PCA Magazine Fall 2019

36 PCA The Magazine | SEPTEMBER-OCTOBER 2019 PREMIUMCIGARS.ORG Andwhen you look at aHarley rider revving his engine, this need has been validated. We are a species that is desperate for validation. When something gives us joy, we return to it faithfully and do so until it doesn’t. If people are constantly seeking validation about themselves, why shouldn’t we be the people giving it to them?” When people discuss a business, said Schmidt, they refer to the company as “they” … talking about the human beings who represent that company. To be competitive, companies should therefore be striving for “they plus” where the brand and the people behind it represent somethingmore for the customer. “If a person doesn’t have a positive they- plus story to tell about the company, what will become their primary purchase criteria? It will be price and convenience,” he said. “If you don’t have the plus behind the they, bad things happen. “Everything today being sold is a commodity. If you take the name off the product, people can’t tell it fromsomething else. Commoditizedmarkets always drive the price down. People, absent the they-plus story, will always buy the cheapest stuff available.” In any industry, as it matures, they start to lock stepwith their competitors. If one starts talking about quality, they all do it. The problem, Schimdt said, is when everyone is saying the same thing nobody listens anymore. It creates a level playing field where you can’t chargemore. All the stuff is the same somost companies go the cheaper route. “The value of a product is what people say to be true and believe to be true. When a product and the people behind that product are spoken about positively, the value increases. When this happens you don’t have to sell on price. People then think they are going to paymore because it’s worth it,” he noted. SEMINAR SERIES As in past years, the showkicked off with its seminar series, addressing two main themes: branding and social media marketing. In addition to the brief recap below, PCAmembers can access full audio and PowerPoints of the seminars on premiumcigars.org . DEFINING YOUR BRAND “In the retail environment we are not talking about the initial purchase, it’s the repeat purchases, cross-selling, upselling and, maybemost importantly, it’s about the advocacy: having people tell others about their experience in your store which may bring in new customers and potential referrals,” saidMark Carr, president of Carr Consulting Group. Carr outlines three coremarketing concepts for tobacconists: • Build a strong brand: how you are defined in the eyes of your customers. • Understand your competition: determine which unique values you bring to themarketplace. • Identify the customers you are after. These three concepts, said Carr, come together in developing a “value proposition” to focus and drive strategy. “One way to look at this is howWall Street looks at it,” he said. “Take, for example, the Coca-Cola Company, where the brand represents about 50 percent of the company’s value. If Coke were to go completely out of business, perhaps froma natural disaster, destroying all their physical assets, they could still walk into a bank and get a cash loan to rebuild. That’s the value of a brand. Brands used to be amonologue, now it’s a dialogue. Brands used to be conveyed by word of mouth or one-on-one. Now that word of mouth includes digital and online andwhat they say about your business online.” Carr said developing a brandwill drive purchase behaviors, and it’s not about what you promise or say to your customers, it’s about what you deliver. If what you say is alignedwithwhat you do, then your business will find success. If not, you’ll end up in a “brand death spiral.” “A complaint is told to seven people and a referral to only one or two,” he said. The idea is to always be creating value by offering your customers emotional benefits (howdoes it makeme feel) and expressive benefits (howdoes it makeme feel in the eyes of others). “Take Volvo … a really safe car and they promote safety as a functional benefit. So this also has an emotional benefit. I feel safe and I can afford a Volvo. The self-expressive benefits also come into play ... I can afford a Volvo, I can afford the best formy family,” he points out. To position your brand, Carr said, your brand needs to be distinctive, motivating, believable and executable, and you need to clearly identify your target market. What are customers going to buy fromus?How much do you know about them? A value proposition answers these question. Howdo you create your value proposition? Carr said to tailor your operation to deliver value, identify your customer segment, do an honest gap analysis (what can you do better?) and develop a narrative that distinguishes you fromyour competition. THE CYCLE OF SERVICE “Everyone’s business is a brand. It’s not just a store,” saidMichael Herklots, vice president of retail and brand development at Nat Sherman. “You have the core values of what makes a brand. Spend some time clearly defining your brand; what does it mean, what does it stand for, what are you andmore specifically what are you not. As you begin tomake decisions about your business, make themmeasured against the question, is this in line with the authentic core qualities of my brand?” Inmanaging Nat Sherman’s store inNew S H O W S T O P P E R S