Marketing – Page 2

December 26, 2011February 18, 2012

Gary Vaynerchuk is Wrong: There is a Social Media ROI

At last year’s LeWeb, my colleague and social media superstar Ayelet Noff asked my favorite wine guy Gary Vaynerchuk the question that we were all hearing in 2009, 2010, and finally forced to answer in 2011: What’s the ROI of social media.

Gary answered that that’s the wrong question – and it’s a problem. Gary asked, “What’s the ROI of your mother?” It’s not about data or Facebook friends or Twitter fans, he said.

He also said that ROI should be “relationship with consumer.”

But ROI of social media is far more than relationships. It’s not just about the The Thank You Economy (though brand goodwill is one tangible ROI measurement)

There are a lot of people getting paid for “social media” consulting because they know how to use Facebook but not measuring ROI. This is how we were all doing it in 2009.

In 2012, it’s time for accountability.

At work, I’ve been a passionate advocate for Twitter – not because I love it (I love whatever tool works) but because it has a high click through rate and is an appropriate tool to integrate with other campaigns to achieve one of my key business goals: qualified leads. But I’ll use whatever tool achieves that goal – Twitter or Facebook, a trade show, or a magazine ad. What matters is achieving the strategic goal – using whatever tool is appropriate given my budget and organization. Social media is part of ecommerce. I’ve made clear sales – actual dollars – directly attributable to blog posts.

What’s the ROI of social media? Here are some possibilities:

Sales – immediate, tangible revenue
Qualified leads, in whatever form – names/email addresses, downloads, form submissions, etc. – that are targeted and qualified, using your qualification definitions.
Lowered costs
Customer service questions answered

Define your KPIs first and maybe social media can help you achieve this. On the other hand, maybe not – either way you should be comfortable finding the tool to achieve your KPI.

Here are some answers from Groundswell, Forrester Research’s first book on social technologies, on how social TOOLS can be used to accomplish BUSINESS functions:

The ROI is tangible and quantifiable. Here is another example on how social tools can help save money in customer service can be seen here.

OK, I admit, this title was a bit of link-bait and I’m being a bit unfair to Gary – who knows that the ROI in social media is what we aim to achieve.

In a later interview, Gary made the point that most social media marketers are clowns — talking about Facebook likes and Twitter followers, instead of how social media is a channel to achieve business goals.

Gary made the point that you need marketers who know how to use digital tools to achieve business goals and hiring some 22 year old kid who knows how to use Facebook isn’t the right person to be managing your business.

It’s time to start being accountable – 99.5% of social media “marketers” are clowns – encouraged by marketers who are technoilliterates seeking out the 22 year old kid who doesn’t understand business – those of us who have been doing this for a long time, like Gary, Ayelet, and me all know that this a tool to achieve business results.

November 22, 2011November 21, 2011

Louis CK on Twitter

Listen to Louis CK on social media strategy. He hates Twitter. Just because it’s the cool shiny tool doesn’t mean you should be running to it when your basic business strategy is lacking.

Stop going after the shiny things.

Start going after the value (which probably includes social media).

Maybe Louis CK should be doing your social media strategy:

November 21, 2011October 27, 2015

Positioning: Defining The Battle (Crossing the Chasm Strategy Part 6)

The following is sixth in a series of posts about high tech marketing strategy based on Geoffrey Moore’s Crossing the Chasm.

In order to win the battle for customers and revenue, you must define the battle.

One essential component to building a market is positioning.

Positioning is the image or identity in the minds of their target market for its product, brand, or organization.

Despite common misconception (and Wikipedia’s own entry), positioning is not a process but rather the market position itself.

To succeed “we need to understand who or what the competition is, what their current relationship to our target customer consists of, and how we can best position ourselves to force them out of our target market segment.”

Create the competition

Define the competition in such a way that you are the leader.

It must be a competition big enough that there’s a market, but also targeted enough to win.

Geoffrey Moore might be the greatest marketing consultant with a PhD in Renaissance English but so what? That’s a small, irrelevant niche.

He could claim he’s the greatest marketing consultant of all time but – as much as Crossing the Chasm is great – that’s simply false and even worse not credible.

Our positioning should change depending on the stage of the technology adoption life cycle that we are targeting, according to the Competitive Positioning Compass.

The early market is dominated by specialists interested in technology and product, rather than company or market issues.

The mainstream market is “dominated by generalists who are more interested in market leadership and company stability than the bits and bytes or speeds and feeds of particular products.”

Markets begin in a state of skepticism and evolve to a state of support. In the early market, the technology enthusiasts are the skeptical gatekeepers. In the mainstream, it’s the pragmatists. However, once they give their blessings, they buy in. Hence, you need to create a value proposition for each group that’s compelling.

In order to win the pragmatist than we must focus on market-centered concerns. Shift our marketing focus from product-centric values to market-centric ones. See the chart below:

Product-Centric	Market-Centric
Fastest product	Largest installed base
Easiest to use	Most third party supporters
Elegant architecture	De facto standard
Product price	Cost of ownership
Unique functionality	Quality of support

According to Moore, “it is the market-centric value system – supplemented (but not superceded) by the product-centric one – that must be the basis for the value profile of the target customers when crossing the chasm.

Next comes positioning.

There are four important principles to remember about positioning:

Positioning is a noun, not a verb – it’s attribute, not a marketing process.
Positioning is the single largest influence on the buying decision – it serves as buyers’ shorthand
Positioning exists in people’s heads, not in your words – You must frame a position that actually exists in other people’s heads “and not in words that come straight from hot advertising copy.” Forget creative or buzz or fluff. If it’s inauthentic, it’s not correctly positioned.
People are highly conservative about entertaining changes in positioning – the most effective positioning strategies demand the least amount of change.

How do we come up with a position? There are four important steps:

Name it and frame it – reference what they seek and under what category it resides. Jargon is gobbledygook and has no place. Listen to Strunk and White, be clear and concise.This is the minimum needed to get a technology enthusiast to buy.
Who for and what for – Customers will not buy something until they know who is going to use it and the purpose it serves. This is the minimum needed to get a visionary to buy.
Competition and differentiation – Customers can’t know what to expect or what to pay until they can place it in a comparative context. This is the minimum needed to get a pragmatist to buy.
Financials and futures – Customers can’t be completely secure in buying unless they know it comes from a vendor with straying power. This is the minimum needed to get a conservative to buy.

So, now what? I still don’t have an elevator statement, or a positioning statement.

What is a positioning statement? What is it made up of?

The claim
The evidence
Communications
Feedback and adjustment

A good position must pass the elevator test. It must be credible. Can you explain your product in the amount of time it takes to ride up in an elevator. If not, you will fail. You won’t get funded. Here’s why:

Your claim can’t be transmitted by word-of-mouth.
Your marketing communications will be all over the map.
Your R&D will be all over the map. You will have no winning proposition, but many losing ones.
You won’t be able to recruit partners and allies.
You won’t get financing from anybody with experience — if you can’t pass the elevator test, investors know that you lack a clear and investable marketing strategy.

Define your position based on the target segment you intend to dominate and the value proposition that you intend to dominate it with.

Positioning is dynamic. It’s not a one time event, but something that – like agile – should have continuous iterations.

Here’s a proven formula to win. Try it out:

For (target customers – beachhead segment only)
Who are dissatisfied with (the current market alternative)
Our product is a (new product category)
That provides (key problem solving capability)
Unlike (the product alternative – competitors and substitute goods)
We have assembled (key whole product features)

November 19, 2011November 19, 2011

The future of online advertising

November 8, 2011October 27, 2015

Developing The Whole Product: Crossing the Chasm Strategy Part 5

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

One of the most important functions of marketing isn’t viral and it isn’t advertising and no, it’s not creative slogals. Rather it’s in the fundamental 4Ps taught in every Marketing 101 class: Product.

In order to win the marketplace, you must wire the marketplace. 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. That starts… with targeting markets that have a compelling reason to buy your product. The next step is ensuring that you have a monopoly over fulfilling the reason to buy.”

Moore brings Theodore Levitt’s model of product defined in The Marketing Imagination.

Generic Product – what’s shipped in the box
Expected Product – what the consumer expects – the minimum configuration of products and services necessary to have any chance of achieving the buying objective
Augmented Product – The fleshed out product achieving maximum chance of achieving the buying objectives – all the products and services that are related
Potential product – The product’s room for growth

Pragmatists buy the whole product.

According to Moore, “Whole product planning is the centerpiece for developing a market domination strategy.” He continues, “Winning the whole product battle means winning the war.”

In the following model, there are only two categories: (1) what’s shipped (the generic product) and (2) what else the customers need in order to achieve their compelling reason to buy. Moore calls this the “marketing promise” made to win the sale. Failure to meet this promise in a B2B marketplace has serious consequence, this isn’t fluff or mumbo jumbo but a promise that must be delivered on.

This can, of course, be delivered with partners and additional vendors over a period of time. You don’t need to provide everything yourself but you do need to create the whole package.

November 4, 2011October 27, 2015

Chasm Strategy: Point of Attack – Determing Your Target Customer (Part 4: Chasm Strategy)

The following is the forth part of a series of posts about high tech marketing strategy based on Crossing the Chasm by Geoffrey Moore.

Moore opens with a quote from Yogi Berra: “If you don’t know where you’re going, you probably aren’t going to get there.”

The fundamental principle to cross the chasm is to pick a specific niche market and focus all your resources on achieving the dominant position in that segment.

It sounds simple but most organizations fail.

Why?

According to Moore, it’s a high risk, low data decision.

Businesses love data. MBA-types love data. Engineers and computer programmers, left-brain thinkers, love data even more.

But we don’t have the data to make the right decision (an aside: this is why I think social scientists make great marketers: we are used to taking scientific approaches to imperfect data sets and make decisions based on imperfect data, but still more data driven than journalists or English majors).

According to Moore, you’re about to make “what may be the most important marketing decision with little or no useful hard information.” Since your target is discontinuous, past experience doesn’t provide us accurate positions as we’re changing the data points.

What now?

According to Moore, use “informed intuition rather than analytical reason.”

Informed intuition involves making conclusions based on data fragments, a few high-quality images, taken to be archetypes of a more complex reality. In other words, take memorable images and make conclusions.

Moore calls this “data characterizations” but many of us know this today as “personas.” Personas, first developed in the early 1990s, provide:

a better understanding of customers
shorter design cycles
improved product qualityAccording to Wikipedia, “personas are fictional characters created to represent the different user types within a targeted demographic, attitude and/or behavior set that might use a site, brand or product in a similar way.”
According to Moore, characterizations “represent characteristic market behaviors.”

We’re not talking about target markets, but rather target customers. How do we develop this? With the Market Development Strategy Checklist.

According to Moore, capture scenarios. This is not a formal survey – that takes too long. They’re imperfect and they incorporate our prejudices (one reason why a diverse team is important and there’s significant value in having people from different background on your team. When you’re doing global marketing, if you have people from your target country on your team, all the better).

The checklist “consists of a set of issues around which go-to-market plans are built,” namely:
- Target customer
- Compelling reason to buy
- Whole product
- Partners and allies
- Distribution
- Pricing
- Competition
- Positioning
- Next target customer

October 31, 2011October 27, 2015

Invasion – Choosing Your Target Market (Crossing the Chasm, Part 3)

The following is the third in a series about high tech market strategy based on Geofrey Moore’s Crossing the Chasm.

A big strategist failure that many organizations get into is picking the wrong market. Either, they don’t pick one at all and just see what sticks or else picks a market that is so wide (“everybody with a cell phone,” “mothers over 30,” “all people of a specific religious or ethnic group of a certain age,” “all Java programmers”) that it’s impossible to develop a market penetration strategy.

If your market is everybody, than your market is nobody.

This is particularly true when trying to cross the chasm from early adopters to majority. As we might remember from the Technology Adoption Life Cycle, the majority (even the early majority) need to see that your solution is suitable for their industry and is respected.

But, you’ve just started, and now you already have to win a market? That’s impossible, right? Wrong!

According to Crossing the Chasm, launch a targeted invasion – like the Allies did at Normandy – pick a specific niche that is small enough that you can win but large enough that it can show that you can handle the unique requirements of industry.

According to Moore take a D-Day approach, “Cross the chasm by targeting a very specific niche market where you can dominate from the outset, force your competitors out of that market niche, and than use it as a base for broader operations. Concentrate an overwhelming superior force on a highly focused target.”

This is what Apple did when starting out, winning the graphic design industry.

Moore continues:

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, as the enterprise leaves behind the niche represented by the early market. It is usually interpreted as a letdown in the sales force or a cooling off in demand when, in fact, it is simply the consequence of trying to expand into too loosely bounded a market.

Yet many companies don’t follow this strategy because it’s not logical to them … to their peril. According to Moore, “Unfortunately, sound as this practice is, it is counterintuitive to the management of start-up enterprises, and thus, although widely acknowledged in theory, it is rarely put into practice.”

According to Moore, companies are failing because they are going after the short-term sale – and thus causing a long term crash. He writes that companies refuse to adopt a market-driven approach at the expense of a sales-driven approach. But “the consequences of being sales-driven during the chasm period are, to put it simply, fatal.” This is, unfortunately, especially common in bootstrapped startups and startups in Israel, lacking significant initial capitalization.

According to Moore this sales-oriented strategy fails because during the chasm period the goal must be to create a pragmatic customer base that’s reference able and can access other prospects and begin to build a word-of-mouth community. To capture this initial group, our initial group must achieve all of their objectives, including the whole product, to be discussed later. In order to completely satisfy this initial group, all emphasis must be made on providing the complete satisfaction of the initial group – which will then lead to more sales later.

Also, pragmatist companies want to buy from market leaders. By creating market leadership in a niche, you open the door for other companies in other markets and industries to recognize your leadership and give you a chance as well.

According to Moore, “If you do not commit fully to this goal, the odds are overwhelmingly against your ever arriving in the mainstream market.”

October 26, 2011October 27, 2015

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.

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.