SPEAKER_01 0:21

Okay, Mina and I today would like to talk about messaging because messaging is a fundamental part of the value vert flywheel pillar. As you know, last couple of weeks we've been talking about value. And just a reminder, of course, the Vert flywheel pillar is value engine reach and team. And over the next couple of weeks, we're doing a deep dive on value. So two weeks ago, we talked about there's no point to scaling your business until you can prove that people are willing to pay the price that you need them to pay to exchange the value that you're willing to deliver. Last week we talked about exactly who that person is. So making sure that you can define your target audience. And so this week we're going to talk about how you can cut through and crystallize on your messaging. See, the problem is that a lot of owners make the mistake of getting too technical, selling features. They fall in love with their product, they know everything that goes on behind the scenes. And what is important to you as a professional or as a provider of a particular product or service may not necessarily be important to your consumer or your end customer. And that's the mistake that a lot of businesses owners make is they conflate the two. They think, well, this is what would be important to me as an educated buyer. Remember, you are an educated buyer of the product or service that you're selling because you understand the nuances, you understand the idiosyncrasies and what actually goes in to make a good quality product or service, but buyers don't necessarily identify with that. And really what we want to talk about today is instead of selling on features or technical specifications, we should sell on or have messaging around outcomes. So what is the result of the product or service that the potential customer or client will experience as a result of choosing you and your business? And so today we're going to talk about what is value really in the customer's mind, how to get that messaging right, really compress it in one sentence. And we've got some really good examples to share with you and how to put that number to demonstrate what inaction costs for the customer. So if they don't choose you or don't choose a product in your category, what's the outcome? And then how to make that all believable by giving, you know, social proof and guarantees and these sorts of things. Now, value is very important. It's great that you're able to develop and deliver a product or service that actually demonstrates value. But if you can't articulate that in the way that the customer wants to hear it, then there's actually no point. You could have the best product or service out there, but no one's going to recognize it. So being able to articulate this and be able to sort of cut through all the market noise and position your value statement is really critical. So, Mina, let's start at the beginning. What is a customer actually buying?

SPEAKER_00 3:17

So a customer's probably buying one of three things. And it really comes down to three descriptions that I call either functional, emotional, andor social values. So essentially a consumer wants to know after they've paid for your product or service, what difference shows up once they've acquired it? Has it provided any sort of functional value? So functional value refers to the practical result. So think about things such as or metrics such as has it saved them time? Has the revenue increased in their business? Has it reduced errors in the business and improved quality control? Have you, for example, is it a weight loss product? Have they actually lost weight? This is the layers that people or founders actually default to. They focus on one functional value rather than the next two values. And the next one is around emotional value. So this is how a customer feels once they've bought the product. Are they less stressed? Has it relieved them from some sort of burden that they've faced? Does it give them more confidence or more control in whatever they're trying to achieve? And finally, it's around social value. Does it actually signal anything in their lives that makes them look successful? So think about things such as a handbag or a car or a house or something like that. A lot of those things are somewhat status symbols. So think of social value as somewhat of a status symbol. So from our perspective, a weak off is actually where you actually only target one of these functions. But a good off is one that touches on all three. So if we use Canva as an example, functionally, Canva is really a design tool. They took what the likes of, for example, Adobe had and really made it a lot more functional for the consumer. So if you break down the functions of it, so functionally, also I should say the values of it. The functional value is that it was a design tool where you could produce the same output as you could in Photoshop without the same level of training required that small businesses don't necessarily have, nor neither have the time for. From an emotional perspective, it removed the dread of sort of staring at a blank design file and thinking, oh my god, I need to produce something by five o'clock, a slide deck or something similar. Where do I even start? So it relieved them from an emotional stress. And socially, if you think about it, when you went to present a slide deck or a PowerPoint or whatever it was, you felt a lot more confident presenting a presentation that was produced in Canva because it looked a lot more professional. So it touched on all three aspects. And that's why in 2012, when it was founded, it reached a valuation of 40 billion US dollars by 2021. So it wasn't was the product was already somewhat already out there. Adobe Photoshop had a very similar product, but what was different about Canva is that it touched on all three of those points. Zig Ziggler had a line that said that people really buy emotionally and justify it logically after the purchase. Similarly, Harvard's Gerald Zeltman went further and argued that around 95% of purchase decisions are actually made subconsciously. We decide everything with feeling first and then build a rationale case afterwards. It's more commonly referred to as man math sometimes, where we use creative logic to justify an expensive purchase. So if your entire pitch is rational, so you're trying to sort of focus on the logical output of it, you're only really talking to 5% of the consumers out there. It's the ones that are going to be highly logical, think about the purchase over and over again before actually committing. Whereas if you actually focus on the two other aspects, the functional oral, the social, the emotional, so all three aspects, then you're hitting a much larger larger customer base. So I'll take it to you to test your own offer or your own product or whatever it is, and ask yourself in one sentence, in each one of those values, what it does functionally, how it makes the customer feel, and what it signals about them to others. And if you can only answer one or two of those, then you've really got a weak product. So short, if you can actually hit all three, how do you compress that into something you can actually say to the consumer?

SPEAKER_01 6:59

Really simply, Mina, in one sentence. And that's where the discipline lies. It's not a paragraph, it's not a list of items, some bullet points, a mission statement. It's really one sentence. And after the customer hears that sentence, it should be memorable. They should be able to kind of repeat it back to you. They really understand where you're coming from. And the discipline inside the discipline is actually write it in the customer's language, in their voice, not yours. From their perspective, again, not yours. It's not we leverage a proprietary methodology to optimize outcomes. That's a lot of that's a word salad. A word salad that's built for you. What does the customer actually get? Say that. So let me share a couple of examples, a couple of old ones, but they're really good. And I'm going to follow it up with a more local Australian current example, if you like. So the probably the most famous one-liner is when an absolutely and positively has to be there overnight. That was FedEx's slogan that they launched in 1978, and it was incredibly successful because ultimately, if you wanted to send a parcel in the late 70s, good luck to you. You know, you didn't have email, you didn't have text message, you didn't have any of the internet or anything like that. Parcels was all that we had. Mina wasn't born then, but I can assure you that's all that we had. And there's times that you absolutely need that reliability, and it really, really cut through. Another classic example is Domino's. Domino's had a 30 minutes order it's free kind of promise. It worked and it really cut through. Again, you know, people are hungry when they order food. Again, we didn't have Uber Eats, we didn't have, you know, those sorts of things back in the late 70s when Domino's launched this tagline or customer promise. So really that was revolutionary because on-demand food wasn't a thing. But if you think back then, it really cut through. It ran into a bit of trouble because delivery drivers were being sort of accused of driving dangerously and just to meet the deadlines so they could still charge for the pizza. And they pulled that guarantee in 1993. But it's a bit of a cautionary tale because we can come up with a promise. As I'm going to explain in a second, you've really got to back it up with the artery. You've got to be believable, it's got to be deliverable. It can't just be a marketing story. But another example and one a little bit closer to home, Bunning's lowest prices are just the beginning is an absolute killer of a line because price is probably the first thing that we think about if we want some sort of hardware item. You know, whether we're buying, well, unless we're a tradie perhaps, but you know, whether we're buying a particular tool or something we need around the house, we don't want to get ripped off on it. It's probably not adding a lot of utility. There's probably not a lot of status or anything like that, unless maybe you're a tradie and you like your brands. But for the most part, that you want to lead with a price guarantee. And remember, Bunning said that if you find it cheaper anywhere else, they'll match it for you. But the real genius in the line is it's just the beginning. So everyone knows that you go to a bunning's the huge range of products. You know, if you're looking for a particular product, they'll still have maybe two or three different options for you to choose from. You also know that often a lot of the people have a lot of DIY knowledge. They could be extradies themselves. So if you're in the paint department, you want to ask about paint or in the wood department you want to ask about, you know, asking a carpenter for some ideas or whatever, you know they're going to sort of back you up. So there's some real genius in that. Again, they ran into trouble a couple of years ago because they were selling products that were unique to Bunnings. And so, you know, they couldn't offer the 10% sort of guarantee, you know, we'll beat the price or sell it to you for 10% or less because those products weren't available somewhere else. But again, that's a bit of a cautionary tell for these brand promises to make sure they're deliverable, that they're defendable, and certainly from a legal standpoint. And that's what I'm sort of saying. Uh, customer promise can't just be a throwaway marketing line. You know, it's got to be something that has proof underneath it that you can actually deliver on it, that doesn't put your business at jeopardy, that is backed up by a good engine, a robust engine. And that's why these pillars are so interrelated, because as you can see, your customer promise has to be underpinned by a good engine. It's something that you can then use in your reach in terms of marketing, and then your team obviously has to understand what that customer promise is as well. So I'm going to talk about social proof as well, is a very big thing and something a lot of businesses have used to their advantage. But Mina, let's talk about the cost of inaction because that's a big part of our messaging as well.

SPEAKER_00 11:43

From my perspective, you really need to quantify the cost of inaction. By saying you simply have a problem and you should really deal with this or think about it, it doesn't really move anyone. You really need to quantify it. You really need to put a number behind it. And it almost sounds rich coming from an accountant talking about numbers, but numbers really do move people. It creates urgencies. You have to be able to answer the one question for the customer, what is the actual cost of doing nothing? What is the cost of inaction? What is the opportunity cost? And there are really five lenses that you can use to quantify that. And the first is financial, and that's really pretty simply put, the dollar is gained or lost by delaying. So how do we, if we delayed this decision now, what would it actually cost us? And the next one is time. So if we execute no hour, what's the speed to outcome or the waste of time by waiting? The next one is risk, the chance something goes wrong. So while they sit on their hands, so it could be things such as compliance exposure, viable errors, reputational damage. And I'll probably use an example of that in our industry. I remember about maybe 10, 5, 10 years ago, there was a big push on, for example, order insurance. And, you know, it was really much an emotional and risk exercise to try to push clients to get order insurance. And unfortunately, back then there was a lot of accounting firms doing the wrong things, take cuts on those products and so forth. But it worked well because it created a risk. It created the sort of fear behind not having the insurance. And the next one's emotional, which sort of ties into a little bit of risk, and it's the ongoing stress and uncertainty of an unsolved problem. And finally, social. So the cost of their status by not having it. So I almost liken this to a real estate agent always having a flashy car. You know, it's almost embedded in the service line where they needed a flashy car to show that they're successful and for people to actually trust them. Now you don't need to quantify all five. You only need to measure one credibly, and you can describe it probably in a broad range. And I'm always weary of businesses that sort of put just one single number around, you know, what it saves you. I always say always put a range in place. So put a conservative case, a midpoint, and an optimistic case. Because the range is a lot more reasonable, whereas a singles figure can be a lot more suspicious. So if you take the case of Blockbuster Netflix as an example, in 2000, if you believe it or not, Netflix founders flew to Dallas and offered to sell the Netflix business to Blockbuster for $40 million. Now, they were essentially laughed out of the room by Blockbuster, and that cost of decision, that cost of inaction made them bankrupt within 10 years. Now, Netflix went in public in 2002 and they kept building that subscription model and the streaming model that Blockbuster sort of went against and defended. And end of the day, they actually filed for bankruptcy in 2010. So every year Blockbuster didn't act, the cost of inaction compounded. And by the time it was undeniable, it was just too late, it was unrecoverable. And that's really the honest part of this exercise, and it matters. You're not trying to scare anyone into a purchase they don't need. You're doing the arithmetic Blockbuster refused to do. And I'd love to, I would have loved to actually been in that conversation because I would have loved to see what Netflix actually had shown Blockbuster in terms of the figures and whether they actually provided any figures around their growth potential and what the risk of inaction is. Because I almost feel as if they actually came with that pitch to them, then they wouldn't have laughed them out of the room. Maybe Blockbuster would have had a different sort of trajectory in that case. Now, a number on its own isn't enough to make customers believe in you. Customers need to specifically also understand what you're delivering and how you're going to deliver it. So, Stuart, what does that take?

SPEAKER_01 15:10

Proof meaner, but before I talk about that, I just want to recap. We've spoken about having a customer promise positioned in a way that's one sentence that cuts through, that's unique to your business, that really identifies with the emotional drivers that link to that customer. We've talked about also making sure that we're clear on the cost of inaction. You know, what is the opportunity cost of not choosing you? And now what we want to do is talk about proof. And we want to provide proof as to the customer promise and the value that we're going to deliver. And we can do that in a few different ways. Really, three different ways we can provide that customer proof. And it's important to think about trying to utilize all three because they're going to work different ways for different product categories, different clients, different risk profiles in terms of the risk associated with the product or service that you're selling. But the first one is to have a kind of unique philosophy or methodology or something that's proprietary to your business. So it's not just a generic we do well or we have a high quality, but we've got this specific process, methodology, technology, these sorts of things that are unique to us. Sort of like KFC's 11 herbs and spices. Something that's sort of unique that's going to cut through. The second way that you can demonstrate proof is social proof. And this is probably one of the most powerful because it's things like case studies, reviews, Google reviews, third-party validation or recommendations, transparency and measurable results that people can see. And social proof, I think, is even more powerful today, given we're all online. And you know, if you're like, I mean, anyone's going to Google a business, right? Google reviews, have a look at Reddit reviews, even use AI to sort of gather reviews on particular products or services. I think everyone these days does that. And the last one is a guarantee. So the role of guarantees are supposed to do is remove risk. So what I'm sort of saying to you is if you buy my product or service and you pay a certain amount, I deliver to, you know, I guarantee certain results that you will experience. You know, these are benefit statements that are in the eye of the customer. But if they don't materialize, you know, I'll refund your money or whatever that guarantee looks like. And essentially what you're trying to do, particularly for higher risk transactions, I mean, you're not going to guarantee a sandwich if you're selling a sandwich in a cafe because that's a low-risk transaction. But certainly for high risk transactions, you might want to offer a guarantee or even products where value isn't obvious immediately. So a situation where you sell a business and you have an earnout is a little bit like a guarantee. You know, if you go and buy this business from me and you pay this price, you know, I guarantee you're going to generate this sort of level of profitability. And it's a perfect example where you've got a high-risk transaction. A really good example of, you know, a proprietary process and using that in marketing and messaging is really Dyson. So the vacuum cleaners. You know, no one gets excited by vacuum, or well, at least I don't think they do. They're pretty boring products, and to really cut through is kind of difficult. And Dyson really came out when bagless vacuum cleaners weren't really a thing. I mean, there's a few around, but mostly that was the pain point is you had to go and buy these bags, put it in your vacuum cleaner, empty them out, you know, and they're sort of they weren't really reusable. You had to, they were consumables, you had to keep buying them. And so, and then also the other criticism of vacuum cleaners back when Dyson started was that uh the longer they were around, the weaker their suction became. And so apparently he came up with like more than 5,000 prototypes to really work out until he worked out the cyclone technology that really worked in Dyson vacuum cleaners that's still present there today, and where he could then guarantee no loss of suction. And that really cut through the market at the time. It's not that big a deal today because I think there's a lot more competition from similar style models, but they really own the market. And just like in the UK, instead of saying people would vacuum their place, they'd say they're hoovered their place. They use the brand name as the verb. Is another way how manufacturers, product manufacturers, can sometimes own a market, own a customer segment. And certainly Dyson did that. Another example was Zappos, which is an online retail business that was started by Tony Hashea, who's unfortunately now past, but he came up with a 365-day return policy. So they originally started retailing shoes online. And this is at the beginning of the internet, you know, when online sort of transactions weren't that commonplace. And so a big kind of risk profile was well, if I get the shoes and they don't fit and what I'm saying, they don't, you know, that they don't feel comfortable, these sorts of things. Well, he instigated this 365 returns. So you could return almost a year later and still get your money back, and there was no cost to return and so forth. And it really reduced the barriers, the risk associated with customers purchasing. And I remember him telling a story where they had one customer that she'd buy shoes on a on a Friday or Thursday, they get delivered on a Friday, and she'd always return them on the Monday. And clearly she was wearing the shoes on the weekend and then just returning on the Monday. And it was a famous story because they identified the customers continue to do this every week, but they thought there's such good marketing. She kept telling her friends about Zappos. And of course, not her, all her friends would behave in the same sort of way, and they thought it was great marketing. So it's funny how you can have these sort of guarantees or reducing risk or providing a stronger promise to a customer. And, you know, sometimes it can be one of your best marketing tactics also. Now, as I said, all these pillars, these vert flywheel pillars, intersect and they rely on each other and they compound, which is something that we want to, you know, as we get deeper in this podcast, we want to really explore. So the discipline really behind making a strong customer promise is that it's not just marketing spiel. You need to back up your claims, you need to provide that social proof. If you really are delighting customers, show me the proof. Why? If you're delighting customers and you're telling me that's what you're doing, you've got two five-star Google reviews, you're probably not really delighting customers. If you guarantee a certain outcome, make sure that your engine is robust to deliver that outcome at scale without compromising quality. And that's why, you know, your value needs to feed into engine, needs to feed into reach and also team. Now we can sit here and lecture you on the theory, but I think probably the best way to sort of pull it all together, and I've already touched on this uh a little bit, is to give you a perfect case study on how messaging to your target customer that really cuts through can really transform a business. And Mina, you're the perfect person to take us through that case study.

SPEAKER_00 21:54

Thanks for your confidence in me, Stuart, but I'm not sure if I am the perfect person, but nonetheless, I'll still go through it. And it's probably just the same example that you used before, and it's around FedEx. And from the late 1970s to the 1980s, and yes, I wasn't born then, the slogan was when it absolutely, positively has to be there overnight. There was a short, concise slogan that went straight to the point. And if you notice what it doesn't say, it doesn't say we operate a fleet of aircraft and a Centralized sorting hub in Memphis. It doesn't mention logistics at all. It's about the pure outcome which people really resonated with. Stated in exactly the words as stressed by the executive would use to describe what they need. Something absolutely positively there tomorrow morning. Then look at the proof of it underneath. So this is where we sort of reference the engine. The mechanism was operational, an end-to-end tracking system so the customer could see exactly where their parcel was at what point in time, which was unheard of at that point in time. You know, if you think about the industry standard back in the 1970s and 1980s, you know, parcels went into the van and you sort of hope that it will get there and get there on time. And the guarantee was direct. If it didn't arrive on time, you got your money back. And that removed the risk from the customer's desk to FedEx. So really, if you think about it, all three value dimensions that we first opened with. Functionally, the parcel got there overnight. Emotionally, the tracking and the guarantee took the worry out of not knowing. And socially, it signaled status. It signaled that you're organized and you took the matter seriously. It made the cylinder look competent to whoever was waiting on the other hand. And not a lot of people would have thought of that. So, Stuart, that's the model. What should someone listening actually do with this?

SPEAKER_01 23:31

They need to do an audit on their business, mean I really before you touch your marketing, your website, your sales scripts, any of that sort of detail, you really need to define what your core promise is. Make sure it's strong as possible. Everything that we've really talked about. Again, it's not a paragraph, it's not a list of inclusions, it's not a value statement. It's really just that one line that's going to resonate with your target customers that's really going to cut through. And it's got to it's got to touch on all three things that we spoke about, what it actually does for them, features, but what it does for them, how does it make it make them feel? And where are the signals? I mean, status. Seth Godin talks about status a lot and it works in many different ways. It can be a status as in I'm, you know, in the buying this luxury item because I deserve it, I can afford it. It can be status like that. But also, as in previous podcasts we mentioned, you know, driving EV might be a status symbol that, you know, I'm caring for the environment. I've chosen the EV for this way. So status is a really big thing that we shouldn't ever overlook. And then make sure we really address what's the cost of inaction because that's part of our marketing message as well. Whether it's financial time, risk, emotional, social status again, and quantify it, you know, honestly within a range, because we've really got to make sure that, you know, it's just a lot easier to not make a decision. There's a really great example of the emotional pain associated with decision making. When I remember reading something between donor rates in Holland versus Belgium, and, you know, the northern part of Belgium is very similar culturally to Holland. You know, they obviously border each other, and obviously the southern part of Belgium is more closer to France. But culturally, they're very comparable. There was a lot higher organ donation rates in Holland. And the reason why is on the Vic Rhodes or the Rhodes government body, when you registered your car, you had to opt out of organ donation in Holland, where in Belgium you had to opt in. People would prefer just to not tick a box, right? So the in Holland they didn't tick the box to opt out, and in Belgium they didn't tick the box to opt in. So it's really important to sort of leverage that point of inaction. And also, like you think about it, if we take it back to the example I spoke about, really bunnings, which is lower prices, just the beginnings. So what's the cost of not going to bunnings? Well, maybe you pay more, maybe there's less choice, maybe they're not going to be as helpful. And then finally, create some proof. And that proof can be, you know, a proprietary sort of system or process. It could be social proof and leveraging social proof, or it could be offering a guarantee. From our perspective, in financial services, social proof is a big one because, you know, it's one of those situations where value isn't necessarily obvious up front. You've really got to get into the product, you've got to try it. Maybe you've got to be a customer for a couple of years to really see and cement and feel the value. So social proof for higher risk transactions can be very valuable. So, really, over the course of the next week, the homework that me and I would give you is really nail that customer promise. What is it? Can you articulate it in one line, hitting on all the things that we spoke about? Next week, we're going to talk about pricing power, which is a very important part of value. And if you're able to wrestle some pricing power away, you can build a very sustainable and robust business that is well positioned to be able to reinvest in itself and deliver even more value to its customers. So until then, bye for now.