Category: Business Strategy

Posted on

Crossing the Chasm–The First Step–The New Strategic Principles (Chasm Strategy: Part 2)

The following is the second in a series of posts about high tech marketing strategy based on Crossing the Chasm.

It’s Strategy Stupid.

CB-Celebration-Still

This should be obvious, but it’s not.

We’re enamored with the next shiny thing to realize that the basic fundamentals are even more important than ever.

Marketing is about markets. Strategy.

Do you remember the four Ps? The core principals of marketing:

  • Product
  • Price
  • Promotion
  • Place

These principles guide all marketing activities, including crossing the chasm from early adopter to mainstream.

In particular, Geoffrey Moore lays out the following path (or, as he might prefer, warplan) to cross the chasm:

Niche: Defining your target market – it’s not everyone. In order to cross the chasm, Moore advocates a “D-Day strategy,” choosing a very specific niche market that can be won. Says Moore:

Companies just starting out, as well as any marketing program operating with scare resources must operate in a tightly bound market to be competitive. Otherwise their “hot” marketing messages get diffused too early, the chain reaction of word-of-mouth communication dies out, and the sales force is back to selling “cold.” This is a classic chasm symptom ….

Identify the market that has a compelling reason to buy your product.

Product – Product has always been a core marketing role, but it’s not as simple as one may think. When one is buying a car, he or she needs a wide range of services: tires, gas stations, accessories like car covers and floor mats, insurance, etc. Not just the car. This is what Moore calls the whole product concept. But, what do you do with a new product that’s discontinuous innovation? According to Moore, “For a given target customer and a given application, create a marketplace in which your product is the only reasonable buying proposition.”

Messaging and Positioning – Define the battle. Define what you are doing and what benefit it provides. Locate the product within a buying category that has some established credibility and position your product as the correct buying choice for this audience. These claims must be credible (no hype – egoism and false claims are not good marketing) and represent a large enough audience in order to be relevant.

Address the values and concerns of the pragmatists (not the visionaries). This is about creating a compelling value-proposition that answers the WHY (BUY) to the WHO (that we’ve already defined). If you’re everything to everybody than you’re really nobody.

It’s not about the features (big processor, nice architecture, cheap price, or supported technologies) but rather about the benefits — what these features provide.

According to Moore, “positioning is the single largest influence in the buying decision.”

Pricing and Place (Channel) – Launch the invasion. According to Moore, “the number-one corporate objective, when crossing the chasm, is to secure a channel into the mainstream market which the pragmatist customer will be comfortable.” Motivate the channel.

Moore than explores several channels, such as retail, direct-sale, OEMs, Internet retail (in this analysis, the book, revised in 2002, is quite outdated), integrators, and more. Analyzing whether the goal is fulfilling existing demand or creating new demand, choosing the appropriate channel depends on your goal.

Cheaper isn’t always better. Pricing strategy is also essential. Are you basing your pricing based on customer needs or your fixed costs? Moore provides guidelines for how to pick a price to fit your positioning. Hint: Cheaper isn’t always better but being priced significantly above your competitors can also be a failure. Price carries a message. You need a price that presents market leadership.

Making the right choices for these issues will get you past the chasm. But how do we do this?

The next several posts will explore the specific strategies and tactics that need to be put in place in order to successfully cross the chasm and delve further into the above strategies and tactics for startup and high-tech business success.

Posted on

Hi Tech Business Strategy: The Technology Adoption Life Cycle (Crossing the Chasm Part 1)

The following is the first of several posts about high tech business and marketing strategy, based on the bible of high tech marketing, Crossing the Chasm.

As my colleague Josh Cline likes to say, we frequently put the cart before the horse, developing a plan before engaging in a strategy.

We can’t implement a promotional plan before we understand the decision making cycle and just how technology is adopted. Selling to the uber-geek early adopter requires a different strategy than selling to your mother and selling to a small, disruptive startup is also going to require a different strategy than selling to a global behemoth.

We know that, right? But do we know how to map a promotional and strategic plan throughout the entire technology adoption lifecycle. In order to develop a plan, first we should understand how technology is adopted.

The technology adoption lifecycle is a model from the 1950s and 1960s (first used to understand how farmers purchased corn!) that intended to describe how new ideas and new technologies spread in different cultures. According to Wikipedia:

The technology adoption lifecycle model describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or “bell curve.” The model indicates that the first group of people to use a new product is called “innovators,” followed by “early adopters.” Next come the early and late majority, and the last group to eventually adopt a product are called “laggards.”

Technology Adoption Life Cycle

According to this model, the process  of technology adoption takes place at a steady pace, with the first group (making up about 2.5% of the population) being the innnovators, the next group (another 13.5%) are the early adoptors, and than a larger growth happens next – the 34% that are the early majority, immediately followed by another equal group, the late majority, followed by the laggards, the remaining 16%. While each group is not equal in size, according to this model, progression naturally flows from one group to the next. Thus, when developing business strategy, one simply pinpoints their location on the map and develops and adapts naturally as your company develops along the cycle.

So – why do so many startups fail and don’t gain majority support?

According to Geoffrey Moore, it’s because this model – first developed for agriculture – is flawed. According to Moore, companies get stuck in the chasm – the gap between innovators and early adoptors and the rest of us.

The model is wrong and so the strategy based on winning is also flawed.

Technology adoption doesn’t take place at a continuous place.

Rather, it gets stuck in the chasm before experiencing tornado-like rapid growth.

This is Moore’s revised model:

tech

According to Moore, there is a gap – a chasm – between the Early Market and the Mainstream Adoption. It’s not continuous and it’s possible to get stuck in this chasm.

In order to avoid getting stuck, Moore outlines a series of prescriptions and strategic requirements, including positioning, price, product, and place, in order to cross the chasm between the early market and market to the main street.

Yup, you must start with business strategy.

The next several posts will outline strategies that high tech companies, especially startups, can put in place in order to win their market and sell disruptive products to the mainstream.

Posted on

Using Web Analytics to Measure Your PR Results

One of the things I’ve always advocated when consulting clients or internally is to measure business outcomes, not just activities.

Digital marketing has actually made tracking actual business results much easier and much more accountable than print or telephone channels.

In digital marketing, this requires web analytics. There are several types of analytics, but the most popular is click-stream, which tracks actual clicks and visits.

Many of us have Google Analytics or other click-stream tracking set up … but many of us probably have never checked it.

This is a huge mistake. By measuring our web data, we can:

  • determine the effects of our outcomes. In PR, this may be determining which media outlets or wire services drive more traffic or more conversions (you did define your conversion metrics, right?)
  • Determine effective channels
  • Determine which messaging drives more conversions
  • Determining if there are missed messages or missed areas that are gaining traction despite not being targeted – discover untargeted and hidden markets
  • Determine which channels, both paid and earned media, drive more conversions
  • Evaluate decision making funnels, across multi-channel campaigns

 

 

Traditional public relations measured outputs, not outcomes. Traditional PR reports measure data such as coverage volume, placements, sentiment, etc. But what business value does that provide?

Of course, before implementing a tool, we need to define our conversions: our overall business goal and the steps along the sales and decision funnel that are necessary in order to achieve this goal. As our campaign is running, we should be analyzing our results to see where we need to optimize. This may mean pitching new reporters, using a different wire service, or perhaps refining our message.

By incorporating an effective analytics programs into our marketing campaigns, we don’t have to guess the business results: rather we can see them as they happen. Without them, we’re operating blind.

Posted on

Are Your Business Goals Realistic?

I’ve touched before on the importance of strategic planning before: decide what you want to do before you decide what services or tactics you want to implement. One of my colleagues, The Cline Group’s Josh Cline (Disclaimer: I’m a past director at TCG and currently sit on the firm’s advisory board), also wrote about this on his company’s blog. Josh wrote:

So, what is the big problem? Companies today are forgetting the traditional holistic approach to marketing strategy. They are forgetting or ignoring basic business and marketing fundamentals like messaging and positioning, branding and overall perceptions. Companies are missing the basic marketing principles, such as mapping the marketing plan to the company’s short-term and long- term goals and its business objectives.

So, you have a goal, now what?

Make sure your goal makes sense and is realistic and achievable!

What makes a goal realistic, though? Some aspects of a realistic goal include:

  • Mapping to your short and long-term objectives: Yes, we know you want to make millions, have immense profits, and reach mass adoption but perhaps you need brand awareness which means that the freemium model will hurt your short-term revenue in order to create long-term adoption and long-term profits.
  • Do your tactics make sense for the goal: If you want business leads, than you need something that has a registration form. A video or media article probably isn’t the best route. It won’t offer leads. But if you’re looking to increase awareness or understanding of your product, those would be great channels to consider. If your goal is to get XXX leads, than is it being implemented in the channel that is going to provide XXX?
  • Understanding the benefits and risks of your communications channel: Having a social media account doesn’t mean you’re going to go “viral“. In fact – there’s no such thing as viral. You’re chances of an instant social boom are low. And if you do get the boom, it’s likely to “bust” pretty quick. Unfortunately, most companies still don’t get digital media channels, whether it’s social media, the web, search, mobile, or email, and so either don’t set any or don’t set the right goals for this channel. This is also true for lots of other channels, as well.
  • Understanding the decision cycle and sales funnel: Are you assuming instant success? Success and traction take time. Your first month might give you fewer leads or awareness (however you measure that) but after six months, the exposure to multiple touchpoints may lead to conversion?
  • Unique to your specific position: While it’s OK to get inspiration from others and the competitive landscape is very important, your firm is unique – it has unique staff and resources and sits in a very individualized competitive landscape. No other company, even in the same country and industry, is exactly like yours.
  • Adhere to industry norms: While no company is unique, unless you are so different, there are many things in which we have baselines for. If open-rates on emails in the construction industry are 28.7%, and you’re in the same industry, you should be aiming as an initial baseline for a similar open rate. Of course, you may end up doing better or worse, but that’s an important baseline. But, if you’re a construction firm and getting a 14.5% open rate, more common in the travel industry, I would be worried. However, if my goal is for a 50% open rate, clearly your goal is simply unrealistic and should be changed.

Realistic goals can certainly include projections for rapid growth, if that’s reasonable for your market. But they shouldn’t assume rapid growth because some other company did it. You’re not them, and if you’re assuming rapid growth based on someone else (“I’m going to be the next big Facebook”) than you already lost network effects and first player advantage.

Are you setting realistic and achievable goals?

Posted on

The Marketing Creativity Conundrum

Frequently, when planning marketing campaigns or discussing how to market a brand or product, there’s a demand for creative ideas. The first stage of many people’s planning is looking for creative ways to “promote” their campaign.

how_to_store_a_cakeBut, frequently, what they are missing isn’t creativity but rather a working strategy:

  • What’s the strategy?
  • Who is the audience? Usually there are multiple audience stakeholders
  • What’s the core messaging (values/benefits for each target market)
  • Are you positioned in the right market?
  • Are you going after the people most likely to buy?
  • Tactically – are you running a B2C campaign for a B2B campaign?
  • Have you discussed the ROI: What’s in it for them?
  • Are you using the right channels? If you’re working with a PR company, are they pitching media with the right messages or just posting press releases on free press release sites?

There’s a role for creativity, but that’s the icing. Creativity – or lack of it  – won’t make or break your product/service. However, if you have the wrong strategy, than you won’t succeed. You can have a cake without icing, but you can’t have a cake without flour. Strategy is the flour, while creativity is the icing. Icing’s nice, but are you trying to get the icing without doing the hard work?

Creativity comes after a proper strategy.

Posted on

Strategy Requires Tactics Throughout the Entire Sales Funnel

Strategy must embrace the entire sales funnel: from branding and positioning and defining market position to determining the best tactical approaches to bring a lead into the sales funnel and nurture them until the sale is closed and they are a brand evangelist, creating more leads for you.

This is not a one time approach.

Strategists – frequently outside consultants – tend to come in and build a positioning. But, without the knowledge of time to implement, the strategy sounds great in theory but has more holes than string cheese when trying to implement it in the real world.

Implementors, however, don’t get the big picture. Some just want to push hard to make the sale and don’t see the steps in between. Others are big at talking about engagement or likes or fans or traffic, but don’t get that the end goal is to convert: sales, donations, or whatever else the goal is that was initially defined (you did define it, right? probably not for these implementors).

There are multiple touch points until someone buys something. People don’t buy – or even try – the first time that they hear about a new product. There are even more to turn the customer into an evangelist which will create repeat sales and new customers through word-of-mouth.

In order to download a software trial, the sales funnel might look something like:

  1. Saw a tweet | social media
  2. Read a blog article shortened with bit.ly |MARCOM and social media
  3. Read an article on product website | MARCOM and web
  4. Saw an ad in search results (PPC) | web and PPC firm
  5. Read an article in a print magazine | public relations
  6. Friend posted a link to online version of article on Facebook | word of mouth, public relations, social media
  7. Person Googled name of company | SEO
  8. Got to website and downloaded trial software | web

This is not a simple process. It took multiple touchpoints that were often performed by a variety of staff or agencies to achieve the conversion. And, while measurement is essential, this conversion won’t be measured completely accurate, with a mix of online and offline elements, brand awareness leading to the final conversion, and technical problems that will not lead to accurate traffic sources being counted.

This will lead to blindness when evaluating the implementation. Those who developed the strategy that requires the tactics needs to understand the need for multiple integrated touch points. Marketing strategists need to be integrated and get a multiple touchpoint model. Those implementing need to be able to integrate as well, crossing multiple functions and one person should have multiple skills, and also ability to work with a variety of staff members and share the credit for conversion.

Of course, the job isn’t done yet. The product hasn’t yet been sold.

The process gets even more complicated when going from download to sale:

  1. Downloadable product must be functional, with minimal bugs, and a good user interface | development, product management, UI
  2. It should serve its intended purpose, solve the users pain | development, product management, marketing
  3. User then recommends co-workers try it out
  4. Co-worker than recommends boss buys it
  5. Co-worker reads article in blog (that was reprinted from software consumer magazine) about how product
  6. Attends a webinar about product’s cool features
  7. Boss reads article in CIO magazine about how product saves company money
  8. Boss requests CFO explore the company’s financials
  9. CFO asks team leader to quantify time saved by using software
  10. Team leader reads white paper from company and summarizes it in report to CFO
  11. CFO reads analyst survey about product and how it compares to its competitors
  12. CFO approves purchase but asks for discount
  13. Sales has to negotiate price
  14. SALE

Marketing strategists and implementors also need to create and implement strategies that cross multiple team functions: from marketing, sales, individual users, lower-managers, middle managers, and upper management. There are multiple touch points to reach a sale. Does your strategy incorporate it?

 

 

Posted on

E-mail Marketing is Not Dead: The Problem with the Social Media Bubble

There is a social media bubble. That is not to deny the growing importance of social channels in an integrated digital marketing strategy, but there are more and more voices decrying email as dead and only social networks, like Twitter and Facebook, as relevant. Why send an email, when you can tweet, they ask?

That not only misunderstands communication but is sure to ensure that their target audience misses their message.

E-mail is more relevant than ever, to reach key audiences. In addition, email has among the best ROI. Click through rates of email are among the highest — more than banner ads or video.

In 2010, over 107 trillion emails were sent — 294 billion per day. There were over 244 million new email users. 25% of which were corporate accounts.

Over 93% of web surfers subscribe to permission-based email, according to eMarketer. “Best practices for email marketing can be summarized in one sentence,” said David Hallerman, eMarketer principal analyst and author of the new report, “10 Best Practices for Email Marketing.” “Get accurate and detailed data from people who want to hear from you, then automate the numerous steps involved in sending them relevant messages.”

E-mail is also adapting and changing. These are concerns that marketers need to be aware of.

  • More and more email is being read on mobile devices
  • Email is increasingly becoming social as well, with content being shared online and links from articles being shared

“Not only does email usage remain a prime activity among internet users of all ages, it allows marketers to contact their target audience with timing and personalized details that social sites cannot match,” said Hallerman. “And the rise of mobile usage helps marketers reach their customers via email more than before, since many people use those devices to check email much more frequently than they might have in the past.”