Marketing Wisdom

It doesn’t take much to be successful in the marketplace – really. If you have the product that everyone wants, you will be a success, no matter how many walls and hurdles are in front of you.

Sadly, most of us are in the position where we don’t have a product that will cure cancer or be an iPhone – we have a product that most people don’t know that they want or even need.

What does it take for a product to be a success? Credibility!

Would you buy from a company that no one trusts?
Would you buy from a company that makes a product that kills your pet?
Would you buy from a company that kills all the fish in the ocean?

Of course not – to purchase a product from a company, they must be and have credibility.

What’s it take to build your credibility? It takes time, effort, and understanding from many many different divisions within your company (from money from accounting to contracts from your lawyers to creative from your agencies).

ONE: It takes a strong management team, a marketing heritage, a great spokesperson – all of these are required to get the foundation started on building your credibility.

TWO: Produce a product that has a strong ROI, proposition, and value to your customer.

THREE: Have marquee customers – customers with a name.

FOUR: Have partners that are recognized by their brands. Having Microsoft behind you versus Joe’s Garage Computers goes a long way in building your credibility and success.

FIVE (lastly): Change the market – slightly or incredibly. You have read my article on companies being speedboats or oil tankers -it doesn’t matter in this case; if you can change the direction of the market, then, you have brought credibility to your company, your brand, and your product.

If you skip/ignore one of these, the path to success is extremely difficult if not impossible. They truly are not difficult to accomplish.

Presentations

I’m sure that I spoke of this before – maybe in parts, here and there – but, wanted to bring it up again.  Was reading an article the other day on how to make a presentation (like PowerPoint).

It amazed me how still, to this day, after years and years, people still don’t know how to make and do a presentation. I don’t want to discuss how a presentation should be made or not; I want to discuss the other elements of a presentation.

What other elements?

In a past posting, I mentioned that I do NOT do presentation when I go on press or analyst tours. Why? Because I want the other individual focused on me, not on anyone or anything else. When they are looking at me, I know when they are paying attention and when they are not.

Was at a job interview the other day, and one of the questions I was asked was: “If, in the middle of your presentation, you notice that your audience is not paying attention as attentively as they should. What would you do? a) Start over, b) Ask if they need me to repeat anything, c) Ask if I am going to fast and they are lost, or d) Ask if they don’t understand anything”.

What amazed me, if you have done over 50 presentations in your life, is that there was no “e) Skip ahead to the meat of your subject, worry about the details later”.

When I lived in Israel, I was reminded that what I had always been doing was welcomed, as I always would present “e)”, which the the Israeli culture demands. Get to the meat of the subject and cover the details later.  In other words, get to the strategy and go over the tactics at a later time/date.

I know, I know, it depends on your audience – a CEO wants strategy, where Product Managers want tactics first and then strategy. In other words, the CEO wants “what”, and the PM wants “how & when”.

I know I am rambling again, but, I am a member of a board of advisors for Dell Computer. They send presentations out, from one of three individuals. Two of them present as if I am a PM, while the other presents as if I am a CEO – AND, that same individual, in later slides, gives the tactics if I have further questions or issues.

Okay, an analogy. If you have kids, or nephews, nieces, etc., you probably have been in the position of one of the following:

1) “Owww, it hurts, it hurts. Help me.”

2) “I bit the inside of my mouth. It hurts. Help me.”

Which one would you prefer? Of course, #2. Gets right to the point, huh?

To close this, back to them paying attention or not. Do presentations when you have a technology that can’t be seen with the naked eye, or have to display large images, sketches, etc. to numerous individuals. When I have one or two people that I have to give a presentation to, I do not do a presentation. When more then three, then, do a presentation.

How far should you go with Social Networks?

There is a lot of discussion about “if” or “when” a company/business should start a social networking site.

A social network is a place where people can come and a) post comments, b) read stuff about your business/company, c) speak with others, real time (IM) about anything, and d) post comments.

Why do I have the same points twice – because by having a site like this, people can post positive as well as NEGATIVE comments about your business.  As I stated in a previous post, negative comments are good to have, as it is instant feedback on areas that need improvement, as well as showing that you believe in freedom of speech. 

You can always remove any negative comments (but then, why have a social networking site?).

This is the issue of having a site like this. The blogs, you can control.  The content, you can control. But, by allowing your customers to speak with each other and post what they think, that is, again, the issue of having this technology on or as your website.

Think it through before you put up a social networking site. It does cost some money, but, the damage can be incredible if you don’t watch yourself (and the site!). 

Let’s take the dogfood recall as an example.  Would you, if you were one of the major brands, have fared better if you had a comment area on your website? Would it have been beneficial to have a blog so your customers can read about what you are doing?

As all of you know (if you are a follower of this blog), I absolutely believe that it would have been beneficial.

The first would have been to issue apologies through the blog.

The second, would have been to issue next steps through the blog.

The third, would have been to get customers to talk to each other about what they are going through with their pets.

And the fourth, to respond to the customers about their concerns. Yes, you would have had customers say “I will never buy from you again”.  But, if you were the dogfood manufacterer BRAND, then, you could have laid out next steps on how you will never allow this to occur again (we didn’t see that anywhere, did we?).

Think it through if you are going to get into a social site – I think it is worth it, no matter what, but, sometimes, your management may not think so.

Web Site Start-Up

Recently I was consulting a friend and an idea they had for a website. He showed me a typical website that sold a unique item – each item had a price, picture, description, etc. next to it (no, it wasn’t Ebay). For each picture to be placed there, the web site stated that it would cost $30 per picture, per month. There will thousands of pictures on the site. At $30 per picture, this translated into $30 million dollars in annual revenue (just from having a picture on a web site!!!).

So, I asked him the following:

1) Don’t you think, if this little company was bringing in $30 million, just by putting pictures on its site, a larger company wouldn’t scoop it up?
2) Do you think that this company (a company that has pictures of its products on the site), that has over 1000 pictures on the site, is paying $300,000 a month to have them posted there?
3) Don’t you think that this website offers a “group” discount to major advertisers there? Like $1 a picture?
Then we got to his idea:
4) What are you going to do that is different? He responded with, “I will charge $20 and everyone will come to my site”.

That’s it. Needless to say, I sent him in a new direction with the following instructions:

a) Call one of these companies that are advertising on the site and ask them what they pay per month to be there – he did and found out that it was $500 a month or the $30 a picture, whichever comes first.
b) Find out if the web site gets a commission from referring a sale through the site – he did and the site does get a commission
c) What value are you bringing, beside the price difference? This was the key point and actual turning point of his business model – he wanted to share his wealth of knowledge and charge for it, and by putting pictures of products to sell on his site, at a cheaper price, he would get people to buy his knowledge. 

So, he is now pursuing the path of building a cheap website, listing and showing thousands of products (cheap to him is under $10,000 or free) with no database behind it (he will enter each picture and relevant information manually) so that people can find out information about the product he wants to sell, his knowledge.

Xbrand Communications appreciates and applauds his endeavor, but, with many reservations. To make a company grow, or for that matter, to even get it off the ground, some investment of moneys must occur. That having a college student design and implement a web site, in a manner that will allow him to enter all the information, in a timely manner, is setting up his business for disaster, if not outright failure (can you imagine entering on a template, thousands and thousands of product pictures, their descriptions, their prices, etc. and keep doing that every day as products are sold and replaced?).

With a little thought and effort, he could easily build a website with his knowledge posted on it – not all of his knowledge, but, enough to hook the reader into wanting to know more so that they will pay for it. There are many web sites out there that do this, and do not put it behind another marketing/selling mechanism. 

But, either due to lack of certainty in his knowledge or because he believes he can steal all the other web sites customers by offering a cheaper price, he is doing just that – trying to get all the other customers to come to his site because it is $10 cheaper – and please remember, this is being done with no firm business model, no marketing plan (would you pay for your product to be on a web site knowing that it won’t be advertised?), and no moneys put into the company to make it grow.

Thank goodness he isn’t an Xbrand client. Xbrand Communications would not take his money because we would have to tell him that we would have to pass on the project, as paying us a few thousand dollars does not or will not make a company – we can only help a company grow and prosper, with a proper business model and marketing plan. If the business model is flawed to begin with, there is nothing we can do.

By the way – in follow-up, he has come to realize that he will have to invest at least $50K to make the company and website that he wants. We at Xbrand are now helping him be a success, as he has hired the correct people and management to make the company into a world class provider.

Competition

 Last month I encountered, I guess, one of the most amazing statements I have ever heard from a CEO of a large company.  An employee had approached him and stated “Company ZZZ, our major competitor, has decided to target kids from the age of 12-18. What should we do?”.  The CEO responded with “Let’s send them a card saying ‘Good Luck’”.

Sadly, it really did end there.  Company ZZZ went on to making huge inroads into this market, capitalizing on some basic research and market understanding – to put it in perspective, Company ZZZ grossed more then $200 million in their first year in this emerging market.

The CEO that made the statement of “good luck” spent the next three years (after discovering that the competition was successful)  trying to catch up with Company ZZZ – and really was never able to gain market share. 

Why did this occur? A few things come to mind:

a) The CEO made it personal between his company and that of the competition – he never stepped back and looked at the opportunity, only that he hoped the competition would fail – Don’t make business decisions on personal feelings or basis
b) The CEO could have quickly and easily been able to enter the market much sooner if he would have sent the employee who brought the information to him to do a little research into the potential market and “WHY” the competition was targeting this market – because he either didn’t believe in the potential or didn’t want to “copy” the competition, his failure to act cost his company millions, and soon, billions, of dollars
c) He didn’t know about it, hadn’t thought of it, so why try it
d) His companies resources were already stretched too thin and couldn’t switch gears to get into the action.

There were, of course, many more things, but, I think you get the idea.

There are three types of companies in the world – Oil Tankers, Mid-size boats, and Speedboats. 

Speedboats can turn on a dime and react to market fluctuations and survive, but, they usually can’t deliver large volume and expertise in a given field – Asia owns the “market” on speedboat companies.

Mid-size boats can turn quickly to react to market conditions and also be able to deliver large volume – they keep themselves streamlined so they can quickly react and move with the market (and not against it).

Oil Tankers (and we all know at least one of these companies) can deliver huge volumes of product and are there when you need their specific product (keyword – specific), but, either because of their size, expertise, or mentality, they are unwilling or unable to change with the market.

There are numerous books on companies turning from Oil Tankers to Speed Boats, so, I will stop with this analogy here.

A few last words:

1) Never make or take the competition personally – they are in business, just like you, to make money and sell product
2) COPY the competition – there have been too many times in all my years where I have heard VP’s of Sales and/or Marketing say “We can’t do that, the competition is doing it”.  Forget it – copy the competition (of course, respect all patents and IP involved), there are many times that copying them does not cost money (or legal issues); for example, remember when you bought a TV and there was a warranty card inside? And then, there was a warranty card AND the option to go on the web and register the product? Many companies would not do the web registration – even though it saved thousands of dollars – because they didn’t want to copy the first company that did it. Look at Asia – they make trillions of dollars a year, legally, by copying product on the market (and I am not referencing the illegal products that are also manufactured in Asia).
3) Step back and look at the forest – always.  A word, that cannot be overused (even though I know some of you will argue with me), is convergence.  Especially in today’s technology market, products are converging so fast, that many companies that refused to look at the whole forest, are gone.  The PDA market never believed that the cell phone would be serious competition – now look at who is left in the PDA market? Convergence is key to the success of you OR your competition – don’t just look at the tree (your specific market) you are standing in front of, step back and look at the forest on occasion.

The Installed Base

Just finished reading an article about how Ipod will never fall, as it was first and now has a commanding lead in the market.

Was interesting to read the editor speak about how the Zune failed and now the Sandisk/Yahoo MP3 will fail also, because they don’t have an installed base. It was also interesting to see how the editor never mentioned any other product category that fell to a late arrival; for example, Toyota overtaking Ford/Chrysler/GM; Dell overtaking Compaq; AMD taking over Intel; and so on.

Is amazing to see this, as this is what drives many CEO’s to not take risks and enter existing markets and, I believe, it is why we are seeing so many new companies come up with totally new ways of doing things or improving on existing things (which then leads to numerous lawsuits and no one ever benefits).

As a marketer, you can’t live in the numbers – you MUST take risks and see the opportunities that are out there. There are always people who will buy “the other product” to stop the monopolization (look at Microsoft and Linux). Is that enough to sustain a company – probably not, but, it can be enough to take the first steps.

Research is great (as I wrote about previously), but, it can also lead to you never wanting to take risks or open up new markets.

How fast should you move

Remember my boat theory, how some companies are oil tankers and can’t move to save themselves and others are speed boats that can turn on a dime?

Am working with a client, very small, not even a speed boat yet (maybe a kayak), and they are getting ready to become a speedboat.

The first question that I ask these companies is: “are you ready for this?”.

Most small companies that are ready to grow “think” that they are ready, but, really don’t put everything together that needs to be done and what will happen when it starts.

So, ask the following questions before you “make the leap”:

1) Do you have enough product to meet supply and demand?

2) Do you have enough staff to meet the demand? (From sales calls to answering the phone.)

3) Do you have the facilities to meet the growth?

4) Do you have a business plan in place to steer you?

5) Do you have the money to meet the growth?

6) Do you have a plan in place to replace yourself? (To bring in a CEO or Business Manager.)

7) Do you have the time to make this happen?

This last one trips up a lot of my clients – because they have children, or have just bought a house, or want to travel the world. It comes down to – are you ready to make this happen or not? Starting a business requires allot of time, but, after it is up and running and you are ready to take it to the next level, you will lose all comfort levels and a lot of what you are working for and had.

What do I mean? After you have had your own business for five years, you have it pretty much down pat – where you can take three day vacation three times a year, you can have children, you can buy a new house, etc.

When you plan on taking your business to the next level, then, you will lose all those “comforts” that you have built to date.

It’s depressing to some degree, but, the pay-off is ten-fold.

Good luck.

SEO’s and you

So, you think you need a SEO?

Well, do you? If you go to Googles SEO pages and read all of their information, they even ask you the same question.  Do you really need it or, do you need to pay alot of money to a SEO firm, or, does your firm have the experience and quality that is needed to be SEO’d?

You must always list your company on the search engines.  But, do you need to pay alot for this? No – you shouldn’t be spending over $1000 a month (this is for a $1M or less company). Of course, also determine if you really need to be listed? If you are the only bakery that sells cookies in Butte, Montana, then don’t spend the money, spend it on more traditional marketing campaigns.  But, you can list your company on the search engines, FOR FREE; don’t believe what SEO companies tell you.

Back to Google – if you look at their help site, they consistently come back to something that ALL marketers should have and do, and that is “trust your instincts”.

My point is this – there is alot of hype and excitement over SEO, from “hiring” marketers that can do and know SEO to “hiring” firms that do SEO.  It reminds me of a perfect analogy that all of you can relate to, and that is “do I need to go to this tradeshow or not”?  How many times did you sit and try and determine if you needed to go to a tradeshwo or not – it came down to ROI and brand building. It is the same with SEO – how much will it help you and what will the ROI be?