Right Regulation. Wrong Iceberg.

•April 24, 2012 • 1 Comment

One of the more amazing things about the 100th anniversary of the sinking of the Titanic is the amount of continued research and speculation about what  happened that night. Evidence cites that the original number of lifeboats was reduced from 48 – more than enough to handle the entire group of passengers and crew – to 20. It has been suggested that the owners of the ship intentionally put too few lifeboats aboard so that the aesthetics of the main deck would not be obstructed, or because more lifeboats would be overly expensive. Neither supposition is accurate.

The truth is both sadder and more mundane. Rapidly sinking ships were rare by the early 20th century. In almost every situation, other ships had time to reach a stricken vessel before it went under. The lifeboats on the Titanic had more than enough capacity to make repeat trips until all the survivors were safe.

The Titanic met every safety standard of the day. It followed every regulation. And yet, those regulations clearly assumed that what had worked for the past several decades would continue to work, even as passenger vessels grew increasingly larger. The Titanic didn’t have enough lifeboats because it carried what the regulations told the shipping company it needed to. And that turned out to be a tragic miscalculation.

Our current political leaders could learn something from the big ship going down. The Republicans are quite right in saying that we’ve got too many nonsensical regulations that make it unnecessarily complicated to run a business. At the same time, the Democrats are equally correct when they point out that businesses have proven, again and again, that they can’t be trusted to act fairly and responsible without some degree of regulatory oversight.

This constant back-and-forth doesn’t help anyone. It reminds me of a networking meeting I attended several years ago. The speaker was from the Federal Reserve. Someone asked him whose position on medical insurance reform the Fed preferred — that of the Republicans or the Democrats. The gentleman responded with a sly smile, and said the unofficial position was that the professionals wished that the honorable Senators and Representatives would just go home for a while.

His point was that businesses hate uncertainty. When politics are as polarized as they are now, one party rams through an agenda. Several years later, the other party undoes it. Businesses hardly have time to adjust to one set of rules before another takes its place. And so businesses pull back. They slow down investment.  They reduce hiring. They wait for the dust to settle.

Today, we argue. Polemic takes the place of policy. And progress is very hard to achieve. Thomas Friedman of The New York Times calls it a “vetocracy” — in which government shifts from the art of the possible to us-against-them, no retreat, no surrender. It’s more important to win, or at least be ideologically pure, then to actually get anything done. And so the country drifts, without any consistent guidance.

Our leadership is looking backwards for inspiration, not forwards. They’re like those regulators applying smaller vessel lifeboat regulations to the Titanic. It’s not whether regulations are good or bad. It’s that no one really thinks about which regulations are appropriate for the task, or how and when to measure their effectiveness.

Politics have trumped statesmanship and civic responsibility. It’s all about ego and winning, about destroying the other side rather than finding a middle and moving us forwards. While the politicians are fighting over who gets to steer the ship, the rest of us are noticing that the icebergs are floating closer and closer. And it’s not a very comforting feeling.

For more information on lifeboats and the Titanic, check out this article in a recent edition of The Wall Street Journal: http://on.wsj.com/IxIARU.

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Do Corporations Have Habits?

•April 1, 2012 • Leave a Comment

I was listening to an interview on Fresh Air the other day (http://n.pr/HcPCYy) about how habits are formed, and how they affect the behaviors we exhibit, the choices we make and the things that we buy. The guest was Charles Duhigg, author of “The Power of Habit: Why We Do What We Do in Life and Business” (http://amzn.to/Hy6KgR). Although he was talking about individual behavior, it occurred to me that there may be some lessons in his findings that we B2B marketers can use in our professional lives.

Duhigg detailed new research showing that when someone follows a habit, there are three components – the trigger, the response and the reward. We tend to understand the response, but rarely the trigger or the reward.

For example, you may go to the break room every afternoon at 3:30 for a cookie. You might think you go because you’re hungry. However, the real trigger is that the afternoon is the longest stretch you work without a break, and you want to socialize with coworkers. The reward is interaction with other people and getting to move about for a bit. If you want to lose a little weight, recognize the difference, drop the cookie and focus on the socialization.

Habits change most easily during life cycle events. CPG companies and retailers target college students, recent graduates, and pregnant women because those life stages are when people are most receptive to new approaches and new brands. It’s a very exact science. People who buy new homes change coffees. Recently divorced people drink different beer.

Since organizations are made up of people, it’s reasonable to assume that companies and government agencies operate similarly at some level. That leads to three questions for us B2B marketers: what are these triggers for our prospects at both the corporate and individual level, when do those corporate life cycle events take place and how can we shorten our sales cycle by better identifying and taking advantage of them? More to the point — can we exploit these triggers to give us an advantage when selling into organizations with robust and highly formalized purchasing processes?

I work for a technology company. We might want to build marketing campaigns around unconventional triggers, such as our prospects’ fiscal years. The goal would be to launch a new campaign 4-5 months before their fiscal year begins, when budget discussions are at their most open. Or we might build a list of purchasers and influencers at F500 companies, check on a regular basis to see when there’s changeover in key personnel and target influencers and decision makers who have just stepped into new roles. In some cases, it might be as simple as identifying which companies see technology as a competitive differentiator and allocate 20% or more of their revenues to IT.

There must be other triggers that open doors and create opportunities outside structured purchasing processes. Likewise, these triggers should carry rewards that have something unique or unexpected about them. For example, a new purchaser or influencer might be willing to purchase a rapid deployment/service-based version of our software. We make a small sale, and our new champion gets an independent, third-party snapshot on financial performance in the area that he/she now runs. It’s a great opener to demonstrate value and create the opportunity for a more substantial sale in the next budget cycle.

I’m interested if anyone else has build marketing programs along these lines. Any comments, thoughts and experiences are most welcome.

Back Talk

•March 26, 2012 • Leave a Comment

On March 20, the Boss blog on NYTimes.com ran a post titled, “Why it’s sometimes OK to bad-mouth an old boss (http://nyti.ms/GAvfqy).” The genesis of the post was Greg Smith’s incendiary departure from Goldman Sachs, and Smith’s blistering op-ed piece in The New York Times that accompanied his resignation.

The poster is Jay Golz, a business owner in Chicago. His point is that Smith should be appreciated for what he did, not condemned or blackballed. Something was wrong within Goldman Sachs. Smith put his neck and career on the line to try to fix it. And yet, he’s now considered something of a pariah.

Golz goes on to discuss how corporate culture increasingly values loyalty to a fault, even when it leads to disaster. In his businesses, it makes it very frustrating when he’s hiring because he rarely gets to engage in true dialogue when interviewing applicants. He doesn’t want employees who can’t advocate for themselves, or who are too timid to stand by their convictions. Without that drive, his businesses can’t succeed. And yet, when he asks why people want to leave where they are and come work for him, all he gets are platitudes and evasions.

Golz believes that he needs honest discussions to help him separate talent from the malcontent and the lazy. Yet, many people he interviews are either coached to avoid negativity, or are too scared and desperate for a job to risk anything that might cast a damaging light on the interview.

I understand that feeling, having recently endured a long unemployment streak myself. I work in a specialized area, in an industry and city where the community is small and word travels fast. If I bad-mouth a boss or employer, it will likely make its way back.

And yet, I learned that I couldn’t afford to not be honest and open about my motivations for changing jobs. The trick is to do so in a way is positive, or at least objective, in terms of how the situation transpired, what both sides learned from it and how the experience has made me a better manager. It’s quite possible to point out what happened without trashing anyone unnecessarily.

There’s another advantage to being upbeat but honest in these situations. If you’re interviewing me, I’m interviewing you, too. I’m not going to leave one less than ideal situation just to find the same thing somewhere else. I know when you’re pushing me, playing mind games or trying to get something for nothing. And it tells me a lot about what it might be like to work there.

Golz has a point. Too many applicants and interviewers fall back on platitudes, evasions and half-truths. Too many managers look for potential employees who aren’t going to embarrass them. That’s shouldn’t be the basis for anyone to build a business or a career.

Southwest Gone South

•March 17, 2012 • Leave a Comment

So it turns out the biggest benefactor of AirTran being swallowed by Southwest is… Delta? Say what? Delta now has Southwest, the biggest, most aggressive of the discount airlines operating a major hub out of Delta’s home town.

In a normal world, yes. But Southwest has made this situation anything but normal.

Southwest has failed to take AirTran’s corporate and customer culture into account. AirTran had a very popular business class and an inexpensive upgrade program for anyone wishing to escape coach. They had an aggressive frequent flyer program. Their customer service was smooth and efficient. Their fares were excellent. They served smaller cities and airports.

AirTran met regularly with their most loyal customers to get feedback on how to be better. They often put those suggestions into practice, farther cementing the loyalty of their customers. When a friend, one of the airline’s top frequent fliers, named his dog AirTran, the dog was given free flights for life.

Southwest ran roughshod over all of these “soft” but important considerations. On routes that both airlines fly, Southwest is almost always more expensive. Their Web site is much more complex to understand and use. Flights to smaller cities and airports are disappearing.

Southwest met repeatedly with AirTran’s top customers as part of the merger. Then Southwest ignored them. Business class will slowly disappear. So will AirTran’s frequent flyer program. AirTran’s cheap stand-by flights for students were discontinued without notice – the website makes it look like the program is still in existence. My son discovered this at the airport. Southwest’s solution was to offer him a last-minute fare at triple the normal price.

Southwest has spent a lot of money on AirTran, only to give customers in AirTran’s biggest market incentive to toss loyalty out the window and fly the competition. Delta gets to look great by comparison. That’s ironic, since Delta has earned its reputation for customer dissatisfaction over the last decade. All Delta has to do now is match some fares. They don’t actually have to do anything better. It’s enough to not be Southwest.

Southwest needs to spend a little less advertising that it’s consumer friendly and a little more learning how to actually be responsive to their customers. There’s more to it than letting bags fly free or not having change fees. AirTran could have taught them much, if they’d been willing to listen.

In the meantime, we’ve started flying Delta again. That’s something that wouldn’t have happened if Southwest had been smarter – and we’re not the only customers making that decision.

When Good Is The Enemy of Great

•March 8, 2011 • Leave a Comment

What happens when the big, obvious technology problems have all been solved? Have they – really? Or have we become so cautious that we’re killing the next big thing before it has a chance?

I’ve been thinking about these challenges a lot lately. It started at my last corporate stop. We introduced a new Internet security technology into a saturated market, with little awareness of the specific threat our technology protected against. We had no direct competitor to validate the market. And we had no name recognition among our staff within the industry to accelerate thought leadership.

We made it work, but it wasn’t easy. It took some seriously unconventional thinking to get people to listen to our story. Then we coupled the messaging strategy with basic marketing blocking-and-tackling accelerated to warp speed, so it looked like we were much larger and more sophisticated than we really were.

These days, I’m in touch with three companies who all face similar issues, albeit from very different perspectives. The first is a cloud-based CRM service. It’s less expensive than Salesforce.com, easier to use and simpler to customize. The developers work closely with each customer to make every engagement a success.

And yet, businesses buy into Salesforce.com whether it fits their operational model or not. Customers who actually discover this little CRM gem love it – but getting the word out and into a receptive ear is extremely difficult. Word of mouth helps, but only goes so far. Too many companies see that Salesforce.com is big, therefore it must be the best, and therefore it must be right for them. Add in a large – and expensive – ecosystem of consultants and add-ons, and the safe solution becomes very seductive. Even if it’s not the best or most cost-efficient option available.

The second company has a dashboard that measures the performance of social media efforts such as blogs, tweets, Facebook posts and LinkedIn posts across the Internet. Their technology provides key performance indicators that make it relatively simple to link social media activity to specific marketing campaigns – and extend traditional marketing metrics such as ROI, leads generated or leads converted into the social media realm.

Their service is fast, responsive, accurate, easy to use and simple to configure and/or customize. It should be a slam-dunk in the marketplace. However, there are many other products and services purporting to do the same thing. I’ve asked several contacts within this company’s target market their opinion on the service, and the answer is concise and consistent – it may be the greatest thing out there, but there’s so much other social media stuff knocking on my door every day that I just don’t have the time to look at it.

Finally, the third company uses existing investments in Outlook and Exchange to help end users run more effective meetings – and for managers to be able to measure whether their staff use meeting time efficiently or not. It’s a sophisticated system, but very intuitive. The key performance indicators are easy to understand. And the benefits are straight forward to quantify, based on the cost of time wasted in meetings that fail to achieve their objective, run far longer or shorter than intended, or lack proper follow up for action items that come out of discussion.

The challenge here is that only a small number of people within a small number of organizations realize that meetings don’t have to be inefficient. More typically, people assume that they know how to run a great meeting – even if they don’t. So the sweet spot for this company is the huge number of organizations that run poor meetings but are unaware of their lack of productivity. It’s a tough nut to crack.

All three of these companies solve smaller problems very, very well. All three are run by smart people who are acutely aware of the challenges they face. All three need marketing assistance. And yet, all three have found that most agencies and marketing professionals only know how to support established brands – or only want to back guaranteed winners in a down economy. And so they’re left to “bootstrap” as best they can.

It makes one wonder if Steve Jobs and Steve Wozniak tried starting Apple from a garage today, would they ever get noticed. I have my doubts.

In baseball, home runs are exciting. But the best teams win through lots of singles, too. So why are investors, marketers, analysts, journalists, bloggers and the like so unwilling to support the little guys with the cool dreams?

It’s easy to back the proven entrepreneur or the second/third/fourth entry into a market. It takes guts to back the smaller solution that expands what used to be disruptive or the unproven idea that might be the next big thing. If all we look for are home runs, then we’re leaving an awful lot of potentially successful business behind.

Lost in The Toys

•February 15, 2011 • Leave a Comment

We marketers have so many great tools these days. CRM solutions. Sales and marketing automation platforms. Social media. SEO. AdWords. The list goes on and on – and grows seemingly overnight.

And yet, sometimes it’s the simple things that work best. Take the challenge facing a friend of mine. He’s a terrific CPA (and well worth your business – send me an email and I’ll put you in touch with him). But there are hundreds upon hundreds of CPAs in Atlanta. They are all licensed, and so at least minimally competent.

What can his firm do to stand out in a very large crowd?

Over the years, we’ve had a wide range of conversations over how to generate new business without spending a small fortune in the process. He’s tried Yellow Pages ads, magazine ads, Google AdWords, specialty Web sites – pretty much every tool in the marketer’s arsenal that’s appropriate for a small business.

After all of those efforts, guess what works best? It’s not the fancy stuff or the shiny new toys. It’s something simple, basic and too-often overlooked.

Positive recommendations.

That’s right. Facebook “likes,” positive reviews on kudzu.com, Yahoo! Local and Google Places and direct references via Facebook and LinkedIn have been his most effective means to win new customers.

My friend’s firm delivers quality and value. They back their work. Their customers are long-term and loyal. In the end, that’s what people want when they choose their accountant and financial planner. In spite of all that technology rolling around out there, it’s personal, independent validation of just how good he and his firm are that drives more business than anything else.

There are lessons here for bigger businesses. It’s so easy to get caught up in the magic of marketing over the Internet. It’s so simple to deploy weapons of mass demand generation, micro-focus on target audiences, measure every last piece of response. And yet, at the end of the day, it’s the personal connection that often is the primary driver for making the sale.

Consider the challenge from another perspective. My daughter is a marketer’s nightmare. She absolutely hates any sort of push communications. She doesn’t like it when she buys something and then gets hit with an ongoing series of ads, emails and flyers for related products and services. Spam and mass email marketing drive her nuts. She keeps her email list and contacts on her phone to a select, close few.

Why? Because she’s growing up in a world where it’s more important to filter information than to seek out and find it. With all the audio and video noise bombarding her every day, she’s decided to take control of the data flow by cutting out as much of it as possible. And her primary criteria for what she is willing to look at come from personal recommendations – friends and family.

The Yellow Pages publishers had a motto many years ago – Reach Out and Touch Someone. It’s a good maxim for us marketers to follow. We need to remember that we’re talking to people, not demographics or targets or any other impersonal abstraction. Somebody has a need. They want the problem to go away. They want to be treated fairly. They want to receive good value. Making that connection is harder work than monitoring data on CRM software dashboards, but it’s also where the true payoff begins.

Where Are The Kids?

•September 10, 2010 • Leave a Comment

I’ve noticed something odd in our subdivision. The kids are disappearing. When we moved in 11 years ago, this place was over-run with school-age offspring. Every morning, they’d be everywhere waiting for the bus. Every afternoon, hordes of them would wander home. The pools were packed with kids. But now – not that many, and fewer every year.

It’s a big subdivision. We have over 2200 housing units. We even have our own elementary school. More and more kids are being bussed into that school from other parts of our town. I don’t think it’s any sort of socio-economic redistribution. I think it’s because we don’t have enough kids here to fill it up. It’s weird.

Our neighborhood was built in the early ’70s. Over time, it’s developed a robust cycle. People move in when they have kids. The move out when their kids move on. There are a few grey beards that stayed, and even fewer where the kids moved back and three generations now share a house. For the most part, however, turnover has been the norm.

Maybe that’s changing. The collapse of the housing market has made it harder for people to get credit to buy a house, or for sellers to recoup sufficient value to justify selling a house. We used to see dozens of “For Sale” signs all over the neighborhood every spring and summer. Now, there’s only a few. They take many months to move.

I think it’s going to take a long time for the real estate to recover. When it does, buying habits and expectations will have shifted to meet the “new” normal that we’re all adjusting to. What that means for subdivisions like ours may not be so wonderful.

Right now, young families have a couple of options. If they have the money, they can move intown. I am constantly surprised by the number of kids in Midtown, living in mid-rise apartments and condos. It’s brought a great vitality to the city. It also takes serious money.

So what happens to the people who used to buy out where we are – the close-in suburbs? Right now, they can’t afford us. They might rent an apartment elsewhere in the area. More likely, they’re moving farther and farther out into the exurbs. That’s where housing is cheapest. And so our neighborhood gets greyer, and those of us who will want to downsize when our kids leave for college will be stuck with big houses we’ll no longer need.

There’s a hidden cost here that I haven’t heard any of the economists and housing sector experts address. The more younger people buy way out there, the fewer houses that sell closer in. More and more people have to drive longer distances, since jobs are scarce and public transportation down here is embarrassingly underdeveloped. Poor regional resource planning (water, zoning, political balkanization) only accelerates the trend.

In short, the housing market’s woes are a bad mix for our laissez faire attitude towards growth down here. It’s causing problems as we struggle to restore growth to the area. It’ll cause even more problems when the economy recovers.

Maybe it’ll all balance out. People will get tired of the long drives and start looking for houses closer in. Eventually. By then, those of us already here may have paid down our mortgages sufficiently to get at least a little return on our investments. But it’s going to take time. In the meantime, there are fewer and fewer kids in the neighborhood. It’s too quiet out there. Way too quiet.