Power Niche Marketing: The Great Marketing Revelation – It Is All Statistics

Here is one of the great revelations of marketing. This is something I figured out over time and I am not sure exactly how. Certainly no one told me this and I didn’t read it anywhere. Maybe it is because I was a math major and just think about things mathematically. It is this:

Marketing is a game of pure statistics.

Ask anyone – I mean anyone – how they got their clients or their customers – especially their first clients or customers — and it is (almost) always completely serendipitous. It was a result of a series of events that could not be predicted or planned for.

I was picking up my three-year-old daughter from a play group because my nanny who usually does was sick, so there I was. I met the mom of my daughter’s friend, who happens to be a high-powered… and we were talking. I mentioned…. and then she said……. and the next thing you know, there I was…..

It is all completely random. Indeed, if you make a marketing plan with ten target customers or clients, it almost always works out that your best shot fails and one you thought had no chance at all turns into a big win.

In the legal world, if you ask a big rainmaker for advice you will hear everything, and stated with incredible confidence too, as to how you get clients. You hear:

It is on the golf course – that’s where “real” business is done.

It is from across the table – clients see you take their lawyer to the cleaners and they want you on the next matter.

You just do great work and the clients will find you.

You meet people at the synagogue or church and then talk business later.

You get clients from referrals.

You just be a nice guy, since clients like to work with people they like.

You just be an asshole, since clients want someone tough working for them so they can feel protected.

The reason you will hear just about everything from all sorts of people is that this happened to work for this particular rainmaker, so she thinks it is critical, and the be-all and the end-all of marketing success, but it is (almost) always happenstance that tricks the person into thinking that is “the way” when it is just “a way” that happened to succeed in that circumstance.

You simply cannot predict what will happen.

Of course, I cannot “prove” my theory that it is all about statistics; however, I am pretty certain I am right. So please consider trusting me here.

Now all this talk about statistics may sound very depressing. “Bruce is advocating the randomness of life, which effectively means not only marketing, but life itself, is purely random and therefore pointless. Gee!”

However, once you accept my theory that marketing is essentially random and statistically based, and you get over being a bit shocked by that, some amazing revelations spring from it:

First – if you know you cannot predict outcomes, then the best chances of success will come from making as many marketing attempts as possible.

Second – you should spend as little time as possible on each attempt, since you are trying to maximize the number of attempts.

Third – within the framework of the first two points here, you should make the attempts as effective as possible.

That is what a statistician/mathematician would do with the foregoing information, right? Instead of trying to pretend the world is not what it really is, a mathematician would just do the foregoing, wouldn’t she? It is all just simple math – I don’t think of myself as a weirdo (although that is of course a subjective self-evaluation); however, I live my life by mathematics, since math doesn’t lie to you. It tells you the truth which, as I noted above, I highly value, and then I work from there.

Ultimately, the lesson I am giving you here is that, whatever you are doing with your marketing, be efficient with your time. Spending twenty hours writing an article will make you “feel good” like you are “marketing” and doing something useful, but just playing the mathematical odds, this is not a strategy that is as likely to succeed as would spending those twenty hours doing the other things I have suggested to you in prior columns and will suggest to you in future columns.

You should have no reason to be depressed about this revelation. Indeed, instead, you should be energized and excited by it. You just learned a key fact in how to play the marketing game:

Make as many attempts as possible.

Spend as little time as possible on each attempt.

Make your attempts as effective as possible.

Power Niche Marketing: My Most Awkward Article — Terminating Non-Optimal Client Relationships

Even if your dance card is not filled, it is in your interest to rid yourself of certain clients that will harm your career and/or you cannot service appropriately. Non-optimal client relationships include the following, and you certainly know it when you see it:

  • They want you personally to do everything.
  • They don’t seem to care at all about you or your personal life or your other client/customer demands.
  • They are enormously focused on price — no matter what service you provide or pricing adjustments you give them, they always want the price lower.
  • They don’t make referrals or tout you or give strong references or show a desire to be helpful to you.
  • They make you unhappy — possibly you are always worried you will lose their business.
  • They monopolize your time so you can’t build relationships with good clients.
  • You cannot service them properly because you don’t have the expertise or the staff but you are clinging to them even though it is not actually in the client’s interest.

Take a deep breath and end these relationships. You will feel great afterwards and, more importantly, a yoke will be off your neck that will permit you to do other things that will be advantageous for your career and at the same time better for the client as well. Instead of servicing a client that will not lead to anything good for you or the client, you will now have the chance to find clients that will be great win/win relationships.

Along these lines, reject the view that you will keep the non-optimal client until you find the good client. The non-optimal client will take up too much of your time and hinder your efforts to get the new client. This is scary to do but necessary.

And of course, one way or another, life is too short to not enjoy at least a good amount of it.

By the way, I don’t advocate terminating a client or business relationship rudely. You are in the same industry, and you don’t want to make an enemy. But you have a career to build and this is ruining your chances.

Also, sometimes a “bad” client can be a “great” friend and great relationship for you in the industry you work in. Occasionally, I have just spoken to a client and said something like this:

“Look. I think it is obvious we are great friends but the lawyer/client relationship isn’t a good one for us. Let’s end that and stay the closest of friends and try to help each other in the real estate world.”

Each time I have done this there has been a very positive — almost relieved — reaction from the client. It seems that when I am feeling it isn’t ‘right,” typically the client feels the same, and our relationship changes in a positive way. And a couple of times this has led to a discussion as to what is wrong with the lawyer/client relationship and we have fixed it and continued on, much improved.

A related issue is to try to pick your clients wisely. They should be ones you are simpatico with, who find your value propositions useful and inspiring, who like you personally, who benefit from your Power Niche, who you just click with, and most importantly who you can provide value to. If you can do that then the odds are that the relationship will be a good one for both of you.

Indeed, you can fall in love with a client like this, and really help the client build his/her business and add dramatic value. Also, hopefully, this client will add great value to your career.

To sum up, a good lawyer/client relationship is two-way in nature and, if it grows right, it can become truly a labor of love for the lawyer. I can truthfully say that I love my clients dearly. Of course have our “moments” but these are people who mean a lot to me and it makes just about every day a good and fun time to service them and help them in their careers and in achieving their business goals.

Retail Is Dead – Long Live Retail

The retail world is in turmoil.  That is nothing you don’t already know.  I will not bore you with the 100 or so articles on retailers closing and all of the negative press in the retail and real estate worlds.  Instead, I will give you my (philosophical) thoughts as follows…..

I start with a question as to what, in a big picture sense, is “retail” anyway?

It is a place – a location – where someone with branded (or unbranded) goods sells their wares to the public.

  • Retail is therefore a classic “middleman”.

  • And what does the internet do to “middlemen?”

  • It destroys them – or at least eviscerates their profit margins.

So what is happening to traditional retail?  It is being destroyed.  And the agent of destruction is a company that cannot seem to make that much money itself; namely, Amazon.  It is disintermediating retail and “taking over”; however, it is kind of, well, ironic, that even that company has had trouble making much money (especially when subtracting stock-based compensation).

Incredibly Wall Street – and investors – have decided that Amazon doesn’t need to make money to have a market cap in the hundreds of billions of dollars – but that is a side issue.  The point for retail is that the internet – largely through Amazon – is destroying the traditional retail industry.  Even the behemoth – Wal-Mart – is in the cross-hairs of this disintermediation.

But the “death of retail” has been largely exaggerated.  Indeed, I think that instead of the destruction of retail there is going to just be a dramatic industry shift as follows:

I would start the analysis – like I often do – with Michael Porter – the Harvard Professor who is a worldwide authority on competitive advantages.

Porter says don’t try to get “better” than your competition.  Instead try to be “different” from your competition.

From my analysis of Porter I have come up with the concept of the “Power Niche.”  This is a phrase I have coined that advocates developing pricing power in a small niche market – as opposed to having no such pricing power in a broader market.

Yet it seems like many – doomed – retailers are doing the opposite of what Porter (and I) recommend.

For example, there seems to be a rush to improve:

  • Efficiency

  • The “experience” of the customer

  • And a bunch of other things of similar import

I think overall these ideas will go nowhere because they are just making the retailer “better” and the laws of perfect competition – as exemplified through Amazon – will just grind on and on with this inexorable race to the bottom of profitability.

Instead, there is an easy way out for many – but not all – retailers and that is to just shift the dial from being a “retailer” to being a “purveyor of exclusive branded products.”

If you are a “retailer” who is selling something you can buy at Wal-Mart or Amazon or pretty much anywhere else you have zero competitive advantage.  If however you are selling Spiffy Jiffy Blue Jeans that can “only” be purchased in your store, and nowhere else, you hold all the cards for the customer who wants Spiffy Jiffy – there is nowhere else to go.

Does this mean you win?  No, of course not.  But now you have a fighting chance.  Instead of a race to the bottom of profitability you are now in the business of building a brand.  As one of the greatest investors of all time –Warren Buffet – has said, he buys brands because they permit the owner of the brand to sell the product at an above-market price for an extended period of time.

The brand is therefore the thing.  It is the “Power” in the “Power Niche” (if you are thinking like me) or the “being different instead of being better” concept (if you are thinking like Porter).

So to sum up:

I think traditional retail is close to dead and dying.  There will be a few survivors which are the low-cost producers – like Amazon and Wal-Mart.  Most of the other traditional retailers will go the way of the dodo.

However, branded retail (with exclusivity) is just getting started and I think will do very well over time.

For real estate players, if you buy my thinking, the analysis is easy; namely, look at the retailers in the buildings you are buying, lending on, leasing up, etc.  Ask, do they have Power Niches?  Are they selling branded exclusive products?  Or are they racing Amazon to the bottom of profitability.