A startup veteran notes: "For the first few years, we were totally in a survival mode. We were very, very lean in terms of money and time. We didn't begin with clearly defined aspirations that in four years we'd achieve X and Y. It was more like, 'Let's do something and see what happens.' We went to the try-a-lot-of-stuff-and-see-what-works school. We had a business plan at the beginning but only because we needed one to get a line of credit. We didn't know much about running a business. We figured to learn what we needed as we went along. We went where the market took us.”
As Abraham Lincoln noted, “Things may come to those who wait, but only the things left by those who hustle.” Start-ups and turnarounds are very similar. You don't have much cash or much time. You have to make good decisions and make things happen quickly. Be prepared to skate fast over thin ice. Be prepared to move forward without the right answers. Concentrate on areas where you’re in control. Don’t worry about things that aren’t in your control. Work to develop an instinctive understanding of your target customers. Everyone in your organization needs to develop a proprietary, emotional relationship with the customer, continually striving to understand and respond to their needs.
To nurture start-ups toward maturity quickly, it helps if they belong to a group of interdependent yet nominally independent companies, all built around a core base of knowledge. Idealab strives to help its member companies, not by showering them with cash, but by leveraging shared creative and technical know-how. "We really don't think of ourselves as venture capital," says founder Bill Gross. "We're creative capital. The money we bring is incidental."
Idealab is a business incubator. Like a traditional VC firm, it provides seed money and takes a minority equity stake in the companies it adopts. Like a think tank, it brainstorms technology applications that could form the basis for new products. And like a parent company, it takes a substantial role in overseeing the operations of its subsidiaries. In a fast moving market, one or two months can be the difference between success or failure. The shared knowledge at Idealab enables a start-up to avoid many mistakes so that it can do in four-and-a-half months what would take another start-up nine months to do. Much of the time saved stems from the fact that Idealab companies don't have to build everything from scratch. Since they share office space and administrative services, startup teams are free to just concentrate on those factors that are uniquely related to their businesses.
Idealab is trying to harness both the power of a big company and the nimbleness of a small one. It aims to add value through shared knowledge and creativity and in that way build better companies. The CEOs of the individual businesses have complete freedom to shape their companies while determining which of Idealab’s suggestions seem most relevant and possible to their situations. Idealab uses its experience to systematize the generation of new business ideas. Among its learnings:
- You need to be incredibly highly focused to succeed.
- Even if you have a wonderful product, if you can't clearly communicate to the customers where the product's benefit is, it's not going to do you any good.
Venture Catalysts such as Artemis Ventures and Guy Kawasaki’s Garage Technology Ventures act as hybrid VC, headhunting and management consulting firms, helping startups in every way imaginable. Incubators can help by removing the need to pay attention to routine issues. "The first few months of a start-up are analogous to the first few nanoseconds in the birth of a star," says Steve Glenn, the founder of PeopleLink, which raised $35 million from GE, AT&T and Goldman Sachs and became a leading provider of online community software. "Whatever happens during that short period will determine your permanent trajectory. So if you're freed up from the administrative stuff, you can focus on aiming that trajectory as high as possible."
Wednesday, December 31, 2008
Tuesday, December 30, 2008
How to attract and keep customers.
Entrepreneurs survive by being enthusiastic about their ventures and by being committed to unceasing promotion of their their concepts. It seems unnatural for such people to equate "being silent" with actively promoting their venture. Yet, they’re not selling when they’re talking; rather, they’re selling when their targeted prospect is talking. Provide interesting information to your prospects and then listen to what they say. Let them "teach" you exactly what the hot-buttons are that can lead you to sales success. No one understands the targeted customer’s needs as intimately as the prospective customer does. If you listen closely enough, your customers will explain your business to you.
Selling is helping people make business decisions that are good for them. It’s finding a need and filling it. Learn how to offer solutions beyond price - because you know your customer’s business as well or better than they do. List the features of your product or service but sell the benefits.
Once you get a customer, keep selling to them. Customers are so difficult and so expensive to get, you don’t ever want to lose them. Sell them upgrades, maintenance, new products, new services. Aim to create a recurring revenue model. Continually refresh your memory of the reasons the customer did business with you in the first place.
The four main reasons why people buy are - Pride, Pleasure, Profit and Protection. What matters in sales is Continuity, Commitment and Content, and the last is the least important. All things being equal, the person with the best sales presence will get the order. To quote Aristotle, “People are convinced more by the depth of your conviction than by all the facts at your disposal.”
When you're selling, the ten most important "power words" that get the customer’s attention are:
- money
- save
- you
- new
- free
- proven
- guaranteed
- results
- health
- love
These words were identified by researchers in the Psychology Department at Yale University as having extraordinary persuasive power and are listed here in order of importance. Use these words early in your sales presentation and I guarantee that you'll get your client's attention.
Selling is helping people make business decisions that are good for them. It’s finding a need and filling it. Learn how to offer solutions beyond price - because you know your customer’s business as well or better than they do. List the features of your product or service but sell the benefits.
Once you get a customer, keep selling to them. Customers are so difficult and so expensive to get, you don’t ever want to lose them. Sell them upgrades, maintenance, new products, new services. Aim to create a recurring revenue model. Continually refresh your memory of the reasons the customer did business with you in the first place.
The four main reasons why people buy are - Pride, Pleasure, Profit and Protection. What matters in sales is Continuity, Commitment and Content, and the last is the least important. All things being equal, the person with the best sales presence will get the order. To quote Aristotle, “People are convinced more by the depth of your conviction than by all the facts at your disposal.”
When you're selling, the ten most important "power words" that get the customer’s attention are:
- money
- save
- you
- new
- free
- proven
- guaranteed
- results
- health
- love
These words were identified by researchers in the Psychology Department at Yale University as having extraordinary persuasive power and are listed here in order of importance. Use these words early in your sales presentation and I guarantee that you'll get your client's attention.
Monday, December 29, 2008
Ten ways to attract new business.
1. Be a walking example/demonstration of how effective your product or service is. Being congruent (when people sense that you believe and live what you speak about) is the number one way to establish credibility.
2. Do your homework and discover what your "typical" customer's biggest problem is. Pretend it's your own problem. Now solve the problem. Take the solution to the customer, packaged around your own product/service. If you’re a solution provider, the barrier to entry is harder for a competitor than if you’re a product provider.
3. Polish your product knowledge and presentation techniques until they’re razor sharp. Your stories, examples, jokes, facts, comparisons and closes are your "tools of the trade." Spend a minimum of four hours a week polishing your tools.
4. Make a notebook of your best stories, best examples, most effective closes, funniest relevant jokes and the rebuttals to the biggest objections you face. Have the rest of the sales team do the same. Compare notes, then compile a "best of the best" file of the best stories, examples, closes, etc. Continually expand and add to your notebook each month.
5. Improve your communication skills so that people want to be around you. Learn rapport skills through Neuro Linguistic Programming (NLP) training, for example. Learn to identify different personality types and communications styles and know how to respond to each. Hone your listening and questioning skills. Polish your speaking and languaging skills until your presentations are very effective.
6. Add value to your current customers by making sure they're maximizing the use of the product/service. Show the customer how they’re saving money by using your product. Be willing to take as much time as necessary to educate and support them, especially after the sale.
7. Turn your customers into your company's R&D department. Get lots of feedback from them. Be so "in tune" with their needs and desires that you can anticipate what your customers will want even before they ask.
8. Ask your best customers for a letter of recommendation or a testimonial letter (on their letterhead). Three or four sincere testimonials can raise your average close ratio by 30-50%. An easy method is to interview your best customers over the phone, take notes (quotes), then email the notes to them. They can easily edit and print them out on their own letterhead, and mail the letter to you. Show the letters to all new prospects - this is more effective than the slickest brochure!
9. Strengthen your personal foundation/reserve levels so that you act like you don't need the money anymore. Then your motivation is based more on creating value, solving the customer's problems and genuinely helping them get what they want or need. This is a much more attractive sell.
10. Master the following six-step selling process until it’s second nature:
- Establish rapport.
- Ask questions to understand the customer and to find their real need.
- Based on the need, determine exactly where the real value is for the customer.
- Link their need to the value provided by your product/service using concise, persuasive communication (don't over-present).
- Assume the sale and conditionally close. If there’s a green light, then close the sale officially.
- If there are any objections, handle them by cycling back to previous steps (find the real need, link it to your product, etc).
2. Do your homework and discover what your "typical" customer's biggest problem is. Pretend it's your own problem. Now solve the problem. Take the solution to the customer, packaged around your own product/service. If you’re a solution provider, the barrier to entry is harder for a competitor than if you’re a product provider.
3. Polish your product knowledge and presentation techniques until they’re razor sharp. Your stories, examples, jokes, facts, comparisons and closes are your "tools of the trade." Spend a minimum of four hours a week polishing your tools.
4. Make a notebook of your best stories, best examples, most effective closes, funniest relevant jokes and the rebuttals to the biggest objections you face. Have the rest of the sales team do the same. Compare notes, then compile a "best of the best" file of the best stories, examples, closes, etc. Continually expand and add to your notebook each month.
5. Improve your communication skills so that people want to be around you. Learn rapport skills through Neuro Linguistic Programming (NLP) training, for example. Learn to identify different personality types and communications styles and know how to respond to each. Hone your listening and questioning skills. Polish your speaking and languaging skills until your presentations are very effective.
6. Add value to your current customers by making sure they're maximizing the use of the product/service. Show the customer how they’re saving money by using your product. Be willing to take as much time as necessary to educate and support them, especially after the sale.
7. Turn your customers into your company's R&D department. Get lots of feedback from them. Be so "in tune" with their needs and desires that you can anticipate what your customers will want even before they ask.
8. Ask your best customers for a letter of recommendation or a testimonial letter (on their letterhead). Three or four sincere testimonials can raise your average close ratio by 30-50%. An easy method is to interview your best customers over the phone, take notes (quotes), then email the notes to them. They can easily edit and print them out on their own letterhead, and mail the letter to you. Show the letters to all new prospects - this is more effective than the slickest brochure!
9. Strengthen your personal foundation/reserve levels so that you act like you don't need the money anymore. Then your motivation is based more on creating value, solving the customer's problems and genuinely helping them get what they want or need. This is a much more attractive sell.
10. Master the following six-step selling process until it’s second nature:
- Establish rapport.
- Ask questions to understand the customer and to find their real need.
- Based on the need, determine exactly where the real value is for the customer.
- Link their need to the value provided by your product/service using concise, persuasive communication (don't over-present).
- Assume the sale and conditionally close. If there’s a green light, then close the sale officially.
- If there are any objections, handle them by cycling back to previous steps (find the real need, link it to your product, etc).
Friday, December 19, 2008
The Hung Wu Vase, a poem by Robert Graves.
Robert Graves (July 1895 – December 1985) was an English poet, translator and novelist. He was educated at Charterhouse School and St. John's College, Oxford. He was awarded the James Tait Black Memorial Prize for both of his novels, I, Claudius and Claudius the God.
Graves fathered eight children with a variety of partners and had a fairly turbulent love life, as the following poem illustrates. Of course, love wasn't the only intensely-felt experience in his long life, but it was the one which helped him to make poetic sense of the rest. He once commented that, "Poetry cannot be separated from the state of being in love." He and his last love, Beryl Hodge, are buried in the small churchyard on the hill in Deia, on the northwest coast of Majorca, looking out over the sea.
The Hung Wu Vase by Robert Graves.
With women like Marie no holds are barred.
How do they get the gall? How can they do it?
She stormed out, slamming the hall door so hard
That a vase on a gilt shelf above - you knew it,
Loot from the Summer Palace at Pekin
And worth the entire contents of my flat -
Toppled and fell ...
I poured myself a straight gin,
Downing it at a gulp. 'So that was that!'
The bell once more ... Marie walked calmly in,
Observed broken red porcelain on the mat,
Looked up, looked down again with condescension,
Then, gliding past me to retrieve a glove
(Her poor excuse for this improper call),
Muttered: 'And one thing I forgot to mention:
Your Hung Wu vase was a phony, like your love!'
How can they do it? Where do they get the gall?
I'll be off next week, and back on December 29th.
My Christmas wish for all of you is:
May you always be blessed
With walls for the wind,
A roof for the rain,
A warm cup of tea by the fire
Laughter to cheer you,
Those you love near you,
And all that your heart might desire.
Graves fathered eight children with a variety of partners and had a fairly turbulent love life, as the following poem illustrates. Of course, love wasn't the only intensely-felt experience in his long life, but it was the one which helped him to make poetic sense of the rest. He once commented that, "Poetry cannot be separated from the state of being in love." He and his last love, Beryl Hodge, are buried in the small churchyard on the hill in Deia, on the northwest coast of Majorca, looking out over the sea.
The Hung Wu Vase by Robert Graves.
With women like Marie no holds are barred.
How do they get the gall? How can they do it?
She stormed out, slamming the hall door so hard
That a vase on a gilt shelf above - you knew it,
Loot from the Summer Palace at Pekin
And worth the entire contents of my flat -
Toppled and fell ...
I poured myself a straight gin,
Downing it at a gulp. 'So that was that!'
The bell once more ... Marie walked calmly in,
Observed broken red porcelain on the mat,
Looked up, looked down again with condescension,
Then, gliding past me to retrieve a glove
(Her poor excuse for this improper call),
Muttered: 'And one thing I forgot to mention:
Your Hung Wu vase was a phony, like your love!'
How can they do it? Where do they get the gall?
I'll be off next week, and back on December 29th.
My Christmas wish for all of you is:
May you always be blessed
With walls for the wind,
A roof for the rain,
A warm cup of tea by the fire
Laughter to cheer you,
Those you love near you,
And all that your heart might desire.
Thursday, December 18, 2008
Five steps to great marketing.
Looking at marketing as an investment rather than an expense, Craig Palubiak offers five marketing guidelines to help you maintain your edge over the competition:
1. Think mission before commission.
It's critical to have a well-defined corporate mission, and to keep that mission in the minds of employees. Understand that your mission is a vital part of your company's culture that can lead your organization to prosper. It's also important to learn the missions of your customers, prospects and partners to see if they fit with yours.
2. Learn to read the need.
Develop mechanisms that allow you to stay in touch with the marketplace, so you stay a step ahead as the market changes. When asked what made him a great hockey player, Wayne Gretzky responded, “Most players go where the puck is. I go where it will be.” The same is true for businesses. Go where the market is going. A good customer survey can prove invaluable in this endeavor. A "good" survey means one that, in addition to measuring your performance with customers, also measures how important your performance is to them and what it costs you to deliver that performance. You'll have a better picture of where you're wasting time and resources on business that doesn't really matter to the customer, and where you're doing well.
3. Move from feature to teacher.
In the days before the new economy, companies could get by merely selling a product's features. Today, however, you have to be a knowledge source for your customers. Sixty-five percent of customers defect because of service indifference. And while 96% of unhappy customers never complain, they'll tell an average of nine other people about your poor service. Welcoming complaints, seeking them out, improves your odds of keeping good customers and gaining new ones. To avoid the complacency that leads to lost customers, find out what your customers' three primary needs are and what they'll be in the future.
4. Master "customerization."
Not all customers are the same. Some are good, and some are lousy. Great marketing consists of discriminating between the two. Get rid of the lousy ones, or find a way to turn them into good ones. When you look for good customers, pay attention to margin as well as volume. You might have low-volume, high-margin customers who are well worth pursuing. See where your true opportunity is, and make a decision about where you want to go with each customer. Short-term customers often are undervalued. While long-term customers may be your company's lifeblood, certain types of short-term customers can benefit your business. Treat them separately and differently, but make sure they don't interfere with your ability to service your long-term clients.
5. Pay attention to the competition.
Nothing pushes you to new levels of performance more than competition. Just make sure the competition pushes and doesn't guide. To harness that drive, you have to know where they are and what they're doing. Talk to your customers and suppliers, and develop some clear competitive intelligence. Get out of your office and visit them. Find out who the top three competitors are, why they’re successful, what you can learn from them, and what you need to do differently.
The main purpose of marketing is to identify the appropriate markets for your products and services and then open up a conversation with prospects in those markets. This involves both attraction and seduction. Attracting customers requires that you become relevant in their world and they feel relevant in yours. Seduction entices people to do business with you by demonstrating that you understand and care about their needs like no one else, and demonstrate this by making relevant offers and suggestions. Selling is the major component in marketing that makes a product wanted.
1. Think mission before commission.
It's critical to have a well-defined corporate mission, and to keep that mission in the minds of employees. Understand that your mission is a vital part of your company's culture that can lead your organization to prosper. It's also important to learn the missions of your customers, prospects and partners to see if they fit with yours.
2. Learn to read the need.
Develop mechanisms that allow you to stay in touch with the marketplace, so you stay a step ahead as the market changes. When asked what made him a great hockey player, Wayne Gretzky responded, “Most players go where the puck is. I go where it will be.” The same is true for businesses. Go where the market is going. A good customer survey can prove invaluable in this endeavor. A "good" survey means one that, in addition to measuring your performance with customers, also measures how important your performance is to them and what it costs you to deliver that performance. You'll have a better picture of where you're wasting time and resources on business that doesn't really matter to the customer, and where you're doing well.
3. Move from feature to teacher.
In the days before the new economy, companies could get by merely selling a product's features. Today, however, you have to be a knowledge source for your customers. Sixty-five percent of customers defect because of service indifference. And while 96% of unhappy customers never complain, they'll tell an average of nine other people about your poor service. Welcoming complaints, seeking them out, improves your odds of keeping good customers and gaining new ones. To avoid the complacency that leads to lost customers, find out what your customers' three primary needs are and what they'll be in the future.
4. Master "customerization."
Not all customers are the same. Some are good, and some are lousy. Great marketing consists of discriminating between the two. Get rid of the lousy ones, or find a way to turn them into good ones. When you look for good customers, pay attention to margin as well as volume. You might have low-volume, high-margin customers who are well worth pursuing. See where your true opportunity is, and make a decision about where you want to go with each customer. Short-term customers often are undervalued. While long-term customers may be your company's lifeblood, certain types of short-term customers can benefit your business. Treat them separately and differently, but make sure they don't interfere with your ability to service your long-term clients.
5. Pay attention to the competition.
Nothing pushes you to new levels of performance more than competition. Just make sure the competition pushes and doesn't guide. To harness that drive, you have to know where they are and what they're doing. Talk to your customers and suppliers, and develop some clear competitive intelligence. Get out of your office and visit them. Find out who the top three competitors are, why they’re successful, what you can learn from them, and what you need to do differently.
The main purpose of marketing is to identify the appropriate markets for your products and services and then open up a conversation with prospects in those markets. This involves both attraction and seduction. Attracting customers requires that you become relevant in their world and they feel relevant in yours. Seduction entices people to do business with you by demonstrating that you understand and care about their needs like no one else, and demonstrate this by making relevant offers and suggestions. Selling is the major component in marketing that makes a product wanted.
Wednesday, December 17, 2008
Marketing on the Web.
In the past, “viral marketing” meant relying on word of mouth to get your product known. But like so many other concepts, it’s been reinvented by the Internet. There are three levels of viral marketing on the Web.
The first is to embed your advertising message so deeply in your product or service that your customers hardly realize they’re passing it on. Hotmail, for example, was one of the first to provide free email. Each outgoing email message had the tagline, “Get Your Private, Free Email from MSN Hotmail at http://www.hotmail.com.” Today, Hotmail has more than 260 million users.
The second level involves making the content of your Web site so compelling that viewers want to share it with others. As comic strips, video clips and other attention grabbers are forwarded to friends, the marketing messages go along for the ride. The culinary site, Epicurious.com, allows visitors to email recipes from its database. The first few lines of the recipe provide a link to to the Epicorious site, describing the recipe database and offering information about ordering cooking supplier from one of its partners, Williams-Sonoma.com.
The third level offers viewers an incentive to hand over the email addresses of friends, family members and coworkers. Onvia.com, a B2B news and information site for entrepreneurs once offered a chance to win an Audi coupe just for sending in five email addresses. The benefits of viral marketing are increased recognition among a targeted audience for far less money than traditional marketing efforts. One of the pitfalls is that you lose control over the message and its distribution, but selectivity and proper targeting can minimize this.
For marketers, Web 2.0 offers a remarkable new opportunity to engage consumers. (See an excellent WSJ article by Parise, Guinan and Weinberg in The Journal Report, Monday, Dec 15th, 2008). Web 2.0 encompasses a set of tools that allow people to build social and business connections, share information and collaborate on projects online. That includes blogs, wikis, social-networking sites and other online communities, and virtual worlds. A growing number of marketers are using Web 2.0 tools to collaborate with consumers on product development, service enhancement and promotion.
For example, a leading greeting-card and gift company set up an online community - a site where it can talk to consumers and the consumers can talk to each other. The company solicits opinions on various aspects of greeting-card design and on ideas for gifts and their pricing. It also asks the consumers to talk about their lifestyles and to upload photos of themselves, so that it can better understand its market. A marketing manager at the company says that, as a way to obtain consumer feedback and ideas for product development, the online community is much faster and cheaper than the traditional focus groups and surveys used in the past. The conversations consumers have with each other result in many new and interesting insights, including gift ideas for specific occasions, such as a college graduation, and the prices consumers are willing to pay for different gifts.
Consumers have to have some incentive to share their thoughts, opinions and experiences. One way is to make sure they can use the online community to network among themselves on topics of their own choosing. That way, the site isn't all about the company, it's also about them. For instance, a toy company that created a community of hundreds of mothers to solicit their opinions and ideas on toys also enabled them to write their own blogs on the site, a feature that many used to discuss family issues.
The first is to embed your advertising message so deeply in your product or service that your customers hardly realize they’re passing it on. Hotmail, for example, was one of the first to provide free email. Each outgoing email message had the tagline, “Get Your Private, Free Email from MSN Hotmail at http://www.hotmail.com.” Today, Hotmail has more than 260 million users.
The second level involves making the content of your Web site so compelling that viewers want to share it with others. As comic strips, video clips and other attention grabbers are forwarded to friends, the marketing messages go along for the ride. The culinary site, Epicurious.com, allows visitors to email recipes from its database. The first few lines of the recipe provide a link to to the Epicorious site, describing the recipe database and offering information about ordering cooking supplier from one of its partners, Williams-Sonoma.com.
The third level offers viewers an incentive to hand over the email addresses of friends, family members and coworkers. Onvia.com, a B2B news and information site for entrepreneurs once offered a chance to win an Audi coupe just for sending in five email addresses. The benefits of viral marketing are increased recognition among a targeted audience for far less money than traditional marketing efforts. One of the pitfalls is that you lose control over the message and its distribution, but selectivity and proper targeting can minimize this.
For marketers, Web 2.0 offers a remarkable new opportunity to engage consumers. (See an excellent WSJ article by Parise, Guinan and Weinberg in The Journal Report, Monday, Dec 15th, 2008). Web 2.0 encompasses a set of tools that allow people to build social and business connections, share information and collaborate on projects online. That includes blogs, wikis, social-networking sites and other online communities, and virtual worlds. A growing number of marketers are using Web 2.0 tools to collaborate with consumers on product development, service enhancement and promotion.
For example, a leading greeting-card and gift company set up an online community - a site where it can talk to consumers and the consumers can talk to each other. The company solicits opinions on various aspects of greeting-card design and on ideas for gifts and their pricing. It also asks the consumers to talk about their lifestyles and to upload photos of themselves, so that it can better understand its market. A marketing manager at the company says that, as a way to obtain consumer feedback and ideas for product development, the online community is much faster and cheaper than the traditional focus groups and surveys used in the past. The conversations consumers have with each other result in many new and interesting insights, including gift ideas for specific occasions, such as a college graduation, and the prices consumers are willing to pay for different gifts.
Consumers have to have some incentive to share their thoughts, opinions and experiences. One way is to make sure they can use the online community to network among themselves on topics of their own choosing. That way, the site isn't all about the company, it's also about them. For instance, a toy company that created a community of hundreds of mothers to solicit their opinions and ideas on toys also enabled them to write their own blogs on the site, a feature that many used to discuss family issues.
Tuesday, December 16, 2008
Crafting marketing messages.
Marketing isn’t about today - it’s all about tomorrow. It's about getting to know your audience and planing your future. Start by putting out messages to industry analysts about where you want to go. Get their feedback and advice (and pick up great inside information as well). You want them to believe they’re creating an industry so they can then become the experts in that space. But you’ve got to pay them in the interim by buying their research because that’s how they make a living.
“Pull" marketing is based on giving the prospect something of value before you ask them to buy. It’s a way of establishing the basis for a relationship that takes place before you offer them the opportunity to become a customer. "Push" marketing is asking for an order without having established a relationship and is a totally non-selective process. Anyone who wants to buy can become your customer. If your business proposition is based on having a customer for a long time, “pull” is the only way to insure that both parties are interested in a long-term relationship. A “stay-in-touch” program is a low-cost way of building top-of-the-mind awareness with existing customers and with prospects who haven’t yet found compelling value in the sales message.
Many entrepreneurs are so technology and product driven that they never recognize that marketing is important. They don’t recognize that prospects and customers don’t care directly about the functionality of products. Prospects and customers care about benefits and, more specifically, the value of those benefits in their own lives. "What's In It For Me?" is the central question that any prospect or customer is dealing with (whether consciously or unconsciously) while receiving your company's marketing message. The entrepreneur must address this question while, at the same time, providing a marketing message that:
(1) helps inappropriate prospects take themselves out of consideration (because dealing with inappropriate prospects costs money and wastes valuable time).
(2) prepares true prospects to be receptive to the sales message they’ll eventually get from you.
(3) leads them directly into the selling cycle.
Product packaging is a great way to activate the consumer’s impulse to buy. It's the loudest possible advertising vehicle you have - it’s right in the store when customers are standing there with their money. Yet, go down the cereal or pasta isles in any supermarket and you’ll see that very few companies really try to market with their packaging. Frito Lay is an exception - it’s always updating its packaging.
“Pull" marketing is based on giving the prospect something of value before you ask them to buy. It’s a way of establishing the basis for a relationship that takes place before you offer them the opportunity to become a customer. "Push" marketing is asking for an order without having established a relationship and is a totally non-selective process. Anyone who wants to buy can become your customer. If your business proposition is based on having a customer for a long time, “pull” is the only way to insure that both parties are interested in a long-term relationship. A “stay-in-touch” program is a low-cost way of building top-of-the-mind awareness with existing customers and with prospects who haven’t yet found compelling value in the sales message.
Many entrepreneurs are so technology and product driven that they never recognize that marketing is important. They don’t recognize that prospects and customers don’t care directly about the functionality of products. Prospects and customers care about benefits and, more specifically, the value of those benefits in their own lives. "What's In It For Me?" is the central question that any prospect or customer is dealing with (whether consciously or unconsciously) while receiving your company's marketing message. The entrepreneur must address this question while, at the same time, providing a marketing message that:
(1) helps inappropriate prospects take themselves out of consideration (because dealing with inappropriate prospects costs money and wastes valuable time).
(2) prepares true prospects to be receptive to the sales message they’ll eventually get from you.
(3) leads them directly into the selling cycle.
Product packaging is a great way to activate the consumer’s impulse to buy. It's the loudest possible advertising vehicle you have - it’s right in the store when customers are standing there with their money. Yet, go down the cereal or pasta isles in any supermarket and you’ll see that very few companies really try to market with their packaging. Frito Lay is an exception - it’s always updating its packaging.
Monday, December 15, 2008
How to market the product.
Marketing 101 says gain market share, build your brand and profits will follow. But you need to make sure there’s a real marketing opportunity in the first place. It’s critical that the market structure is compatible with the entry of a new, initially smaller competitor. There have to be "enough" total customers for a given company to gain a share which will be meaningful in its own right. It’s equally important that the company is in a market that’s growing. Markets that are locked up - for whatever reason - mean that young companies will have far greater difficulty reaching and signing up customers. So, check the existence of a sustainable market space and don’t bother with markets that are too small. If there’s only one company in a space, it’s not really a space. However, if your market is too big, competitors will be attracted and encouraged to join in.
You're always in competition with other unknown entrepreneurs. The relevant question never goes away: Do you ship now and enter the market before your competitors, thereby gaining early market share? Or do you wait, improve the product until it's the best available and then steal market share with a superior product?
If you think you have a good idea, implement it immediately and see what happens. If you chose not to ship, you can't ever get the opportunity back and your competitors may beat you to it. Sometimes, you have to be in the market early, even if it means losing money, if you’re to be in the market at all. But if you’re too early to market, you have to wait for the market to develop. In the meantime, competitors recognize that “this is a great market opportunity.” You won’t be alone for long.
Putting something out there and being able to make noise about it is actually a great way to develop software. The hardest thing is to just get the customers’ attention in the first place. Once you get their attention - if you haven’t already pissed them off - you can then do release after release, like Microsoft. By the time you get to release number three, you actually have a working product. Get innovation out into the light of the marketplace as early as possible rather than waiting to perfect it. Once it hits the light, no one can anticipate what it will lead to - or whether it will succeed or not. Trusting the search and sanctioning experiments whose results no one can know allows progress to be made. Progress depends on serendipity and spontaneity, on events that no one can predict or foresee. Don’t ask for answers in advance. Don’t try to create a life without surprises. Trust serendipity. In a high-risk society, pain and prosperity go together.
Professional entrepreneurs use today's cheap information technology to gain a dynamic sense of their customers and competitors. They can pull up their history, the way they pay their bills, what they're talking about - and get a real feeling for them. They can get $10 worth of value for every dollar they spend on information. Jeff Spillers, who was vice president of business development at WebThreads, a startup that produced software to followed users' paths (threads) as they moved through a Web site, describes how his company used the Web to find out about competitors. “We used every search mechanism with every combination of phrases imaginable to turn over every rock and dig out information about other Web tracking companies. Then we used this information to draw a matrix of what features our competitors had. This did two things: it told us who we were up against, and it told us what the marketplace was like. When we went to a competitor's Web site, we looked for indications that they were moving in a particular direction, indications that a big announcement was coming, heightened activity in particular sectors, such as hiring. We looked at what types of jobs they were hiring for, how many ads they had. Almost anything we wanted to know about a competitor, we could find out from tracking its Web site.”
You're always in competition with other unknown entrepreneurs. The relevant question never goes away: Do you ship now and enter the market before your competitors, thereby gaining early market share? Or do you wait, improve the product until it's the best available and then steal market share with a superior product?
If you think you have a good idea, implement it immediately and see what happens. If you chose not to ship, you can't ever get the opportunity back and your competitors may beat you to it. Sometimes, you have to be in the market early, even if it means losing money, if you’re to be in the market at all. But if you’re too early to market, you have to wait for the market to develop. In the meantime, competitors recognize that “this is a great market opportunity.” You won’t be alone for long.
Putting something out there and being able to make noise about it is actually a great way to develop software. The hardest thing is to just get the customers’ attention in the first place. Once you get their attention - if you haven’t already pissed them off - you can then do release after release, like Microsoft. By the time you get to release number three, you actually have a working product. Get innovation out into the light of the marketplace as early as possible rather than waiting to perfect it. Once it hits the light, no one can anticipate what it will lead to - or whether it will succeed or not. Trusting the search and sanctioning experiments whose results no one can know allows progress to be made. Progress depends on serendipity and spontaneity, on events that no one can predict or foresee. Don’t ask for answers in advance. Don’t try to create a life without surprises. Trust serendipity. In a high-risk society, pain and prosperity go together.
Professional entrepreneurs use today's cheap information technology to gain a dynamic sense of their customers and competitors. They can pull up their history, the way they pay their bills, what they're talking about - and get a real feeling for them. They can get $10 worth of value for every dollar they spend on information. Jeff Spillers, who was vice president of business development at WebThreads, a startup that produced software to followed users' paths (threads) as they moved through a Web site, describes how his company used the Web to find out about competitors. “We used every search mechanism with every combination of phrases imaginable to turn over every rock and dig out information about other Web tracking companies. Then we used this information to draw a matrix of what features our competitors had. This did two things: it told us who we were up against, and it told us what the marketplace was like. When we went to a competitor's Web site, we looked for indications that they were moving in a particular direction, indications that a big announcement was coming, heightened activity in particular sectors, such as hiring. We looked at what types of jobs they were hiring for, how many ads they had. Almost anything we wanted to know about a competitor, we could find out from tracking its Web site.”
Friday, December 12, 2008
In answer to your query, a poem by Naomi Lazard
Naomi Lazard is a poet and a playright. She was born in 1936 in Philadelphia and attended the City College of New York. Her poetry has been published in The New Yorker, Harper's, American Scholar, Harper's Bazaar, Hudson Review, The Nation, Saturday Review, Chicago Review, and other magazines. She has been Poet-in-Residence at Hamilton/Kirkland College and at the University of Montana. A past President of the Poetry Society of America, Lazard is a founder of the Hamptons International Film Festival.
This poem of hers seems appropriate today as we contemplate the fate of the American auto industry.
In answer to your query by Naomi Lazard
We are sorry to inform you
The item you ordered
is no longer being produced.
It has not gone out of style
Nor have people lost interest in it.
In fact, it has become
One of our most desired products.
Its popularity is still growing.
Orders for it come in
At an ever increasing rate.
However, a top-level decision
Has caused this product
To be discontinued forever.
Instead of the item you ordered
We are sending you something else.
It is not the same thing,
Nor is it a reasonable facsimile.
It is what we have in stock,
The very best we can offer.
If you are not happy
With this substitution
Let us know as soon as possible.
As you can imagine
We already have quite an accumulation
Of letters such as the one
You may or may not write.
To be totally fair
We respond to these complaints
As they come in.
Yours will be filed accordingly,
Answered in its turn.
This poem of hers seems appropriate today as we contemplate the fate of the American auto industry.
In answer to your query by Naomi Lazard
We are sorry to inform you
The item you ordered
is no longer being produced.
It has not gone out of style
Nor have people lost interest in it.
In fact, it has become
One of our most desired products.
Its popularity is still growing.
Orders for it come in
At an ever increasing rate.
However, a top-level decision
Has caused this product
To be discontinued forever.
Instead of the item you ordered
We are sending you something else.
It is not the same thing,
Nor is it a reasonable facsimile.
It is what we have in stock,
The very best we can offer.
If you are not happy
With this substitution
Let us know as soon as possible.
As you can imagine
We already have quite an accumulation
Of letters such as the one
You may or may not write.
To be totally fair
We respond to these complaints
As they come in.
Yours will be filed accordingly,
Answered in its turn.
Thursday, December 11, 2008
How to deal with the press.
News stories providing third-party validation offer credibility for your company among investors, customers and partners. Positive stories can attract angel and venture funding and strategic alliances. Here are some tips and cautions:
1. Craft concise differentiation messages. Avoid hype. Be quotable.
2. Prepare to commit your time for interviews and educating reporters. Don't sell, be helpful. Attitude cements credibility.
3. Get to know how the media works and thinks. Read bylines, analyze stories, become a student of news.
4. Build relationships - expect to be a part of a bigger story, don't expect to be the story.
5. You can’t control the media. You can control how you present yourself and your message, and you can influence by offering other trusted contacts as sources.
6. Think trends. What's happening in the market that might be interesting to a particular reporter? What gossip could you share?
7. Be a little crazy. Don't be afraid to try something new and different if it will help define your business or product.
8. Don't sit on news. Timing is critical to an editor's decision to use a story.
9. Build viral public relations efforts. Coordinate with your strategic partner's public relations efforts and compound your opportunities.
10. Always remember:
- You're never off the record.
- You’ll never have the opportunity to read a reporter's story before it appears, so don't even ask.
- Don't get angry, you'll lose.
- Don't ever lie to a reporter.
Next week, I'll switch to marketing. But first, tune in for poetry Friday............
1. Craft concise differentiation messages. Avoid hype. Be quotable.
2. Prepare to commit your time for interviews and educating reporters. Don't sell, be helpful. Attitude cements credibility.
3. Get to know how the media works and thinks. Read bylines, analyze stories, become a student of news.
4. Build relationships - expect to be a part of a bigger story, don't expect to be the story.
5. You can’t control the media. You can control how you present yourself and your message, and you can influence by offering other trusted contacts as sources.
6. Think trends. What's happening in the market that might be interesting to a particular reporter? What gossip could you share?
7. Be a little crazy. Don't be afraid to try something new and different if it will help define your business or product.
8. Don't sit on news. Timing is critical to an editor's decision to use a story.
9. Build viral public relations efforts. Coordinate with your strategic partner's public relations efforts and compound your opportunities.
10. Always remember:
- You're never off the record.
- You’ll never have the opportunity to read a reporter's story before it appears, so don't even ask.
- Don't get angry, you'll lose.
- Don't ever lie to a reporter.
Next week, I'll switch to marketing. But first, tune in for poetry Friday............
Wednesday, December 10, 2008
How bad PR can kill a startup.
Many new ventures are rich in ideas, engineering features and programming genius but still over 80% fail. After working with startup companies since 1994, Tom Gable of San Diego-based Gable PR, has identified nine ways public relations and marketing communications can help kill a start-up. Understanding and managing these nine areas can put a startup on the road to building a successful image and brand. These concepts can be applied to internet companies and to traditional companies moving into integrated on-line/off-line marketing communications and public relations programs.
Pandora's Positioning.
The business and marketing plans are crammed with every buzz word on earth, yet the new venture isn't clearly differentiated. Jargon alert: If you talk about being first to move with robust, turn-key, best-of-breed, next-generation, leading, scaleable, end-to-end solutions, journalists, customers and investors won't take the venture seriously.
Babel Branding.
The vast majority of new products or services fail because they try to be all things to all people. They don't demonstrate and communicate why the new brand is better than what currently exists. A new brand needs to cut through the clutter to reach a distinct market segment.
Budget 22.
This is the PR equivalent of Catch 22. The CEO wants major global coverage on a neighborhood budget. Results are driven by agency time and creativity in carrying out the program on a consistent, continuous basis. Match expectations to budgets.
Egomaniac Expectations.
Budget 22 usually leads to demanding Fortune 500-type coverage (WSJ, NYT, magazine covers) without looking at the reality of the company and its budget, products, services and size versus existing trends in the rest of the world. The breakthrough factor comes from being able to communicate and prove how you fit into the bigger picture and why you’re the harbinger of a new trend or development.
Creative Quagmires.
Kill creativity by involving the wrong people in writing, or participating in editing by committee. You don't ask lawyers to write software code or engineers to prepare legal briefs, so why involve them in the creative processes of brand positioning?
Missing Metrics.
The venture can't provide timely, relevant data to demonstrate progress against plan, the competition and the market, or its ability to scale. The media (and investors) demand ongoing proof of principle. It isn't good enough to just exist with a good idea. You have to be able to prove that it works as promised.
Hysteria Marketing.
Expecting short-term miracles and changing directions faster than a hummingbird at a flower show. The result: Diluting budget impact and creating internal confusion. Stick to an integrated, strategic program that ramps up in support of the business, marketing and capital investment plans.
Dullness.
Lack of energy, passion and personality. You have “stuff,” but so does everyone else. Become the messiah for your concept. "Flippers" (those looking to turn a quick buck rather than create something of lasting value) need not apply.
Old Economy Thinking.
Top-down, one-way marketing models and old economy thinking are just that -- old. Think interactive and environmental. Go deep into your database and mine data so you truly know your customers. Connect with them. Find new opportunities every day to show them you’re empathetic, sympathetic and intuitive about their needs and beliefs. Create two-way relationships and build wonderful environments for ongoing communications.
Pandora's Positioning.
The business and marketing plans are crammed with every buzz word on earth, yet the new venture isn't clearly differentiated. Jargon alert: If you talk about being first to move with robust, turn-key, best-of-breed, next-generation, leading, scaleable, end-to-end solutions, journalists, customers and investors won't take the venture seriously.
Babel Branding.
The vast majority of new products or services fail because they try to be all things to all people. They don't demonstrate and communicate why the new brand is better than what currently exists. A new brand needs to cut through the clutter to reach a distinct market segment.
Budget 22.
This is the PR equivalent of Catch 22. The CEO wants major global coverage on a neighborhood budget. Results are driven by agency time and creativity in carrying out the program on a consistent, continuous basis. Match expectations to budgets.
Egomaniac Expectations.
Budget 22 usually leads to demanding Fortune 500-type coverage (WSJ, NYT, magazine covers) without looking at the reality of the company and its budget, products, services and size versus existing trends in the rest of the world. The breakthrough factor comes from being able to communicate and prove how you fit into the bigger picture and why you’re the harbinger of a new trend or development.
Creative Quagmires.
Kill creativity by involving the wrong people in writing, or participating in editing by committee. You don't ask lawyers to write software code or engineers to prepare legal briefs, so why involve them in the creative processes of brand positioning?
Missing Metrics.
The venture can't provide timely, relevant data to demonstrate progress against plan, the competition and the market, or its ability to scale. The media (and investors) demand ongoing proof of principle. It isn't good enough to just exist with a good idea. You have to be able to prove that it works as promised.
Hysteria Marketing.
Expecting short-term miracles and changing directions faster than a hummingbird at a flower show. The result: Diluting budget impact and creating internal confusion. Stick to an integrated, strategic program that ramps up in support of the business, marketing and capital investment plans.
Dullness.
Lack of energy, passion and personality. You have “stuff,” but so does everyone else. Become the messiah for your concept. "Flippers" (those looking to turn a quick buck rather than create something of lasting value) need not apply.
Old Economy Thinking.
Top-down, one-way marketing models and old economy thinking are just that -- old. Think interactive and environmental. Go deep into your database and mine data so you truly know your customers. Connect with them. Find new opportunities every day to show them you’re empathetic, sympathetic and intuitive about their needs and beliefs. Create two-way relationships and build wonderful environments for ongoing communications.
Tuesday, December 9, 2008
How to pick names and logos.
When picking a name for your business, a lot of the work has to do with what you want to tell the world about the brand. Agilent Technologies toiled for the first four months of its life as “Newco.” The word Agilent (agile-nt) was finally chosen to signify speed, focus, accountability, and agility (the -nt at the end just adds more weight to the word). The word "lego" is a combination of the Danish words "leg godt," which means "to play well." In Latin, lego means "I study," or "I put together." The best product names are short, catchy, positive, easy to remember and clearly communicate what the product is about. Since most startups have limited funds, a new product needs to virtually sell itself.
When choosing a logo, aim for an image that conveys clear meaning at a glance. The UPS logo, created by Paul Rand in 1961, is a good example. The logo is economical and succinct, simple yet distinctive, businesslike yet warm. It communicates the company's essential mission without needing a tag line to explain it -- a package with a bow, just enough detail to be jaunty but spare enough to be timeless. The name of the company is reinforced because it's integrated into the logo, and the classic shape -- a shield -- makes it look official. The emblem signifies trustworthiness and inspires customer confidence. And the colors brown and gold, not the standard blue and green that are usually found on corporate logos, make the company memorable to consumers. The overall effect is that people get the message without being barraged with excess information. Although the shipping business has changed considerably since Rand created that design almost 50 years ago, the UPS logo remains timeless and effective.
The name of your company should be the vessel through which all your marketing flows. It’s the one thing your competitors can’t take away from you. Your marketing has to send the message that you’re relevant: it has to give people reasons to buy. For example, the marketing and advertising for the new VW Beetle presents a reason to buy if you’re one of the select few who have an optimistic personality and you don’t take yourself too seriously. Your personality matches the personality of the car. This is your car. Your decision is not about price, it’s about what this product means to you, how it fits into your life. Now that’s a reason to buy.
Branding is everything on the Internet, where all but the largest branded websites find it increasingly difficult to attract visitors. Branding tactics that work in the real world don’t always work online because companies aren’t allowed to say or market anything online unless the customer wants to hear it. The fact that the customer is in charge is the central theme differentiating television from Internet marketing. On the Internet, the advertiser must “pay” the consumer to endure the brand message by performing some kind of service in return. At startup, Saturn’s site offered the usual dealer referrals and car specs. But it also provided a lease-price calculator, an interactive design shop for choosing options, and an online order form. As a result, in its early years, 80% of Saturn’s customer leads came via the Internet.
It pays to develop high visibility. Promotion is about getting your message out without spending a lot of money in the process. Think creatively and have a sales message on all your communication. That way, you get publicity without paying extra for it. If you can’t be #1 in a category, create a new category where you can be because no one remembers #2. And the customers’ perception is the only reality.
When choosing a logo, aim for an image that conveys clear meaning at a glance. The UPS logo, created by Paul Rand in 1961, is a good example. The logo is economical and succinct, simple yet distinctive, businesslike yet warm. It communicates the company's essential mission without needing a tag line to explain it -- a package with a bow, just enough detail to be jaunty but spare enough to be timeless. The name of the company is reinforced because it's integrated into the logo, and the classic shape -- a shield -- makes it look official. The emblem signifies trustworthiness and inspires customer confidence. And the colors brown and gold, not the standard blue and green that are usually found on corporate logos, make the company memorable to consumers. The overall effect is that people get the message without being barraged with excess information. Although the shipping business has changed considerably since Rand created that design almost 50 years ago, the UPS logo remains timeless and effective.
The name of your company should be the vessel through which all your marketing flows. It’s the one thing your competitors can’t take away from you. Your marketing has to send the message that you’re relevant: it has to give people reasons to buy. For example, the marketing and advertising for the new VW Beetle presents a reason to buy if you’re one of the select few who have an optimistic personality and you don’t take yourself too seriously. Your personality matches the personality of the car. This is your car. Your decision is not about price, it’s about what this product means to you, how it fits into your life. Now that’s a reason to buy.
Branding is everything on the Internet, where all but the largest branded websites find it increasingly difficult to attract visitors. Branding tactics that work in the real world don’t always work online because companies aren’t allowed to say or market anything online unless the customer wants to hear it. The fact that the customer is in charge is the central theme differentiating television from Internet marketing. On the Internet, the advertiser must “pay” the consumer to endure the brand message by performing some kind of service in return. At startup, Saturn’s site offered the usual dealer referrals and car specs. But it also provided a lease-price calculator, an interactive design shop for choosing options, and an online order form. As a result, in its early years, 80% of Saturn’s customer leads came via the Internet.
It pays to develop high visibility. Promotion is about getting your message out without spending a lot of money in the process. Think creatively and have a sales message on all your communication. That way, you get publicity without paying extra for it. If you can’t be #1 in a category, create a new category where you can be because no one remembers #2. And the customers’ perception is the only reality.
Monday, December 8, 2008
Startup advice from John Major.
John Major is the Founder and President of MTSG, an investment and strategic consulting partnership. Previously, he was the CEO of Novatel Wireless, Inc., a San Diego based provider of wireless broadband access solutions for the worldwide mobile communications market, where he led the company's successful IPO.
- Remember, a great idea often sounds dumb initially to smart people.
- Get the goals explicit and clear. When you don’t know where you’re going, all roads lead there and this slows you down.
- Keep the message simple. Remember the line from the movie Jerry McGuire; “You had me from hello!”
- Have operations review meetings once a week. Ask, “How can we all work together to make the success we want happen?”
- Get people used to asking themselves, “How do I have to change my behavior to make others more successful?”
- When people aren’t successful, they know it. So, help these people out the door and make sure to thank them for their contributions. In a small industry, you’ll probably end up working with them again, so don’t burn your bridges.
- People can be categorized along the following continuum:
Some are dumb - Some are smart
Some are high energy - Some are low energy
Make sure the dumb, high energy people are working for someone else, preferably for your competitors.
- Impose limits on your growth. Too many opportunities can kill you as easily as too few.
- Don’t look to maximize sales; look to maximize profits.
- Many growing companies fail because they don’t really understand their economic model. When they don’t stay aligned with their market, they don’t have enough money.
- Remember, a great idea often sounds dumb initially to smart people.
- Get the goals explicit and clear. When you don’t know where you’re going, all roads lead there and this slows you down.
- Keep the message simple. Remember the line from the movie Jerry McGuire; “You had me from hello!”
- Have operations review meetings once a week. Ask, “How can we all work together to make the success we want happen?”
- Get people used to asking themselves, “How do I have to change my behavior to make others more successful?”
- When people aren’t successful, they know it. So, help these people out the door and make sure to thank them for their contributions. In a small industry, you’ll probably end up working with them again, so don’t burn your bridges.
- People can be categorized along the following continuum:
Some are dumb - Some are smart
Some are high energy - Some are low energy
Make sure the dumb, high energy people are working for someone else, preferably for your competitors.
- Impose limits on your growth. Too many opportunities can kill you as easily as too few.
- Don’t look to maximize sales; look to maximize profits.
- Many growing companies fail because they don’t really understand their economic model. When they don’t stay aligned with their market, they don’t have enough money.
Friday, December 5, 2008
Suburban, a poem by John Ciardi.
John Ciardi was born at home in Boston's Little Italy in 1916. After the death of his father in 1919, he was raised by his Italian mother (who was illiterate in both English and Italian) and his three older sisters, all of whom scrimped and saved until they had enough money to send him to college, first to Bates College and then Tufts University where he graduated in 1938. The next year he took an M.A. and the prestigious Hopwood Award in poetry at the University of Michigan. He taught at Harvard and Rutgers, although he considered teaching to be "planned poverty." A longtime resident of Metuchen, New Jersey, he died on Easter Sunday, 1986, of a heart attack, but not before composing his own epitaph:
Here, time concurring (and it does);
Lies Ciardi. If no kingdom come,
A kingdom was. Such as it was
This one beside it is a slum.
Ciardi served as a highly popular poetry editor of the Saturday Review from 1956 to 1972. His occasional public television broadcasts were supplemented by his weekly National Public Radio series begun in 1980 as "A Word in Your Ear." Here's a typical example of his work:
Suburban by John Ciardi.
Yesterday Mrs. Friar phoned."Mr. Ciardi,
how do you do?" she said. "I am sorry to say
this isn't exactly a social call. The fact is
your dog has just deposited-forgive me-
a large repulsive object in my petunias."
I thought to ask, "Have you checked the rectal grooving
for a positive I.D.?" My dog, as it happened,
was in Vermont with my son, who had gone fishing-
if that's what one does with a girl, two cases of beer,
and a borrowed camper. I guessed I'd get no trout.
But why lose out on organic gold for a wise crack
"Yes, Mrs. Friar," l said, "I understand."
"Most kind of you," she said. "Not at all," I said.
I went with a spade. She pointed, looking away.
"I always have loved dogs," she said, "but really!"
I scooped it up and bowed. "The animal of it.
I hope this hasn't upset you, Mrs. Friar."
"Not really," she said, "but really!" I bore the turd
across the line to my own petunias
and buried it till the glorious resurrection
when even these suburbs shall give up their dead.
Here, time concurring (and it does);
Lies Ciardi. If no kingdom come,
A kingdom was. Such as it was
This one beside it is a slum.
Ciardi served as a highly popular poetry editor of the Saturday Review from 1956 to 1972. His occasional public television broadcasts were supplemented by his weekly National Public Radio series begun in 1980 as "A Word in Your Ear." Here's a typical example of his work:
Suburban by John Ciardi.
Yesterday Mrs. Friar phoned."Mr. Ciardi,
how do you do?" she said. "I am sorry to say
this isn't exactly a social call. The fact is
your dog has just deposited-forgive me-
a large repulsive object in my petunias."
I thought to ask, "Have you checked the rectal grooving
for a positive I.D.?" My dog, as it happened,
was in Vermont with my son, who had gone fishing-
if that's what one does with a girl, two cases of beer,
and a borrowed camper. I guessed I'd get no trout.
But why lose out on organic gold for a wise crack
"Yes, Mrs. Friar," l said, "I understand."
"Most kind of you," she said. "Not at all," I said.
I went with a spade. She pointed, looking away.
"I always have loved dogs," she said, "but really!"
I scooped it up and bowed. "The animal of it.
I hope this hasn't upset you, Mrs. Friar."
"Not really," she said, "but really!" I bore the turd
across the line to my own petunias
and buried it till the glorious resurrection
when even these suburbs shall give up their dead.
Thursday, December 4, 2008
Four pillars of brand building.
The first question that an emerging business needs to ask is: "What makes our brand stand apart?" Examples of muddy car brand identities; how can you tell the difference between GM’s Oldsmobile and Buick? Ford has struggled for years with the question: "What’s a Mercury?" According to a recent study, Coca-Cola and Disney still maintain their differentiation, while Greyhound and Kodak do not. The winners have been adept at innovating what their products are about, identifying and attaching new attributes to their image.
To make your brand look multidimensional and your competitors look uni-dimensional, you need to know what it takes to be successful in your market space and the key product attributes that differentiate you from others. Once you know that, tell that story over and over again. Change the rules of the game over and over again. Act like the leader, but don’t try to do what larger companies do with less money or you’ll risk looking like a cheap also-ran.
The second pillar of building brand equity is establishing brand relevance. Customers are always subconsciously asking, "Does this brand speak to me?" This is the so-called personal appropriateness of the brand. People can be extremely aware of what a brand stands for without being personally interested in making the brand a part of their life. Think of Ferrari and Victoria's Secret as examples.
The third pillar is brand esteem, which is a measure of how highly consumers regard the brand. This is closely related to perceived feelings of popularity or highly perceived quality. Global brands with the highest esteem ratings due to their perceived quality include Hallmark and Lexus.
The fourth pillar, brand knowledge, is the consumer's understanding of the brand's inner workings. High brand knowledge suggests acute customer intimacy or proof that consumers are experienced with how your product or service works for them – for better and for worse. This is the culmination of any branding effort.
BankDirect, initially a creation of New Zealand’s ASB Bank, wanted to be first in the market with a “no branch” virtual bank concept (branchless banking using call centers and Internet technology) and so reap first mover advantage. Initial research had identified a key target consumer group who knew what direct banking was all about and would likely be early adopters. They were busy people who valued their time and had high account balances. They were computer confident and likely to meet the minimum computer system requirements. They knew that a branchless bank should have lower fees and mortgage rates and higher deposit rates (the cost of an Internet transaction is a few cents versus over a dollar for the average transaction cost with a bank teller).
So BankDirect was designed for these consumers, and not for business clients. BankDirect’s name was a key element in branding the new product because the company didn’t have to explain what the business did. Since its target customers understood the concept of a branchless bank, advertising didn’t have to spell out all its advantages. As a direct marketing operation, a high percentage of the budget was allocated to advertising, which was designed to appeal to the early adopters and make the phones ring. After six months in operation, BankDirect had enough of a database to begin to see trends (for example, most of their customers didn’t come from ASB but from outside the bank).
To make your brand look multidimensional and your competitors look uni-dimensional, you need to know what it takes to be successful in your market space and the key product attributes that differentiate you from others. Once you know that, tell that story over and over again. Change the rules of the game over and over again. Act like the leader, but don’t try to do what larger companies do with less money or you’ll risk looking like a cheap also-ran.
The second pillar of building brand equity is establishing brand relevance. Customers are always subconsciously asking, "Does this brand speak to me?" This is the so-called personal appropriateness of the brand. People can be extremely aware of what a brand stands for without being personally interested in making the brand a part of their life. Think of Ferrari and Victoria's Secret as examples.
The third pillar is brand esteem, which is a measure of how highly consumers regard the brand. This is closely related to perceived feelings of popularity or highly perceived quality. Global brands with the highest esteem ratings due to their perceived quality include Hallmark and Lexus.
The fourth pillar, brand knowledge, is the consumer's understanding of the brand's inner workings. High brand knowledge suggests acute customer intimacy or proof that consumers are experienced with how your product or service works for them – for better and for worse. This is the culmination of any branding effort.
BankDirect, initially a creation of New Zealand’s ASB Bank, wanted to be first in the market with a “no branch” virtual bank concept (branchless banking using call centers and Internet technology) and so reap first mover advantage. Initial research had identified a key target consumer group who knew what direct banking was all about and would likely be early adopters. They were busy people who valued their time and had high account balances. They were computer confident and likely to meet the minimum computer system requirements. They knew that a branchless bank should have lower fees and mortgage rates and higher deposit rates (the cost of an Internet transaction is a few cents versus over a dollar for the average transaction cost with a bank teller).
So BankDirect was designed for these consumers, and not for business clients. BankDirect’s name was a key element in branding the new product because the company didn’t have to explain what the business did. Since its target customers understood the concept of a branchless bank, advertising didn’t have to spell out all its advantages. As a direct marketing operation, a high percentage of the budget was allocated to advertising, which was designed to appeal to the early adopters and make the phones ring. After six months in operation, BankDirect had enough of a database to begin to see trends (for example, most of their customers didn’t come from ASB but from outside the bank).
Wednesday, December 3, 2008
Developing the brand.
To develop a brand, you must have a marketing strategy. Once you have that, spend as much money as you can on establishing your brand. Give products away to get great customers to use them early on and build momentum. Build the biggest, boldest branding campaign you can and take all the new business you can get. Power through the hiccups and play catch-up with all the other elements of the business. Grow as fast as the market allows you. Have a gigantic vision - don’t wait until you’ve done it all to make bold claims or it’ll be too late. Branding establishes your identity depending on how loudly you scream about it. Make the claim and pay it back. Work to get your brand and reputation to exceed who you are because your brand has an enormous impact on your valuation.
The most successful businesses are those that tie their product to a single concept in the customer's mind, such as Volvo and safety; Federal Express and overnight delivery. The more specific the focus, the more everybody in the company can have that focus too. Brand recognition can help raise the barriers to entry for smaller, more obscure rivals that might compete on technology or on marketing, but can’t compete on both. Technologies frequently change, but a great brand goes on and on. A product or service can be copied or imitated, but a brand cannot.
When you develop a brand program, don’t forget your employees are a primary audience. They must understand what the brand promises so they can translate and interpret it. Branding serves both to focus people’s strategic thinking and to shape customer’s perceptions of the business’s unique value proposition. Successful brand marketing is effective even when the consumer isn’t thinking of buying your product. It plants a seed in the mind of a consumer not yet in the market. In businesses where products or services become obsolete quickly, a strong brand is one of the few things customers and employees have to hold on to, but a brand means little unless it’s accompanied by quality, consistency and flawless execution.
McDonald’s core brand attributes are being reliable, fast, wholesome, American and family-minded. If Mercedes made hamburgers or computers, it wouldn’t get much advantage from putting its logo on them. Consumers are smart enough to know what the boundaries of brands are, so new offerings must be complimentary to the company’s existing core products. Many successful new products are really extensions of existing products. The core attributes of the Coke brand are permanence (“Always Coca-Cola”), authenticity (“The Real Thing”), and feeling good. The Coca-Cola company conducts regular consumer surveys to determine how the beverage scores on more than a dozen value attributes which have included “young,” “modern,” “warm,” and “friendly.” More people buy Coke than any other cola and, most importantly, they enjoy the experience of buying and drinking Coca Cola. The fond memories of childhood and refreshment that people have when they drink Coke are often more important than a little bit better cola taste. It’s this emotional relationship with brands that make them so powerful.
The most successful businesses are those that tie their product to a single concept in the customer's mind, such as Volvo and safety; Federal Express and overnight delivery. The more specific the focus, the more everybody in the company can have that focus too. Brand recognition can help raise the barriers to entry for smaller, more obscure rivals that might compete on technology or on marketing, but can’t compete on both. Technologies frequently change, but a great brand goes on and on. A product or service can be copied or imitated, but a brand cannot.
When you develop a brand program, don’t forget your employees are a primary audience. They must understand what the brand promises so they can translate and interpret it. Branding serves both to focus people’s strategic thinking and to shape customer’s perceptions of the business’s unique value proposition. Successful brand marketing is effective even when the consumer isn’t thinking of buying your product. It plants a seed in the mind of a consumer not yet in the market. In businesses where products or services become obsolete quickly, a strong brand is one of the few things customers and employees have to hold on to, but a brand means little unless it’s accompanied by quality, consistency and flawless execution.
McDonald’s core brand attributes are being reliable, fast, wholesome, American and family-minded. If Mercedes made hamburgers or computers, it wouldn’t get much advantage from putting its logo on them. Consumers are smart enough to know what the boundaries of brands are, so new offerings must be complimentary to the company’s existing core products. Many successful new products are really extensions of existing products. The core attributes of the Coke brand are permanence (“Always Coca-Cola”), authenticity (“The Real Thing”), and feeling good. The Coca-Cola company conducts regular consumer surveys to determine how the beverage scores on more than a dozen value attributes which have included “young,” “modern,” “warm,” and “friendly.” More people buy Coke than any other cola and, most importantly, they enjoy the experience of buying and drinking Coca Cola. The fond memories of childhood and refreshment that people have when they drink Coke are often more important than a little bit better cola taste. It’s this emotional relationship with brands that make them so powerful.
Tuesday, December 2, 2008
Branding the product.
The idea of branding initially developed in medieval Europe. Plagues were a major ordeal at the time and people became ill from drinking brews infested with germs and vermin. The German purity law of 1516 was a very successful attempt to change that. As a result, beer brands sprang up to tell drinkers which of the available lagers were brewed in accordance with the regulations. From then on, brands were used to confer quality on products and consumers were prepared to pay more if they were assured of higher quality.
A brand isn't just a famous name. A brand is a set of differentiating promises that link a product or a service to its customers. Research shows that prospective buyers of business printers, for example, consider and compare the brand leader’s products and those of only one other company before making a purchase. If a corporate brand isn't on this short list, it generally won’t be purchased. Without a strong corporate brand to separate it from others, even superior new products will be overlooked by the majority of buyers. Brand equity is that aspect of corporate reputation (such as reassurance of product quality and trusted service) that leads an individual to buy a company’s products or services. Brand preference increases directly as awareness increases. Advertising builds brand equity and hence leverages the company’s marketing ability.
One of the first jobs of any branding endeavor is to break through the communications clutter and get products into the buyer’s consideration set. Sell your brand to multiple audiences but be sure to change the message for each different audience. Nowadays, brands are increasingly becoming icons of a particular life style and attitude. So, brand positioning must include attitude and personality - it’s an image, it’s a flavor. Your positioning is very, very important - it’s the spot you own in the business universe. What’s your positioning? What’s your differentiation? An example could be, “We make your Web site faster and we guarantee it.”
In consumer markets, brands are everything, They reassure bewildered consumers and help lift a company’s products out of the commodity marketplace so they can command both loyalty and premium prices. A brand is an emotional shortcut between the company and its customers. In some ways, you could say that a brand is a type of packaging, wrapping itself around the product, guaranteeing a certain quality and consistency. It creates a gravitational pull to your company. Intel spent billions of dollars on marketing, almost half as much as it spent on R&D. As a result, its branding of “Intel inside” became a “trustmark,” (that is, a trademark that consumers regularly put their trust in). That became as much a part of its dominance as its technical leadership.
Branding helps new companies survive long enough to secure a market foothold for their products and services. It helps them retain a loyal following and boosts their credibility when they announce plans to enter a new market or launch a new technology. As technology becomes more complex, it enables customers to short-circuit often baffling buying decisions. Remember the slogan, “No one ever got fired for buying IBM.”
A brand isn't just a famous name. A brand is a set of differentiating promises that link a product or a service to its customers. Research shows that prospective buyers of business printers, for example, consider and compare the brand leader’s products and those of only one other company before making a purchase. If a corporate brand isn't on this short list, it generally won’t be purchased. Without a strong corporate brand to separate it from others, even superior new products will be overlooked by the majority of buyers. Brand equity is that aspect of corporate reputation (such as reassurance of product quality and trusted service) that leads an individual to buy a company’s products or services. Brand preference increases directly as awareness increases. Advertising builds brand equity and hence leverages the company’s marketing ability.
One of the first jobs of any branding endeavor is to break through the communications clutter and get products into the buyer’s consideration set. Sell your brand to multiple audiences but be sure to change the message for each different audience. Nowadays, brands are increasingly becoming icons of a particular life style and attitude. So, brand positioning must include attitude and personality - it’s an image, it’s a flavor. Your positioning is very, very important - it’s the spot you own in the business universe. What’s your positioning? What’s your differentiation? An example could be, “We make your Web site faster and we guarantee it.”
In consumer markets, brands are everything, They reassure bewildered consumers and help lift a company’s products out of the commodity marketplace so they can command both loyalty and premium prices. A brand is an emotional shortcut between the company and its customers. In some ways, you could say that a brand is a type of packaging, wrapping itself around the product, guaranteeing a certain quality and consistency. It creates a gravitational pull to your company. Intel spent billions of dollars on marketing, almost half as much as it spent on R&D. As a result, its branding of “Intel inside” became a “trustmark,” (that is, a trademark that consumers regularly put their trust in). That became as much a part of its dominance as its technical leadership.
Branding helps new companies survive long enough to secure a market foothold for their products and services. It helps them retain a loyal following and boosts their credibility when they announce plans to enter a new market or launch a new technology. As technology becomes more complex, it enables customers to short-circuit often baffling buying decisions. Remember the slogan, “No one ever got fired for buying IBM.”
Monday, December 1, 2008
Neil Senturia’s commandments.
Neil Senturia’s commandments for new ventures.
- Understand your customer’s pain and find a way to alleviate it.
- “If we can get just X% of this market” isn’t a very compelling story.
- Investors have short memories.
- “No” is a way station on the road to “Yes.”
- You have to have a working product, not just a good idea.
- Timing is more important than anything.
- You can’t go fast enough.
- Be aggressive but don’t take unnecessary chances.
- The golden rule is that the guy with the gold rules. Never, ever run out of money.
- Return all phone calls. Attend all meetings. Everything matters.
- Don’t be limited by reality.
- When you’re small, get big people to help you. Team up with strong partners.
- Answer all threats. Improve your position and pose a counter threat.
- Play for the initiative. If you have it, maintain it.
- Cut your losses but lose as little as possible.
- When you dance with the devil, dance quickly.
- Rely on your own powers. If you can’t see the power of your opponent’s move, there probably isn’t any.
- Out-hustle the other guy.
- Try to develop with threats, but don’t threaten pointlessly.
- When you can’t decide, accept.
- Choose a plan and stay with it.
- To gain time, you usually have to sacrifice.
- Remember Einstein - time slows down as speed increases.
- Build your company around great technology and great people.
- Don’t let brilliant, talented people leave.
- If you’re going broke, keep it to yourself.
- Either be really well liked or don’t be liked at all.
- Being on the edge of success is half an inch from disaster.
Senturia was a founder and CEO of Atcom/Info, mohomine, Soflinx, and currently heads up Blackbird Ventures with his wife and fellow investor, Barbara Bry.
- Understand your customer’s pain and find a way to alleviate it.
- “If we can get just X% of this market” isn’t a very compelling story.
- Investors have short memories.
- “No” is a way station on the road to “Yes.”
- You have to have a working product, not just a good idea.
- Timing is more important than anything.
- You can’t go fast enough.
- Be aggressive but don’t take unnecessary chances.
- The golden rule is that the guy with the gold rules. Never, ever run out of money.
- Return all phone calls. Attend all meetings. Everything matters.
- Don’t be limited by reality.
- When you’re small, get big people to help you. Team up with strong partners.
- Answer all threats. Improve your position and pose a counter threat.
- Play for the initiative. If you have it, maintain it.
- Cut your losses but lose as little as possible.
- When you dance with the devil, dance quickly.
- Rely on your own powers. If you can’t see the power of your opponent’s move, there probably isn’t any.
- Out-hustle the other guy.
- Try to develop with threats, but don’t threaten pointlessly.
- When you can’t decide, accept.
- Choose a plan and stay with it.
- To gain time, you usually have to sacrifice.
- Remember Einstein - time slows down as speed increases.
- Build your company around great technology and great people.
- Don’t let brilliant, talented people leave.
- If you’re going broke, keep it to yourself.
- Either be really well liked or don’t be liked at all.
- Being on the edge of success is half an inch from disaster.
Senturia was a founder and CEO of Atcom/Info, mohomine, Soflinx, and currently heads up Blackbird Ventures with his wife and fellow investor, Barbara Bry.
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