Now is a great time to improve your products!

Today’s economy gives five added incentives to tune up your product portfolio.

1) With business down, many firms aren’t working at capacity. So it is easier to free up people to examine your products for competitiveness and profitability and take steps to improve them.

2) Compared with other marketing expenses, product improvements can be relatively inexpensive to implement.

3) Many firms are reacting to the downturn by discounting their price, which hurts short-term profitability and degrades long-term value perceptions. Product improvements allow you to maintain or improve profitability and increase the perceived value of your offerings.

4) Product improvements create news, attracting attention without the need for expensive advertising. They also boost the effectiveness of any advertising you do.

5) Product improvements help keep current customers from bargain shopping among your competitors.

Five product improvement steps:

1) Talk to your customers! Find out what’s important to them.
-------------------------------------------------------------------------------------------------
Brand Keys conducted an analysis of 1,847 products and services, in 75 categories, via their Customer Loyalty Engagement Index. On average, the study found that only 21 percent of all the products and services examined had any points of differentiation that were meaningful to the consumers. This is nearly 10 percent less than a benchmark study that was conducted in 2003!
-------------------------------------------------------------------------------------------------
Two good questions are “What one thing about our product should we never change?” (Then probe for others) and “If you could change one thing about our product, what would it be?” (Then probe for others).

2) Chart your position versus competition, comparing target segments, features & benefits, cost, profit margin, distribution, marketing, service, and other relevant factors.

3) Clearly identify what you want your products to stand for. Then be sure you live up to your positioning. Lip service won’t cut it with customers. For example, don’t claim high quality unless you can provide it!

Once you stake out a position, review your marketing mix to be sure there’s no dissonance (for example, don’t position your product as high quality and then discount the price…)

4) Don’t keep improvements a secret. Tell people about it! Make sure they are trumpeted on your website, in your sales collateral, and in relevant industry and general publications. Remember, competitive advantages are short-lived, so you want to maximize the initial impact of product changes.

5) If the competitive advantage created by product improvements is short-lived, an ongoing differentiation process is necessary. Don’t wait for the next recession to follow this advice again. After completing step #4, schedule a return to step #1 and repeat!

I have developed and introduced 21 different products and product lines, and tested over 4,000 new products. If you feel you might benefit from outside help in tuning up your product portfolio, give me a call.

Business Blogging—a marketplace differentiator

Yeah, I know, when you think about competitive advantages, your mind instantly turns to price, packaging, promotion, and all that other MARKETING 101 jazz. But what if you’re already doing all of that and (because everyone else is doing it too) you still need more of an edge? Well, how about blogging?

Remember:
· People do business with people they like.
· People do business with people like themselves.

Blogging is a great way to convince current and potential customers that you fit into one of these two categories. And it offers the chance to reinforce that conviction repeatedly over time.

In an earlier “marketing thought” I described the persuasive power of stories. Blogging is an efficient way of telling stories that will present your people and product(s) in a positive light. Business contacts tend to be impersonal. Blogging puts a personal face on your company and product or service, building an emotional connection that increases your chances of acquiring and retaining customers.

Potential blogging topics
1. Think anecdotes and personalities—“personal face”—remember?
2. Talk about how your company was founded—what are its “roots.”
3. Provide personal details about your employees (include pictures!) tied to what they do at work.
4. Talk about the procurement or manufacture or quality inspection of your products.
5. Discuss your employees’ qualifications for providing whatever service(s) you provide.
6. Provide pictures (literal or through words) of your facilities.
7. Talk about what went into developing or introducing a new product or service.
8. Provide a case study or testimonial.
9. Provide a tip or suggestion, and describe where it came from (who and why).
10. Describe your experiences at (or reactions to) an industry event like a trade show; provide information about upcoming events.

You can provide a link to information about products or promotions, but make it an “afterthought.” Lead up to it indirectly, keep the reference brief, and provide a link to the detailed information.

Who should blog
Unless you have someone who is unusually prolific and verbose, you’re going to need either an outside writer or a team of several contributors. Not everyone will be a good blogger—do an internal “talent search.” Look for passion, and hire professionals to “polish” your postings if necessary.

How often to blog
At least once a month for B2B, and probably not more than once a week.
At least twice a month for B2C, and probably not more than twice a week.
The more “pithy” and relevant your blogs are, the more people will want to read them.
Create a publishing calendar or schedule. Don’t leave your timing to chance.

Treat this like any other marketing initiative; set objectives and track readership and results.

If you think blogging sounds too “artsy-fartsy” to provide concrete business results, then you’re going against the corporate marketing wisdom of companies as big as Boeing, Dell, Kodak, and General Motors, and as small as... me!

Intrigued, but don’t know how to get started? I can help with everything from technology to identifying potential contributors to creating postings. Give me a call!

How can social media networks increase sales?

Everyone is talking about social media these days, but many people have told me they just don’t understand how things like Twitter, Facebook, Linked-In, or blogging can build their business. Here is how I answer them:

Let's assume your goal is to generate either direct sales or leads for your sales force, and you want the internet to help you. So you create a website where prospects can find the detailed information needed to convince them your offering is the one they need.

But there are literally millions of websites out there—how do you increase the chance of prospects finding yours? Social media networks can act as advertising to help guide people to your website.

Twitter—gives you the ability to email VERY brief “tweets” (maximum 140 character email messages) to a group of people who have agreed to “follow” (receive messages from) you. Use tweets as “headlines” that make people want to come to your blog or website to read more.

Facebook—once you’ve created a personal profile, you are allowed to create a separate company profile. Just as people link to each other by becoming Facebook “friends,” people can become “friends” of your company; in effect creating a network of interested people to which you can email information! Linking your Facebook company profile to your website provides another way for internet searchers to “find” you.

Linked-In—increases the number of times your company name appears during internet searches. Each of your employees can be listed, and each employee’s listing can contain links to your company’s blog, Facebook page, and website.

Blogging—your website provides one way for internet searchers to find you, and you can use search engine optimization to increase the chances of that happening. But blogging provides many additional chances of a searcher being led to your website. By writing about topical subjects, bloggers (writing individually or as part of a corporate “team” of bloggers) can greatly increase the amount of internet content tied to your company, and hence increase the chances that an internet search will lead to your company.

For the business person, social media networks can be thought of as additional forms of advertising. But to be effective, social media require the same thing that good advertising does—content that is relevant and valuable.

Think about it. If you were at a party, would you waste time talking to someone who was boring, or who just repeated the same story over and over again? No. You would want to spend your time with someone who was interesting.

Well, the people who use social media networks are looking for interesting connections. And if you want to get people to “follow” you on Twitter, become your friend on Facebook, look you up on Linked-In, read your blog, and come to your website, then you have to provide content they find relevant and valuable, and do it in a witty, easily understood manner.

Are your employees a rusty asset?

Companies spend a ton of money communicating their marketing message to prospects and customers, but most do absolutely nothing to formally communicate that message to their own employees, the people who have the most contact with (and often the most influence on) those key groups.

Nor do most companies spend any time teaching employees how they can reinforce and leverage the company’s marketing during their interactions with prospects and customers. At best this is a lost opportunity. At worst, companies are actively sabotaging their own marketing efforts.

You expect sales and marketing to know “the company line.” But what about the people in billing, shipping and distribution, operations, and legal? What about the receptionist?
How well do they know your branding messages and the features and benefits of your products or services?

Why does it matter? Because during their public interactions these employees can not only extend the reach of brand messaging; their product knowledge and brand-reinforcing attitudes can generate positive word-of-mouth and increased customer loyalty for the company. And because when employees feel more like part of the corporate “family,” you will probably see improvements in internal morale and retention.

Here are some easy-to-implement ways to educate employees:

· Provide a brand presentation as part of new employee orientation
· Provide a simple one-page handout listing your brands’ reason for being and primary messaging (you’ll find preparation of this piece will also help management focus).
· Expose employees to all company advertising and sales collateral.
· Provide examples of how you would like/expect employees in different departments to interact with the public.
· Give employees a list of public FAQs, and contacts for less frequent questions.
· Post reinforcing signage in employee areas, and include reinforcing messaging in employee communications.
· Praise, reward, and publicize employees who receive “attaboys” from the public.

Behavior change is major factor in new product success

When people have used a product (I include services under this label as well) repeatedly, they have positive attitudes toward it, and beliefs about it, that have been reinforced over time.

These make it difficult to convince them to switch. If we want people to change their behavior to adopt a new product of service, we have to either create new attitudes and beliefs, or change how important problematic attitudes and beliefs are to the behavior.

Effecting this change is tough. A Harvard Business Review article by John Gourville documents how consumers irrationally overvalue the benefits offered by products they use repeatedly. This often leads them to reject products that are objectively superior to the “incumbents” they're already using.

Compounding this problem, the study says that companies tend to irrationally overvalue the benefits offered by the innovation they are introducing (to about the same degree that consumers overvalue the incumbent product), resulting in a huge perception gap.

The size of this gap has a significant effect on how you introduce a new product. A useful way of evaluating new products is to plot the behavior change required against the perceived benefits the new product offers.

Your CMO can help you evaluate the degree of behavioral or attitudinal change your new product require for a target market, and can help you identify cost-effective ways to effect that change. Steve has developed and introduced 21 different products and product lines, and can help figure out what it will take to make your product successful.

A moment of silence for the "Age of Advertising"

First a little history: Traditionally, people bought goods produced locally; often by their neighbors. So they could predict which products would be good and which would not based on personal knowledge of who was producing them.

As transportation and packaging improved throughout the 19th and 20th centuries, it became feasible to buy products made far away. In this expanded environment, people rarely knew who had produced what they were buying. Soon manufacturers began “branding” their products in order to create a trusting relationship similar to what people used to have on a local level.

For example, if you were just buying generic laundry powder by the scoop out of an unmarked barrel, there was no telling how well it would clean. But if you knew that Tide detergent was good, and your laundry powder came in a box with the now famous target logo on it…well, you get the idea.

So far, so good. But the rise of regional and national communication channels led to abuse of branding. Manufacturers quickly began advertising to communicate their products’ benefits, and it didn’t take them long to discover that with enough advertising they could create demand that owed relatively little to their products’ intrinsic quality.

Since consumers had no comparably loud “voice” to refute inaccurate or misleading advertising claims, manufacturers could pump up profits by substituting marketing dollars for product quality.

Then came the internet, which made it easy to search out the exact product that would best meet their need. Freed from the necessity for big advertising budgets, choices proliferated. And consumers quickly forged a collective voice that first matched, and then overwhelmed advertising. At this point, anyone can access an enormous body of consumer experiences that generally allows them to form a much more accurate and objective opinion regarding product quality than they get from manufacturer advertising.

My point (finally): With advertising “neutralized,” manufacturers need to return to branding basics. Honing product features and improving quality are once again the primary way to increase sales, and branding is important primarily to make sure that consumers associate those features and that quality with the correct product.

As it always has been, advertising is important to create awareness, but its unprecedented ability to drive demand has been transferred to the internationally available word-of-mouth network created by the internet. [note: this very word-of-mouth network is now your very best resource for product development…]

If you want to discuss prospering without advertising, I can help. Let’s talk!

Are McCain and Obama good marketers?

This year's presidential campaign advertising has been exceptionally negative. News analysts reported that McCain has recently introduced 15 new negative ads, versus 14 new negative ads by Obama. I have not seen a "positive" advertisement in weeks.

Conventional marketing wisdom says that you need a "unique competitive advantage" to attract customers. Historically, marketers have interpreted this as meaning they should improve their product to rise above category commoditization. However McCain and Obama have gone in a different direction. Since they only have one "competitor," they've decided to "improve their product" by making the competition less appealing.

There are three huge "negatives" to this approach:

First, you aren't developing a positive image for your "brand." And if you don't tell customers what your benefits are (or in marketing terms, create a positive "brand image"), who will? Granted, negative ads presumably degrade the opponent's brand image. And theoretically that leaves the negative advertiser one-up. But with the opponent doing the same thing, both sides lose.

Second, this policy of unintentional mutual destruction guarantees that politicians’ “customers” will have an increasingly negative opinion of politics in general. This weakens both the Republican and Democrat parties (“the category”) and leaves them vulnerable to other alternatives (“competitive categories”).

Of those queried in a recent bipartisan survey by the Project on Campaign Conduct:
--39% believe all or most candidates lie to voters
--67% say they can trust the government in Washington only some of the time or never.

Third, defending your brand against attacks eliminates risk taking. You attempt to reduce your vulnerability by avoiding innovation, with the result that your “product” never improves. This strategy virtually guarantees that things remain the same. And as the customers of our politicians, how happy does that make you?