Everybody likes testimonials.  But what are they really for?

A testimonial’s number one job is to help you help you sell.  A good testimonial shows that your product made somebody else happy: by generating money, saving money, or taking care of some other need that they thought was important.  A good testimonial shows how you’re different from your competition.  A good testimonial from a credible customer shows that you’re a company that smart people are happy to hire.  All of these things help you sell.  And all of these things can help you sell at a higher price.

More subtly, a testimonial strengthens the relationship between you and your customer.  In a good relationship, both sides like to help each other.  And a testimonial is an opportunity for your customer to do something nice for you.  In the process, your customer may begin to hold you in even greater esteem, as they realize just how many ways you’ve helped them.  “Gee, I’d forgotten how good it was to get X product or Y service from you folks.  Thanks!”  And by formalizing their praise in a public way, they strengthen their commitment to working with you.

Meanwhile,  as you ask for and receive a few words of praise, you’re taking an honest look at the value you’re providing to your customer — finding out what’s really great, and forcing some honesty about what you might not have delivered.  And lastly, you’re giving your customer an important opportunity to be heard — not only by you, but also by everyone you’re going to share their words with.

Elisabeth Sullivan at the American Marketing Association recently interviewed me for an article on Demarketing.  I’ll be writing more on this topic throughout this month.  Here’s a first brief entry:

What is demarketing?  As I think of it, demarketing is (1) about making a conscious decision about the things you don‘t want to do, and then (2) making your decision clear to anyone who might otherwise be interested in hiring you for them.

The first part is strategy.  The second part is communication.

If we do a good job of marketing (i.e., making a conscious decision about the things you do want to do and then making your decision clear to anyone whom you’d want to hire you for them), we don’t have to spend too much time on demarketing.

That said, the market is full of temptations, and we need a shot of demarketing every now and then to avoid several traps, among them:

(1) the “yeah, we could do that, too” trap — in which we see a market we might chase because it looks fun and because it looks like it could generate some cash flow, even if the opportunity costs of pursuing that market are too high.

(2) overeager (or poorly managed) sales staff who see only their commissions on any sales, rather than the company’s profits on good sales.

(3) poor-fit potential customers who might show up, take a lot of time and energy, and end up giving you no business or, worse, unprofitable business.

More on this topic all this month…

American businesses do all sorts of crazy things to prevent people from giving them money: they refuse cash, they refuse credit cards, they say “no” when people offer to pay up front, etc. And online — arghhh — how many times do eStores ask us to provide a ton of superfluous information before they let us buy something? (Even worse: some charitable organizations make us provide tons of registration info before we can DONATE with a credit card!)

But you’ve got to love this bathroom attendant I spotted on a recent trip to Mérida, Mexico. His job is to collect 3 pesos (~25 cents) from each person who visits the toilet. I saw him miss out on at least four customers (like the lady pictured above) because he was sleeping.

Nota bene: while he’s clearly violating the “don’t make it hard for people to give you money” principle, he may well be adhering to a higher economic ideal: “spend your time on the thing that returns the greatest value.”

Schmoozing is not Selling.

Sorry I can’t remember the source of this very smart quote.  And I’m even sorrier that I didn’t learn this lesson in my early twenties rather than my (late?) 30s.

In my first job as a consulting engineer, I worked with another twenty-something engineer whom I’ll call “Susan”.  Compared to the other young engineers at our office, Susan and I spent a lot more time visiting with our firm’s various clients, and I rightfully felt that she and I were a notch better at the business side of things than our engineering-only peers.

But when our firm moved to a new building, I couldn’t help but notice that Susan got assigned to a nice private office while I was relegated to one of the large shared spaces.  So why did she rate better?  Turns out that I was spending most of my “relationship” time getting to know our clients personally and building an amicable bond.  By contrast, Susan was spending her relationship time finding out what our clients needed to get done, and telling them we could take care of it in exchange for a large chunk of money.

Schmoozing is not Selling.

And when you get right down to it, while those clients may have liked me more, they were getting a lot better service from Susan.  I was getting to know them, personally.  She was solving their problems, professionally.

Stay tuned for a followup post: Selling is Helping.