D SUNDAY ADVOCATE, Baion Rouge, La. [) March 90,1997.) TH “gy DALE DAUTEN ‘SYNDICATED COLUMNIST Avoid pricing yourself short “A mooch is a mooch is @ mooch.” #— Rob Dalton, entrepreneur he other day, Twas sitting through a presentation by aprofessor from the Harvard Schoo! of Arrogance (busi- nesstorium division). He was. working a stack of 4 overheads, many of them of the readed “low chart” variety. One of these was s0 dense that I actually counted 13 boxes and 25 arrows on a single blurry age. Such minutiae sets off what I've named the Lucidity, Paradox: “Explain a concept insufficient detail, and it wall become clearer and clearer uati it eventi- ally disappears.” ‘And what was about to slip into the Lae cidity Paradox vas the professor's most interesting point: that customers are not equal and many aren't desirable, espectal- ly the ones that are prce'sonsitive “switchers.” : ‘What got me back to reality was the ob- | servation of a member of the audience, Rob Dalton, the owner of a company that sells industrial steam-cleaning equipment, ‘who shrugged and said, “A mooch is a mooch is @ mooch, The same guy who beats you up on price is the same guy who is going to complain and is the same guy ‘who is going to alienate your employees.” ‘This entrepreneurial wisdom reminded ‘me of my own experiences with mooches, back when I ran a market research com: pany. Once someone had been idemtified aS A mooch,-instead of discounts, we added a “nuisance tax.” We'd add 20 per- Cent to our bid, then when the inevitable negotiations started, agree toa 10 percent reduction. But even the additional profit ‘was not enough to make the business ‘worthwhile. You give in-on price and get a hard time. Moodley doit Jost hanier con costs, they hammer-dogmn. your spirit, You can! “tara ng at th sometime. Tesked Norm stoch,"who rans Ine Circle, a company out of Minneapolis that creates advisory boards in which business Simersameet an exchange tess, at he has Jesined about pricing strate told me ota sim hes sen in print sBops, ‘Nie offer Quality, Prive, Service — pick twoot the three” Sochr argued that cone sumors understand thet ofthat sent- ‘ment and that we hadbetter acknowledge that they know it’s true. .. What ‘claim do most businesses make ihout themselves? Tes some version ot “igreat products, service and prices.” This seems ike a surefiro business strategy, but, instead, it wil cost you customers Hete is Swches Law: "if you say, ‘The highest quality and the best service at a competitive price,’ people won't trust you.” ‘They wort trust you because they Know, consciously or unconsciously, thats Isr ne Slochr also told me the story of com- pany out of Minneapolis that makes horse Blankets the worlds best horse Dancers, ‘Ter strategy was to sll these quality Blankets at about $85, a price sma to thatofeompetiors ‘The company wanted to increase its sales and Stich solution was 10 increase prices, The owner objected, say- ing "We make a far prot now" But Stoehr explained, the key market i Atablan horse ‘owners, mostly ‘people who are wealthy arid who want the best, ‘tho are looking to buy "a blanket that worthy of the steed So the company creased the price to $250, and sales ‘ent up — not just dollar sales, but unit sales, as well. ‘So hats going on here? You try to dis aunt and merely get roubie. is teh bad karma? Sponge voodoo? Mooch juju? ‘The answer is that price isn’t just money. Price is the start of a relationship. You cut prices to-get business and you don't just Eire up mmey, you pve up respect os well eral you just proved tat your “reg ilar price* was a kind of He. You have proven that your customers have to Keep 4am eye on you, koep after you, that you fan be tasted. in ather words You srt by giving in on price and you've already begun giving up. o é Please sorite to Dole Dauten in care of King Features Syndicate, 285 East 43 ‘Street, New York, NY 10017, or by sending e-mail through CompuServe (73654,3711)mn sous uD 4 lunquenb @ ayenr 0 Ayrumpzoddo ue pass ‘ait nq “soTOUE 90 TATA. ‘ew saquedaog “009 01 ujsnyuoo wsouy punoy nq saam soul Joy asn ou ey uo tou sung ISOC ‘pouslsopioxo ‘aanpadsiod —sxowoysn> uy wo “azaa yeu] pulr—soMyOue aU JO sou soumqur Alzeau oxom yep sionpoxd lop sfea Teubpuauog 0 WOM) 4 4 put dn papua Aatp “somyeay powwonstud -08 49930 0} Asto!20x9) yySn0} soquedui0D -pereyo yeu ZprepNeS AusnpUT au puok —-wod toynA ZBurjoxTEW Ine “99 nom psm.oq pus sou uot 2038 s,Aiysmpuy aj Jo wo PING 07 staeeu Sjadiea Uopsonb uounjuodesip raBeymeape aanioduwc Jo, sy “SoL}sMpuy YA PLE EAD exRsOD + nosy pede Aveduoo iy sms “ang Ase oa puodog sak Suu oars Bq) a peuodey Tew. sep ‘sdueduico amok a8ue4p 0} aoy $9105 “uojehoug a “Hone, “anjea ioriadns éyeoqped sieAnq ayo oy. —yuouraxoadun peuetANOU MeL uu dssopuojl ong seueape Jul auoipe tayo nq ose opLoutaN ped piingao fupxreurpauogyo jou ymsosayj are xa serueduoo ‘pue a1y uy “won nadiod oxy pote stsoUbt! dnooy Wo SUIS ug Sujsodisy aze satzysnput sestuosdiu09 i» pu roxnoun sat] uoRsenD SuBioqneyy aguay puy 3 pIRoy4“saUG}IND Jo} asU—S Ose PRO 1 quedo any ipmpoua pose poe AynestoingossameNyeuaproNOSa CASE CEG) “MA A “onc atn ‘vga wa ToMA MEA IMO BuyOd Aq —TayNp aap puesropu sxBpecy sous, “say TEUINOP 8, jarem —-op ate suoneduioo pue Azisnow ue Surg) —|§ —<—< <_< absoqueduicn TPMOU2-YST BAO) sassauZax smUR ZunjuNN oeaveENS yop Jo SABA wat AftEIO} JapIS TaN, “TaN op o} exhz|s pe ‘op S10) woo 0} siafeuetu saysnd uonesouut Yo ~aduoo yeys ssesse AqTDONMA swesoUELL roseueyy, ‘sad Supzaauoyd Sif ‘uoyay atp 1 sua mda gay ser A tao yryssaoons Ss emp pue saree oo usu ashr og etaes Sunxprs “eagonposdaunoo ynaduio auy Sureaq uo sno0} © 2 “oan oj do nay is orwasai mo mn “SEWITaAPE aA 2paLoyjo L943 Soy azon ye Suga. puw soxeanineu axfsuad ,-tjaduoa Jo wepr ayn Suryoaut anow 6 sysnpar any yee pmaddon pros onsio| Uy suofson ete ee ley Sotad oy Sitoge ey ange Tous edo, jens spusnao ods pov des eu JOYNON S] asvjuvapy aayyadwoy, uoy 4 6st "Te Wea “AVONOW TWNUNOL Lamas TIVM HLWhat's in a Phrase? Page | of 2 BusinessWeek | online ee JANUARY 14, 2005 vieweowT By Steve McKee What's in a Phrase? Companies spend billions soarching for momorable slogans, but the payoft is elusive and other key aspects of business may be neglocted ‘ew years ago, the ediors of Adverising Age came up with a ranking ofthe top slogans ofthe 20th century. At ‘the top of the list: "Diamonds are forever," for DeBeers. Others included Nike's (NKE ) “Just do it," Coca-Cola's: (KO ) "The pause that refreshes,” and Miller Lite's "Tastes great, less filling.” These verbal icons are likely to be recognized by almost every American consumer. ‘Today, however, memorable slogans are the exception, not the rule. Emergence, a brand-strategy firm based in ‘Allanta, recently conducted their second annual slogan survey. They contacted over a thousand consumers ‘across the country and asked them {o identify the businesses affliated with a variety of slogans, The results? Fewer than half of the slogans were known by more than 5% of respondents, and a fifth of them were recognized by 1% or fewer. Ouch. WHO CARES? Take a rif test yourself. Coca-Cola may be "The real thing," but you probably aren't aware that its current slogan is simply "Real." How about GE (GE )? “We bring good things to life" is od news. Now its "Imagination at work.” although you probably didn't know that. Many of the worst performers in the study were some of America's best-known brands, including Wendy's (WEN ), Staples (SPLS ), Kmart (KMRT ), Miller, Chrysier (DCX ), and Sears (S ). And these are companies that spend billions — billions ~ on advertising, ‘The lesson is simple for businesses big and small: Slogans aren't magic, and in most cases consumers don't pay that much attention to them anyway. Companies that focus too much an slogans end up neglecting the truly Important aspects of their businesses. ‘Take McDonald's (MCD ). I's current slogan, "Im lovin it," performed feirly well inthe slogan survey ~ recognized by 23% of consumers. But its previous tag line, "We love fo see you smile,” fll ft. The problem wasn't that it didn’ rol ofthe tongue well enough, or was contrary fo the Golden Arches core identity. The fast-food giant stumbled because its siogan’s underiying message wasn't being translated down to the store level. McDonald's simply wasnt making people smile like it used fo THREE RULES. Rule No. 1 in slogan-making Is to not advertise your aspirations. Saying "We love to see you smile" or ‘Quality is Job One" challenges cynical consumers to prove you wrong, which they're all oo happy to do. ‘The very advantage small businesses often have over bigger competitors is customer service, so the last thing you want to do is put forth an empty slogan that doesn't defver. Rule No. 2'is to give your slogan time to develop. State Farm's "Like a good neighbor" came in at 70% in the survey, followed at 67% by Wal-Mart's (WMT ) "Always iow prices." Both of these slogans have had time to be ‘seeded into the consciousness of the marketplace. Companies that change their slogans too often never give them a chance to take root. You have to be patient. Rule No. 37 Consider not using a slogan at all. After all, people may have a hard time remembering the tag lines http://www. businessweek.com/print/smallbiz/content/jan2005/sb20050114 6617 sb037.ht.. 9/1/2006