Posts Tagged Sam

Marketing vs customer value

Many times I’ve heard marketers say something like “You have to give something to get something.” And many times, the person means “[The customer] needs to give [their personal information] to get [my content].” As a marketer I can see the logic, especially when it comes to targeting, measuring, and tracking. But as a consumer, it’s not always clear to me that what I’m getting is as valuable as what they’re giving.

There’s a great article from HBR [N.B. requires purchase and/or login] that talks about the gap between sellers’ and buyers’ perceptions. According to the article, sellers overvalue their wares by up to a factor of 3x, while buyers undervalue those same wares by up to 3x, resulting in a nearly 10x gap between what the seller thinks their thing is worth and what the buyer is willing to “pay” for it.

Put it another way: how many of us have clicked a link or gone to a website only to be immediately challenged to “log in or register to see that content”? Before you are even able to evaluate whether the information is good and valuable and credible you have to give up your personal information, sometimes including your street address and employer’s name. It might not seem like that big of a deal, but given the recent rash of security breaches around the internet (viz: Citibank, Gawker Media, Sony, et al), it should make you wonder exactly how secure your information is, what is the risk of that information being leaked to the rest of the internet, and what happens to you if it does get leaked. Only then will you start putting your information in the right context to decide whether giving it up is the right thing to do.

As a vendor, you have to ask yourself whether that White Paper is telling the customer something they can find in any first year MBA textbook, whether that blog post titled “37 Ways to Supercharge Your Marketing Plan” is really all that insightful, or whether the news you’re hiding behind a paywall is something the customer can freely find somewhere else (see also: the Disney Corporation).

Good marketing is not about targeting, or measuring, or tracking; good marketing is about getting inside the customer’s head and offering something that they really find valuable. Not something that’s inside the 10x margin, not something that’s slighly less crummy than the competition, not something that was easy for you to get done and approved, but something that helps the customer solve a problem that’s big enough to matter and let them do it without a bunch of “exciting (upsell) opportunities” standing in their way. Only then can you really become the “trusted advisor” that is the holy grail of customer-marketing relationships.



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Skype: An option for a brain drain

UPDATED 12:01, Monday June 27, 2011:

According to Silicon Alley Insider, the executives who were let go will be receiving some/most of the equity compensation in question.  While it’s still difficult to know exactly what’s going on or the motives behind it, it’s still a good illustration how bad publicity and the appearance of impropriety can travel very quickly.  I still think what I wrote below applies: the changing tide of compensation, and how it’s perceived in the market, could severely stifle innovation in this country, at least as much as any tax, levy, or tariff.


A few weeks ago news broke of Microsoft’s purchase of internet VOIP/VidOIP service Skype. At the time I wrote about what the strategic play might be for Microsoft, what they might consider doing with the service, and how I’d like to see it incorporated into my work digital lifestyle. Now, a few weeks later, news about Skype is again breaking acrosss the interwebs, but this time it paints the service – and specifically it’s management team and a key investor – in a much different light.

Sunday morning Michael Arrington wrote on TechCrunch about stories of Skpe employees being terminated and their stock options being reclaimed by the company (he uses the word “worthless” in the title). Rob Beschizza at Boing Boing had similar thoughts on the matter (he invoked the word “screwed” in his title). Over on, Fred Wilson had slightly more tempered thoughts on the matter but does recommend the entire system be rethought.

The intricacies of employee stock options in general and these stock options in particular aside, there’s a larger issue that Skype and Microsoft need to consider. Whether or not it’s true, it appears as if Skype terminated a bunch of people just before a big payday and then took away one of the major incentives that convinced the person to work at Skype in the first place. What’s more, they did it in a way that has been called disingenuous and perhaps even actionable.

At some point, the current Skype management team is going to want to start another company, and they’re going to have this reputation to overcome.  Their other investors are going to want to invest in another technology company, an organization who’s employees might flee the moment the deal is announced. Ninety nine times out of 100, acquisitions and investments are for the people, not the technology.

We talk alot about the impact of taxes, tarrifs, levies, and other monetary vehicles on innovation and advancement. But what of the impact of this type of behavior on technological innovation? Silicon Valley, one of the major hotbeds on American innovation, has long depended on the promise of equity compensation in lieu of cash. If employees no longer trust equity compensation, start-ups and small businesses might be forced to switch to more traditional cash-based compensation, which could severely limit their ability to bring enough people on staff to get things done as quickly as necessary, thereby stifiling technology innovation.

The people that really have to be carefule here are Microsoft. If Skype’s people start to view their options as completely worthless, then there becomes very little incentive for them to stay. Since the talent should be at least as much of a concern as the technology in any acquisition, Microsoft could find themselves holding a shell of a company worth much less than the $8.5B they paid for it.

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Kathy Sierra: Pixie Dust & The Mountain of Mediocrity

Kathy Sierra: Pixie Dust & The Mountain of Mediocrity

I never understood how any of this made sense, given that very little of what I see “brands” (or their human spokestweeters) do on social media is changing the fundamental nature of how users interact with their products. “But that is not the point! It is about being human!”. Nope, I still don’t get it. Why would anyone want to compete on *that*? It felt fragile to be in essentially a marketing arms-race of who-is-the-most-engaging-social-media rock star. What does that really have to do with what users do with the product?

A nice companion read to Kris’ Going beyond the sizzle (of technology marketing).

[via: Tom Fishburn: Marketing Fairy Dust]

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Post Hoc Ergo Propter Hoc

On Friday, the HBR Daily Stat posted a story about the link between high school club memberships and a person’s propensity to be a manager later in life. Later that day I ran across a tweet from Dave Zinczenko of Men’s Health Magazine, claiming that 7+ hours of sleep a night leads to a lower risk of heart disease.

The thing that strikes me about both of these articles isn’t necessarily the information that they convey – I think many would agree that getting more sleep is better and that the editor of their high school yearbook will make a good manager. What strikes me about both of these articles so completely confuse the concepts of correlation and causality.

Is seven the magic number of hours of sleep to ensure you’ll live a long and prosperous life? Or is the kind of person who sleeps at least 7 hours a night the kind of person who takes care of themselves, watches what they eat, exercises, and tries to limit the amount of stress in their life? Does being in a certain school club raise the likelihood of being a manager, or do people who gravitate towards certain school clubs (a la Freaks and Geeks) tend towards a certain kind of success?

President Bartlet: CJ, on your tombstone it’s gonna read ‘Post hoc ergo propter hoc.’
CJ: Okay, but none of my visitors are going to be able to understand my tombstone.
President Bartlet: Twenty-seven lawyers in the room, anybody know ‘post hoc, ergo propter hoc’? Josh?
Josh: Ah, post, after hoc, ergo, therefore… After hoc, therefore something else hoc.
President Bartlet: Thank you. Next? Leo.
Leo: ‘After it, therefore because of it’.

If you think I’m nitpicking over very fine distinctions, consider this: how many times has a finance manager asked you to quantify, in dollars, the benefits of your marketing activities? How many times have you been asked to predict – and later to show – causality between what you’ve done and some form of business result, no matter how multi-variate and subtly complex the interdependencies really are.

Did sales go up because of the advertising campaign you recently launched, or did they go up because the economy got better and people feel more comfortable spending money? Did market share go up because of they change you made to your product or the change that your competitor made to their product? Is your product not selling because people simply aren’t aware of your product, or is it not selling because people don’t see a need for your product. Or are there many more factors that contribute to your success or lack thereof?

While I think its important to set measurable goals and work towards attaining them, I also think its important to know when your thing did something and when you did something while something else happened at the same time. And I think its important for all of us to be honest about when it’s the former and when its the latter.

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Seth: Are you a scientist?

Are you a scientist?

Ask a physicist what will happen if you fire a projectile like this in that direction, and she’ll know. Ask a chemist what happens if you mix x and y, and you’ll get the right answer. Even quantum mechanics mechanics can give you probabilities that work out in the long run.

I’m not always the biggest fan of Seth Godin’s brand of “crackerjack marketing” – for my taste it generally lacks the subtlety and nuance that paints life in anything other than primary colors 1– but I do have to admit that most of his observations are sound, at least in the broad strokes.

As someone who spent the better part of his life as a scientist, I can tell you that while Seth’s observation might be technically right, it does lack the subtlety of insight.  Scientists spend vast tracts of time testing and observing the world, and only after gathering, collating, and interpreting the data do they build hypotheses of how the world works.

Scientists make predictions, and predicting the future is far more valuable than explaining the past.

In reality, scientists predict the future by explaining the past.  And to be fair, they don’t so much “predict the future” as tell you what would be consistent with past observations.

But buried somewhere here is a lesson, whether you’re in science, marketing, or any other knowledge worker driven field: future insights are only as good as the summation of your past observances.  It is, at times, attractively expedient2 to rely on “key thought leaders in the field”3 to generate your “insights” rather than a full-fledged primary marketing research study.  We can’t do large-scale marketing research studies, the argument goes, because we don’t have the budget.

But ask yourself this question: what’s more expensive – fielding and executing a good primary marketing research study, or better on a product that only a small handful of people will like?

Or as I’ve heard said before, The plural of ‘anecdote’ is not ‘evidence’.”4

  1. I know there are a great many “Seth-heads” out there. Please understand that I’m in no way saying that being a “Seth-head” is wrong, only that he doesn’t suite my taste. It would be a shame if the only thing you took from this article was this comment about Seth, as I’m trying to address a larger point, which you’ll hopefully see below.
  2. READ: Cheap and fast.
  3. READ: A few good customers.
  4. I can’t seem to find the original source of this quote, so I’ll link to where I first remember hearing it. It now graces a crude printed sign hanging on my own cubicle wall.

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Strategy on One Page

Strategy on One Page

It comes down to asking the “Why, what, who, and how” of your business, arraying it across one page in a way that makes it extremely useful as an alignment tool amongst management or board members. This is hardly a novel concept, but it falls into that category of common sense that is not so commonly done.

Tjan goes on to outline 4 questions he thinks helps frame up the gestalt of a company.  Those questions include:

  1. What’s the big idea?  Why do you exist?
  2. What is your value proposition?
  3. Who are you trying to serve?
  4. How do you know you are winning?

Not sure I agree on the order of the questions, but the intent, I think, is sound: if you can’t clearly and succinctly describe your company to yourself, how will you ever be able to describe it to anyone else.

Put it another way: if you’re asked what you do at a family get-together, how are you going to explain yourself?

One potential pitfall of the above questions is the temptation to answer them too broadly.  Often I have heard people say “Well, my product is really a global product, and my positioning is really global positioning, so I’m really serving everyone everywhere.”

It seems that the most successful companies are those that are able to answer the above questions as narrowly as possible.  Take 37signals for example: they have a very narrowly defined user base that in turn informs a very narrowly defined product.  If a customer asks for a product modification, more often than not their answer is “No, we’re not going to do that. We’d hate to lose you as a customer, but we understand if your needs have outgrown our product.”

Compare that to Microsoft and their almost pathological need to have “Windows Everywhere for Everyone.”

The most important of the four questions above, I think, is #4 … how do you know you are winning?  It’s easy to focus on doing things, but as my friend John likes to say “Activity does not equal accomplishment” (not sure from where he borrowed that).  You need to know what success looks like, you need to know what and how to change mid-stream, and you need to have enough data to make an informed decision.

How do you think through a business strategy?

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HBR: The Risks of Quantification

The Risk of Quantification

Admitting uncertainty means facing reality — and our own needs for security. But admitting uncertainty is not enough. We must learn to actively embrace uncertainty and work with ambiguity.

As I sit in a two day meeting about drawing insights from data quantification, this article is very timely.  Obviously there’s merit in looking at your data and trying to draw as many insights as possible, but we as marketers can sometimes end up hiding behind the data, using them as an excuse to take no action in favor of gathering and analyzing more data.

There comes a time, however, where you have to accept whatever level of ambiguity you’re willing to accept, make a decision, and take action.  The question then becomes: When is the right time?  A better question might be: What do I get by delaying and gathering more data?  Am I falling prey to the law of diminishing returns?

As the ever-prescient Merlin Mann likes to say, “How do you know when you have enough [information] to get started?  What can you not do with the [information] you have right now?” 1

How do you overcome “Analysis Paralysis”?

  1. You can read more here or watch here.

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