I have heard it said that “a goal of marketing is to know your customer so well, that your business’ product or service sells itself.” This is somewhat analogous to what I once heard that every good trial lawyer knows and practices. That is, in court a lawyer never asks a plaintiff, defendant, or witness a question for which the answer is not known. An unanticipated response could be catastrophic for the trial lawyer’s case. For both professions, not knowing something that should be known could lead to a disaster. Thus, certain knowledge is key to the success for each respective profession.
Still, some businesses occasionally succeed on dumb luck alone, at least for some length of time without sufficient planning and marketing. An acquaintance of mine was a business owner who had such dumb luck – for a while that is. In the early 1990’s, he opened a mortgage brokerage company. Due to the then booming housing market, he made a lot of money from the existing strong demand for such services. The results of his success provided him with a false sense of confidence and security to the degree that he developed a self perception where he believed he was invincible, incapable of making errors and could succeed at any business venture. His luck began to change, however, when he hired an inexperienced bozo, to manage his company, who was incapable of developing any sense of business acumen due to his opinionated and incorrigible nature. The idiot managed to run it into the ground. My acquaintance ended up having to close his business while the housing-market was still strong. Following, he tried a series of similar related businesses without having any success. For the past several years, he has been trying to make a comeback in Multilevel Marketing businesses. To my knowledge my acquaintance has failed to achieve much in his Multilevel Marketing schemes. Thus, failing to plan, organize, market and overseeing day to day operations of your business may sooner or later, lead to business failure. Further, if a business owner does not understand the market in which he or she is pursuing, valuable time can be lost. Other times such negligence ends in colossal failure including significant loss of invested money.
Let me share an experience I had where poor marketing and business planning resulted in such colossal failure. Several years ago I was invited to interview for a company that purported to have come up with a unique and revolutionary concept. The business’ founder (who was also the company’s self-appointed CEO) came up with what he believed was a unique and brilliant concept that would revolutionize an industry. His idea was a DVD yearbook. He further envisioned that DVD yearbooks would replace traditional, hardcover yearbooks. His reasoning was: (1) DVD yearbooks could be produced and sold for a far less cost than traditional yearbooks; (2) every home has at least one DVD player and thus a market for such existed; (3) having moving pictures would have greater appeal than still photographs; and (4) students, faculty and parents would find the idea of having a DVD yearbook as being progressive and therefore “cool,” and thus be a “must needed” product.
The CEO was a very charismatic man, with a gift of being able to sell his ideas very convincingly. Using his sales skills, he was able to convince a group of his investors that DVD yearbooks would revolutionize the market and thus provide a substantial return on an investment. The group invested a substantial amount of money in order to establish the business, including purchasing quality equipment, recruit and hire talented and notorious personalities as company leaders in key positions. This including a nationally recognized former ESPN sports announcer, who he made Vice President of Marketing (it turns out she knew little about marketing even though she had an MBA degree, but, she did have many media connections). He also hired a CFO who had formerly been employed by a well known U.S. automaker. Invested money also provided high paying salaries to lure some of the company’s top brass. It was also used to hire a marketing firm that designed an expensive, attractive brochure featuring the DVD yearbook and was to be mailed out in batches over several weeks to about 150,000 to potential customers, schools within the United States. He also hired his father in law, a former cranky and crusty old military pilot, as a Vice President of something, for which I never understood his exact roll in the company. (What I remember most about him was that he wore “floods,” as they were called when I was a kid, which are pants that were about 3 inches to short, exposing his white socks and athletic shoes that were purchased from either Kmart or Walmart. I never saw the man smile. Rather, he always wore a scowl on his face seemingly to express disapproval). Invested money also was used to hire and provide payroll for support staff, computer geeks and editors. Finally, invested money was used to hire and provide a payroll to a sales team of ten, in which I was to be part of.
During the interviewing process it was revealed to me that a fairly good base salary would be provided, with a commission compensation that was projected for an average sales rep to earn between $85,000 and $100,000 per year, plus benefits and spiffs including ipods, cash give a ways, cruises, and all of the perks that go with good sales jobs. There were other attractive features about the opportunity which was revealed during the interviewing process that made the company seem like it was a great place to work. For example, I was told that employees who contributed to the early success of the company would be rewarded by having opportunities for quick advancement accompanied with pay increases. I noted that the company’s building was new and had nice, expensive furnishings. The conference room where the interviews took place had a nice conference table with expensive chairs surrounding it, and nice paintings hanging on its walls. While given a tour of the company, I noticed each desk had new computers and monitors. I liked the managers who interviewed me. They seemed like they would be a great people to work for. They were very optimistic and seemed laid back, yet, professional and confident about the company’s ability to revolutionize the yearbook industry and thus grow. For these and other reasons it seemed that the company was on the brink of success for which I could contribute and be a part of! So, I gave my two week notice at my then current position and accepted employment with this company anticipating perhaps an opportunity of a life time.
On the morning of new hire orientation, we were told about the company’s brochure mailing campaign and that it was scheduled to start that week. Also, by the end of the mailing campaign, every grade school, middle school/junior high and high school within the United States’ borders would receive a brochure. The brochures were being mailed direct to the schools’ decision makers. Our job as sales representatives was to take inbound phone calls resulting in interest generated by the mailed brochures, sell the features and benefits of the DVD yearbooks, then close the deal. “A very simple process,” we were told.