strategic planning

August 20, 2012August 20, 2012

We’ve got marketing management all wrong

We’ve got marketing management all wrong.

We’re defining the tactic – email, social media, trade shows, conferences, PR – without clear goals.

As The Cline Group’s Josh Cline wrote, we’re putting the cart before the horse – running forward before we have the goals or a plan.

It’s not a traditional or digital marketing divide. Companies are going to trade shows and looking for MARCOM pros with trade show experience without knowing what trade shows can do for their business and defining what they want to get out of the trade show. They return thousands of dollars in the red and with their pockets stuffed full of business cards and some touristy trinkets. They’re looking for email marketers while buying email addresses, and wonder what their newsletter has done for them, and they are seeking people to create and manage Facebook pages before they even conducting a POST Analysis and defining whether Facebook is the place that their customers are and can achieve your business goals. Then they wonder why they haven’t bought.

This is the way things have been for a long time – except the explosion in digital media and the ability to measure goals immediately and easily with built-in analytics make the status-quo even less acceptable today as businesses can measure their progress with more precision and speed than ever before.

Social media is a perfect example in which many have gotten it wrong. Deciding that their competitive strategy is “social marketing” or hiring for social media without understand what it can (and can not) do for you will not bring results. The age of experimentation is over.

Recently, I’ve seen an explosion in jobs for “social media managers” that don’t define what they expect “social media” to do for the business. Social media is a tool like a telephone – it can be used for all sorts of purposes and there are many different ways and goals it can achieve – advertising, cold calling for leads and sales, customer support, market research, etc. Are they looking for thought leadership and new website visitors from a blog, leads from LinkedIn (and that webinar or white paper), a Facebook community to energize their existing fan-base, a viral boost of brand awareness from the funny video, or a conversation with their target audience? Even worse, they are frequently advertised as entry level when the job requires both strategy and implementation. These are all different goals which can be done by different personalities and have to be implemented differently.

While it’s important to have dedicated staff who knows how to use the tools, it’s even more important to first define your goals.

If you don’t define your goals first, you won’t get results. 63% of B2B companies are still not generating leads from social media – a goal for virtually any company that needs to drive revenue – most likely because social media is siloed and not integrated and because they haven’t built a program to get leads that includes social media.

Social media is mature and has proven results (Facebook itself is 8 years old, the Web is 20 years old, and online forums are even older) that you should be getting a tangible ROI from an approach that includes social media – whether leads, customer support, market research, or whatever other goal that you define. If you don’t have the KPI, don’t pre-determine the tactic. The KPI must be defined in order to generate the ROI. At the same time, approaches and tactics are very different depending on one’s goals. A plan that aims to generate “buzz” – i.e. brand awareness among a mass group of people – is going to look very different than a plan whose goal is leads.

While the potential and capability is there, because companies aren’t defining what they are trying to achieve and the business goals defined by the C-suite aren’t adequately communicated to middle- and lower-managers in the trenches, ROI is not seen.

As Scott Opplinger wrote, “They might not get the results they want because they had no idea what results they were trying to accomplish in the first place and in most cases had no clearly defined method for measuring those results had they defined clear goals.”

Before determining what tactics you want, first map out:

Your business goals and the timeline you want to achieve it – for example 20% sales growth in 3 months, 33% more leads, 1,000 downloads a month, 10% reduced support costs, increase in conversion from leads to sales, more software renewals, 10 evangelists to write about you a month, etc.
Develop your benchmark and your goal
Develop the roadmap of how to achieve these goals – the different mix of tactics that will help achieve them, including KPIs to measure your progress
Measure your steps periodically and adjust accordingly.

In order to be realized, your business goals require channels and tools such as social media, email marketing, media and analyst relations, SEO, conversion optimization, web design/usability, advertising, and more. But, before hiring an expert in one of those areas, ensure that your marketing management and strategy is developed by someone or a team (like The Cline Group) that understands both the channels and what your entire business aims to achieve.

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 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.

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.

October 24, 2011October 27, 2015

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.”

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:

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.

October 10, 2011October 10, 2011

Are You Eating Your Own Social Media Dogfood?

Eating your own dogfood is when a company uses the products it makes.

Frequently, marketing teams don’t eat their own dogfood when it comes to social media.

And the result is often bad strategy.

Everyone now seems to be clamoring for “Social media.” “Open up a Facebook page,” they say … even if they don’t know why. Go Viral … even though they are lacking positioning.

Social media strategy frequently requires a Groundswell strategy, including:

Breaking down silos: operating across all touchpoints, including marketing, sales, customer service, R&D, etc.
Letting go of control: user-generated content
Realistic goals: it’s not viral but expectations aren’t realistic
Frequent, quality content. It’s not a montly newsletter or static website.
Allowing employees (Forrester’s HEROes)
Data & Analytics Focus, on a short-term and long-term basis
Technological Literacy: These tools are digital and need computer literacy
Corporate rules that allow for information gathering and social media access

However, this is not how traditional marketing, with its origin in brand management and reliance on one-way, static print, operated.

Therefore, traditional marketing, with its silos and technophobia, is often unable and unprepared to make working Web 2.0 marketing strategy that drives realistic business results (including, simply staying in business).

Marketing Profs also writes about why eating your own dog food is important.

Creating a great online community or social-marketing program has just as much to do with the philosophy behind the effort as it does with the tools that facilitate such offerings.

Just as the field of email marketing adopted best-practices like opt-outs and truthful subject lines, the discipline of community building and social marketing has best-practices that should be upheld. Anger your customers by posting fake comments in your own blog posts or talking trash about your competitors, and you’ll pay through negative PR, or worse—customer attrition.

In such a transparent environment, there is little room for error. (Just ask global PR firm Edelman how its “Wal-Marting Across America” campaign for Wal-Mart turned out a couple of years back.) You also need to make a lot of decisions on the fly, so having an experienced “pilot” can make for a much smoother ride.

One of the reasons that companies use their own products first is to test them in real situations. With social media, too often your executives and marketing strategists are building strategy without understanding what the social media channels can and can not due and their cultural “language”.

We still have people talking about MySpace.

On the other hand, we also have some who throw in vocabulary which doesn’t actually make sense to anyone who is actively engaged. And others who are quick to berate their team for not being on the newest fad (when they don’t know how it’s going to work), begging companies to get a company page on Google+ (which don’t exist yet) when Google’s senior management isn’t even eating their own dog food, ignoring social strategy like the POST Methodology.

But you must eat your own dog food.

If not, your clients, customer, and community know.

According to David Armano, EVP of Global Integration at Edelman Digital:

you’d better show an intimate grasp of the space. Because, we’re all out there—Googling, Digging, looking for signs that you know what you’re talking about. Take a page out of Marcy’s book if you are in one of these roles. Engage people in relevant, meaningful ways and add a few notches of credibility to your belt.

If you’re not eating your own dogfood, it’s clear. You’re not credible. You don’t know what is going on with your customers, and your community, and you are probably also making bad strategy, causing significant damage to your business.

If you’re looking for an agency or hiring, ask the following questions (from Marketing Profs):

If you’re a brand looking for a company to build your online community or create your social-marketing program, ask that company the following questions:

Does it philosophically embrace the concepts that it’s asking you to adopt (e.g., transparency, authenticity, and a “give before you get” approach to value)?

Is it practicing what it preaches by blogging, engaging customers through its own customer-support community, commenting on other industry blogs, and engaging the public in places like Facebook, LinkedIn, and Twitter?

Does it have “community” or “social” experience working with brands like yours?

If you don’t like dogfood, it’s time to get a taste for the Kibbles.

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