Posts Tagged ‘marketing’
|This article was originally published on “Sensei Blogs – A Business Blog with a Point of View” and is reprinted here with permission.|
“Is your message one of welcome or one of distress and danger?”When you look at your own company, are you writing a long-term story, or a series of short-form articles? Are you letting your inner essence focus your business decisions, or are you looking for opportunistic quick hits? Do your various messages across different mediums have a consistent theme, and are they true to the vision of your firm? If you are unsure of your answers, take a moment to reflect and reconnect with your inner essence. Your corporate narrative will thank you. Image “Long Beach 1933” by California Watch, Licensed under Creative Commons
By definition, a strategy is not the same as an innovation. But a strategy can be innovative, and it can also be disruptive, and there are no shortage of organizations out there today that love to talk about their disruptive strategies. But is being disruptive in a market, or towards a competitor, a viable strategy? Is it sustainable? Or is it merely something that is best used in an opportunistic manner?
“Disruption creates chaos. Chaos cannot be controlled.”
Personally, while I almost always caution clients against relying upon disrupting their competition, or a market, as a business strategy, there is a part of me that understands the value of leveraging an opportunity to disrupt the flow of a competitor. THE SEVEN DISRUPTIVE SINS How an organization attempts to disrupt its competition is often tempered by the depth of their pockets, the desperate nature of their situation or their willingness to push (or even outright cross) the lines of the law. But, putting aside graft and corruption, most organizations tend to gravitate to the same Seven Disruptive Sins when it comes to disrupting their competition. I call them sins, for while they may have their virtues or desired effect, they may also come back to bite you. Hard
“Chaos cannot be controlled, but it can be leveraged.”
So let’s take a look at the most common strategies I see used, misused and abused by organizations to disrupt their competition… 1. Talent Acquisition: pulling key personnel away from a competitor, in an attempt to limit their competitiveness.
“To every action there is always an equal and opposite reaction.”
~ Sir Isaac Newton
Pro: Acquiring great talent in any area of your business is always a good idea (top sales reps, developers, executives, support staff, etc.). And when pulled from your competitor, can limit, or at least disrupt their footing for a period of time.
Con: Pulling top staff from a competitor usually means offering a sweeter, more costly deal. It also opens the door for your competitor to potentially find a new, more creative or hungrier, replacement. Add in non-compete agreements (especially where customers or IP are concerned) and ultimately you may have just overpaid for talent AND given your competitor an opportunity to lower their own operating costs.2. IP Acquisition: buying patents, or even entire companies, in an effort to keep (or take) the technology away from competitors. For example, during the dot-com boom, larger firms were buying up smaller firms left and right – not just because they needed the technology but to take it out of the market (a great example today would be the recent sell off of Nortel patents, or the likely interest a sell-off of RIM patents would generate).
Pro: By locking up a piece of technology that your competitor may rely upon or leverage in the future (a good example would be buying a smaller firm that resells product through a competitor), you can take away portions of their product/services portfolio.
Con: Buying anything costs money. And who isn’t to say that your competition will, as a result of your action, be forced to rethink their product/service strategy and develop a new one that isn’t more in touch with customer demand? More importantly, companies need to be nimble in today’s market. Technologies change fast, and you don’t want to be left holding outdated product.3. Flooding the Market: selling products or services well below market price in an effort to take away customers and revenue from your competition (something we see often at the international trade level). Interestingly (thanks to Alan Berkson for this example), we see this all the time in the Cable TV and Mobile sectors, where vendors undercut their competition (through special contract pricing) to win customers that they know they will lose after their 12/24 month contract is up.
Pro: You can’t argue with the value of taking away market share from your competition.
Con: Every time you underprice your product, or give away an extra service, you are taking profit out of your pocket – something that few firms can afford to sustain for any period of time.4. Supplier Acquisition: controlling the supply of parts, either through exclusive deals or acquisition, to restrict competitor’s access. If everybody in a market relies upon Company X for certain technology, bringing that supplier under your umbrella can force competitors to shift their own strategies (note: this is not the same as developing your own in-house alternatives to parts/components that are universally used within a market, such as Apple building their own chip fabrication facility).
Pro: Controlling the supply of commonly used products in a market can certainly be a competitive strength (imagine if Apple bought Intel…). It can provide (after the cost of acquisition is recouped) lower cost of goods sold.
Con: You buy it, you’re stuck with it. Take something away from somebody and they’ll find a way to engineer something better. Just as nature abhors a vacuum, so do markets. Pull a key component out of a market and somebody will find a way to replace it (with something faster, better, cheaper). Lesson: don’t force your competition to become innovative.5. Distribution Acquisition: controlling the distribution channels for your product – a great example being the exclusivity agreements that restricted food chains from selling both Coke and Pepsi products.
Pro: If you can prevent your competitor’s product from ever appearing on the shelf, you’ve clearly got an advantage.
Con: Linking yourself to a particular distribution channel is great, until that distribution channel falls to deliver, or has competitive challenges of their own (think McDonalds/Burger King and Coke vs Pepsi).6. Legislation/Regulation: pushing the enactment of laws and regulations that favor you, or restrict your competition is a practice as old a government and provides for a thriving lobby economy at the state and federal level. A similar example is the tactic that government contractors employ to “shape” government procurements in such a way that the specifications of the requirement can only be met by their product or service.
Pro: If you can control the playing field, you can control the game. By enacting legislation (or bid specifications) in such a way as to preclude your competition, you’ve given yourself home-field advantage.
Con: Putting aside the issues of potential corruption, laws and regulations are usually enacted in a particular context to address a specific requirement. But laws and regulations rarely go off the books, and all too often they are applied in ways totally unintended. For a great example, check out Wickard v. Filburn and the Agricultural Adjustment Act of 1938 which was intended to stabilize US wheat prices but is now being used to restrict a variety of activities, including the personal growth of medicinal marijuana in states where such use is allowed.7. Creative Marketing: taking a bit of poetic license when talking about a competitor’s product. In politics, we’d call this a smear campaign.
Pro: Highlighting weaknesses, or shortcomings – especially when documented by others – can be a great way to position your competitor’s product in a dim light.
Con: Nobody likes to be misled or fed partial information, and while spreading Fear, Uncertainty and Doubt is a mainstay part of both business and political culture, in the age of Pervasive Communications, fact checking is available 24×7. Even if your data about a competitor is true, ultimately, the continued use of this approach will be viewed as “dirty politics” and reflect poorly on you, not your competition.SOME THOUGHTS Disruption is a part of nature, and it is no surprise that we see it often in markets. But intentionally trying to create a disruptive strategy carries its share of risk and can take away from the value proposition of a company’s own product and services. In the end, if a company doesn’t focus on their own products and services first, disrupting a competitor won’t add any value as they won’t be in a position to leverage the (often temporary) disruption to their advantage.
Photo of EMI Album by Hans Thijs, Licensed under Creative Commons
In the end, your carefully crafted message goes well beyond your target market and reaches a much larger group of people that you never intended to be part of your audience. If you are trying to build/energize a community, you may find yourself with a mob, on a global scale. #KONY2012 Take the case of the Kony 2012 campaign. It’s a documentary film about Joseph Kony and his Lord’s Liberation Army (if you haven’t seen it, you should). Starting in Northern Uganda, Kony (a man indicted for war crimes by the International Criminal Court) has, over a period close to 30 years, maimed, killed and enslaved children (some put the estimate at 66,000) into military service to support his cause. His reign of terror has moved well beyond the Ugandan borders into the Democratic Republic of Congo, the Central African Republic, and the South Sudan.
“Reaching an audience beyond your intended audience has consequences”
- “That Joseph Kony is known as the World’s Worst War Criminal” and
- “That U.S. and international efforts to stop Kony are bolstered with a more comprehensive strategy for disarmament, demobilization, and reintegration (DDR).”
If an idea, a documentary, or a story has the ability to generate a massive emotional response (either positive or negative), pervasive communications allows it to spread – to go viral -and there isn’t any way to stop it (again, this includes traditional mainstream media, digital/social media and tra-digital media). If the consequences of this viral spread are unanticipated, what begins as a proactive messaging activity can quickly become a reactive damage control operation. What does this mean for cause-based content in the future? Ultimately, it places a much greater responsibility on choosing the “right” channel(s) within our pervasive communications network, as well as crafting messages that are either by their nature self-limiting or have universal appeal. The case could also be made for non-cause (i.e., commercial) content as well – pervasive communications doesn’t discriminate in its ability to impact a message, regardless of media. Either way, what the Kony 2012 phenomenon has shown us is that the rules of content distribution that applied only a few short years ago no longer apply. It is a different world that we live in today, and we’re only just now beginning to understand the rules.
“Content no longer knows or respects borders”
The difference between direct vs indirect influence is like the campfire game – what you tell one person may not be what they tell the next…Indirect influence, on the other hand, is a bit more of a challenge as it involves a third-party (and intermediary influencer of sorts) that the business needs to influence in the hopes that the third-party will in turn influence their target audience. UNDERSTANDING WHO INFLUENCES, AND HOW If we take a look at the different organizations within a typical corporation, we can see how they influence the organization’s customer base. Direct Influence Groups
- Sales directly touches the customer through personal 1:1 interaction. This is the front line, where the influence of a sales strategy & pitch (or even an individual sales rep) can be the most directly measured.
- Marketing touches the customer base en masse (although sub-segmentation usually occurs to a great extent). Their goal is to directly convey a corporate or product image, create demand and literally influence a customer to think about their product or service. Measuring the success, or influence, of a marketing campaign is possible, but not quite as easily as the direct 1:1 interaction of a sales rep.
- Business Development touches organizational partners. When it comes to building partnerships and team-oriented strategies, business development is the functional equivalent of sales – it is almost always a 1:1 pitch and its effect can be immediately measured.
- Customer Service touches existing customers. When the customer has a problem, customer service can not only help resolve issues and answer questions, but can, on a 1:1 basis, help influence how a customer uses a product/service, how they perceive the company in general and, potentially, influence future sales.
- Analyst Relations (AR) involves the process of interacting with, and influencing, industry analysts, who in turn have the ability to influence their clients and followers (your target audience). Measurement of this influence can be difficult.
- Public Relations (PR) targets the press and media (print, online, bloggers, etc.) with the goal of influencing these groups and individuals to share information with, and thus influence, their readers (your target audience). The influence of PR campaigns is often measured by the number of “mentions” a firm has, or by a post-campaign outreach to measure public (potential customer) awareness, or (if the PR campaign is designed to improve the value of a tarnished brand) consumer sentiment.
- Investor Relations (IR) has a similar role to AR, in this case dealing with financial analysts and investment firms with the hopes of shaping a positive image and value proposition about your firm, which they hopefully will share with their clients, resulting in a healthy stock price. Measurement of IR value often (and somewhat unfairly) is measured by stock price or analyst recommendations alone, and not by increases in consumer sentiment or sales (while the financial analysts and investment firms may not directly interact with your target audience, it is hard not to connect the dots between a poor/falling stock price and the reluctance of consumers to purchase your product – nobody today wants to buy from a business that is viewed as financially at risk).
- The C-Suite, who has the ability to make or break a deal, to influence their entire customer base or investor community with a single sentence (think of the power and influence that Steve Jobs has by merely showing up at an event!).
- The Customer – perhaps the most influential group of all, even if they are outside the core corporate structure (a perspective, by the way, that I think is slightly off-base: the customer should *always* be considered part of the complete business organization). Their ability to drive your business should be both welcomed and never underestimated.
All influencers are equal but some influencers are more equal than others…So let me pose a few questions – knowing full well that the answers will vary between industries, markets and economic business cycles…
- Are all business groups equal when it comes to the value of their influence?
- Are certain types of corporate influence more effective in *gaining* new customers?
- Are certain types of corporate influence more effective in *retaining* existing customers?
- With a limited budget, where would you focus your resources in building a strong corporate influence strategy?
- Is it possible for all of the different business groups to effectively work together to form a culture of “fluid corporate influence” that operates as a continuous feedback loop, or are there just too many barriers and silos for this to take place (Bonus points if you can give me an example of a firm that does this today!)?
The evolution of the social check-inThe social check-in has been around since before the days of the pony express – we used the available media to tell our friends and loved ones that we had arrived at a particular destination. We were not only there, but we wanted them to know we were safe. It was a basic, and necessary, part of life as the world expanded around us. But with the arrival of social media, businesses began to realize that the check-in could be something more – it could be entertaining, it could be fun, it could be competitive and it could drive business. Companies like Foursquare, Shopkick and Facebook gamified it, made it competitive and engaging, turning it into something that they hoped would drive their business, or the business of others (check out my post on Gamification and the Gaming of Foursquare for some background on that topic). And to an extent, they were right. Checking-in was Fun! You could check-in to your favorite coffee shop, broadcast it to the world and even get points, perhaps a discount on a cup of coffee or become the Mayor of Anywhere. But what really is the value of being the Mayor of some local hangout? Not much, except perhaps the bragging rights within your own social graph (example: I have a couple of friends who are on a mission to see who can check-in to the most Starbucks).
Most of the people I know check-in to engage with their friends, or to simply let them know what they are doing or where they can be found. Businesses assume that a check-in to their location is an endorsement, that they’ve captured another “potential customer” (a concept that my friend Alan Berkson, @berkson0 of the Intelligist Group, would argue is “so last century”). In fact, I’ve seen more than a few people check-in with comments like “worst service ever” – so perhaps that endorsement isn’t quite as real as many people think (ironically, with Foursquare you can check-in, add a negative comment and still get your points – an interesting way of making YOUR point, especially if you rebroadcast that check-in through other, much larger, social media networks). And it is here, where people are starting to use the social check-in as a statement, as a way to question what they see around them, that I think we are approaching the point where the check-in can become so much more than it is today.
I’m not sure people care about social check-in points or likes as much as they used to.
The 4 components of the new social check-inThe emerging social check-in has four basic components (let’s toss aside points, likes, mayorships, etc. for a moment). They are:
- The personal check-in itself (somebody deciding that they want to check-in to a particular place/event/etc. and share it with their friends),
- The place/event/etc. where the check-in occurs (which could be a fixed location or a time-sensitive event),
- The people within (or in some cases peripheral to) the social graph of the person who will see the check-in, and (most importantly)
- The statement or comment that the check-in conveys to those who see it (the *influence factor* of the check-in).
Let’s check-in to social causesA couple of months ago, I had the opportunity to chat with a few people inside the social check-in space. It was an informal chat that got me thinking about the value of being able to check-in to “social events”, not just businesses. When I came across the “Old Guy” Foursquare check-in, it sparked an interesting thought – we have the opportunity put real meaning behind check-ins. Consider the following:
- Checking into “certified” Social Events would be a good thing. With most check-in tools, you can create your own locations, so setting up a location for a charity event is possible, but it isn’t necessarily time sensitive and doesn’t necessarily mean that the event is an actual charity (social good) event. I think we can improve on this.
- Checking into a Social Event *remotely* (to show support for the cause) would be an even better thing. Call it a “like” or a “support” – but letting people express their backing for an event – while it is taking place – is something I consider worthwhile.
- Checking into a Social Event (either on site or remotely) and being able to *donate via PayPal* would be a great thing. You’ve got my attention, you’ve got my support, why not give me the opportunity to contribute?
For an out-of-the-box insight on the whole notion of generational check-ins and the impact of pervasive social connectivity, check out Alan Berkson’s excellent post Turn On, Check In, Hang Out!Photo courtesy of Travis Nep Smith
- The Introduction: Sometimes finding the right analyst, or getting in front of the right analyst, can be a challenge. This can be difficult in situations where a firm is moving into a new market sector (product and/or geographic) and may not be familiar with the most appropriate information analysts to reach (think of a US firm trying to move into ASIA/PAC as an example). Using an outside resource (an agency, advisor or perhaps even another industry analyst) to help find the right “connected” or “influencial” person can be extremely effective.
- The Event: Outsourcing clearly makes sense whenever the word “event” is involved. In fact, the bigger or more important the event, the more outsourcing becomes a viable option (especially for a staff-constrained AR team). Much of the event coordination and publicity can (and should be) handled by hired guns (working under your direction, of course) and free up an AR pros time for more 1:1 analyst “relationship building” activities. This is also a great opportunity to involve PR and Marketing (see below).
- The Startup: For firms that are just entering into the market, the ability to recruit – and pay for – a quality AR team may simply be beyond their means (CAPEX vs OPEX in a manner of speaking). In this situation, outsourcing the entire AR function to an outside “professional” team, under the control of a “C”-level or Senior “R”-level person my be the most cost-effective approach (especially if the level of work activity will fluctuate considerably over the first year or two).
“my B2B had become a B Not 2 B”And after 9 months of chasing every lead, every opportunity, meeting at every trade show, and even managing to get their staff to do a side-by-side product comparison, I was left with absolutely nothing. No sale. No opportunity. Nothing.
Nothing, that is, except the realization that I had started my task without one necessary key bit of information: the name of the actual “influencer” who could make such a deal a reality. For lack of this name, my B2B had become a B Not 2 B. In this case, it turned out that the influencer was the head of operations for a single customer of my target, a customer that had such a significant installed base that when my target inquired about their willingness to introduce a new product (mine) into their network, they informed my target that while they were not totally happy with the existing product mix, they saw no value in adding a new, potentially disruptive, component into their network, even if it was smaller and less expensive. It had nothing to do with price or features and everything to do with mitigation of risk and not having to retrain their internal staff on a network that was “doing just fine”. Had I known this to begin with, I would have found a way to “influence” my target’s actual customer directly. It may have worked, or it may not have. But I do know that my chances of success would have increased considerably (and yes, I do think I could have closed the deal). In the years since, the lesson I learned has driven my business decisions in every single venture I’ve started: if you identify the key influencer any deal, and get them to buy into your product or concept before your actual market pitch to the target buyer, your chances of success increases significantly (your time to sale can decrease as well). As a side note, one other lesson I’ve learned is that if you can’t convince the influencer (especially if it is your target’s customer) of your value, it’s sometimes, but not always, better to factor in the opportunity cost and find a better prospect. Flash forward to today and the era of social marketing and the ever increasing pace of technology and product development. It’s more important than ever to understand how each individual deal is influenced, and who is involved as they key influencer, which can differ extremely on a case-by-case basis. It may be a person within the business you are targeting, or it may be consultant, advisor or industry analyst. Or, like my first experience, it may be a customer of your target (or a collective group of customers) who in turn may be influenced by their own C2C communications or consultants, advisors and industry analysts (industry analysts, btw, are my favorite starting point, since a really good analyst will know who the consultants and advisors are working with, as well as the requirements of both vendors and consumers in any given market). The real challenge today is in identifying the real influencer(s), as the number and type of people who can influence a B2B (or B2C) deal has grown tremendously (as has the speed with which, in the era of social networking , a deal can be influenced one way or another). As a result, an increased number of purchasing/partnership deals that are not totally internally driven involve more than one outside “influencer” – a trend that mirrors both uncertainty in the consumer space as well as the fragmentation of the consultant/advisor/analyst space. To counter this, we see a strong requirement for an increased level of cross-domain collaboration within businesses, involving marketing, public relations, analyst relations and even customer support being required to correctly identify and target the influencer in any B2B or B2C marketing or sales strategy. So although the technologies and markets may have changed, the “influencer” axiom, which has been around since the first bartered exchange in human history, applies today more than ever, and is one of the first questions I always ask myself before beginning any business effort. And if this question isn’t one of the first questions you ask, it should be.