The Science of Marketing

I recently decided that marketing needs a few more Ps.  Don’t worry, the classics; Product, Place, Promotion and Price; still apply.  But over the past year, the more I worked with clients on company, technology and product launches, the more I encountered four new Ps: Problem, Promise, Progress and Proof.  Here’s why I’ve added them to my marketing lexicon.

Problem

Just as all good stories have a villain, all good products have a problem (in high tech marketing, that’s why "solution" is such a popular word).  But many times in marketing, we acknowledge that there is a problem, but we don’t spend enough effort getting to know it, and we certainly don’t spend enough time talking about it.  The problem your product solves is the villain in your story – so build it up, show the reader how evil the villain can be and what effects it has on its victims.  The better we are at articulating the problem, the more our attractive our solution becomes.  Here’s a problem from last year that many companies are still playing to: gas is wicked expensive.

Promise

When we launch a product – ahem – solution, we make a promise.  Example: to develop a car that goes 40 miles without burning a drop of gas.  As you think about your company’s promise (or promises), try to balance the bold and the relevant – making a strong statement, but making sure it appeals to the people that can make or break your company.  And by all means, remember to link it to the problem you’ve identified and promoted.  If you find that your company’s promise has nothing to do with your market’s problem, go back and rethink one or the other.

Progress

I’ve identified a problem, and promised the market that my product is going to save the day.  Now what?  Pretty quickly, we have to show progress, demonstrating that we’re on the right path to delivery.  The need to show progress is most acute when there is a long gap between the promise and the delivery of a solution.  Think about GM’s announcement of the Volt in 2007.  Here we are two years later, and still nothing.  But that’s cool, right?  Because every six months or so, the company has provided updates on its progress – announcing the availability date of the first production model, leaking photos of the new design, and indicating that testing has begun.  Many of my clients develop complex solutions to difficult problems, and that can take awhile, so I spend a lot of time working with them to keep the progress flowing.

Proof

Here’s the big finish, the moment we’ve all been waiting for: the end result of lots of progress made delivering on a promise to solve a problem.  Proof can come in many flavors – quantitative, qualitative, case-by-case, market wide, from an analyst, from a test lab, from a customer, or even from a simple photo.  When GM finally rolls the first Chevy Volt off the line, pictures will be taken.  But is a photo adequate proof that they’ve delivered on the promise?  How about when the first Volt owner drives her car 40 miles without a drop of gas – is that enough?  Maybe a stellar M.P.G. rating from the E.P.A.?  GM’s first profitable quarter?  We’ve all got our own burden of proof when it comes to the promises companies make, so it’s only fair that our constituents will have their own benchmarks too.  For that reason, when it comes to proof, too much is never enough.

I’ve been using these four Ps for some time to help keep my clients (and myself) on a path to good marketing.  I like to create a simple table with a column for each of the new four Ps, and start by listing each of the promises made in marketing.  Then I fill in the problem, progress and proof columns for each promise to see where the voids are.  Give it a try- it’s a simple excercise that can tell you a lot.  I promise.

I just read a post from Drew McLellan that is both simple and true.  In "Are Your Eyes Bigger than Your Budget," Drew reminds us that we have to draw a line when spending money on marketing.  The moral to his story, I believe, is not that we should cut back our spending to the point where we’re no longer marketing, but that we should let our budgets be our guides to prudent, effective programs.

There are plenty of ways to burn through a marketing budget without getting much return.  Sometimes I feel like a broken record when I say this, but the most important thing we can do is focus.  We should focus on the audiences that are critical for success.  We should focus on the conduits to those audiences that offer the most credibility and the broadest reach.  We should focus our messages on the one or two things that meet the audience’s urgent needs, while differentiating us from our competitors.  And most importantly, we should focus on our marketing goals as an acid test for green lighting any program.

Budgeting is a pain.  Always has been, always will be.  But an even greater pain than the act of budgeting is the realization that we’ve wasted precious dollars on programs that didn’t provide a return.  In order to avoid this kind of pain, focus on your audience, conduits, messages and goals before you start plugging numbers into a spreadsheet. 

Here it is, only two days after the historical election of 2008, and the campaign signs have already started to disappear.  I’ll miss them, because the multitude of ads that always seemed to congregate together at intersections and on hilltops always made me chuckle.  How could anyone’s message get through when there are 30 – 40 signs all vying for attention?

These masses of competing signs remind me of crowded markets, and how difficult it can be for a company to get its message across when so many others are plastering the neighborhood with their own signs.  When you find yourself up against several other companies that all claim to do exactly what you do, it’s time to stop printing signs, and start looking at your messaging and marketing mix.  Here are a few tips that might help your company slice through the noise.

Get to know your market and audience

If you expect to reach your audience better than your competitors, you need to know your audience better than your competitors.  By segmenting your market into a few manageable groups, you can talk to each group of companies based on their unique attributes rather than as a single unrelated mass.  But go beyond segmenting your market – profile your audience too.  Whenever there are multiple stakeholders involved in a purchase (as is often the case in high tech business to business selling), it’s important to separate those who can recommend, influence, overturn or approve a deal.  Once you know who you’re talking to, work to understand the unique concerns of each group as the foundation of good positioning.

Be Different

If your competitors are all saying the same thing, don’t join the party.  Look at what the other companies in your space are claiming, then find the holes in their stories that present an opportunity for you.  The more you can align a differentiated message with the unique concerns of your audience, the better chance your message has of getting through.

Change The Channel

Just because your competitors are printing signs, it doesn’t mean you have to.  Look at all the options available for generating awareness and find a venue that nobody else has thought of.  If all of your competitors are advertising in a trade publication, sponsor their monthly newsletter instead.  If everyone else has a booth at a trade show, secure a keynote speaking slot and sponsor their cocktail reception.  If everyone else uses lawn signs, get a blimp.  You get the picture.

Just because everyone else is saying or doing it, it doesn’t mean you have to join them.  The key to standing out in a crowded market is doing a better job of talking to people on their terms, presenting a better story than your competitors and selecting opportunities for awareness that nobody else does.  

In January, we wrote a post, "Getting The Brand Together: Consistency", which discussed brand promises – that what you say better be what you do.   Well, to do this you need to sit down and think hard about what it is you do and how to reflect that in your brand.  Consumer product companies have institutionalized this process.  High tech B2B companies to a less extent and high tech B2B start-ups not so much.

In the beginning, the usual process with a high tech start-up is: start a company, get a creative designer to design a logo, pick some colors and fonts.  Sometime later, messaging is developed.  So, the look and feel (visual brand) and the language (verbal brand) of the company are disjoint and possibly out of sync.  With so many companies vying for your audience’s attention these days, consistency is critical – so it is critical that the visual and verbal brand act as one.

There are three main concepts to think about when architecting an integrated brand.

1. The Word - Think about what your company does.  What word does it bring to mind?  Now, how can you get your brand to look like this word?
2. The Core Values – Think about how your company does what it does.  What values does it bring to the market.  Now, how can you add flavor to your brand that reflects these core values?
3. The Market – Think about your competitors, partners and customers.  What do their brands look and sound like?  Now, how can your brand stand out while fitting in?

By approaching your brand development in this structured way, you are more likely to have a tighter bond between what you say and what you look like.

Ask any author and I’m sure he’ll tell you – it’s not easy giving birth to a book.  Now multiply that by 237 and you’ve got The Age of Conversation 2: Why Don’t They Get It.  Throughout the monumental task of finding all these authors, getting their releases signed, chasing down their chapters, editing their work and weaving it all together; Gavin Heaton and Drew McLellan have made it look easy.  And now, about nine months after kicking off this project, I’m told that Gavin and Drew are going into ‘ahem’ labor and putting the finishing touches on the book.  We even have a due date – October 25!

Goofy puns aside, this effort really is about the children, with proceeds from the book benefitting Variety: The Children’s Charity- an international organization dedicated to improving the lives of children around the world.  The first edition of The Age Of Conversation raised well over $11,000 for this worthwhile cause.  This year, we’ll look to do even better.

I know this process is a ton of work for Gavin and Drew, but it’s a labor of love and they’re doing a great job.  Hats off to them for all their hard work.  I’m really rooking forward to the special delivery (from Amazon) next month.  In the meantime – would someone please go get some ice chips – stat?

Read the rest of this entry »

There are two granite compasses in my backyard.  One is aligned with true north; the other is aligned with magnetic north: 15° west of true north.  This summer someone asked me "why? who cares?"  Well, someone using a map to hike from here to there would care about the magnetic north compass and someone drawing a map would care about the true north compass.  Same thing, positioned two different ways for two different audiences.  This concept holds true for B2B marketing: the same companies, products and services must be positioned differently for different audiences.  This is especially true in the high tech B2B world where there are multiple audiences with diverse issues in the middle of the buying cycle.

Positioning and differentiation (more on this next week) are the two foundations on which messaging is built.  But, many high tech B2B companies often rush to develop messaging without mapping out positioning and, as a result, may ignore key audiences.  To avoid this, start positioning by identifying the key audiences involved in the buying decision.  In the high tech B2B, these audiences can be broken down into four broad categories:

• Technology evaluation – what does this do better than what we have?
• Operations management – how will it fit into my current environment?
• Business decision – will this help me make or save money?
• Risk assessment – will this company be around in a year?

Positioning should be thought of in terms of these audiences.  Remember many of these audiences have the same concerns, although their level of interest may vary for each issue.

The best way to pull the positioning together and document it is to map out a  positioning matrix as below.

This matrix gives a quick and easy read of three positioning statements, their supporting benefits and enabling product or service features correlated with the level of interest for each audience (H = High Interest, M = Medium Interest, L = Low Interest).  Beyond developing messaging, the matrix can be used by a company’s entire ecosystem for a basis of relevant and consistent outbound communications, whether it’s a piece of collateral or a personal conversation.

Could a little thought and a positioning matrix help your communications efforts?

I miss driving stick.  Revving the engine at a stoplight, dropping into gear and hearing the tires chirp, downshifting into a sharp curve.  Exciting stuff, especially with the right car.  But beyond the thrill of it all, there’s also something rewarding about working through the progression of gears that reminds me of well oiled marketing communications machine.

Much like a 5-speed transmission, marketing communications activities need to work in sequential stages to be effective, especially with more strategic sales.  Take, for example, a developer of enterprise-wide security solutions, where there are many stages in the buying cycle and several stakeholders involved in the purchase decision.  Customers for this type of solution aren’t going to a website, downloading a free trial and installing it.  They’re writing RFPs, kicking tires, calling in technical experts and getting their finance department involved.  Marketing communications for these high touch sales doesn’t begin in 5th gear – you can’t post a web site and expect a thousand people to click "Buy it Now".

It all comes down to understanding the buying cycle in a given market, looking at the stakeholders and learning about their chief concerns.  Think about first gear – where prospective customers begin the process of evaluating new products – and implement programs that position your solution as a viable option.  In second gear, when technology evaluators begin putting competitive products to the test, be sure your communications activities differentiate you.  Rolling into third gear, a business level audience may get involved, so you must be able to demonstrate how your product can improve the bottom line.  Fourth gear may target an operational team tasked with figuring out how your solution will impact existing systems and processes; so build some tools that demonstrate simplicity and integration.  And in fifth, when last minute considerations can derail a sale, be sure you have the information and materials you need to manage objections.

While audiences, tactics, and messages will vary, the approach holds up to any complex sale.  Phase your communications efforts to mesh with what’s going on in the buying cycle.  Those who try to close a strategic sale in first gear will find themselves spinning their wheels. 

Drew McLellan recently wrote about expecting too much from your marketing, concluding that "marketing takes time, repetition, and patience."  So true, and to that, I’d add a progression that jibes with the buying cycle.  What would you add?

Setting price in the high tech marketplace, where solutions are new and value is not clear, is always a challenge. And I’m often asked, "how should we price this thing?" Well, I have to admit that I am far from being a leading expert in this area. But, I have had the opportunity to work with some very good product and financial managers who are experts. So, I asked them. Below are some snippets of what (I think) I heard, most of which were advice on how to get to pricing.

To be clear, I’m not talking about consumer products here. These people work in high volumes, sell to a multitude of consumers, and probably live and die thinking about pricing. I’m talking about high tech B2B, where the sales cycles are long, the customers are usually few and the price tags are always large.

Market Position

• If you are not the best, you have to be the lowest priced.
• You can get a 5% premium if you are the best with not more than three or four competitors.
• If you are trying to break into a new market, you probably have to undercut the competition or "give away the handle to sell the blade".

Competitive Offerings

• Know what your competitors are pricing for similar features and functionality. (Note: often times I hear "we have no direct competition", so think of competition as who loses if you win.)

Deal Analysis

• Always review each lost deal to see if you lost on price.
• Always review each won deal to see if you won too easily.

Value Selling

• In high tech oligopsonies (for all you MBAs), it is critical to build relationships at all levels (see Buying Cycle: In Their Shoes) in order to sell value to individual stakeholders.
• And above all, sell on value rather than cost plus. This means that you have to work hard at articulating and testing your value proposition (and constantly repeat the process).

So, there is no clear answers when pricing game-changing technologies, products and services, but rather different methods and processes of navigating the waters.

Do you agree or disagree with any of this advice? Can you share something that worked for you?

OK, this may not be the kind of post that you print off and bring on vacation, but summer isn’t just about the light reading we stuff into our beach bags.  It’s also a good time to take a deep breath and ponder some heavy stuff.  With that in mind, what follows is some summer reading on how a good marketing strategy can directly improve a high tech company’s sales effort. 

While many professionals view marketing strategy as the groundwork for outbound communications activities such as public relations, advertising and web programs, it also has a tremendous impact on increasing sales productivity. High tech companies often allocate the majority of their budgets to product and technology development, leaving sales and the other departments to fight for what’s left. With a limited budget and a relatively small headcount, the sales force must be extremely efficient in identifying, cultivating and converting leads – focusing on the markets and customers with the highest probabilities of success, presenting their products in a way that solves real business problems and promoting their strengths and managing their weaknesses in the face of competition.

Segmentation

Given the luxury of an infinite sales force and a limitless sales budget, most entrepreneurs would love to sell their products to every customer in every market. Faced with the reality of limited sales resources, however, the wise entrepreneur knows that the key to achieving the company’s sales goal is focus. Conducting a thorough market segmentation exercise helps focus the sales effort on the markets, customers and applications that present the highest probability of success in the shortest amount of time. While pursuing fewer prospects may seem counter-intuitive to achieving an aggressive sales goal, going after the right prospects will decrease time spent in futile meetings and allow more time for closing quality deals.

Positioning

Closing quality deals means having quality conversations. In the high tech world, sales meetings often revolve around deep technology discussions with technology evaluators rather than business conversations with the real decision makers. While it is important to tell a compelling technology story to the people that will eventually be implementing your product, achieving an aggressive sales goal requires an understanding of where the business problems reside, who is responsible for solving them and how your solution can improve your customer’s business. Doing so means analyzing the buying cycle that your prospects go through as they uncover a problem, research solutions, evaluate products and plan for implementation; then identifying the stakeholders that play a role in each phase and understanding their specific business concerns. By positioning your product in the context of the customer’s business concerns, you can increase your odds of being selected by ensuring that your messages and value proposition resonate not only with technical audiences, but with the business decision makers that are actually empowered to buy your products.

Differentiation

Even with a well positioned solution, your prospects will undoubtedly seek out both direct competitors and alternative solutions to your product. Achieving your aggressive sales goal demands the ability to consistently win business at the expense of the competition, and doing so means being able to differentiate your product. Differentiation provides a foundation to promote the strengths and manage the weaknesses of your product against the competition, outfitting your sales force with the information they need to proactively frame discussions with prospects in the most advantageous ways, and overcome objections that might otherwise cost your company a sale.

This summer, when you think about how to improve your sales effort, think about this: how can a solid marketing strategy help your sales team?  I’d suggest that segmentation improves focus, positioning produces a compelling value proposition, and differentiation helps overcome competitive forces. Let me know if you disagree or if I’ve left anything out.

As I was surfing the YouTube the other day, I decided to tune in to the Politician Channel and was surprised at what I saw.

Barack Obama: 1,150 videos and 55M views

John McCain: 219 videos and 4M views

That’s a 5-to-1 difference in number of videos posted and close to a 14-to-1 difference in views.

I’m not trying to wax political (something I would never do in a blog) and I know the whole John-McCain-is-old-doesn’t-use-the-computer-and-hates-bloggers thing, but, with all due respect, what the fig?

There are something like 60M broadband subscribers in the US. Now, knowing that, if you

1.) Needed to get the word out to a large audience

2.) Had a communications tool that hit that audience and was (practically) free

Wouldn’t you take advantage?

Something for us B2B marketers to think hard about. If social networking tools could change the outcome – why not?