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.

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.

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.

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.”

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.

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............

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.