BJREES

B2B marketing and AI

Category: Leadership

Reflections on marketing leadership. Topics include decision-making, strategy, working with boards, and the evolving role of CMOs and marketing leaders in technology companies.

  • 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.

  • 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!

     

  • 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…

  • 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

  • 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.