tactics vs. strategies in business and selling
If you are in business or in sales there is something that you must learn and that is the difference between a tactic and a strategy. I must give credit where I found this brilliant information and that is Chet Holmes. When I first heard about this I thought “Why didn’t they teach it this way in graduate school? “
If you think of your process as a puzzle whether you have an internet business, brick and mortar shop or you go out and do sales or have a sales force. Every action has to be deliberate and have the responses as what is wanted from the clients defined. We will start by asking a few questions and then get into some of the best business information I have seen in a long time.
- If you have a sale on your products is that a tactic or strategy?
- If you have a price drop is that a tactic or strategy?
- If you run an advertisement is that a tactic or strategy?
For some of you out there it may be both, well at least you think so.
Let us start from the beginning. A tactic is just one move or 1 simple step that could be a guess with no other action planned behind it.
A strategy on the other hand is a group of tactics designed to encompass each other and make up the strategy.
Let’s take a look at the examples and start with a product on sale and a price drop since both are close in what they do. If a company or person simply drops the price to get a sale nothing has been done to rebuild the profits lost for the company or person selling. As a side note anybody can sell on low price and run their company into the ground, profit is the lifeblood of any company.
The correct process would be that of adding a condition to the sale such as: If the price is dropped so many widgets have to be ordered to make up the difference and they have to be paid for wish cash today. The other part would be that the order is automatic from here on out. The best part is that there has to be something else involved like an up sale of a valuable product that does help your client. If you have bought anything on the internet lately companies take you through the up sale process as you check out.
The up sale starts with thanking the person for the order and then jumps to the next page where all of your resistance is broken down. Normally they start with a product that is twice as much as what was just purchased. They know you will not buy this one. Next is a lower priced product about equal to what was just purchased. Some people will buy this one. Now is the product or service that is the “target” for you to buy.
So you just bought a DVD set from Scott Sylvan Bell and it was $377 market down from $631, my first up sale would be that of something similar with almost the same price for this example it will stay at $377 for a similar product that was once priced at $631(and you think to yourself no way am I spending another $377 , that’s $754 dollars and I barely had enough to buy this product, I am clicking no. You brain may start to think wait I could have saved $518 and that regret starts to build, should I have done it is the next thought?). You are getting close because now you are in their sales funnel or buying web and you are starting to think about what you are missing out on.
So here is your second sales strategy option the DVD set at $377 marked down from $631 and now the offer is that of a CD set at $177 marked down from $277 (and you think to yourself I am not spending $544 today but if I do I save $354 today and I really do want that CD set). All of the sudden you notice you can break the purchase into 3 payments something you didn’t notice earlier. You are tempted but you say no. Once again the regret in the back of the brain jumps in but you cannot click the back page. The seller has just “put” some regret on you, something that will work well for them on the next page.
This is where a well developed strategy works for you as a sales person or business owner. The buyer or you for example says “I am not missing out again I am going to buy another product, I am not going to miss out again”.
As a side note buying resistance is like a glass of water for a short time. If every time a no is gained pour some of the water out of the “resistance” glass, the buying resistance has been lowered. Hence some of your selling strategy is in the resistance. A sales tactic would not have any of this the product would have just been on sale. Later on in the day the sales resistance will be energized by the buyer automatically.
Your next sales strategy option appears and it is the awesome DVD set for $377along with a training CD for $127 marked down from $197 and you see the option, you have just gone through a process where you said “no” a few times, your buying resistance is down because you can only hold so much at one time and you look at what has already been passed up and you click the box. You now have just bought the DVD set and the CD set not because of the overall cost but because what you have saved. Both the DVD set and the CD together should have been $828 you paid $504 and saved $324, what a value.
Congratulations you just went through a sales strategy that got the company 2 sales instead of 1, was it ethical? Sure as long as the products are good and worth what the original list price was. The best thing of all is that: you as the buyer are happy you got such an awesome deal on the products. The seller also has you on the hook later to get some of those products that you missed assuming that you do get value out of the products that you offered as the resistance earlier.
If the products are great your consumer will look at those other items as missed as must haves and just like a compulsion to complete they will come back and buy them later. Think of this like baseball cards, magazines or anything else that people collect. Sales strategies work sales tactics do not.
For the third example you run an advertisement but have not defined what that ad is supposed to do. An ad agent just tells you to put up ads and run on volume so you listen and keep paying them.
Some of the best advertisements ever have been ongoing stories similar to Maxwell house coffee. This is what the NLP crowd calls an open loop. Buyers or people who are paying attention do not want to walk away without hearing the rest of the story, almost like there was a news cast of something important and the television or radio shuts off. The buyer thinks “what was that, where is the rest I have to know more”? Now they are in your selling strategy. As mentioned above people crave completion and you now have some “mental real estate” for your future use.
This advertising strategy now has a captive audience instead of noise in the channel about a sale. Everybody has sales and they can be effective or ineffective based upon your strategy.
The second component to your advertising strategy is tracking the advertisement. On the internet split tests can be run to figure out what ad is pulling the best response. In a brick and mortar business your advertising agent does not want you to be able to determine the value of your investment. That is their sales strategy; see how it’s coming together like a puzzle. You must track where people or clients are coming from in order to know where you are making your money and where you are not.
Part of your strategy is to find advertising that is effective and you can mainly tell from tracking. Direct advertising is that where your potential buyer takes an action, part of your sub strategy is to get them to do something: go to a website, cut out a coupon, o r even bring a stuffed animal into the store. Remember the more steps you have the more of a strategy that you will have. One step is a tactic and can be use full for only so long.
