Articles

$300 for a backpack !?!?

I’ve noticed that when I see something for sale that has a significantly higher price than other options in the same category, it challenges part of my mind to understand why the price is so much higher.

The first time I saw the $300 price for GORUCK’s GR1 backpack, I was kind of shocked. “$300 for a backpack!?!?! You’ve got to be kidding!” I literally had sticker shock.

By the time I bought one a few months later after literally saving up for it, I had done a TON of research to understand if that price was justified. Along the way, I completely educated myself on that company’s unique approach to designing and building backpacks, their unique lifetime guarantee, and every other bit of their marketing message.

The higher price challenged me to fully investigate GORUCK’s differentiation, and it worked. But that’s the world of B2C products, where the price is usually one of the first things you see and spending decisions are perceived more as costs rather than investments.

What about B2B services, where price is custom or usually not revealed until partway through a sales conversation and the context of a good deal is getting a return on investment? How can you use differentiation to support a premium price, and to prevent sticker shock when that price is revealed?

Part of the answer is that you can focus on discovering the value of that project during the sales process. If you’re not already regularly doing that, go to http://expensiveproblem.com, sign up for the Value Pricing Bootcamp there, and start learning how to.

The other part of the answer is your marketing. You can market your services in a way that differentiates them from cheaper options.

I’m going to give you some high level ideas now, and then drill into some more specifics in upcoming emails.

Here are three basic approaches to differentiation:

    1. Understand what benefits your clients associate with premium services, and focus on that in your marketing. This could be level of touch, could be responsiveness, could be quality, could be expertise, could be almost anything else. You really have to understand your clients in order to know!
    2. Know when to say “we’re expensive” or “we’re probably going to be the most expensive option”. I know from experience you can do this artfully through your marketing message and branding, but if you’re going to literally say the words “I want you to know that we’re expensive” you should almost certainly do it via a realtime voice conversation–not via email–and you should be very careful about how you say it.
    3. Position your business as a way for your clients to get more value because of your unique background, experience, inventions you’ve developed, etc.

If you’re not sure how positioning relates to value, you definitely need to read: http://thepositioningmanual.com

More tomorrow on differentiation,
-P

Meaningful differentiation

Differentiation is critical, but it’s easy to get it wrong.

In yesterday’s email, I told you about how I hired a cheaper contractor to build a deck and the very painful results of that decision.

Part of the difference between those two contractors was how they made decisions that would have long-lasting effects on the thing they were building. In a way, their worldview was part of their difference. I suspect the same is true of you.

To the cheaper contractor, crappy screws that would not last long in the harsh Oregon coast environment were functionally equivalent to more expensive screws, or even better because the cheaper screws saved him maybe several hundred dollars.

To the more expensive contractor, using premium screws was part of his justification for charging a higher price for the project. For example, when he came out to give us an estimate he mentioned stainless steel screws, which are very expensive. This contractor was not going to absorb the higher cost of the premium screws; in fact he was going to pass that cost right along to me and charge me a higher hourly rate for making this–and many other similarly better–judgement calls.

That, in a nutshell, is differentiation. Differentiation is the answer to the question: “How are you different than all the others out there with similar skills?”

When it comes to marketing your expertise in building software, differentiation is tricky. How do you help potential clients understand that you will make dozens, hundreds, or thousands of better judgement calls that may cost more in the short term but deliver significantly better results in the long term? And how do you do this without vomiting too many technical details all over them too early on in the marketing process? And how do you focus on stuff that actually matters to your clients?

By the way, a worldview that is focused on software quality is not the only effective differentiator. Speed may be another good one, or raw expertise may be yet another. I’m just talking about software quality here as an example of how you think about differentiation in general.

You can’t just punt on the differentiation question. If you do, you’re saying in effect: “I can’t tell you why I’m different than the ocean of developers out there with similar skills so I’m not even going to try.” When you do that, you agree to be viewed (and priced) as a commodity. As yet another Rails, NET, Java, or full-stack developer.

An effective differentiator depends on you (your way of viewing the world of software development) and your clients (what’s important to them). That’s why I can’t just type up a list of great differentiators for you here. It’s the Venn Diagram overlap between you and your best clients, and it’ll be different for every person.

Why does differentiation matter? Aside from helping you stand out from others with similar skills, it helps contextualize your pricing. In other words, it can help justify a premium price for your services.

I’ll continue this thread in tomorrow’s email.

In the meantime, check out this free email course on positioning. Positioning is the absolute foundation of effective differentiation, so you need to understand it: http://positioningcrashcourse.com

Talk to you soon,
-P

2,400 rusty screws

When I lived at the Oregon coast, my wife proved to me beyond a shadow of a doubt that she is a patient, determined badass.

We had paid an out-of-work unlicensed contractor to build a deck for us. The deck was 60′ long, 10′ deep, and made from 3″ wide Ipe decking and pressure-treated wood for the support structure.

The contractor was a nice guy but took some shortcuts without asking us. I think I’ve mentioned this guy to you before. There was always some reason he couldn’t work a full day. One day the reason was that his brother had shot himself in the leg with his own gun; twice.

Anyway, one of the shortcuts he took was to use the cheapest Phillips-head screws he could find instead of premium ceramic-coated star-drive screws.

His excuse for this shortcut was that we were paying him a flat rate for the project and he needed to keep his costs down.

We just wanted the deck built and went along with it.

6 months later, half of the cheap-ass screws he used were beginning to rust. This, of course, was a 100% predictable outcome of using the cheap screws.

My wife unscrewed each of those screws and replaced it with a premium ceramic-coated star-drive screw that had an actual chance of surviving the 8 months of rain per year the deck would be facing for the rest of its life.

I figure there are 2,400 screws in that deck: 4 boards per foot x 60 feet, 2 screws every 2′ for the length of a 10′ board = 2,400 screws.

My wife went out each day for an hour or so and unscrewed rusty old screws and replaced them with new ones until the project was done. It took a lot of days. Like I said, she’s a patient, determined badass.

Everything about this story makes me think about custom software projects and how you market your services.

  • We just wanted the deck built without having to care about the details of how, like what screws were used, so we turned a blind eye to some of those how choices. But… I had to actually live with the results of the builder taking shortcuts in how they built it. How could that have gone better? For example, when would have been the right point in that project for the contractor to get our signoff on the kind of screws used?
  • We had spoken to a far more expensive contractor before we hired the one we went with. How could that more expensive contractor have better communicated to us that they would not take shortcuts like using cheap screws and that it was worth paying them over twice as much? And how could they have done that without making it seem like a scare tactic?

How do you market your expertise? How do you assure your clients you will get the project done quickly but without using “cheap screws”?

If you don’t market your services because you don’t have to, congratulations! If you don’t market your services because you don’t know how to do that effectively, check out http://thepositioningmanual.com. It’ll help you with the very first step, which is defining who you focus on and what you do for them.

Talk to you soon,
-P

KaBOOM!

The water heater at my house blew up yesterday, and it made me think of you.

My wife and I live in a smallish house with two cats and my ancient dog Malcolm. Because the house is on the small side, the gas-fired hot water heater is located in a metal enclosure outside the house. It looks like a giant gym locker that’s 7 feet tall and 3 feet wide.

It’s been raining a lot here lately. When that happens, water can accumulate in the bottom of this enclosure, and if there’s enough water there it can extinguish the flame in the hot water heater.

Yesterday my wife was taking a shower and heard this very loud bang outside the house.

I went outside to investigate and smelled a strong burning smell, but nothing was on fire.

I’m speculating here, but here’s what I think happened:

  1. Water accumulation in metal enclosure extinguished flame of hot water heater
  2.  For some reason, gas safety shutoff didn’t kick in right away, allowing gas to accumulate inside the enclosure
  3.  Some other part of the hot water heater was hot enough to ignite the accumulated gas, causing a small, loud, but ultimately non-destructive explosion

This makes me wonder if you have a “safety valve” in your business to protect you from “explosions” like clients firing you, low lead flow, projects going south, etc.

There are lots of potential safety valves, but I favor the following:

  • Multiple forms of revenue. Not a bunch of projects going in parallel, but multiple different but related ways of making money.
  • Sufficient profitability to allow you to weather unavoidable dry spells.
  • An excess of inbound leads so if you suddenly have availability you can temporarily become less selective in order to restore cash flow quickly.
  • A blend of fast-acting and slow-acting lead generation techniques at your disposal so that you can shift your focus to fast-acting ones when you see a slow period coming up in a few months.

You know what I’m about to say next. You’re mouthing the words silently even as you read this…

All these “safety valves” are easier to build for your business if you have a clearly defined, strong market position. I’d love to help you with that: http://thepositioningmanual.com

Talk soon,
-P

Hawks have to hunt even when it rains

In Sonoma County, CA where I live, there are a lot of hawks.

It’s been raining a lot here lately, and I noticed today that even when it was raining some hawks were circling above an apple orchard hunting for food.

The relationship between project work and lead generation activities can be so loosely coupled that we forget that we need to “hunt” for leads even when it’s raining money and you’re slammed with project work.

That’s why more and more I’m recommending that my Positioning Accelerator Program students choose marketing activities that are inherently enjoyable. Fun, even.

Doing this makes it easier to keep up the hunt even when it rains.

Hunting for leads is 5000% easier when you know what you’re hunting for: http://thepositioningmanual.com

Talk to you soon,
-P

Two mysteries centered on The New York Times

I actually don’t know everything, even about the areas of expertise I’m 100% focused on in my business.

OK, now that you’ve cleaned up the coffee you just spit out on your phone or keyboard, allow me to explain…

Of course I don’t know everything there is to know about positioning, lead generation, and email marketing for self-employed software developers. Nobody really could, even if they focused 100% on it for years like I have.

But that’s really what keeps it interesting. There’s always more subtleties to discover, even when you go narrow and deep.

In this email I want to direct your attention to two phenomena that are still sort of mysteries to me. I understand parts of them but not all of them, particularly why they work the way they do.

Mystery #1: Email Marketing

I came across an article from 2015 on Digiday about how The New York Times is using email marketing. Some relevant quotes from that article:


The New York Times has caught the newsletter fever. In the past year, it has launched a dozen of them — it now has a total of 33.

But with everyone seemingly launching a newsletter these days, the Times has to be mindful of the competition for inbox attention. That has meant taking a closer look at what readers are actually interested in.

“Historically, the newsletter has just been based on our sections,” said Dork Alahydoian, executive director of product at the Times. “We realized that’s not necessarily what people are interested in. So we’ve been exploring two ways of looking at it — going beyond sections to lifestyles and different themes. The other approach is going much narrower. It’s no longer a one-size-fits-all.”

The Times wouldn’t say how many subscribers it has but shared some numbers that suggest its approach is paying off. Subscriber volume has grown 14 percent in the past six months, with the number of newsletter subscribers ranging from tens of thousands to several million depending on the newsletter. Average gross open rate (which, unlike the uniques open rate, which is typically lower, counts duplicate opens) for weekly newsletters is 50 percent, with some of its newer ones including Kristof’s, the Times Magazine, Booming and Motherlode have gross open rates topping 70 percent. The gross open rate for media and publishing newsletters is 38.5 percent, according to email marketing company MailChimp. (The Times wouldn’t provide its unduplicated open rates.)

Times users are twice as likely to become paid subscribers if they signed up for a newsletter first.

“Inbox clutter is something we’re sensitive to,” said Nicole Breskin, a digital product director at the Times. “Because it’s so saturated, it’s important we produce something of value.”

The key takeaways for me:

  1. Times users are twice as likely to become paid subscribers if they signed up for a newsletter first.
  2. The emphasis on going narrow and producing something of value.

I see similar patterns in my business when it comes to email marketing.

The mystery to me is exactly why the highly saturated venue of the email inbox so dramatically outperforms other also-saturated marketing channels like social media. I think I could cook up some bullshit theories about why, but at the end of the day it’s still largely a mystery to me. I know what works, but I’m not 100% sure why.

Drip interviewed me today for an article they’re writing on people who email their lists every day.

I speculated a little bit about this question, but at the end of the day I honestly don’t know exactly why anyone from little ole’ me all the way up to behemoths like The New York Times can make effective use of email marketing by going narrow and striving to provide value, but I do know it works.

And you could be doing it too, if you’re not already. 🙂

This leads me to the second mystery.

Mystery #2: The Trust Reservoir

This bit of info from Adexchanger earlier this year:


The New York Times saw its highest subscriber increase since 2011, the year the publication introduced digital subscriptions, following the November presidential election.

It added 296,000 digital subscribers in the fourth quarter, up 19% from the previous quarter and a 45.9% increase year over year.

CEO Mark Thompson said digital subscriptions had accelerated even prior to the election because consumers will pay for quality news products. Providing content worth paying for is part of the Times’ long-term strategy. Subscriptions now account for half of the Times’ revenue.

The broader cultural environment–at least among the subset of people who have the ability and inclination to think critically about issues like where you get your news–included a lot of concerns about political propaganda and thinly veiled advertising, otherwise known as “fake news”. If you think that your problem is fake news, how do you find a solution?

I theorize that you seek the “high ground” of trust. In other words, you ask yourself “who do I trust the most to not publish fake news?”. If that’s the question, then I think The New York Times is the answer for many.

The Pew Research Center put this chart together in 2014:

Trust Levels of News Courses by Ideological Group

The New York Times is not the most trusted news source across the board, but if you look at news sources that appeal to liberals more than to conservatives and those that emphasize subscription revenue (this excludes a lot of the more trusted-by-liberals news sources that are purely ad-revenue broadcast models) you’re left with a small group that includes The New York Times.

Whether or not this fully explains The New York Times recent explosive growth in subscribers, what does this imply for your business?

What could you be doing to develop a reservoir of trust with your ideal clients?

I’m pretty sure building up a reservoir of trust will work very well for you in the long term.

The New York Times is pretty clearly focused on the audience of liberals. What type of client are you focused on serving? If you don’t know, how will they find you? How will you know when you find them? Get some answers to these critical questions: http://thepositioningmanual.com

Talk to you soon,
-P

Funky Hummus

I got food poisoning this weekend.

At least, that’s what I think it was. I woke up at 11pm on Sunday night needing to barf, and then had a wicked fever from 2am until a few hours later.

While I was lying there shivering uncontrollably under four blankets (not kidding), I began to try to isolate the cause.

I think it was some funky hummus I got from the corner store earlier that day. They sell some super tasty hummus, but it’s made locally by this nameless outfit and I suspect on the day they made this batch something was off with their cleanliness or something. My wife said it tasted strange too.

The poison hummus, of course, made me think of this protest sign that made the rounds recently online:

Sign saying: “We gave you hummus. Have some respect.

I do think hummus is a real gift to humanity.

But it’s going to be a long time before I can disassociate hummus from vomiting, fever, and shaking uncontrollably with chills. And I’ll probably never buy the no-name hummus again from our corner store.

My first attempt at using in real life (IRL) teaching to generate leads was kind of a flop, and I didn’t try again because–like the poison hummus–it’s hard to trust that the same problem won’t happen again the second time. Also, I was having much better success generating leads online, so the effort and expense of IRL teaching seemed unnecessary.

Last months’ Dev Shop Marketing Briefing guest expert Liston Witherill gave a fantastic 30m presentation followed by a very interesting 60m of Q&A on how to avoid the kind of mistakes I made with IRL teaching.

If teaching as a form of lead-gen is interesting to you, then check out the recording of that presentation: https://philipmorganconsulting.com/dev-shop-marketing-briefings/dsmb-using-irl-teaching-to-generate-leads/

Talk to you soon,
-P

Inappropriate power frames

List member Lee said some nice things about an email I wrote last week and then asked this question:


At some point could you write a post or email about your philosophy on asking for a reply with each/most/many of the emails that you send?

I ask because I see the “Hit Reply and let me know…” technique being used and promoted more and more, so much so that I wonder if it’s becoming just another tactic for many people with a list. Personally, I’ve started replying to many of these requests just to see if the sender actually takes the time to respond to my reply – it’s my way of gauging the trustability of the sender and their intentions towards their list.

Happy to oblige, Lee. Get ready for a bit of a rant. 🙂

I see this “hit REPLY and let me know” thing being used in 4 ways.

1) Legitimate method of “engaging” with your list

In my email last week about email marketing, I said “engaged email list” several times. I certainly understand if anyone got the impression that having an engaged email list is some kind of ultimate business goal.

It shouldn’t be, though. It’s a means to an end, but not the end itself.

For me, the end is my mission of helping self-employed software developers successfully make the transition from generalist to highly-paid, in-demand specialist.

In other words, that’s why I want to “engage” with my list, and why I consider it important to have an “engaged email list”.

My mission is furthered if I understand more about the people on my email list and build meaningful relationships with them.

Asking for people to hit REPLY sometimes and continue the conversation that I’ve started is one way to learn more and build those relationships.

People hitting REPLY even if I don’t ask them to but they have a question or a reaction to something I’ve said also furthers my mission, and I’m always humbled and delighted when it happens.

So that’s reason #1 people use this technique, and I’m 100% in support of this motivation.

2) Training SPAM filters

When an email list member replies to a list email, they train their email software’s SPAM filter to consider the sender’s email “safe” and not SPAM.

I don’t know a lot about exactly how this works because I’ve been fortunate to not have to learn. 🙂 So I don’t know how many replies it takes to accomplish this training, etc. I just know the “hit REPLY and _______” technique is promoted as a way for email marketers to have fewer deliverability problems and it probably does actually work as advertised.

3) List segmentation

Asking for a REPLY can also be used for list segmentation purposes.

Drip has a reply tracking feature that can identify (and tag and take automated action) when a list member replies to an email, and I’d bet other sophisticated email marketing platforms have similar features.

So some marketers might use the “hit REPLY and ______” technique to identify the most active and engaged segment of their list for some purpose (probably to sell to you 🙂 ). I’ve seen one marketer talk up an upcoming webinar and then say “if you don’t have the link for this hit REPLY and I’ll send it to you”. I’m 90% sure he’s doing this for list segmentation purposes and to train SPAM filters and not because it’s an effective way to give people a link to a webinar. He could just include the link in the email if that was his goal. 🙂 Getting a REPLY from warmer prospects is almost certainly his real goal.

I don’t currently use replies to segment my list. I do have Drip’s reply tracking enabled, but I don’t segment based on that information. I have a somewhat more casual approach to email marketing in general and I’m not currently looking for the kind of optimizations that micro-segmentation can deliver.

4) Inappropriate power frame

I have read more than one book on email marketing that advises marketers to “bounce around” new subscribers in your first email to the new subscriber (often called a “welcome email”). That means asking them to do a bunch of crap like follow you on social media, make sure your email is moved out of the Gmail promotions tab, maybe setting up a special folder for your emails, and hitting REPLY to answer some question, etc.

This is an inappropriate usage of what Oren Klaff calls a “power frame”, which is a subtle (or sometimes not-so-subtle) way of establishing dominance in a conversation or relationship.

Sure… done artfully in a high-bandwidth, realtime conversation, power frames can be useful to advance your mission.

If this power frame thing is done only to establish some kind of dominance over the new subscriber or to get them in a compliant sate of mind, I believe it is inappropriate because it is needy.

It betrays a subtle belief that the email marketer can’t rely on the strength of their mission or the value of their message, and instead needs little optimization “hacks” to get good results from their email marketing.

I reject that belief. If your mission is clear and relevant to the kind of people you are attracting to your email list and your message to them is valuable, interesting, or simply entertaining, then you’ll get the engagement you want without trying to dominate people (which would only interfere with your mission in the end).

When folks join my list I do ask for a reply at the end of my welcome email, but I do it for reason #1 above, not as a sad ploy to establish some kind of power frame.

So there ya go, Lee! Hope this was helpful and interesting.


If your dev shop got fewer than 10 leads last week, you need to take this free email course –> http://positioningcrashcourse.com

The language of Eden

You’ve gotta check out this Quora Q&A I came across recently:


Q: If 2 babies were left alone on an island and they survived, would they create their own fluent language or would it be more like different grunts?

A: King James IV tried it in the 15th century. He put twin babies on an island with a mute couple to see if the children would speak the language of Eden.

The children developed a communication method but the experiment failed because although they might have been speaking the language of Eden no one else knew what it sounded like.

I don’t know what the language of Eden sounds like either, but I do know what the language of self-employed devs who are drowning in leads sounds like.


If your dev shop got fewer than 10 leads last week, you need to take this free email course –> http://positioningcrashcourse.com

It’s not really there

After I shared that Bruce Lee quote with you last week and asked what your “one kick” is, list member Fuad sent me some Youtube videos of him breaking some boards with his unalloyed Karate badassery.

I asked him if it hurts to kick through a wooden board and he dropped this amazing life lesson on me:


No, not at all, if you do it right anyway.  When I was a white belt and just starting martial arts, for our very first board break our teacher explained it to us like this:

Imagine the board as a layer of air, or of water.  Once you realize it’s not really there you will pass through it easily.  The reality was that in fact I didn’t even feel it – you have to see the pieces afterward to know that it actually happened.

This was actually a huge lesson that I took to heart and used over the years as a teacher in many subjects.  When you have an obstacle in front of you – as long as you envision it as an obstacle, you will have a hard time overcoming it.  

Once you accept that it’s not actually there, you have no issue passing through it.  In other words, the real obstacle is in your own mind.  Hardship and ease – these are states of the mind.  For the martial arts students who saw a board in front of them – an unsurmountable obstacle, they focused on the board instead of beyond the board, and they could not break their boards.  

From a physics standpoint, you need to make your target the area behind the board – that is your real destination.  if you target the board, you stop at the board and don’t generate the force to penetrate beyond it.  Same thing goes for everything in life – don’t focus on what you think is the goal, focus beyond it and you will get there in stride.

You know what I’m going to say next…

What about you and the challenge of becoming a highly-paid, in-demand specialist? Is that an unsurmountable physical obstacle or one that exists only in your own mind?


If your dev shop got fewer than 10 leads last week, you need to take this free email course –> http://positioningcrashcourse.com