3 Questions You Must Ask To Get Customers To Choose You 1st

In the US, we have a habit of jumping right to the answer. It’s what our society values.

When we stop to ask questions and spend time on the question, we ultimately get better answers. Questions force us to take different perspectives.

But not all questions are created equal. And it’s often valuable to ensure we’re asking the right questions.

This week's newsletter focuses on three questions for marketing, branding, and advertising that I’ve found valuable. Answering them helps ensure that you’re doing what matters to your customers. Answering them helps you get chosen first.

This Week:

• Marketing: Where Is The Market Moving?

• Branding: What Should We Be Trusted For?

• Advertising: How Will The Customers Respond?

• Five-Bullet Book Summary: $100M Offers by Alex Hormozi

• Three Other Things I'm Paying Attention To: Questions, Branding, and Customer Service

Marketing: Where Is The Market Moving?

Conrad Hilton almost lost it all during the Great Depression.

His small hotel chain almost joined the 80% of hotels that went out of business during the Great Depression. But Hilton knew that once the Great Depression was over, there would be a travel boom that he could be perfectly positioned to take advantage of if he could make it through. He believed a bright future was ahead.

Hilton got loans. He merged with another company to avoid defaulting on his loans. His partners in the merger refused to uphold the agreement, and Hilton lost control of his hotels. But he eventually gained them back, one by one.

When the Great Depression ended, the boom came and Hilton’s holdings helped propel him to become the first international hotel chain.

Hilton knew where the market would move and did everything to be in a position to take advantage of it.

Figuring out where the market is headed is something marketers often miss.

They spend a lot of time analyzing where the customers were and where the customers are. However, they spend little time understanding where the greater market forces will push customers tomorrow.

When I consulted with Kohl’s on marketing strategy during the Great Recession, we spent a lot of time answering the question, “Where Is The Market Moving?” And answering this question led Kohl’s to beat its main competitors coming out of the Great Recession.

Macy’s and JCPenney pulled back their marketing efforts. They were hesitant to invest in an uncertain environment. At Kohl’s, we doubled down on serving budget-conscious customers. We knew that when the Great Recession ended, the budget-conscious customer would be looking for places to spend their money in a smart way.

We positioned Kohl’s to be that place. We didn’t let up. We invested more. And when the time came for them to resume spending, Kohl’s won. Kohl’s overtook JCPenney and Macy’s in market share and increased their revenue by $790 million the year after the Great Recession.

Although it’s important to know where your customers are, it’s essential to understand where the market forces are pushing your customers.

It’s too easy to get left behind if you don’t keep ahead.

Ask, “Where Is The Market Moving?”

And then figure out how you can meet your customers there.

• Click here to read a fascinating recap of Conrad Hilton’s journey to creating his international hotel chain.

• Conrad Hilton wrote a book, Be My Guest, about his journey to success. I haven’t read it yet, but I’m adding it to my reading list.

Branding: What Should We Be Trusted For?

Brands aren't built in boardrooms.

This is why rebrands are almost always a bad idea. Rebrands treat a brand as something that can be the product of an exercise. They treat a brand as something a company has or doesn't have.

But that's not the way brands work.

Brands are measures of trust. And trust doesn't happen overnight. It accumulates.

A brand says to a customer, "You can trust us to solve this problem for you, always." The strength of your brand is the strength of that trust. Brands are built over time, not all at once.

Brands are built one customer intertaction at a time.

And when brands break that trust, they also fail one customer interaction at a time.

Any brand strategy that doesn't seek to accumulate trust over time is not a brand strategy.

Not every brand needs to be trusted for everything. And not every brand needs to be trusted for the same thing.

But every brand has to be trusted for something.

Without that trust, it's hard to create preference. It's impossible to prefer something that doesn't consistently deliver what it claims. And creating that preference is the main goal of branding.

Branding increases the likelihood that a customer will choose you. It increases the likelihood that they prefer you.

Preference starts with trust.

Trust builds brands.

When you're building your brand, ask, "What should we be trusted for?"

Figure that out. And constantly reinforce it.

Because without that trust, your brand isn't worth anything.

• I've seen many agencies pushing rebrands lately. Almost all of them fundamentally misunderstand that brands can only be built over time, not all at once. Their rebrands look like fancy design projects with clever copy. Branding is not a design project by another name. Brands are psychological, not just visual. Ultimately, the only winner in a rebrand is usually the agency's bank account.

Advertising: How Will The Customers Respond?

It's easy to think you know better than your customers.

You spend all day working in your company. You've seen the data. You live and breathe it.

But you're not your customer.

You may have created powerful ad. But the ad may be for you. Not your customers.

Just because you like an ad doesn't mean that customers will respond how you want.

Building ads from customer insights is a great start. But it's just a start.

Most companies start with customer insights. They filter those insights through a brainstorming session. They make a decision. And they flesh out an ad. It gets refined. Finally, it gets approved.

But almost every company forgets to do one thing: they forget to ask how the customer will respond.

Aside from using customer insights to set the context initially, most companies don't bring the customer back into the decision-making process. They filter the ad through their eyes. Not the customers' eyes.

A lot of bad ads would be avoided by taking the time to take the customers' perspectives.

So, next time you're developing an ad, take time along the way to ask, "How will the customers respond?"

Without that perspective, you can never accurately judge the potential of your ad.

• There are many ways to incorporate this question. You can build it into your agenda. Or, you can do what Amazon does and leave an empty chair to represent the customer in a meeting. Click here to read more about Amazon's empty chair practice.

Five-Bullet Book Summary: $100M Offers by Alex Hormozi

In 2023, I read 59 nonfiction books. My top book was $100M Leads: How To Get Strangers To Want To Buy Your Stuff by Alex Hormozi.

It took the top spot because of its ability to synthesize a lot of the practical stuff in print into a single source.

This week's book does the same. It's Hormozi's first book, $100M Offers: How To Make Offers So Good People Feel Stupid Saying No.

What it teaches you:

​How to create offers so valuable that people feel compelled to purchase.

The big idea:

​The perceived value of your offer is created by four factors that make up the Value Equation:

Value = (Dream Outcome x Perceived Likelihood of Achievement) / (TIme Delay x Effort and Sacrifice)

Dream Outcome: The ideal future people get by using your product or service.

Perceived Likelihood of Achievement: How much people believe that they'll reach their dream outcome.

Time Delay: How long it takes people to get the Dream Outcome.

Effort and Sacrifice: What people will have to endure or give up to get the Dream Outcome.

Most companies focus on improving the top of the equation (Dream Outcome x Perceived Likelihood of Achievement). The best companies focus on improving the bottom of the equation (Time Delay x Effort and Sacrifice).

Two key ideas:

​1. Even more important than the value equation is demand. You shouldn't try to create demand. Instead, you should find a market with an existing demand and amplify it through your offer.

There are four characteristics of a great existing market: they have massive existing pain, they have purchasing power, they are easy to target, and the market is growing.

2. People buy because they believe they are getting a deal: they perceive the value of the product or service to be worth more than the price they pay.

There are two ways to increase the discrepancy between price and value: lower the price or increase the value. Decreasing the price is usually a bad decision.

As a bonus to increasing value through the Value Equation, you increase the value the customer gets when you raise your price. This increase in value comes from the customer's perception that a higher price indicates a more valuable product or service.

A quote that stuck with me:

​"[I]f you offer a service where a customer must do something in order to achieve the result, or solve the problem you say you solve, they must be invested. The more invested they are, the more likely they are to achieve the positive result. Therefore, it follows that if you care about your customers, you should get them as invested as humanly possible. Ideally, this means pricing your services or product in such a way that it stings a little when they buy. That sting will force and focus their attention and their investment in your product or service."

Three Other Things I'm Paying Attention To: Questions, Branding, and Customer Service

• Questions: The questions this week made me think of a quote from the poet Ranier Maria Rilke from Letters to a Young Poet. It’s a great quote that I revisit regularly to remind myself of the importance of questions and not jumping to answers: “Do not now seek the answers, which cannot be given you because you would not be able to live them. And the point is, to live everything. Live the questions now. Perhaps you will then gradually, without noticing it, live along some distant day into the answer.”

• Branding: I guess I’m doubling down on Alex Hormozi this week. Lately, it’s not often that I agree with someone’s take on branding. However, on a recent episode of his podcast, The Game, I thought he had a really good take on the goal of branding that aligns with my view of branding as psychological strategies and tools to create preference. Hormozi says, “Branding is essentially about teaching behavior at scale by associating value with a brand.” You can listen to the 28-minute episode “Be Unforgettable: How to Create Content that Resonates” on Apple or Spotify.

• Customer Service: I’ve started to publish articles three times a week on Medium (Monday, Wednesday, Friday). On Monday, I wrote about the difference between an experience at an airport in Japan and one in the US. And how the Japanese concept of omotenashi—giving service without expecting anything in return—can improve customer service for any organization. My Medium articles are normally behind a paywall, but you can click this friend link and read it without any charge.