Archive for the ‘functionality’ Tag

Note to Social Media Platform Vendors: Consodidation is Coming

As we have been ramping up the platform selection process for several clients, it has become obvious that some of the vendors are struggling. I can’t speak to their financial situation, but I can speak to the frustration that we have with many of them who still think the platform war is about features and functionality. As a consultant, you have to know that I see a lot of platforms. I think the last count was that there were over 100 platforms. If I can’t see anything special about your particular platform, how will the market?

That doesn’t mean that there are not good platforms out there. There is a group of the top platforms that do “get it” and are building the functionality to support the customers in the right way. See, web 2.0 is about empowering the customer, goving them that unique experience that gets them to come back over and over. Adoption trumps functionality. Customers don’t care about widgets, all they care about is the experience. By the way, I am talking about the platform customers’ customers…

Vendors who are building platforms to provide the flexibility to provide that “mass customized” experience are going to be the winners.  The ability to provide unique functionality to the users in a seamless, non-intrusive way will win. That means, as I heard lately, that the “platform” will have to disapear. Both in terms of becoming components AND in the unique quirks of design that enables you to figure out a particular community is actually run on XYZ platform.

My customers, who buy platforms, do not want their customers to think about the community platform, rather they want the experience to fade into the background and the focus to be on the content and the interactions with their company. The platform vendors who can do that effectively the fastest will grow the fastest. Believe it or not, it isn’t really about software development and how you can connect to ~500 enterprise applications. That is now becoming table stakes for the social media platform market.

The next bar will then be how do I fuse the public social network experience with my corporate community to enable potential buyers to easily transition to my platform without a cumbersome registration process (that still gives me their information) and a seamless ability for my current customers to share their customer experience with the world (better ways of optimizing the syndicaton process for search optimization and supporting the influencer marketing process).

Platform vendors who are marketing how easy they are to do business (easy to assemble widgets, flexible architecture, designable workflow, flexible data modellng, just in time report development) with AND have a standardized model for mass producing custom experiences will win (the experience based upon who I am, what I want to do, and when I want to do it can be built iu real-time).

If you are still trying to sell a standardized SaaS software package to  the world, you may want to rethink what the market leaders are doing. They are not selling features and functionality, they are selling solutions. And by the way, the solutions are focused on satisfying their customers’ customers…

Wish List for Social Marketing Metrics

I get requests to review social media related platforms all the time; functionality, metrics, and integration. Some of these platforms are really good and some of them will die a quiet death. I make it a point to not discuss any specific platforms just because I want to stay strategic in this blog. But, I think there is value in outlining what I am looking for in the way of platform measurement capabilities that will support my social marketing strategy. Here is my wish list of activities that I want to measure and for which I am trying to collect tools; some of which is available and some is still not ready for primetime…

  1. Automatic Chatter Analysis – who, what, where, when, why, and how with comparisons, triggers, analysis, and a dashboard.
  2. Synchronization of My Social Networking Contacts – cross platform and multiple networks with the ability to start with one and find someone on another; i.e. uploading a twitter contact and have the ability to synch with LinkedIn or Facebook or email.
  3. Social CRM – then do that for all of my company’s contacts, dropped into a CRM system which I can then manage multiple contacts, campaigns, and relationships
  4. Online Community Lead Scoring – apply lead scoring to my own hosted community. I want to be able to identify when activities in the community indicated greater interest and send that into my CRM or multi-channel marketing system for follow up.
  5. Multi-Channel Reach Measurement – include social networking channels, twitter, blogs, back links, SEO, & SEM. Not just email and web analytics.
  6. Social Influencer Scoring – compare the various potential lead influencers to compare; blogs, communities, social networks, twitter, forums, sites, etc.
  7. Lead Source Analysis – Need a better way of being able to identify and track indirect sources for leads. I can use the latest web analytic tools to identify pages, but I need a way to elevate that to identify the sources of leads to compare and contract; i.e.  2nd generation re-tweet triggers a wave of people to our website. I want to be able to match the tweet to the twitter user to the lead. This would require some serious integration between social media and web analytics with a healthy dose of marketing legwork.
  8. Strength of Social Marketing Channels – Once you can track, then you can evaluate.
  9. Cost of Lead Acquisition by Social Marketing Channel – This is the Holy Grail; to measure the cost of lead generation by channel. Cross match it to revenue from leads and lead source and you have ROI.
  10. Social Marketing Brand Strength – Measurement of reach, calls to action, and actual action. There are some metrics out there with proprietary formulas, but this is still nascent.

If automatic ROI calculations are still some point off into the future, then what can we measure today and how can we justify our expenditures on Social Marketing? My answer is that it depends on the “how’s”; how big, how complex, how sophisticated, how much is your budget, and how much time? You can track a great deal with the tools currently available which is more sophisticated than much of the traditional brand-oriented mass communications channels that exist today. So, the good news is that we are moving in the right direction, but it is still more art than science. Well, at least until the platform vendors provide the above capabilities.

Is Your Marketing Like Teaching A Dog to Read? Part 2

In part 1 of this series, I shared a story about a professor who taught his dog to read… obviously, the dog could not read at the end of the semester, but the professor “taught” the dog. Unfortunately, this is very common in marketing, especially in emerging growth companies. The companies have very “pretty” marketing materials; website, collateral, powerpoints, but when you cannot really understand the audience, value proposition, or why they are different.

The litmus test for marketing materials is whether you can use your competitors name in your materials and it would apply. Or you could insert a company name from another industry and it reads just fine. Finally, you could insert any company name and no one understands what you do.

The real challenge is that the organization did not go through a structured exercise to map the value chain: audiences to benefits to functionality to features. Here is a high-level process to do just that:

1. Focus on identifying the market & associated segments

2. Fnd the pain – immediate call to action – for each segment; ie. this is the problem or opportunity you address; your solution = benefits

3. Communicate in the language the market understands – means you need to have a market SME, customer advisory board, or perform lots of prospect interviews to understand their needs in their language.

4. Test your messaging – social media participation, sales calls, speaking events, networking events, advisory boards, analysts, etc. Frequency and time allow you to polish your messaging. I know that I am ready when I can get through the 1st several meetings with a prospect or an investor without them finding holes in my presentation and Q&A. Doesn’t mean your offering won’t have challenges in due diligence, but if you are targeted to the right audience with the right solution, the first two meetings should be about concept, relationship, and “fit”.

5. Model your marketing on the sales process – each stage is idenitfied and marketing’s support required – One of the biggest challenges to getting the marketing materials “right” is identifying the scenarios under which it will be used. If your sales process is to work through partners, then providing a generic sales presentation won’t work. If you are selling into a specific vertical, then understanding the buying process may mean that you have to have 2 different presentations; one executive and one technical for different meetings. Collateral and sales support materials are very expensive to produce (opportunity costs) so focusing on a limited number of high-quality tools versus having a checkmark for materials is critical.

6. Focus on how to speed up the sales process – optimize, accelerate, replicate – momentum, reselling, bridging – One of the biggest challenges in any sales process is the “porpoise effect”. You build momentum and then it subsides, you resell and build momentum, and then it subsides. Most qualified buyer sales that seemingly look qualified with a need, but don’t get beyond the initial sponsor die due to lack of momentum. Either the sponsor could not sell internally or lost focus… The ability to empower your sponsor to be an evangelist will assist you in maintaining momentum. Everything in sales support should be around how do we help the potential customer make a decision faster. You will close more sales this way.

7. Participate in the early sales – look for objections – price, package, credentialling, references, technology, features/functionality, language, benefits, positioning, competitors. My biggest beef with some marketing communications people is that they don’t understand the market, customers, or the products. I want to get in front of the customers and interact with the market. I need to understand the buyer behavior and get feedback to fine tune the messaging.

8. “Save your powder” – the first set of sales to early adopters doesn’t require big marketing; focus on sales support, business development, online marketing, andPR; expensive marcom, tradeshows, events, and brochureware after the message has been tested. Save the marketing dollars till you have proofed the model and are ready to grow big. My approach to marketing budgeting is like “rolling a snowball downhill”. Make a small investment to credential your sales process;  when the market is proofed, build upon the foundation.

9. Build a customer lifecycle early. Know where you are going and how you will get there. Build towards a critical mass of referencable customers. Shrink the product’s functionality & features to slightly beyond what your target market requires. Also, make sure you set customer expectations so that you can exceed them. Make sure the roadmap is clearly articulated and scales with your customer expectations and your identified new market segments.

10. Your first set of references and referrals are the most expensive & the most valuable. Focus the organization on wowing the customer and tie all organizational goals to customer satisfaction.

Making sure your marketing “dog” can actually read is critical to scaling your business. If you have to personally evangelize to every new prospect to get them to understand the concept of your product and the value for them, you will have a very expensive sales process. Even service companies need to package their services to scale effectively.

Part 3 will address the challenges of Mid-Market companies.

Part 4 will address the challenges of Established Brands.

Unhorsing an Entrenched Competitor

Since my last post was about first mover advantage https://rosenhaft.wordpress.com/2009/06/02/web-marketing-leveraging-first-mover-advantage-on-the-web/, this post will be a how-to on enter a market with an entrenched, but less capable competitor. The assumption is that your offering is of superior quality or has unique attributes for the market at large. There are different strategies for purely niche products, “me-too”, or purely local offerings that are the subject for later posts. This post is for that company that has developed a better mouse-trap and needs a market entry strategy to unhorse an less capable, but established competitor.

My last post discussed the micro-economics behind the marketing and this post will do the same. Displacing a competitor is all about two costs:

1. Opportunity Costs – the value of your opportunity outweighs the switching costs; time, money, resources, pain, risk, etc.

2. Switching Costs – hard AND soft costs; time, money, resources, training, risk, pain, etc.

The entrenched competitors barriers to exit are your customers barriers to entry for your offering. Many companies under estimate the switching cost equation in displacing a competitor. Many times a company has a much better offering than their entrenched competitor, but cannot seem to get traction. When you di deeper, you find out that there is much more to the “cost” of switching beyond features or a small price difference. You find out a customer has to go through extensive training, has an extended contract that is not up for renewal, or doesn’t perceive the value of the offering as worth the hassle of switching for such a small price savings.

The keys to switching are really about changing the rules of the market. Bringing something new in terms of capabilities, changing the cost structure through planned commoditization, providing a different focus, bringing a targeted solution, AND FINALLY – being easier-to-do business.

Major Factors

1. Price –  Competing on price alone is a very difficult as it actually devalues the offering and discourages loyalty. “Cheep” is different than “economies of scale”. At the onset of the article, I positioned “me-too” offerings as a different strategy. This is why… “me-too @ a lower cost” has a place in the spectrum of the market targeting the cost-conscious buyer. Knock-offs are a good example; however, this takes a different type of positioning to target the cost-conscious buyer with a specific call-to-action. This is a particular market strategy that, in reality, is a niche. If done poorly, or not by design, it can lead to devaluation and rampant commoditization. If you can match the quality with 20% less cost, you generally can attract a portion of the market’s attention depending upon the industry and the competitor (see relationship below).

2. Capabilities – Features & Functionality – This is the secret-sauce approach. We are better because we can provide better capabilities that the competitor cannot. This may be a segment of the market or the whole market depending upon your capabilities. Features tend to not be sufficient on their own to motivate switching.

Better functionality may not necessarilymotivate a buyer to switch either. If you are higher priced with better functionality, you will have trouble with major displacement . The cost factor will be weighed into the equation unless your capabilities significantly change the buyers value equation; ie you save them much more money than the offering’s cost. “Our product saved the buyer 35% in processing time which translated into $250,000 in savingsover 3 years.” If your product costs $75,000 installed, which is $25,000 more than your competitors, but you save them $$225,000 in total cost over 3 years, you can make a case for displacement. If you are more expensive and cannot calculate a hard $ ROI, you will have to rely on a combination of techniques for displacement. For products that are truly revolutionary in which you change the cost structure of the market, you can introduce a lower price, and show a better ROI; then you have an opportunity to displace a large part of the market.

3. Relationship – Customer Support /Responsiveness /Ease-of-Use / Easy-to-Do-Business – Most companies provide mediocre service by definition. Whether by scale issues, complacency, or distraction; a majority of entrenched industry players are vulnerable to displacement based upon customer dissatisfaction. The notable exceptions are the ones that really shine. Service is particularly challenging for product companies.

If you are a new entrant, make service a hall-mark of your offering. Take the time to put in place the processes that will enable you to demonstrate your responsiveness to the challenges of the market. If your competitor’s customers are annoyed by the amount of training it takes to get people productive, then this should be your focus. If a competitor takes 2 business days to answer an email, then this should be your focus. My guess is that average companies probably have 10-20% of their customer base vulnerable to switching due to service. Below average service companies probably have a lot more.

4. Speed– the axiom of “time is money” is a great selling point for a potential customer if you can demonstrate the ROI from the change. Selling that we are faster (slightly) in itself does not generally motivate buyers. Proportionality is critical. Did you upgrade your last PC because it was milliseconds faster? If so, you were a minority; hence why the PC & chip industries are rethinking the “speed is better” industry sales pitches. Save 20% in a major operation & improve quality; you have a customer’s attention. Do it at a lower cost due to changes in technology; better. Now, do it without disrupting their organization’s operations while they switch; you have a “winner”.

5. Tailored Solutions –A large competitor’s niche or market segment, may actually be your market. Once again, proportionality applies. For your competitor, a segment may be 10% of their total market. A niche may be 1 or 2% of their revenues. For a company with $2B in revenues, $50M may not be sufficient to focus. For you, $50M is a sufficient market to enter and begin your market domination. If you competitor is not focused on a part of the market, then the obvious strategy is to pick a small enough market segment that you can dominate with a more tailored offering.

The challenge is to balance the entry into the niche without pigeon-holing yourself or awaking the sleeping giant. Your ability to service this niche with ramifications for the rest of the market, may be just the wake-up call and the validation for upgrading their offering. You could create your greatest competitor; who then leverages their relationships to the market with a “me-too” offering. Your competitor could even use your “newness” against you as a risk mitigation strategy.

Figuring out how you will enter, how you will communication the value, how you will expand beyond the entry point, and how you will evolve your offering to stay ahead of the competitor is critical. You don’t want to win the initial battle and find yourself losing the war….

6. Risk Management – Most new entrants fail to gain traction because they fail to account for the buyer’s fear of change and overall inertia. “I am not really happy with our vendor, but….. we would have to go through training, we have a contract, saving that little money isn’t important, we are comfortable, we are used to it, etc.”

Pick your excuse…. what they are really saying is that your offering isn’t worth the trouble in switching. You haven’t built a sufficient case to risk switching. Contrast that with a resounding YES that certain products and services elicit. These offerings provide a significantly, measurable, emotional, and tangible improvement over what they are doing today. AND these offerings do it in a way that seems easier and doesn’t involve much risk of switching.

Pull all of the above together to build a multi-faceted, multi-stage market entry strategy and you have the potential for a “disruptive” offering. The reality is that most companies don’t have a disruptive, “home-run” where they can drive word-of-mouth merely by “building it and they will come”. The majority of younger companies will have to focus on the fundamentals and build upon their slight advantages. In essence, they will have to manufacture runs from their singles and wait for the “right pitch”. Understanding your competitors strengths and weaknesses, the market opportunity for improved offerings, and understanding the market’s risk equation are the keys to successfully entering a new market. 

There is a concept that I call “switching point” which is the micro-econmomic version of Malcolm Gladwell’s “tipping point”. The switching point is the threshold in which you have created sufficient value to convince the potential customer that the opportunity of your offering outweighs the switching costs from the competitor. This is not an absolute, in fact may be unique to each customer, but a good market analysis should incorporate an identification of this equation into the sales process. Understanding the buyer motivation, switching challenges, and pain points will assist you in displacing an entrenched competitor.

In Web 2.0 Software, Adoption Trumps Functionality

The last several years have seen the greater adoption of social media and other Web 2.0 software components. These component software tools provide users with a more interactive experience, personalization, with the ability to create their own content, links, tags, navigation, etc. Additionally, you are seeing the growth of the “connected web”; web services, RSS, embeddable code, ubiquitous meta-tagging, widgets, consumable data, etc.

The proliferation of these software applications has migrated to every sector; consumer, enterprise, SMB, etc. What used to take NDA’s, sharing and modification of API’s, and endless meetings now can be accomplished with a snippet of code.

As the web transitions to more semantic driven applications and less user-interface driven, you would think that functionality would become increasingly important in applications.

In my experience, the trend is towards the opposite and that ADOPTION trumps functionality. The challenge is that we have too many options on the internet; too much data, content, search results, websites, applications, etc. The word I hear over and over is “overwhelming”.

So, if you have a very limited window of attention from your audience, why would you throw extraneous “stuff” at them hoping something would stick. Instead, take advantage of the Web 2.0 technologies and provide them with a tailored experience with just-enough functionality.

More importantly, focus on what is their motivation and interests. Not all potential buyers are the same. Don’t provide a generic website experience that meets 80% of 80% of the visitors and satisfies none. Instead, focus on identifying what a 100% of a smaller audience that you know will buy and add additonal functionality to support additional segments over time. Customers provide unsolicited referrals when you exceed their expectations and provide them a WOW! experience. This is the heart of word-of-mouth marketing. EXCEED CUSTOMER EXPECTATIONS!

If you cannot exceeed the whole group, then focus on a small enough group that talks to each other and build from there. You see countless blogs and articles about how to launch products on the interet. This is the reasoning behind the axioms. You need a critical mass of associated happy customers that will tell others about it.

It is about numbers. If you satisfy 1% of a large group, that doesn’t make much of a market impact. If you satisfy 80% of a small group, you own the market. Bottom line, adoption of your solution is more critical than providing everything, including the kitchen sink.

Of course, the secret is prioritizing the “right” functionality to satisfy the customer which takes someone asking them….