One big mistake as an entrepreneur can cost you millions of dollars, momentum, and years
of lost time.
And the reason why I tell you this is because a lot of times marketers, when you think about
marketers, there are a lot of mistakes you can make as a marketer.
And by the way, if you're an entrepreneur, CEO, guess what else you are?
You are somewhat of a marketer, because at the beginning when you're building your company,
as a founder, you may not know it, but you're marketing, whether it's directly or indirectly,
you're marketing yourself.
And you don't ever want, as a marketer to have a bipolar personality.
Just like individuals sometimes one day we're happy, one day we're upset, one day we're
this, one day we're that.
Sometimes you see some brands that they're so bipolar.
They're all over the place.
They don't even know what it is.
It's almost like a kid that wants to try to please everybody.
And the highest form of maturity is when one becomes independent of others' opinions, meaning
you as a CEO, you as an entrepreneur, need to position yourself and realize who you want
to be and sticking to it.
Here's why the biggest mistake marketers will make is trying to appeal to every single customer
and you just can't do that.
Because no one hasn't done it and become massively big, because you just can't do it.
Now why is that?
Let's talk about it a little bit for you to understand what it is.
Look, there's really four different categories you can choose to be, as an entrepreneur,
and as a business.
Let me explain.
On this side [left], we have high quality, meaning the higher you are here, represents
the better quality of a product you have.
If you're further on the pendulum here means you're low cost.
Cost, more expensive [right], less expensive [ left].
Better quality [top], lower quality [bottom].
So if your product is here [bottom left], it means you're what?
Low cost, low quality.
If your product falls here [top right], you're high quality, high cost.
If you're here [top left], quality is high, but cost is low.
If you're here [bottom right], quality is low and cost is high.
Now some people may say, "Pat, can't I just be everywhere?"
No, you can't.
It's very simple.
Harvard is here [top right].
A community college is here [bottom left].
Public education may be here, but some places, if you go and live, I don't know how many
times.
. . I'm going to try to get my kids into West Plano area, because it has the great what?
High quality education, but what?
Low cost.
That's still a bracket you're going into.
You go into certain areas, and public school's going to be here [bottom left].
You go in some private schools and may be up here [top right].
It doesn't matter what the product is.
I can go into different products.
Let's look over here, and I want to do a test with you.
Ferrari.
Think about it.
Which of these four categories do you think Ferrari falls under?
A low quality, low cost?
No.
Low quality high cost?
It's not low quality so we know automatically it's not here [bottom].
Is it high quality?
Yes.
Do we know it's high quality, high cost?
Yes, Ferrari is right here [top right].
How about Starbucks?
You pay $5 for a cappuccino, whatever you want to call a Frappuccino, so cost is high
and quality is high.
At least that's what they claim.
And if their quality wasn't that high, they wouldn't be as big as they are today.
So they must have great quality.
If we go to Tesla, what do you think Tesla is?
Is Tesla very, very expensive?
So you may say, no, the cost is not really that high, but the quality is high.
So maybe Tesla is here [top left].
Maybe Tesla is here.
Because you can get a Tesla nowadays, what Elon Musk's goal is to try to produce a product
that's a middle America product, with a very, very high quality.
He wants to go here [top left].
That's his goal.
He's not trying to be Ferrari.
He wants to be here, high quality, low cost.
Where's Wal-Mart?
Think about Wal-Mart.
Do you think Wal-Mart cares that they're here [bottom left]?
Wal-Mart's the biggest company in the world.
Wal-Mart doesn't care if you don't like Wal-Mart.
Wal-Mart knows, we're not going to sell $6,000 Canali suits, and we're okay with it.
You're not going to go to Wal-Mart and say, "I would like to buy some Ferragamo shoes."
They're going to say, "I'm sorry, you want what kind of shoes?
We got a Ferrajack shoe, for $9.99.
You're not getting Ferragamo shoes here."
I'd like to get a Ferragamo belt.
Ferra what?
Ferra.
. . We have Ferra belts, $11.
Forget the gamo, we have the Ferra belt.
You're just not going to get that.
And that's where Wal-Mart plays.
And by the way, they have 2.2 million employees around the world.
So if you say, "I don't like Wal-Mart," they don't care if you like them.
That's where they are [bottom left].
Jaguar.
Some people say, why did you put Jaguar on there?
Because Jaguar is low quality, high cost.
Before they become Ford, for many years, everybody would make fun of Jaguar, because Jaguar wanted
to be this high end, luxury car that you pay $60,000 to drive, or $55,000, $80,000 to drive,
and it looked good, but the quality just wasn't that good.
It was very expensive, low quality.
Until Ford bought Jaguar, and they changed their reputation into what they are right
now.
If they didn't, they would be still here.
By the way, a IKEA would be what?
IKEA would probably be low quality, low cost.
IKEA would like to say we're here [top left], but they're here [bottom left].
Now, for myself, when we started the company, I started off, myself, as Morgan Stanley Dean
Witter.
.Now watch this.
When I started with Morgan Stanley Dean Witter, I just want to tell you this.
The clientele you dealt with at Morgan Stanley Dean Witter were who?
People that had a net worth of a million dollars and up.
So I'm dealing purely here [top right].
Our fees were higher, but I'm also up here [top right].
Then I went to Trans, then I started PHP, with our friends.
We started the PHP Agency.
Our goal was to be high quality, low cost.
This is where we wanted to be.
We want to provide the highest quality products out there, with the lowest amount of cost,
that works for us.
Now, anytime you create an identity, anytime you create an identity, once you create an
identity, you have a reputation of what your product is.
When you have a reputation of what your product is, and all of a sudden you decide to change
it, guess who you throw off?
Your existing base of customers.
Because here's what happens.
The thought is, well, you know what, if you try to appeal to these guys, we'll also do
a very, very good job.
Can you imagine how much money we could do?
Because it makes sense, right, common sense wise.
You know, we need to get everybody because it just makes a lot of sense.
Really?
Let me tell you a little bit of history.
There used to be a time there was competition for cigarettes.
Many, many years ago.
You had Marlboro, Camel, and Winston who were competing.
Very close.
If you remember, Camel was about what?
How cool they wanted to be, all this other stuff, and Winston was coming up, all these
things, and Marlboro.
Okay?
What ended up happening during this period, Camel and Winston fell for market manipulation,
media criticism, all this stuff, and this is what the market did to them, media did.
Media told Winston, Camel, and Marlboro, you know what your mistake is?
You don't appeal to women.
That was a big.
. . believe it, you're watching this right now and saying, "Pat, what are you talking
about?"
Go study it.
You don't appeal to women.
People are not attracted to Marlboro, Winston, and Camel, and we believe, these are consultants,
those who know everything, right?
We believe if you try to start appealing to women, you're going to crush it, and the first
one to do that is going to blow up.
Really?
So guess what happens?
Camel and Winston fell for it.
They started having girls smoking cigarettes in commercials.
They started having girls holding cigarettes in magazines.
They started having all these pretty girls smoking cigarettes.
And they said, Oh, we're going to get it.
We're so smart.
Marlboro is not moving.
They don't move.
And guess what ended up happening?
They never moved.
Marlboro didn't move.
Marlboro didn't fall for anything.
Because Marlboro made a decision a long time ago, Marlboro is a cigarette, this is how
they are, and they're completely okay with that.
Marlboro is a cigarette for man's man.
That's their m.o.
While everybody told them to switch, they didn't do it.
Now watch what happened.
Let me give you some numbers here.
Today in the marketplace, Winston has 2% of the market.
Camel has 8% of the market.
Newport has 13% of the market.
And let me tell you what Marlboro's got.
Let me tell you here.
So we got Winston what, 2?
8 [Camel], 13 [Newport].
You know what Marlboro's got?
41% goes to Marlboro!
You know why?
Here's why.
Now it's cigarettes, by the way, just so you know, the brand alone, Marlboro, if you wanted
to buy it, it's $80 billion, if you want to buy it today.
Last year, 391 billion Marlboro cigarettes were smoked, last year.
Let me say it again.
391 billion cigarettes.
I don't smoke cigarettes.
I can't stand cigarettes.
There's nothing about cigarettes I like.
My family, they were smokers.
I cannot stand cigarettes to save my life.
I'll smoke four cigars per year, and that's pretty much it.
I cannot stand the smell of cigarettes.
41%.
Why?
They stuck to their product.
So the question comes back to you here.
This is me and you talking now, nobody else.
I got the question for you..
Who is your ideal customer?
Are you trying to please everybody?
Can you imagine if Morgan Stanley one day says, "yes, our ideal client is a net-worth
of $5 million, with a $1 million of investible cash.
And oh, by the way, you can also do $50 a month with Morgan Stanley Dean Witter.
What are you talking about?
I go to the bank to do that.
I go somewhere to open up a CD.
You want to do that [top right].
No way.
They lose their identity.
And by the way, so many companies do this.
So if you're a smaller company and you're thinking, you know, it's just me.
. . so many people, because they see the potential of the market and they want everything.
It is very important.
What if Wal-Mart, look how confusing this could be.
I want you to think about it.
Wal-Mart makes an announcement next year, and this is what Wal-Mart says.
"Effective January 1st 2017, Wal-Mart will start selling Ferragamo and Canali suits."
What would you say if Wal-Mart said that?
Tell me you wouldn't be confused.
And by the way, do you think the customers that go to Neiman Marcus, which is high-quality,
high-cost, you think they would go into Wal-Mart to go buy those Canali suits?
Do you know how confusing it is?
It's very confusing.
Very, very confusing.
It's the same to say if Neiman Marcus decided to say, "We're selling $9 shoes, come and
get it."
That's just not going to happen.
So who's you're ideal customer?
You.
You've got to ask the question, do you know it?
Age bracket, income range, what do are they doing, what do they like, why do they come
to you?
Who is your product?
What are you marketing your product to?
And then stick to it.
And do whatever you can to compete in that space and be the best in that space.
So your biggest differentiator could be Neiman Marcus and Nordstrom [top right], we are here
[bottom left], and we're happy with that.
We are here [top left], we're happy with that.
You can go here [bottom right].
We're going over here [bottom left].
Target likes to say Target is whatever, but guess what?
Target is not as low cost as Wal-Mart is.
And by the way, here's the other part to keep in mind about this.
Once you decide who your ideal customer is, and once you decide where you want to position
yourself, don't let this confuse you.
You will have enemies.
You will have opposition.
You will have people that will say terrible idea, he has no clue what he's doing.
She has no idea what she's doing.
Everyone's going to try to confuse you.
And if you can stick to the message long enough, you'll succeed.
If you can't, you're like the rest of the entrepreneurs and marketers out there that
made the mistake of trying to appeal to everybody, and lost every single thing they had.
And they lost their success, millions, and they went from a market where they were competing
with Marlboro and then all of a sudden, they dropped, dropped, dropped, dropped.
And now they're at 2%.
Winston, Winston in Iran was Winston.
Winston is 2%.
Camel used to be very famous.
Today 8%.
Marlboro 41%.
Stick to your message for the longest period.
Market it strong, until all of a sudden you become one of the competitors, everyone says,
"Oh my gosh, they're so smart over there."
It's not that you're smart.
It's just the highest form of maturity is when you become independent of other people's
opinions.
And other's opinions is everybody telling you what to do.
Stay focused on what you want to be and who you want to be and where your ideal customers
are going to be.
With that being said, let's get that pillow here.
Hey, I was excited about doing this episode.
Very excited about doing this episode, because I get this message all the time.
Pat, I want to get this customer, that customer.
This video is dedicated to all of you that say, I want to get all.
. when I ask you who your customer, you say everybody.
I disconnect.
Because you can't have everybody as your customer.
You've got to know exactly who your customer is.
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