Thursday, January 21, 2010

The devil is in the details

It doesn’t take much to change an average experience into an exceptional experience that generates a competitive advantage. But employees, who have taken on increasing responsibilities in the past few years, are hard put to find the time to maintain even an average experience. They are happy to utilize technology to provide customer touches like “personalized” thank-you emails and newsletters.

The problem is, customers know just how much effort these technology-enabled touches cost, and they value them accordingly [low].

Increasing reliance on technology has conditioned us to avoid anything that requires customized effort. That opens up a huge opportunity for those who are able to think outside the “automated” box.

Here’s an example that impressed me over the past two years. I joined the American Marketing Association’s Cincinnati Chapter, and quickly discovered why it is one of the highest rated chapters in the country (with over 600 members). Rather than letting a new member “drift” into the organization, they invited me to an orientation where the chapter’s opportunities were described in detail and I was invited to sign up for activities I was interested in. They also worked to engage me through a variety of media--snail mail, email, Twitter, and Facebook. I was even offered the opportunity to schedule a one-on-one with the Chapter President.

I became a volunteer, and have enjoyed public recognition for my contributions through a special nametag (everyone wears nametags at events to facilitate networking) and invitations to volunteer thank-you events that include both special educational seminars and “fun” events like minor league baseball games. I’ve also been impressed with the yearly brainstorming sessions aimed at improving these already effective procedures.

The AMA doesn’t have to do all this-- the officers and volunteers are unpaid, and all have regular jobs. But because they make a special effort, they have a very successful organization.

If you said none of these things are particularly innovative, you’re right. But they’re doing them, and that’s the competitive difference versus organizations that do not do them. When the time came to write the check for another year’s membership, I didn’t think twice.
If you’d like some help in customizing your customer and prospect touches, give me a call. I’d be happy to help!

The Lone Ranger has left the building

The premise behind the Lone Ranger was that he’d ride into town uninvited, clean up your problem, and ride away, leaving a silver bullet behind. Alternatively, silver bullets are reputedly the only effective weapon for dealing with werewolves, witches, monsters, and other troublesome entities.

Thus “silver bullet" refers to any simple, one-step solution. The expectation is that some new technology or practice will quickly and easily cure a problem. Want prospects? Companies that will provide you with lists of “guaranteed” names for pennies each. Want to lose weight? Plan “X” will let you do it without exercise while eating whatever you want. Want to increase customer loyalty? All you need to do is Tweet. And so on, ad infinitum.

There is no shortage of people and organizations promising silver bullets, and management teams beset by poor economic conditions and short on time and money are more than willing to listen. But they shouldn’t. Because while “Yes Virginia, there is a Santa Claus,” there is no silver bullet.

If there was, the silver bullet salespeople would be rich and retired. Instead they’re spending large amounts of money running infomercials and big display ads to attract the suckers seeking that shiny ordinance.

“If it sounds too good to be true, it probably is…”

Silver bullets are a triumph of hope over logic. People want to believe silver bullet solutions are real, because they would make our lives so much easier. The alternative is to research the problem, test possible solutions, and diligently and vigorously execute the best one. This is a lot of hard work with an uncertain outcome. Who wouldn’t rather hire the Lone Ranger?

Here’s the unpalatable fact: Cheap, easy, high-quality, instant solutions are rare to non-existent. If you want a solution, particularly one that creates a competitive advantage, it’s going to take some blood, sweat, and tears. Plus adequate funding and a reasonable amount of time.

Chasing silver bullets will cost you time and money that can be better spent on doing what you realize (deep in your heart) needs to be done. Committing the necessary resources to do the job right.

If you want a business-building marketing solution, Your CMO would be happy to provide it. Hi Ho Silver…away!

Averting the Twin Towers disaster

No, I’m not talking about the World Trade Center, but rather about two mainstays of your organization--marketing and sales.

Marketers and salespeople have different mindsets. (see Sales or Marketing, who cares?) So it isn’t surprising that, even though they share the goal of acquiring and retaining customers, the two functions often exist in separate silos which interact poorly, if at all.

2008 research led by the CMO Council concluded that the strategic versus tactical approaches taken by the two disciplines tended to create divergent time frames, metrics, and vocabularies. “Salespeople consider up to 90% of the collateral materials created by marketing useless, and marketers deem nearly as much of the sales-created content as brand dilutive or downright inaccurate.”

In a 2008 survey of 506 sales and marketing professionals (“Closing the Gap: The Sales and Marketing Alignment Imperative”) 56% of respondents said their companies don’t have formal programs in place to unify sales and marketing functions. 30% said that their “marketing organization operates in a vacuum, crafting programs that do little to affect sales.”

Misalignment between these key parts of the organization often results in
· Misspent marketing funds
· Poorly exploited or wasted sales opportunities
· Inefficient lead generation and nurturing
· Poor customer profitability

Five ways to start creating alignment
1. Start by ensuring you have management buy-in for the effort; do not proceed without agreement from the Sales VP, Marketing VP, and CEO.
2. Obtain interdepartmental consensus on terms like ‘qualified lead,’ ‘profitable’ and ‘sale.’
3. Define each department’s responsibilities to the other. This should include Marketing’s role in lead generation, providing competitive analytics and defining points of differentiation and Sales’ commitment to identifying prospect wants and needs, accumulating prospect information, and reporting results. Some firms go as far as creating actual “contracts” to be signed by both functions.
4. Collaborate on setting goals and identifying metrics which allow you to measure success.
5. Create a system that allows sales and marketing to share prospect/customer data.

Your CMO has extensive experience with creating effective sales/marketing partnerships. If you’d like to fine-tune that relationship, give me a call!

Three questions define your PROMISE’s effectiveness

It goes by many different names. USP, Unique Selling Proposition, Competitive Advantage, Brand Promise, Value Proposition, and Point of Difference.

It’s the PROMISE that is made to prospective customers to influence them to choose your product over your competitor’s. Every business needs one. Lots of companies have one. Frankly, most of them aren’t very good.

Here’s three ways to measure the effectiveness of your PROMISE:

1) Is it unique? Does it set you apart from your competition?

2) Is it relevant? Do potential customers care that you’re offering it?

3) Can you deliver? Are you willing and able to fulfill your promise?

If you meet all three of these criteria, you have a successful PROMISE, and, based on the three examples below, a successful business as well:

● Melt in your mouth, not in your hand.

● Fresh hot pizza at your door in 30 minutes or it’s free.

● When your package absolutely, positively has to be there overnight.

If you think about it, a successful PROMISE is an all or nothing proposition:

UNIQUE + RELEVANT but not DELIVERABLE = one-time customers and bad word-of-mouth.

UNIQUE + DELIVERABLE but not RELEVANT = Nobody cares!

RELEVANT + DELIVERABLE but not UNIQUE = Parity or commodity position

Your PROMISE should really be called a Unique Buying Proposition, because if it is done right, you won’t have to sell your product--people will be asking if they can buy it.

Want to talk about developing or refining your PROMISE? Your CMO can help!

Ten ways to make your competition work for you

How much effort do you put into tracking your competition? For most of us, the answer is--not enough. You wouldn’t try to run your business with no regard for the law, or economic conditions, or your customers. But it is surprising how many people feel they can run their businesses with little or no regard for their competition.

There are exceptions. Pizza parlors carefully monitor competitive menus and promotions. I’m sure General Motors spends a lot of time keeping an eye on Toyota. And airlines pay close attention to competitive pricing and initiatives. But many other businesses pay only occasional and cursory attention to their competitors. That’s a mistake.

Here’s ten suggestions for gathering and (more importantly) making use of competitive information:

1) Reach corporate consensus on who your competitors currently are (this may be harder than you expect). Review this list regularly (semi-annually?)

2) Make someone responsible for tracking competition. It isn’t hard--your receptionist can do it if you tell them how.

3) Prove you think this information is important. Review competitive information regularly, and share your findings with the appropriate people.

4) Set up a grid comparing the details of your offering(s) to those of the competition. This can include anything meaningful-- prices, sizes, flavors, channels of distribution, store hours, shipping costs, return policies, etc. Look for differences and decide if they are advantages or disadvantages for you; then leverage the advantages and chip away at the disadvantages.

5) Benchmark competition by printing out all the screens on their website, then have someone look for changes on a regular (quarterly?) basis. Pay particular attention to pricing, product portfolio changes, service offerings, news releases, etc.

6) If your competitors are public companies, buy a share of stock in each so that you will receive their mailings.

7) Have your employees collect and forward sales collateral and advertising from the competition to the person you’ve made responsible for competitive tracking (another good reason to have such a person). Find a way to reward them for their efforts!

8) Don’t just watch established competitors. While start-ups may not be an immediate threat, they obviously feel they’ve found a significant chink in your armor, or they wouldn’t be entering the industry. Analyze them carefully to find out why they think you’re vulnerable.

9) Periodically (annually?) do a threat assessment that considers competition from outside the industry. It wasn’t a hard-copy carrier that crippled FedX’s overnight letter business, it was FAX machines.

10) Set up an exercise where you create combined teams of internal and external people with the assignment of putting you out of business. Then take a long look at the plans they develop. If they can think of it, so can your competition!

Having trouble finding time to watch the competition? Your CMO can set up a system for you. I’ll even monitor the competition for you, so you don’t have to. Let me know if I can help!

Get your hands dirty!

When was the last time you personally did any did any prospect/customer research? Not commissioned research, not read a summary of research, but actually did the research yourself? I know you have a ton of other things to do, but if you haven’t participated in any research in the past twelve months (and I’ll bet you haven’t), then you’re really missing an opportunity. To quote John Frank, editor of the American Marketing Association’s marketingnews: “It’s much too easy in marketing to just be looking from the inside out to what you think customers want and/or need.”

Authorities and pundits are pretty well agreed that significant advances in new product development or substantive competitive advantages won’t come from just asking prospects/customers what they want. Great new products and real competitive advantages come from insights into the attitudes and motivations of your target market, as observed from their behavior. And if it is hard for people to come up with those insights from direct observation, imagine how much more difficult it is to come up with them by simply reading research data and summaries!

I don’t know about you, but there have been times in my career when I’ve commissioned important research, then because of the pressure of other responsibilities, never looked at the actual data gathered, but simply read the executive summary. (How many of you have interview CDs or DVDs of prospect/consumer interviews sitting in a drawer that you’ve never listened to or watched?)

It’s a rare report that can communicate all the non-verbal cues that direct observation reveals—the emotion in someone’s voice, or the passion implicit in their body language. How often do you actually use your product: cook and eat the food item you make, or apply for your insurance policy online, or ride the bicycle you manufacture? How often do you watch someone else do it? There is no substitute for first hand experience and observation! Lots of things can be safely delegated. This one can’t. Or at least this one shouldn’t be.

No one says you have to design your own research or schedule your own interviews. Let your marketing research department or supplier create the questionnaire and handle the administrative details. But you should be there—at least once in a while. Because if you aren’t, you’re missing a golden opportunity to come up with the insights that you are uniquely qualified to find.

The more satisfied you are the more danger you are in

Because for most people, satisfaction means “things are going good, and I don’t have to change them.” And the longer you leave things unchanged, the more time you are giving the competition to catch up with or leapfrog past you.

The best friend a marketer has is the attitude that things can “always be better” and the discipline to act on that attitude. We’ve all got a lot of demands on our time. The marketing environment is more challenging than ever, and there is always a new crisis on the horizon.

In addition to these distractions, we’ve all heard “if it ain’t broke, don’t fix it.” And certainly New Coke fiasco and the Ford Edsel are stark reminders of how “improving” a product line can go wrong. [Not to mention how I’ve never forgiven Frito-Lay for making their previously excellent restaurant-style salsa so much “better” so that I had to switch to Hernandez!)

On the other hand, there are numerous examples of how complacency has led to decline. From the movie studios ignoring television to IBM’s lack of interest in home computers to Kodak and Polaroid’s reliance on film, we can all name instances where “satisfied” companies have had their lunch eaten by competitors.

So is it a case of “damned if I do and damned if I don’t”? If that was true, it would make sense to take the path of least resistance and do nothing.

But it isn’t true. If you don’t, then you can count on the competition to work like crazy to come up with a better value proposition for your customers. Some will fail, but most of us have so many competitors that the odds are in favor of one of them succeeding.

However if you do, rigorous marketing research and pilot testing can significantly lessen the chance of failure. And at least if you’re taking action, your fate is in your hands rather than the hands of your competitors.

Successful marketers (and companies) find ways to institutionalize continual improvement. They regularly schedule the time and manpower to pay careful attention to consumer wants and needs, stay up-to-date with improvements in technology, and carefully monitor competition. Finally, they make improvement a regular part of their goal-setting.
So stay dissatisfied. And when you retire, you’ll be able to look back on your career with satisfaction!