This may well be my favourite book of the year. It's jam packed with so much awesome that I read it back to back twice, and delved in to some sections multiple times.
I'd highly recommend this book for anyone who runs their own business, my favourite realisations...
It takes only two consumers to make a market. The very foundations of economics, if supply is limited to one unit, and two consumers both want that unit then the price of that unit will rise until one consumer is no longer willing / able to buy it.
This concept is the foundation of the whole book, Priestley argues that to build a business you must always have more consumer demand than you are able to supply, as this keeps price high, protecting your profits.
The remainder of the book is essentially a how to guide, that explains different structures and ideas that you can use to create this effect of being 'oversubscribed'.
A good example of this is differentiating yourself from the rest of the market. Priestley's thinking here is much like Peter Thiel's in Zero to One (another awesome book). Both authors argue that if you create a completely transparent market place, with no barriers to entry then there will always be a race to the bottom as competitors drop prices to compete and profits are reduced. Both Thiel and Priestly discuss how to make your business a monopoly, by creating a unique market place that makes your business indistinguishable to others.
The great example that is given for this is actors. America has hundreds of thousands of registered actors, but only a handful make million dollar salaries. With such a supply of actors in the market, why is the price of the stars so high? It's because stars become monopoly commodities in their own market places. They build brands and networks that distinguish them from the hundreds of thousands of other talented actors out there.
How can you become a monopoly, how can you redefine the market place that you self your product in? What networks, brands, patents and other tools can you employ to make your businesses offering so different that it is protected from price wars and a race to the bottom...?
I realised that what we're doing at Apply.Property is completely unique. At present there isn't a comparable service on the market. As such our tool can give an estate agent a HUGE competitive advantage. To scale the sales of our product what we must do is focus on a very small number of our early clients and ensure that the results they achieve from using Apply.Property are so staggering that other companies in the industry will be banging down our door to get access. This part of the book made me realise that we needed to increase our pricing.
Another section of the book that is worth discussing, what is value? Priestly argues that ideas are free but implementation is paid for.
I couldn't agree with this more. In start-up land people are so protective of their 'amazing' ideas that they refuse to talk about them. They don't realise that an idea is worthless, it's the implementation of making that idea a reality that is the hard work, and produces the value.
This gave me some good ideas on how I could make changes at Apply.Property. While our product has many offerings, the core one that we use to sell is converting enquiries to viewing bookings. To show agents that there is an opportunity here we started to track their performance. Once per week we create a mystery shopper account and email agents to request a viewing of a property. We then monitor the time it takes for them to respond. Sometimes it's quite horrific, here is our league table.
We can give this information out for free. If people then want help improving their performance they can then pay us for the implementation.
This leads to another awesome lesson in the book. Priestly talks about how you can use the 80:20 principle to focus on the right clients. In order to filter out time wasters it's a good idea to put up a small barrier to see who is, and isn't genuinely interested in your product.
We decided to implement a £99 set up fee. It's a tiny amount of money for a business to pay but ensures that they are serious about trying Apply.Property and that they won't waste our time in setting up their account and then never using it.
Getting clients through a sales funnel is an art that I'm still learning. Priestly has some smart ideas on how to make a sales funnel more efficient. Our product is currently binary. You can buy Apply.Property, or not. It means that agents who are 80% interested in buying, have only two options. Even if a client is 99% ready to buy, by definition they are not 100% ready to buy, so they don't.
This is a huge inefficiency, we need to create a product for prospects. A smaller, low risk product that they can buy before they buy the core product. This means that prospective clients who are maybe 20% interested in the core service, can buy a smaller offering and then be moved through the sales funnel to buy the core service when they are ready.
We already have so many companies that want to use our core product that we don't need to create an intermediary offering. However when we start to scale the business this will be something that I come back to. I've already go some ideas about what we could sell. I imagine it will be in the analytics space, helping agents set up metrics to track their team performance and provide reporting. We will do the leg work to help them see their inefficiencies, we will then be ideally placed to sell them the product that will solve their problems!
My ambition will be to develop an eco system of products that can be cross sold and add value in many ways. But we have to walk before we can run!
Some of my other notes that made me think. Do you like/value your customers? Do they like/value you? Can they afford you? Do they have the capacity to pay? What do you have that they value?
What is your capacity? - How many people can you delight?
Are you doing something for more than just the money. Talk about something BIGGER than what you do share your vision!
When building sales Priestly talks about having a campaign focus and he provides some really clear steps on how to structure this:
Talk about the vision, the bigger picture.
Break down objectives into a timeline and make this very detailed.
Create a communications schedule. Emails, Press Releases, PR, Adverts. When will they go out?
The milestones, price rises, cut off dates, early bird specials, what happens when?
Have main events, entertainment, seminars, launch party, grand openings.
Add in shipping dates, when will you be delivering the service?
Post campaign activity, what needs done? Reporting results, telling stories, follow up, thank you messages.
Priestly says that customers need 11 marketing touches and/or 7 hours of content before they will buy something. Thus your campaign should structure how you can create 11 interactions and 7 hours of engagement.
There are stages in this customer journey.
Helping the customer define their criteria, what they want to achieve.
See if they are interested in engaging, are they motivated.
Find the relevance, what do you do that will help them get what they want.
Connect with them, educate or entertain.
Enhance the connection to be emotional.
Build trust and rapport.
Close the deal.
This is another big to do on my list, create a structured 7 hours of content campaign that will enable Apply.Property to have an effective sales funnel that converts prospects to clients. I'm particularly keen to learn how we can do this at scale. E.G. Webinars and events where we can present to multiple prospects at once, rather than one to one sales meetings. We're already working to this philosophy by hosting www.sptr2016.com but we can improve how we structure it.
Priestly also talks a huge amount about forming a team, and creating a company culture. This is something that I am greatly enjoying working on at Apply.Property.
Priestly provide a good template of Internal company mantras:
You get what you pitch for, and you can always be pitching. To do this you need clear communication skills.
Influence comes from output. Credibility comes from results.
Income follows assets. Assets are things that would be valuable tomorrow if the team where hit by a bus today. Brochures, sales script, process documents, working software.
Get famous for the results of your clients. Help find ways to show case your clients success stories. Be their PR company!
You're in partnership with everyone who touches the business, respect them care for them and help them succeed! Create win wins.
Prolific is better than perfect: it will never be perfect. Get on with it!
Innovation never ends. Always strive to do the smart thing, best not easiest. Results.
It made me realise that we need to continually be training and improving the skills within our team. I'm keen to have the capacity of our team grow in the following areas:
Communication, be able to clearly explain concepts externally to clients, and internally to team members. Clear communication reduces mistakes and increases efficiency.
Increase exposure. We do a lot of work but we don't talk about it, we should be publishing blogs, articles, report, content, spread the message of our mission.
Turn insights into products/offerings that can scale. We have the data, we have the developers, we have the customer relationships, let's produce awesome useful tools and get them in the hands our clients!
A large part of creating your own market place and barriers to competition comes from forming partnerships and strategic alliances, this is something we need to get better at.