“Oversubscribed” by Daniel Priestley is a business guide that advocates generating more demand than supply before selling, reducing risk and increasing profits. It is divided into two parts, with the first focusing on building demand and the second on marketing campaigns. The book also includes comparisons with other influential business books and actionable advice on creating remarkable products.
Create More Demand Than You Can Meet
This section focuses on the key lesson of Oversubscribed: To increase profits, attract more customers than you can serve. The benefits of word-of-mouth advertising are also discussed, along with strategies for getting people talking about your business. According to Priestley, this is the most effective way to create demand for your product.
The Core Message: Exploit the Law of Supply and Demand
Oversubscribed aims to increase profits by creating more demand than can be met. Priestley explains that the law of supply and demand affects pricing: high demand allows for high prices and significant profit. Additionally, popular and scarce products continue to generate demand. Therefore, continued advertising is crucial even after demand exceeds supply.
Build Demand Through Word-of-Mouth
Oversubscribed emphasizes the importance of attracting more customers than can be handled, with a significant portion of the book devoted to methods of achieving this goal. Priestley cautions against mass marketing strategies such as commercials and printed ads, which are less effective due to people’s general weariness of being advertised to.
Instead, he advocates for word-of-mouth marketing, which has become more effective than ever thanks to social media. People are more likely to buy products that their friends are using, and social media allows for easy and rapid sharing of information about companies and products.
Here are ways to make people talk about your company:
- Be remarkable and unique to stand out.
- Undercut competitors’ prices to gain a competitive edge. IKEA is an example.
- Offer a more convenient product or service. Streaming services replaced cable TV due to convenience.
Method 2: Advertise Your Company, Not Just Your Products
To build brand loyalty and withstand competition, create a market niche by designing your company’s image. Advertise company values, such as supporting a charity or offering good employee benefits. Additionally, prioritize good customer service and use surveys to improve it.
Drive Interest With Campaigns
To make your business profitable, Priestley advises being a campaign manager, not just a salesperson. Connect with large numbers of people through special events and mailing lists. Priestley’s method for a successful marketing campaign has five phases, which we’ve organized into five steps:
- Connect with potential customers through special events and mailing lists.
- Build interest with informative and engaging content.
- Offer a low-risk way for customers to try your product or service.
- Sell your product or service.
- Deliver and celebrate your success while continuously innovating.
Step 1: Determine Your Supply
To plan a successful campaign, Priestley recommends determining your business’s capacity in terms of how many customers you can serve and how often. This will vary depending on your business model, such as handmade clothing with limited orders versus a family restaurant serving many customers daily.
Step 2: Prime the Market
To sell successfully, you need to know your target audience and communicate with them clearly. Determine if your ideal customers want and can afford your product, then send regular newsletters to keep them interested. Priestley also suggests offering subscriptions for updates about specific products to maintain the relationship with your customers and gauge their interest.
Step 3: Reach Critical Mass
Priestley’s Oversubscribed emphasizes the importance of having more demand than you can fulfill. To determine the appropriate level of interest before launching your product, Priestley outlines three goals. If you meet at least one, you’re ready to sell:
- If there is strong interest, sell when engagement is five times the amount of product, which could be demonstrated through preorders and deposits.
- If there is moderate interest, sell when engagement is 10 times the amount of product, which could be shown by event attendance and mailing list signups.
- If there is mild interest, sell when engagement is 100 times the amount of product, which could be indicated by clicks, views, and downloads.
Step 4: Make the Sales
After generating enough interest in your product, the next step is to make sales. While this should be a straightforward process, many new companies struggle with it. They feel uneasy about asking for personal information and money, leading to wasted time and failed deals.
However, it’s important to remember that a sales conversation means the customer is already interested in your product, so there’s no need to feel uncomfortable. Simply collect the information and money you need to close the deal confidently.
Step 5: Keep People Talking
After making sales, Priestley suggests exceeding customer expectations to excite them and start the next marketing campaign. This could include free samples or small gifts. You can achieve this by setting customer expectations slightly lower at the start.
However, research suggests that making the most appealing promises you can live up to is the best approach, as exceeding promises doesn’t necessarily make customers happier. Lastly, when starting the next campaign, highlight your business’s success to create demand.