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When Marcus Sheridan graduated university in 2001, he joined two of his friends who were starting a swimming pool company.

For the next seven years, business was good. With real estate prices rising to historic levels, anybody could get a loan for a swimming pool. Many did.

As you might have predicted, the wheels started to fall off in 2008 when the economy crashed.

Pushed to the brink of bankruptcy, Sheridan was forced to find a way out, and he found it in a simple but powerful content marketing strategy he calls They Ask, You Answer.

He used it to save the company, ultimately generating millions of dollars in new sales directly attributable to the methodology you are about to learn.

Join me for the next 10 minutes as we explore how you can do the same for your business, no matter the size of your company or the industry you compete in.

A Massive Buying Shift and the Blur between Sales and Marketing

Before we move on to the principles of Sheridan’s system, we need to cover a couple of important points.

First, consumer buying patterns have gone through a monumental shift over the past decade. As Sheridan points out, multiple studies show that the vast majority (Sheridan tells us that it’s 70%) of the buying decision is made before a prospect talks to a company. This is consistent no matter what market you are in. Large, small, B2B or B2C.

Second, you might be inclined to think that the lessons you are about to learn don’t apply to your specific business or industry niche. Everybody believes that their business is the one exception to the rule – that the people in your industry don’t buy the way this system suggests they do. Ultimately that’s up for you to decide, but there’s only one way to find out for sure and that’s to try it.

“They Ask, You Answer” Defined

At the core of They Ask, You Answer is an obsession with what your customer is thinking, searching, asking, feeling and fearing.

As Sheridan was pondering how to save his company, he sat down at his kitchen table late one night and brainstormed all the questions he had received about fiberglass swimming pools over the previous nine years.

When he was finished he had more than a hundred questions listed on the piece of paper.

Then, as you might have guessed, he and his business partners set off to answer each one of them in a blog post or video. Most of the articles were published to their website as blog posts, with the title of the question becoming the title of the post.

These weren’t one or two sentence answers – these were real answers with deep explanations and they weren’t glorified sales pitches – they approached each answer with a “teacher’s” mentality – answering without bias and only trying to educate the readers.

As Sheridan points out, every single industry has hundreds of buyer-based questions. So it’s ironic that most company websites don’t even address more than a few of them.

If you find yourself thinking “there’s no way our buyers have that many questions,” this means you’ve lost touch with your customers and you need to start learning what your ideal customer wants to know.

After a few months of doing this with his pool company, Sheridan started to look at the web analytics on their website to determine what was working and which content was generating the most traction.

He found that there were five types of content that seemed to generate the most interest and buying behaviours:

  • Pricing and Costs
  • Problems
  • Versus and Comparisons
  • Reviews
  • Best in Class

Why were those the ones that moved the needle the most? Because those are the issues that we (and all consumers) obsess over when considering a purchase. Most businesses hide from those questions or only deal with them when face-to-face with a customer, but not Sheridan and from this day forward, not you.

Let’s cover each of them in turn.

Content Subject #1: Pricing and Costs

If you’ve ever gone on a website to research a product and couldn’t find pricing information, you’ve likely felt what Sheridan calls the “F-word of the Internet”: frustration.

Most companies resist putting pricing information in their website because of one of three reasons.

Every solution is different

Yes, it’s true that your pricing might vary from customer to customer depending on their needs, but no matter what business you are in, it’s possible to give your prospects a range of probable prices. At the very least, you’ll what to give your customers a sense of how pricing works in your industry.

Your competitors will find out what you charge

It’s unlikely that your competitors have no clue what you charge.

You’ll scare your customers away

Sheridan makes two great points here. First, if your customer can’t afford your product, there’s little to no chance that you’ll convince them on a sales call. Second, talking about price is not about affordability, it’s about psychology. You are more likely to trust a business that’s upfront about their pricing.

So instead of hiding behind one of those excuses, be willing to specifically address the main pricing questions you get.

Create a list of all the major products and/or services you sell. For the ones that generate the most revenue for you, produce at least one blog post or video explaining the factors that dictate the cost, what the prospect can expect to see in the industry, and where your company lands.

An article that Sheridan posted titled “How Much Does a Fibreglass Pool Cost?” has generated $3 million in additional sales, directly attributable to the article.

In fact, that single post single handedly saved his business, his home, the homes of his business partners and the jobs of all of their employees.

Content Subject #2: Problems

This content subject is all about turning weaknesses into strengths.

When people buy, their instinct is to worry more about what might go wrong than what might go right. They know that they can go to your website to find out all the great things that will happen if they buy from you – that’s what they get from every website they visit.

For instance, Sheridan tells the story of how somebody might decide between getting a fibreglass pool or a concrete pool. For years his prospects would ask him something along the lines of “what are the problems with a fibreglass swimming pool?” and, you can be fairly certain that whatever questions people ask you in person, they’ll search for online as well.

That’s why they ended up writing a post titled “Top 5 Fibreglass Pool Problems and Solutions.”

Everybody in the pool industry thought they were crazy for writing that post. How many of their competitors had that information on their website? Zero. How many prospects wanted to know the answer to that question? All of them.

When considering whether or not to address the elephant in the room, you need to make a choice. You can allow them to search for and find the answers to those questions themselves, or you can address them directly and allow your customers to determine whether or not it’s an issue for them.

Aside from creating a level of trust your competitors won’t dare match, doing this has two advantages.

First, you get the opportunity to explain why, in spite of the problems, your product/service would be a good fit for the prospect. For instance, one of the drawbacks to a fiberglass pool is that it might not be long, deep or as wide as customer might like, but if lower maintenance and a pool that will last a lifetime are more important to the prospect, it might be worth the tradeoff. This turns your weakness into a strength.

Second, you eliminate people from your sales and marketing funnel that will never become customers in the first place, freeing you to pay closer attention to those that might. If they’ll find out the problems eventually (they will), they might as well find out now.

Content Subject #3: Versus and Comparisons

The third major content subject is something that we, as consumers, are fascinated with: comparisons. This versus that.

Over the years, Sheridan and his colleagues had heard the same question from their prospects for years: what’s the difference between a fibreglass pool and a concrete pool?

So, they wrote a post titled “Fibreglass Pools vs Vinyl Liner Pools vs Concrete Pools: An Honest Comparison.”

Again, the temptation here is to avoid bringing these types of questions up. Why address problems that some of your prospects might not even consider?

Two of the reasons we covered in the previous section – turning weaknesses into strengths and using marketing to eliminate bad leads.

The other two reasons are traffic and trust.

If people are thinking about these questions they are searching for the answers online. Would you rather they come to you for the answer, or some third party site that lets other (sometimes misinformed) consumers answer it for you? To top it off, search engines love this type of content and serve it much higher in the rankings than self-serving sales messaging.

When your prospect sees that you are open and honest, they are more likely to trust you during the rest of the sales process and you are more likely to make a sale.

Here’s what to do next.

Write down every question you’ve ever received from a prospect that asks you to compare two or more things. This includes obvious things like something you sell vs. a competitor’s product and less obvious things like things that you nor your competitors sell.

After you’ve made that list, write your answers and start turning them into blog posts, e-books, webinars and so on.

Content Subjects 4 and 5: Reviews and Best in Class

Let’s start this section by saying that what you are about to hear is going to seem crazy, but, just like the other tactics you’ve learned about so far, they will work if you embrace them.

One of the questions that people always ask is “who is the best _____?” So, in true They Ask, Your Answer form, Sheridan wrote a blog post titled “Who are the Best Pool Builders in Richmond Virginia (Reviews/Ratings).”

He listed the five companies he truly believed were the best and, for good measure, he neglected to include his own company. That’s the part I told you might seem crazy. Why would he do that?

The first reason is as soon as you put yourself on that list, you lose all credibility. It becomes a puff piece and you jeopardise the trust you are trying to build with this strategy.

The second reason is less obvious, but even more important. Where are those prospects when they are reading this post? They are on your website. Not your competitors website, or a third party website. This means that you control the messaging and while you don’t want to include your company in the list, you can position yourself as the expert. Tell them about all of the other great content on your website relating to their questions. You’ve just welcomed them to your front door, don’t be afraid to invite them in for a tour of the house.

Go ahead and Google “best pool builders richmond va” to see how Sheridan expertly crafted that specific post.

Hope you found that useful. Until next time….

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘They Ask, You Answer’ by Marcus Sheridan appeared first on Vanguard Business Coaching.

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In many ways, the things you pay attention to and focus on drives your success in life.

Without focus, it would be impossible for us to live in the modern world. At the same time, the world we live in is so ripe with distractions that it’s becoming increasingly difficult to keep our focus on any one thing for long periods of time.

Emotional intelligence pioneer Daniel Goleman tells us that there are three different types of focus: inner, other and outer. Goleman tells us that a well lived life demands that we be nimble in each.

By understanding and developing our skills in those three areas, we can improve our results in any area of our lives.

Let’s explore how to do just that.

The Anatomy of Attention

In order to understand focus, we need to first understand how attention works.

The best place to start is with the things that break our focus – distractions.

In today’s world, there are plenty of things to distract us from focussing on the things we need in order to succeed.

The two distractions

There are two main types of distractions – sensory and emotional.

Sensory distractions are easy to identify and to some extent, manage. For instance, when you are reading you tune out almost everything that is going on around you. Your brain weeds out the continuous flood of background sounds, shapes, colours, smells and so on.

Emotional distractions are harder to identify and much harder to manage. The biggest challenge comes from the emotional turmoil in our lives. Trying to focus on your work after you’ve had a blow up with a family member at home is all but impossible.

The two systems

Just as there are two types of distractions that can cause us to lose our focus, the brain has two systems that it operates.

First we have the bottom-up mind, which is:

  • fast and operates in milliseconds;
  • involuntary and always-on;
  • intuitive, operating through networks of association;
  • impulsive, driven by emotions;
  • the executor of our habits and guides our actions;
  • the manager of our mental models of the world.

Second, we have the top-down mind, which is:

  • slower;
  • voluntary;
  • effortful;
  • the seat of self-control, which can (sometimes) overpower automatic routines and emotionally driven impulses;
  • able to learn new models, make new plans and take charge of our automatic repertoire – to an extent.

Our voluntary attention, willpower and intentional choices are all top-down. Our reflexive attention, impulses and habits are all bottom-up. Because of that, our mind is doing a continual dance between stimulus-driven attention and voluntary focus.

However, because your brain likes to conserve energy, it prefers using the bottom-up system. Any time we use the top-down system, we end up burning energy. That’s why learning new things or creating change in your life is hard – your brain doesn’t want you to do it because it’s easier not to.

When your mind is adrift

Your mind naturally wanders. If you ask people the question “are you thinking about something you are not currently doing?”, there’s a fifty-fifty chance that they’ll answer yes.

This obviously has implications for your ability to be “in the moment” and focus on the task at hand and it’s exactly why so much time, energy and money is focused on the concept of mindfulness. As pioneer of American psychology William James put it, “the voluntary bringing back of a wandering attention, over and over again, is the very root of judgment, character and will.”

However, even a wandering mind has its uses. That’s because your daydreams are often focused on solving unresolved problems. It also allows for the exploration of previously unconnected ideas, which is the source of all creativity.

Your goal is to be able to engage in mind wandering when you want to and focused on the task at hand when you want to.

That may sound trivial, but it’s an important point. You only have the ability to remain focused for a finite amount of time and then you need to recharge your brain’s batteries, so to speak.

And as Goleman points out, surfing the web (no matter how mindlessly), playing video games or answering email doesn’t do the trick. However, things like taking a walk in nature and – you guessed it – meditation work perfectly.

Inner Focus: Self-Awareness

Now that we’ve covered how attention works, it’s time to move on the first area of focus you need to master – yourself.

Self-awareness

Self-awareness and in particular the decoding of the internal cues that our bodies give us – holds the key to making great decisions in life.

There are two major streams of self-awareness.

“Me,” which is the part of you that creates stories about your past and future based on the sum total of your life experiences to date.

Then there is the “I,” which exists in the moment. This is the part of you that is in tune with your body, which helps you to determine whether or not a decision “feels” right.

Being aware of both the narratives you’ve built up over your life (so you can change them) and being in tune with your body are the two main ways you can continue to become more self-aware.

Seeing ourselves as others see us

No matter how good you get at self-awareness, you still won’t be able to get a complete picture until you see yourself as other people see you.

One surefire way to get an accurate view is to do a 360-degree evaluation, where you asked to rate yourself on a number of factors and then those self-ratings are checked against other people who have rated you for the same things.

Interestingly, studies have shown that the further up the organisational food chain you are, the greater the gap between the scores you give yourself and the scores other people give you.

Assuming that you are a leader (or want to be one some day), continually checking these types of ratings will help you understand how you are perceived.

You’ll also want to consider getting advice from people you trust whenever you are making big decisions in your life – they will help you cover up your blind spots.

Willpower

We won’t spend a ton of time on this, but your amount of willpower determines a lot about your success in life. Numerous studies show that children who exhibit high amounts of willpower go on to make more money and make better decisions about their health. They even commit less crime, if that’s something you’ve been losing sleep over.

At its core, willpower is the ability to remain focused on one thing while your impulses or desires are distracting you.

When an impulse is distracting you – lets say there is a plate of freshly baked chocolate chip cookies on the table – your reward circuits are focused on what’s tempting about them – they are chewy, hot and delicious.

Here’s what’s interesting – just by shifting your focus onto something different about the cookies – they are round, have dots on them, and are made in an oven – you have switched your focus and lowered the chances of you reaching for the cookie and eating it.

Becoming aware of how and why things tempt you and actively shifting your attention away from those things when they happen (self awareness at its best), will help you make better decisions

Other Focus: Reading Others

Empathy is the ability to focus on what other people experience. There are three main varieties.

Cognitive empathy lets you take another person’s perspective, comprehend their emotional state and manage your own emotions while you evaluate theirs. These are mostly top-down operations.

Emotional empathy is when you feel what the other person is feeling. This is a bottom-up process, and mostly formed during infancy – you are wired to feel another person’s joy or pain even before you can think about it.

Finally there is empathic concern which takes this one step further by leading us to care about the other person and to take action if the situation calls for it. This is both a bottom-up (automatic) and top-down (thoughtful) function and getting the mix right has implications for your life.

For instance, many people who stir up too many sympathetic feelings for other people end up suffering themselves, to the point of losing their ability to take action.

On the flip side, other people who show no sympathy for others (either naturally or by training) lose the ability to put themselves in other people’s shoes and also lose the ability to read other people’s emotional cues – a great predictor of success in most professions.

The best way you can practice reading other people, it turns out, is to amp up your empathic concern to a level that allows you to connect with the other person, but not so much that you lose the ability to control the emotions you feel by doing so.

Outer Focus: The Bigger Context

The last area of focus to explore is the bigger context.

In order to understand the bigger picture in things requires us to understand patterns and systems.

Systems, Goleman points out, are invisible to the naked eye. As a human, we all struggle with system blindness. We are very bad at understanding things where the cause and effect are distant in time and space. Because of that, many of our solutions work in the short-term, but in the long-run end up making problems worse.

Here’s an example. The simple and obvious solution for traffic jams is to build more and wider roads. In the short-term (after the roads are built), it’s easier to get around, but very quickly, people start making more car trips, moving further away and buy more cars. Making the long-run traffic problem worse.

This means that human beings have a very tough time grasping the concept of threats that come over an even longer time horizon like global warming.

Rather than focus on the negatives (like our carbon footprint), Goleman suggests, we should focus on the positives in our actions, which we can see in the here and now.

The reason this is a better approach is that negative emotions are poor motivators in the long run – we are wired to want to avoid them. Positive emotions, on the other hand, are great motivators and can be sustained for long periods of time.

The Well-Focused Leader

Ultimately, how you put all of this together as a leader will have a huge impact on your team’s success or failure.

As the preceding sections show, we all have a limited amount of focus to direct on achieving our goals. Directing that focus where it’s needed most is your most important leadership activity.

As Goleman points out, organisations need leaders with a focus on generating results. However, those results will be more robust in the long run when leaders don’t just tell people what to do or do it themselves. Instead, leaders need an other focus, motivated to help other people be successful too.

The more you widen your focus to include inner, other and outer inputs, the more effective and well rounded your leadership style will be.

Hope you found this summary useful. Until next time…

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ coaching prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘Focus’ by Daniel Goleman appeared first on Vanguard Business Coaching.

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As human beings we spend a lot of time predicting what will make us happy in the future. For some of us it’s the family vacation we’ve always dreamed of, for others it’s the new car we’ve had our eyes on for years, and others it’s finally paying off the mortgage on their home.

Dan Gilbert makes the argument that we are particularly bad at this task, for three main reasons.

First, our imaginations don’t give us and accurate preview of what our emotional futures will be because our brains fill in and leave out important details about the future.

Second, we naturally project our current feelings into a future that will not necessarily exist.

Third, we forget that things will look differently once they happen in the future.

The antidote, Gilbert suggests, is something that most of us will ignore. Let’s explore why we are not very good at predicting what will make us happy and uncover the secret to doing it right.

Why we think about the future: Prospection

Here’s a remarkable fact: human beings are the only creatures on earth that think about the future. This is something that Gilbert calls nexting.

The first type of nexting is a survival mechanism and happens immediately and unconsciously. For instance, if you’ve ever been walking on a trail and heard the sound of a rattlesnake, your first instinct will be to move away from the sound as fast as you possibly can. These instincts are built deep into your caveman brain.

The other type of nexting is more about long range planning, like thinking about where you want to retire, or what you’ll eat for lunch next week at that restaurant you’ve always wanted to go to. This type of nexting occurs in our frontal lobes and allows us to think about the future before it happens. There are a few reasons we do this:

  • It’s pleasurable: by thinking about something you’ll enjoy in the future, you get to experience it twice – first in your imagination, and then in real life.
  • To protect ourselves: we anticipate negative events so that we can minimise their impact or eliminate them entirely.
  • To exercise control: we have a fundamental desire to control our own destiny and thinking about and planning our future allows us to fill that need.

Which is all fine and dandy, except for the part that we are not very good at it. Which leads us to make choices that work against our ultimate happiness.

Shortcoming #1 – Realism: Filling In and Leaving Out

The first shortcoming of our imagination in predicting what will make us happy is that we fill in the details inaccurately, and leave out details that are relevant to how happy we’ll actually be.

Filling In

There have been plenty of scientific studies that show that our memories are not reliable representations of what actually happened in the past.

Instead of storing perfect records of past events like, say, a video recording, our brains store snippets of past events in different parts of our brain and then, when we want to recall a memory, our brain finds those fragments and reconstructs them to build the memory.

Whatever isn’t actually there gets filled in by the imagination and there’s the rub – sometimes the things that our imagination uses to fill in the gaps didn’t actually happen. Then the brain restores that memory back with the newly fabricated information. Which is why you can get 100 different versions of an event from 100 different people at that event.

This fabrication, Gilbert points out, happens so quickly and effortlessly that we no idea what’s happening – we just believe that whatever we just pulled up in our minds is an accurate representation of the event.

Now, let’s think about our future predictions. How happy will you be next week if your best friend asks you to go to a party with them?

As your imagination gets to work trying to answer this for you, some interesting things happen. If you are like most people, you start to fill in details about the party – where it will be, who will be there, what food and drink there will be and you’ll use those details to start making predictions about how happy you’ll be.

The problem is that your imagination went through this entire process of filling in details before you even know what they were and you start to make choices based on your (probably inaccurate) predictions.

The thing to understand here is that your brain does the exact same thing when you are thinking about more important things in your life, like what job you should take and where you should live.

Leaving Out

Just as we fail to consider how much our imagination fills in when we are thinking about the future, we also fail to consider how much it leaves out.

For instance, when most people are asked how they would feel two years after the sudden death of their eldest child, they suggest that they would be totally devastated, wouldn’t be able to get out of bed in the morning and would perhaps consider committing suicide.

As Gilbert points out, nobody who gets asked this question ever considers the other things that would happen in those following two years – attending another child’s play, making love with their spouse or reading a book while taking in a spectacular sunset.

This is an extreme example, but it illustrates the point that our imagination almost never captures the entire story.

Shortcoming #2 – Presentism: Projecting the Present onto the Future

This shortcoming is a bit easier to explain. Basically, our imaginations are not as imaginative as we believe them to be.

Basically, we tend to fill in holes in the future with data from the present. We anticipate that whatever is going on right now is what will be going on in the future.

For instance, once you’ve stuffed your belly full at a holiday meal, you have a hard time imagining that you’ll ever be hungry again. We fail to see that our future selves will view the world any differently than we view it now.

Or when scientists are asked to make predictions about the future, they almost always err by predicting that the future will be too much like the present. Respected scientists are on record as saying that human beings would never experience space travel, television sets, microwave ovens, heart transplants and nuclear power.

The tendency to project the present into the future ensures that we have a really hard time imaging a future where we will think, want or feel differently than we do now.

One of the more interesting findings from the entire book is that how we think we’ll feel in the future is determined quite heavily by how we feel right now, even if what’s happening right now has nothing to do with what will happen in the future. For instance, when you are having one of those days where everything seems to go wrong, you’ll be much less likely to predict being happy about the get together you have planned with your friends the following week.

Without realising it, how you are feeling in the moment has a huge bearing on how you’ll be able to predict your future happiness and, to top it off, you have no idea that it’s happening.

Shortcoming #3 – Rationalization: Things look differently after they happen

Rationalisation is defined as “the act of causing something to be or to seem reasonable.”

We all have a psychological immune system that protects us against all sorts of emotional upsets. Like all of the other mechanisms we’ve been describing up until this point, it operates without us realising it’s there.

The end result is that we, as Gilbert describes, “cook the facts.” Here’s a quick description of a study Gilbert did in order to explain.

A set of experiment subjects were invited to a fake job interview that they thought was real. In the pre-interview, they were (in the middle of a bunch of other questions) asked how they would feel on a scale from 1-10 if they didn’t get the job. When they didn’t get the job (because that was the whole point of the experiment), they didn’t feel quite as bad as they thought they would. In fact, after a short period of time they were just as happy as when the went in to the interview.

Basically, the finding of all of these studies is that our psychological immune system kicks in to protect us from negative experiences, with three caveats.

First, the negative event needs to reach a certain pain threshold. For instance, it will kick in when you are being rejected at a job interview, but not as much if you stub your toe.

Second, it will only kick in once it’s clear that we can’t change the experience. For example, people experience an increase in happiness when genetic tests show that they don’t have a dangerous genetic defect (as expected) or when the tests reveal that they do have one, but not if the results are inconclusive.

Third, we have a much easier time rationalising actions that we have taken rather than inaction.

The end result is that we fail to realise our ability to generate a positive view of our current circumstances and thus forget that we’ll do the same in the future. Ultimately leading us to not accurately predict how happy we’ll be in the future.

The Solution: Asking Others Experiencing It Right Now

As Gilbert points out, most of what we know is not based on our own direct experience, but on second hand knowledge. You’ll find this to be true if you make a list of all the things you know and go line by line marking it firsthand or secondhand.

We believe and put our faith in many things that we have learned secondhand, but when it comes to deciding what will make us happy, we stubbornly rely on our “nexting” mechanism in almost every case. As we’ve already learned, that strategy doesn’t lead to good outcomes. We forget how good or bad things were in the past because of our selective and unstable memories and then we project those memories into the future to make inaccurate predictions on how we’ll feel then.

This is the point in the summary where we discuss the advice that Gilbert suggests we’ll most likely not take.

By far the most accurate way to determine whether or not a certain future state will make you happy is to ask somebody who is experiencing it right now.

Do you want to know what it will be like to move to a foreign country and leave your family and friends behind? Ask somebody who just did it. Want to find out how you’ll feel about it 10 years from now? Ask somebody who moved 10 years ago.

As Gilbert says, the human race is like a living library of information about what it feels like to do just about anything that can be done. All you need to do is ask.

There are studies that show that when people are forced to use surrogates to determine how happy they will be about a specific imagined future, they make very accurate predictions about their future feelings.

So why do we reject the solution? Because we don’t like to think of ourselves like the average person. Maybe other people are bad at predicting their future happiness, but not me. As you might have guessed, that’s what EVERYBODY says. So while you are busy rejecting the solution because you are unique, you are merely confirming that you are exactly like everybody else.

The biggest mistake we make, Gilbert suggests, is that we don’t make very good predictions about how happy accumulating more “stuff” will make us.

There is a mountain of evidence that beyond a certain level of wealth, it makes little to no difference in the level of happiness you experience. Yet we keep striving for more.

The problem is that the entire market economy system depends on people continually buying and producing more and more stuff. As Gilbert points out, if everyone was content with the amount of stuff they had, the economy would grind to a halt.

So, the next time you find yourself about the pull the trigger on that big splurge purchase, consider finding somebody who did the same and ask them how much happiness it added to their life beyond the initial jolt of excitement.

You might be surprised at the results.

Hope you enjoyed this summary

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘Stumbling Upon Happiness’ by Daniel Gilbert appeared first on Vanguard Business Coaching.

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This book is about creating the life you want through the pursuit of mastery. It’s about becoming the best in your chosen craft and finding inspiration from the masters throughout history.

Mastery, at it’s core, is the feeling we have when we have a great command of reality, other people and ourselves.

By studying the masters throughout history – like Leonardo da Vinci, Napoleon Bonaparte, Charles Darwin, Martha Graham, and others – Robert Greene has found that at the root of mastery is a simple process and it’s accessible to all of us.

Join me as I explore that process and explore strategies for moving through this process in the most powerful way possible.

1. Discovering Your Calling

According to Greene, in seach of us is an inner force guiding us towards our Life’s Task – what we are meant to accomplish in our time on earth.

In childhood, this was clear to us, even if we didn’t understand it. We were drawn to some activities and subjects and we had a natural and deep curiosity about those things. However, as life moves on, we start to lose that force. We listen to our parents, friends and teachers and gradually shift towards what the world expects from us. In the process we lose touch with our inner force.

So, whether you are just beginning your career or you are nearing the end of it, the first step toward mastery is to look inward and reconnect with that force. When we do that, everything else starts to fall into place.

Strategies for finding this “life task”

  1. Return to your origins: what were you obsessed with when you were younger? This is where you’ll start to find clues that will lead you to your life’s task.
  2. Occupy the perfect niche: find the combination of your natural interests and a niche that you can dominate.
  3. Avoid the false path: money, fame and making our parents happy are all paths towards an unfulfilling life.
  4. Let go of the past: if you are in a career that doesn’t fit your life’s path, find a way out. Just because you invested time and money into it, doesn’t mean you should keep doing it.
  5. Find your way back: you’ll be pulled off your path in your journey towards mastery. Make sure to keep finding your way back.
2. Submit to Reality: The Ideal Apprenticeship

After your formal education, you are entering the most critical phase of your life – the apprenticeship phase. As Greene points out, every time you change careers or acquire a new skill set, you re-enter this phase.

This is where you’ll master the skills you need to succeed and where you’ll transform yourself into an independent thinker, preparing you for the creative challenges you’ll face on your path to mastery.

An apprenticeship can take many forms – working with a master in the field, graduate school, or working different jobs within a field. The important thing to remember is that you are the only one who can direct this phase – nobody is going to do it for you.

Strategies for Completing the Ideal Apprenticeship

  1. Value learning over money: in the apprenticeship phase, learning is always worth more than money.
  2. Keep expanding your horizons: whenever you find yourself settling into some circle of people or thought, force yourself to shake things up and look for new challenges.
  3. Revert to a feeling of inferiority: as soon as you tell yourself you already know something, the learning stops. Always have a beginners mind.
  4. Trust the process: the path to mastery takes time. Keep learning and working in your field with as much energy as you can muster.
  5. Move toward resistance and pain: this is always where the growth is.
  6. Apprentice yourself in failure: failures are the best opportunities for learning and growth.
  7. Combine the “how” and the “what”: always strive for a deep understanding of how everything works in your chosen field.
  8. Advance through trial and error: try out as many different paths as you can to get to your ultimate destination. Trial and error is the only way to break new ground.
3. Absorb the Master’s Power: The Mentor Dynamic

According to Greene, the mentor-protege relationship is the most efficient form of learning.

If you pick the right mentor, they will know where to focus your attention and how to challenge you to grow. In the process, their knowledge and experience become yours.

Strategies for Deepening the Mentor Dynamic

  1. Choose a mentor according to your needs and inclination: make sure you choose one that connects with your Life’s Path and that suits your current needs.
  2. Gaze deep into the mentor’s mirror: as Greene says, we should strive to get the sharpest dose of reality possible from our mentor. Welcome criticism as an opportunity for growth.
  3. Transfigure their ideas: as you learn from your mentor, don’t simply copy their ideas. Make them into your own by thinking for yourself.
  4. Create a back and forth dynamic: always make it clear what you are looking for from your mentor, and push back on them when necessary. This is the mentality that true masters adopt.
4. See People as they Are: Social Intelligence

One of the biggest obstacles in the pursuit of mastery comes from the emotions we have to face with as we deal with other people. Quite often we misread the intentions of other people and react in ways that cause confusion or conflict.

Social intelligence is the ability to see people for what they are in the most realistic light possible. If we can learn to focus deeply on others, get adept at reading their behaviors and understanding their motivations, we can keep ourselves on the path to mastery.

If we don’t do these things, we have not achieved true mastery and whatever success we have achieved will be fleeting.

Strategies for Acquiring Social Intelligence

  1. Speak through your work: your work should demonstrate an understanding and caring for the people you are serving.
  2. Craft the appropriate persona: people will judge you based on your outward appearance. You must consciously mold these appearances, creating an image that suits you, so that you can control people’s judgements and allow you to focus on your work.
  3. See yourself as others see you: get comfortable being honest about your flaws. Start by reviewing past events that didn’t go well and looking for your contributions to them.
  4. Suffer fools gladly: fools are a part of life and you can either deal with them productively (by ignoring them) or unproductively (by letting them absorb your time and attention).
5. Awaken the Dimensional Mind: The Creative-Active

As you accumulate more skills and start to internalise the rules that govern your field, your natural inclination will be to seek ways to use your newfound knowledge in ways that suit you.

However, you are likely to feel anxious and insecure about doing that, preferring to stick with applying what you learned only in the ways in which you learned it.

To continue on the path to mastery, you must fight through this anxiety and expand your knowledge to related fields and in the process make new connections between different ideas.

As you do this, you’ll start to see more and more of reality around you and in the end, bring you to new heights of power.

Strategies for the Creative-Active Phase

  1. The Authentic Voice: finding your voice takes time. Sometimes it take years to absorb the techniques and conventions of your field, but if you don’t take the time to master them and personalise them, you’ll never find your authentic voice.
  2. The Fact of Great Yield: be on the lookout for things that have profound ramifications to your field.
  3. Mechanical Intelligence: whatever you are creating or designing, you must test and use it yourself. In doing this work, you see and feel the flaws in the design. This craftsmanship involves creating something with an elegant, simple structure, getting the most out of your materials — a high form of creativity.
  4. Natural Powers: creativity takes time, and you should give your self the ability to explore a wide variety of fields as you search for big insights. In this stage, slowness is a virtue.
  5. The Open Field: by taking all of the knowledge and skills you have created so far on your journey and applying them against the conventions that currently pervade your industry, you can find the proverbial white space.
  6. The High End: if your work ever starts to feel stale or boring, return to the larger purpose that put you on this path in the first place.
  7. The Evolutionary Hijack: creativity and adaptability are inseparable. We must learn to take what we experience and move with the opportunities that present themselves in the moment.
  8. Dimensional Thinking: instead of trying to boil down your field into simplifications and abstractions, you look at your field from as many different angles as possible, giving your thoughts added dimensions. This makes the process more complicated, but ultimately leads you close to the truth.
  9. Alchemical Creativity and the Unconscious: by looking for contradictions – both in the world and within yourself – you’ll find a rich mine of information that is deeper and more complex than you ever thought possible.
6. Fuse the Intuitive with the Rational: Mastery

By immersing ourselves in our field of study for many years, we start to develop an intuitive feel for the complicated components of our field.

When we combine this intuitive thinking with rational processes, we find ourselves expanding our minds to the outer limits of our potential.

This is where we finally achieve true mastery.

Strategies for Attaining Mastery

  1. Connect to your environment — Primal Powers: The ability to connect deeply to your environment is the most primal and in many ways the most powerful form of mastery the brain can bring us. In order achieve this, we must become powerful observers of the world around us.
  2. Play to your strengths — Supreme Focus: Mastery – Greene points out – is like swimming. It’s too difficult to move forward when we are creating our own resistance or swimming against the current. Know your strengths and move with them.
  3. Transform yourself through practice — The Fingertip Feel: practice and the thousands of hours we need to invest doing it, is critical to our success. Embrace the transformative powers we gain through practice.
  4. Internalise the Details — The Life Force: your path to mastery must include the ability to extend your knowledge as far as possible by absorbing all of the details you possibly can.
  5. Widen Your Vision — The Global Perspective: As Greene points out, in any competitive environment in which there are winners or losers, the person who has the wider, more global perspective will inevitably prevail.
  6. Submit to the Other — The Inside Out Perspective: our natural tendency is to project onto other people our own beliefs and value systems. We must combat this by continuing to expose ourselves to other people and attempt to see things as they see them.
  7. Synthesise all forms of knowledge — The Universal Man/Woman: we should seek to have our mastery not over this subject or that subject, but ultimately on the connections between them, based on decades of deep observation and thinking.

Hope you found this useful. Until next time…

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘Mastery’ by Robert Greene appeared first on Vanguard Business Coaching.

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Lorenzo Gomez started off his career stocking vegetables in a grocery chain in south Texas. The path between where he started and where he is today – the Chairman of both the largest co-working space in Texas and the 80/20 Foundation – is littered with golden nuggets that any new graduate would be smart to pick up and use.

Join me as I explore the 12 main principles Gomez learned along the way.

Section 1: Creating Your Personal Board of Directors

The first three principles are about assembling what Gomez calls your own Personal Board of Directors.

Gomez learned the concept of a board of directors while he was at the company Rackspace – a multi-billion dollar web hosting company.

He was working for incredibly smart and accomplished people, including the chairman of Rackspace Graham Weston. When Gomez – only a few years removed from stacking groceries – learned that even Weston reported to a board of directors, he says it was like unlocking a bonus level of a video game.

In the same way a successful company has a board of directors looking out for its best interests, you can have a personal board of directors looking out for you.

Principle I: Your Deputies Love You

There are many reasons that a personal board of directors is important to your success.

First and foremost, you want multiple people on your board because no one person can fill all the roles you need in your life – not even your wife or favourite parent.

Second, we crave community and closeness as human beings. Having people you can open up to creates a structure in your life that otherwise you’d be unable to tap. People often say to leaders that it’s lonely at the top. When you start your career, you are going to learn that it’s lonely everywhere.

Third, your board of directors will be there to help you make better decisions, and see the things that you would otherwise miss.

What Kind of People Make the Best Board Members?

There are three things that you’ll want to consider when choosing your board members.

First, you want to surround yourself with people who have your best interests at heart. This goes double for your board members.

Second, you’ll want to choose people who have expertise in the areas you lack. You want people who can give you different perspectives than you’d otherwise have on your own.

Third, you also want to choose people who accept who you are as a person. Remember, you need the social-emotional support of your board members as much as you need their expertise.

Principle II: Who You Hang Out with Matters

You’ve probably heard the Jim Rohn saying that “we are the average of the five people we spend the most time with.”

So, just as you need to choose your personal board of directors carefully, you also have to choose your friends and mentors carefully.

Most importantly, don’t be afraid to break up with friends who are no longer good influences on your life and career.

Principle III: Crushes Are Not Mentors

Another important type of person you’ll want in your life is a mentor. A mentor is somebody who (a) has domain expertise that you want to develop, (b) is willing to share that expertise with you, and (c) believes in your potential.

As you start your career, you’ll need to avoid the trap of thinking of “crushes” as mentors. Being cool, popular, or any other quality that isn’t related to expertise in a field that will help you in your career, does’t count.

Most importantly, mentors are people who have considerable experience in their fields and can teach you things that you wouldn’t be able to learn in a textbook.

Section 2: Understanding How Business Works

Now that we’ve covered how important it is to surround yourself with good people, let’s move on to some truths about the business world that they won’t teach you in school.

Principle IV: It’s Not What You Know, but Who

Gomez recounts the time when he got one of his first jobs strictly by trading on the social currency his brother had built up as a hard worker.

Many times in life you will be afforded opportunities strictly because of the people you know and who will vouch for you.

It’s not what you know, but who you know that matters. This is even more true these days because companies are putting even more emphasis on hiring people with high emotional intelligence and work ethic, knowing that anybody can be taught the technical skills required to be successful.

This has a few implications, but none are more important than understanding that you need to build a good reputation.

One of the easiest ways to do this is to associate yourself with A-players. When you are in a new job or role, find out who the A-players are, and then learn their tricks and associate with them.

Principle V: Stand Out from the Competition

If you are just starting out in your career, and you don’t have a reputation yet, all is not lost.

As Steve Martin once implored us, you need to “be so good they can’t ignore you.”

There are a few things you can start working on today to stand out from the competition.

First, you can specialise in a few skills. If you can become the go-to person in your office or professional network for an in-demand skill, you’ll start to earn a reputation.

Second, you can do things that differentiate you from the other people around you. Gomez tells the story of how he started to stack the lettuce as a pyramid while working at the grocery store. People started to notice the little things he did that went above and beyond and sometimes it’s the little things that make all the difference.

Third, always look for a job that is close to the customer. That’s because the further away you are from the customer, the more expendable your job will be – especially in hard times. If you ever get offered a job that seems too fun or too good to be true, find a way to turn it down.

Principle VI: Dance with the One Who Brought You

When you join a business, you’ll learn that in many ways it’s a lot like high school. Choosing which clique you are going to join will be in your career network forever.

As Gomez points out, loyalty is the glue that holds networks together and can often be the catalyst to open new doors in your career. In short, loyalty is a word you need to get comfortable with if you want a long and successful career.

Carefully consider the cost of your loyalty. What does somebody need to do in order to earn it? Once you’ve determined the answer, don’t compromise.

At some point in your career, your loyalty is likely to be tested in the form of a job offer to leave your current role for more money. Unless you need the extra income because of extraordinary circumstances in your life, job hopping for more money isn’t a good career move. Especially if your current boss spent some of their reputation currency to bring you aboard.

The right time to leave is when you find an opportunity that will teach you new skills that you can’t acquire at your current place of employment.

Principle VII: No Man Is an Island

As Gomez explains, there’s a lie that we see in all business success stories – that behind every epically successful business, one person did it all.

That’s just not true. Not for Apple or Facebook, and certainly not for you. In order to succeed in your career, you need to learn how to work on a team.

The first job you have when joining a new team is figuring out what you bring to the table beyond what’s on your job description. Find as many ways as possible to make yourself useful to your team and you’ll eventually be accepted.

The next thing you need to do when you join a team is to figure out its social contract. These are the unspoken rules that govern the conduct of the team. For instance, at Rackspace Gomez quickly learned that if you wanted help from the engineering team, you needed to ask nicely.

Violating these unspoken agreements will cause you to be rejected like the human body rejects an organ transplant.

Section 3 – Living In The Real World

The real world doesn’t operate like the school world, and there are some things that your teachers won’t teach you.

What follows are some of the things that you’ll be wise to learn before you learn them the hard way.

Principle VIII: Have a Servant’s Heart

Having a servant’s heart means wanting to help people. In the context of your career, this means helping your customers. There are a couple baselines for having a servant’s heart.

First, always give the customer what they pay for.

Second, remember that it doesn’t cost anything to smile. Serving your customers with a smile on your face goes a long way.

Third, move with a sense of urgency. Moving swiftly with a sense of purpose is the fastest way to show a customer you have a servant’s heart.

Principle IX: Everyone’s in Sales

Gomez tells the story of listening to Graham Weston deliver a speech to the graduating class at Texas A&M where he said:

“Everybody’s in sales. Whether you know it or not, even if you aren’t selling a product, you have to sell yourself and your ideas.”

It’s a great principle that holds true in business and life. There are a few keys to making this work for you in your career.

First, think service first, and sales second. You’ll always be better at selling your products, ideas and yourself by doing it this way.

Second, never sell an idea with “I think.” The surest way to kill all of your persuasive powers is to convey any doubt in your pitch.

Third, understand the power of story. As human beings, we are wired to listen and respond to stories. Always use a story to set up your pitch.

Principle X: Don’t Spend What You Earn

The last thing you want to worry about as you are building your career or business is your personal finances.

There are a couple of surefire ways to create this unneeded stress in your life.

The first is to spend all of what you earn. When you start making your first real paycheck, you’ll be tempted to start spending lavishly. Gomez recounts the story of him going out and buying a sports car after his first big raise at Rackspace. Don’t do that.

The second is to lend money to the people you are closest to. If you are going to give money to friends and family, always do it with no strings attached. You will almost never get paid back and the stress it will cause in your relationships isn’t worth the hassle.

Avoid those two things like the plague and you’ll be off to a good start.

Principle XI: You Can Only Control Your Attitude

Things will go wrong in your business and your life. There’s no way to avoid it, but what you can do is control your attitude when it happens.

Gomez makes that point that he’s failed at this principle more than he’s succeeded, but the times he’s succeeded have been some of the best times in his work life. When he’s failed, they have been some of his worst.

A specific way to control your attitude is through the practice of humility. The essence of humility, Gomez says, is genuine interest in others. Taking a genuine interest in other people is a choice that you get to make on a daily basis.

Principle XII: When to Be the Boss

There will come a point in your career where you’ve developed enough skills and experience that you will start to think about starting your own company. The fact that there are significant ups and downs in every career will only amplify these thoughts.

This is an incredibly difficult choice.

Sometimes the right choice is to suck it up and stick with your job. The odds are stacked against your new business succeeding and even the ones that do succeed struggle far more than you’ll ever know from the outside.

However, if you know that deep down that you won’t be able to look yourself in the mirror if you don’t give it a shot, that’s the time to quit your job and become your own boss.

I remember when I reached that point. Interested to hear from others who also took the decision to start their own business and how it’s gone.

P.S I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘The Cilantro Diaries’ by Lorenzo Gomez appeared first on Vanguard Business Coaching.

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Peter Drucker once said the following:

“Profit is a condition of survival. It is the cost of the future, the cost of staying in business.”

As you’ll learn in the following 12 minutes, pricing is one of, if not the most, important driver of profits. Yet it receives very little attention.

Hermann Simon, one of the world’s most foremost experts on pricing, wants you to change that. He makes a very compelling case.

As he points out early in the book, excellent pricing drives profits and profits are what your business needs to survive.

What Price Actually Means

Simon has been asked thousands of times over the years what the most important aspect of pricing actually is.

If he needs to give a one word answer, he says that pricing is “value.” If he needs to elaborate, he says that pricing is “value to the customer.”

In essence, he is saying that the price a customer is willing to pay and thus the price a company can and should charge, is always a reflection of the perceived value of the product or service in the customer’s eyes.

This means that managers and business leaders essentially have 3 main tasks as it relates to price:

  1. Create value. This is where product creation and innovation come in.
  2. Communicate value. This is how you influence your customer’s perception of the value you create. It includes your unique selling proposition and your brand.
  3. Retain value. This is about what happens after the customer buys your product or service. Expectations about how long value will last (and your ability to deliver on that expectation) has an outsized influence on your customer’s willingness to pay the price you’ve set.
The Relationship Between Price And Profits

Most people know that if you increased your price and volume stayed the same, your profits would go up, but most people (including some really smart business people) don’t know just how much it could impact their bottom line.

Most companies in the world operate at margins that are between 1% and 3%. An industrial company with margins above 10% would be far above average. Of course, there are exceptions to this rule like Apple, but even their net margin stood at 21.6%. To drive the point home that most businesses are not like Apple, Simon points out that if the average company were as profitable as Apple, we’d live in a utopia beyond our ability to imagine.

To give you a concrete example, if Sony raised their prices across the board by 2% without seeing any drops in volume, it’s profits would increase by 236%. Walmart’s profits would increase by 41.4% with the same 2% increase in price.

While you’ll have to run the numbers for your own business to see what the impact might be, it’s clear that price is one of the most powerful tools you have at your disposal to make more money.

Most people look to improve their marketing and sales efforts when they want to increase their bottom line. Pricing has two advantages over sales and marketing:

  • Price changes usually can be implemented very quickly. Developing a new advertising campaign and waiting for it to have the effect you are looking for could take months or even years.
  • Price is the only revenue driver that you can employ with no upfront investment.
Different Ways To Set Prices

There are 3 different approaches you can use to set prices. One of them is the right way.

Using Costs to Set Prices

Many people use a “cost-plus” approach to setting their prices. There are a number of problems with this approach, even though it sounds like a reasonable thing to do. Here are two of them.

First, it has nothing to do with your customer’s willingness to pay. Second, even if it did, your customers don’t know what your costs are, so they couldn’t make their decision that way even if they wanted to.

Following The Competition

This means that you set your prices based on what your competitors do. This also sounds like a reasonable approach and is probably the easiest path to take, but it also has a number of problems associated with it. The most important being that it’s almost never the best way to set prices to optimise profits.

Market-Based Price Setting

The third and best approach to setting your prices is to take the market-based approach. This means understanding what your demand curve looks like, which is like a graph that shows the number of sales you would make at various prices, with volume on the Y axis and the price on the X axis.

In general, when the price goes up the volume goes down and vice versa. The goal with the demand curve is to find the price where you maximise revenue and profit.

There are four ways you can go out doing this:

  • Use your expert judgement. You can start to get a handle on your demand curve by asking yourself and your team how much volume you would lose if you increased your prices by 10%. Keep asking for different increases or decreases and you’ll end up with an approximation of your demand curve which will help you make pricing decisions.
  • Ask your customers directly. This would be a more accurate way to do it and you could use your email newsletter and a simple survey to accumulate large numbers of answers. However, be careful with this approach because just asking the question usually makes customers more sensitive to price.
  • Ask your customers indirectly. In the pricing field, an approach called conjoint measurement was created to get customers to make tradeoffs between price and value. They are shown many variations of products and price and are asked to rank order their preferences. You’ll probably want to hire an expert like Simon if you dig into this level of detail.
  • Use price tests. This is the most accurate way to get your answers because all of the other approaches are thought experiments. As behavioural science tells us, there is a large gap between what people say they will do and what they will actually do. Luckily, digital technology makes it fairly easy to run A/B tests and find out the actual answer to “how much does demand rise/fall based on different price points?”
Should You Price High or Low

Once you’ve determined your demand curve and how much people are willing to pay for your products/services today, it’s time to make a decision: which pricing approach is the best for you to take moving forward.

There are 3 main categories to choose from.

Low Price Strategy

This is where you price your product as low as possible to capture as much volume as you can. Thus, the focus of your business is around driving down the cost to produce your products and creating efficiencies.

You probably already know this, but there is only room for a couple of low-priced players in any market. If you are going to choose this approach and be successful with it, here are the factors that will help you do so:

  1. Begin with a low-price strategy from day one. Many times it requires a new and innovative business model.
  2. Be extremely efficient in managing both costs and processes.
  3. Guarantee adequate and consistent quality.
  4. Focus on your core product and don’t do anything that isn’t absolutely required by the customer.
  5. Have a high-growth and high-revenue focus. You’ll need to make up your lack of margin with volume. Economies of scale are your friend.
  6. Be tough and forceful in your purchasing.
  7. Have little debt. Instead, rely on self-financing or supplier credit.
  8. Exercise strong control over the entire value chain.
  9. Focus your ads on price.
  10. Don’t mix your messages: Almost all of the successful “low price–high profit” companies stick to an “everyday low price” strategy.
  11. Understand your role. Most markets have room for only a small number of “low price–high profit” competitors, often just one or two.

Luxury Goods Pricing

On the other end of the spectrum are luxury goods pricing companies. This is where there is little connection between the cost of production and the prices you set.

If you are going to choose this approach and be successful with it, here are the factors that will help you do so:

  1. Ensure your product delivers the highest level of performance. This goes for every dimension of your business, including the materials you use to the way you distribute your product.
  2. Ensure your product can deliver the prestige effect.
  3. Set your prices high because price is a quality indicator for luxury goods – the more it costs the more it must be worth.
  4. Keep your volume and market share within strict limits. If “everybody” has your product, you’ve lost the luxury game.
  5. Avoid discounts and special offers like the plague.
  6. Hire top talent in every part of your business. Every employee is an extension of your brand.
  7. Keep control of the value chain. There’s no room for B players.
  8. Understand that the primary factor in price setting is the customers’ willingness to pay. There is little or no connection to the “value for money” equation.

Premium Price Strategy

Finally we have the premium pricing strategy. This is where there is a direct connection between the value you deliver and the prices you set. This is where you try and create the optimal value in your market place and share some of that value with the customer.

In other words, you create a product that generates more value for your customers than the competition’s product and thus also charge a higher price.

While it’s almost impossible to give a general answer to the question of how much more a premium price is to a “normal” price, there are a number of considerations to keep in mind as you pursue a premium price strategy:

  1. You must provide superior value.
  2. The price to value relationship is your competitive advantage, unlike low-cost or luxury where the price is the deciding factor.
  3. Innovation is the foundation of your growth – you must continuously be searching out new value.
  4. Creating a consistently high level of product and service quality is a must.
  5. A strong brand is a must. Your customers need to understand what you stand for.
  6. A strong communication program is a must. Your consumers need to hear your story if they are going to understand your differentiated value.
  7. Shy away from special offers. Premium pricers offer discounts very infrequently.

Which price strategy is best for you?

For most companies the best strategy for creating strong profits is to use a premium pricing strategy. There’s certainly room for a couple of low-price and luxury producers in every market, but the high percentage play is to choose the premium route.

Specific Pricing Situations Explained

Now that we’ve covered pricing in general, let’s move on to some of the more specific applications and how to drive the profit needle even further.

Price Differentiation

Sometimes it makes sense to create different prices for different people, or for different situations. Here are a few ideas to get you started:

  • Price bundling: you can often maximise profit by packaging together several products and charging a total price less than the sum of the individual products. If you’ve bought a car recently, you’ve seen this in action.
  • Price unbundling: in some situations it might make sense to do the reverse – unbundle what used to be packages into separate product lines.
  • Volume discounts: there are two ways to give volume discounts – one where the discount applies to the entire volume purchased and another where the discount applies to the incremental volume. The incremental approach almost always leads to higher volume.
  • Skimming: this is where you decrease the price of a previous version of your product when you release a newer version. Apple has used this approach with great success.

Pricing In Crises

Often times you’ll find yourself in a crisis where you need to make price cuts in order to survive. If you do, make sure you do it intelligently by keeping the following in mind:

  • make sure you use price-oriented advertising and additional communication to drive the desired increase in volume;
  • consider offering additional goods or services instead of lowering prices;
  • consider that maybe an increase in price is the right approach, like Panera successfully did in the 2008 financial crisis.

I hope you found this useful and please write me a review if you have any specific topics you would like me to write about.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

The post Book Summary of ‘Confessions of The Pricing Man’​ by Hermann Simon appeared first on Vanguard Business Coaching.

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