MarketingMuses

Five Minds for Technology Marketing Professionals

Howard Gardner, Hobbs Professor of Cognition and Education at the Harvard Graduate School of Education, is a psychologist and author known for his theory of multiple intelligences. Application of his theory, especially for education, has been controversial. But I think his latest book, Five Minds for the Future, is a must read for technology marketing professionals.

His thesis is that, “…vast changes that include accelerating globalization, mounting quantities of information, the growing hegemony of science and technology, and the clash of civilizations,” requires, “capabilities that, until now, have been mere options.” He describes “Five Minds,” or cognitive abilities that will command a premium in the years ahead:

1. The Disciplinary Mind — the mastery of major schools of thought (including science, mathematics, and history) and of at least one professional craft.

2. The Synthesizing Mind — the ability to integrate ideas from different disciplines or spheres into a coherent whole and to communicate that integration to others.

3. The Creating Mind — the capacity to uncover and clarify new problems, questions and phenomena.

4. The Respectful Mind — awareness of and appreciation for differences among human beings and human groups.

5. The Ethical Mind — fulfillment of one's responsibilities as a worker and as a citizen.

While the book is not directed specifically at technology professionals, I found much of what he said echoed characteristics of the most effective people I know: deep domain expertise, intellectual curiosity, creativity, global perspective, knowledge of and respect for diverse cultures, and teamwork.

It is and will continue to be possible for anyone with a few of these characteristics to succeed in technology marketing, but I believe those who excel and assume positions of leadership will exhibit all of these abilities.

Metrics that Matter: Market Share and Dynamics

If you don’t measure your marketing performance, you can’t improve it.

Marketing metrics are measurements of trends, dynamics and characteristics that can help you focus on more rewarding market opportunities, allocate resources appropriately, and determine the effectiveness of your strategies and tactics.

Market share is the percentage of your company’s sales (in units or revenue) divided by the total sales within a specific market. Its value is apparent when viewed in the context of market dynamics such as market share growth (or decline), market growth (or decline), and relative market share.

Take a market share of 30%. Is this good or bad? It depends. If last year’s market share was 25%, it’s probably good. But if it was 35%, it’s probably bad.

What about next year’s sales forecast of 15% growth? Whether it's good or bad depends on market growth. At 20% market growth, 15% sales growth means you’re losing market share. That’s a problem. 15% growth means you're just holding your own. This may be acceptable in the short-term, but not in the long run. And while 15% sales growth in a market growing by 10% will increase your market share, it means that 33% of your growth depends on capturing competitive market share. This is usually more difficult to achieve than simply matching market growth.

Relative market share is a measure of your company’s market share as opposed to that of your largest competitor. Some studies suggest that companies with high relative market share tend to be more profitable than their competitors. So a 30% market share is good if your largest competitor’s is 15%, but not very good if it’s 50%.

Relative market share and market growth rate are key variables in determining competitive strength and in allocating resources within a company’s business units or product lines. The BCG Matrix developed by the Boston Consulting Group is one of the more popular analytical tools for this purpose.

Develop a Message Platform for Program Effectiveness

Delivering a consistent message across all communication channels amplifies the effectiveness of your brand building, demand generation, thought leadership, and go-to-market programs.

I previously described the 4C’s of effective marketing communications. Consistency is a fifth C that is essential to an effective program or campaign. I develop a message platform by rigorously answering the following questions, and then communicate the resulting content consistently across all channels — website, PR and AR, direct marketing, advertising, literature, presentations, and events.

1. What product or service is the subject of the program?
2. Describe the primary market for the product or service?
3. What business factors are driving demand for the product or service?
4. What problem does the product or service solve?
5. What is the single most important message the program should communicate?
6. What is the specific call-to-action for this program?
7. Who (by title) authorizes the purchase of the product or service?
8. Who (by title) specifies or recommends the product or service?
9. What unique benefits does the product or service offer?
10. What features support the above benefits?
11. What other benefits (not unique) does the product or service offer?
12. What features support these benefits?
13. Who are the key competitors, and what are the competing products or services?
14. What are their respective strengths and weaknesses?
15. What are the actual weaknesses of the product or service?
16. What are the customer-perceived weaknesses of the product or service?
17. In what geographic location(s) will this project be used?

Communicate Solutions; Not Problems

If you're describing the problem to prospective customers, then you’ve got a bigger problem: You’re not targeting the right market.

A few years ago I helped engineer at turnaround at a struggling security-software startup. They had developed a very effective method to monitor Web-applications and detect suspicious user behavior indicative of unauthorized access and malicious conduct. But the market was, “Any company with web-access to confidential information,” and the first 12 of 30 sales presentation slides described the problem, as did the website and literature.

I quickly met with analysts and determined that recent regulations required financial institutions and their service providers to protect confidential customer information from unauthorized access. In addition, the media was highlighting high-profile data security breaches at financial institutions involving online fraud and identity theft. I proposed a marketing strategy that targeted executives with responsibility for protecting customer financial and identity data from fraudulent online access and theft.

Soon after, we made a presentation to a top U.S. bank. 4 slides in, one of the prospective customers said, “You don’t need to tell us about the problem. We understand that. Show us the solution!” The sales representative quickly jumped forward to slide 13. A few days later, the same thing occurred during a presentation to a major online brokerage. After that, sales removed the first 12 slides from the presentation.

Over the next few months, all marketing communications was refocused on online fraud and identity theft solutions for financial institutions, with a value proposition of information security, compliance and risk management. Sales took off, and the company executed its goal of a successful exit.

Is Branding or Innovation More Important?

Futurelab, an international marketing consultancy, has a Marketing & Strategy Innovation Blog that I follow because its contributors are a group of international thought leaders with interesting perspectives on the subject. Idress Motee, CEO of Idea Couture, recently took issue with an article by Al Ries, a principal in Ries & Ries, in AdvertisingAge titled, “Innovation Should Be Seen As a Tactic, Not A Business Strategy.” Here’s a link to Idress’s response to the Ries article, ‘This Man Is Confused.” What follows is my comment about both articles.

Is branding or innovation more important? Both branding and innovation are inputs. And while each is important, neither directly determines the ultimate success of a product or service. Success is a measure of output. And output is a value proposition based on user experience and price. People will usually buy the best experience they can afford.

Mr. Ries misinterprets the basis of Apple’s success in his Advertising Age article, which says:

“Then there's Apple, which seems to be an exception to the principle that innovation cannot build a brand. Certainly Apple has been successful because of the widely held belief that all Apple products are highly innovative. That's true today, but what about tomorrow? Innovation cannot last forever. Sooner or later Apple is going to run up against a brick wall and find itself fighting a host of competitors who dominate their categories. Apple doesn't dominate any category, yet manages to compete successfully against Hewlett-Packard and Dell in personal computers. Against Nokia and Motorola in cellphones. Against Sony and Samsung in consumer electronics. Against Microsoft in personal-computer operating systems.”

To the contrary, the Apple iPod dominates the personal music player category, and Apple iTunes dominates the online music service category. This is the engine that has driven Apple’s growth over the past 5 years. Apple didn’t invent either category. And while innovation and branding have both played a part in Apple’s success, it’s real competitive advantage is a better user experience than the alternative products and services at a reasonable price.

Contrast this with the Apple Newton MessagePad, a truly innovative product that defined the personal digital assistant (PDA) category. Unfortunately, it was too expensive and did not deliver the desired user experience in terms of size, hand-writing recognition, PC synchronization, and other important user criteria. When the PalmPilot addressed these deficiencies, it restored the viability of the PDA market and became a runaway success.

Even early personal computer innovations credited to Apple, such as the graphical user interface (GUI) and mouse, were developed by Xerox at its Palo Alto Research Center (PARC). Apple’s achievement was to understand how these innovations could significantly improve user experience.

Last year Apple dropped Computer from its corporate name, in recognition that even though its share of the computer market had quadrupled, from 2% to 8%, its market position had shifted from personal computing to consumer entertainment and information. And its commercials, promotional materials and retail stores emphasize a superior user experience, not innovative technology.

The market success of a car, computer or consumer electronics device is ultimately the product of a value proposition that delivers a better user experience at a reasonable price.

Marketing in a Global Village

David Meerman Scott practices what he preaches. He used his blog, WebInkNow, to develop content for his book, ‘The New Rules of Marketing & PR.’

The book’s thesis is that the Web offers companies and organizations of all sizes the ability to get, “…the right message to the right people at the right time.” Its main strategic point is that marketers should focus on buyers and their problems (rather than hyping products and services), and think like a publisher by, “…delivering content when and where it is needed and, in the process, branding you and your organization as a leader.”

To me, the book’s greatest value is its in-depth examination of new media tactics and channels, such as blogs, podcasts, videos, search engines, online media rooms, and more. The book is structured like a blog, and divided into three sections: 1) How the Web Has Changed the Rules of Marketing and PR, 2) Web-Based Communications to Reach Buyers Directly, and 3) Action Plan for Harnessing the Power of the New Rules.

If you are just dipping your toes into new media marketing, read the whole book. While information in some sections is redundant, it will be worth your time. If you are already involved in new media marketing, dive right into section three’s action plan, where information is cross-referenced (like a blog) to earlier sections in case you want to dig deeper into any specific subject.

Lessons from People Magazine

People magazine is the most successful paid-subscription magazine in history.

In his book, ‘Steal These Ideas!’ Steve Cone says, “Its success is based on four principles that you can use to create the most compelling marketing materials possible.”

1. Use pictures of real people, not models who are nameless

2. Use captions with pictures, always, always, always

3. Write concisely; you are not on a government commission

4. Leave plenty of white space on every page so the eye can digest what’s there

But will this work with B2B technology marketing? You bet it will!

Include pictures of company executives with their website profiles and in company literature. Include pictures of developers, engineers and other people responsible for your products and services in your marketing literature. And include pictures of customers, with their approval, in your case studies. Better still, insert short videos of all these people with the related information on your website.

B2B Value Propositions

There are 3 basic B2B value propositions: increase revenue, decrease expenses, and mitigate risk.

By definition, the goal of for-profit companies is profit. Profit is a product of revenue less expenses, measured by the equation P = R – E. But making a profit is just the start: profit and its sources must be protected. This can be as simple as insuring profit producing assets, such as plant and equipment, or as complex as sophisticated risk management techniques used to balance the return and risk of financial investments. If you don’t think risk mitigation is important to a company’s success, or survival, I have two words for you: Bear Stearns.

The most compelling reason for a company to spend money is to make significantly more money. The key word here is significantly, and leads to other essential criteria of a successful B2B value proposition such as return on investment, break-even period, and risk assessment.

Developing and delivering a compelling value proposition is the cornerstone of successful B2B marketing.

The 3C’s of Marketing Analysis

In 1975, Kenichi Ohmae, a director at the management-consulting firm McKinsey & Company, published ‘The Mind of the Strategist: The Art of Japanese Business.’ While it is now considered a somewhat dated classic on Japanese corporate strategy, its core premise is very relevant to marketing:

The purpose of strategy is to maximize competitive advantage, strategy begins with analysis, and the ‘strategic triangle’ of customers, competitors, and company is an effective analysis framework for identifying competitive advantage.

I read the book in 1985, and have since used the ‘strategic triangle’ as the starting point of every marketing plan I’ve developed and written. Simply put, I analyze customer needs by market segment, examine how competitors meet those needs, and determine my company’s competitive advantages and disadvantages. This method of analysis yields two critical insights:

1. The market segments to target now based on present competitive advantage.

2. The market segments that offer the best future opportunities based on size, projected growth rate, and a company’s ability to quickly and economically gain a competitive advantage.

Synergy is a Hideous Word

Marshall Goldsmith, in his book ‘What Got You Here Won’t Get You There,’ describes Barry Diller, the chairman of IAC/InterActiveCorp, responding to a Harvard Business School student’s comment about the lack of synergy in IAC’s various online businesses. “Don’t ever use that word synergy. It’s a hideous word,” Diller said. “The only thing that works is natural law.”

Mr. Goldsmith agrees, and says, “You can’t force people to work together. You can’t mandate synergy.” He adds that people will do something, “…only if it can be demonstrated that doing so is in their own best interests as defined by their own values.” And that people’s self interest, “…usually boils down to four items: money, power, status, and popularity.”

Synergy is often cited as an expected benefit of restructurings and acquisitions. I served as director of corporate marketing in a Fortune 100 division that restructured from independent business units to a matrix organization, and I’ve worked as a consultant to integrate the marketing operations of several acquired companies. Only one method has consistently worked for me:

Learn the self-interests of people who are essential to organizational change, and convince them that helping achieve it will contribute to their personal success.