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  • Setting Ambitious Marketing Targets is a Waste of Time

    red-business-graph
    We all, periodically set targets for ourselves and/or other marketing folk. How often have we started the year with a plan that goes something like this:
    1. Do activities a, b and c,
    2. Through activities a, b and c, achieve the following “up-and-to-the-right”* targets:

    up-and-to-the-right

    Great, we’re all rich! But what I want to argue is there are two problems with this type of planning and target setting – a minor one, to do with the shape of this graph, and a major one to do with philosophy of super-ambitious targets like this (the graph above suggests a 40% increase in leads per month over 9 months, and still going up…).

    Firstly, the minor point of the shape of this graph. Here’s what the graph above is actually saying:

    1. We currently get around 100 leads per month, and this is fairly predictable from January through to March.
    2.  I’m going to do something very clever at the start of the year that’s going to increase this rate of leads to 105 in Apr, then 110 in May and so on. I.e. not only am I going to increase the number of leads over the current “standard, background” rate, but that increase is going to keep getting bigger and bigger each month.
    3. In theory this goes on forever – by the end of next year we’ll have doubled the monthly lead rate and so on in to infinity.

    My issue is with the concept that the number of leads per month keeps getting bigger and bigger. In reality from the experience of running many, many campaigns, I’ve seen three types of chart:

    No Impact Whatsoever

    up-and-to-the-right

    Temporary Impact

    up-and-to-the-right

    Sustained Change in Awareness of Product

    up-and-to-the-right

    The first chart obviously means that what we did didn’t work – fair enough, learn from your mistakes and try better next time.

    The second shows that we did have an impact, and we did bring in more leads, but that when we stopped our activity the rate of new leads coming in each month dropped down to previous levels. This is a perfectly legitimate and potentially great result! If you managed to get 10 extra leads per month for 3 months (i.e. 30 new leads), if these cost $100 each to obtain (i.e. the “campaign” cost $3,000) and you actually made $200 per lead, then your campaign has given you an ROI of 100% ( ($6,000 – $3,000)/$3,000 ) – a great result! The issue of course is that once the campaign is over, you have to think of something else.

    The third shows an impact whereby you’ve done some sort of activity and this has led to a sustained change in the number of leads coming in each month. They key point here is that previously, whatever marketing you were doing, you were bringing in 100 new leads each and every month. This is no mean feat – if we weren’t doing anything right and your product sucked, then we’d be getting zero new leads per month. So to increase this rate to 110 and to sustain this is a significant achievement. Obviously there’s a relationship here to chart 2 – if you’re carrying out extra activity that’s costing you $100 per lead and you’re managing to sustain that over time (i.e. the activity isn’t getting stale, such that new leads are diminishing), then that’s great. But ideally, you’ve done something as a one-off (say, a great set of new interesting content, easily findable by all), which is providing a long term increase in the average number of leads per month – definitely a great achievement.

    So firstly, I have an issue with the shape of this graph. If we wanted to be really ambitious, I’d suggest that only graph #3 above (“Sustained change in awareness of product”) is what you should be suggesting – that you might be able to take the average monthly lead rate to a new plateau.

    But secondly, and perhaps a bigger question, is how ambitious you should be. Really, when we’re setting these “targets” what we’re setting is objectives for the coming period. I’ve previously mentioned the great book Good Strategy/Bad Strategy by Richard Rumelt, and here Richard talks a lot about the need for good proximate objectives and how these objectives should be formed. Specifically, from chapter seven:

    One of a leader’s most powerful tools is the creation of a good proximate objective – one that is close enough at hand to be feasible. A proximate objective names a target that the organization can reasonably be expected to hit, even overwhelm.

     The bit at the end is particularly interesting – “..even overwhelm”. But what’s the point in setting a target if it’s going to be so easy to hit, that we’d likely overwhelm it? That’s not going to stretch you or your team is it? You might as well switch on to auto-pilot for the rest of the year if your target is going to be so easy that you’ll overwhelm it? And it is counter to many performance management systems, not least Google’s! As pointed out in this video about Google’s OKRs:

    Always have goals that are uncomfortable to push you to achieve more. If you know for 100% you are going to achieve your objectives, challenge yourself more. 

    There seems to be a mismatch here between Richard Rummelt’s approach and Google’s.

    Firstly it’s worth pointing out – the Good Strategy/Bad Strategy approach certainly doesn’t propose “do nothing” targets. In the example at the top, an objective which was “Just keep coasting maintaining a flat-line for leads” isn’t an objective, it’s just doing nothing! (ignoring the maintenance work required to keep these leads churning through of course).

    What is being advocated is something where you genuinely believe that you will hit a given target. I like to think of this as “Would I privately bet my own personal money on us hitting that target?”. It tends to changes one’s view of a target if one has to stake one’s own cash on it! If you can answer “Yes!” to this question, then it’s a believable objective.

    But still there’s the argument – couldn’t you have done more with a stretch target? An “easy” objective of say, getting 50 new leads though believable, is likely to get you just that – 50 leads, or thereabouts. But if you set an ambitious target of 100 leads, you might not believe it, but you might end up with 70 leads, or even 80, if you really “go for it”.

    Firstly, there’s a minor problem I have with this – I just don’t believe this motivational model. That I or a colleague will be more motivated to achieve more, by setting an unrealistic target. I’ve never seen this happen in the real world. In reality, people are motivated by much more complex factors – who they work for, their colleagues, their interest in their work, whether their work chimes with their personal ambitions, the ability of managers to create an environment of ‘flow’, clear simple objectives for all and so on. Not by having a big red poster on the wall saying “Get me an impossible number of leads”.

    But I think there’s also a major problem with this approach. For me, short term objectives are just stepping stones towards the long term goal of what we are trying to achieve. So if we were to get 50 extra new leads, this is a short term objective that is building towards a longer term of building your business, finding loyal customers to nurture, growing awareness, as well, of course, of generating revenue (for investment in the future of your business). So the short term objective isn’t the be-all-and-end-all. It’s a step on a long journey – and this is key. If you can’t predict, with any confidence that you’re going to hit that given target, how can you possibly plan for the future? If I set a target of 100 new leads, and then start building future plans based on that new revenue (e.g. hiring new staff), what happens when I miss that target? I have quickly re-jig my plans, rushing through changes, based on my (predictably) failed targets. We haven’t built any solid blocks for the future, instead we’re back to panic planning.

    In contrast, if we go for a lower target, and by tracking as we go along, see that we’re nicely moving towards hitting that target then, as we approach the end of the year, we can put our next set of plans in to place in a more measured fashion. Much more stable, much more predictable and, I’d argue, a bit moregrown-up than random objectives that no-one ever believes.

    This is why, for me, setting realistic objectives for the coming period is key, and why hopefully those big red “up-and-to-the-right” charts are a thing of the past.

    * Last week I heard someone use “up-and-to-the right” as a verb as in “How are we going to up-and-to-the-right that value?”! It seems the English language abusers attempting to “verb-ify” every word aren’t even sticking to single words now!

    4 thoughts on “Setting Ambitious Marketing Targets is a Waste of Time”

      1. I can’t agree with the first chart explanation. Sometimes the flat line is the output of the extensive marketing effort. It is not always that easy to do nothing and get stable results. I think you should put another graph with the breakdown in the first month of doing nothing :)

        Reply

          1. Adam – I think that’s a very fair point, and I’ve assumed lots of things. We have lots going on in the background, that sustains current levels though if I’m honest a very large proportion of that “Business as Usual” lead number comes from word-of-mouth and reputation. For us (and obviously different for different businesses) if we literally “switched off all marketing”, probably very little would happen in months 1 or 2. However, by 3 and 4, and beyond, we’d start to notice a drift downwards. I.e. the marketing has an impact, but it’s always delayed and chronic (rather than acute).

            Reply

      1. Some really insightful points here. I fully agree about your points about marketing goal setting and the crappy assumptions we tend to make when doing so. Your 3 graphs are genius – and well worth anyone in marketing reading. There are a number of campaigns where I wish I’d asked the question, “realistically which graph do we really expect by running this campaign.

        As someone who has produced a lot of goals that have failed to have the effect I was hoping for, I’ve come to believe that objectives that state (effectively) we will grow by 40% and continue growth beyond that are counter productive. Objectives should be things we can actually do whilst measures might tell you whether you got the results you were hoping for. e.g. Our objective is to produce our product in German and to also produce a German version of our website and success would be an increase of 10,000 German users of our software. Whilst this seems a thinner objective and doesn’t actually give you what you want (the extra users) it is actually stronger because the team can actually all get behind doing something that is genuinely likely to make the businesses stronger.

        Reply

          1. Thanks! For the top graphs there’s also the point that here we assume we get the “background” levels of leads for free – i.e. if we did nothing this month, we’d still get 100 people after our product or service. But for early stage companies this isn’t necessarily the case – if you do no marketing you get absolutely nothing. For them, achieving even a flat line with a modest budget is quite an achievement.

  • Process Hawks and Doves

    In US politics, and now politics around the world the terms “hawk” and “dove” (really “war hawk” and “war dove”) are used to identify politicians who have leanings in a particular direction – either towards controversial wars or against. The arguments always play out on both sides, hopefully tending towards a solid, well-argued solution for a particular scenario. But I always get the impression in these debates that really, almost regardless of the facts on the ground, there are individuals who have a leaning towards war and, in the absence of counter-argument, would take that route; and there are those of the opposite persuasion.

    This made me think about this notion of an internal bias, towards one approach or another, in the much less controversial area of process in the workplace.

    My very first working day (in a proper “grown-up” job, rather than spending Saturdays in a shoe shop) was at British Airways on their computer training scheme (the BACT program, now sadly no more) and I still remember my new boss’s boss coming in to give us a welcome speech. The main point he made, that I remember at least, was that the JFDI approach just wouldn’t fly at at BA. In a company of 50,000 with an IT department of 2,000, there were processes and systems that had to be adhered to, if the whole machine was going to work. I didn’t question this at the time and happily spent a pretty large proportion of my working life at BA making sure everything was in its right place – that docs were named and catalogued accordingly, that all docs were written in a certain style, signed by the right people and that all software was developed in the standard approach (whether changes were big or small). The incident I remember most was having to move my PC from one desk to another. I was about to unplug the thing and pick it up when I was given a stern look by my team leader – there’s a number to call, a form to fill in, then you wait for a team of two (always two), to come down and move it for you. Probably two days later.

    Since then I’ve worked in companies from two people in size to 75,000 and those companies have had very different approaches to process. At a two-person standup, the idea of adhering to some sort of heavyweight process (rather than JFDI) is laughable – we were always flying by the seats of our pants, just about getting things done as quickly as possible, nothing documented, done differently every time, code being shipped without testing, marketing copy being finished and sent out minutes before the deadline. Terrifying – or exciting, depending on the outcome!

    But the point of this post is not to argue for one way or the other. It’s obvious that in a larger organisation, there is a need for process. And in a startup it’s neither possible nor desirable to spend time creating much process.

    What I have found however, and have always found this, is that people seem to have an innate bias towards more process or against. And, like the war hawks and doves, there’s really not a whole lot you can do to change that innate bias. We can certainly have arguments in a specific situation – should we apply a new process to fix a given problem, or just get on with the job? And hopefully everyone will be swayed by the evidence – but this is always a fight against one’s own internal biases. I tend to think of those that prefer the JFDI approach as hawks (perhaps an association with a more cavalier, devil-may-care approach), and the process fans as doves (an association with meekness, and a desire for peace and order, perhaps?).

    (In contrast to my views on war!), I’m quite a hawk when it comes to process. I struggle with, what I perceive as, treacle, oozing through a company and slowing down progress. Particularly in the world of marketing, which for me is about inspiration, excitement, ideas, all mixed with a bit of science, marketing is an area where for me, process can slow down and kill the sort of ideas and innovation needed for great work to be done.

    But here I am, of course, exhibiting my internal bias! I believe it comes from working at startups (which made more of an impression on me than BA ever did), though maybe I’ve always been that way inclined. So I have to fight my own internal bias in discussions on bias and make sure my prejudices don’t colour my judgement.

    And, thinking more widely, I think this extends to many other areas of working life – we all have biases, whether it’s towards process or against, towards short-termism or long-termism, towards a more or less scientific approach to marketing, towards argumentative or inclusive management methods, towards talking or doing – but it’s important to be self-aware of what our biases are, and to adjust our arguments accordingly. What I often find is that spending time listening to the opposite point of view can really help making sure you’re not letting your prejudices override others’ views. It’s not always easy, but I think it can really help to keep yourself in check and, at least try, to come to some sort of evidence-based approach to debate and argument.

  • Getting Stuff Done as a Product Marketing Manager

    plates

    I hardly know a Product Marketing Manager who isn’t overwhelmed by his or her workload. As I’ve written previously, this is at least in part because of the vast number of activities that PMMs “should” be doing – how can you not being doing your job properly if you don’t, at least, have a full content marketing strategy, a mobile strategy, a full list of researched and refined personas, a great Twitter presence, a nicely written weekly blog, a monthly webinar, a multi-threaded email nurturing campaign, remarketing, GDN etc etc? All done by Friday if possible?

    So part of the problem is that there is too much we “should” be doing – though as I wrote, I think most of these things should be dropped if only for our own sanity. But that’s only half the problem – the other is the way in which many PMMs work, including often, myself. Even if we’ve restricted our Work In Progress (WIP) down to four items, we still often find ourselves context-switching between those four things through the day – effectively spinning multiple plates trying to keep on top of all of the activities that do genuinely need to be done.

    Context switching is a well-known problem in any field of work. The gist of it is that, by constantly switching between tasks – often including minor admin tasks such as checking and replying to email – you lose a lot more than just the time it takes to switch tasks. You lose the momentum you’ve built up in something, the time it’s taken to get your focus and flow flying so that you can make real progress. And the problem is far worse for difficult or creative jobs – switching between admin tasks (e.g. from email, to filling in an expense form, to sitting in an “update” meeting) is very easy because, quite frankly, you don’t really need your brain for any of these. But trying switching from something like “Think about the core strategy for my marketing plan for next year” to “How are we going to get people to read our articles on X or Y?” – very difficult indeed; and you’ll lose a lot of time trying to figure out “Now, what were we thinking about those articles? Where did I get to last time? Let me re-read my notes…”.

    So it’s a bad thing. But how do you avoid it? I’m trying something at the moment, which is working really well, so thought I’d share it. Completely by luck I read the following book:

    Manage Your Day-to-Day: Build Your Routine, Find Your Focus, and Sharpen Your Creative Mind (The 99U Book Series)

    (It was a random £1.19 offer purchase on Amazon).

    Now half the book – the second half – isn’t great. It’s a little too full of pat phrases about “Creative thinking” and a bit too close to a self-help manual for my liking. But the first half has a handful of really great pieces on productivity and “How to get more creative work done”. My favourite quote, about email:

    RandomReinforcement

    This quote isn’t about context-switching per se, but about the related problem, that’s sucks up as much of our time as context-switching – email interruptions.

    Anyway, the primary bits of advice that I’m taking from a number of chapters, and that I’m currently trialling are:

    1. Figure out what time of day you do your best work. For me this is most definitely the mornings, starting as early as possible.
    2. During this time (in theory, when you’re going to do your best work), undertake a single, important task (say, for 3-4 hour stretch) that requires critical thinking.
    3. No interruptions, period. For me this means email is switched off, office communicator is off, anything on my phone that could interrupt is off, Skype, Yammer etc etc – basically everything.
    4. No meetings. A 30 minute meeting in the middle of a creative period, and you might as well kill two hours.
    5. Push all admin to the afternoon – no email replies (of course you’re not checking it anyway, are you, so you wouldn’t know to reply!?), no updating task lists, no taking 5 minute breaks to check your company Twitter stream, nothing.

    And so far – it’s been great! I’ve managed to write a long blog post, a couple of big plans, think about a couple of quite tough problems all just in the first week. The hardest part is that you have absolutely nothing to do all morning except the single task. And that’s tough if, like most marketing people, you’re used to jumping between tasks endlessly trying to spin the plates. I keep thinking “Surely there should be something else I should be doing now?”. But no – you’ve got the one thing to do, and that’s it.

    But the point is – you’re paid to think, come up with great ideas, solve difficult problems and add some real value. Replying to emails, having catch-up meetings, updating To-Do lists etc are just the necessary part of working in an organisation and, though necessary, aren’t where you’ll ever make a big difference – and if you don’t give yourself time to singularly focus on tasks, how are you ever going to come up with that great, big idea that could turn your marketing strategy around?

  • The Need to Constantly Change in Marketing

    images
    There’s a quote that I really like from one of Christopher Isherwood’s early novels, The Memorial:
    “Men always seem to me so restless and discontented in comparison to women. They’ll do anything to make a change, even when it leaves them worse off. […] Whereas […] we women, we only want peace.”

    Removing the sexism from this quote (it was written over 80 years ago…), gives you something like the following – I’ve removed all of the brackets etc, to make this more readable:

    “Some people always seem to me so restless and discontented in comparison to others. They’ll do anything to make a change, even when it leaves them worse off. Whereas others only want peace.”

    Now I think this quote applies to an awful lot of people and situations, but this is a marketing blog, so why is it relevant here?

    If you step back and look at the ever-changing world of marketing methodology, and look at it over a timescale of years, and really, decades, then the one obvious feature is the constant change in the methods recommended and used over this period. Some examples known to all of us:

    1. The Internet and digital media. I still remember the first time I saw a website address advertised anywhere, on the back of a Björk CD. At the time I had no idea what to do with it (I didn’t have a computer on the Internet) but I know I was impressed. Now of course, over the last 10-20 years, a marketing strategy which doesn’t involve a website and other elements of web presence would be laughed out of the room.
    2. The death of print media. Apart from the very occasional experiment, we haven’t used print media for advertising at Red Gate for at least 10 years. Again, when I was a kid, every video game, bit of software or hardware would buy quarter, half or full page slots in various print magazines and newspapers. This was expensive and, as an advertiser, you had no idea whether it worked or not. In contrast to digital media, a campaign based entirely on print media would struggle to be taken seriously today.
    3. Banner ads. Getting in to something more specific, banner ads are I think the VHS recorders of our generation. It is a “technology” that has both risen and (almost completely) fallen in our lifetimes. Obviously it grew with the growth of the Internet as a medium and was the obvious like-for-like swap for quarter page ads in print media (just scan in your print ad, and send it over to the magazine to put on their website!). But it has the same problems (lack of feedback for the advertiser) and, as we all know, nobody likes or clicks on them. There have been some advances in recent years (using pay-per-click banner ads through Google Display Network), but banner ads are now rarely at the centre of any campaign.
    4.  Adwords. Again, a medium which as grown with the rise of the Internet and Google specifically. Google make an incredible amount of money, almost exclusively from Adwords, and their whole machine is set up to promote Adwords as a necessary and wise choice for the modern marketer (have you ever seen a Google blog post titled “How you could spend a lot less on Google Adwords”?!). Ten or more years ago, the individual who looked after marketing at our company at the time saw how it could be used to massively reduce our marketing spend (compared to print media) and still get the same results (as well as the benefits of knowing what’s actually worked). This was something that was instrumental in the early success of Red Gate, particularly on a limited budget. But could the same be said today? Is Adwords still the most cost-effective way of generating leads, easily outstripping all others? What sort of future does it hold? I’d suggest the jury is out.
    5. Content Marketing. As I’ve written before, hard to find a marketing blog that doesn’t hail content marketing as the new messiah. One group in particular who were very early to recognise its value were the people who run marketing automation companies…

    6. Marketing Automation. The natural progression on from blind content marketing is the use of marketing automation tools to apply that content in the most relevant scenarios, measure the results, then adapt based on feedback. This is an area which is still in its infancy I believe, simply because of the hurdle to getting started (you have to install and setup something like HubSpot, Eloqua or Marketo – no mean feat).

    There are many other methods of course that have had their ups and downs – mobile advertising and social media are also current fashions but the general point is that like everything in the world of marketing these things come and go.

    But, there’s another important thing to note here – there are people who recognise the importance of the new marketing approach before others and are therefore, arguably, more likely to get the full benefit of using that new method first. Björk has always had a great reputation in the world of digital media (her latest idea – Biophilia, a sort of multimedia collection “encompassing music, apps, Internet, installations, and live shows”) is once again at the forefront of what can be done with digital technology (and its great btw!). Bowie is another who was always at the forefront with www.davidbowie.com – its changed many times over the years, but was a pioneering site for fans in the early days.

    Which brings me back to the Christopher Isherwood quote. There are marketing people who, because of their need to always be doing something new are more likely to find the new things that could be valuable for your business. They’ll always be on the lookout for the new trends, what’s coming up in the future and so on. In contrast there are also people who will stick to what they know, and will struggle to try out new things. Each of these approaches has pros and cons – there is a danger, with constantly looking for the Next Big Thing, that we can fritter away our time on endless trends that go nowhere when that time could have been better spent just getting the Adwords campaigns right.

    But the danger with the reverse position – of always sticking to what you know, and ignoring the world around you – is that you stick with something long after its valuable and never fail to capitalise on the new things coming along (in the early days, when you can have most impact). I interviewed someone for a marketing role 2-3 years ago who said “There’s nothing wrong with print media – have you considered going back to that?”. It’s not about whether he was wrong or right, it’s that this exhibited an approach to marketing that I would have really struggled to work with.

    I’ve no idea what the next big trend will be of course. I think there’s another phase in the content marketing/marketing automation marriage where we’ll soon be able to auto-create content for customers based on their very specific needs (imagine a situation where articles could be automatically created from pre-defined blocks of copy, pieced together based on our knowledge of the customer – an article for a large, late adopter pharmaceutical company would be subtly different to that for a small, early majority financial firm), though a lot of these things will require some real, solid output from the Big Data/Hadoop community. But who knows? The point is unless you’re looking for these new trends – or rather, employing people who yearn to find these new things – then you’re almost certain to miss them till its too late.

  • Increase Your Net Promoter Score to Decrease Marketing Spend

    tapestry-michelfeld-wheel

    Marketing budgets are always on the squeeze. Or may be less that money is tight and more that the expectations on Return on Marketing Investment (ROMI) are raised. “I don’t mind spend £50k on this campaign, but I want to know what return I got, or you won’t have £50k to splurge next year”.

    The point is – how do we get more return for less investment? Well there is a way, and it’s free – and it’s where the company I work for get around half of our traffic. And they’re good leads, probably the best we get.

    What’s the magic formula? What’s the source of these Glengarry leads? It is, of course, being recommended by a friend. We regularly ask our customers “Where did you hear about this product you just bought?” And the two biggest answers are “Recommended by a colleague” and the related answer “Used it in my previous job”. The latter I think of as “Recommended to myself” – if you move job it’s a great opportunity to dump old products you didn’t like using, so to take on the same products again in a new role is a real testament to your product offering.

    These two answers add up to more than 50% of responses, with things like “Google”, “Events” and “Ads” (the things we have to pay for) a long way behind.

    Now obviously there are significant subtleties here – getting to a point where people recommend your products to colleagues takes years of significant investment in R&D, support, innovation, community work and so on. Also of course, paid-for marketing is generally targeted at getting new people in from new organisations. But once you get this fly-wheel of traffic spinning, you can take your ROMI as high as you like – I suspect we could completely cut our marketing spend for certain products and not see a downward trend in leads for a year or two – some products have effectively reached escape velocity. One of the reasons this source is so effective is that not only do you get a great lead when Frank recommends your product to Joey, but then Joey recommends you to Dave and Kim and the effect, if not viral, is at least self-perpetuating.

    But enough of this self-congratulation – what has this got to do with Net Promoter scores? Wikipedia describes Net Promoter scores (NPS) as a measure of customer satisfaction. In essence you ask your customers “How likely are you to recommend our company/product/service to your friends and colleagues? ” on a scale of 0 to 10 (0 is bad, 10 is good). Then add up the number of 9s and 10s (“promoters”) and subtract the number of 0-6s (“detractors”). This expressed as a percentage gives you your net promoter score. Anything above zero is good, anything over 50 is excellent.

    So it could be argued – increases in NPS should indicate an increase in customers’ willingness to recommend you to colleagues and friends (assuming they have the channels to do so – a separate question) leading to lower marketing spend required. But how do you impact NPS?

    I think this is actually an easy, obvious, yet hard-to-implement question. A dollar invested in marketing a poor product with poor support from a badly run company is a dollar thrown away – because you’ll never fulfill the promise made by your advertising. But a dollar invested in making your product, support, sales support, community groups etc great is a dollar invested in future free marketing and revenue.

    But it’s hard to implement this because budgets for marketing and R&D are often quite separate. How do you divert the former to the latter? Not easily. Also note of course you still need to be spending on marketing – as I’ve said before you can have the finest product in the world, but if no-one knows about it you’re wasting your time. But invest that dollar in marketing your world-class product after you’ve made it world-class.

    I haven’t said anything about how to increase your NPS but that’s because it will be different for every organisation. In most NPS surveys the recommendation is to follow up the initial rating question with “What didn’t you like about company X?”. Do the things people ask for! If they all love your product but hate your support, then that’s where to invest and so on.

    The investment in quality you’re making here is an investment in reduced marketing spend in the future.

    As a footnote, we run a big NPS survey once every 6 months with lots of “What do you like about us?”, “What don’t you like?” questions. It’s running as I write this and it’s all I can do not to peek at the answers that are in so far!

  • The End of the Marketing Plan

    Destiny(Sandman)

    I’ve read a couple of books in the last year both with something to say on the subject of marketing plans. Well, I’ve read one and given up on the other. The one I finished was:

    Lean Enterprise by Jez Humble, Barry O’Reilly and Joanne Molesky

    And the one I barely got started on was:

    Marketing Plans by Malcolm McDonald and Hugh Wilson

    This makes this a bit of an unfair comparison review of the two books, as I haven’t made it through the latter, but in a way that’s the point I’m trying to make.

    The latter book comes in at a whopping 592 pages – and that’s for the 7th edition of the tome. And the content is dense – every page is packed with data, information, tables, planning tips and tricks, processes and so on.

    In contrast, the Jez Humble book is being released through an Agile Publishing methodology (release early drafts to customers, gather feedback, rinse-and-repeat), where the first draft came in at a digestible 78 pages. And it’s very readable.

    But again, that’s not really the point – there’s nothing wrong with a long, intense study of a subject. The most interesting difference between the two books is the approach taken to marketing activity. To illustrate the difference, the following is a key diagram from  Jez Humble’s book:

    LeanEnterpriseThis diagram isn’t directly applied to marketing, but instead is making a point about how most companies develop products end-to-end. The authors describe this as “water-scrum-fall” – a process whereby yes, your development teams are writing and testing the code for a new product following Agile practices, and may have been doing so for years, but the rest of the organisation still works in a heavily waterfall based, linear way, with all of the standard problems of waterfall development – bottlenecks, blocks, wasted effort, wrong products to customers, late delivery and so on. By the way, HiPPO stands for “Highest Paid Person’s Opinion” ;-). NB: I won’t go in to the details of “Agile vs. Waterfall” as development methodologies – Wikipedia as ever has a good description.

    My contention is that I would add marketing and marketing planning in to this diagram as a part of the process of developing and releasing a product to market – and that we as marketers still, generally work in a heavily planned, non-iterative, and essentially out-dated approach to developing marketing campaigns.

    The Malcolm McDonald book provides quite incredibly detailed tables for the reader to fill in, allowing you to plan out your whole year of marketing in detail – which segments you’re going after (and everything about those segments), when you’re running campaigns, how many leads you will get from  each activity, forecast revenue generated and a thousand other things. In theory, all laudable activities. And for the last three years I’ve followed this approach (more or less – I could never quite stomach the level of detail required by the book). Every November/December I’ve spent weeks constructing a plan of, essentially, what was going to happen the next year in marketing, down to leads and revenue generated for the next 12 months.

    As everyone knows, these plans never come to pass. But, the argument goes – “It’s the planning that’s useful, and what you learn, not the actual plan”.

    Yes – to an extent, because a plan forces you to think about your goals and objectives, and that can’t be bad. But a key practice in Agile development is the concept of a backlog of work – you have a long list of activity that you want to undertake for a product, but the level of detail for those items is different depending on how soon you plan to do the work. If you’re starting something next week (at the top of the backlog), you’d better have a pretty good understanding and description of the story you’re tackling. However, if you’ve got something you “Hope to do  in about 6 months”, you can leave these items at a very high level, something like “Add in that cool Facebook sharing feature” will do perfectly well.

    Why is this a good idea? Because right now, you fundamentally don’t know what the future holds. Today in February 2014, I have an idea for what marketing we as a team want to be doing in 2014H2, based on the products we have, the customer segments we’re reaching (or not reaching of course!) and so on. But I’m also pretty sure that I’m wrong. That whatever we do in 2014H2 will be only barely related to my current thinking. Right now we’re planning a mass market activity, based on some of the traditional marketing approaches we’ve used before. But what if, in April this year, we suddenly start gaining some real traction with larger accounts in a specific segment? Then I might need to pivot and re-think plans to make the best of this opportunity. Any detailed plans that I had would be thrown out of the window.

    And the point made in the Lean Enterprise book, is why not apply the Agile development approach to other areas of the business too, such as marketing? Release early, gather feedback, iterate-and-repeat. The key benefit is that you’re getting early feedback on what’s working, then you build on that, continuously improving what you’re doing so that by the end of the year you have activities that you know are working – because you’ve been testing them for the previous 11 months and getting benefits (e.g. leads) all along the way.

    This is what we’ll be doing this year. I haven’t made a marketing plan for 2014 at all – and I’m feeling very comfortable with that situation.

    PS the image at the top of this post is the character Destiny from the amazing graphic fantasy novels – The Sandman by Neil Gaiman (I can’t recommend these books highly enough – I’m now on my 4th read). Destiny holds a book (the “Book of Destiny”) that contains the past, present and future of every living being. As I said, the novels are fantasy.

  • Keeping an Eye on The Competition

    Elizabethan Football woodcut print by English School, 16th century

    Many, many years ago I studied psychology and one of the most interesting courses I did was on development psychology – how we go from  babies to infants to toddlers to children to teenagers to adults. The most fascinating lecture series was on Theory of Mind – the notion that, as we grow up we gradually realise that others around us have minds completely separate from  our own, with completely independent thoughts (amazingly, this is only really fully developed in most people around age 11). Babies are born completely egocentric – they have no comprehension of entities other than themselves. And even 2-3 year olds are generally incapable of understanding that someone else might have a different point of view to  themselves (the classic experiment shows how a 2-3 year old is rarely capable of understanding why an adult can’t see something he/she sees, even if that item  is completely blocked from the adult’s view).

    Anyway, the point is that there is a gradual shift from a wholly egocentric perspective (“I am everything there is the world”) to comprehending and respecting others’ independent points of view.

    What has this got to do with competition and product marketing? Well I think this process (of “growing up” essentially) maps quite nicely on to how many companies grow up in their view of competitors to their products. Many startups and small companies (often in “incubators”!) are very inward-focussed. They concentrate heavily on their products and innovations and, yes, they talk to their customers, but competitors? If you’re lucky, you might see a random email asking “Has anyone tried out competitor X’s product yet?”.

    As companies grow, someone might twig that “Hey, perhaps we should see what others are doing in this space!”. So perhaps some “Competitor sheets” get written and you might try out their tools, but you don’t really fear them and this still comes back to an egocentric point of view – the belief that from a customer’s point of view, you are the most important thing in the world – that they will see your products first, and only consider competitors as secondary also-rans. This is the toddler point of view – you know there are other companies out there, but you don’t see them as equals.

    But what happens when you grow up? You realise you’re not the only one around. That there are competitors who sell products just like yours that might be better, faster, cheaper and, most importantly, that the customers out there have no inherent bias towards you as a vendor. There is a lot of brand loyalty out there, but this tends to be for specific products rather than a whole company (e.g. I’ll buy a Sony TV, doesn’t mean to say I’ll buy a Playstation).

    And it’s dangerous to rely on the brand loyalty, particularly when you’re after new customers. The simple truth is that if someone has barely heard of you before, then that person will weigh up your offering against your competitors equally and you’d better make sure what you’re offering isn’t found wanting. Your competitor’s product is just as valid and attractive as yours.

    Which is why we track competitors heavily at Red Gate. This includes things like:

    1. News – announcements, new versions, new functionality and so on (including trying out new features when they arrive).
    2. Company news – has someone just received $50m of funding for a research area you currently operate in? Worth knowing.
    3. Their partnerships. That small player is less easy to dismiss when they’ve just struck a partnership with IBM to distribute round the world.
    4. Twitter – are people talking about them? What are they saying? In what volume? NB: A lot of Twitter activity can be self-generated by publicity-hungry companies, so worth checking where it’s coming from.
    5. Google Alerts – this is a general measure of “web activity” but can show things like:
      1. Are people writing posts about them?
      2. Are they developing a lot of support collateral and documentation themselves?
      3. Is the competitor product very buggy (for example, in the tech world, many ask for answers to problems on Stack Overflow). NB: if there are a lot of questions about a competitor product this means both that it’s popular and that it might have bugginess problems – worth reading what people are asking.

    Another interesting point about keeping an eye on activity, is that it gives you a crude measure of where in the hype cycle a particular product is. Gartner produce a very interesting hype cycle each year for emerging tech (in essence, is this product/tech just hype or are people really using it):

    Gartner Hype Cycle

    (NB: I love the term “Trough of Disillusionment”!).

    The following two (anonymised obviously) charts are for two different competitors of ours:

    Competitor A

    Competitor A

    Competitor B

    Competitor B

    These charts show the number of tweets and alerts for each competitor each day.

    Competitor A doesn’t get much Twitter activity – may be the early adopter hipsters aren’t tweeting about it on a daily basis. But, there are lots of alerts for the product, most of which are on Q+A sites, users asking questions about “How do I configure X?”, “How does Y work?”.

    Competitor B isn’t doing so bad on Twitter. A steady stream of activity, particularly over the last few weeks. But, for alerts, it’s all very quiet. And, if you look at what the actual tweets are, most of those come from the vendor themselves.

    So for competitor A, this is likely to be a product late in the hype cycle – i.e. people are actually starting to use it! Competitor B – it’s all still hype. I’m more afraid of competitor A than competitor B..

    Anyway, we as an organisation have grown up and take a lot more notice of the competition nowadays – and we don’t assume a customer will always buy from us instead of them (despite us being better ? ). Would you say the same?

     

  • Xbox One vs. PS4 – How Marketing can Drive Development

    Titanfall-by-Grafittibox

    Hard to miss it, but two next-gen gaming consoles were launched just before Christmas – Microsoft’s Xbox One, and the Playstation 4.

    Normally this sort of thing would pass me by (I’m not a big video game fan – they just seem like complete time vampires), but something I noticed was how interesting the two launches were as marketing exercises.

    Both did very heavy outbound marketing. At the Xbox launch, you could barely turn the TV on without a slick Xbox ad being shown, the advertising was anywhere you looked, there was an extensive roadshow and they had a very heavy Twitter presence (lots of updates about features, events, sneak peeks at functionality, that sort of thing). All this was great, and the PS4 did something similar. But that wasn’t what I thought was so interesting (in fact, both campaigns felt extremely well-honed and professional, as you’d expect – but perhaps a little too predictable and dull?).

    What I thought interesting, was how differently the two consoles were positioned. Or more specifically, how differently they were trying to position the two consoles in the customers’ minds. Put simply, the Xbox One is obviously trying to position the console as a unit for the family living room. Yes, it has zombie killing games, but that’s only part of it – there are fun games for the kids and the family, video and music functionality (including film hire), the Kinect (advertised as “Now can detect up to 6 people” – i.e. a family), HDMI pass-through and so on.

    Look at the PS4 tagline – “This is for the Players”. They’re going straight for the hardcore gamer. They’re pushing on the processor power, the superb, but adult-focussed game range, it’s reputation as the “player’s” console and so on. There’s an equivalent to the Kinect, but it’s a bit of an afterthought (and doesn’t come in the box – hence why the PS4 is that much cheaper), and of course the PS4 can stream  videos etc and play Blu-rays, but that’s barely mentioned in the ads. Additionally they’ve much more of a deal of supporting indie game shops, hoping to get more interesting and diverse a range of games.

    That’s why the arguments about “Which console is best?” are rather tiresome. They’re targeted at different groups, and have different functionality to match. If you’re buying the thing so that the kids can play a dancing game on Kinect, do you care if that’s rendered at 1080p or 720p? But if you’re buying something to feel the thrill of hi-octane car chases, that frame rate really matters.

    The important point I wanted to draw out here though, is that it’s not just about the marketing – it’s about the product too. If the consoles were more or less the same (and there are sooo many similarities!), then marketing them differently would just be that – fine, but perhaps not enormously impactful.

    But in fact, the machines themselves are very different – Microsoft made a big decision to include the Kinect in the box, significantly increasing their launch price. Additionally, the PS4 doesn’t play music CDs in the Blu-ray player (though coming soon apparently). These are two product decisions (amongst others) that I believe would have followed on from a marketing decision about how the Microsoft and Sony wanted to position the consoles for particular markets. By making big product development decisions based on this sort of market research, you end up with a much stronger proposition for the market. It’s not just an ad telling you that the PS4 is better for gamers – this is backed up by what you’re buying. The processor is faster (in certain circumstances ? ).

    It’s a simple example, but I think a useful one. For me, personally (not a big video game fan, has kids, wants a way of accessing decent TV through a console) the Xbox One is much more attractive. But when I mention this to the avid gamers at work, I’m laughed at – how can you even consider not buying the PS4? (NB: Microsoft’s terrible PR last year about stopping customers selling games second-hand really didn’t help..). But we’re very different customers looking for very different things.

    I think both consoles will do well, but likely in the different markets – both have been positioned cleverly, but most interestingly – they’ve obviously listened to their marketing department to determine that product direction, to make sure each ends up with the best product to actually fit their respective markets.

  • Dissecting Thought-Leadership

    [no title] 1972 by Andy Warhol 1928-1987

    To start, I don’t really like the term “Thought-Leadership”. Like many things in marketing, it’s a bit too “marketing-ey”. It also has echoes of NLP, something I’m not a big fan of, to say the very least.

    But, I guess it’s pretty descriptive for what it means – I’d define it as something along the lines of:

    Providing insight, ideas and leadership in a given subject area, that stretches the limits of the current consensus, driving a subject in new directions and providing deeper understanding.
     

    The reason I’ve highlighted “leadership” and somewhat repeated this idea later in the sentence, is that I believe it’s important to distinguish between this sort of activity and certain types of content marketing which are merely reflecting the current consensus and knowledge in a given area. It also highlights why I think thought-leadership is so hard, particularly if you’re using this as a marketing technique.

    First, to distinguish between thought-leadership and merely “reflecting the consensus” – I think this distinction is based on whether you are genuinely providing new insight and a deeper understanding on a subject, or are you just re-iterating others’ points of views and ideas? There’s nothing inherently wrong with the latter (unless you’re plagiarising of course ? ) – a lot of great content marketing is based on this approach. The example I gave a while ago, of VW providing content on how to keep your car safe in the winter is a really solid bit of content marketing. What they’re talking about (getting tyres, brakes etc checked before the winter starts, checking tread, knowing your revised stopping distances and so on), is hardly pushing the forefronts of engineering knowledge. But does that matter? I think this is really solid content marketing, which will enhance VW’s reputation and draw in people to their site.

    But it’s not thought-leadership. I’m not sure what thought-leadership in the area of car winter safety would actually be!, and I’ve actually struggled to find really good examples, outside of the area I work in. I think this is because, although there are many personalities (particularly in marketing, where the Cult of Personality is rife!), how many of these are providing ideas where you think “Wow, I would never have thought of that! I now, fundamentally see this subject in a new and different way”. Rare, I think. As I say, there are a few I know in my work subject area (database development), but outside that?

    The two good examples I could find in marketing generally are:

    1. Steven Wood at Eloqua (now part of Oracle). Steven has written a couple of great books on marketing automation – Digital Body Language and Revenue Engine. I see these as great thought leadership because he wasn’t just repeating received wisdom on a given subject, but really trying to say something new, and to give a more in-depth point of view on the subject.
    2. Google Analytics blog. The thing I like about the GA blog is that it’s a mix of content but, more importantly, that they do genuinely try to say something new and insightful with many of the posts.

    But, I think there’s a couple of other things these examples have in common, which make them good examples of Thought Leadership – things which are not easy to replicate in a convincing way:

    1. Authority – both are respected sources of information, so you listen. If it was exactly the same content from a.n.other random individual, I think it would be more difficult to get value from the content.
    2. Relevance to business – again, both talk about topics which promote their businesses. As I mention, I think it would be relatively easy to find someone authoritative to talk on a topic of his/her choosing, but is that going to promote what you sell?

    And this is why I think effective Thought Leadership is actually very difficult indeed. You need to find someone who fulfils the following three requirements:

    1. Knowledgeable/insightful and able to push the topic forward,
    2. Is a respected influencer in the community,
    3. Is willing to talk on the subject that promotes your business.

    You can throw money at the problem of course, by hiring some big names. But even then, if you hired someone very expensive and authoritative in a specific area, but that person wasn’t already very interested in the subject matter of your business (criteria 3), you’ll still struggle to get good thought-leadership from that person.

    An alternative is to grow someone from within. May be your CEO would be willing to tour the world talking about a given topic, writing blog articles on the side to support this. Or maybe you’ve got some very smart internal people who are already authorities on a subject, but you didn’t know it. All are options, but as I say, if you fulfil the three criteria above, you’ve a lot more chance of having a real impact, rather than just pushing out content that few people read..

  • My 10 Biggest Marketing Screw-ups of 2013

    Alexander O'Neal Criticize

    It’s nearing Christmas, time for “Top 10…” and “Round up of 2013″ style posts, so here’s mine. One of my failings is that I’m a terrible self-critic, so I thought I’d write a piece on “My 10 biggest marketing screw-ups this year”. I don’t think I’ll get fired because luckily I work at a place that believes that “Visible mistakes are a sing that we are a healthy organisation.”, from p82 our Book of Red Gate. More seriously, we actively encourage learning from mistakes (a sort of kaizen I guess) and, as the quote says, if you’re not making mistakes, perhaps you’re not trying hard enough.

    So, excuses out of the way, here are the top 10 mistakes I think I made in marketing this year. I’m sure my colleagues could list many more, but these are the ones that are top of mind. NB: I was going to do a “What I learnt” section for each item, but for most it’s pretty obvious – Don’t do it it again!

    1. Trying to do too many things in parallel rather than in series

      This covers a lot of the year in fact, and was perhaps the thing that took me the longest to correct. In essence, there have been many times in the year where I’ve kicked off multiple activities (e.g. some Adwords work, a new site, some new emails, a change to pricing, some new social media activity), all at once, I guess with a view that “Well, one of these things must work!”. This is, I believe, a mistake for two reasons – i) Measurability. When you (hopefully) get a lift in traffic, which of these activities made that difference? Who knows!?  And, ii) I think if you try to do 10 things at once, you’ll do each of them, at best, adequately, and likely fail at all of them. If, instead, you focus on one specific activity, get that working, tuned, and implemented to the best of your ability, then move on to the next thing then this is more likely to get the results you’re after long term. Better to do 3 things well, than 10 things poorly.
    2.  Not being brave enough about making some significant changes to marketing spend

      Obviously I won’t go in to details here about what we spend on what, and that’s not really the point. The real issue is about following one’s gut feel for certain things, and having the courage to carry those changes through. For much of this year I’ve believed in making significant changes to certain parts of the marketing mix spend, but for a long list of reasons, none of which were insurmountable, I haven’t pushed those changes through. I could have done, but the changes would be risky, unpopular with many, and aren’t strictly in the area I work in. Nevertheless, I wish I’d pushed these changes through.
    3. Occasionally being too “Marketing-ey” in copy

      I work in the software industry. Tech people have a radar for marketing spiel second to none. Any hint of hyperbole or marketing-speak, and it’s a massive turn-off for our customers. Our copy needs to be plain, say what it does, talk in the customers’ language and so on. There’s been at least one major and a few minor incidents this year where I’ve written copy which is definitely on the wrong side of this line, and which shouldn’t have gone out. I guess it’s a quality/attention-to-detail thing, making sure I’ve done a final check of everything I’m sending out with a final “Is this just marketing BS?” check at the end.
    4. Periods of time out of contact with customers

      There are have been dry periods during the year where I’ve gone for weeks and weeks without speaking to a single person who buys our products. Just no good and, basically, laziness. Even if I’m not at conferences, or going on customer visits, there’s absolutely no reason I can’t just call a couple of them up and see how they’re getting on with our products. As I said a couple of posts ago, if you’re not at the coalface a lot of the time, keeping yourself up to date with what the customers really need, you can drift in to an ivory tower of speculation and digression, losing focus on what the customers are really interested in.
    5. Too much time re-jigging pages on our website

      It’s just too easy! Perhaps it’s borne of the Lean Startup movement, but it’s very tempting to endlessly play with web page layouts with the (I believe, mistaken) belief that “If I just put the video on the left and change the colour of that button, conversion rates will double!”. It never has. As I say, it’s just so easy to play with the website (rather than doing something more difficult and longer-term, such as “Building a community” or “Finding 10 reference customers”), and I should have resisted the temptation to sit in this comfort zone.
    6. Too much short-termism; not thinking long-term enough

      This is related to the previous point, but the Lean Startup movement implies “Make change X and watch conversion rates go up 10% in a week!”. But that rarely happens – genuinely building demand not just leads can take significant investment of time and effort, and you might not see the results for months, even years – if you can even measure the impact anyway. Endlessly pivoting week-to-week, just because some minimal piece of marketing work hasn’t shown immediate results is a hiding to nothing.
    7. Chasing shadows in KPIs

      This is a phrase borrowed from a colleague, but if leads go down 10% this month, compared to last month, does this matter? I’ve spent too much time investigating ups and downs in various metrics, to little effect. It’s the long term trends in KPIs – whether tracked over quarters, years, or even longer, that bring real insight in to your market, movements in customer demand and so on, and just chasing the shadows of local changes doesn’t really lead anywhere very useful.
    8. Not implementing marketing automation earlier

      We’ve been crying out for marketing automation for a long time and now, finally we’re implementing HubSpot (hurrah!). It’s going to be transformational to the way we carry out certain activities. But we’re not implementing it because of anything I did – thankfully another colleague made the effort to push the trial and implementation through, and it’s down to him that it’s now up-and-running. Given the importance of the change to all our activities, I should have prioritised it earlier in the year, if not last year and not let organisational difficulties get in the way. I guess the real learning here is that if something is going to fundamentally change the way other things are done, you should implement it first, as the other work will just become obsolete. It would be like endlessly tweaking all of your music and playlists in iTunes, getting it all perfect then at the end just switching to Spotify anyway..
    9. Not supporting Sales properly

      Sales people are the individuals actually talking to your customers on a daily if not hourly basis. If a sales person says “I really don’t know what to say when this problem comes up for customers, or how our tools solve it”, you need to listen and you need to help. In particular if your products do actually solve that problem for customers and you haven’t told your sales people it does, you’re throwing money away – revenue from leads that probably cost you a lot to acquire. Why throw it away at the final hurdle?
    10. Not just accepting that some things are unmeasurable

      Some (if not most ? ) of good, effective marketing is basically unmeasureable. You’ll never be able to quantify the enormous value to be gained from, say, taking a key industry influencer out to dinner and taking him/her through your ideas. I think I’ve spent too much time worrying about measuring everything. Instead now, I partition activities in to “measureable” and “unmeasureable”, I try to accurately measure the former and just forget about the latter – it’s pointless.

    And I’m sure there are many more things (I know there are lots of small things along the way..). Most mistakes are obvious with hindsight – of course if you don’t support sales properly, they won’t be able to sell as effectively as they could – but certainly not all are obvious with foresight. For example, at the time, it seemed like a great idea to analyse KPI data on a month-by-month basis (we’re all data driven aren’t we?) and it’s only with hindsight and experience that I see how little impact and importance that endless burrowing has had.

    So I’m quite happy to be open about these mistakes – some perhaps I should have avoided, but most are just things I’ve learned from another year of working in marketing in the real world.

  • Market Sizing – Old vs. New Markets

    anthony-gormley-field-1991-ls-m1

    I was attempting some market sizing activity this week. It’s something I haven’t done for a few months and quite frankly I’d forgotten how hard it was.

    I start from a premise that the future is completely unpredictable. Really, aren’t we kidding ourselves when we think we can predict how many people will buy our widget and at what price? But then this seemed rather defeatist, and I have seen market sizing produce some value, so I thought I’d try and break the problem down a bit.

    The other think I noticed this month was how much fruit-specific cutlery there is out there. You can buy a Kiwi spoon, a Mango splitter, a Grapefruit spoon and endless other tat to fill your kitchen drawers. So I thought I’d use this as an example market sizing task, focussing on a new, brilliant product idea I had, the “Apple Knife” (patent pending) – a knife specifically designed for cutting up apples with a fork bit on the end for picking up the pieces. I know, genius.

    So the usual method I use for market sizing is the standard “Start big, and narrow down” approach. And I try to use some sort of staging for this, a version of which is described here – try to define some sort of Total Addressable Market (how big would this market be, if we had 100% market share?) and then calculate some proportion of this, based on how many people we can reach, what market share we might able to get and so on. As a massively over-simplified example, for our wonderful Apple Knife product:

    • People in the world – 7bn
    • People who regularly eat apples – 1bn (I have no idea, btw)
    • People in the UK who regularly eat apples – 60m (we’re only going to sell to the UK to start)
    • Households – 26m (realistically, we’re only going to sell one per household)

    So, in theory, so far,  our Total Addressable Market is 1bn knives – if every person in the world who ate apples bought one, this is what we’d sell. I don’t think this will happen. So we have to start narrowing down the numbers.

    NB: You can always narrow the numbers down in different orders – addressable geography first,  or # of households first? I’m not sure it matters, but generally certain orderings are easier than others (e.g. it’s easier to find the number of households in the UK than it is in the whole world).

    Anyway, here’s where it gets interesting. If I were a naive presenter on the Dragon’s Den, I might go in and argue – 26m knives will be sold in the UK, at £5 each, makes a total market of £130m, ker-ching! (let’s ignore things like manufacturing and marketing costs for now).

    But, I suspect the dragons would have something to say about this. The next stage in the narrowing process is the most important and, I think, the most difficult – how many people will actually want to buy an Apple Knife? To continue our sizing process:

    • People in the world – 7bn
    • People who regularly eat apples – 1bn
    • People in the UK who regularly eat apples – 60m
    • Households – 26m
    • Households that will actually want one – 26m x n%

    And the key of course here is, what is the value of n? If we think everyone will want one, it’s 100%, great. But, if we’re being slightly more realistic, n could be as low as 0.01% – leaving us with a total market of £13,000 (26m x 0.0001 x £5) – somewhat less attractive as an investment opportunity. Or even less of course (I’m going off the idea more and more, as I think about it).

    I think the first parts of the market sizing, if not trivial, are much easier than the latter parts. It might not be easy to find, say, “The number of companies in the US that sell products online”, or whatever your top level numbers are for your business, but that’s a number which can, reliably be found – if I do the hard work to find that number of businesses, say 1.3m, then that number is correct and won’t change for a while.

    The latter numbers (or percentage multipliers) are very unpredictable however. But not completely – what are the tricks for improving the accuracy of this figure? I think this really depends on how new or old your market is. And this exists on a scale. With our Apple Knife example,  there are the following possibilities:

    1. We’re already in the specific apple knife business. We’ve been selling them for 30 years, and have been selling around 2,500 per year. We reckon our new model is a bit better than the old one, so we hope to see this go up to around 2,700 per year. But it might not, so a reasonable forecast for market size is somewhere between 2,500 and 2,700 – pretty accurate.
    2. We’re already in the “fruit cutlery” business selling around 5,000 kiwi spoons a year. We’ve got a pretty good understanding of the supply-chain, the market, we’ve spoken to our outlets, to see what they think etc, and have come up with estimates of between 1,000 and 5,000 apple knife sales a year based on that. This isn’t as accurate as “a new version of the same product”, but at least it’s close. There are also subtleties to do with how close different markets are – may be there’s a separate market for “exotic fruit cutlery” with particular dynamics? Or the soft-fruit vs hard-fruit cutlery markets are different in interesting ways? I have no idea, but the principle here is – you’re not starting from scratch.
    3. You are starting from scratch. You’re a company that currently makes electroplating chemicals and have lots of spare cash to spend; and you think apple knives is an interesting market for you. Ignoring concerns I might have that you have no idea what you’re doing in the new market, have no reach, no brand, no unfair advantages etc etc, you also have the issue that you have nothing to base your market sizing figures on – how on earth can you estimate these numbers (though see caveat below about stealing other peoples’ figures). You might have a go and estimate figures of between 1,000 and 20,000, but who knows?
    4. Brand new product/market. I’ve trawled Google, and I haven’t been able to find an apple knife for sale (I can’t imagine why!). So not only do you have no info about potential market size, but no-one does. Here, how do you know whether all 26m households will buy an apple knife, or not one single one?

    (NB: There’s a caveat here about access to competitors sales information. You might not be in the apple knife business yourself, but if you know a competitor who is, and have seen their sales figures – or can work them out from revenue etc – then that’s a great start. However, it doesn’t take into account massive differences such as market reach, brand, channels and other barriers to entry that differentiate the competitor from you. Nevertheless, looking at other companies’ revenue is a great check – if the biggest player in the market is only make £50,000 revenue per quarter from fruit-cutlery sales, that’s a good ceiling on your estimates..)

    Most examples I hit upon fall in to one of these four categories. A I say, the early parts of the calculation are relatively easy, but the latter parts, if your problem falls in to the last couple of categories – and most interesting innovations and product ideas do –  are very difficult indeed.

    And the basis of the problem – it’s almost impossible to predict take-up of a new product or a new innovation. If you’re producing a new laser printer, with slightly better functionality than others, at a slightly lower price, you can have a good stab at market sizing. But what if you’re innovating to provide a fundamentally different way of solving a pain-point – a pain-point which might not even be addressed at all at the moment? Though we all like the certainty of saying “This idea could make us £10m!”, we really are kidding ourselves. Instead, I prefer a more experimental, research based approach where we start on a new idea in a cheap or lean way (make a version of the apple-knife yourself and stand outside John Lewis, showing it to people and see how many would buy one), then start making forecasts when you have some idea of need and interest from the customers. E.g. if 1 in 1,000 people you asked said they’d buy an apple knife, that’s not a bad start. Though I think I’d be lucky to get that much interest..

  • Working on the Coalface

    Henry Moore Miners at Work on the Coal face

    Everyone who works in marketing and product management should be spending as much time as they possibly can with customers. Period. This is, of course, a bit of a bland and obvious statement (like all those marketing books that promise so much and deliver so little!) – we know this, we don’t have to be told again! But perhaps we do need to remind ourselves of why it’s so important, why it’s so dangerous to let this activity slip.

    I’m currently out in the US working the booth on a tour our company runs (called SQL in the City). This is a fantastic series of events which, at a first glance looks like our company just wanting to give something back to the community – free training, free books, giveaways and so on. And this is true: this is what we’re doing, and is a primary motivator for the tour because we believe (and I personally believe this very strongly) that supporting the community in a simple and altruistic way is one of the strongest feeders for the top of the funnel for our company.

    But a slightly more cynical person might suggest – “Hang on, isn’t this just a sales and marketing event? You’re just pushing product!”. And this is also true: obviously we’re using this as an opportunity to talk about our latest products, what we’re doing next and to show this to customers. And this is fine – there’s no bait and switch here, customers don’t mind us talking about this because 1) We’ve been upfront that we will do so, and 2) Because our products are great (I was once told that the big advantage of working in marketing for a company with great products is that “You’re just providing the opportunity for customers to find and use your wonderful products – they should be thanking you!”).

    But there’s a third reason, which we don’t really advertise and is, for me, the true value of the events – staying at the coalface with customers. Over the last 3 days I’ve probably spoken to around 40-50 customers, and I’ll speak to another 20 or more on Monday. I’m speaking to them about what we’re doing now, what we’re doing next. I’m speaking to advanced early adopters/innovators* about our vision for what’s to come, late/early majority people about current new products (“What do you think of this?”), and skeptics about existing and older products that have been tried and tested by thousands. I’ve talked to people in different industries, at different levels of seniority and there are even variations in viewpoints by geographical location.

    And, as ever, this has just been fabulously useful on a very practical level. Every time I speak to customer I adjust, refine and improve my perspective on what we should be doing. Sometimes these are very subtle nudges (“Mm, may be that idea for product X isn’t quite as simple as I first thought”) and sometimes quite big changes (“I’ve really overestimated how sophisticated late majority people in finance are, for these features – I need to re-think our whole marketing approach there”). One very practical and specific example from yesterday – we’re thinking about providing training packages for some of our products and I ran this past someone currently (not) working for the Federal Government. He told me that, for his department he can easily get budgetary approval for training – not a problem. But that he will never get approval for travel and hotel expenses. So for him, all training has to be onsite at his office (for which he can easily get approval), even if it’s more expensive than doing it somewhere else. This was something I had no idea about before yesterday.

    But there always tweaks and adjustments, always. And if you’re not speaking to customers all the time, you hit the significant problem of drift. This is the phenomenon where you start with a really great idea for a product (hopefully from talking to customers historically), and then you start to talk about and “develop” the idea back at the office. So you start with a great use-case (“I’ve just spoken to 5 law firms who say they really need something to automatically read paper documents, perform some OCR and store that data in a database”). You take that back to the office and start throwing it around – what if it did more than that? What if it classified documents as well? What if it provided some interpretation on top? What if it worked for multiple languages? What if it could store the data in the cloud? Etc etc. All great ideas I’m sure, but what would the customers think of the final product? Imagine taking this behemoth to a customer and his/her response being “Erm, I just wanted something cheap to scan in my documents – what’s all this complexity?”. Better to find this out earlier rather than later. Better to make small course corrections as you go along by re-forming and re-shaping the offering with customer input than only finding out at the end that you went way of course somewhere. NB: This is actually just a reflection of the standard Agile approach to product development – the second principle of the Agile Manifesto is:

    Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.


    How can you make adjustments to your requirements if you don’t know what the customers want?

    So, nag over – go and see your customers. Go to a conference, call one of them up, take part in forums, email (though it’s a poor substitute for face-to-face), anything.

    * for definitions of these groups see Geoffrey Moore’s Crossing the Chasm – the 101 book for tech marketing.

  • My Product is Great. Why Do I Need a Marketing Department?

    campbells-soup-pink

    Well, I still hear this question and there is some logic behind it. I’ve created a product of beauty and wonder, why do I need to invoke the dark arts of marketing to get it out there? Won’t its greatness shine through and act as a beacon to all those lovely customers with their dollars and cents? It’s a simple enough question.

    Mm. Well, here are my 10 simple reasons for why you need a marketing department (okay, well perhaps a single marketer, if you’re just starting out).

    1. The first is really an aggregate of all of the reasons below. Creating a product without then applying any marketing is like building something in the attic of your home. With the windows shut. And the blinds closed. And the lights turned off. And then expecting people to just knock on your door out of the blue and ask “Can I have one of those please? Here’s $1,000!”. Until you’ve told someone that your product exists, they don’t know about it. Obvious stuff I know, but it doesn’t matter if you’ve just invented a time machine made from the parts found in a common garden shed – if you don’t tell anyone, they won’t know about it.
    2. Now, a bit more detail. There’s the foundation work you need to sell your product – a website. I don’t think it has to be anything clever (I’m much more of a fan of well-written words, over beautiful design, but each to their own), but it has to exist, it has to be findable (basic SEO, linked through from social media – see below, linked through from other sites and so on), it has to be usable so that the visitor doesn’t tear his/her hair out shouting “Where the hell do I press to get this thing?” and it has to tell you what the product is (again, see below).
    3. So far, all so simple. But again, a website will be left sadly unvisited, unless you drive traffic. How? 100s of ways, but a first is social media. Building a network of interested parties, letting influencers in the community know you exist, building a Google+ network to build traffic, replying to Twitter questions with “Yes, we do that! Come and see our site”, and doing all this in a way which isn’t creepy and too “marketing-ey” is a difficult and arduous task – for which you need a marketing person with personality, tact and a knowledge of social media etiquette.
    4. Another great way of building traffic to your site and something that has been very successful for Red Gate, has been encouraging 3rd parties to link through. This might be, again, contacting influencers and giving them free copies of your product (with the hope of a review in return), replying on forums when people ask appropriate questions such as “Does anyone know of a product out there that does X?”, contacting partners who could cross-market with you and so on. Again, a lot of social skills, diplomacy and patience are needed for this sort of thing, but the pay-off is well worth it.
    5. Positioning. Here I really mean product positioning and really what I mean is simply this – tell me why the product is so great! What’s this product great at? Why is it better than the competitors? What actually is it? The last might sound unnecessary, but in the few seconds that someone visits your site, they need to know immediately what the product is and does – particularly for a new product. Sent.ly is a good example – all over the front page: “Send & Receive SMS using the best SMS API there is.” There’s no confusion here, I know what the product is, and that’s good marketing. NB: for familiar products, something like this isn’t needed (e.g. iPod – you don’t need to put “An MP3 player that holds 1000s of songs”), but it’s essential if you’re just starting out.
    6. Explaining what the product is for humans. This follows from point 5 above, but you can’t expect people to figure out what your complex morass of interwoven modules, add-ins and platforms is – most people have better things to do. A good example here is Amazon’s Elastic Beanstalk. At the very top of this page it states:


      AWS Elastic Beanstalk is an even easier way for you to quickly deploy and manage applications in the AWS cloud. You simply upload your application, and Elastic Beanstalk automatically handles the deployment details of capacity provisioning, load balancing, auto-scaling, and application health monitoring. 


      (NB: If you don’t work in the area covered here, this might still seem like gobbledigook, but believe me, it’s a really good simple explanation of what the platform does).


      Again, this might see obvious, and something that anyone, whether marketing or not, would surely do. But it’s still very common to come to a site and go away thinking “Yes, but what does the product actually do!?! I don’t get it!” – so frustrating.

    7. Pricing. How much will people pay for it? And more interestingly, how much will different groups of people pay for it? I’ve seen examples where the exact same bit of technology can be priced at 10 times the price for different customers. This could be considered as somehow “unfair” but if something is 10x more valuable for one customer than other, than why not? And if one customer has 10 times the capacity to pay, is that not also fair? Of course the clever bit is finding, and selling to, customers who are willing to pay that 10x premium – again, all marketing.
    8.  Creating new propositions from the same product. Okay, you have a great piece of tech that does all sorts of clever things, but it’s not necessarily something anyone would buy yet (except Early Adopters perhaps). What if you provided the product with 24/7 support? With an account manager? With an online academy? What if you put together a cheat-sheet for how to use the product in a completely different way (to its intended purpose)? What about a SaaS version? I found a great example recently of an add-in for a popular content management system that, basically turned that system in to a magazine publishing platform, sell-able to publishing houses (who may have no idea how the underlying product is pieced together). A great marketer can find those markets, propose the product idea and take it to that market at the right price.
    9. Lead generation and nurturing. Of course the goal of marketing is to generate leads – people who want what you sell and have started down that road with you. A decent marketer will generate leads. A good marketer will generate the Glengarry leads. A great marketer will be generating demand. Rule 20 in the book “42 Rules of Product Marketing” states “Generate Demand, not Leads”. A good example given by the author is organising a party for a Friday night. On the one hand, you can just tell people the night before, cajole/bribe them in to coming, try and trick them with a “Free drink” offer or something. And this will get a few folk through the door. They don’t really want to be there, but at least they crossed the threshold!?! Wouldn’t it be better though to start building excitement about the party weeks before, get a great band or sound system in, tell people what’s going to be happening, make sure a few key people will be coming and so on. You won’t then have to bribe anyone to come, they’ll be battering down the door. This is building demand, and a great marketer will focus on this rather than cheap tricks just to get any lead at any price.
      Also, once you have the leads, you need to look after them – nurturing. Imagine getting everyone through the door then demanding they all take a drink there and then (whether they want it or not), then letting find the next drink for themselves. Wouldn’t it be better to keep everyone happy, listen to what they want during the party, be ready with drinks when they want them and so on?
    10. Finally (though I could think of many, many more), branding and brand awareness. I think of branding as the most underrated, misunderstood and difficult of good marketing. I couldn’t possibly write a good treatise here on what branding is. I just think of it as “The reason why I’d always buy a VW over a BMW, regardless of how good the actual cars were”. I think it’s underrated, misunderstood and difficult because, even for larger organisations, the skills required to really create a strong, long term brand that customers will go to again and again, are very hard to find and it’s something that can so easily go wrong. For small companies, I think the brand can actually happen by accident – if you’ve got a great bunch of people putting together a fun company with a high quality product, then that will shine through in all of your output, creating a positive brand that people will naturally warm to. In contrast, if you’re not a very nice bunch of people, you’re probably going to have to spend a lot of money to try and cover up that fact with the paying public ?

    ..and there’s so much more here I could write (running great events, the whole of advertising, channel management, sales support etc etc etc), but these were the first 10 that came to mind. Hope you agree!

  • Waiting for Google

    This isn’t going to be a very exciting post unfortunately, though it was supposed to be. I visited the UK Google offices this week to have a chat about the future of Google Analytics, well Google Universal really. I was hoping for some help, some tricks and tips, perhaps a few sneak peeks at a roadmap with dates and maybe some contacts for people who were nearer to the holy grail of marketing attribution than we are, and could help us out.

    First of all, I have to mention the offices (in the newly built Central Saint Giles). Though not a big fan of the buildings themselves, the interiors of the Google offices were fabulous (as you’d expect). The area I liked the most was the library – where the rest of the office is very lively, colourful and conducive to high-octane innovation (or whatever they do there ? ), the library was this wonderfully quiet, brown-carpeted and wood-panelled space, which felt like a great place to really get your head in to a problem without the distractions of email, Twitter, Facebook, Yammer, LinkedIn, Youtube, RSS feeds and everything else that stops us doing real work.

    But, that aside, we were there to talk about the issues we have with Google Analytics (GA), for help with the endless problem of marketing attribution, and also to talk a bit about social media.

    And they do have a lot of great stuff coming up in Google Universal (GU from here on). The vision is obvious in its simplicity – to break down the barriers that exist between silos of information whether online or not. So today, when we look at the attribution models that exist there are a lot of things missing in the model (a lot of these are straight from Avinash’s posts – who works for Google as well, particularly his post here):

    1. Offline activity before online activity that contribute to lead generation, including –
      1. Events and conferences,
      2. Word of Mouth,
      3. Print ads and direct mail,
      4. TV, radio, posters etc,
      5. (Potentially) product trials
    2. Offline activity after online activity, primarily sales that take place on the phone or by email (i.e. not through a browser tracked by Google),
    3. Activity happening on different devices (right now, GA doesn’t pick up that the customer who bought yesterday, actually did lots of research on his/her iPad just before purchase) – phones, tablets, home PCs vs work PCs, other browsers even.

    One of the key things they’re trying to do as well, which was very interesting, was to move away from viewing Visits, Unique Visits or even Unique Visitors and instead to consider the Customer as the central key for the data. “Unique Visitors” is a proxy to this, but suffers from all of the problems mentioned above – if that individual customer browses sites on a mobile device, found out about you at a conference and eventually buys on the phone (with a brief visit to your site, somewhere in the middle), then you still don’t really know what happened, even if using Unique Visitors as your focus.

    So this was all very interesting and all very exciting. But what I realised about half-way through the conversation, was that so much of what they’re offering is still very much in the future – hence the title of this post. There are many things that are theoretically possible, but I’m afraid they were a little short on real and useful implementations that we could take away and use. Two problems for which we didn’t get great answers were:

    1. Attribution of offline activity such as an event. I was really after some great best practice advice and to find out how others had fixed this problem. Instead it was mainly just some quite obvious suggestions (“Have you tried a specific redirect URL for customers at an event, such as www.red-gate.com/NYCEvent2013?”) which we already knew,
    2. Integration with CRM systems so that customer data could be pulled in to GU and used to segment better. E.g. if you could add in your own knowledge of your customers to GU – for example, what sector they were in – then this would be a great way to split out your attribution to suit your own business. You could display things like “Show me what marketing worked for the Insurance sector vs. Healthcare”. But again, this is a way off. In theory it can all be done right now, but there are no pre-existing add-ins for Salesforce, SugarCRM, Dynamics (all the standards) as yet. If you want to try it, you’ll have to have a crack at using the APIs yourself.

    So my last question to them was basically “Can you give us a feed or channel through which we can find out when these things are going to be available?” – and this answer was actually useful. The best place is the training and thought-leadership events and conferences that they run about GU, as things will often get discussed at these events that aren’t firm yet, that aren’t quite ready for public consumption and so it’s a great place to hear the buzz. If I go to one of these sometime soon, I’ll report back if its useful!

    So overall, a little disappointing, as I’m quite a practical person and wanted to come away with something I could implement the next day (as an aside – always a great rule of thumb for training/educational events – if people can leave your conference and implement something the next day, that’s a great success). I’m excited about what they’ve got coming, but I really want to see the worked examples, the pre-written integration packs, the services that seamlessly plug in and “just work” for measuring offline activity. When these come, I think we’ll really start to see the true power of something like Google Universal.

  • What I Should Be Doing as a Marketer. But Won’t Be

    1988_2014-durer-kdd

    “Should” is a complicated – and dangerous – word in marketing. How many times have you read blogs and articles proclaiming that you “Should be doing more mobile marketing”, that you “Should have full content strategy”, that you “Should be creating personae for all of you target segments”, “Should be doing more on Twitter”? And it’s not just from marketing “thought-leaders” – as a marketer, I probably hear suggests on a daily basis of new things that we “should” be doing.

    But I want to use this post to dissect the word “should” a little. When someone says “You should be doing more social media advertising”, what do they mean? I think “should” is a word with too broad a definition in this context.

    As a first pass, I’d like to narrow “should” to mean “Activities which will have a positive impact on the business and affect the KPIs you worry about”. I know this is obvious but we’re not doing God’s work here – marketing activities and spend exist to generate and nurture leads to make money for your business. Unless you’re doing marketing for the church, in which case, yes – you are doing God’s work.

    A second criteria that has to be applied is a constraint – you only have limited resource (either people or money). I suspect there are very few activities that would be particularly negative for your business. The problem is that many have very little impact at all. This would be fine, if it weren’t for the fact that marketing costs money – so it needs to do something positive for your business, or you’re just wasting your limited resource.

    So the criteria so far is that you “should” carry out an activity if it positively affects your business and if it’s do-able with your limited time and money. So far, so obvious. But, how do you know whether these criteria are met (the first one is the hard one – it’s pretty easy to know how much something will cost to do, much harder to know if you get a return on that investment)?

    I try to use four levels of qualification to assess whether we do something. I’ll describe these below, then try to apply them to the plethora of activities that our business does. Really these are measures of “How strict am I going to be on the evidence I need and level of analysis required to say that a given activity is really worthwhile?”.

    The levels are:

    1. “Should” do, because thought-leaders on the Internet think it’s a good idea,
    2. “Should” do, because although there’s no data to support it at all, I believe these are having a beneficial impact,
    3. “Should” do, because there’s pretty good data showing it actually works,
    4. “Should” do, because there’s good data that would stand up to scrutiny by any scientist worth his/her salt.

    And here’s my table of activities showing whether I think we “should” do these things using these criteria. NB: By “Should” I really mean “Spend a lot of time and/or money getting this right”:

    Chart

    As you can see – a lot.

    Couple of points to make:

    1. Nothing fits the fourth criteria – having evidence good enough that wouldn’t be ripped apart by a half-decent scientist. I studied science at college, and remember ripping apart published psychology papers because of poor experimental setup (there is always an alternative explanation in psychology!). I’ve never seen any study or data in the area of marketing which reaches even the lowest standards applied by a psychology researcher – for example, running longitudinal studies or setting up proper controls. Still, if we applied this criteria, we’d never do a single thing in marketing!
    2. The list of things where there is even half-decent data supporting the work (criteria three) is also pretty short. As per my previous post, this is why we’re working with HubSpot – that list has to grow bigger, so that I can more confidently say “Yes, that works, and here’s the evidence (albeit, scientifically embarrassing) that it does”, converting criteria three items in to criteria two items.

    Given all of the above, here’s what we’re planning to spend more time on going forward shown in red. As I say, the fact that there’s nothing against “SEO Optimisation”, say, doesn’t mean we don’t spend some effort on it as a company. What it means is that I don’t believe spending a lot more time and effort on it, will move any needle that I’m interested in:

    Chart2

    Again, a few points:

    1. Everything we’re doing is something I believe works! Even if I have no evidence for it…
    2. But we’re not doing everything I believe works – this is the time/resource constraint. We have to prioritise and some activities that could have an impact just won’t happen. Even though we “should” do them.
    3. There are things like “Google Adwords” which we won’t be spending more time on, not because it’s not very important but actually because I think we already do a great job and we’re in the arena of diminishing returns.

    But, we do plan to kill a lot of activity. Activity that we really “should” be doing. It’s just that I need to use a different definition of “should”, one that allows us to focus and focus on things that I think will make a difference.

  • Measuring Offline to Online Marketing Attribution

    sisyphus

    This post is about one of the many issues facing anyone trying to do marketing attribution – how do you measure the impact of offline activity on online success? If you’re selling online, but you’re carrying out offline activity (TV ads, magazines, direct mail, events, arguably word-of-mouth) then you don’t get this sort of insight “out-of-the-box” with Google Analytics – well, not yet at least!

    Avinash Kaushik (@avinash) has written a great post here, describing the problem in a simple way. Essentially, how do you figure out where all of that Direct and, in our case at least, most of the Organic traffic is coming from? I’m not showing figures, but the snapshot below shows the five most important channels for part of Red Gate’s business:

    Top 5

    NB: This is based on a channel grouping and attribution model that I described in a previous post (I’ll write another post later about the set up of this model for us). It’s not “Last click” attribution by a long shot (and so doesn’t suffer many of the problems of that model), but does still present an issue of how to get some insight in to where traffic is really coming from.

    For us, the vast majority of “Organic” is people just typing in the names of our products or company (i.e. it’s not SEO as such, it’s just people who can’t be bothered to type in “www.red-gate.com”). And Direct is the black box that it is for everyone else.

    Having lots of this Direct and Organic traffic is great of course! Everyone knows us already – maybe we should pack up, go home and leave the traffic to roll in!?! But, for me this isn’t really enough. Knowing that there are stacks of people out there just typing in our product names, without having any idea what we’ve done to influence that is tough. Particularly as we spend a lot of money on events and other offline activities – we need to know the impact of these.

    Separately, I’m about to start helping with a piece of work for a large direct mail provider to help them prove the importance of direct (postal) mail in an online world – they need to be able to prove this impact (it’s not just enough to say “Of course it works – it always has!”, when everyone else is using Google Analytics to prove the impact of online activities). They need to link direct mail to Google Analytics – Universal Analytics really – so that customers can show the way that direct mail drives online events and eventually revenue.

    Anyway, here are the things we’ve done historically to try and address this (most of which are as Avinash has suggested) and then want we’re going to try in the future.

    What We’ve Already Tried

    1. Doing it by hand. As described in an early post of mine, it’s possible to go through, by hand, and track all of the revenue generated by a specific offline activity. E.g. “We did that event in Colorado, let’s manually track everything that happened with the people we spoke to”. This does have the advantage that, data problems aside, you should be producing a pretty accurate picture of the ROI on a particular activity. The downside is that it’s very manual. And worse – it only tracks activity for point-in-time activities. What about the general background activity going on – word of mouth, ongoing ads/campaigns and so on?
    2. Redirect URLs on offline material. E.g. we go to a certain event, and the URL plastered over everything is something like “www.red-gate.com/agile2013event” or similar. This then redirects to a URL with UTM codes so that we can use GA to see the impact. Again, this works well for specific events, just not great for general background activity.
    3. Ask people on the website! Again, another of Avinash’s suggestions, but we have questions on our download forms, asking people where they heard about the product:FirstHear
      This has the significant advantage that it includes things like “Recommend by colleague” as well as other offline activities such as tradeshows. Also, by mixing online and offline answers in one question, this gives you some measure of relative importance of different activities (even if absolute numbers don’t mean much). NB: A number of people leave this as “Please select..” (we don’t force people to answer), so it’s flawed, but the info is still very useful. NB: Around half of people in total answer either “Recommended by colleague” or “Used in previous role” – get a great product and half of your marketing job is done for you..

    All of the above have provided interesting bits of information, but none have provided anything like the data we really need to accurately compare online with offline marketing and to treat all sources equally. As I’ve said before, I suspect this is a Sisyphean task, but that shouldn’t stop us trying.

    What We’re Going to Try in the Future

    There are two approaches we’re going to try next – one based on Google Universal, the other with HubSpot.

    1. Google Universal. I’m really excited about the possibilities of Google Universal Analytics. It’s still only in public beta, but the most interesting parts are to do with allowing companies to collect data about offline activity then load this up in to GA like any other channel. Previously it has been possible to pull in data about, say, an event and track that manually (my option 1 above), but without it being integrated in to GA, it’s hard to weigh different activities against each other accurately. We’re looking at using this for a number of different types of offline activity in the coming months and will report on progress! It’s also the key method I’ll be suggesting for the direct mail initiative – how great would it be to be able to show the impact of direct mail accurately alongside SEO, PPC, videos, content marketing and so on?
    2. HubSpot – an alternative, but very related approach is marketing automation. I’ve written about this before, in relation to Eloqua’s product, but marketing automation tools allow you to automatically start tying various activities (offline and online) to the good leads that you generate. The dream (which I know will take work to achieve) is that when we’re looking at a great lead that’s come in to the system, we’ll be able to see what that person has seen and done beforehand, for example:
    • Attended event where we were exhibiting,
    • Read some articles on our sister publishing sites,
    • Searched for some products,
    • Found our site, read the product homepages, and downloaded the whitepaper,
    • Came back a month later and downloaded the product,
    • Tried the product and used the key features,
    • Came back to our site and clicked on the pricing page.


      …at which point we’d probably give him or her a call! At first glance it may seem that only one of these is an offline activity (the event), but actually things like “Trying out the product and using key features” are also offline in the sense that they’re not immediately trackable in web activity. Products like HubSpot provide APIs that allow you to feed in other data that isn’t immediately available so that you get a fuller picture of what the lead has been up to.

    We’ll see how both of these methods work out though both do rely on the same thing – some mechanism for indicating offline activity online, either in GA or HubSpot. However one great thing about HubSpot in particular is that we already track a lot of offline activity in our CRM (for example, adding references on tags for people who we meet at conferences), and this could easily be pulled in as part of the history for a lead. I.e. if we’ve recorded in our CRM that Joe Bloggs went to our conference a year ago and now, a year later, is reading our whitepapers, then this will automatically get shown and we can, in theory, start automatically showing the value of this offline activity.

  • When Marketing Isn’t Really Marketing – Google Analytics Multi-Channel Funnels

    I was excited this week about the prospect of finally having the time to play with Google Analytics’ advanced Multi-channel Funnel (MCF) functionality. As announced at their summit last year, they’ve extended their advanced attribution modelling to all GA users and this provides the opportunity to (finally!) try and attribute some measure of value to the various different marketing activities that are carried out as part of the marketing role.

    There are three things that have been introduced that are particularly interesting:

    1. The facility to look back 90 days in a visitor’s history rather than just 30
    2. The option to create custom groupings of channels to be used in the MCF
    3. Most interestingly, the option to create a custom attribution model (more below)

    There are/were lots of blog posts written about these changes. On the 2nd item, this post from the Search Engine People is a great summary of what can be done with this functionality (essentially, re-grouping the standard channels groups – organic, direct, PPC etc – in to groups more relevant to your business).

    The new type of model (called a Proportional Multi-touch Attribution Model) does away with the idea that it is the order or position of a touch point in the model that matters in the process. In a standard “last-click” model for example, then it is the last thing that a visitor did before hitting your site (whether typing your URL in to a search box, clicking on an Adword ad, or whatever), that gets all of the credit for the visit to the site (or for triggering the specified goal).

    In the new model (PMAM for short!), it is simply the importance that you assign to a given touch point that actually makes the difference to the attribution model, regardless of position. For example, if customer 1 clicked on a banner ad, then carried out an organic search before hitting your site and customer 2 carried out an organic search, then clicked on a banner ad, then both of these funnels would be treated in exactly the same way.

    But, what’s even more interesting, is that not all touch points are treated equally. For me, the purpose of most marketing activity is to somehow nudge customers along some sort of customer buying journey. We use quite a simple framework at Red Gate as follows:

    1. Awareness of problem – is the customer aware of the problem or opportunity that your product addresses?
    2. Discovery – can you help customers discover your solution to that problem/opportunity in the market?
    3. Validation – can customers validate your product?
    4. Retention – after they’ve bought, can you look after them and keep them?

    NB: This model is taken almost wholeheartedly from the book Digital Body Language by Steven Woods – a great and simple read which I’ll review on this blog sometime soon.

    Anyway, the point is – marketing activity, I think, should be focussed on moving people down this funnel. If you were selling a bit of anti-virus software, is everyone out there Aware that this is even a problem? In this market, I expect so, so perhaps your biggest problem is helping people Discover your particular solution amongst the masses. So if you were marketing an anti-virus product, you really should be working on helping people who haven’t Discovered your product to do so.

    So, when putting the PMAM together, you need to make some decisions about how valuable you think different activities are at pushing people through the funnel. And this is where I think the custom channel groupings get really useful. A good example in The Search Engine People article is the need to split branded and non-branded organic and PPC searches. Why? If your anti-virus software was called “Ben’s AVSoft” (for some unknown reason!) then people might find your website through two distinct types of search – by typing something like “Great windows anti-virus software” (non-branded) or by typing in “Ben’s AVSoft” (branded – because the customer obviously already knows about your product). If a customer clicks on an ad of the former type that you’ve put up, then I would argue that that marketing activity has done more to push that customer down the funnel than the latter. This is because you’ve moved that customer from being just Aware of the problem to having Discovered your solution. With the branded search, you haven’t done any such thing – they’d previously discovered your product by some other means, and are now probably just coming to your site to have another poke around.

    I.e. the purpose of bits of marketing activity is to effect some sort of state change in the potential buyer – and the values you give to different touch-points should reflect how impactful those touch points are at effecting those changes. The way the PMAM works (or at least, the way I’m going to try and implement it in Google Analytics) is that you give a value, relative to 1, for how important you think each touch point is. So, if you think a non-branded Google PPC Ad is 10 times more effective than a branded Ad for marketing effectiveness/effecting a state change, then you could give the former a rating of 1 and the latter a rating of 0.1.

    And this is where the Custom Channel Groupings as outlined in the Search Engine People article are so useful. You can’t for example, go through every single referring site and mark each one on this scale. Instead you merge them up in to groupings meaningful to your business then provide a rating for each group. As they suggest, I would certainly split branded and non-branded PPC Ads in some way (perhaps based on the Ad Group names, if a good convention is used?), but you could also split up types of referrers, types of email and so on.

    And this is why I titled this article “When Marketing isn’t really Marketing”. Can you really call it “marketing success” in, say, SEO, when a customer types in “Ben’s AVSoft” and comes straight through to your page? Of course some earlier bit of marketing activity was phenomenally successful because the customer must have heard of you somewhere – may be a conference, or a blog post, or from a colleague. But each of these activities were what I would call “successful marketing” – they’d effected a state change in the mind of the customer to bring them closer to your product. The search for “Ben’s AVSoft” wasn’t marketing at all. If anything it was just a semi-technical piece of work to make sure your Google result looked bearable (because it’s not hard to get high ranking for a search on your exact product name – as long as you don’t call your product “Taylor Swift”).

    And, just for the record, here are my strawman ratings for some of the most important touch points that we use:

    1. Non-branded PPC and organic – 3
    2. Branded PPC and organic – 0.1
    3. Direct – 0.01
    4. Banner ads – 2
    5. Referrals – 2-4 depending on details
    6. Social Media – 2
    7. Emails to customer base – 1
    8. Emails to non-customers – 2

  • SaaS Product Management, Lovefilm and Getting Stale

    lovefilm

    Lovefilm have just revamped the app that is used by devices such as Blu-ray players and the PS3 and it is, in my opinion, a great improvement. There are a large number of changes but I think also, and I’m speculating massively here, that the improvements were heavily shaped by some great data driven product management.

    Lovefilm (and its competitors, like Netflix) is essentially Software as a Service – you provide a monthly subscription to access an application that delivers streaming films and TV shows to your home. They deliver this service through web browsers, Smart TVs, PS3, Kindles, iPads etc etc using a variety of interfaces, depending on the device. The one I see – via a Sony Blu-ray player – had a complete overhaul this week and they definitely seem to have got a lot right. The problem with the previous app was that, it worked fine when they just offered a handful of films – they had sections for Genres, Recently Added, Staff Picks and so on. However, as they started to add a lot more content, the interface began to creak. For example, where do you put TV shows? With multiple series? And, as you keep adding series, do you just keep putting them at the end of the list, or start grouping them up?

    They also had a findability problem with films – the genre categories would contain a mixture of films and TV shows and “new stuff”, making it hard to find “The highest rated comedies” or similar. And there were a number of other quirks in the system (e.g. if you accidentally pressed Stop halfway through a film, getting back to your previous location was painful).

    I won’t go in to the details of what the new interface looks like, but I suspect, and this is the interesting point here, that they must have used usage analysis data, from the previous app, to decide what to do in the new design. I.e. rather than just asking a few people “How would you want to change the interface?”, I suspect they’ve looked at how people have been spending forever hunting things down or, how customers have been repeatedly doing things like trying to get back to where they were in a film, and used this data to guide the changes.

    This is a way of working not really available if the product you offer can’t be interrogated for usage. Certainly if you sell a behind-the-firewall product then, by definition, you’ve no idea how customers are really using it. You can go and ask them of course. Or you can sit over their shoulders for a day, but is that the same as gathering together the data from 1,000,000 users, aggregating it, analysing it, and working out where people are really struggling?

    So I see the Lovefilm example as a success story for a new type of Product Management – data-driven, analysis-driven product management, enabled by a SaaS product. It’s a positive story because, in a recent call with an analyst, I asked the question “So, as an organisation transforms over to a service based model, what do you see as the real challenges it faces?”. I expected some bluff about the technical issues, product support, retaining customers and so on, but his reply was interesting – “The biggest issue we see companies facing is their inability to transform Product Management. It’s a function that has to radically change its techniques and tools to carry out the research it needs, to know what customers want.”. The analyst saw this as a big struggle because many Product Managers had been around a while, and had, to some extent, got “stuck in their ways”.

    And this made me think about some of the interviews I’ve done over the last year or two for marketing and product management positions. Something we look for, and really struggle to find, is the mixture of experience (i.e. they know the pitfalls, the issues, the complexities of the roles) and willingness to adapt (i.e. they’re willing to forego their experience, and listen to something new). I’ve had a number of marketing candidates sit there and tell me that “Direct postal marketing has always worked for me – these new things like social media and mobile advertising are a flash in the pan”. Mmm. The change in product management when moving to a service-based model, towards data-driven decision making, retention of customers and so on, will be one that many will struggle with as well I think. But, if you’re willing to learn something new, it’s a great opportunity to advance your career in to space that is very much in its infancy right now.

    And I think the results – such as Lovefilm’s new interface – are worth it.

    As a final positive note, something else I think they did well, which is quite a traditional approach to marketing (!), is to do a big launch. Not in terms of advertising, but in terms of the product. As well as  the new interface, they’ve added new content – some great new films and TV series – and new features, such as streaming HD. Doing a big bang like this (rather than just tweaking things and slipping things out, one by one), I believe has an impact more than sum of its parts. For a start, it’s memorable enough for me to write this blog post about it!

     

  • How To Measure Campaign Success

    Annie Hall

    Quite a simple post this time round. Essentially how I measure the success of a given campaign or piece of marketing work. NB: This isn’t the Holy Grail of properly attributed marketing ROI – when I’ve worked that, I’ll post it up, if I haven’t retired first – but instead a framework for how to show whether what you’ve done has worked or not.

    The model consists of three stages – Inputs, Outputs and Outcomes. I’ll describe these below. For the article I’ll use an example campaign – we’re launching a new product, say a tool to monitor your website performance – and we’re using a number of tactics to promote this – a free, downloadable iPhone app, a new website, some content marketing, some Adwords, social media etc etc – the usual suspects.

    Inputs

    The first part, often forgotten about, is to measure the Inputs to your campaign. By this I mean – what is the quality of execution of the campaign? Before initiating campaign work there is, generally, a long process of research, analysis, customer feedback, market segmentation etc which gets distilled in to some sort of proposition or idea. For the web performance tool, you might have carried out all this work and ended up with a campaign idea around “Keep an eye on your global website performance from your mobile phone” (or hopefully something stronger than that!). You’ve chosen a segment – say IT managers of smaller companies in the US – and you have a lot more information about the feelings you want to elicit, the differentiators you want to promote and so on.

    But – that doesn’t mean to say all that great information gets in to your campaign. Woody Allen has said how he measures his “best” work not in terms of quality or audience response but in terms of how close the final film is to his original vision. Similarly, if you went in to a campaign with a particular value proposition and a really clear idea of what you wanted, is this what you ended up with? This is the measure of Input quality.

    In this example, if the agency you used came back with a campaign that captured everything you wanted, the right tone, the right target audience, channels, content etc etc, then you’ve scored highly on Inputs. NB: This is very much a qualitative measure – you can try giving a campaign a mark out of 10, but what does that really mean? The way I see it, if I sit there completely satisfied thinking “That’s exactly what I meant”, then I’m happy.

    Another part of measuring Inputs, which I sometimes carry out, is to look at a few quantitative KPIs covering the basic measures for parts of the campaign. For example, with Adwords, how many impressions did we actually get (i.e. it’s not whether the ads were effective or not, just whether we’ve correctly placed them and bid appropriately)? How much are we spending on different ad campaigns? And so on.

    NB: This does not, of course, mean it will work! Your research and analysis could be completely wrong – wrong segment, wrong message, bad ideas. But at least you can go in to the campaign confident that you’re giving it your best shot. Nevertheless, any boss worth his/her salt will want to know “Did it work?”

    Outputs

    There are two stages to answering the question “Did it work?” – Outputs and Outcomes. Outputs is the first of these and is the measurement of the immediate KPIs that you’re tracking for the various parts of your campaign. I.e. We changed some Google Adwords – are more people clicking on these now? We changed the website – have we increased the conversion rate? In our example promotion, we created an iPhone app to promote the product (perhaps the app shows a demo for our company’s website). We might have loved the app (scored high on Inputs), but how many people actually downloaded it!? And used it? And our new website – how many visits have we seen? Time on page? Conversion rates? And so on.

    For a given campaign, there might be 10, 20 or more of these KPIs, often at quite a low level – they provide immediate feedback on what is and isn’t working and, ideally, should be used within a Plan-Do-Check-Act (PDCA) framework to continuously improve everything you’re doing.

    NB: Outputs is the area that is almost never forgotten about, mainly because it’s the easiest to measure (who would put up a new website and not check Google Analytics to see how many clicks it’s getting!?)

     Outcomes

    Great, so the campaign looks good, you’re getting clicks and downloads but, the question any exec should be asking you is, so what? What is the impact of this on the bottom-line? On revenue? Outcomes is the measurement of the final impact of the work you’re doing. In a commercial organisation this is likely to be revenue. However, if you’re working for a healthcare charity, this might be something like “Awareness of a particular ailment” or if working for the government, “Awareness of new policy X”. Or even for a commericial organisation a campaign may be something like “Awareness of our brand”.

    But, it’s essentially the single figure that you care most about, that is the driver for your organisation. Unlike Outputs, there should really only be one of these values. And it should hopefully be simple to measure. What is very difficult however is attributing changes in this figure (say, revenue, in our example case) to any particular part of a campaign. As I’ve mentioned, this is a Holy Grail for marketing – showing that “My work I did on Adwords last month, which is costing us $1,000 per month, directly led to $10,000 in revenue – an ROI of 900%!”. So I don’t generally try to do this. Instead, I just look at the revenue trends moving, hopefully!, up over the months following the campaign. This measurement is full of caveats – can you really attribute the increase in revenue to your campaign? Could be market movements? Could be new product features? Could be noise! But this doesn’t really matter – you still need to be looking at this figure. It’s often the case that, sadly, it’s very hard to pick up increases in revenue attributable to particular campaigns, but the figures need to be shown nonetheless.

    And that’s it – as I say, pretty simple! One qualitative measure (Inputs), multiple low-level KPIs (Outputs) and a final big KPI (Outcomes).

  • Value and Predictable Revenue Improvements

    I really like this very simple post about how to buy wine, when you don’t really know much about it (which is definitely me). Basically, select a price (say, £7.95), then select a wine at that price. That’s kind of it. And what Evan Davis is saying is “Statistically, give or take anomalies, most wines at £7.95 will be about £7.95-ness in quality”. The article is written from the consumers’ perspective but if you view it from the vendors’ point-of-view, he’s saying “If you want to charge £7.95 for your wine, you’d better make it worth around £7.95 in value”.

    Though this is a massive over-simplification of the process of coming up with a product, researching that product, marketing it, selling it effectively etc etc, it is, for me, a fundamental approach to product marketing. If you want to add 50% to your bottom line, then, somehow, you need to be adding 50% more value to customers this year compared to last year.

    I’ve written previously about the difference between big-M Marketing and little-m marketing – the difference between finding new markets, new people, researching what people want, creating propositions etc and the less impactful role of just tweaking Adwords, designing flyers and so on. I think the two most effective bits of work that a Product Marketing person can do, under the banner of “Big-M Marketing” are:

    1. Finding whole new markets and groups of  people who could use your proposition in some way. I.e. you’re currently selling wine in the UK for £7.95, why not sell wine in Ireland for 10 Euros?
    2. Finding new ways to add real value – researching what people actually want and either coming up with new products, or adjustments to a product that people want. Really, providing something of tangible value.

    An example of the latter is lower-alcohol wine mixers. There’s a large section in Sainsburys selling pre-mixed Buck’s Fizz,  Kir Royale, Bellini and so on which barely existed 5 years ago.

    images

    Some bright spark has thought “Hang on, rather than forcing someone to find a cheap Cava then try and find where on Earth the cassis is displayed, let’s just mix them and sell them at a great price!”. It’s clever – if somebody has to drive, but doesn’t just want to drink orange juice, they’re very low alcohol and great too.

    If you were a wine vendor, and a marketing person in your org came up with that idea, there’s a pretty good chance you could increase your revenue by a reasonable margin that year (assuming you get everything else right!). Particularly if you were already selling all of your current wines in the right places, with the best labels, at the right price, in the right combinations (if relevant).

    Of course another way the wine company could make more revenue is to improve the wines they currently offer. Obviously, easier said than done, but if they can come up with the processes and methods to improve the grapes (I suspect “Having better hillsides in France” might be part of it) and the wine thereafter, they’re directly improving the value of what they offer – and therefore, by Evan’s simple economics, can charge more for their wine. NB: I don’t think much market research is needed here – I can say pretty confidently that a better tasting wine is what most customers are looking for..

    This doesn’t mean, of course, that there isn’t revenue to be obtained from great presentation and promotion. If both of the following labels were on £7.95 wines, which are you most likely to buy:

    Wine Labels

    And of course there are countless examples of great marketing adding enormous wealth to a company’s coffers. The one that comes to find is Calvin Klein underwear. Add your brand name to a pair of pants and watch your business soar! And there are lots more examples like this where, fundamentally, the product offering hasn’t been improved at all (were the pants really any better for Klein putting his name on them?) and the marketing push has had an amazing impact.

    But – I think this sort of success is just far less predictable than success borne of product improvements. These are shots in the dark and for every Tango Orange ad, there are a string of forgotten, and often very expensive marketing failures. Also, I’ve rarely seen examples where just re-arranging product combinations or thinking of some clever re-presentation of the core value has made any sort of lasting impact.

    In contrast, I believe adding new, researched features to your product offering is the most predictable way of increasing revenue. I.e. by adding value to your offering, you can charge more for it and make more money. Simple! Joel Spolsky said this a long time ago:

    With six years of experience running my own software company I can tell you that nothing we have ever done at Fog Creek has increased our revenue more than releasing a new version with more features. Nothing. The flow to our bottom line from new versions with new features is absolutely undeniable.
     

    So if you have a choice between spending £100,000 on finding and implementing great new features for your products, or spending that on a new advertising campaign, though the ad campaign may produce some magic like it did for Tango, the more predictable revenue will come, I think, from adding some real value for your customers.

  • Competition, Disruptive Innovation and Total Recall

    total_recall_kw_new1

    A key part of any product marketing role is analysing the competition for your product. Put simply, when your potential customers are looking to solve a particular problem or take advantage of an opportunity, what are the options that they see, one of which (hopefully!) is you?

    Sometimes this job is easy when you have direct and obvious competitors (presumably Sony see Samsung as a competitor for TVs and vice-versa), sometimes not. However I think it’s worth breaking the problem down in to different types of competitor, most of which are relevant regardless of product category. I’ve listed these below (well, the ones I use anyway), ending with perhaps the most dangerous competitor of all – disruptive innovation.

    Following on from an earlier post, I’m going to use the product category of “Holidays”, and try and work out what Eurocamp’s competitors are in this space.

    Types of Competition

    1. Not buying anything

    Though it seems strange to talk about “not buying anything” as a competitor (who exactly is the competitor!?), this is an important group to consider if one of the biggest impediments to people purchasing your product, is people not purchasing anything.

    I think there are actually two sub-divisions here – people who don’t buy anything because they don’t want to, and those that want to, but can’t.

    1a. People who don’t buy anything because they don’t want the product category

    It’s hard to imagine who wouldn’t want a holiday, so I think this is a small group in this category. However, if the category was pet food, then this is simpler – I don’t have a pet, so you’re never going to convince me to buy pet food. This group isn’t really competition at all of course, so forget about this segment.

    1b. People who don’t buy anything because they can’t

    A very different group to the above. In the area of holidays, there are many reasons why people don’t buy a holiday at all even though they want one. But you can often do something about these problems as a way of “Beating the competition”. For example:

    Don’t buy because can’t afford it – offer much cheaper alternatives, out of season, last minute offers, cut cost-base and so on.

    Don’t buy because don’t want hassle of foreign travel – offer holidays in home countries, or take away all of the hassle of getting to the sun (think “Costa del Sol”).

    Don’t buy because no-one to go with – offer holidays targeted at singles, either for mixing with other people, or aimed at adventurous independent spirits!

    Don’t buy because too busy with work – offer weekend breaks

    And so on. There are ways of addressing this sort of competitor, as long as the desire for the product category is there.

    2. DIY

    Rather than buying a holiday, why not just get in the car, put a tent in the boot, drive to the south of Europe, set the tent up and hey presto – a holiday without paying a penny to any provider! This is a group who want to take a particular opportunity/fix a problem (in this case, taking a holiday), but don’t want to buy anything from anyone to do it. An example in the world of software – instead of buying MS Word to write documents, why not just use Notepad, or Write that comes free with Windows?

    There are various reasons why people prefer to do it themselves, rather than pay you for your product or service. Sometimes this is price – they can’t afford to buy your product. Sometimes though this is on principle – why pay for something you can get for free, or build yourself with a little effort? I don’t remember my parents ever buying a sandwich from a sandwich shop – they would always go home and make something instead, it was cheaper and nicer (i.e. for them quality outweighed convenience).

    If the reason for not buying something is price, then see above for possible solutions – can you offer something which is really not far from free (perhaps selling just part of the service) which the customer can afford? If the customer has to go my ferry or plane, then you could offer this limited service. With campsites as well of course, you could still profit from the holiday, by selling pitches in a variety of sites.

    If the reason is principle, then the only way to address this is to really honestly think about what value you can add. This sort of customer isn’t going to buy your product just because you have a shiny website and an easy purchase process. Can you offer better pitches than could be obtained otherwise? Faster check-in? Flight availability the customer couldn’t get otherwise? Can you genuinely take away all of the organising hassle that goes with a holiday? Offer facilities, tours and activities that they couldn’t get otherwise?

    3. Direct, obvious competitors

    This bit’s easy. If you’re Eurocamp, there are a series of direct and very easy-to-find competitors which, give or take, offer more or less the same product at a similar price with similar service. At the sites I’ve been to, Eurocamp, Canvas Holidays, Keycamp and others all offer the same accommodation and at similar prices.

    There are all sorts of strategies for competing against direct obvious competitors – brand? Price? Key differentiators? It depends on your market of course, but at the very least you should have, for these direct competitors, key “killer lines” for why you’re a better purchase than them. If not to display externally, for your sales and marketing teams to use in competitive situations, when pushed.

    4. Same product category, different market

    This can mean a lot of things, but what I’m really thinking of, are the competitors in the same category (here “Holidays”), but that are addressing a completely different market. For example, a week on a campsite for £300 is a “holiday”, and a week at the Hôtel de Crillon in Paris for 10 times this much  (at least!) is also a “holiday”. Similarly, if you’re selling a piece of word processing software for £100 and someone else is selling a something for £300, that does an awful lot more then yes, both of you are in the “Word processing software market”. However, you’re addressing a very different market. In the latter example, Microsoft sell MS Word for less than £100 and it’s sufficient for most people. However, a lot of academics pay a lot more for Nota Bene, primarily because of its advanced citation and bibliography functionality. Are these the same market? Similarly, when someone is looking for a £300 holiday on a European campsite, are they going to be looking at 5* hotels in Paris as well?

    For these reasons, although it’s good to identify these different competitors, and make a judgement call on how close to you they are, I don’t believe they’re as important as the others listed above. The exception to this is when they start innovating and moving in to your space – the last category of competitor:

     5. Disruptive Innovators

    This is the hardest group to track and the most dangerous. Clayton Christensen coined the term “Disruptive Innovation” in the classic book The Innovator’s Dilemma, and there are lots of sites showing some good examples of disruptive innovation, for example:

    1. http://www.slideshare.net/Christiansandstrom/5-examples-of-disruptive-innovation
    2. http://mashable.com/2011/10/09/7-disruptive-innovations/

    I like the infographic on the 2nd link, with some good simple examples:

    Disruptive-Companies3

    A few themes come through here – often the disruptive technology somehow fulfils the same need for value (e.g. computing power for entertainment and other needs) in a cheaper, more portable way (the iPad). Also of course, and most dangerously, these innovations often come out of the blue and can completely undermine your business model (pity the poor netbook providers).

    Really your only protections against these disruptions are to both keep an eye on what “the market”/your competitors are up to (keeping up with market trends, looking for new ideas that are bubbling up, new releases from current and potential other competitors, talking to analysts)  and also investing in innovation yourself. You should be actively trying to undermine your own business by looking for new approaches to solving the same problems – you should, after all, have the expertise!

    Back to the world of holidays – what would be the disruptive innovation in this category? The best I could think of was the use of memory implants in the film Total Recall (the classic original of course, with Arnie, not the dull remake). Instead of having to actually go to Mars, they could implant the memories of going instead, presumably at a fraction of the cost.

    But like all disruptive innovations, it wasn’t without technical glitches, and as far as I’m aware, we’re not quite there yet…

  • Why Product Managers Often Aren’t Great at Marketing

    Machiavelli

    Back when I was a developer, many years ago, I worked with a superb sales person – an ex-McKinsey sales person – who had been tasked with explaining to all us techies “What Sales Did”. Of course we already knew the answer – “Nothing, except get paid more than us, drive nicer cars, get more recognition, fly around the world and generally take up space that could be used by someone useful – someone like me”.

    The start of his explanation was as follows:

    “A sales department exists to convince people to buy things that they don’t want. If they did want it, then it would be an orders department.”
     

    He then went on to elaborate on different techniques, but at the heart was this basic premise. In essence, if someone is phoning you up and saying “I love your product so much, I’d like to buy five right now!”, then you don’t need great sales people or indeed sales people at all. You need people to write down the orders, get the invoice sent out and follow up on payments when they’re late.

    Sadly, the reality is a lot different. Most people out there don’t want your product. Unless you’re Apple, you’re not fighting customers off with a stick (and in the world of software, “Running Out of Stock” is rarely an issue!), so a considerable part of any marketing or sales role is to convince people that they want something that they don’t currently think they want.

    Now of course there’s a lot of gradation in what this really means. It varies from the almost illegal and certainly immoral (convincing someone to buy payment insurance, that they can never claim back on) to the much nicer end of the spectrum, where you are just making someone aware of a genuinely great product, that they might never of heard of before. For example:

    Thing-a-ma-bobs

    These knitted chainmail hats from Thing-a-ma-bobs are just the greatest things. But before someone had told me about them (or at least, posted a photo on Facebook), I had no idea they existed and so certainly didn’t want them. As soon as I saw them – where can I get one? The product is great.

    But this is still sales and marketing – it’s marketing that put this item in front of me. Similarly, I’m very lucky to work for a company that makes great products. I would say it of course, but Red Gate is the first place I’ve ever worked where I genuinely believe the products are great (my test for this is “Would I recommend the product to a friend?” – as I say, sadly, the first place I’d ever say “Yes”…).

    So marketing at Red Gate is a job I’m happy to do – because at no point do I feel like I’m hoodwinking someone in to buying something which is crap. Nevertheless, the job does consist of letting people know what the products are, promoting what they do, convincing people they’re better than the competitors’ versions, convincing people they have a need in the first place, even if they didn’t realise it, and so on. I.e. convincing people to buy something they didn’t previously want.

    And this, finally, gets to my point – working in marketing requires a certain perspective, a certain attitude, which is that you’re willing to change the minds of customers from not wanting your thing to wanting it. You’re willing to manipulate (in the nicest possible way), cajole and influence so that people get their wallets out, when they were, previously, quite happy not to.

    And this, I think describes why some Product Managers struggle with some marketing activities. At the heart of the product management role is a concentration on the product. Of course many roles in product management and marketing overlap, but the job title gives it away somewhat – most of your time as a PM is spent on creating the best possible product that fulfils the market’s needs given time, budget etc etc. And surely, when your masterpiece has been created, its perfection will not need explaining!? Its so obviously a great product, that does exactly what everyone wants and needs, any marketing is just superfluous? If anything, marketing has a negative connotation – if something is being marketed, this would imply the product needed marketing. How can this be?

    Obviously this is an over-exaggeration (like all blog posts ? ), but the point is about the type of mindset that I often see differentiates product management folk from product marketing. Are you willing to promote your products and services to people, even when there are alternatives out there that, Heaven forbid, might be as good as, or even better than yours? And are you willing to convince someone to buy something which, right now, they have no need for, and have never even thought about buying?

    Are you willing to convince someone to buy something they don’t want?

  • Five Tips for Implementing Marketing Analytics

    Competing on Analytics

    The book Competing on Analytics by Thomas Davenport and Jeanne Harris is a short but very interesting read about the need for organisations to significantly improve their analytical capabilities if they want to compete in the modern marketplace. The argument, quoting directly from the author is that:

    In today’s global and highly interconnected business environment, traditional competitive differentiators-like geography, protective regulation, even proprietary technology-are no longer enough. What’s left is the opportunity to execute a business with more efficiency and effectiveness than your competitors, and to make the smartest business decisions possible. Analytics can help do this. 
     

    I.e. unless you are implementing and using advanced analytics, you’re going to be left behind because you can’t use some of the traditional differentiators to keep any sort of advantage. NB: I don’t discuss Big Data in this post at all, as it’s more about the why rather than the how. But probably a post there for another time..

    One of my favourite quotes from the end of the book is:

    Analytical competitors will continue to find ways to outperform their competitors. They’ll get the best customers and charge them exactly the price that the customer is willing to pay for their product and service. They’ll have the most efficient and effective marketing campaigns and promotions. Their customer service will excel, and their customers will be loyal in return. Their supply chains will be ultraefficient, and they’ll have neither excess inventory nor stock-outs. They’ll have the best people or the best players in the industry, and the employees will be evaluated and compensated based on their specific contributions. They’ll understand what nonfinancial processes and factors drive their financial performance, and they’ll be able to predict and diagnose problems before they become too problematic. They will make a lot of money, win a lot of games, or solve the world’s most pressing problems. They will continue to lead us into the future.
     

    What a great place to be! But of course it’s not as simple as that. So below are a number of tips I’ve picked up from trying to implement this sort of thing over the years, or watching clients trying to do this as well.

    1. Fit the implementation to your real needs. One of the first things to note is that a lot of the examples of success that they give in the book – Amazon, Netflix, Google and so on – are big companies. These organisations have millions of customers and, at that scale, the benefits of well-embedded customer analytics are obvious – Tesco Clubcard is another great example of significant profits generated through analytics.

    So firstly, I think it’s a bit of a struggle implementing many of their ideas when you’re running at a much smaller scale – even if you thought it beneficial. One of the companies I worked at a few years ago had a total potential market of precisely 29 companies. If we wanted to know anything about these companies we didn’t look to data analysis to understand patterns of behaviour, we went to see them and asked!

    2. Start Simple. A second more subtle point here though is about making sure you pick off the low hanging fruit before moving on to anything advanced. One of the questions I was asked at a job interview a long time ago now, was to do with detecting fraudulent activity on bank accounts. The question was “If we gave you the data showing the amounts going in and out of a bank account each day for the last 3 months, what’s the first thing you would do to try and spot fraudulent activity?”. I’d just finished a maths course 2 months before, so I launched in to a tirade about algorithms for picking out outliers, spotting complex patterns in the data, weekly seasonality calculations, de-trending the data and so on. After a few minutes of this, the interviewer interrupted and said, “Mm. I’d probably just draw a graph and see what was there”. I did manage to get the job in the end and found out that a reasonable proportion of the “advanced analytics” needed to detect banking fraud was really very simple algorithms to spot outliers, pretty close to what you’d be doing by eye (think “3 standard deviations away…”).

    An example from the world of marketing – you might be trying to figure out “What type of customer in our CRM system is more likely to stay with me long term, continuing to buy products? (i.e. high LTV)”. There might be a lot of subtle factors here, but there could be some real no-brainers. For example, I’d suggest that customers who have spent a lot with you in the first 3 months are more likely to spend a lot in the future (because the initial spend is indicative of certain levels of budget and/or appetite for your products) compared to someone who spent very little. Of course you have to test this in the data (because it could be completely wrong – see the quote at the end about the blocks to implementing analytical thinking), but if you wanted a simple model for “Which accounts should we spend more time with?”, a simple binary model of “Spent more than $100k with us” vs. “Spent less than $100k” might be a good first start!

    3. Get some early wins. There is always a (not completely unreasonable) objection to analytical marketing along the lines of “This stuff is all well and good, but if we spent more time just putting together some great ads, some great messages, reaching out to the community, running some great promos etc, then the money will flow. We’ll worry about analysing the detail later on”. Sometimes this comes from a certain mindset (again, mentioned in the quote below), about “the power of ideas over data”. Sometimes  it comes from seeing failed implementations. I have a lot of sympathy with the latter – it is very easy to spend an enormous amount of time and money on this sort of project – time that could be spent elsewhere in the business – and see precisely no advantage at the end.

    One way of combatting this problem is to make sure you get some early wins, even if these aren’t the primary purpose of your project. For example, you may have a vision of an all-encompassing CRM system that knows exactly the right email to send at the right time to the right customer (“Dave, we know you’ve been enjoying our product for 19 days now and that your boss, Helen, is interested in how the product could help her with regulatory problems in the textiles industry – here’s a whitepaper answering her questions and a quote for a price that I know exactly fits her budget for this quarter.”). But if you wait for utopia, without showing some earlier, simpler wins, you’ll be working for years battling off disgruntled executives with other priorities.. So better to pick an early problem where you know you can win. If you’ve never sent any segmented emails at all, then start with a simple opportunity (like sending different emails to new vs. existing customers based on some analysis) then prove that this has had a positive impact on either outputs (such as click rate) or (much) better still, revenue. Once you’ve proven positive return, then move on to the next stage with something a bit more clever.  I’d use the phrase “Build success on success”, but it sounds far too cheesy.

    4. Analyse off-line first, on-line later. There’s a great model for step-wise implementation of CRM analytics, along the lines of:

    a. No analytics – purely transactional CRM system.

    b. Offline analytics (e.g. showing that you need to treat new and existing customers differently), implemented manually (sending emails by hand once a week).

    c. Offline analytics implemented automatically (e.g. above analysis embedded in to CRM/email system such that different customers automatically get the right emails. Or offline analysis shows that certain types of customers prefer particular products/prices, so these are hard-coded in the system),

    d. On-line analytics, automatically adapting based on data coming in. For example, your initial model might say that “Customers who come in from Northern Europe are more likely to purchase product X” but, as data comes in, you find this changing over time. The models in the CRM automatically pick up that Southern Europe is now more likely to purchase product X, so automatically adapts to offer this product to these customers instead.

    The last options is, for most, a complete pipe-dream, and can actually be quite dangerous. Therefore I’d strongly recommend a model where analysis is carried out off-line, on sets of data, then the conclusions from that analysis are proven online first. E.g. your offline work shows that customers in China are more price-sensitive than those in India? Implement this by just hard-coding different prices for the two countries and seeing how you get on..

    5. Ignore all of the above if you’re working in a SaaS environment! A lot of the caution above stems from trying to run before you can walk. As I say, if you only need to sell 2 widgets this month to break a profit, your time might be better spent phoning up all of your potential clients, rather than analysing their behaviour to the nth degree. But – the SaaS world disrupts this approach. If you’re not analysing behaviour, interactions, price sensitivity, churn rates, click-through rates, conversion rates etc etc etc from the start, then you’re putting yourself in a very precarious position. Customer service and sensitivity to customer needs is everything in the SaaS world and if customers aren’t getting what they want, they’ll leave you and move elsewhere (the downside of easy adoption is easy rejection).

    Hopefully some of these tips are vaguely useful. With regard to the book – it describes some interesting principles, and is good at a certain level (quite high level), though is a little short on detail. Nevertheless, I thought I’d end with my favourite quote, about the factors that hinder adoption of advanced analytics in organisations:

    Gary cites four common factors that hinder analytical competition: deeply embedded conventional wisdom that has been around for so long, it’s hard to reverse; decision making-especially at high levels-that fails to demand rigor and analysis; employees themselves who are not willing or equipped to do analytic work; and the power of ideas over data.

  • Book Review: Positioning by Al Ries and Jack Trout

    positioning

    Another book review this week, this time Positioning by Al Ries and Jack Trout.

    Obviously this is a book that had been around a long time. And there are endless reviews, over the years with different opinions. However, what’s interesting from skimming through the Amazon reviews, is that there’s a real mix between people who think the book is genius and those that think it’s just not relevant today, as it was 30 years ago. And there are a few examples of one of the most cutting remarks that can be made about a marketing textbook – that it’s good for students but not “relevant in the real world”.

    I do think it’s a great book, and still just as relevant today as it was 30 years ago. In fact, I’d argue, it’s more relevant.

    Like all great marketing books it has, at its core, an extremely simple message. Rather than paraphrase, I’ll quote verbatim:

    Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. Perhaps yourself.
    But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.
     

    There then follows a lot of detail filling in what this really means, for example:

    • That you need to position your product to link with what’s already in your customers’ minds. You can’t create new ideas in peoples’ minds, so you have to link your product to what’s already there. And you can’t change peoples’ minds.
    • Today’s marketplace is so over-crowded with products and messages that, unless you come up with a massively over-simplified idea, your message just won’t get through.
    • You have to start from how your prospects view the market and what your competition are doing. You then try and position your product using this “outside-in” approach (“How do we fit in that market?”) rather than an “inside-out” approach (where you start with your product and try to figure out “How can we sell this?”)
    • You need to find the hole (or “Cherchez le creneau”) in the market which, although simple in concept, is actually the hardest part of the process. Why? Because if something was obvious (“Why don’t we create an online storage service?”), then someone else has already done and will be first in the market (and if you’re first to be successful in a market, then that’s a hard position for others to overtake).

     But there are a few things that I particularly like about the book and why I think it’s even more interesting than perhaps it was a few decades ago. Firstly, as they point out, “We live in an over-communicated society”. Well if that were true in the early 80s, it’s even worse now. The low barrier to entry required to get any new product off the ground (or even a pseudo-product with a honeypot landing page) means that there are often hundreds of products out there in a similar category to yours, with the budget and knowledge to get their message out there. How on Earth can you get yourself heard over that din? Going back to the very simple task of “How do I differentiate against the rest of the market? How am I unique? Why would anybody out there want this instead of all of them?” seems an almost necessary task to undertake before moving on to more detailed, tactical marketing methods.

    Secondly though, and I think the reason why I found the book so useful, is that any search for “Marketing books”, “Marketing blogs” or “Marketing conferences” today brings back a series of results almost exclusively around the areas of lead generation, SEO, PPC, content marketing, funnel optimisation, lead nurturing and so on. Obviously, all of these are vital in the world of digital marketing. But these go hand in hand with the upfront basic work of figuring out your position, your message, and what you’re trying to sell. Your content marketing campaign will struggle if you don’t know what the proposition is that you’re trying to market – and hence what you should be writing content about!

    Another comment made about the book is that’s only relevant with big advertising budgets, for big brands. It’s certainly true that most of the examples provided are for brands that everyone will have heard of. But, I think this point is perhaps less relevant today – 20 years ago you needed significant budget to make any sort of splash. But that’s not the case so much now. With content marketing via blogs, and other mechanisms, there are other ways to get your message out (though obviously budget is still needed for other channels).

    The last point I’d make is that I really like the emphasis on the point that forcing yourself to stick to the more rigid approach of assessing the market (looking from the “outside-in”) and trying to “find the hole” makes the job more simple (you know what you need to do first), but really more difficult. This forces us to raise the bar for new ideas and pay much closer attention to those that we think are great and assess them against much stricter criteria. It really doesn’t matter if you come up with great idea, even a fully-coded great product, if that space is already taken. Just saying “But ours will be better!” is wishful thinking that could cost you dearly.

  • Is it the Content or the Author that Matters for a Blog?

    St Jerome

    If, like me, you subscribe to a lot of marketing RSS feeds, then you can’t have failed to notice the almost overwhelming proportion of posts about content marketing/SEO and how choosing appropriate and useful content for, say, your blog is a killer way of drawing in early stage leads. This SEOMoz post is a good guide to improving your blog reach, for example.

    Hard to disagree with that. However, we’ve been working on a blog at our company recently (The Future of Deployment if anyone is interested!) and, if I look at the traffic on that site over time, it struck me that actually there were three primary things that affected the impact/success of any given post (NB: the blog is at an early stage, so we’re talking about the generation of new traffic here, rather than reads from existing subscribers). In approximate order of importance (IMHO):

    1. Who the author is,
    2. Whether people link to it (because it’s interesting),
    3. The SEO credentials of the content.

    To explain these a little further – the first is reasonably obvious. We’re lucky at Red Gate to have prominent, well known people who can write for us. When they blog, they promote their posts, everyone thinks “Hey, Joe Bloggs has written something new, I’ll check that out” and we get good traffic.

    The second source of traffic is, as it says, about whether the community out there, or others (for example our sales people), find the content useful enough to either link to the post, or send links to the post out to the public.

    And third is the rather narrow task of using a tool like Yoast’s SEO tool for WordPress (which I love BTW) to get the SEO right on your blog post.

    Of course, if you can, you work on all of these – you get great people writing for you, you reach out to the community to get the word out, and you work on your SEO representation. But, as ever, we only have limited time, and my conclusion, from looking at what works, is that, basically, it’s the 1st item which has seemed to work best for us. So, if you want traffic, it’s not what you write that matters but more who writes it. This then leads to the next logical conclusion which is that, perhaps, if you want to really make a success of a blog, time directed at making friends in your community, particularly with people who are already very well known, may be considerably more valuable than time spent trying to get your content just-so.

    Of course what your doing here is buying in their reputation, hoping some of it will rub off on your blog, then your company. But this seems reasonable – there’s an awful lot of great content out there (a good post here, from Hubspot about how “Everyone’s doing it, so you’d better be good”) and actually a lot of it is reasonably obvious “no-brainer” stuff (e.g. I must have read 100 times, “Make your content interesting if you want people to read it” – thanks for that). So how can you differentiate? If someone who you respect, who you trust, and who you know is an expert in his/her field is telling you something, you’re far more likely to listen, and hear what’s being said above the noise.

    So may be your time is better spent taking some of the hot dogs in your industry out for expensive lunches, rather than hunching over a laptop trying to craft the perfect erudite post on a given topic. Ah, the sacrifices we have to make as marketers…

  • New Year, New Markets, New Products

    Durer Solid

    Many of us will have come back after the Christmas break trying to think of new activities, new ideas and new opportunities for 2013. One of these is – is there some new product, proposition or market we could address, obviously with a view to expanding the addressable market, or creating new revenue streams?

    Easy, surely? I’d suggest that getting this right is about the most difficult task for a marketing person. Why? Because there 1,000 factors that affect whether your new idea will fly or not, you can’t possibly hope to think of all of them, the ones you don’t think of could kill your proposition flat, and you might not be able to test the idea properly for some time. NB: I’m a big fan of failing fast with new ideas, but in the real world this is much easier said than done: can you truly test the viability of your product, till you’ve asked people to actually buy the thing?

    Anyway, given this, what can you do to give yourself the best chance of success? From my experience of the last few years, your chances are increased considerably by reducing the number of perturbations from your core business, as much as you can.

    By this, I mean that, for each new idea, you should consider how many different changes you are making to your core, successful business, with the new idea. The sorts of axes of change I’m thinking about are things like:

    1. The core product,
    2. The business model,
    3. The people you’re selling to,
    4. The type of customer you’re trying to reach,
    5. Region,
    6. Channels

    And so on. Many of these have multiple sub-categories of course (e.g. business model covers many areas).

    This issue is often described in product management circles as:

    “Never propose a new product in a new market at the same time – do one or the other”.
     

    And this is a good summary. But why is this a good idea? If your current business is selling CDs online to UK end consumers, and some bright spark in your company proposes some brilliant new idea, “Why don’t we provide an online data translation service for East Asia – I’ve just read an article about a great opportunity out there!” then, yes, this might be a fantastic idea in the abstract, but you are almost certainly doomed to fail in your attempts to address it. Why? Fundamentally because you don’t know what you’re doing and the number of axes on which you are changing your model are so great that the number of unknowns will be overwhelming. In this example:

    1. The core product has changed from CDs to some new data service. How will this service work? What are the costs of running it? Do you have the skills to create this product?
    2. Business model – you’re currently set up to acquire CDs from somewhere, sell them online then send them out in the post. What do you know about selling a SaaS model? How do you reach these people? How do you even run a business like this – who are the employees you’ll need?
    3. It’s extremely unlikely anyone who might be interested in the new service will have heard of you, so your brand recognition is starting at zero.
    4. You’re currently selling to end customers, B2C. What do you know about a B2B model? And who are the buyers and users in your target companies? What’s the hierarchy? Who influences who?
    5. Region – UK vs East Asia. These are not the same.
    6. Channels – all of your current channels to customers will be obsolete.

    And so on, ad infinitum.

    One way of representing these changes is with a cube:

    Cube2

    What this cube also hopes to represent as well, is the point about the significant increase in potential pitfalls from changing on so many axes. If, conservatively, there were 10 things that could kill your new idea when changing along any particular axis then, if you just changed one of these things (for example, you started selling CDs in the US as well as the UK), then there are 10 obstacles (some you’ll know at the start, some  you won’t), which you’ll need to overcome to succeed. But, if you change 6 things (imagine a 6-dimensional hypercube!), then the number of things that can scupper you is 10^6, or 1 million! For example, it may be that the specific way that Japanese customers buy SaaS data services is regulated in some way that you could never guess, and you would have never found this until it was far too late.

    This is, of course, a massive over-simplification, which is why the image at the top is of Dürer’s Solid (something more complex than a simple cube*). It’s not nearly as simple as each axis being equal and having the same impact. I would argue strongly that your chances of success if you’re selling something to the same group of people is much higher than if you’re trying to do anything with a new group of people. Even if you’re selling your wholly-unchanged product to a brand new group of people, none of those people know anything about you, they have no trust in you and it’s going to take considerable work to convince them otherwise. In contrast, a group of people who know you well and have had good service from  you in the past, will always be interested in what you’ve got coming up next.

    Of course, this all shouldn’t hold you back from trying to think of great ways of growing your business, but I now try and confine myself to twists on an existing business. Currently selling in the UK? Try selling in the US. Currently offering a perpetual license? Try selling a monthly subscription (to the exact same people for the exact same product). Or currently selling a version of your product to large banks? Try a version for the tier-2 smaller banks. And so on. Once you get headway in your new market, then push along a 2nd axis, starting from your new stronghold.

     * I know the analogy with Dürer’s Solid is weak, but I’m such a fan of Dürer that I had to find some way of crowbarring it in

  • Product Management and iTunes 11

    Green Goblin

    Just to start – this isn’t another post written just to whinge about iTunes. It’s a post written to whinge about iTunes and its relevance to product management.

    Is the following situation familiar? Product manager or marketer wants to add new features, use-cases and options to their product, based on customer feedback, that they think will attract new customers or at least keep existing customers happy. Engineers have a different point of view – “We’ve got to go back to formula and do a re-write”.  I mean, what’s the point of re-writing the application to support some new framework or methodology, if it’s not going to make any difference to customers?

    And then you get iTunes 11 and I’m sure, in a story familiar to all iTunes sufferers, Apple have done another UI overhaul, whilst leaving the core engine seemingly untouched. Sure it looks cleaner and prettier now:

    iTunes 11

    But – I don’t know if Apple have tried to put the product “on a diet”, as the review says, but it still has the massive imprint on memory that the previous versions have all had.

    This means that as soon as you try to do anything, for example, plugging in an iPhone and trying to select files to copy over, every click takes, what seems like, an eternity.

    As I say, this isn’t just a straightforward moan about iTunes – I’m sure there’s enough of that around on the web. The point I wanted to make was regarding product management. As I mention above, normally I’m firmly on the side of “Please leave the engine re-write alone: customers don’t care what framework it runs on, they want the fancy new features”. But I think this is only the case up to a point – iTunes is an example of a product where I actually take the complete opposite point of view. There aren’t any more features they could add to the product (it’s basically a way of transferring music from my C: drive to my iPhone) and I’ve no interest in a pretty re-design.

    However, the fact that the thing is so achingly slow to respond and so painful to use, is one of the primary reasons why I’m looking to dump my Apple devices and move back to an Android phone. Of course it’s not just iTunes, it’s iOS 6 too – another example of bloatware where, actually, what the users need is a re-write to make the thing faster, not just look prettier (and actually, I preferred the look and feel of iOS 5).

    But my point is that, for certain products, the best thing a vendor can do to get more sales, or retain existing customers IS the engine re-write. I think you need a ground swell of problems for this to be the case – and I suspect the work to re-write iTunes is not an insignificant piece of work – but I do think it would be the best thing that a product manager at Apple could do.

  • Favourite marketing posts of 2012

    This post is now 11 years old so a lot of the links no longer work!

    This is my last post of 2012 before breaking up for Christmas and I thought I’d finish with one of those lazy “Everyone’s out for Christmas, let’s just re-use some old material” posts, summarising my favourite articles that I’ve read this year.

    Rather than keeping a methodical record of what these have been this year, I’m actually just going to use the items that exist in my Pocket app, on the iPhone. This great little app lets you store articles that you find for reading later, when offline, though it’s also useful as a way of keeping track of “Things I really want to read, I just don’t have time right now”.

    Sadly, I realised that this totals around 30 or 40 items, which reflects poorly on my ability to get round to reading anything. So I’ve tried to group these in some way and just give a brief summary for each, for why I found them so useful. Also items marked *** are my particular favourites. Enjoy!

    Marketing Attribution

    The Buyer Lifecycle

    • Tom Pisello: The ROI Guy: Who Do B2B Buyers Trust? – another big priority for next year is mapping the customer journey/lifecycle and provide appropriate and well-timed content for our customers (aka context marketing). This is a nice practical guide to the sort of content people want at different stages.

    Blogging

    Product Marketing and Roles

     Marketing Automation and Lead Qualification

    Social Media

    • Social Media Measurement Is Still In Infant Stage of Growth – I’ve struggled to measure the ROI of work in social media (I’ve ended up at “Not everything that counts can be counted” – not very satisfactory) and although this post doesn’t give many answers, it’s nice to know I’m not the only one!
    • Search versus Social – which one wins? I love this infographic on which is better for marketing activity, Search or Social. E.g. what is better for lead gen? Search. For brand awareness? Social. ***

    Content Marketing

    Practical SEO Tips and Tricks

    B2B Marketing

    • Your Business Tech Buyers Are More Social Than Ever | Forrester Blogs – Red Gate are a B2B organisation (well, we sometimes like to say, B2BC – treating business buyers like end consumers), and I thought this was an interesting Forrester post about how you should be using Social Media in the B2B environment – these people are still using Twitter to find information, particularly for the type of buyers Red Gate has

    Miscellaneous

  • Lean Personas – How to Make Personas More Useful

    First of all, I prefer the term “Personas” to “Personae”. Doesn’t “Personae” just seem pretentious, n’est-ce que pas?

    Anyway, the point is, I’ve always struggled, over the years, to find personas a useful tool in marketing. I’m specifically talking about marketing here, rather than user-centred design – I know these are two sides of the same coin, but my main concern is with their use in marketing.

    The process of creating personas has often been interesting, perhaps even fun, but then when it comes to the next stage – of actually using them in some way to drive marketing effort – they never seem quite right and they never seem very usable. I think they can also be slightly dangerous – if the process for creating personas hasn’t been cast-iron, then you can find yourself making messaging and positioning decisions based on, what – a few Google searches, chats with a couple of customers and a few internal meetings? Not really good enough!

    So I thought I’d describe the process I prefer to use. A key part of this, though, is the end goal. For me this is:

    Resulting personas should be strong enough that they are believable, simple and genuinely useful for sales, marketing, user experience and any other member of the team.

    This seems a little vague, but the point is – the usual problem with personas is that a lot of effort is made, some big pictures of archetypes are printed on the walls… then everyone gets on with their jobs, ignoring the work that’s been done. A persona should be so strong, that the sales team members recognise that person perfectly, have just spoken to five of them that week, and keep referring to the persona, without being hustled by marketing or UX.

    So, the process I use is as follows, and is actually very simple:

    1. Start with some market segmentation. Don’t be tempted to jump in to personas yet, but start by trying to figure out a few basic segments for your market. There are lots of ways of doing this but, for me, the key point is to avoid personas at this stage. Why? Because it can bias your segmentation towards familiar and known archetypes, undermining the validity of your segmentation. For example, if you’d worked marketing mortgages for a living, and you’d always worked in the homeowner segment only, then you might be able to come up with a rich and powerful set of personas for types of mortgage owner such as “Young, stretched first-time buyer”, “30s affluent”, “Older, careful-with-money” and so on. These would be based on your biases about people you’ve encountered in your work. But what about Buy-to-Let borrowers? If you’ve never encountered them before, you wouldn’t even consider different BTL personas. It might be (I don’t know) that a quarter of all mortgages are lent to this group, and by missing out this group in your work, you’re forgetting to create personas for a key segment. If you start with a segmentation first, based on some real data, then you’ll be spending your efforts on persona creation in the most valuable areas.
    2. Once you have your segmentation, take the largest ones of most interest (2-4, any more can get confusing) and create personas based on these. NB: It may be, in the above example, that you’re just not interested in Buy-to-Let borrowers. Fair enough, ignore them, but at least you’re doing that based on real data.
    3. There are a lot of well-documented processes for creating individual personas. Your user-experience teams, if you have them, are likely to be of great help here. For me though, a guiding principle is that these have to be based on real people. I know this is obvious, but if the end goal is believable and useful personas, then these will only happen if you’re pulling out traits from people you’ve actually spoken to. In the example above, if you were trying to better define a “30s affluent” persona, you need to speak to some people in their 30s, who are genuinely affluent. Are they actually in their 20s, or 40s? Does age even matter? And do they feel affluent? What’s that based on? Then, when you go in to further characteristics (such as “Where do they go out?”, “What websites to they read?”, “What newspapers?”, “What sort of neighbourhoods do they live in?”, or whatever you’re interested in), these also need to be validated. It’s very easy to fall in to stereotypes here (“Go to the theatre”, “Read The Guardian” etc) but are these true or just projections of our own prejudices?
    4. Once you have some interesting personas, the next stage is to then validate and adjust these with customers. This is why I call this post “Lean Personas”. Rather than spending months coming up with perfect personas, then launching these in your marketing, I think it’s a lot more useful to do an initial, decent job, then to test these against the people you’re talking to, whether on the phone, at conferences, or wherever. Obviously you can’t ask someone “Would you consider yourself a 30s-affluent type!?”. But you can ask, as background, “What papers do you read?”, “Where do you go out?” and so on.
    5. Repeat steps 3 and 4 a few times, perfecting your personas as you go along. Of course you can start using these in early marketing, but the real value can often take quite a few months, if not longer – when you reach a point where your sales and other people are willingly using your personas to help them in sales conversations, and when you can classify people in to personas at the drop of a hat, because they’re so familiar and so right, then at that point, you’ve got some great personas going forward.

    Good luck. I’m about to embark on this exercise myself, so I’ll write up how I get on!

     

  • Product Marketing and Product Management Roles

    Simple Minds

    I wrote a brief post, about the different roles in the area of product management and product marketing, so it was interesting to read what Saeed Khan had to say on the subject in the following two posts (the first one in particular):

    http://labs.openviewpartners.com/role-of-product-marketing-in-your-startup-part-1/

    http://labs.openviewpartners.com/role-of-product-marketing-in-your-startup-part-ii/

    These posts give really great insight in to what the different roles are. In particular I think he gives a really nice, succinct description of the product marketing role:

    Product Marketing is responsible for developing positioning, messaging, competitive differentiation, and enabling the Sales and Marketing teams to ensure they are aligned and work efficiently to generate and close opportunities. Product Marketing is strategic marketing at the product or product line level.

    I agree with a lot of what he says. My one caveat is where Saeed talks about some of the poor definitions of the distinction that are used. In particular, a definition I’ve trotted out myself a few times is:

    Product Management focuses on putting product “on the shelf,” and Product Marketing focuses on getting product “off the shelf”.

    I use a slight variation on this, specifically:

    Product Management focuses on putting the right product “on the shelf,” and Product Marketing focuses on getting product “off the shelf”.

    The criticism Saeed makes of this and other definitions is that they are overly simplistic and don’t help people understand the subtleties of the different positions. But I beg to differ – I think it’s exactly this simplicity that makes this definition more useful. Less correct, yes, but more useful. Like any model or descriptive aid, this phrase is wrong in parts. For example, if a product manager wasn’t worrying herself about how the product is going to get off the shelf, then she’s not doing her job properly. Additionally if the product marketing manager isn’t thinking about how the product experience could be improved to help usage and sales, then he’s missing possible opportunities for improving the marketing/sales funnel.

    But – to people outside the product management/marketing function, I think it really helps people to get a grip on what product marketing managers do. I’m not sure that’s explained as simply with Saeed’s approach.

    The other point to make as well, is that it really depends on the people you employ. No individual perfectly fits in to one hole or the other. We have product managers who are quite product marketing-ey, and some that aren’t (and the same, reverse point for PMMs). It’s not a criticism of one type or the other, it’s just that people are generally better suited working to their strengths, and the jobs people actually end up doing rarely fit in to narrow definitions.

    Still, great post – and nice to know that what we do at Red Gate kind of fits in with how others see the split!

  • Are you doing marketing or Marketing?

    Seventh Seal

    Very interesting post here from the start of this year, from Joshua Duncan:

    http://www.arandomjog.com/2012/01/the-end-of-product-marketing/

    In it, Joshua describes how the role of Product Marketing Manager (PMM) is, essentially, moribund – not because the work done by these people isn’t required, but because these activities are rapidly being taken up by other individuals (Product Managers, MarComms etc), leaving PMMs with little left to do.

    To be fair, what he says at the end is – you’re not going to survive if you’re an average product marketer, because a lot of the day job will be done by others, so you’d better get very good at some part of the role.

    It’s nice to see some great comments at the bottom of the post (rather than the usual trolling!). And it is a very thought-provoking article. However, for me (or at least for the place where I work) the flaw is the difference between what I think is marketing, small-‘m’ and Marketing, big-‘M’.

    If the marketing function at your organisation consists of, basically, a few website updates, a bit of Adwords, check your SEO now and again, knock up some flyers for the trade-show, some banner ads and landing pages, may be even a few blogs now and again, then I can see Joshua’s point – a product manager covers the product strategy (and so doesn’t need any input from marketing-types) and the marcomms team (whether internal or external) can write the copy, produce the website and flyers and so on. And I think this would cover pretty much everything you need to keep the marketing juggernaut going. But I call this small-‘m’ marketing – it’s all necessary work (if you’re not on top of your Adwords and SEO, for example, then you’re just throwing opportunities away), but how much value is a PMM really adding to this? If the product manager is on top of the product strategy, users and benefits, and marcomms are looking after copy?

    Where I think PMMs can really add value is doing proper big-‘M’ Marketing. And by ‘value’ I mean revenue. The sorts of things I’d classify as big-‘M’ Marketing are:

    1. New markets. Sure, your existing customers see every new product new release, but what about the stack of potential customers who know nothing about you? Or would never consider using you? If you currently sell exclusively to tier 1 banks, how are you going to reach tier 2 banks? Or how are you going to reach the government sector, where you’ve never had any luck before? Or Brazil!?
    2. New business models. If you’ve always sold a perpetual license before, how are you going to start selling on a monthly subscription? Are these the same people? How are you going to change your offering to suit?
    3. Turning a product in to a proposition. You have a great product, but what needs to be added to turn it in to an attractive proposition? Support contracts? Professional services? What?
    4. How do customers perceive your product range as a whole? Does it make sense, all together?

    And so on – for me, these are the reasons why marketing is so interesting and so difficult. And, more importantly, where you can make a significant impact on revenue. I didn’t get in to marketing to figure out whether banner ads at the top of the page are better value-for-money than the bottom of the page, but to try and figure out ways to make a significant difference to revenue by doing strategic Marketing, not marketing.

  • Marketing and Data Testing

    Anyone who’s worked in a digital marketing environment will probably recognise one of the following two scenarios –

    1) You’re merrily working through your day when you check up on a KPI graph that normally bobs along nicely only to see some unpleasant looking change (generally a “drop” of some sort). Panic.

    2) You’re merrily working through your day when who should turn up at your desk but your boss, looking less than cheery, holding up a sheet of white A4 with what looks like a graph on it. With a drop on the right hand side. Panic.

    Of course scenario 1 is for those people who have better monitoring/dashboard systems, but the end result is the same – why has that KPI suddenly started slipping off the edge of the comforting plateau where it’s been sitting for the last 6 months?

    NB: This is certainly more likely and relevant for things like “web site visits” or “whitepapers downloaded” than slower moving items, but the principle is still the same.

    For me, the important question is “What do I do now?”. If it helps, here’s what I did when this happened to me two days ago…

    1) Firstly, don’t panic – I don’t know about you, but, unless your whole website is down, I’ve never found panicking help to get a problem resolved. It just muddies your thought processes.

    2) Communicate with the people who care about the figures. If you found the problem, there’s nothing to be gained from “trying to fix it before anyone notices”. They will notice, and it’s better coming from you.

    3) On to the more practical help – in my example, we spotted that our leads generated from the website (from people downloading the free trial) were down around 20% for a specific product. Usually the daily run rate for leads is pretty steady, so it was surprising when this figure was consistently down for a few days.

    4) Don’t panic (again). Here is a non-exhaustive list of reasons why this specific KPI could be down, in an order which I hope makes sense:

    * Customers are no longer interested in what we sell,

    * We’d change something on the structure of the site which de-emphasised this particular product,

    * We’d make it less clear how to get hold of the free trial (e.g. a design change to the page),

    * People are finding the free trial but there’s a bug which means when they click to get it, they don’t,

    * There’s a bug that means when they click to get the trial, they do get the trial, but we’re not recording this in our CRM system,

    * Everything is working, it’s just that the analytics cube which we’re looking at isn’t functioning properly (i.e. it’s a reporting problem)

    …and many other possibilities. As you probably spotted this list is ordered from “Our company is in trouble” to “Phew!”.

    5) Analysis. As I say, there’s little point going through the details of how we found which of these was the problem, because every situation is different, but the most important tip, I think, is to take a methodical approach. If your symptom is “The leads shown in our cube are looking a little low” then the cause could be any of the above. You have to go through each in turn, discounting that option. As an example, my first thought was to discount the first, rather worrying possibility. I looked at the Google Analytics visitor numbers for the whole of our website and for the specific product in trouble. No change – within seconds I saw a re-assuringly unwavering number of visits for the immediate past.

    6) Don’t jump to conclusions. And be nice to people. In almost every situation I’ve ever been in like this, the source of the problem is pretty far down my list – and it’s likely to be a technical problem (i.e. somebody didn’t test something fully). Going in with your size 13s, making unresearched accusations and being unpleasant about it turns a solvable problem into a horrible week for a lot of people – if someone has made a mistake they’re going to be feeling pretty unpleasant about it anyway.

    7) Obvious really – fix it!

    8) Learn from it – it could be a 100 things. Is it the testing process? Does your monitoring process need to be more finely-tuned? Do you need to slow down on making too many changes at once? It’s obvious and a cliche, but if you don’t learn from it, you’re doomed to repeat the mistake.

    The above is all well and good, but a reasonable question is – so what? Isn’t this blog supposed to be about marketing? This just sounds like a data problem?

    The main reason why I think it’s important for marketeers to be able to help with fixing this sort of thing is – you are the owner of those metrics. If something goes wrong, it’s up to you to get it sorted. You’re also most likely to understand the ins and outs of how the website and lead generation process works – just handing tasks like this on to someone else and saying “I don’t get what’s going on, let me know when it’s sorted”, is only going to lead to slower results.

  • Product Marketing, Product Management, Product Owner etc etc

    Product Marketing, Product Management, Product Owner etc etc

    As mentioned a few posts ago, I attended the Agile 2012 conference a few weeks ago. As far as I can see, one of the products of this movement has been the advent of the “Product Owner” role in the scrum team. This is someone who, as far as I can gather, does some of the work of the Product Manager, but is generally working much more closely to the Scrum team, guiding them with what they should be working on next.

    There are various articles written on what the different roles in the area of product management and marketing should be doing. The Pragmatic Marketing Framework is a superb resource describing all of the different tasks that form part of these roles.

    However, from reading a lot of these articles, many seem to be missing a fundamental point. In fact all of these roles, as I see it, are fundamentally the same – all are trying to figure out what are the features, benefits, propositions and messages that will make money from your product. If a product owner isn’t prioritising features that will make a difference to revenue (whether short term or long term) then she isn’t do her job properly. If the marketing person isn’t trying to craft propositions and messages that make some difference to the bottom line, then again, he is wasting his time. And more importantly if one of those people is ignoring factors outside of their traditional role, then this is something that needs addressing. Some of the most successful product marketing I’ve seen is where a product marketer suggests changes to the next sprint of the product or when a product owner has ideas about how to present features in a certain way, to certain types of people (maybe even writing the blog post herself).

    To be honest, I find most of the conversations around defining job roles rather dull – as long as everyone is working on the same commercial goals, the nature of different peoples’ jobs tend to fall out pretty quickly based on what needs to be done.