Red Zen Marketing

In these tough economic times, many companies' development and engineering groups are examining their stable of products and services,conducting 'line reviews' to search for those quiet, hidden products that are no longer producing at the expected levels, with the aim of raising net profitability. Other firms put their sales analysts to work on analyzing relative customer profitability, producing a ranked listing with the bottom 'losers' slated for receiving a "Thanks for the memories" letter from the VP of Sales.

Though it's always valuable to have data, and I'd argue for monitoring these sort of indices on an ongoing basis in any firm, and I'm sure there are occasions in which each of these approaches bears some fruit, there are some important cautions to be heeded when looking to approaches like these in lean times. My experience with technology-based companies in particular highlights a number of situations in which lean times are opportunities.

Here then, is my list of five mistakes I've seen technology companies make in trying economic times, and a few suggestions of how to avoid making these in your firm.

1. Taking actions without talking to customers -
   It seems so obvious to me after watching this mistake made over and over again, but when your firm as a vendor or partner of your customer is going through a difficult time, that is the time you most  need to know what your customer really needs, what they depend upon you for most, what matters to them about the product/s you provide.  So many times I've seen companies end-of-life seemingly unprofitable products--shutting down lines to save tens of thousands of dollars, like in my first example, and then watched hundreds of thousands in orders disappear the next quarter since customers depended upon that other product to be available from the same vendor. This likewise goes for 'value engineering' projects which end up substituting components in critical customer products-- don't do it wiithout involving your customers in the process!  Often, upon initiating serious and sincere dialog with customers about product offering questions and issues, new opportunities will be illuminated, unseen challenges that they are facing will be uncovered and in pursuing these, you will find a new level of partnership and trust established with the customer. 
2. Becoming absorbed in endless parochial analysis -
   This error appears to be made by a certain type of manager or leader most; those most uncomfortable with making hard choices will put off decisions by continuing to research the problem/s endlessly, calling in analysts from finance, marketing, manufacturing, etc. to all put there data on the growing pile. They are only satisfied when multiple conflicting results continue to hit there desk--feeling that the conflict best represents real world information, but simultaneously giving them more cause to postpone decision-making and order up more research and investigation of the problem: "what about European sales? How has Customer Support been affect in the Fourth Quarter over the past two years? What about legal claims over the affected periods for sales of those products in Canada?" The questions go on and on. The focus stops being on making a pragmatic business decision for the health of the company--or even about using the data to make a decision--but becomes about collecting answers to more questions. In this case, those assisting in collecting information need to provide 'impact and conclusions' statements along with data, to help guide the discussion beyond data to reach directional decisions for the business. If you're the hapless soul that becomes mired in the indecision and analysis paralysis, make sure to scope every analysis assignment with an objective statement: why is this being done? what business question will the results of this analysis guide? It also helps to describe ahead of time what results are expected and what action is likely to be taken based upon those results--all ahead of time--even if only for your own use. Doing this will help you stay focused when the data comes in.  
3. Forgetting sales basics -
   It's all too easy to dig in to start weeding out less profitable customers, but many times the issue is closer to home: Sales Management may be failing. One thing I learned from leading a sales organization -- and those of you with senstive eyes may need to look away - many sales people are lazy.  They often don't spend time on 'tough' accounts that time more time to develop. A high percentage of sales people in the typical organization are 'order takers' and need to be well managed to keep them on task and on track. Low performing customers may be more an indication of sales personnel performance than of customer attributes. Sales management needs to talk to those customers before you cut them loose-- do your due diligence and you may find opportunity lurking just below the phone receiver. It may be time to invest in good old sales training to reinvigorate your team.
   
4. Cutting Back On Innovative New Products -
   R&D or product development may often be the first casualty of a downturn. I've watched this more than once. Sadly, in each episode, the firm had sacrificed its future for the short term. Yes, this may not be the time to start that incredible new cold fusion project, but the project that is 3/4 complete and 5 months from launch, expected to reinvigorate channel and partners is not the place to take aim simply because it's a big number on the spreadsheet. The costs later in lost market position, lost share, lost leadership, etc. are tangible and real. Be cautious when reviewing your future product pipeline for sacrificial lambs during hard times - you want to be sure you still have the fat sheep to take to market when the time comes and it's needed.
   
5. Stopping Web Development and Refreshes/Downplaying Online Marketing -
   Over and over I've been watching well intentioned companies in various categories from software to biomedical equipment to technology materials cut back on previous plans to update and modernize their online presence when faced with their current economic situation. Seemingly flying in the face of obvious trend information indicating the accelerating pace of B2B online research and purchase behavior, home surfing for work purposes, use of social media for business (yes, read- Twitter, Facebook, etc.), and increased business broadband penetration, these businesses are sitting back on their hands. They blindly cede their category leadership to ambitious competitors. They hold tightly to a tens of thousands of dollars while market opportunities worth hundreds of thousands or millions of dollars remain at stake in their segments, with their market positiioning becoming stale and more out of date by the month as they wait for better times. It's penny wise and pound foolish. In today's market, a technology firm needs a leading online presence to be taken seriously. The majority of B2B purchases have vendors researched online prior to any contact via telephone being made--if that impression is not aligned well with a set of competitors, you don't get the chance to make a personal impression, and you've already lost the battle before entering on the field.
   

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Wasn't it just yesterday that the Cluetrain Manifesto was published and the Internet was abuzz with an entirely new vernacular? Truth, it's actually been a full decade since that very seminal--and even controversial--online manifesto/book hit the 'Net. In order to commemorate the anniversary, Keith McArthur began the “Cluetrain Plus 10” discussion project with 95 distinct and intelligent bloggers covering each of the 95 Theses that make up the original tome.

When I first encountered Cluetrain, about 9 months after it was released, it put into words for me the perspective I had long held regarding company and customer interplay and interactions. Of course, as the Internet came of age this attitude in Cluetrain was even more relevant than it was in the Ladder business--where I was serving as head of new product development at the time. Recall that there was a rash of other brand and e-commerce focused books discussing the uniqueness of Amazon and other early Internet firms about this time as well.

Ten years of still needing to get a clue

Although one can argue that Cluetrain overstated many points in order to press their arguments, I want to address one of these that I think is still very salient in today's world. Perhaps moreso than 10 years ago:  CLUETRAIN said: Companies attempting to “position” themselves need to take a position. Optimally, it should relate to something their market actually cares about. This is 'cause' marketing, but is not about being transparently mercenary. Read on.

When a firm discovers an opportunity to develop a new product, one of the first and most natural--one might say even necessary--tasks that either emanates from the need for the product, or is a required task for the development project is for the existence of a market position. This is the Ries and Trout verstion of Positioning from the classic marketing text.

I've watched many midsize AND large firms make the mistake of positioning a product or service solution basd solely on internal factors (how will this product align to our other offerings) rather than how the product will make best sense to the target customers. Worse, are when large firms cater their focus to shareholder concerns exclusive to customers, and communications woefully miss the mark--failing miserably to speak to the pain points, competitive pressures, and needs of the very users they hope to create purchase orders or open check books to purchase the product! 

Step into that Persona to get a clue

No, the focus needs to be directed on the customer, and the positioning needs to keep in mind the persona of that customer that is the primary purchase decision maker and/or user that will make decisions. What needs and dissatisfactions with the current offerings are they enduring? What opportunities exist to show them a better way to solve their issues? What holes in the market exist that your solution can step into--hopefully in a manner that will even create a barrier to other competitors by allowing you to 'own' that piece of the customer's mind as you step into solving the problem.

Unfortunately all too often I've found products' positioning messaging lacking any concerted effort to answer the most basic requirements or failing to address competitive pressures, effectively creating a positioning 'map' telling customers to go away. These firms' common mistakes include:

Addressing the 'market' rather than defining personas, thus making their language so broad as to be useless

Talking about features of the product and forgetting that it is what that feature does to benefit the user that matters to them--what's the benefit? What's in it for me?

What separates your product or service from the rest? Most forget that they are in a competition and fail to address why a choice for their product will benefit the customer in some 1-2 tangible ways. It seems obvious, but is SO frequently missed.

So, what can be done about this?

There's a question. One answer is to use the development of your personas to create a messaging and positioning framework document (Microsoft has a reasonable template document here and description for use, here) to help guide a structured means of thinking about and forming the positioning for the product. It's enormously helpful and will fend off the loose manner in which most positioning is conducted. Small wonder Microsoft has perfected this tool.

Do you have a Story to tell?

One thing to consider:What you do and what your company stands for matter too. Seth Godin likes to say these days that marketing is about telling stories. One of his primary points is that the story must ring true and have some authenticity if it is to be retold to others. (Hear that reference to word-of-mouth? That's what we're all searching for!) Particularly as the world becomes more and more connected through email and social media 24/7. Postitive WOM moves fast -- trouble is negative WOM moves too. Just watch do a twitter search on #failwhale to see. 

We know that people make every purchase for an emotional reason at the core. Yet, we all still make purchases from firms we don’t really “connect” with (whether a product, a service, or even making donations), but we all do this somewhat grudgingly. Because of this, we are all open to other, more emotionally fulfilling, purchase options. If we encounter an option from a firm that we learn is committed to a goal that is important to THEM as people, and that WE SHARE, whatever that goal may be, they will WIN. It may be fighting global warming, or saving baby seals, or fighting the ash borer beatle, or honey bees, or breast cancer, or -- you get the idea. It may also be something as simple as 'fighting boredom one phone at a time' or 'creating beautiful backyards'. It's about forging an emotional connection.

Get all Emo  (-tional)

If you are really trying to reach customers who are interested in your product or service, would you want to be a company people understand & sympathize with at an emotional level, or a firm that’s just a choice of last resort?

The beauty of the Internet is it's ability to provide a vehicle for customers to search, find, try (do you offer this?) and buy a solution that they believe represents their best 'fit' to their needs. When your solution matches their needs at an emotional level, you have risen above their simple needs and matched your story at a deeper level--beyond rational--possibly at their heart. That's power. That's marketing at it's best. Positioning for the heart, and not just the head is what great marketers strive for.

How can you accomplish that with your next product introduction, or, with a product you already need to revitalize?

(Sure, I can help...)

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You really begin to see how you've tormented your audiences for years upon watching this.

Yes, there is a reason I've loved Guy Kawasaki's recommendation to limit text on slides to 10 words or less, but this makes the point with so much more humor!!

Enjoy. (and think twice next time, eh?)

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Yes, here it comes. A word from "our sponsor"...

The bills that arrive like little paper messengers serve as monthly reminders that no matter how entertaining, or distracting, or engaging this online universe may be, there are responsibilities beckoning from beyond this comfy Herman Miller.

So, in the interest of self-preservation, a little self-promotion here:

• For four years, I ran Compeau-Fawkes Marketing. You can see some of what we did over at that site, still active.
  
• One of my recent projects prior to leaving Mural Consulting was working with that stellar team on fleshing out some resources and other aspects of the ISV Key Success Factors Framework(tm) which can be viewed here. It's extraordinary useful, whether a firm is considering the Software as a Service model, or just wants to improve their web-centric marketing in general. 
• Browse my LinkedIn profile (link to me as a friend if I know you) or snag a copy of my resume for light reading. 
• Here's just a few of the firms/groups I've worked with on projects, either through my firm or others', in just the past few years:
• Microsoft Communications Sector
• Microsoft Dynamics CRM
• Xerox Customer Insights Group
• CiCi's Pizza - Franchises
• BT (British Telecom)
  
• Lakewood Presbyterian Church
  
• Palmsource Developer Relations
• Sony Ericsson
• Palm International Group
• First Presbyterian Church
  
• Quickoffice, Inc.
  
• iambic Software
• Carry the Day, Inc.
  

Ah, now that wasn't so painful, was it? Thanks for indulging me.

Click here to download:

RedZenvcard.vcf (3 KB)

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'

Compete.com chart of Twitter.com's growth over past year

Can Twitter Survive?

The combination of a few recent occurrences has gotten me thinking. One was the recent Ashton Kutcher (@aplusk) vs. CNN Twitter follower race to 1 Million. The other was some dialogue I had via Twitter with Guy Kawasaki related to his use of his Twitter account (@guykawasaki) which played out partly over at his HolyCow.com (Posterous-hosted) blog. Another was the pace at which Oprah Winfrey (@oprah) gained followers for her recent foray into the Twitter universe this past week upon interviewing Ashton after his 'win' over CNN and all that resulted from that on the Tweetscape.

As I consider the growth curve above -- which terminates well before all recent shenanigans this past week--and the increasing mainstream press coverage of Twitter (witness the mention of Twitter in the clever new Sprint ads - see past post), I can't help but wonder if the quickening pace of user adoption of Twitter will lead to the following cascade of events:

1. Increasing number of 'friends' on each of our Following and Followers lists - as Twitter adoption accelerates
   
2. Similar to the Facebook effect, as more and more of our friends and colleagues embrace the new communications channel, the number of status updates/posts will see a corresponding increase
3. Increased use of mobile access/posts, driven by smartphone adoption and integration of Twitpic, further driving up volume of traffic
4. Numerous software business startups to help manage tweet volume, with varying degrees of success achieved -
   
5. Increased business use of Twitter - as more and more companies jump on the bandwagon, following consumers onto the platform, further driving up traffic; "Tweet guidelines and retention policies" become topic of discussion within businesses (grin)
6. Second wave of Twitter use refinement - 'on message' business Tweeting via multiple Twitter accounts comes into it's own, facilitated by Twitter infrastructure
7. Widespread "unfollow" campaigns as a reaction against: volume of gross tweets received, distraction impact of gross numbers of those Following
8. Business awakening - as businesses realize that the ration of time & resource allocation to Twitter has not reaped corresponding outcomes
9. Twitter barely survives through a classic Silicon Valley rise and fall -- glory days behind it, it limps on with 5-8MM users - a mix of technophile loyalists paying a modest subscription fee and personal-tweeters who never moved beyond the simple 'what are you doing now' mantra of use
   

What do you think?

--
Mike Compeau
mike.compeau@compeau.net
724-734-1624

www.twitter.com/mikecompeau
www.linkedin.com/in/mcompeau

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