In past seasons on HBO's Six Feet Under, the Fishers were often battling a funeral home conglomerate looking to take over the family-run business. The big company could afford employee perks and lower customer prices and had plenty of cash to buy out the smaller fish in town. After several battles, the Fishers are about to give in… when the conglomerate files for bankruptcy.
In this case, the Fishers won. But competing with the big guns is never easy, especially when the mom-and-pop shop isn't a known entity. But there are small companies that like the Fishers are winning the battle. And, frequently, price isn't the only battlefield.
This week: How can a lesser-known, small company overcome the pricing battle? Don't let your problem bring you one step closer to the grave; instead, write to 100,000 “MarketingProfs Today” readers who can help your business stay alive. You will receive a complimentary copy of our book, A Marketer's Guide to e-Newsletter Publishing.
This Week's Dilemma
I am the marketing director of a consulting firm. We're not one of the big consulting houses. Before we approach potential clients, awareness of us is low. But we have a track record of getting very good results for our clients. The single biggest issue we face is pressure to cut our charges because clients “know a guy who'd do it at half that price.”
The reality is that going with someone simply based on price is much riskier for the client; but many can't seem to get their heads around paying our rates when they've never heard of us before, despite the case studies and references. With a small marketing budget, how can I help ensure our firm gets paid what we are worth?
You Say Marketing, I Say Mahketing
I have worked in a software company as a marketing support professional for the past three years. My responsibilities include making business proposals, creating marketing collateral and developing presentations. This is my first job, and I'm ready to switch over to another company. Every time I go to an interview, I'm asked questions about goal-setting, target-setting, segment identification and such. My present profile doesn't identify such terms, though in every interview I've been asked about the same terms.
What is your definition for these marketing phrases?
• Segment identification
• CTR (click-through rate)
• USP (unique selling proposition)
—Marketing Support Professional
Summary of Advice Received
Some people believe that these terms are simple and something that every marketer should already know. However, we've learned that the knowledge and understanding of various terms varies widely in marketing. While CTR (click-through rate) is second nature to us, for example, some people haven't discovered the world of online marketing and all of its terms.
When preparing for an interview, you may want to bone up on the following three terms that we asked our readers to define; also, you'll find some advice on using other resources to familiarize yourself with current marketing terminology:
1. Segment identification
4. Resources for marketing terminology
1. Segment Identification
This is also known as market segmentation. WordIQ's definition: “the process of grouping a market into smaller subgroups.” David Shultis, marketing communications manager of Biotage, says this:
Sub-markets in the industry, which can be identified as unique product or marketing features for business development. It's a way of grouping similar types of customers and prospects. In our industry (life science), it might be something like: academia, government, large pharma, biotech/biopharma, hospital.
Scott Schult, director of marketing at St. Petersburg/Clearwater Area CVB, says, “Segment identification is a clear understanding and articulation of a specific marketable audience.”
Yaman Ogut of Fidelo provides a creative definition and analogy. He says, “It's shooting at the leg, well-defined and with a clear purpose, to not kill. It's not just students, but students with disabilities, I meant the people with hearing impairment to be specific.”
A reader defines it as the key characteristics that describe the profile of our consumer clusters. When writing this article, we write with an audience of marketers in mind. So it wouldn't go over well if we talk about the Pythagorean theorem, sine, cosine and other mathematical terms that some of us have tried to forget.
The MarketingTerms.com definition of CTR: “The average number of click-throughs per hundred ad impressions, expressed as a percentage.” CTR is an important metric for marketers who track online activity to determine how well an ad or copy is doing.
Schult says it is “the percentage of online clicks to a target source generated by the total impressions to a marketing message.”
Ogut points out that the higher the CTR, the better:
When you click on an advertising banner on the Web, you have clicked through by way of a specific advertisement. Any ad, or impression in Web-speak means money, cost. When money is spent, it is wise to later gauge or better yet before, whether that money was spent wisely. CTR is a number-, percentage- or points-based; always, the higher the better.
Another reader says “CTR is the percentage of how many viewers immediately click the Internet ads to go into the destination Web page or site.”
According to the American Marketing Association, USP is “an approach to developing the advertising message that concentrates on the uniquely differentiating characteristic of the product that is both important to the customer and a unique strength of the advertised products when compared to competing products.”
About.com Marketing has a short and powerful definition: “the unique product benefit that the competition cannot claim.” What makes a product so special? Why would anyone want the product when there are many out there like it? The answer to the question is the product's USP.
Schult says, “USP is a marketable offering that differentiates and creates maximum demand for your product/service above the competition.”
Ogut believes USP is outdated and suggests “value proposition” instead, although it may also be outdated.
Adrian Woodliffe, managing director at Genisis, thinks of it as “differential.” He says, “USP is a differential that is driven by the brand essence that offers the consumer a unique experience. However, I debunk the concept. It is rare that a company or product has only one USP. That is also a shaky premise for a brand. There are often several USPs.”
Shultis sums it up, “Simply stated, USP is the value we bring (in the way of a product or service benefit) that separates us from our competitors.”
4. Resources for Marketing Terminology
The marketing support professional can study for interviews by reading about marketing on the Internet, in magazines and in books. Those who have a degree in marketing most likely learned terms used less often today. Just like technology, the marketing industry changes. Another way to prepare for an interview is to join online discussion groups and participate. However, you can't beat real-world experience, and adding to it is a cinch.
Ogut reassures the marketing support professional that he or she probably already has an understanding of most of the terminology asked about in an interview:
Be frank when being interviewed; tell them that you are not familiar with the term and ask them to describe the activity; perhaps you may have practiced it under a different name.
While researching the definition of the three terms, we discovered no site has all three terms, at least not under the same names. Many of the sites we visited focus on online marketing terms, and their selected terms vary. This proves that there isn't a standard marketing vocabulary, especially for online marketing.
Even traditional marketing terminology differs between sites, books and other resources. When you do a search for the Ps of marketing, some places identify them as the three Ps, others as the four Ps and one has five Ps listed. This goes to show that not all marketing theories or terms are created equal.
Take the vocabulary from past interviews and research their definitions. Ask friends and colleagues about terminology.
If you're already a walking dictionary, do you have other challenges on your mind that a glossary can't solve? Share your challenge, and we'll put the pool of resources on the job.
Continue reading "SWOT Team: Overcoming the Pricing Battle" ... Read the full article
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
Sign in with your preferred account, below.
You may like these other MarketingProfs resources related to Pricing.
Price increases don't have to mean your customers' running in the opposite direction. Differentiation and open communication can help. Here are some strategic basics of raising prices.
Price wars create a seemingly unsolvable dilemma: Match the competitor's price and risk losing profits, or ignore the competitor's price and risk losing revenues. Yet, based on a vital but universally neglected business principle, there is a powerful solution to winning—and preventing—price wars.
Thinking hard about how your approach to pricing impacts conversions and sales? When applied with know-how and finesse, the right psychological pricing tactics can turn your customers’ brains into buying machines. Well, almost. Here's how to put the basics of "price psych" into action.
A subscription-based business model can be extremely successful—when it's marketed well. Here are some tips for reaching more of your target market, engaging your audience, and controlling churn rates.
Customers want free shipping. Brands know shipping isn't cheap. How can you satisfy your customers and still make a profit?
Pricing can be one of the most sensitive parts of a marketing proposal, but these four tips can help your prospects focus on the value of your services rather than the dollar amount—and give you their Yes.