Marketing Principle – Rule Of Three

There\’s a marketing principle called the rule of three. This rule says that your product or service must be superior in at least three ways to any competitive product or service in your market. It must be faster, better, cheaper, easier to use, higher quality, more convenient, or superior in some other way.

But you must have at least three reasons for a person to switch from their current product or service to yours. What are they? This is not to say that you cannot enter the market and defeat your competitors with your new product or service. But remember, your competitors are usually very determined and more experienced than you are. They will be very aggressive about protecting their markets and their customers. They will upgrade or otherwise modify their offerings, cut their prices, increase their services and do everything they can think of to frustrate your desire to enter the market.

You must be prepared for what is called competitive response. Whenever you try to sell something to anyone who\’s already purchasing it from someone else. In analyzing your competitors, you must find out exactly how much of your proposed product or service they are selling currently, is this market fixed, growing, or declining?

  • If the market is fixed, you will have to take away market share from people who are determined not to give it up.
  • If the market is declining, which means that there are fewer customers for this product or service each month and each year, you should think very carefully about whether to venture into that industry in the first place.
  • If the market is growing, you must determine how much and what you can do to get a reasonable share of this expanding market.

You must find out exactly what your customers are charging, how much customers are actually paying, and the total aggregate size of the market. In many cases, you hear claims that competitors are selling large amounts of a product or service at a particular price. But when you do your homework, you find out that the actual quantity of sales is much lower, and the price that they are actually getting from the customer is considerably less than the amount that they are advertising or charging initially. This reality can considerably change or skew the economics of getting into this business.

Now, here\’s an important fact that I will repeat over and over again and again, no one really cares about your product or service. No one cares what it is. No one cares about how it was developed or the technology that went into it. Nobody cares about you or your company or your history, or your background. Nobody cares about you or your product or service at all. All that people care about is what the product does for them.

  • Customers buy one thing and one thing only: improvement.
  • Customers buy a product or service only when it is absolutely clear to them that it will improve some aspect of their life or work cost-effectively.

Economists say that every human action is an attempt to relieve a felt dissatisfaction. The customer must feel or be made to feel dissatisfied, discontent, or unhappy with their current situation, and simultaneously see that purchasing your product or service will relieve this feeling of discontent.