I love this article from Helen Edwards – about the need to understand marketing theory but then the need to apply it to the real world. Theory without execution is just an indulgence, a wholly academic pursuit. But if you’re executing well against a poor strategy, you’re just peddling fast in the wrong direction.
She provides some great examples towards the end, of tools to help you link theory with practice. Reading through the articles mentioned, I happened upon this HBR article from 2004, from W. Chan Kim and Renee Mauborgne, about Value Innovation. I started reading with some scepticism – I mean, what does a term like “Value Innovation” even mean? All sounds a bit vague and hand-wavy.
But as I read through, a strange feeling of familiarity came over me. The idea that, in a highly competitive landscape, you need to move away from just making incremental improvements to match your competitors. Instead, you need to break free from the pack by staking out a new market space – re-defining the market – based on a deep understanding of what customers truly value.
So far, all so academic. What does this mean in real terms? How does this relate to what we do at Redgate? The reason this felt familiar, was a realisation that this was how Redgate had been working for years, but I doubt we even knew it!
There are many ways of running a software product company, all have their pros and cons. At Redgate we invest heavily in product development. But I don’t mean just in numbers – really the investment is in quality. Finding great software engineers, designers, product managers, coaches, tech leads and so on. It’s a constant source of worry – where do we find these great people? Are they unicorns? Have we exhausted the pool of talent in Cambridge?
But why worry about this so much? Why do we need such an exceptional group of people (almost) all of them co-located in Cambridge?
I believe the answer can be found in Kim and Mauborgne’s Value Innovation theory. Copycat development – where you just keep an eye on your competitors and do the obvious things to an existing product – is pretty easy to run. You don’t need the best people in the country to do this – just keep an eye on the competition, see what they’re doing and try to do a slightly better version of that.
But, as pointed out in the article, this can be a downward spiral – there’s downward pressure on price, as all products become decidedly “average”, none of them truly catering to the needs of customers.
What if, instead, you spent your time analysing the jobs to be done by customers? Taking an evidence-based approach to solution design, talking to customers, truly understanding what they value, so that you can build an innovate solution to their problems (rather than just what your competitors thought was important)? What if you focussed on really solving customers’ problems, finding new, better solutions?
There are some great articles on the Redgate Medium feed – Ingeniously Simple – such as this one on Evidence-Based Decision Making. The benefits of this sort of approach are hard to quantify but it is, for me, a great example of how a great marketing theory is being applied in the real world: the market strategy for the company is one of Value Innovation – finding the true best solutions for customers – and that’s a lot of hard work. It requires the best people in industry, and they’re hard to find.
But we hear the results from customers all the time. We survey our customers constantly about “Where did you hear about us? Why did you end up with Redgate?”. And our biggest source of leads? Referrals. We then ask them, “Well why would you recommend Redgate?” and the answer is always a resounding “It’s the best product there is!”. Of course a customer wouldn’t describe this as “Redgate provides the most innovate solution that matches the value I seek”, they describe it as “You have the best products” – but that only happens when you invest in understanding the customers’ needs completely, and innovating on the solutions you provide. Great marketing theory, put in to practice.
As an aside, this makes it more difficult to marketers to understand marketing sizing and addressable market – Redgate rarely fit in to the categories described by analysts, as we try to break these categories (as described in the Value Innovation article, Kinepolis ignored the existing categories of “ordinary cinema” and multiplex, and created a new category of megaplex, designed purely around an understanding of what the mass market valued). But it’s a small price to pay for having the best solutions in the market.