Business Insights

One of the most basic concepts of economics is want vs. need.

They may sound similar, but they’re as different as day and night. As a small-business owner, it’s important to distinguish between the two in order to attract more clients and grow your business. By learning the specific wants and needs of your clients, you can learn how to better market your product or service in a way that speaks to your ideal client and leads them to buy from you.

A want is something you would like to have. It is not absolutely necessary, but it would be a good thing to have. A good example is music. Now, some people might argue that music is a need but you don’t need music to survive.

A need is something you have to have, something you can’t do without. A good example is food. If you don’t eat, you won’t survive for long. You might not need a whole lot of food, but you do need to eat.

It may sound completely counterintuitive, but the fact is, wants are much more powerful than needs. Even though their needs must be fulfilled for survival, most people make their purchasing decisions based on their wants, rather than their needs.

For example, people need to lose weight for health reasons. A weight-loss clinic might assume that clients would respond to a weight-loss program that is positioned to help them feel better and improve their health. But oddly enough, what most people want from a weight-loss program is not health, but to look better, attract more romance into their lives, to receive compliments from people and gain confidence. Those are all emotional wants versus objective needs.

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What is optimum performance?

The question raises different responses from different people. Have you ever thought about how much better you could be doing with your small business or in your career? What about your relationship with someone you love or the state of your health right now?

I have to admit that at any point in my life, one or more of these areas needs more attention than I give it.

There seems to be so much to do, so much to accomplish if ‘more’ is the focus.

Let me suggest that the quest for more is a trap. It never stops.

Optimum performance is about playing life at the highest possible level. If we are so full of potential, then why are most of us not living up to that potential in every area of our life?

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You may have read a post here early last month that talked about when it makes sense to give your product away. In that post we were explaining the value of getting your message or product out to the masses of prospects who might value your core product or service.

And, in my previous post  I wrote about a couple of ways to boost the lifetime value (LTV) of your customers.  To refresh your memory, the LTV of a customer is defined as the total gross profit that you accumulate from a customer over their lifetime (based on the definition of lifetime you pick as noted above), less the original customer-acquisition cost and the subsequent marketing expenses over their lifetime. 

Both of those posts are central to my message today.  You may have heard us mention the value of acquiring a new customer at a loss.  This seems counter-intuitive, but it plays right into the psychology of marketing, and it leverages the LTV of your future customer. 

It is a basic fact in marketing that your current customers will be more likely to make an additional purchase from you than the likelihood of a purchase from a prospect.  I’ll give you an example from world of catalog marketing where, one of the measures of marketing campaigns is revenue per thousand catalogs mailed (Rev/M).  Using a generalized example, when a cataloger mails their “Christmas Wish Books” to prospects and to existing customers the difference is dramatic: 

Rev/M of catalogs mailed to current customers is $5,000/M catalogs mailed while Rev/M coming from catalogs mailed to prospects is $1,250/M.

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“In times of change the learners will inherit the earth, while the learned find themselves beautifully equipped to live in a world that no longer exists.”

Your business, your clients, and your world are in a constant state of movement and change. The above quote from Eric Hoffer does a great job of explaining the importance of embracing change. If you stand still or stop growing, then your competition may pass you by, or the needs and wants of your clients may change.

It’s been said that people don’t like change and yet the facts show that in the process of change is usually when you are the happiest and most productive. People actually like change, they just don’t like being forced to change, especially by others.

Whether you need to change to keep pace in your business, or you are asking your clients to make changes when they invest in your product or service, you’ll often run into resistance. Let’s take a look at why people tend to resist change:

• You might feel awkward or uncomfortable
• You might feel alone or isolated
• A feeling you can only handle so much at one time
• A tendency to look at the negative first
• A belief that you lack the resources
• People are at different levels of readiness
• Conditioned to revert back to old habits

It is important to recognize these feeling so you can identify them when they show up for you, and so that you are prepared to deal with these issues when they show up for your clients.

Here are seven things to remember when you’re running into resistance to change:

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Growth is the lifeblood of entrepreneurship and business success. It is also the lifeblood of our economy. It is why we at OneCoach are dedicated to teaching and empowering growth. But growth requires work, change and transformation. Perhaps most importantly, growth requires personal transformation in the leadership of the organization.

Most small-business owners have enough knowledge, experience and resources to get themselves into business. However, few have the depth and breadth of knowledge, experience and skills to remain capable as a leader as the business grows– unless they grow too. Growth brings increasing demands, of:

• complexity
• management
• human systems
• financial management
• competitive response
• planning
• training
• development
• technology and information management
• and leadership itself.

Hence, the leader must transform to adapt to all of these changes. The leadership skills, experience and methods that were appropriate for a three-person startup operating out of a garage will not serve a 100-person firm or a multicultural international enterprise. Business growth constantly puts a leader in new positions that require learning, new perspectives, new skills and new stamina. If the leader relies upon what has served in the past, it may not serve in the future. Unfortunately this realization may come too late, unless the leader is ready and prepared for change, expecting, waiting and preparing for it rather than being forced into it or surprised by it.

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