Do you “over-welcome” your new employees?

A story of a CEO attuned to creating great company culture.

A CEO friend of mine who managed her one-hundred-person remote workforce as a virtual company told me her story of how she welcomed new employees as she grew her firm.  Strike that. She over-welcomed her new employees.

Preparing for the new employee

Days before the official start date, she made sure that the new employee’s business cards arrived in the mail, that the employee’s phone and Internet services were up and running, and that an email account was already established.  But many of us do that, maybe not so timely.

Then she topped her explanation with: “A few days before the start, a package arrived from us at the employee’s home with a welcome letter, a copy of the CEOs book, and a giant fortune cookie, with the fortune cookie message streamer clearly visible.”

“You will be successful at our company!” the fortune stated.

One pleasant surprise after another

What a great touch – especially for someone expected to be self-motivated enough to work long hours from home, to get to know fellow employees through Zoom, Slack or Teams, and texting, and to be productive immediately when hitting the ground.

The benefits of hitting the ground running.

[Email readers, continue here…]   It started me thinking.  How many days or weeks or even months do we expect a new employee to take in becoming acclimated to our company and its culture, to the marketplace, and to our ways of doing business?  For example, most of us expect a salesperson to be truly productive only after about six months of building a territory or client base.  But isn’t there a better way to approach this expensive process of acclimation?

Special considerations for salespeople

For a salesperson, how about paying an override commission to another salesperson for a short period to help find and close new business? Or how about helping the employee gain confidence by handing the first several accounts to the new person ready to close?  How about assigning a big brother or sister to each new employee to show them the culture and process?  How about teaching a class in corporate culture yourself to one or more new employees?  Some of us have done one or more of these things.  But what could we have done better to launch a new employee successfully?

The outcome from “over-welcoming”

My CEO friend created a great company with a culture so strong, every single employee was able to work from their home, wherever in the world it might be, and contribute at the highest level to the success of the enterprise.  And oh, yes, she sold her company recently for a tidy sum to a buyer anxious to spread such enviable practices throughout the parent organization.

So, considering the benefits, maybe we should start with a surprise fortune cookie with a personal welcome message.

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Posted in Depending upon others, Surrounding yourself with talent | Leave a comment

Six ways to make your site-app-product go viral.

It doesn’t happen by accident.  Not every new game-related site is a Steam, and surely not every social network is a Facebook. And not every texting application is a Twitter.

A story of an app from nowhere to near dominance

Then how did Discord “suddenly” become so hot that even Microsoft was rumored to want to buy it for staggering amount?  Discord is a great example of a company going viral mostly from word of mouth.  From its start in 2015, the number of registered users has “suddenly” climbed from 45 million in 2017 to a reported 300 million by the end of 2020.   That compares with a reported 330 million for Twitter which had a nine-year head start and so much more free press from famous users over the years.

Soon, Discord could become dominant, even before an entire generation of millennials even knows the name.  How has this happened, and are there lessons for us in this?

How do you make your product go viral?

What are the elements needed to focus upon in making the attempt to take a product viral?  Intrigued by the thought, I recently made a list. It was as much in reaction to my getting blank stares from entrepreneurs when I asked the above question as it was for me to better understand the problem itself.

Here is my list.

First: Planning. Retail or end user web sites aren’t even noticed  by potential users or customers without being discovered through a real marketing program, aimed at finding the flywheel effect (the moment of going viral that makes all the difference between failure and success.) In today’s world of social marketing, it takes someone knowledgeable if not expert in understanding how to use available resources in promotion and marketing.  Some apps, like Discord, attach a brand link to the bottom of each message so that every recipient can click upon the link and become a user of the product without further marketing by the company.  So, the lesson is: always find a way to make a second-generation recipient or buyer a future raving fan.

[Email readers, continue here…]   Second: channels.  I was chairman of a company that distributed its product through over one hundred fifty retail Internet travel channels, all websites where someone else spent the money attracting their users and attempting to go viral. We could not have begun to reach a fraction of that audience with any amount of money if we did not reach through these channels.  Sometimes, it is just the right idea to brand your product inside that of a known presence.

Third: cost. Even a great marketing plan to gain an audience fails if there is not enough money to prime the pump and start the flywheel effect moving.  And of course, that could easily require a large amount, far beyond the capability of a small company looking for its initial audience. And yet, word of mouth sometimes is all that is needed. Google became an overnight industry standard for search strictly by word of mouth, never spending a dime on advertising in its early years. Marketing cost is not the best measure of success. Accurate targeting measured by acceptance is more important, even if the cost is near nil.

Fourth: measurement. If you can’t measure the results of your attempts to gain a viral response, how can you know when to focus upon reinforcing or changing the effort?  Well-tuned metrics are an absolute must. And the tools for most are available, sometimes free, for the educated marketer.  You cannot be successful if you cannot measure the results of your effort.

Fifth: reactionIf everything goes right in finding the right plan, channel, cost, and measure of success, and if you do nothing to reinforce the success or change the focus, the rest of the effort can easily die a slow death.  Respond to positive niche adoption with increased focus upon those niches.

And sixth: the pivot.  A reaction is not often enough. Many times, it takes an intelligent repositioning of the entire offering to try again with revised ideas based upon learned experience.   And, like the story of Discord and Twitter, it takes continual product and feature updates to stay ahead of the competition or overtake a sleepy competitor.  A pivot or product enhancement in reaction to user or customer comments will advance your chances of success.

It is a cycle that must be learned and followed to successfully maximize an opportunity in any industry and for any product or brand.  So, where in that cycle are you today?

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Posted in Finding your ideal niche, Positioning | 1 Comment

When to pivot from your original plan?

Plans do not often work as devised. 

We are not always smart about the market or the product.  We may miss the context of the times and come to market too soon or too late. We might not have researched the market diligently or used a focus group or other market research.  Well, the good news is that great teams are not bound by their original product or marketing plan.  Greatness finds one definition in management’s ability to “pivot,” or change the plan in reaction to its early response from the marketplace.

How do investors usually react to a pivot?

Investors most often celebrate teams that quickly find flaws in the original plan and reallocate resources in another direction before more wasted resources.  Even the term, pivot, seems to call up images of a light-footed dancer able to move so very quickly in any direction.

My story of a great pivot

My favorite example of a world class pivot comes from the CEO and board of one of my most successful investments.  Green Dot Corporation was formed by an entrepreneur in the year 2001 to create a product to permit those without credit cards to purchase items on the Internet.  Think of it:  to shop on the web, you must have a card, not a nine- digit routing and bank account number.  The young, inexperienced entrepreneur had two assets that attracted me – rights to use the MasterCard name on this new product, and a laser focus to make this work in any form possible.

Early market experience can cause a need to pivot

[Email readers, continue here…]   Over the years, the original vision changed dramatically several times as the world’s first debit cards were invented by the firm, positioning the card to be used by the un-bankable, those unable to obtain credit cards or in some cases even checking accounts.  The firm grew to dominate its new field, create an infrastructure to allow any of its current 100,000 retail stores to simple activate or load the card with money from any cash register.  It replaced Western Union as the preferred way to send money across great distances.  And it built a billion-dollar market and then some – where the original vision and plan might have restricted the then-small company to a tiny percentage of that.

And we who held early stock celebrated together the ringing of the NYSE opening bell the day that often-pivoting company went public.

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Posted in Finding your ideal niche, Growth!, Positioning | 1 Comment

Switching costs: A competitive advantage?

We know that one of the ways we hold onto our customers is if there are high switching costs to move away to a competitor.  But how about the other side of the coin?  Do you have an estimate of the cost for a potential customer to switch to your side?  And are you prepared to help with concessions if needed?

Here’s important homework for your marketing effort.

Know the cost to move from your existing platform and estimate the switching costs for moving from a competitor’s product or service to yours.  Offer incentives to existing customers to stay, and for competitor’s customers to switch.  Protect your base with incentives to stay that are intangible – such as membership in an insider’s club, access to special deals not available to others, and attention from the executives at the top.

The costs of replacing a lost customer

The momentum from an old decision that took lots of effort to implement is worth something to a marketing professional.  To keep an existing customer, even if by offering discounts, is much less expensive than the cost of attracting a new one.  To reduce switching cost from a competitor is to lower the barriers to a quick decision that might have been otherwise much harder to make.

Consider increasing the cost of your customer’s switching

Increase the barriers to your customer’s switching, not just with excellent service, but with some form of personal touch.  Recognizing a longstanding customer with an appropriate gesture from the top is best of all.

A personal story to illustrate the point

[Email readers, continue here…]   Recently, I received a hand-written letter from two co-CEOs of a company I had helped with a few hours of time.  They accompanied the letter with a customized gift of their product that contained the logo and name of the college where they knew I was a trustee.

First, I have not received a hand-written letter other than a greeting card from any business associate in what feels like decades.  I was in such shock, I did not respond in kind.  What to do?  Pull out a piece of stationery that had been sitting unused for over a decade and write in longhand?  You aren’t supposed to respond using a less personal vehicle than the original one. So, email was out. A phone call might have done it, but not with the elegance of the original correspondence.  Now, every time I turn from my desk to the credenza behind, I see that letter and gift.  I am not willing to just file the letter or put the gift on the shelf.  That’s the power of a great outreach from the top.

The lesson from extraordinary effort

And that is a lesson for all of us in marketing.  Find the right way to reach existing customers that stands out from the usual.  Find an offer that makes switching easy for others. Pay attention to opportunities to differentiate yourself from the rest.

Someday I will file the letter and put away the customized gift.  In the meantime, those two guys got many more miles from a relatively simple gesture than I would have thought possible.

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Posted in Growth!, Positioning | 1 Comment

Entrepreneurism is all about personal risk.

Well, of course it is.  So, let’s dig a bit deeper. Sometimes, you can reduce your personal risk by taking in other people’s money in various ways, perhaps starting with a consulting contract with a customer, purchasing a going business where profit or loss is known, or spinning off an existing revenue-generating portion of an existing business.

But the risks don’t stop there

Even using one of the strategies just mentioned, the risks of having enough cash to fund daily operations or growth can be daunting.  The same is true about marketing. If you don’t directly engage the potential customer at the right time, place and mood, you are at a disadvantage from the start.  There are too many competitors for a customer’s time and money to make an error in your approach and offer.

Here’s the ultimate thing about entrepreneurism

If you don’t choose to enter the fight, it is impossible to win it.   And entering the fight without the proper resources usually assures defeat.  Resources such as money, experience, statistics about your target, experienced marketing and sales talent, and especially a compelling need and attractive product are all important to the ultimate success of an enterprise.

So, ask yourself:  Are you ready to enter the fight?  Do you have the resources necessary to at least give you a chance to win?  If not, what do you need to do so, and how can you get those resources?

Then there is the risk of underestimating time and money

[Email readers, continue here…]  I am often surprised at the inexperienced executive’s estimates of time to breakeven for a product or a company, about the time and cost to market, about the expense in overhead needed to stay in the game.   Most of all, I am surprised at that typical person’s inexperience in the marketing arena and understanding of the importance of marketing to the success of the product.

Research the market before allocating resources

You may have all the other ingredients. But without an excellent marketing plan and a way to execute upon that plan, the best product and the most cash reserves won’t bring in the customers.  Since great marketing means addressing the wants and needs of the customer, about distancing the product from any competitor, about getting the message out to the most people possible, you’ve got to commit resources and energy to the fight in order to have a chance to win it.

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Posted in General | 3 Comments

Your “drop dead” question for a customer survey

Here’s the question:

Sean Ellis, the marketing guru behind DropBox and other successes, advises clients that “The most important question on a survey is, ‘How would you feel if you could no longer use this product?’”  He goes on to quantify the response.  If more than forty percent of the respondents say they would be “very disappointed,” then the product should go viral and be a great success.  Conversely, if less than ten percent say this, those companies or products would have a hard time getting traction in the marketplace.

Why it’s a great question

What a great test.  It reminds us that our customers, especially early adapters, must want to continue to use our products to the extent that they “would be very disappointed” if unable to do so in the future.

Other question for a great survey

What other questions could we wrap around this critical one to form a great survey that is both short enough and powerful enough to be relevant to our marketing effort, let along our R&D and production efforts?

Using Sean again as a source, we might ask: “How did you discover our company?” and provide several checkbox answers, including ‘friend or colleague.’  Again, it is a sign of a viral marketing effort to get more than forty percent checking that box.  Then “Have you recommended our company to anyone?”  Use just ‘yes’ and ‘no’ as possible answers and look for more than fifty percent ‘yes’ responses.

…and the closing question for your survey

[Email readers, continue here…]   And there is always the great open-door question: “Would it be OK if we followed up by email to request a clarification to one or more of your responses?”  If more than fifty percent say “yes” you have a real hit on your hands.  It means you can use this respondent as a resource for case studies and marketing quotes in the future.

Keep your survey very short to insure many responses.  But do include at least one specific question about your product to be sure the respondent is an actual customer.

A final word: Other kinds of surveys

Most of us know of the “net promoter score” which is the ultimate survey.  One question. “On a scale of zero to ten, how likely are you to recommend our business to a friend or colleague?”  You’ll find more about this with a simple search.

Then there are the long surveys where you could attempt to find more about satisfaction with service, delivery time, quality of product, packaging and more.  You’ll soon find that the more questions you ask, the fewer responses you receive. The fact is that most of us will jump out of such a survey after seeing more than three or four short questions.

Which brings us back to the “drop dead” question and short survey we’ve outlines above. Be careful, short and focus only upon the most important question(s) to get the most responses and best answers.  Good luck!

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Posted in Positioning | Leave a comment

Do you really want to be the first to market?

My stories of missing the context of the times

Over the years, as I managed my several computer companies as CEO or executive chairman, I made the decision to go to market with a brand-new product that had never before been exposed to my customer’s marketplace.  In each case, after overwhelming publicity, certainly noticed by a great number of potential decision makers, and after record-breaking sessions at industry trade shows to introduce these to the potential buyers, the products failed in the marketplace.

Artificial intelligence thirty-four years ago

I recall the introduction of artificial intelligence into the hotel reservation process, a “one-up” on the airline method of yield managing the price of airplane seats.  With the cover story in the industry trade journal, record-breaking overflow education sessions at the international trade show, and even glowing reports from the first hotel user’s management, the product failed to attract more than two customers and had to be withdrawn from the market, even though it was an unqualified success for the first users. 

Changing the rules to fit the market

 As a side note, we returned to market with the application as a software-only product without artificial intelligence and without some features, reduced the price from $150,000 to $8,000, and had a subsequent hit on our hands.

In another instance, we introduced the first kiosks for hotel lobby check-in.  They were large, a bit clumsy looking, and gathered cobwebs in the lobbies of some great hotels.

“Do you have the resources to evangelize?”

[Email readers, continue here…] These and other efforts to be first over the years have led me to ask my current crop of CEOs as I serve on various boards, “Do you have the resources to evangelize the market, educate your potential customers, AND sell your product?”  The answer is invariably ‘no,’ because the cost of evangelizing a new product is completely unknown.  A marketing professional or the marketing department certainly can work to obtain good press, appealing to curious journalists and early adapters. Early meetings with potential customers will yield enthusiasm for a “free test” of the new product.  But if it is a radical departure from the comfort zone, the cost of promoting and marketing the new product will be beyond the capability of most small or medium sized companies.

Apple as a surprising example

Even Apple rarely attempts this, with all its resources.  Apple is well known for building upon the work of early adapters.  After failing with its early Newton tablet, Apple waited for fifteen years before reinventing and repositioning the tablet as a much friendlier consumer device.  The same occurred with the iPod.  Apple was not first or second.  They just added the infrastructure needed to seamlessly purchase and download content to their offering and produced a friendly way to use a product (iTunes) that previously required early adapters to manually download songs to their devices.  For argument’s sake, let’s credit the iPhone with igniting an entire product class.

My unexpected advantages of being first

I will readily admit that the half million I spent on the artificial intelligence system that failed generated the greatest positive press we ever had.  As a corporate promotion, it was a hit. As a product marketing effort, it was a failure.

Set your expectations if you still want to be first

If you are going to be first in a market, plan on a very long time from introduction to acceptance.  Triple the time you estimate for the effort and add four times the cost you estimated for marketing.

Remembering a massive first-to-market failure

Does anyone know how much Toshiba lost with its HD DVD format marketing effort?  First to market over blue ray with what some say was a better product, Toshiba dropped over a billion dollars into that one and lost it all.  There are numerous examples like that one.

You might be an exception. 

Chances are that you’d do much better by inventing a better mouse trap, and marketing it for its advantages over a product that the consumer already understands.  But there is always a winner at a table with the odds stacked against the player.  It just doesn’t happen often enough to expect success.

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Posted in Finding your ideal niche, Positioning | 1 Comment

“LALA” – A short lesson in marketing

Focus upon you as marketing genius

Let’s focus not upon the process of marketing and positioning, but on you.  How should you become the best marketer you can be, even if you are a first-time entrepreneur or a seasoned CEO?

There’s an answer for that.  The title of this insight helps us find a formula: LALA.

Memorize your use of “LALA”

Listen! 

The first rule of marketing and positioning is to listen to the marketplace.  Interview potential customers, hold focus groups, meet with existing customers.  Hire consultants. Attend trade show education sessions. Ask you field representatives to debrief you about what they are hearing.  But listen!

Adapt! 

Create, change, throw out, tweak or put more resources behind those efforts or campaigns that are working.  Listening does no good without action.  And the first thing in marketing is to adapt your product or service to the needs of the marketplace.

Learn!

[Email readers, continue here…]   Measure the results of your changed program in as many ways as possible. Create metrics for customer acquisition, retention, conversion, reach, or anything that helps you to better understand the effects of your changes to the program.

Adapt (again)!

It’s not unfair to reinforce the cycle by again adapting to the market after learning from your changes.  Start the cycle all over again, and never stop.

LALA:  Listen, adapt, learn, adapt.Facebooktwitterlinkedinyoutubemail

Posted in Positioning | 1 Comment

Four ways to create marketing excellence

First, let’s recall the four “P’s” of marketing

Marketing is a science devised to help drive customers to your door.  There are lots of ways to define how to market well, including the four P’s of marketing (1): product, price, promotion and place.  This is considered to be the producer-oriented model. These are still the driving focus behind most marketing courses, and deserve to be so.

More we are taught in marketing classes

Then there is the four C’s, the consumer-oriented marketing model (2).  The four Cs: Consumer, cost, communication and convenience.  This makes sense too, and surely deserves time.

Oh boy. Then there’s the compass or cardinal definitions model for marketers:   N=needs, W=wants, S=security, and E=education.  We can go on forever.

But I have my own model that is even simpler.

I’ll call it my IDCL model, just to fit into the scheme of the conversation.

I= increase revenues.  Find a way to position the company and the product to be wanted so much that it moves into the needs column for the consumer.  Use all the techniques you learn in marketing classes to drive demand.  Higher demand results in higher prices – if there is limited supply.  Or, with or without limits on supply, higher demand results in greater revenues, satisfying the “I” in the formula.

[Email readers, continue here…]   D=Decrease costs.  With greater demand comes the option to increase production and gain efficiencies of scale, driving costs down in the process.  Even without higher demand, reducing costs should always be a focus for management to provide breathing room for increased profits.

C=Customers, and more customers.  Marketing should provide a pool of ready to listen customers, no matter what the price or complexity of the product.  More importantly for management, finding a way to focus on extreme customer service will be the most inexpensive, effective marketing tool of all.  Existing customers have low acquisition costs, addressing the “D” in the equation.  Extremely happy existing customers are the greatest marketers you will ever have.

And finally, L=Low touch-no touch.   The world has turned upside down with COVID-induced worries about touching any kind of surfaces, and for good reason, even after we exit from the pandemic period.  How can you differentiate yourself from others with a no touch product, if you are a producer of a product that must be pushed, handled or driven to make it produce results?  Are you behind others or ahead in thinking of ways to market a unique experience that fits into this new era?

Increase revenues, decrease costs, better serve customers, and think low touch-no touch.  IDCL:  that could be a motto or even a manifesto for any good management team.  And it’s a good place to start a focus upon positioning.Facebooktwitterlinkedinyoutubemail

Posted in General, Positioning | 6 Comments

Could you achieve ten percent net income each month?

How planning is done today

Most entrepreneurs and managers, when modeling their business operations using a spreadsheet, start with expected revenue by month.  Then they calculate cost of sales, and then project their expenses, to find the bottom-line profit or loss each projected month.

One way to think for tomorrow

There is a rarely used twist that makes lots of sense.  Add a new row at the bottom of the spreadsheet.  Project your revenues and costs as in the original exercise.  Then consider that an operating entity should be able to generate a ten percent operating profit based upon revenues – and add a row to your spreadsheet immediately below “operating profit” that calculates 10% profit from sales each month.

Something new emerges

Compare that with the operating profit as calculated, which surely will be lower, probably negative, for months or even years.  The difference is something new – a target for reduction of expenses or addition to revenue for each month in which the calculated number is lower than 10% of revenues.

Why this is different and powerful

[Email readers, continue here…]   We are not taught to think this way, but rather to find the month in which we break even in our plan, then calculate the accumulated losses to that point, add all the cash needed for investment in fixed assets, and end up with the amount needed to finance the business through equity or debt financing.  This new tool gives you that number plus the amount needed to make the business a viable entity with a chance of long-term survival and growth.   The longer the time it takes to break even or get to that magic ten percent net, the higher the number of dollars needed.  Sometimes, the difference is a reminder to consider a reduction of expenses if revenues cannot be raised from projected levels.

The ultimate reminder

And sometimes, this exercise is just a reminder that we are all in business to make money, not to just break even.  Just like assuring that your own at-market salary is included in a forecast even if not drawn in cash during the earliest periods, the 10% target reminds us all that the target must be higher than merely breaking even, even if that means reassessing all expenses until the target is met or exceeded.Facebooktwitterlinkedinyoutubemail

Posted in Growth!, Protecting the business | 1 Comment