Magical Marketing - Houdini's Secrets [26] *

Harry Houdini, born Ehrich Weiss in 1874, dazzled American and European audiences with spectacular magic and illusion feats until his death on Halloween, 1926. Adapting his name from his hero, J. E. Robert-Houdin, a French magician, Houdini quickly established himself as the top entertainer in the world in the late 19th and early 20th centuries. While everyone knows about his marvels as a legendary magician and escape artist, few know that much of his success was due to superb marketing.

Here are 5 marketing lessons learned from Houdini that you can apply to your entrepreneurial venture (and you don't need to wear a strait-jacket or be handcuffed to pull off this marketing magic).

1. Always be prepared! Houdini always had a plan and was very resourceful. He was ready for any physical or mental challenge. While Houdini clearly took chances, he believed in managing risk. He used his superior intellect to conduct research and obtain knowledge of all situations and always had the right tools to get the job done. It was not uncommon for Houdini to spend up to 10 hours a day practicing challenging escapes.

2. Leap-frog the competition. Houdini constantly studied the market and prepared for imitators and new competitors. He dissected strategies used by his rivals and never let his competitors know what he would do next. He read every book that was published on magic acquiring a personal library of more than 5,000 volumes on the subject. While rivals were content to break out of handcuffs, Houdini did this while suspended upside down from skyscrapers, on top of bridges or immersed in water.

3. Fine-tune your positioning strategy. Houdini understood the sheer power of a brand name a century before this became all the rage in marketing. Quality was at the heart of his value proposition, always exceeding customers' expectations in his live performances. He knew that perception was reality and had every detail worked out in advance to provide a superior customer experience. While other magicians made rabbits disappear, Houdini vanished a full-grown elephant in plain sight. To extend his brand, Houdini went global and conquered Europe, as well as America.

4. Build a world-class product. Houdini carefully guarded his trade secrets and invested in his product. He diversified to build his product line and product mix. An advocate of the kaizen approach (continuous improvement), Houdini regularly sought incredible new offerings while enhancing his existing repertoire of tried and true stunts. His three-minute water torture escape from a steel-encased cabinet was world renowned. This was one of his several signature acts that could not be replicated.

5. Be creative and never stop promoting. Houdini was the consummate sales pro as well as the master showman and publicist. He stimulated word-of-mouth promotion in every city he visited by promising unimaginable events that he later successfully executed. Houdini often dropped in on local police stations during the day in the cities he was visiting and challenged them to keep him from escaping their most secure chains/restraints, handcuffs, jail cells, or locks (his arsenal of four hidden keys/picks always got the job done). The publicity gained from these teaser appearances drew huge interest to his evening shows. The word spread nationally and internationally in an era that had no television or internet!

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

* This post is extracted from his article "Houdini's Magical Marketing Strategies" published in the Journal of Strategic Marketing (2020).  Full article: Houdini’s magical marketing strategies (tandfonline.com)

 

The Value of a Value Proposition [23]

One of the most critical challenges for organizations is to differentiate themselves from competitors. It is easy to be like everyone else but great companies have their own identities and carefully conceived value propositions. Realize that different isn’t always better, but better is always different!

Think about the following 5 questions (and answers)

1. What is a customer value proposition (CVP)? How does it differ from a mission and vision, slogan, or positioning?

A value proposition is a brief but powerful statement of overall business strategy, such as Lexus’ ‘passionate pursuit of perfection.’ It is the company’s promise to the customer. It should be clear, concise, comprehensive and company-specific. A well-designed CVP is a strategic business tool that considers customer needs and wants, offerings, pricing, promotion, channels, and  a competitive advantage via people, processes and technology. Mission statements explain what the business is doing today while vision statements are forward-thinking. Slogans are creative advertising phrases that capture attention. Positioning may be product- or image-based and relate to designing and delivering value to target markets.

2. How about some great examples of customer value propositions?

• Amazon.com and you're done
• Citrix Systems - work anywhere and on any device
• FedEx - when it absolutely, positively has to get there overnight
• Gillette - the best a man can get
• Intel inside
• Office Depot - taking care of business
• Target - expect more, pay less
•  Uber - the smartest way to get around
•  Visa - it’s everywhere you want to be. 

3. How should managers build a customer value proposition?

Customer value consists of four core components: service, quality, image and price. These elements provide the basis of an organization’s value proposition. The S-Q-I-P diamond can be used to create value for customers, establish a solid business philosophy for the organization, guide strategic decisions and, ultimately, affect business performance. The vertical axis on the diamond — service and quality — represents the backbone of the firm’s offerings, while the horizontal axis — image and price — provide signaling/communicating cues to the target market. The key is to select one or two dimensions to dominate and stay competitive in the other areas. Examples include ‘where shopping is a pleasure’ for Publix’s service; ‘solutions for a small planet’ for IBM’s quality; ‘what can brown can do for you’ for UPS’ image; and ‘always low prices’ for Walmart’s pricing.

4. How does a customer value proposition relate to competitive strategy?

According to Treacy & Wiersema’s influential book, ‘The Discipline of Market Leaders,’ companies can excel by practicing one of three business strategies: best product like Nike’s product leadership, best deal like Target’s operational excellence, or best friend like Nordstrom’s customer intimacy. Innovation, process efficiency, low cost and relationship building are key in implementing value-based strategies.

5. How can organizations improve customer value propositions?

Current CVPs can be enhanced via innovation and adding value. Think about offering legendary customer service like Ritz-Carlton, cutting-edge products like Apple, unique customer experiences like the Virgin Group or pricing innovations like eBay. There are many ways to add value, such as adding benefits, branding, breaking ‘accepted’ industry rules, customization, dominant merchandise
assortments, frequency marketing programs, hassle reduction, internet options, segmented marketing, solving problems, supply chain management or technological superiority.

This blog post is the 11th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .    

Image Positioning - Differentiate to Communicate Value [9]

[Do what you do so well that they will want to see it again and bring their friends. Walt Disney]

American society is intrigued by image. Consider this related word – imagine. Disney is all about the customer experience and emotionally and magically transports guests to another time or place. Image is often associated with entertainment, fashion, and technology markets. Corporate image is the reputation of an organization viewed by its various stakeholders – investors, employees, customers, business partners, communities, etc. All companies have a singular corporate personality that differentiates them from their rivals. The communication challenge is to manage and enhance the firm’s identity over time.

A perceived image is based on two components: 1) what the company does and says, and 2) what the customers/market say about the organization - this is more important. Companies must manage a strong IMC (integrated marketing communications) program consisting of advertising, selling, sales promotion, online, social media, and public relations activities. Customer-generated content such as Facebook posts, tweets, blogs, and online communities can dramatically impact organizational performance.

Perhaps your company is not a global giant – does image research make sense for you? Consider these seven queries as you revisit your marketing communications strategy: 1) How important is image in your value proposition?, 2)  Should it be even more important?,  3) Does your image clearly resonate with your target market?, 4) How can you get your customers and the market to share more positive messages about your company?, 5) What is your main point of differentiation from your competitors?, 6) Should coolness be a major or minor part of your IMC strategy?, and 7) How can you best tell your business story to communicate value?

This blog post is the 6th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4^th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information contact Art Weinstein at artweinstein9@gmail.com, 954-309-0901, www.artweinstein.com 

Winning Business Models for the Now Economy [3]

[It ain’t that hard to be different.  Tom Peters] A successful business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive edge by demonstrating that the firm does something different, more innovative, and better than its rivals. Realize that different isn’t always better, but better is always different. Sirius XM Satellite Radio is always on whether you are at home, at work, in your car, or at the beach. Many customers listen to SiriusXM eight to twelve hours a day! Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power. Newspapers have struggled to become information providers as their readers aged and defected to new media. Sound business models answer the following 3 questions: 1) where should we compete?; 2) how should we compete?; and 3) how can we monetize products, services, experiences, and ideas. According to Accenture, 80% of companies hope to grow by developing new business models by 2019.Consider these 20 business models as you evaluate or develop your business strategy.

Digital Business Models

1. Access: Customer usage not ownership (Spotify, Zipcar) 2. Bricks-and-clicks: Retail and e-tail (Best Buy, Target) 3. Bundling: Sell 2 or more products for a discount (Comcast, Microsoft Office) 4. Community of users: Users generate knowledge, solve problems (eBay, Wikipedia) 5. Crowdsourcing: Outsource to non-employees for solutions (My Starbucks Idea, Doritos Super Bowl Contest) 6. Experience: App-based service plans (ClassPass, Zeel Massage) 7. Free: No cost products/services, revenues generated elsewhere (Skype, YouTube) 8. Freemium: Basic service at no charge, enhanced services have fees (LinkedIn, MailChimp) 9. Long tail: Millions of products offered, most sell very few (Amazon, Netflix) 10. Marketspace: Digital marketplace of buyers and sellers (Alibaba, eBay) 11. Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (USA Today, Visa) 12. On-demand: Services as needed (TaskRabbit, Uber) 13. Open business model: Companies share low cost options [way below branded] Linux, Qualcomm) 14. Pay for value: Customers opt to pay what they wish (Neighborhood café, Radiohead CDs) 15. Platform participant: Enhance platforms by creating user applications (Foursquare, Zynga) 16. Pure-play: Online presence (Blue Nile, Overstock.com) 17. Shaper: Open up new marketspace (Apple, Facebook) 18. Software as a service (SaaS): Deliver applications over the internet (Salesforce.com, ADP) 19. Subscription: Recurring fees for services purchased on a regular basis (Dollar Shave Club, SiriusXM) 20. Unbundling: Sell a single product from a set of related products (AT & T DSL, Windows Live Essentials) Think about the 7 questions below as your management team assesses your business model and market performance. 1.  Can you clearly explain your business model? 2.  What is unique about your strategy? 3.   How does it compare with your direct and indirect competitors? 4.   Have you broken any industry rules lately? 5.   Can you develop a more innovative and interesting business model? 6.   Will your business model win in the market? 7.  Does your organization truly deliver superior value for customers in the Now Economy? __________________________________________________________________________________________ This blog post is the 3rd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com, www.artweinstein.com/, 954-309-0901 .