3 Hidden Marketing Takeaways From Major Corporations

Tips for Creating a Killer Webinar Presentation

Thinking like a consumer won’t make you rich. If you want to take your success to new heights, you need to think like a marketer. Here are three secrets to start:

1. You’ll never get rich selling a product

Companies that start out selling products often change their business model when they realize selling products alone is an unsustainable model. It’s only when they make the change that they see a new level of success.

A common misconception is that McDonald’s sells hamburgers and fries. Savvy entrepreneurs might think they make their money from selling franchises. The truth is even more surprising. McDonald’s makes their money in the real estate business.

Harry Sonneborn, former CFO for McDonald’s, was quoted saying, “We are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent.”

From hotdog stand to real estate mogul

McDonald’s started out as a hot dog stand run by two brothers in Pasadena. It took the grand vision of a milkshake machine salesman named Ray Kroc to turn the business into a successful franchise model. However, what you probably don’t know is how the McDonald’s franchise model really works – it’s not your typical franchise.

Most franchises make their money by selling supplies to franchisees or by collecting large royalties. McDonald’s does it differently. The corporation becomes the landlord to franchisees.

The hamburger giant purchases properties and leases them out to franchisees at large markups. On top of that, McDonald’s takes a percentage of each location’s gross sales. Only 15% of 36,000 locations across the world are corporately owned. The rest are franchises.

This genius business model ensures they’re able to pay their rent even when sales drop.

2. Big companies switched to the subscription model for a reason

You might remember when software like Adobe Photoshop was only available as a one-time purchase that sometimes came close to $1,000 (for the Adobe suite). Many people couldn’t afford this price tag, so they pirated the software instead.

Today, Adobe, along with other companies both new and old, are switching to a subscription model instead. Consumers can afford the monthly payments, love the convenience, and businesses are able to generate a steady stream of income from subscribers.

Subscription services have reached an all-time high with the introduction of “subscription boxes.” You can have just about anything delivered to you every month. You can subscribe to a monthly delivery of razors, healthy snacks, pet toys, coffee, tea, makeup, tech gadgets, and more.

As an example of profitability, in 2014, Dollar Shave Club reached over $60 million in revenue, triple what it was the year prior.

Remember Blockbuster? Maybe not

Most kids today don’t know what Blockbuster was. That’s because the company went out of business when it didn’t keep up with consumer demand for online movie rentals. Netflix entered the scene in 2000, and Blockbuster never made a move to compete. They ended up with over $1.1 billion in losses.

Subscription models aren’t new

The subscription model has been around for decades, and has been in use by mega successful companies. It’s just taken people a while to catch on.

One company that’s been successfully using the subscription model since the 1970s is Nutrisystem. As this review site points out, “Nutrisystem is a meal-delivery system first and a weight-loss program second. While the company provides a variety of tools and plenty of support for participants, there are no in-person meetings, formal schedules or structure. More than anything, Nutrisystem’s main claim to fame is its simplicity.”

People love convenience; the easier you make it for them to get what they want without getting up from their couch, the more money you’ll make.

3. People buy dreams, not products

The goal for any marketer is to sell you a dream, convincing you their product is your ticket to that dream. That’s why people take out loans that keep them in debt for decades. They want to live “The American Dream” at any cost.

Here’s another example: a toaster isn’t just a way to heat up bread – it’s a revolutionary device that lets your kids make their own breakfast so you don’t have to get out of bed.

Learn from the marketing pros. Appeal to your market based on their dreams, not the features and benefits of your product. Move away from the consumer mindset, and into the mind of a top-notch marketer.

 

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