This is the first in an updated series of posts where I explore how numbers can help you in your business regardless of the size or complexity of your operation.
I am starting with 5 and 7 because they represent the number of elements that the average human brain can remember. Five represents the low end and 7 the upper end of the range.
Five fingers and toes
Starting with five, it is the number of fingers and toes humans have on each hand and foot. When we learn to count we realize this. When some celebrate a victory, they share a high-five. Postal codes in the US have five numbers before a 4-digit extension that many do not use. After five primary grades that follow kindergarten, students graduate to middle school. Age 5 is when most kids officially begin their formal education – spending significant time with adults other than their parents. The headquarters of the US Department of Defense is in a five-sided building called the Pentagon.
The Boston Consulting Group developed a model that relates market share and profitability in a domestic market. The model says that companies that have a ≥ 20% share in a domestic market are almost always profitable, whereas companies that have ≤ 15% market share may or may not be profitable. If one were to divide 20% into 100%, that leaves room for five major players in a domestic market that are likely to be profitable. If you divide 15% into 100%, the number is between 6 and 7. Once again, there is room for 5 to 7 players in a domestic market. Those that have a ≥ 20% share of the market are likely to be profitable. For companies that have a ≤ 15% market share, their profitability is less certain. If you look at most pie charts that represent markets and you count the wedges, you will typically find 5 to 7 wedges, which is consistent with this model and with the number of things the average human can remember.
The Power of 7
Seven keeps coming up again and again in just about everything. It is a lucky number in many cultures, and in the USA, phone numbers have seven digits plus an area code. There are the seven wonders of the world, the seven dwarfs, seven continents, Shakespeare talked about seven ages of man, seven deadly sins, seven virtues, and seven is the optimum hours of sleep for humans.
7 fundamental building blocks of marketing
While many in marketing learn the 4P's, that is not enough since it does not include three essential elements of marketing’s periodic table - the marketing information system, corporate image, and positioning. To correct this, a 7 Building Blocks™ model is provided below.
- Marketing Information System strategies to research the market and to continuously collect, analyze, report, and act upon information from the marketplace.
- Corporate Image strategies to create, protect, and enhance the image of the organization.
- Positioning strategies that identify the target audience with an unfilled need and fill that need better than competitors with a unique and compelling image of the product.
- Product strategies that provide the goods and services that the target audience wants.
- Pricing strategies that offer the product at prices buyers are willing to pay and for which sellers are willing to sell.
- Distribution strategies that make it convenient for the target audience to find, buy and use the product.
- Promotion strategies that communicate the benefits of the product in such a compelling way to prompt a buying action.
Universal Marketing Structure™
A model to help clients and students communicate more effectively is the Universal Marketing Structure, which also contains seven main elements.
- Headline. Data shows that 83.3%, on average, only read and remember the headline of a communication. Therefore, it should contain (1) unique and important benefits, (2) a hook to interest the reader to take further action, (3) the name of the company and product (unless the positioning strategy requires separation).
- Body text. The Body Text should provide more information and details for those that are interested to find out more about the product and company. Since only 16.7% get to this point, marketers should not rely on people reading the body text.
- Close. The Close should (1) Solicit a Buying Action, (2) Tie-in with the Headline, (3) End the communication, and (4) Contain a Marketing Information System code to measure the success of the communication.
- Photo and Graphic elements. The photo and graphic elements should help to communicate the main unique benefits, be visually compelling, show the product looking as good as possible, function as a size reference if necessary, help to break up the body text into "bite-sized" pieces, show before and after examples if appropriate.
- Format. The Format should make it easy for the busy or lazy members of the target audience to find and remember the main unique benefits of the communication without forcing them to read, listen to, or watch the entire communication.
- Signature. The Signature (which is comprised of the name, logo and slogan) should give identity to the communication and further the relationship between the target audience, the product, and the company so the prospect is comfortable buying.
- Everything else. Since people typically can remember up to 7 elements, all other important issues such as design, color, fonts, size, shapes, selling psychology, and putting "the WOW" into the communication should be considered here.
How you can apply the power of five and seven to your business
If you are thinking of entering a domestic market, count how many competitors are already in that market, if there are more than four, you should probably not enter the market unless you have an important unique advantage over the others that will allow you to take business away from them.
To help your target audience remember what you want them to remember, you’ll be more successful if your list has no more than 5 to 7 items. Best of luck.