. 60 to 120 minute radio ads to get people to phone a number where then they are interviewed and then sold into another telephone call where they are introduced to a product which takes them to another telephone call. Just 35 million a year with radio ads. So there's all kinds of ways. Imagine if you could run an ad 60 seconds. And how do you test an ad? We're working with one of the top companies in the country. They develop an ad, they narrate the ad, they are happy with the ad, and then they run the ad in a tiny market, a small town. They pay $5,000, get 50 spots and see what kind of response rate they get. They will run the ads five days a week. They'll run one ad on Monday, one ad on Tuesday, Wednesday, Thursday, Friday, and five different ads. And they see which one causes the phones to ring. Then they'll take that and they run it in New York. And what works in Podunk is Podunk is going to work in New York at 100 times the scale. In other words, they debug the system. Get a nice ad. And what if you could have an ad that would cause qualified people to phone you all day long, phone you and call you and say, please, please, please sell me your product or service. I've got my credit card handy. Is that possible? Say yes, it's been done. All that's being done all the time. You ever listen to radio? Those people are not advertising for fun. They're advertising because they're making a lot of money doing it.

Hi everyone. Thanks for tuning in to your virtual backstage pass. You just watched Brian explain the four keys of marketing strategy. Which ones will you be implementing? We want you to share what you've learned with us, so make sure you leave us a comment below. This concludes our backstage pass for day two at the Total Business Mastery event. But if you want to see what happened over the past two days and get live streaming access to day three, click the Get Virtual Access now button below. We've got great new segments to share with you on the third and final day of your Total Business Mastery Backstage pass, so please make sure you stick around. We'll see you then.