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December 31, 2008

Happy New Year... Now Get Back To Work!

Difficult economies can bring out the best in poeple...when the chips are down, you are forced to be more creative than ever.

And so it this last post for 2008 will ponder for a moment what we learned in 2008, in the hopes that it will help us all to be even more effective during what promises to be a challenging 2009:

1. There are no sure bets in business. Lehman Brothers and GM proved that beyond a doubt.
2. The customer is in control. From holding down spending, to bludgeoning Motrin's marketers, to getting Barack Obama elected, the power of the little guy was firmly re-established.
3. Internet strategies are not optional. No one can possibly think that Internet strategies are a second priority any more. Especially in the recession, e-tailing is one of the few bright spots in a dismal picture.
4. Be conscious of phenomena, but implement things that really work. Twitter is fun and engaging, and it can have a real value in many markets, but it is essential to have search marketing, e-mail and other established techniques in your mix now...while keeping a close eye on the new techniques that are evolving customer perspectives.
5. Doors will open. The bad economy may spell the end-of-the-road for more famous names/brands, but as the year rolls on, those customers will seek new suppliers for their needs. Opportunity knocks for those businesses that stay in front of customers supportively during the down market.
6. This too shall pass. This is a tough cycle for the market, but like all other down cycles, these tough times will pass. Start the new year keeping that in mind.

To all my readers, I wish you a happy (and warm) New Year's. See you next year!

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December 29, 2008

What I Learned On Vacation (Pt. 1). Delivering Value vs. A Funky Pricing Plan.

When you go on vacation, you have a lot of time to think (especially if you travel coach because you certainly can't work in the cattle section of the plane...). This year, one of the things I thought about was business models and pricing.

Airlines spend enormous amounts of effort concocting complex pricing schemes intended to maximize revenue per connection/flight. The result is a byzantine labyrinth of prices that make consumers pay for: a) lack of knowledge; b) not being one of the lucky people to get one of the "cheap seats"; c) wanting adequate legroom, etc. I actually believe some transparency might help both the airlines and the consumers. If consumers understood costs better, we might be willing to pay more in return for better service. Of course, given this is the Internet age when we all seem to believe everything should be free (or paid for by advertising) that is a somewhat naive concept.

Take telecoms. If you can figure out telecom pricing structures...you are a better person than I. And now, out comes word that text messages are really a way to fleece customers. But as consumers, we are fickle. We want short-term contracts, low prices, freedom to change carriers...all things that make it harder to plan long-term business strategy. Strange but true, I don't think telecom executives started by saying "Let's devise pricing that only Einstein can figure out." These plans reflect the fact that consumers are smart, and when price plans are simple, we quickly devise ways to exploit them, especially if the products are commoditized. And, telecommunications has reached commodity status, as has airline travel. And while consumer commodities like shampoo can advertise their way to differentiation, service-based offerings like air travel or phone service actually need to deliver differentiated experiences, something that has proved devilishly challenging!

So, how will newspapers, software companies, and the many other businesses being reshaped by Internet transparency and new forms of competition make money over time? Or, how do many of today's "hot" properties (e.g. Twitter) really make money over the course of years? Will 20 million people really be willing to pay for the right to tell you they are about to eat dinner...??? And, will you pay for the right to listen? As for business models based on advertising, they now seem wildly risky given the global "deleveraging". Businesses are being right-sized and based on actual cashflow, not on excess borrowing and vague investment strategies.

Real businesses have costs and helping customers to understand that and justify your price is one of the challenges of Internet transparency. If you are really good at what you do, the value should be obvious. If you are not, then obscure pricing plans seem to be your inevitable destiny (that or hawking everything under the sun like some popular blog sites ;-).

And all this was just on my flight to Lisbon!

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December 17, 2008

Business Marketers Take Note...Time's 50 Best Websites 2008

Why does a mostly-consumer sites article in a general business publication matter if you are the CMO at United Technologies? Or a product manager at Ricoh? or some other B2B marketing type? Trends.

I am sure the blog community will snicker at anyone nominating Time as an "arbiter of trends", but they are (or can be ;-). Yes, some of the picks (Google, Flickr, TMZ.com, and even TinyURL) are well-known and non innovative picks. But they reflect the mainstreaming of technologies in everyday life. Remember that, while we all talk in the blogosphere about "Web 3.0", many companies still do not have a logical and coordinated pay-per-click (aka search advertising) plan in their budgets...

But deeper in the list, other picks reflect the real power of the Internet at work in our personal lives. fffound is a community-driven image/photo archive. CarbonRally turns being green into a contest (what a great idea). And in these sites is depicted the growing socialization of marketing. Yes, it's just "one person's picks"...but those picks are stamped with the imprimatur of a well-established (and still-loved) publication.

OK, those readers who are already forward-thinking are saying "This post is boring." But, from where I sit, the vast majority of markters remain outside the circle of adoption for most new-age strategies in marketing. This type of list should be must-reading from entry-level marketers to CMOs in companies searching for different ways to think. Our lives as consumers help define our business logic...don't be left behind.

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December 13, 2008

Web 2.0 Adoption Matrix

Recently, I watched a client rationalize the "safe" choice among marketing strategies presented to them. That got me thinking about the ways that many companies approach the adoption of new techniques and tools, including Web 2.0 marketing techniques. Throughout my career, I have been consistenly amazed at how much inertia exists in marketing departments -- tremendous resistance to change rooted in the comfort of current knowledge. While I understand the foundation in human psychology, I always think marketing people should know better.

With that in mind, I set out to find a simple idea that would help clients visualize their acceptance of new ideas. The following matrix is a first pass:

The axes on the chart reflect the urgency of change as dicated by the speed of evolution in the market (e.g. publishers have a high urgency) charted against the organizational openness to test new ideas and implement new techniques.

In the lower left, the "Myopic" (e.g. ExxonMobil) don't see the need for change and are commensurately closed-minded about new technologies. In the lower right, the "Innovators" (e.g. P&G, IBM) don't have to change immediately, yet are continually testing new ideas because they know that change is a constant. In the upper left, "Challenged" is the home for the vast majority of companies including big pharma, many name-brand manufacturers and most publishers. This is where the need for change is great, but the attraction of "status quo" techniques (e.g. the "big idea" and the 30-second spot) remains powerful. And finally, the upper right, "Adaptors" are rolling out new ideas because they have been forced into it by overwhelming change (e.g. NY Times).

With marketing being an increasingly mission-critical task in companies (it is the gatekeeper for customer conversations), understanding where your company is on this chart is a valuable reminder of the potential need to rethink the "safe" choice in favor of the idea that may help you breakthhrough and better engage customers in your evolving markets.

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December 11, 2008

All Things To All People.

I spent a lot of time today working on a great sales opportunity. I kept challenging the account team to articulate what the "objective" was. They kept changing target markets, marketing metrics, campaign goals. After a while, it was apparent that we were trying to figure out how to address multiple markets and opportunities with the same basic concept. In short, we were falling into the trap of "all things to all people."

Back in 2003, I was preparing to attend a venture fair and came across a VC quote: "If you engineer to be all things to all people, you risk being nothing to everyone." It was an age-old adage, but I pinned it up on the bulletin board alongside my desk as a reminder...because that annoying tendency seems to be a part of human nature.

This is not an just an entrepreneurial problem. With the auto bailout now apparently collapsed (something I am not too sad about), it is a lesson GM should have learned. If it had narrowed its portfolio and spent more money/effort burnishing the market identity of a smaller set of nameplates, perhaps they would not be in this situation. Or think about Blackberry. The Storm was RIM's answer to the iPhone, but it left behind the one thing the Blackberry was noted for..the keyboard...and replaced it with a clunky, apparently ill-conceived touchscreen.

In marketing, understanding the brand promise is one of the first things you are taught in school. So, what is the brand promise for Burger King? We guarantee to creep you out with our surreal, voyeuristic brand icons? Or, NBC? In the "good 'ol days," NBC carved up viewership with 2 main competitors and everyone was guaranteed sustainable share. Now, all three major broadcast channels wallow in undifferentiated misery. Beyond product strategy is the miserable marketing job that the major networks have done in defining their role in the new media universe. We know what the Food Network stands for, or HGTV and AMC and ESPN. Is there still a space for an undifferentiated generalist?

Changing markets are no longer just a matter of technology advancement. The deepening recession is about to reshape markets in ways few of us could have imagined just 12 months ago. Knowing what you are, what you stand for and who you want to reach now is not just a marketing basic, it is critical to survival.

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December 8, 2008

Building Connections With Customers

I was reading an article in b2b Magazine about 2009 marketing strategies and came across some interesting statistics:

• Visa's luanch of Visa Business Network on Facebook earlier this year had signed up 20,000 small businesses


• American Express' OPEN Network, luanched online last year, attracts over 600,000 monthly visitors

Both numbers will undoubtedly attract attention from B2B marketers seeking to build stronger connections with their customers. There are some lessons behind the numbers, however, before hurtling into the market.

First, both efforts are not-insignificant efforts and are highly focused on delivering value to the visitors/friends. Not every initiative needs to be quite as rich in content as the AMEX OPEN site, but it sets a threshold of expectation that will not be easily matched. However, focusing on content volume is the wrong perspective. Focus first on content value.

Second, these initiatives work in part because of the trust factor each company has established in its brand. A little further in the article are two quotes worth noting:

• "Trust is a brand. All companies will have to find their trust position." Chris Wall, chief creative officer of Ogilvy North America


• "Trust will be a very important brand quality going forward. Companies will need to show transparency in their operations." Mike Mendenhall, senior VP-CMO of Hewlett-Packard Co.

Both VISA and AMEX have established very high trust in a broad swath of customers, and with their well-established brands come eye-popping opportunity in social media.

Fast-forward...what does all this mean to YOU? Here are some thoughts:

• Know your brand (company) -- what it stands for, what customers value in it. From that value comes the seed for any social media opportunity.


• Scale your initiative. Every company with a legitimate value has an opportunity in social media. The key to success is understanding scale and developing a plan that is right-sized to both your goals and to your value. Note...that does not mean small company = small success. Unknown blender manufacturer BlendTec has built a cult following online with its oft-outrageous "Will It Blend?" YouTube video series.
  
• Be authentic. Once an social media initiative starts, the community takes over, and any plan to execute a program that is not your "real" brand will be quickly exposed by the community.

A weak economy is making all marketers more open to innovation and new ideas/concepts. In the long run, this is a potential win-win for both customers (who gain more access and influence) and companies (which gain access and influence!) when well-planned and executed.

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December 4, 2008

Creating Value.

One of the jobs that marketing is often assigned, working in conjunction with product teams, is differentiation. In his ground breaking book "The Marketing Imagination" published a quarter century ago, Ted Leavitt outlined his "whole product" concept in the chapter titled "Differentiation -- Of Anything."

Today, beyond differentiation, we are increasingly focused on defining the "value" our products/services provide customers. This is especially important as you think about what constitutes the "whole product" as it moves through an independent channel of distribution, where distributors and dealers are going to be adding to the layers of value in the final purchased product.

This is part of the sad lesson of GM, Ford and Chrysler. For years, these behemoths lost sight of the "whole product"...the bundle of product, warranty, service, reliability, style, etc. that constituted their offering. They did little to help dealers define and establish value, to their detriment and the dealers'. Back in a 1999 study, Booz Allen consultants concluded that 86% of an autos value was created beyond the factory walls. But Detroit ignored that.

As better manufactured foreign cars moved into the market, and solicitous foreign car dealers focused on customer satisfaction, those "non-factory" factors became big differentiators. And, Detroit cars became easy prey.

The simple "whole product" diagram belongs on every serious marketers wall as a constant reminder of both the components of differentiation...and value.

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December 1, 2008

Finding Marketing Innovation: The Salvation Army

The economic downturn has lots of people nervous...including charitable organizations fearing a downturn in philanthropy. While there is hope that the downturn will not be catastrophic, leaders are rethinking their approach...and supplying businesses with a great example of marketing innovation.

.For an example, look no further than the Salvation Army. This venerable organization has enlisted the Jonas Brothers to add a youthful face to their organization, then launched their online red kettle program -- a Web gadget that users can load to their own Websites to host a local donation campaign.

Their is no guarantee of success, but IMHO, the campaign is a brilliant example of "not standing still and waiting for disaster to strike." The program leverages a core principle of successful philanthropy, local networking, and uses cost-effective Web 2.0 tools to achieve its goal. The Jonas Brothers tie-in tries to make the Salvation Army something other than a dowdy "old people's" organization. The program brings to life many of the basic concepts of social marketing and applies them to a practical problem.

Sometimes, business marketers try to hard to be clever and miss the obvious opportunities. The Salvation Army shows us all that the brightest ideas are sometimes right in front of us and need only to be supercharged by available technology

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