The iPhone and TV Sales

Your life just got a little easier.  Or did it get more complicated?

Nearly everyone carries a cellphone today.  Some also bring along a camera, an internet device, a PDA, a notebook, and other tools to get the job done — or just as entertainment.  These tools are paths to communication, and can also serve as a distraction.

Whatever the case, Apple did a nice job of putting them all together in the palm of your hand.

No, Apple really didn’t invent anything here, and this not just another straw on the heap of praise for the triumph of the iPod.  Love ‘em or hate ‘em, there is a lesson to be learned from Apple that applies to your job in broadcast sales.

Apple’s success has been achieved through intentional simplicity.  What the Honda Motor Corporation brought us in the 80s and the Extra Value Meal brought us in the 90s has found its way into technology, into our pockets, our purses, and our hands.  Simplicity.

This isn’t just about the simplicity of design, which the iPod and iPhone clearly demonstrate.  Simplicity of choice.  That’s the key here.  Consumers crave it.

Would you like the 8GB or 16GB? 

It’s really the same question you get when asked if you’d like to supersize your Big Mac meal.

If you’re wondering what in the world this has to do with television sales and retail success at the local level, it has everything to do with it.

Let’s back up to the 1980s, when the big three automakers were assembling hundreds of different vehicles, each with their unique chassis, trim lines, engine sizes, etc.  Not to mention the myriad of colors, options, and packages that can be heaped atop those decisions.  Wait a second, which one of those came with the cargo net?

Back then, Honda said, “Yeah, we have your favorite color here somewhere.  Plus, you get to pick from the base model or the EX!”  What a concept.

McDonalds and it’s fast-food brethren employed the same stroke of simplicity on its menu.  Now you can drive up, say “Number 3 with a Coke please” and drive to the second window, where they will promptly hand you the incorrect order.  All joking aside — the real point here is that simplicity yields sales.

What ever happened to mass-customization? 

In his book Paradox of Choice, author Barry Schwartz notes while scanning the shelves of his local supermarket that he counted 85 different varieties of crackers.  But Schwartz’s research extends way beyond Ritz and Saltines.  He has clear evidence that when consumers are presented with fewer options, they buy more.  Whether we’re talking crackers or televisions or new homes.

Guess what?  Advertisers are exactly the same way.  Maybe even to a stronger degree.

Those of you who attended our 2006 heard the Pulte Homes story.  Pulte, one of the nation’s largest homebuilders, recognized that of the thousands of variations of homeplans and styles they offered, a vast majority of buyers picked and built among a finite set (roughly eight) of the plans. 

So what did Pulte do?  They decided to concentrate the bulk of their advertising efforts around those eight models, and market share soared.  Less is more (it always was, and always will be).

Here’s where this carries over to sales.  Yes, “options” are a great thing to have … especially if you’re a stockbroker.  But if you’re running a company, you have to worry about rent, employees, inventory, debt, and cash flow.  When it comes to your advertising, you’re not looking for a laundry list of options.  You’re looking for an answer.

A quick corollary to the above point of simplicity.  There are two types of people you meet in sales calls.  The first type are good at spending budgets (marketing directors, assistants, and other committee members).  The second, and more important type, are setting budgets.  Ninety-nine times out of 100, these are your business owners.  These are the people whose attention we must be seeking.

Budget-spenders (non-decision makers) will love all the options you present.  Here’s why.  They are reporting back to somebody who needs to make a decision.  The spenders can “re-package” your options, adding considerable weight for their own bias (some options may be accidentally left off the list … imagine that!).  They’ve proven their worth and justified their position.  Then, “they’ll get back to you with a final decision.”

Stop me if you’ve heard this one before.

Budget-setters, our true customers, love answers.  They want you to tell them, in the next 15 minutes (or less), how to increase profits.  And the best part is … you have that answer already.

Sure, they can still decide if the $199 monthly payment in the creative is market-bearing, or if the female voiceover fits.  But truth be told, their media decision should be singular.  Because the question at hand is also very simple.

Here’s the question again, in case we’ve missed it:  “What’s the best way to increase market share and profitability with my advertising?”

And here’s the answer … it begins and ends with the proper selection and usage of media.  It’s all about choosing the clearest path to the consumer (read: most cost-efficient) and presenting a simple yet resounding message that demonstrates the value of the destination store.

There is a trend in the broadcast industry — as there is in every sales industry — to oversell the optional.  While it’s essential to know and love and demonstrate confidence in what you sell, presenting a myriad of options deteriorates confidence in the primary option.  It’s more an exercise of “saying what we’d like to say” instead of “saying what the business owner needs to hear.”

Yes, business owners think about their advertising, some very intensely.  But more options tend to lead to fewer decisions.

As the father of a young family, I took the plunge a year ago and bought a new minivan.  Though I’d like to think I was the primary decision-maker here, let’s be honest … it was my wife.  But together, we came to a very quick conclusion when comparing the Honda Odyssey with the Toyota Sienna.  Both are great vehicles, and I’m sure we’d be happy with either.  But I can say without a shadow of a doubt that choosing the Honda felt much better once we began navigating the labyrinth of options and models available from Toyota.

Again, Toyota is a marvelous company, and sells lots of cars.  Lots of minivans too.  Apparently, no two are exactly alike! 

And therein lies the secret to all of this: fear of loss.  Business owners, just like consumers, feel the fear of loss stronger than the euphoria of gain.  Being presented with too many options gives one the sense that maybe they could’ve done better in their decision.  JD Power’s own “post-purchase” reports underscore this trend.  Brands with a myriad of options tend to sink over time, while the iPods and Hondas of the world stick close near the top.  Too many options leads to lots of second-guessing, tweaking, and usually a decline in performance because of the inherent risk introduced by these very same options.

While it’s always healthy to consider the options and have a few contingency plans available for changing market conditions, presenting the best alternative to the business owner will increase your close ratio … and improve your own profit margins in short order.

Now, if I could only decide which tie to wear.

Dave Eckstein does not play shortstop and was never the MVP of the World Series. He is a partner in the firm ESA & Company, based in Red Bank, New Jersey.

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