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Define Your Terms

By Peter Lowy

Nearly everybody has experienced it. You've used a word for years but may not really know its precise meaning. While in most instances a dictionary will settle the matter, there are a number of business and marketing concepts where the dictionary definition is lacking or even non-existent. The following primer may help.

Strategy. One of the most commonly misused terms in business, strategy is about deciding which market you will serve. Period.

Tactics. All the activities you undertake to realize your strategy.

Leader. Someone who sets strategy and manages risk, and harnesses the energy of other people to achieve business goals.

Competition. Whatever can substitute for your product or service. Customers define your competition, which might not be who or what you think it is.

Loyal customer. More than just a repeat buyer, it's someone who will advocate for you and bring you other customers.

Customer value. At a minimum, it is the net present value of expected lifetime revenue. This value multiplies for loyal customers who bring you more business.

Loyal employee. It's a worker who helps to build the business. Rambunctious employees with ideas therefore may be more loyal than others who make no waves but who never really help advance the organization.

Marketing. It's everything you do to help make a sale. It includes R&D, customer, supplier, and employee relations, pricing, packaging, promotion, public relations, advertising, Web design, even the way your people answer the telephone, and more.

Prospect. Someone who would have good reason to buy from you. Someone who is capable of buying your product, but has no reason to do so, is a suspect. Many organizations waste a lot of resources talking to suspects instead of prospects.

Reality. How the people you must engage perceive your value, which may be at odds with how you perceive it.

© Peter Lowy