Archive for the ‘communication’ Category

…and his portmanteau words. I can’t help thinking as I write about this brave new world of Cloud Computing that we might need a new one.

Through years of thinking about and writing on the subject of technology marketing, I instinctively refer to the party that sells something to the buying party as “The Vendor”. The problem that Cloud Computing has introduced though is that the selling party in Cloud Computing may not be actually be selling a thing, but rather may simply be providing access to a service.

So whilst there is selling of a sort going on here, if I were to refer to say Amazon as a cloud “vendor” it wouldn’t be strictly accurate. The good news is that we were given the term “service provider” which perfectly describes the second category.

But what about where I am referring to both vendors and service providers, or what about a single organisation that is both a vendor and a service provider? For those instances, I am forced to continually, as you will have seen in these pages, write “vendors/service providers”. Which is fine but it feels wordy and after writing it 50+ times on a page, it becomes tiring to write as well as to read.

So the question is, do we need a new word to describe organisations that sell “stuff” as well as providing access to “things”? Is there already a more suitable word out there? Or does “vendor” have enough elastic in it?

So there it is…

Veniders – VENdors and/or service provIDERS.

…or maybe not. ;->

As Humpty might say – it’s getting very complicult and difficated- isn’t it.

Danny Goodall

Carrying on from my blog on “corporate shyness”, I’m looking here at the different ways we evaluate information and make decisions. The first thing to say is that this is a big subject and one that others are much better qualified to cover than I am. Myers-Briggs has led much of the work on personality types and if you’re looking for in depth information that is not a bad place to start. But I am going to look at how personality traits influence the way we make decisions and what impact that might have on a marketing strategy aimed at influencing people.

Intuition

People who rely on intuition to make decisions typically believe that they see the whole picture.  They feel able to quickly see things in the context of a wider perspective.  When presented with details or detailed arguments, intuitive people will feel uncomfortable or even claustrophobic and will instead lean on what they instinctively believe.

Intuitive people are said to favour products that are positioned as breakthrough or next generation. Strategies like these speak to their self-perceived ability to see trends and to place their decisions in the context of these trends.

Intuitive people are therefore likely to respond well to high-level marketing materials that place a technology or a company in terms of trends or breakthrough strategies. Language that claims and defends a new product category for a company will be appealing to intuitives. Details will likely turn off intuitive people to a particular argument.

Thinkers

As the name suggests, the “Thinkers” classification is one that psychologists use for those amongst us who like to rely on their grey matter to arrive at decisions. They typically have very a highly developed sense of logic and enjoy the analytical element of decision making. Processing data and wading through information is what these people are all about.

When putting propositions to thinkers one should be aware that they will latch onto elements that flow logically. Claims that a product can achieve something without supporting information will be likely to turn Thinkers off. Claims that can be validated using their analytical capabilities will, by contrast, draw them in.

For example

Bad…

“The fastest product in the market”

Good…

“By combining ultra low thickness manufacturing techniques with multi-core processors, our new processors outstrip the competition by a factor of two”

Sensors

Sensors again like to deal in facts and distrust quickly formed opinions, generalisations and hunches. They prefer to deal in the tangible  raw information that is at hand. Facts are important and Sensors have the ability to wade through a great deal of detail and to see the facts in context.

Sensors enjoy messages and campaigns that allow them to rely on their “senses” and experience to understand. Messages that state facts that are “generally” understood work well with Sensors. Their ability to “know” that these claimed facts are true reinforces and validates their beliefs. “Service Oriented Architectures now dominate architectural design and ACME is the leading exponent…” may appeal to a Sensor because the fact that they “know” that “SOA dominates architectural design..” validates the statement in their mind.

Feelers

Feelers are a tough crowd in terms of Business to Business sales and marketing.  They tend to arrive at their decisions by trusting their emotions. Detailed discussions turn them off and instead they are sensitive to the feelings of others.

Third-party recommendations from people that Feelers trust or expert endorsement that “feels” real work well with Feelers.  ”Leading CEO Bob Trustworthy says he chose ACME because he trusted the people he was dealing with…” might be an approach that would work but to be honest this is a personality category that matters more in face to face sales situations than in outbound marketing communication.

It’s important to stress that whilst some of these traits discussed here will be dominant, we each of us has a mixture of these personalities traits and are not simply one or another. That said, psychologists do tell us that we fall into one of two broad categories.  We’re either predominantly Perceivers (Intuitives, Sensors) or we predominantly Judge (Thinkers and Feelers).

How does this manifest itself in marketing strategies and tactics?

Well we first have to ask ourselves if it is possible or realistic to create different marketing messages, collateral or  programs for specific personalities. It’s normally the job of the sales team to identify and exploit these personality traits in one-on-one meetings with their prospects. To expect the marketing team to cater individually for each personality type is pretty unrealistic.

It is however critically important to realise that you need balance.  This can be overlooked if your product management/marketing team is good at creating one type of collateral. For example- if the team naturally favours detailed technical specification and performance information, it is essential to realise that some prospects will positively avoid reading such material. Therefore you may need to balance such material with material aimed at other personality types as well.

It is worth stating that personalities types can congregate in specific job roles or even specific industries.  For example, it is common in my experience for there to be more Thinkers than Feelers in the highly technical discipline of software development. But as you move away from the coal face of the overtly technical disciplines and start to look at the management levels in the IT domain, it is my experience that you find people with a rounder set of personality traits.  (I am aware that this appears like a massive and clumsy generalisation – please see the small print below before suing me…)

The small print (Ironic eh?).

Please note that this is not precise science and that wide generalisations have been used to illustrate points. Subtlety and interpretation are critical when dealing with the psychology of product marketing. Lustratus helps technology companies to market themselves more effectively in a business to business context. As such some of the examples in this blog may not be completely relevant to other industries. That said I’m fairly confident that the principles apply across many industries.

Further reading – well anything on differentiation and specifically anything by Al Ries and Jack Trout.  Differentiate or Die by Jack Trout is a good place to start. Detailed information on the Myers Briggs psychometric studies can be found here.

Danny Goodall

I hope you like the alliterative heading for the blog which was born from some work I’ve been doing recently for a client.  I’m not sure that diffident is exactly the right word but there was no way that I was going to ditch it when it looks so beautiful set against all those “diff” words.

Anyway, I was struck recently by the reluctance of some people to fully embrace the concept and importance of aggressive differentiation.  Whilst I’ve long understood that different types of people reach decisions about products (and lots of other things too) in different ways based on our bias towards one of the following psychological functions (Intuition, thinking, feeling and sensing), I’ve seldom before encountered this on the vendor side of the marketing battle.

I’m certainly not sitting in judgement on this.  On the contrary it has made me look carefully at the way I work with my clients moving forward.  My client has a very strong business and is growing at an incredible rate but they are starting to encounter stiff competition hence my involvement.  I’ve been working on strategies to help to grab a position in the market for them that will undermine their competitors and am pretty pleased with the results.  It’s been a great project and I’ve really enjoyed working with them, they are top people and have great products.  The problem lies in their reluctance to stick out their chest, beat the drum and proclaim their greatness.  They are, I guess you would say, corporately shy.

It made me dust off my copy of Differentiate or Die by Jack Trout to review the psychology of differentiation but this time from the perspective of the vendor.  It set me thinking there is no “one” way to build differentiation strategy.  Whilst it’s important to be able understand the behaviour of your target audience, it’s also important to ensure that you are happy with the chosen strategy and that it sits well with the philosophy and perhaps even the ideology of the company itself.

For example could Company A, staffed and populated by conservative and modest management feel comfortable going to market with a message of “We’re different from Company B because we do X better than them”?  It’s not an easy step for them to take.  The opposite of this would be to expect a vendor who really understands competitive differentiation such Oracle to say “Test our product and it will speak for itself”.  Whilst this might be true a company like Oracle will never turn up the opportunity to thrust the differentiation dagger into the chest of the competition.

Somewhere in the middle lies the truth I guess.  There is immense credibility, not to mention the moral high ground in looking to let your product win the battle for you.  But equally, aggressive marketing by aggressive competitors can cause you to be de-positioned in the eyes of your prospects such that they think they know where you are positioned and won’t even bother to evaluate the product.

So I’m going to cover this subject in a series of short blogs taking a look how differentiation works from a psychological perspective and how this translates into corporate psychology.

Danny Goodall.

So closing out this series of posts looking at differentiation in markets where technical standards have caused little technical difference between products, I’m going to look at standards bodies and technical education as a technique to create differentiation.

Preach the gospel – Educate

The first point to make is that in my experience products that have developed through the process of ratification of technical standards, first find an audience amongst the technical community.  This means that there is an opportunity, albeit with a finite window of opportunity, to become the first vendor to provide education together with access to evaluation software for these early technical evaluators.

I’ve had first hand experience of this early stage marketing exercise.  We fed the thirst for knowledge and the need for evaluation software (to mix metaphors) to build a loyal community of technical evaluators, developers and systems architects.  We were able to craft an image for the company as the developer-friendly standards implementer, the first company to turn to when wanting to understand how the standards should be interpreted and implemented.

Obviously at some point you have to turn this rather “altruistic” approach into a business that  licences software and keeping that audience with you as you do this is not easy.

“Work” the standards bodies

Another technique that can be exploited, although it needs significant “muscle” to be able to carry off, is that of leading that standards-bodies.  Again I’ve had experience of working for a relatively small vendor that was represented on standards-bodies where we came up against larger vendors.  These vendors were able to almost completely dictate the direction of the body through a mix of funding, bluff, bluster and threats.  It was an interesting process to observe and the outcome, whilst not being everything that larger vendor wanted to achieve, was that they were able to grab territory from other vendors on the committee.  If a camel is a horse designed by committee then all I can say is count the humps on the back of the standard when a large technology vendor charitably volunteers to donate 50 man years of code to “expedite” the adoption of the standard.

Time to abandon standards

Lastly, understanding at what point it is right to move on from the standards to create a “proprietary” offer is important.  This may not be a public admission that your product now features proprietary capabilities alongside the standards-based functionality, but the point will come when in order to take the product forward at the pace required standards become secondary.

Using this message of “We have used standards to get ourselves to this point but now we need to implement specific technology to deliver what the market really needs” can be powerful but is a double-edged sword.  Being seen to “abandon” standards in this way can have a very negative reaction.  Whilst this would typically only happen once the market has reached the later stages of maturity, the benefit to the vendor that can first differentiate with proprietary features whilst externally still being perceived to embrace the philosophy of standards is significant.

So if you can be seen as more devout than the other guys, and preach the standards gospel further afield than anyone else, you can grab a position in the market that other vendors will struggle to defend.

Danny Goodall

I’m carrying on this series of posts on how vendors can differentiate themselves in the market when technical standards have had the effect of removing significant functional difference between competitive products.

This time I’m going to look at partnering to create differentiation in your offer.  Whilst the product proposition will remain materially similar to that of the standards-driven competition, a proposition carved from the synergies of the product and a strategic partner can be beneficial.

Partnering – Other complimentary vendors

As I suggested in this post, broadening the product portfolio is one way to create differentiation.  Whilst this can be done through internal product development, it is also possible to broaden the product proposition through strategic partnerships.  Obviously there are some ground rules here.  Firstly the products must be complimentary in that they should not overlap functionally.  Secondly the resultant product set must take the vendor into new areas when compare to the competition.  Thirdly, the partner must not have the same resultant product set themselves or conflicts can occur.  Lastly, the resultant feature set must not be too much of a departure for your sales team to credibly take to market.  If, to sell the partner’s products would require your own sales team to take on skills that they don’t naturally posses, this can be counter productive.  All of these caveats notwithstanding, one shouldn’t underestimate the value of partnering for obfuscation.  i.e. you partner to achieve a tick in the box and to create differentiation with no real intention of selling the partner’s products.

Partnering – Professional services

Similar in concept to the ideas I discussed on methodologies, differentiation can be created around how you implement your technology within your customer’s organisation.  Third-party system integrators or boutique technical consultancies can add value and create differentiation in your offer.  If you are going to rely on a third party organisation to create differentiation like this. it is essential that the reputation of the third party is second to none and that they provide something that you alone cannot.  Perhaps access to a different audience strata or a reference customer base you don’t posses.  In addition you should be wary of laying yourself open to the challenge that your proposition is so different or complex that you require specialist third-party services to implement it.

Partner – Embed your technology

Finally, the ultimate differentiation through a third party is to embed your technology within a third-party’s product.  Not really differentiation as typically when this embedding is carried out your own proposition is actually hidden within that of the embedding vendor’s offering.  That said, I have had first hand experience of using embedding deals like as references to create differentiation.

The claim that “We’re the solution that is embedded in ACME Corp’s product” can have a significant positive impact on credibility.

I’ll close out this discussion in the next post when I look at the use of standards bodies and technical education for differentiation.

Danny Goodall

Part 4 – Broaden the Debate

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

So moving on from my last blog where I looked at the way an organisation can differentiate based on the way that they sell, this entry will look at techniques to move the focus away from the technology and onto some other element of the proposition where real differentiation between vendors exists.

I should perhaps first acknowledge that achieving this sort of holistic approach to taking a proposition to market is not the work of moments.  It takes a committed and capable marketing machine to craft the story and then real focus to ensure that the entire organisation rallies behind the proposition as one.  Getting the prospect to evaluate the competition on your terms is the objective and only through consistent and disciplined messaging can that be accomplished.

But if you can pull this off, in my experience it is one of the most successful ways to move the debate away from a particular product or technology where little difference exist towards an holistic proposition where difference can be noted.

Synergies, other product lines and product stacks

The most obvious place to start, and if you’ve monitored the SOA infrastructure software space at all you’ll be familiar with this concept, is that of combining products or even building out complex stacks of products that together deliver synergistic benefit to the prospective customer. Whilst the capabilities of one product may be very similar to those of the competition, when combining those features with additional products the total is greater than the sum of the parts and is very different from the competition.

The idea goes something like “Well whilst our XYZ product might be based on the same set of standards as ACME corp’s, when combined with our ABC product line you can achieve these additional benefits that ACME cannot deliver”

Methodology or philosophy

Another technique I’ve seen work well is that of presenting the product as being as-is or even commodity and suggesting that the real value delivered comes from a specific way in which the product is implemented.  Professional services offerings often come into play here.  Taking the product and the services together, it is suggested, helps deliver benefits that the product alone cannot.  Again the implication is that whilst the competition might ape the features of the product, the methodology is borne out of a deeply philosophically differentiated approach.

Ensuring the competition is evaluated “properly”

Creating broader propositions as outlined above is actually not that difficult.  The key is ensuring that prospects are encouraged to evaluate the competition on your terms.  You want the prospect to be asking the competition if they have an implementation methodology or a complete product stack.  That doesn’t sound easy and in my experience it’s not as easy as it sounds!  But if you can force the market to value the elements of your proposition that are different from the competition then you’re half way to building a successful business.

Danny Goodall.

Part 3 – Sell Differently

I’m continuing this series of blogs here by looking at the techniques that software vendors can use to create the “illusion” of differentiation in markets where technical standards have led to little material product difference.

Perhaps the most obvious differentiator between organisations that have “broadly” similar technology, and an area that particularly hurts smaller or less well established software vendors, is the vendor’s approach to selling.

Which audience strata do you aim at and what do you say to them?

At its most crude this can be the difference between Vendor A talking to a technical audience about the features of Product A whilst Vendor B is talking to line of business managers within the same company about how their product will provide some business benefit or other. Two similar offerings, with similar capabilities being “sold” in very different ways to very different parts of the same organisations.

The benefit of selling at a business level is enormous.  Decisions get made at that level, budgets get signed off at that level and enterprise-wide relationships get built at that level.  However, the difficulty with this approach, especially for smaller or less well connected vendors, is that gaining access to senior management outside of the IT domain of their prospects’ organisations is very difficult.

It takes years of building credibility and demonstrating proof of delivering benefits (reducing risk, Increasing profit, saving time,removing cost, etc.) to buy a ticket to the business-benefits ball.  Unless you’ve paid your business benefit taxes, have documented how you’ve helped deliver benefits and have an army of references willing to stand up on your behalf you’re likely to not be taken seriously.

In addition, in my experience, the skills that a sales exec needs to credibly describe the features of a technical proposition are usually mutually exclusive from the ones they need to engage a senior C-level exec in a discussion about the business issues that keep them awake at night.

So where to start if you’re a technology-focused vendor looking to sell differently?

Well it’s a journey and will involve dramatically changing the way your organisation thinks, behaves and looks.  Many of your staff will have to undergo a dramatic transformation and many won’t make it (especially the sales team).  Then you need to look at developing marketing messages for IT Business and the Business audiences.  You’ll do this by talking less about specific product capabilities and instead aligning yourself with where the prospect wants to be AFTER they’ve done business with you.

What are their pains, what are they looking to achieve, how can you help them do this and what proof can you provide that you’ve done it before?

The marketing materials and programs that support such a business audience-focused sales approach are very different too.  And whilst this has a significant impact on the structure of the marketing organisation, perhaps the biggest challenge is that just because you’re now selling to a business audience doesn’t mean that you stop marketing to the technical audience.  We still have to convince these guys that we’re able to do the job. So now you’re waging a marketing battle on two fronts and this means significantly greater investment.

But before embarking on this approach you should ask yourself whether you’re committed to the journey.  I’ve worked for, and with many organisations that have seen “selling to the business” as the holy grail, the panacea to address their competitive losses and their inability to control the sale.  But embark on this journey without fully committing to the changes it WILL have on your organisation and it will lead to a bloody disaster.  I speak from bitter experience.

Well that’s about it for the “selling differently” approach to differentiation in a homogenised market.  The benefits of selling at the business level while your competitors are talking to “minions” in the technical side of the business are enormous, but as I’ve mentioned about it’s not an easy journey.

I’ll cover some more differentiation techniques in coming blog posts.

Danny Goodall

In infrastructure software sales and marketing, Lustratus categorises the primary end user target audience as one or more of the following three categories:

• IT Technical – Represents the overtly technical disciplines within the IT organisation that have no management, strategic  or commercial responsibilities
• IT Business – Represents the higher management levels of the IT organisation that have strategic and/or financial responsibilities
• Business – Represents the line of business functions outside of the IT organisation

Whilst there are many subtle distinctions between these these layers a general description of the types of positions and the role of they play in enterprise software sales for infrastructure software is shown in the diagram below:

Danny Goodall

As I mentioned in this blog entry on the Positioning Statement, I learned a lot from Al Ries and Jack Trout’s book Positioning: The Battle for Your Mind.  My copy, published in 2000 is the 20th anniversary edition and I must admit to thinking that its relevance may have diminished over the the 20+ years since it was published.  That’s not the case as the concept of positioning and the associated disciplines and exercises really haven’t changed that much in that time.

That said many of the examples, and the book uses hundred of examples and case studies to make its point, are a little dated.  Whilst an attempt has been made to bring some of these up-to-date the majority are from another era.  That said I think that the age of the examples and the fact that we can now look back with the benefit of hindsight actually adds something to the enjoyment of the book.

One other small issue I have with the book is the advertising-based focus that it takes.  The role, shape, size and relative importance of advertising in the corporate marketing budget has changed dramatically, not only in the 20+ years since the book was first published but also in the 8 or so years since the anniversary edition hit the shelves.  You’ll find yourself interpreting the TV, radio and print advertising examples into modern, web 2.0 approaches.  But that’s OK as it’s a good exercise to go through.  It forces you to digest the main thrust of the book in your context – which is that claiming a space in the mind of a prospect “FIRST” is critical. It doesn’t really matter what medium you use to get the message out.

Being known as the first mouse trap is better than being known as the best mouse trap from a marketing perspective.  In fact being known as the first mouse trap designed to work at night, or the first to work for rats as well as mice or the first humane mouse trap are all better positions to own than being the technically the best.  Owning that unique, defensible position in the minds of your prospects is critical and that is easiest when your are the first to claim the position.

The book contains some great ideas and cites a lot of relevant research that will steer your thinking on the psychology of how prospects buy and how they evaluate the market.  There are some excellent tips on the right and wrong strategies for selecting certain positions.  Repositioning strategies, which touches on an area that I refer to as competitive depositioning, is also covered as a way to change the general knowledge and perceived wisdom in a market segment. I’d recommend anyone with an interest in positioning, whether it’s simply academic interest or for a specific positioning project, to read the book first.

My only other comment surrounds the level of organisation the book seems to be aimed at.  I spend most of my time working with mid-sized corporations or small start-ups who tend not to a) take as scientific an approach as the book advocates and b) don’t have the market muscle/financial ability to boss the market in this way.  I would have preferred to have seen a discussion about positioning for organisations where advertising on a large scale is not an option.  i.e. where outbound communication is limited to little more than a product marketing-driven web site and prospect engagement via the sales organisation.  But as all of the principles remain the same no matter how you’re engaging the market, that’s a small gripe in what otherwise is an excellent book.

Buy it and read it.

Danny Goodall

Pain, problem, need or desire

Continuing  the series of blogs looking at the elements of the positioning statement I’m going to look at the customer pain or problem section.

In this entry I will look at the pain, problem, need or desire that we believe that target customer is looking to resolve.  So just so we have a the context for the discussion, here is the positioning statement format that Lustratus uses.

FOR [the ideal customer] WHO [has this specific pain or problem] OUR [product name] IS A[product category] THAT PROVIDES [this main benefit and reason to buy] UNLIKE [the primary alternative or competitor] OUR PRODUCT [has this unique selling proposition].

In the last blog entry we had started to create the unique position in a prospect’s mind where our products and services uniquely sit.  We did this by first identifying the ideal client.  Now we’re going to expand on the ideal client segmentation by adding a specific pain, need or desire that the ideal customer can relate to or a situation that they find themselves in.  The “who” element describes the situation, nearly always negative, that the ideal customer finds themselves in and the implication is that we can positively alter the ideal customer’s situation.

The following questions often help to narrowing down the “who” element of the positioning statement:

• What is the ideal customer looking to do or achieve that they cannot do without help?
• What must the ideal customer do that they are struggling to do?
• What is the desired state that the ideal customer is looking to achieve?
• What is the problem that the ideal customer is wrestling with?
• What situation (needn’t be negative) does the ideal customer find themselves in?
• etc.

Some examples

In a previous blog entry on the positioning statement we looked at an example REPAMA reverse-engineered positioning statement for Microsoft ESB Guidance.  Here, we saw that Microsoft’s “who” section was was defined as:

WHO are building solutions that leverage the SOA pattern

For those readers who are not experts in SOA (service-oriented architecture) or the infrastructure software market in general, “SOA” here is an esoteric software architecture model that many organisations believe provides great benefits.  Microsoft, amongst other vendors, claims that its products help its users to implement SOA more effectively.

Microsoft is effectively saying that it believes that the situation its target customer (Microsoft BizTalk Developers) finds themselves in is that of ”building solutions that leverage the SOA pattern”.  Interestingly, in our attempt to reverse-engineer Microsoft’s positioning statement, we see that Microsoft has not aimed at an overtly negative pain for the ideal customer.  Rather it has chosen to simply focus on a situation the ideal customer finds themselves in.  Other vendors from the ESB REPAMA SAS report show a different approach to the pain.  Oracle with its Oracle Service Bus product chooses to identify the following area of pain in our reverse-engineered positioning statement:

WHO need to enforce quality of service, security and performance policies across an enterprise-wide network of multiple SOA domains

Progress with its Progress Sonic ESB product identifies this need

WHO need to connect many different IT resources using many different technologies in many physically different locations

So whilst Microsoft has chosen to simply state a situation, other vendors have chosen to highlight specific needs or deficiencies. Remember the positioning statement in its entirety should be used to make the ideal customer feel that you have designed and built the product (or service) specifically for them in response to their specific problems.  Other, more generic examples might include:

• WHO are struggling to implement the latest governmental regulation
• WHO need to remove costs from their IT operations
• WHO fail to bring new products to market ahead of their competition
• WHO are unable to ascertain their risk exposure in a timely manner
• WHO cannot currently meet their corporate governance requirements
• etc.

So that’s the main pain, need or desire section, I’ll tackle the “OUR [product name] section in a later blog entry.  <More information can be found in the Lustratus REPAMA Guide here>

Danny Goodall.

BTW
It should be borne in mind that Lustratus’ focus is on the high-tech software industry and whilst positioning as a concept will transfer to just about any business to business industry, many of the classifications we use assume that we’re dealing with a technical audience for infrastructure software.  So please bear that in mind for your own industry.