Free Prize: Good Enough?

Good morning! Today I'm hosting Seth Godin on his book tour for Free Prize Inside: The Next Big Marketing Idea. We're on day 5 of the book tour, so there have already been a ton of great Q&A with Seth. Here's the first question that popped out at me when I was reading the book...

Q. Seth, you say about quality: “Of course your product has to be good enough… but being very good is bad. Being very good is invisible.” But that seems to conflict with the observations in “Good to Great” by Jim Collins. All the companies in his book demonstrated average cumulative stock returns 6.9 times the general market in the fifteen years following their transition from good to great. One of the three core tenets these companies followed is “What can you be the best in the world at?” After comparing great companies versus good companies, Jim concludes that “good is the enemy of great” and that being “good enough” will prevent you from realizing the financial success of great companies. Can you share your thoughts on this?

A. We’re in violent agreement on this. If you’re not the Mona Lisa, not the best in the world, not the one worth paying extra for, of course you’re not great and you don’t win.

My point about “product has to be good enough” puts the emphasis on the word “product.” Because the basic item—the toothpaste, the candy, the copywriting services—it’s all the same. The commodity part has be good enough, but the free prize has to be great. The Free Prize is the packaging or the way you answer the phone or the pricing or the delivery or the bonus of frequent flyer miles. The Free Prize is a gimmick until it turns into the thing that people actually talk about.

So, yes, your commodity, your product, the thing people THINK they’re buying… that has to be good enough. But your Free Prize has to be great.

Comments

[Scott Miller]

Yeah, Jennifer, I think agree with what you're saying. Let me put it another way: Positioning is *how* to make a successful product, while branding holds all of a product's attributes and qualities -- branding is how the world sees the product.

I think my point is that without proper positioning, branding is left holding a big bag of nothin'. Regardless of the strength of the branding effort, it's very hard to succeed with a poorly positioned product (i.e. New Coke, which had massive branding). This is why I say positioning trumps branding. But that's not to say branding is by any means unimportant.

[jennifer rice]

Scott, this is where we start drowning in semantics. I think we're all saying the same thing, just using different words. I define 'brand' as the idea that resides in the minds of stakeholders (customers, employees, etc.) and that idea is created by what you say (marketing) and what you do (operations). I see positioning is an exercise conducted by the marketing department -- using their understanding of customer needs, the competition, the marketplace, etc. -- to develop the core position for the brand. Unfortunately, 'branding' has become commonly associated with the logo & tag line, not the entire company as a whole.

[Scott Miller]

Seth, I absolutely agree with your point that *everybody* is part of the marketing department. However, sadly, most companies will never figure this out.

Had you had dinner with Al Ries, I think he'd be more in alignment with your view. Marketing and product development should not be sequential, but concurrent. Successful products are those with positioning baked deep into the design, not slapped on like a colorful sticker via branding. This is why branding is inferior to positioning: Branding is the effort to make people buy your product (very tough to do!), while positioning is the science (psychology) of making your product desirable (much easier).

Ries, IMO, understands this better than Trout, both of whom I've spoken with about these topics (regarding other businesses I'm starting).

[seth godin]

Scott,

I had dinner (name dropper!) with Jack Trout last night. I think he agrees with you, except for one thing:

I'm trying to make the point that EVERYTHING can be used to support these conversations (or anything, depending on how you define it) and that EVERYBODY in the organization is now in the marketing department.

Jack's vision is that the good marketers are smart enough to dream up the right position and sell the product the factory gives them. I'm trying to push it upstream, because I think positioning is often used as an inward tweak as opposed to something that creates widespread fashion ideaviruses.

[Scott Miller]

Seth, it seems to me that positioning incorporates your "free prize inside" theory. Positioning states that being better does not win the day (unless the product/service is revolutionary, and thus "disruptive" to the present product leader, using a term from the book, The Innovator's Dilemma). So, if being better isn't the answer, what is? Simple: the product/service must be compelling, memorable and unique. It must be buzz worthy. And being the *first* to have such a product/service gives the company a giant positioning advantage.

This is all covered over and over in the many books by Ries & Trout. We've been using these techniques in my company for 10+ years, and with tremendous success.

BTW, two great examples of a free prize:

o Starbucks, who learn your name and seem happy to see you walk in.

o Leo Schwab Tires, whose people will literally run out to your car to meet you as you pull in. That simple gesture says, "We care about your business," and leaves a memorable impression on everyone whom goes there. It's hard to take your business anywhere else after this experience.

[seth godin]

I wasn't being as clear as I'd like, so let me try again.

There is no product, no service, no b2b or consumer offering that is chosen solely because it is the "best" at the defined need. In other words, people don't hire McKinsey because it's a better consulting product than Bain. They don't buy Timken ball bearings because their ball bearings are "better" than the other ball bearings and they don't fly British Air because it gets them London 15 minutes faster than Virgin.

What drives irrational humans to make choices are the Free Prizes. We assemble a list of all the options that are "good enough" and then we choose the one we choose for reasons that have little or nothing to do with our needs. Instead, we choose based on our wants.

SO

That means your offering must be "good enough" to make the list. And over time, that bar keeps getting raised. Hyundai, for example, just beat Toyota in the JD Power quality ratings. This means that virtually all cars are now excellent and virtually all cars are good enough. So we're going to pick a car for a reason that has nothing whatever to do with its ability to safely and reliably go from place A to place B.

[Jennifer Rice]

You say "the commodity part has to be good enough" and you reference toothpaste and candy. But what about more complex services? B2B? Technology? Are you saying that regardless of the product, there's always a commodity component?