Are you a “Situational” or “Sustainable” Marketer?

November 17, 2010

As I see it, there are two divergent strategies to drive business growth:  “situational”  solution sales, or “sustainable” solution sales.  Short term volume, or long terms quality.  I quote Dov Seidman, the author of “How: Why How We Do Anything Means Everything…in Business (and in Life)”, who explains the difference:

Leaders, companies or individuals guided by situational values do whatever the situation will allow, no matter the wider interests of their communities. A banker who writes a mortgage for someone he knows can’t make the payments over time is acting on situational values, saying: “I’ll be gone when the bill comes due”.

People inspired by sustainable values act just the opposite, saying: “I will never be gone. I will always be here. Therefore, I must behave in ways that sustain — my employees, my customers, my suppliers, my environment, my country and my future generations.”

Steve Martin A Wild and Crazy Guy

Ok… now a dive into the archives … Years ago, before Steve Martin began a national tour playing banjo, before his success as a serious actor  (ie. It’s Complicated), or a hilarious comedy actor (ie. The Jerk), he put out of couple of very funny albums of his standup comedy routines (along with some great  banjo playing).   One of my favorite routines on his 1978 album” A Wild & Crazy Guy” was his analysis of the revenue model for his performances.  I paraphrase:

“If I could fill up a 3000 seat hall at $3.00 a ticket, I’d make $9,000.
If I could fill up the hall at $7.50 a ticket, I’d make $22,500.
but if I could fill it at $800.00 a ticket, I’d make $2,400,000…This is what I’m shooting for – one show, goodbye!”

So do we get the most satisfaction by providing our customers with situational or sustainable solutions?

The answer, of course is never quite that black and white.  If you sell a commodity, and the cost of customer acquisition is low, a situational sale may be fine for you. That’s the basis behind the auction industry, to get a quick sale for whatever today’s situational value is for your product.   But the customer probably won’t come back to see you a second time, unless you have the best situational deal for them again.  Therefore, you survive by responding to the market forces.  But for most products and services, we all know that the cost of obtaining a new customer is much more than the cost of keeping a current customer coming back for more.   Too many businesses who must invest to find customers still focus only on that quick “situational” sale, and too many customers buy the situational product, assuming that the best price is the best value.

Sustainable business is good long term business.  Most sellers of situational solutions never go through the analysis to realize that it’s usually much more profitable (and satisfying) to have 1000 happy sustainable customers, than 10,000 churning customers who are only as good as the next great situational deal.  With a sustainable business model, you manage the market, rather than the market managing you.  To use Steve Martin’s scenario of his big show, if you’re good at what you do, your market will demand that you do it again.  Would Steve Martin really quit performing if he made $2.4 million on one show?  No… he’d do it again, and rake in $4.8 million.

A great illustration of the positive effect of a quality sustainable service was my experience working with Keyword Connects.  Keyword connects generates leads for home improvement contractors.   But not just any leads, high quality leads.  While many online lead generation firms market on the quantity of leads they can produce, Keyword sells ONLY qualified quality leads, turning away more potential clients than they accept.  What a concept!  The clients that “get it” love them. These clients have done the analysis of what a qualified lead really costs them, and have the insight to realize that there is value in quality.   The result? Good profitability for Keyword Connects, Good profitability for the client, and a sustainable business relationship.   And the bonus for Keyword Connects and their loyal clients?  The ability to focus investment on enhancing their service, rather than expanding their sales force to handle client churn.    The net result is a sustainable business for Keyword, their employees, clients, and community.

Steve Martin So did Steve Martin make his $2.4 million?  Yes, he discovered movie acting, and did quite well.   But what’s he doing now?  He’s back doing what he loves best.  Entertaining fans one at a time, playing banjo… And playing it so well, that his fans will be back to see him again, and again, sustained by a quality performance that sells out every show at a fair price that satisfies him, his fans, the venue, and the community.