Are You Experienced? - A Declaration for 2012?

When I was a wet behind the ears sales rep in the Rolling Meadow's Illinois branch office in 1986 (yes, they had computers back then :)), I remember the big sign that hung on the wall;

Calls + Demos = Sales

Now this office sold everything from PCs to copiers (yes, IBM sold copiers) to mini computers (S34, 36, 38, and later AS/400 and RS6000s) and the biggest S360 Mainframes.  Though the sign belonged to the "Office Machines", ie Copiers,  team, I quickly learned in my territory of small manufacturers and distributors, the key to selling the minicomputer lay in not just having the right software package, but in putting a killer demo in front of the customer.  As Jerry Maguire might say, "show me the money" and I say then and now, "show me the demo".

Fast forward 25 years or so and I now have come to the corrolary to this sign for B2B technology vendors:

Marketing + Experience = Sales

As I have blogged about extensively, I believe that B2B technology sales and marketing is being transformed, as we move from products to services, we must move from traditional evaluation based product sales to experienced based service sales, this is true in SaaS models but in many other places too.  In fact, just walk into any Apple store and see this in action, they are built to be giant experience labs, contrast that to the traditional cell phone store or Best Buy with product under glass covered cabinet shelfs or sitting tied down on turned off or canned displays.   

Why is it then that B2B Software and SaaS providers continue to hide their experiences in the equivalent of a locked glass cabinet, behind weeks of qualification and sales calls that make a customer "prove" that they should be able to give it a go?  Why not put the experience (trial, freemium, demo instance, whatever) front and center in your go to market?

I believe there are 3 main "reasons" for this hesitancy.  They are:

1) The belief that the customer will not see enough "value" in the trial or demo experience.

2) The belief that my competitors will learn so much that this will put them at an advantage over us.

3) They simply haven't invested yet (mentally or financially) in transforming their mindset, service and tactics to take advantage of experience marketing.

As you might guess, none of these reasons hold water for me.   The first and second are simply outdated vestiges of the old way of thinking.  If #1 is true, than shame on you for not delivering value, you best be fixing that regardless of your go to market strategy.  

Reason #2 is just living in a fantasy land.  First of all, a determined competitor will get a hold of your product or service, even if you spend a lot of effort and time to prevent it.  Without passing judgement on tactics, I've seen shell companies, resellers, consultants and others to be effective paths for "back door" acquisition.  It's really not hard.  

As for reason #3, rest assured, if you aren't making this investment, one of your existing or soon to be competitors is.  EVERY market is being disrupted and re-invented, you best be the one to do it to yourself.  You can't afford not to!

So with that I'd like to declare 2012 the "Year of Experience Marketing"...care to come along??

The Re-Invention of Everything

Look around and be amazed, everything is being re-invented.  From the tablet computer to the thermostat, from cars to enterprise software, from incubators to light-bulbs.  We are living in an amazing time.  Opportunities abound to capitalize on the biggest industrial change since electricity.  In fact, I've started a Pinterest board (my first!) to show off these products and services off - Check it out.

This got me thinking about what is going on.  We are at the the convergence of 6 megatrends, some new, some old, that when taken together create this incredible rush of innovation and opportunity.  The megatrends are:

• Microelectronics  - Moore's Law Marches on!  - Microelectronics continue to evolve, giving us more and more density and capability.  The innovation here is long from done with nano-circuits promising continue improvement for decades to come.
• Materials Innovation - Nano-materials are silently becoming embedded into new products at an amazing rate, driving innovation that we don't see unless we look for it.
• Cloud Computing and Big Data - This is not some hypothetical marketing hype, compute power is becoming like electricity, on demand and reliable.  This has repercussions well beyond computing, as data processing becomes embedded in everything, using realtime information to make products and services better and more compelling.  The next big thing, the cloud of things?
• Mobility - everything comes with me, my phone, my tablet, my whatever.  We are a mobile society and with ubiquitious Wifi, wired as we move, mobile but connected, not just us, but our stuff too!
• Sustainability- The recognition of the value of sustainability is driving our Green technology quests, and the innovation to create products and services that deliver value but have minimum impact on the environment, energy consumption and society.  
• Design - What began as a music player, has spawned a new design esthetic, simple, functional, easy to use.  Call it the Apple esthetic, and when all is said and done, this may be Steve Jobs biggest and most lasting contribution.  The expectations of elegance and usability, and the value that we put on them has been forever changed.  The bar has risen, and this give rise to more innovation.

Some of my favorites examples  - find them on my Pinterest Board-

Products - Lytro, Nest, iPad (of course) , Embrace
Services/Applications - Pinterest, FourSquare, Spotify

More ideas...add them in comments and watch my Pinterest board for updates

Aspen Trees or Jellyfish, it's All Digital Economy at PARCForum

Had the pleasure of attending PARC Forum talk yesterday by "How Technology is Recreating the 21st-century Economy" by W. Brian Arthur of the Sante Fe Institute. I assume they will also post the slideshare here.

Anyways, essentially Arthur argued that 100% of our economic growth comes today from the digitization of business processing, sprouting what he calls a 2nd, underground economy. His prime example is to think of all the digital transactions/look-ups etc happen between the time you swipe your ID at a Airport Kiosk and it spitting out your boarding pass. He uses the metaphor of an Aspen forest, where 10 miles of roots exist for every acre of trees. Not only that, the Aspen forest grows new trees from it's roots, like he says new processes are always invented, making the roots thicker.

I found a few things very interesting in no particular order:

1) This is the intersection of cloud computing and the "internet of things".

2) This is very likely a root cause of some of the new structural unemployment / jobless recovery we are experiencing, the job simply arent there anymore, think secretary, paralegal, ticket counter rep, etc...it is the death of process white collar jobs.

3) Arthur firmly believes are cars will drive themselves in 15-20 yrs. I feel like this is a bit unrealistic, not from a perspective of technology, but from both cultural/psychological and infra investment reasons, hmmm....

4) Depending on your view, this could be utopian (we are freed of all grunt work), dystopian (we look like the people in Wall-E*) or somewhere in between.

5) If Arthur is right when he says this is the BIGGEST technological disruption ever, wow, someone's gonna make a lot of money...

6) I'd admired Arthur's use of metaphor to communicate, especially the Aspen forest one. However, while he quoted some "stats" he had done, he didn't share his model, that would've been nice, I was left wondering...

7) I'd encourage everyone to view this content once the PARC folks put it up.

I've been to 2 of these in the last year, but really need to make a point of getting to more of them, PARC brings in some amazing Thought Leaders.

Cheers
Ken

Bridging Brand and Demand: Thought Leadership, the Missing Link

Walk into just about any B2B marketing team today, and you will see a very large focus on marketing automation. This is the tip of the iceberg that has been building since the dawn of Google and Direct email, or for about a decade, let's call that time AG for After Google. That iceberg is the maniacal focus on demand over brand, on lead generation over messaging, on revenue over valuation.

I have no qualms about this, driving revenue is what the whole marketing game is about but...

Let's face it, we've got a heard mentality going here. We bid up AdWords to the point of expense that makes us scratch our heads. We spend more and more on jamming "nurturing" touches to wring out pipeline from our marketing database. We hire quant jocks to build dashboards, optimize spend and score leads. We bow to the constant siren call of the VP of Sales, more leads, better leads, more leads, better leads. Oh, and now we nuture our brand on social media, and let's be honest, we don't really know how to do that well or even how to ask the right questions so we can learn...WOW, who wanted this CMO job anyhow?

I started my career in brand marketing at Intel. We spent literally hundreds of millions of dollars a year to build the Intel Inside brand. We measured our success in moving share, preference and all those other cool brand metrics. Was there direct marketing done too, of course, but in the days BG, the web was not the center of our universe. That world is long gone except for the biggest of big brands, and even they have adjusted dramatically.

Now, the hot topic is "Content Marketing". But in my exposure to practice, this is nothing more that nurturing programs where a bit more content is jammed down the prospects pipe, whether they want it or not. And this content is ALWAYS focused on the selling cycle and is rarely powerful enough to make a real difference.

Don't get me wrong, I think that Content Marketing is a good start, but it's missing a big part of the point. Without THOUGHT LEADERSHIP, content marketing will be lost in the same clutter as search words, competition for mindshare is enormous. We are in the world of short attention span theater, NOT Dickensian serial novel writing.

Thought Leadership, a term first coined in 1994 by Joel Kurtzman in Strategy Magazine, can be defined as "having a distinctively original idea, 
a unique point of view or an insight". ORIGINAL UNIQUE, RELEVANT, MEANINGFUL, INSIGHTFUL.

Thought Leadership marketing is the process of bringing Thought Leadership to your brand with ORIGINAL UNIQUE, RELEVANT, MEANINGFUL, INSIGHTFUL ideas that quickly break through the information overload and attention deficit AG world.

Where your content marketing is imbued with Thought Leadership, and your Nurturing campaigns utilize that content, magic happens. You build BRAND AND DEMAND, UNIQUENESS AND REVENUE.

Stay tuned in this space for more on the HOW of Thought Leadership Marketing.

Poking Through the Clouds, Three Strategies for STANDOUT Category Positioning

About 5 yrs ago, I had the pleasure of sitting through sales training with John Costigan. I remember John's opening as he said something like, "How are you?" and got the typical quite reaction. John went on to say something like, "when I am asked, I say "OUTSTANDING" and you should too. Because to STAND OUT, you MUST BE OUTSTANDING".

Fast forward to last week, when I was having a discussion on positioning with a very successful entrepreneur turned VC. He said, "the only way to win in today's markets is to STAND OUT, create something new". Immediately I thought of John and said to myself, "If you want OUTSTANDING positioning, you must STAND OUT from the crowd."

When you look around B2B technology providers, those who do stand out usually take one of three fundamental approaches to differentiation, what I call 1+1=3, Embrace and Extend, and Copy and Paste. All can generate OUTSTANDING results and returns.

As Cloud computing goes mainstream, ISV, Hoster and other service providers can no longer depend on the previously successful, "We are X category, but as SaaS" such as early pioneers like Salesforce.com did. To truly STAND OUT and poke above the clouds, these three strategies offer proven paths to success.

1) 1+1=3 or Market Consolidation - Simply put, this is a strategy of adding together existing, adjacent capabilities in order to consolidate markets.

KJR client Nimsoft (now a division of CA) changed the IT monitoring market early on in the "Cloud era" by providing one product to consolidate the monitoring of Datacenter, Service provider and Cloud infrastructure, as I have blogged about extensively in this space. Market consolidation is an effective differentiation strategy because it provides clear value to the end buyer in cost savings and operational efficiencies.

Embrace and Extend - Next Generation X - The strategy of having competitive parity to existing capabilities and adding high value new ones.

Palo Alto Networks has created very rapid growth and disruption in the mature firewall space by embracing and extending the mature enterprise Firewall market with their "Next Generation Firewall" , not only consolidating the Firewall and IPS markets with their positioning, but by redefining the vary essence of a Enterprise Firewall to be Application and User centric, not port and protocol based. Their new App-ID and User-ID technologies changed the Firewall market dramatically, and gained them real first mover advantage over the incumbents. Embrace and Extend is effective because while disruptive, it goes after existing category dollars.

Copy and Paste - Stealing from other less related markets to create something
NEW!

While Embrace and Extend disrupts existing markets, Copy and Paste creates new ones. Success Factors copied KPIs from financial and capital management systems and created a Human Capital Performance management market. Splunk copied "search" from Google and the Internet to create the "IT Search" positioning that has made it unique and sustaining. Copy and Paste works because the value of the positioning is easy to explain and apply to new markets. Copy and Paste is a great way to position and explain disruptive technologies, and creates new spending rather than consolidation or taking existing category dollars.

So as you look for stand out positioning, leverage 1+1=3, Embrace and Extend, and Copy and Paste as three effective paths to rise above the clouds and generate outstanding returns for your company.

Successful Ingredient Brands - A 3 Part Recipe...and a Cloudy Future?

vs A Showdown!!!

In 1992 I began work on the Intel Inside brand team, when I started as Brand Strategy Manager, Intel Inside working on then Dennis Carter's team with Karen Alter, Sally Fundakowski and Anne Lewnes, an unheralded but amazing innovative team. Whatta ride! In the ensuing years, we built a monster brand, the world's first technology mega ingredient brand.

In 1995, I left Intel to join a fledging, high profile start-up called Netscape. Mike Homer, the legendary (and sadly late..) VP of Marketing at Netscape and Jennifer Bailey hired me and tasked me with building "Intel Inside" for the Netscape brand. The resulting "Netscape Now" program helped us build the Netscape brand and business and served as a prototype for every Internet affiliate program that came after it.

However, when put side by side, it is easy to see why Intel Inside is now legendary in marketing history and Netscape Now is not. What sets Intel Inside, Gore-Tex, Dolby, Nutrasweet, Teflon and other run-away ingredient brands apart is that they built the brand on a basic and powerful recipe of three parts, 1) End user value 2) Brand Investment and 3) OEM or Host Financial incentive.

Let's do a quick comparison of Netscape Now and Intel Inside on these 3 criteria.

1) End Use Value
Netscape Now - The promise of Netscape Now was that the host website was "best viewed" with Netscape. This was a relatively strong proposal at the time, given Netscape's then pre-eminent ability to drive and ship support for web standards. However, it proved unsustainable from the Microsoft onslaught, a topic for another blog - Ken's Score 6/10

Intel Inside - The promise of Intel Inside was Performance and Compatibility. This was a relatively strong proposal which proved incredibly hard to communicate. However, Intel had the resources to drive this value prop into the market, and was in the enviable position to "brute force" this value - Ken's Score 6/10

Verdict: Even

2) Brand Investment

Netscape Now - Netscape rode the PR wave of 1995-1999 with expertise and abandon. Bold, innovative and compelling. HOWEVER, the investment in Netscape Now as an ingredient brand was essentially limited to my salary :). There was NO attempt to build this as a separate brand, it was a viral and community driven effort. While print and TV was out of reach financially, there were plenty of missed opportunities to syndicate the Netscape Now brand with targeted investment in sites like Yahoo, Amazon and others...despite my advocacy, never happened. Ken's Score - 3/10

Intel Inside - Intel made a conscious decision to invest in direct to consumer brand building. In an era before the Internet, this meant massive spending on TV, Print and outdoor ads, target directly at the end user. Intel was looked at by many as "Crazy" for doing this. But the results really do speak for themselves - Score 10/10

Verdict: Intel Inside by a mile!

3) OEM/Host Business Model

Netscape Now - When I wrote the program, I proposed two aspects to drive incentive for the hosting websites to display the Netscape Now brand logo. The first was to build an Internet directory of great sites that were displaying the brand, and to promote this as the place to find the best Web content. The second was to pay sites for each download they generated. Say even a modest amount like $0.25 per download. Both of these ideas were rejected for "sound" business reasons. On the first, Netscape did not want to compete with its partner Yahoo and other media and Internet service providers. Jim Barksdale later called not competing for Internet media as one of his biggest mistakes. The second was that with a free product, Netscape could not pay for downloads. I think the second was a huge mistake. To this day, I believe we needed to invest in market share to drive the business. Ken's score - 0/10

Intel Inside - Intel invested 5% of microprocessor sales into an MDF fund to pay for OEMs to use and display the Intel Inside brand on chassis, boxes and ads. This is the BIGGEST reason for the programs success. In some cases, it was the biggest margin contributor for PC manufacturers. HUGE, and not well understood by most even today. At the time, this program was a $300M/yr investment, enough said! Ken's Score 10/10

Verdict: Intel againAs is clear from the evaluation above, Intel wired the Intel Inside brand for success through a well thought out strategy and financial commitment to it. As our entire industry is being re-juggled by the cloud, those who are contemplating ingredient branding strategies should understand this model and embrace and adjust it to their needs.

Find Your Glider Bike - Paths to Successful SaaS Transitions

I am constantly surprised at how much my 4 kids teach me, but sometimes it's really cool!!!

Owen, my youngest is a typical 3 1/2 year old boy, energetic, physical and fearless. He's been riding on a glider bike for the last year, and loves to blast down hills with his feet in the air, scaring the daylights out of his Dad.

For those of you unfamiliar with glider bikes, it's basically a pedal-less 2 wheeler that you propel like a scooter with your feet. I've been watching him scoot around on his glider wondering how he would do with pedals, would he need training wheels at all?? Would he be faster than his 3 older siblings at getting on a "real" 2 wheeler? (they all transitioned from training wheels at ages between 5 and 6, one with virtual ease, one with a few tries and one with 6 months of struggle. )

On Tuesday this week, the answers became clear. Owen said, "can I ride Addie's bike?". I said, OK sure. Owen hopped on, I gave him a little push and he was off pedaling, with the balance already second nature. Amazing, 3 1/2 and riding a two wheeler already with NO teaching, no back breaking run alongs, no leaning the wrong way for balance.

So, what did I learn? First I kicked myself for not having glider bikes for the other 3, oh well. Second I marveled at the effectiveness of learning balance and pedaling separately, and how it eased the transition in a way that training wheels fail miserably at. Third, I learned that the boy is crazy fearless, but I kinda already knew that from his accumulated trips to urgent care and many other sorties in playgrounds and parks.

This episode got me thinking about transitions, especially ISV to SaaS transformations, and how to ease the pain and difficulty. Certainly, doing this requires a good deal of fearlessness and courage to change mindset, organization and tactics, as I've blogged extensively about. However, I think most organizations can find a glider bike or two to help speed the transition and avoid losing organizational balance in the process.

For example, one client of mine who has been incredibily successful with this transition, was already selling their product in subscription mode 90+% of the time. Perpetual to Subscription is a huge and often challenging business problem. However, for this client, it became a glider bike to SaaS. Pricing drives many sales and customer behaviors, my client rode this glider right into the SaaS model.

Another glider bike to SaaS might be your go to market model. Do you focus on customers getting a taste of your product through download or guided demos? This focus on direct product experience can be your glider bike to SaaS success.

What other glider bikes are out there to help speed this business transition? Would love to hear your stories...

In the meantime, we will be shopping for a new bike for Owen this weekend, and hopefully not going to urgent care!!!

Cheers
Ken