Economics · Modern Times

The Business Of Navel Gazing.

Purchase Money.

It has taken me a long time to realize the mistake I made in marketing; it was in discussion with a friend last night that the penny finally dropped.

Now, it would be more than five years ago that I spoke with an insurance agent for ships, and spoke about his business. He wanted a marketer, but only one who knew as much about insuring shipping as he did. That is to say, the kind of person who knows more about insurance than they do marketing – but that’s the crazy world of marketing for you.

This, from my long defunct Linkedin Profile that gets six views in ninety days:

“Marketing isn’t for fools, and there are too many in the biz already. Nor have marketers stood up to the challenges set for them. Mind you, have these marketers been held to account by those hiring them? No. You’re intimidated when they flaunt their classy MBA and you fawn and reluctantly hand over the cash. Well, that’s business, isn’t it?”

Now this shipping agent told me in no uncertain terms that I didn’t know what I was doing. Well, in terms of insuring shipping, I certainly didn’t – which was, after all, the kind of person he was looking for. In terms of marketing, he didn’t know what he needed. But then, isn’t that the point? That marketing is my expertise, and his is insuring ships?

Obviously not.

But that’s the modern world for you. Everything’s complex, and if you are a marketer, you have to be specialized in one field or other so that those who work in the field know that you’re on their side. That is to say, you share their comfort zone. Which is what this post is all about, really. Because purchase money is all about the comfort zone – that is to say, your money is yours. Everything to do with your business is yours… and thus all decisions are based on what you know.

Hence the specialist marketers who deal with one kind of business. They know the business inside out. Whether they understand marketing is not something they speak about very much.

You see, it was whilst I was discussing customers with my friend last night that he spoke of how difficult it would be for me to determine his prices – you have to be in the business in order to know all the ins and outs. And that is when I was reminded of the former conversation with the shipping insurer: they spoke of how they’d been in the business for decades and how could I know anything about their business if I hadn’t been in the business myself.

That is to say, how could I know how to determine their prices for them.

But then, this only says that they knew nothing of marketing. Or for that matter, business. Theirs or anybody else’s. Because if a business is focussing on how much something costs to make – or how much a product can be sold for, in the case of the insurance salesman – none of them are focussing on their customers. The businessmen are all picking at their navels.

It is important to note here that the old adage holds: “the customer values your product more than he values the money he pays you.” This has nothing whatever to do with how much it costs to produce… okay, so it does if all the customer is interested in is the price of a given product. But that isn’t doing business, it’s merely offloading gear onto the unsuspecting. This is the position most businesses find themselves in: they offer a commodity at a known price and the result is they are up against everybody else who provides these commodities… at a known price. The result is a red-hot competitive marketplace. The results of this are for a future post.

Real Business

Real business, properly done, requires no small courage and a goodly amount of intelligence – even if that is in the sense of nous. A natural intelligence, rather than an educated one. That is to say that it takes courage to recognize a customer who is willing to pay what they reckon your service is worth. This implies that what the customer sees of your business has nothing to do with how you run it.

Paying for a genuine service that makes one’s business run smoothly is something that is truly worth money. It was what I was offering as a marketer – yet all that was wanted was somebody who could figure out their prices and then trumpet them to all and sundry.

That is to say, the direct opposite of what I was offering.

The point of this post is to say that if someone mentions how much it takes to produce something, be assured that they’ve gotten something wrong. That’s understandable in a world that sees universities preaching this kind of twaddle, but academics wouldn’t be academics if they didn’t constrain themselves to their comfort zones, what they know and thus to restrict themselves to an understanding of purchase money. That is to say, they pick at their navels and because these academics have authority, people believe that picking at their navel is good business.

The point is this: production costs are entirely within the control of the business owner, and business owners focus on this because it’s safe to do so. That doesn’t mean it’s wise, it does mean it’s safe. The obverse to this is the fact that everybody can do this, and so competition is a direct result. The problem we face today is that businessmen assume that it is the only way they can do business. Everything they know about business is based on the knowledge of their production costs. Is it any surprise that I should hear it said that I should have been in the business twenty years in order to understand what they know? Obviously I haven’t been picking at my navel for long enough to realize this simple fact.

Mind you, picking at your navel in private is rather more comfortable for them than dealing with nasty clients. Hence the attraction to the unwary businessman.

Commoditization Versus Thinking.

The more the product becomes an established commodity, the tougher the market becomes. But then, the more a product becomes a commodity, the less a person need think.

Think properly, that is.

Think outside the box. Imagine things that haven’t been imagined before, the kind of thing that drives a cart and horses through established ways of doing business. To everybody’s advantage. The problem is that means taking risks which means it takes a courageous businessman to even think of this, leave alone do it. Jan the fraudster had the courage, and he had the gift of the gab to sell a dead horse to willing race-goers. He was so convinced that the horse was a winner, he was able to convince everybody else, too.

Had he spoken with me, he might have saved his house, and his business – and at the same time, found a niche that was worth exploiting.

Rather than one that was dead in the water before he had even had his idea.

But it was his house he lost, not mine.

Market discovery – determining if a product is going to sell – isn’t hard to do, it does take doing – and paying for. It also implies that the businessman is ready and willing to accept the reality that his idea might not be the gem he thought it to be. But that’s the problem with modern, Purchase Money business: concentrate too much on your navel and you have little to go on when you begin to imagine great, profit-making ideas. Look out at the world and you will have the opportunity to find out if what you imagine is true, or not. The problem is that you might find out that you were wrong.

And that would never do!

Well, that’s what I learned from that discussion. I learned something else a few days later, which told me something else about his ways of doing business. You see, he bakes breakfast rolls as a sideline to his main business: he buys them in and bakes them off as needed for the next morning. It was when he said that “I buy on quality, not price, you know.”

Really?

Where’s the Purchase Money thinking in that? If you even think of quality, you have stepped away from the comfort zone and you are considering issues that are broader than mere price. Think of quality and you are thinking of the effect it will have on the customer. I meet this on rare occasions, where someone says something like “well, I do try.” Well, in this instance, trying is doing because if you’re trying, you’re also learning from that trying. In short, such people have broken out of the constrictions of their comfort zone and are looking to serve their customers.

It’s what I was offering the navel-gazers. But they didn’t want to know. Too much risk. They’d rather lose money, year on year than take a risk.

But then, if you need a marketer, you’re not running your business properly – as is stated on my now defunct Linkedin profile:

“If there’s one thing I’ve learned about business, those that look to their customers will be beating the odds.

Those that don’t are being crushed by their competition – and crushing each other.

The first make good customers, but rarely need a marketer. The latter make bad customers, and would mess marketers around and make their lives a misery.”

Well, that’s what I learned in business, and it’s why I’m not a marketer any longer. Navel gazers prefer gazing into their navel because that way the harsh reality can’t intrude on their lives.

Well, not until it’s too late, that is. That’s when they panic. But that too, is for another post.

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