We don’t need no stinkin’ marketing!!

Do you really need marketing?

Was thinking about a new client and if they really needed to do marketing.

At lunch that day, we had been discussing Chipotle restaurants and how they do very little marketing/advertising, and was it right or not? Was it what they wanted (in growth)? Slower rather then faster – and then, who could guarantee that it would grow? Or would the marketing eat into their profit.

So, I started to think about the need for marketing with a product/service/brand or not.

Obviously, if the product is “hot”, then, marketing doesn’t need to be huge – right?

The product is selling itself and the Public Relations efforts are keeping it in the news – so, why do TV, Radio, social media advertising or whatever?

If the product is unknown, brand new, and customers don’t understand the value, then, marketing is needed, right?

Back in the days when I was the chief marketing person for the USB Flash Drive at the patent holding company – they gave me little money (less then $100K) a year to do all the marketing needed for the product- worldwide. (FYI – The market today for this product is over $2B).

There were a couple of ways that I could attack this:

I could scream and fight with the CEO/CFO and ask for more money;

I could only market to analysts and editors what the product was (in a particular region, like U.S., Germany, etc.);

I could go after one small region of the world and market the product (like NYC or LA only);

I could give the money to a retailer as MDF or Co-Op funding and have them advertise the product (as best they could with so little money);

Or I could do something else.

The skepticism of the product from the mass market was palpable. Who needed a device that had 256MB on it? We had the floppy for little things, CD-R and DVD-R for larger things (even though the software caused early heart attacks in many users), the Zip, and of course, the network where we could upload and download gigabytes of info.

That was the weakness – the skepticism, and that is where I attacked. I needed to educate the “early adopters” as to why they needed this product – there was no way that every secretary in the world was going to run and buy this device if they saw it on TV. I needed to hit those that would realize the value of it; that they would tell others, and so on (the perfect and ideal marketing tactic).

So do you or do you not need to put money into marketing?

Sadly, that depends on so many things. Here are just some of them:

Is the brand known?

Is the product needed?

Does it have mass market or niche market appeal?

Is the market an educated or a non-educated market?

What are the demographics – Hispanic, white, 18-25 year olds, retiree’s, etc. market?

Are you going to sell OEM, Retail, Direct, Web?

So many things – that all need to be laid out and understood – which then will lead to your marketing plan, and ultimately if you need to do, and what you need to do, for marketing.

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My Boat Theory

What kind of boat are you?

Years and years ago, at my first job, I came up with a theory (analogy) that I still use to this day – with CEO’s, CMO’s, and the like.

What kind of boat are you? You could be:

An oil tanker, that takes forever to stop and change direction (I usually use this when speaking with someone about the bureaucracy in the company).

Or a huge yacht, that can turn, faster then an oil tanker, but, still takes time to dock, etc. and you definitely don’t want to bang it up, scratch it, etc. (especially if this is a new brand, errr yacht).

Or, are you a speed boat, which can change direction quickly and meet the markets ever changing environment.

Start-ups and small business’ are mostly speedboats.

Small to mid-size companies are usually speedboats or yachts (and some are already oil tankers).

And most large companies are oil tankers.

Don’t get me wrong, in today’s market a lot of large companies are trying to become yachts (and some even speedboats), but, there are many difficulties along the way (more power to them, these are the companies that are succeeding today); look at Ford vs. Toyota, Microsoft vs. Apple, Pan-Am vs. American Airlines (and then American Airlines vs. JetBlue).

What kind of company are you? Are you always trying to make your company a speedboat?

One sure way to know if you are an oil tanker or not is count how many lawyers you have on staff (key point here – “staff” – hi-tech companies have many lawyers for patents, etc – and they don’t count; key point #2, lawyers in an outside firm are not counted either, I am speaking about lawyers that work for the company, in the company). If you have more then one lawyer per 100 employees, then, most likely you are an oil tanker.

I wonder if all legal firms are oil tankers – I bet they aren’t. Wonder why?

Perception is Reality

Every aspect of my professional life is based on the above statement.

It comes down to “is reality real”?

A great question and one that you can have answered (or not) by watching many different movies, like The Matrix, Terminator, DreamScape, or Xmen or whatever meets your fancy – but, it all comes down to “are we really living in this world or is there something else out there that is more real?”

But, you look at today’s media (which is ALL about marketing), and you get the spin – and you can see the control that the media has on the masses. I do hope that you look at what you do and realize that you have the same influence as well as the same power. Of course, with this comes the issue of abuse (which is a whole other book, so, we will skip that for now).

If you can get people to believe that

  1. a) what they “think” is possibly real to
  2. b) it “is” real, then
  3. c) you can change a complete market and what they believe.

Let me rephrase that (so you aren’t as confused as I am):

  1. some people “think” that the earth is heating up,
  2. take them to Alaska and show them a shrinking glacier (and now it “is” real that the earth is heating up – their perception has either changed to something new or it has been validated),
  3. bring them back to where they live and the revolution begins.

Another example, at a web company I worked for, we were just moving along, no great increase in revenue, no decrease, just, status quo – even though the mandate was to grow by 200% in one year.

 Everyone tried everything (they knew) to grow. We didn’t do to well.

 So, we started thinking about the perception in the internet market about who uses the internet and who will pay for it. We knew that there was a huge untapped market out there, the Hispanic market, that had money, but, we didn’t know how much they would spend OR if they would even want internet capability.

 But what did we have to lose?

 We copied everything we had to Hispanic; put out marketing and communication materials saying “The Hispanic market is scooping this up as fast as we can make it available”, even though it really wasn’t true,(the start of the revolution – i.e. people believing that they needed this web company if they were Hispanic).

 My point is – we immediately started telling everyone that the “reality” was that the Hispanic market already accepted this and was using it and you better get on the boat or you are going to be left behind.

Another example: a new product that no one had ever conceived of, let alone knew what use it was for was given to me to launch throughout the world. I couldn’t do it like I did the web service, as no one had ever heard of this new product (again, so new, everyone asked “what do I use it for” – compared to, let’s say, an internet service provider, everyone knows what they do, it comes down to what you get for the dollar).

 I went through the traditional marketing checklist, from putting out a press release or advertising (which I couldn’t do saying “Look, everyone is using it, because everyone wants it” – when, again, everyone would ask, “what the h**l am I going to do with that?”)

 It really had to be a grass roots thing. Which, we see today in a lot of marketing campaigns, where “word of mouth” makes the marketing happen (where people are hired to mention products on blogs or people to go to bars and give out samples, etc.)

 Pretty much do a “red herring” – give the product away (we wrapped every one of our products in a $20 bill (this is how I say it, because we discounted the product by 80%).  This allowed a few huge companies to take a “risk” (we even agreed to buy the product back if they didn’t sell it (or ) and “see” what would happen.

 Once we had the companies lined up (okay, it was really only one company – but, hey, the name IBM is a nice name to have stand behind your product), I then moved to the next level of my marketing strategy.

 Of getting people to start talking about it, analysts endorsed it, and a few more companies got into it (because they saw IBM get into it).  And this was with VERY FEW SALES occurring.

It went on from there – so many companies wanted to “see” it and take a “risk”, that everyone wanted a piece – now, many people have it and many people use it (but, more have it then use it, lol – that’s what’s great about a commodity).

 Okay, you want to know the product?  It is one of my proudest achievements – to take a company and product that no one knew, had gross revenue of $20M, and leave them five years later, with a $600M revenue stream (and bought by another company) …it is a USB Flash Drive, or thumbdrive, or diskonkey, or whatever – you know, the little 128MB or 2GB USB thingy that you store files on.

I remember presenting the strategy on how I was going to make this product a world wide commodity to the CEO and CFO of the company. I ended my presentation with the statement “I am going to do this by making peoples perception about this product into reality”.

 The CFO asked, “What do you mean?”

 I replied “I am going to put this product everywhere, so that everyone believes (perceives) that this product is the hottest thing, that they must have it, that everyone wants (reality) this item, that is why it is everywhere”.

 They both replied that there is no such thing as “perception is reality” and that my strategy will never work.

 Thank G*D for my BU’s GM – (for those of us that don’t and can’t keep up with all of the acronyms out there – that is: Business Unit’s General Manager) – who stood behind me for almost two years and told the CEO and CFO to get out of the way and let me do the job – thank you!!! In that time, we topped $100M in sales.

 Today, I ask the CEO if he believes if Perception is Reality – and he always replies “Never had a doubt”.

The following pages are based on those words – perception is reality. Keep that in mind as you read each point – as that is where I am coming from. You can be losing a $1M a month or making $1B a month, and it still comes down to what does the outside world “think” you are – their perception, because that is the only reality that there is.

Company Cultures

Companies always talk about “cultures” and how important they are for their employee’s – to feel welcome, to feel like they are empowered, and/or to feel like the employee is respected.

But, if upper management believes this to be true, and the employee’s want this, but mid-management doesn’t embrace it, a company remains seriously dysfunctional.

A company I recently worked with had this dysfunction – where employees were seriously disrespected by their managers, employee’s were never given any decision making capabilities, which, for new employees just starting, they quickly realized that they were “snowed” and weren’t truly “welcomed” to contribute to the success of the company.

Unfortunately, this is more common than you think.

What is common is as employee’s are promoted inside a company and they truly don’t have any managerial training, mentoring, or professional capabilities, they result to being power hungry, ruling through that power, and starting a cycle of dysfunction that only perpetuates upon itself and doesn’t ever get corrected. Compound that year upon year, where the power-hungry manager, as well as always surrounding themselves with “yes men”, and the culture quickly turns toxic.

Employee’s want to feel the sense of achievement, know that there is opportunity for advancement, and want to feel respected. Without these basic tenets of being human, employee’s quickly give up hope that they can actually affect a company in any positive way.

How can this be corrected? Unfortunately, because mid-managers are usually in place for a minimum of five years, they have built the walls and base to protect their power. That could either by putting on a different “face” to upper management, delivering on revenue goals, or just having “something” that can be used against their manager (like those dreaded pictures).

Unless upper-management wants to change the culture, and possibly affect revenue for a short time, those mid-managers need to be removed (or at least sent to extensive management courses).

How does upper-management know that there is an issue? Well, there are numerous signs – even though revenue goals are still being met. Employee turnover, employee surveys showing dissatisfaction, employees transferring to other departments/divisions, and so on.

Yes, all employees bitch and complain – it’s in their nature. But, when every one of the employees states that their is an issue (and that could be as easy as mid-managers ever receiving anything more than a “satisfactory” on management reviews, there should be some signs.

In fact, at this company i worked with, there were third-party surveys done, which showed how bad the culture was, that the mid-managers had to “explain” to upper-management that the reason that everything was so bad was not due to their inefficiencies, but because that the companies upper management weren’t communicating correctly. Unfortunately, because mid-management was still able to meet revenue goals (even though they still maintained a 30%+ employee turnover), that everything was swept under the rug (i.e. upper management looked the other way).

I’ve written about this type of culture and this type of manager many times in my career and it always amazes me that either because of who they know or delivering on only a single part of their management goals (like revenue), the rest is forgiven. Reminds me of an abusive father who beats his wife, but because he “brings home the money”, all remains the same.

Until the employee, like so many at this company, leave.

Cultures

Cultures

Having worked for many companies that were based overseas and also sold products in many parts of the world, I have consistently encountered companies that think they know the various cultures they sell and market do and what is “best for them”.

One company I worked for wanted to “crack” the Middle East market and sell their goods there.  The problem was that they were Israeli – and since most (well, all) of the nations in the Middle East are Muslim, there was no way that they were going to be able to get their products sold there.

 

I came up with a simple solution – in fact, it required two solutions:

 

1) The company had to realize that ego played no part in business and that even though they had much pride in their success as a small Israeli company, they would have to forego that part of their brand (i.e. give up their ego and identity).

2) They would need to “re-brand” and “re-package” their goods from another part of the world.  We re-branded the product so the perception was that it came from Australia (we branded it with a Kangaroo – in fact, we were so successful that a Chinese company copied our logo and called their product the Kangaru- but that’s another story; and it cost very little money (compared with the millions of dollars they made from this market).

But, that is one extreme of cultural influence and how it affects the purchasing intent of customers.

Another example was internal to North America.

 

The law firm, based on the East Coast of the U.S., dealt with many clients in the Mid-West as well as the North-West; people who were laid-back, relaxed, and totally honest with their questions and issues.  North Easterners (particularly those from New York and Boston) are used to being gruff, short, and pointed, but, in a way that is interpreted as rudeness.

 

Obviously these two “types” of individuals, when interacting, reacted like oil and vinegar – one laid back and relaxed and the other wanting to move on as quickly as possible.

 

After a one-week training course on the various aspects of the various regions of the U.S. and how to approach each region, the law firm was able to quickly lower the many complaints and issues that were brought up because of the personalities of their lawyers; thus, they were able to quickly get to the law cases that they were called in for and gain the perception that they were compassionate and understanding of the local area and not someone from the “East Coast who didn’t care about what happened on the West Coast”.

When you are approaching a new market, pay particular attention to the various culture and personalities of the people in that market – it cannot be ignored.

If you are already in a market, do an internal check and see if your staff, employee’s, sales people, etc. understand the market (a perfect example is if a sales person on the East Coast calls on an account or customer on the West Coast).

A few rules in dealing with others (what your mom taught you when at a dinner table): never speak about 1) Religion, 2) Politics, and 3) current affairs of the local region. Of course, many times this is brought up by your counterpart – answer the question(s) – neutrally – and move onto the more relevant subject at hand (the selling of your product).