By now, I’m sure you’ve heard a lot about The Avengers. Actually, it’s been virtually impossible not to hear a lot about it. In the wake of the flop known as John Carter, Disney is pulling out all the stops to market this blockbuster – relying on tried-and-true methods (trailers, posters, etc.) as well as unprecedented ones (an online social game, XD cartoon, etc.).

Much has been written about both The Avengers and John Carter, especially on entertainment sites and magazines. But what do their corresponding marketing campaigns teach the company trying to market a chemical analyzer or Droid-based phone?

A lot, as it turns out.

LESSON ONE: EXPERIENCE MATTERS

Do you know who directed John Carter? Andrew Stanton, of WALL-E and Toy Story fame. Although he didn’t possess a speck of action-film experience, with two Oscars under his belt, I suppose he was a reasonable, calculated risk. Sure, it was a bold move – but his inexperience was not the real mistake.

The entire team behind John Carter was inexperienced. From newly-hired (and as of April 20, 2012 – newly fired) studio chief Richard Ross (a former TV executive) to Sean Bailey (head of production) and MT Carney (marketing chief), not one person had the necessary experience to navigate their jobs.

To add push to shove, two key people were shifted out of the team mid-course – Richard Ross replaced Dick Cook, and Carney was eventually replaced by Ricky Strauss. Peter Sealey, former marketing president at Columbia Pictures, told The LA Times, “The worst thing that can happen to a movie is the marketing team changes midstream… It’s disheartening for the filmmakers, for the talent. They lose belief in the film.”

I’m not saying that everyone on your team needs to have a massive marketing portfolio under their belt – and I have certainly witnessed first-hand the benefits of using a fresh (some would say inexperienced) perspective – but there’s got to be at least a couple of key people on the team that know what they are doing. This will also help keep the marketing campaign from unraveling should you be forced to alter the team.

The bottom line: Make sure you have a couple of experienced people spearheading your team. Even better – have a mix.

LESSON TWO: COHERENT MESSAGING MATTERS

Make sure your marketing messages make sense – with what you’re trying to sell, with what you’re trying to say, with what you want your audience/client to take away, etc. It’s best to keep your messages consistent, if at all possible. If you do decide to change course mid-launch (which, although not ideal, sometimes cannot be avoided as we all attempt to remain adaptable, right?), make sure the change makes enough sense to outweigh the complications of that change. The worst thing you can do is confuse (and thus alienate) your potential customer.

It’s the difference between these two trailers:

The John Carter trailer – although beautifully constructed and somehow intriguing – didn’t explain the story or sell the movie. The movie’s director, Stanton, was given the reigns for marketing and (allegedly) refused to listen to the advice of the marketing team. The New York Times reported that Stanton “insisted, for instance, that a Led Zeppelin song be used in a trailer, rejecting concerns that a decades-old rock tune did not make the material feel current.” And I have to admit: it’s a bizarre choice.

The trailer for The Avengers, on the other hand, leaves no room for debate. It’s straightforward and to the point – full of intrigue, explosions, and superheroes fighting the evil guys (plus a few snarky one-liners). The marketing team for The Avengers seems to know its niche, and they capitalize on it. No, it’s not Oscar-worthy, but that’s not the point. The point is to get the right people in the theatre. And with such a trailer, they are ensuring that their customers will come out in droves to see what they expect to see: a great superhero action movie.

The bottom line: Don’t try to be something you’re not. Market your product in a way that makes sense – both for the product and to the consumer.

LESSON THREE: DOING YOUR RESEARCH MATTERS

In other words: don’t make assumptions – especially about your target audience.

Stanton thought everyone knew John Carter and it needed no explanation – hence the mystique of the first trailer. But he assumed wrong, and that cost him. Had he done the research – or at least listened to those who had – he would have quickly discovered that no one under forty really knows the John Carter character. Since he grew up reading the novels, Stanton believed that John Carter was an iconic character. Now, I personally remember picking up these pulp classics by Edgar Rice Burroughs (“father” of Tarzan) at the store for 79 cents – I get that it’s nostalgic. But Stanton let his nostalgia get in the way of reality – believing that, as Andrew Sullivan of The Daily Beast pointed out, “audiences would gasp in delight at John Carter’s very appearance in much the same way that a Batman teaser might only need to flash the Bat Signal.”

The bottom line: Do your research, don’t make assumptions, and do not base your entire marketing strategy on personal feelings. After all, in marketing terms, you are only a sampling of one!

LESSON FOUR: STRATEGY MATTERS

So what’s the big deal about doing your research? Once you have the research, you can decide on the best marketing strategy. Not only did the lack of research on John Carter cost them, but Disney could not even decide on a marketing approach for the film. The LA Times aptly observed, “Posters that at one point had been adorned with a mysterious figure under the letters ‘JC’ were replaced by ads that featured a shirtless man fleeing giant white apes and left prospective moviegoers scratching their heads.”

The Avengers team has a clear strategy, and it’s grabbing attention. It started at the Comic-Con International convention in July 2010. The movie’s director, Joss Whedon, and stars showed up to make a splash. And they’ve been splashing ever since. (OK, in fairness to John Carter, The Avengers really started marketing back in 2008 when Samuel L. Jackson, as “Nick Fury,” gave hints that he was recruiting a team in Iron Man. This stirred buzz with existing fans, who took it viral from there, and Disney capitalized on this build-up after buying Marvel in 2009.)

Part of your strategy needs to be knowing when to go full-scale and make a big Avengers-type splash, and knowing when to be stealthy. There’s not an exact science or a formula to it – part of it is research, part of it is luck, and sometimes it’s just a matter of merely working with what you’ve got. But it is a skill and can be honed and applied. Like hitting a baseball, success is not a 100% of the time thing – but a better than the other guy (competitor) thing.

Take The King’s Speech, for example. Since they had budget constraints and the movie was a tighter, art-house, serious movie, there’s no way they could market as loudly as The Avengers. And you know, it probably wouldn’t have been the right approach anyways. It quietly premiered at the London Film Festival, and relied on word-of-mouth marketing. And it worked all the way to the Oscars!

The bottom line: Make sure you have a strategy in place before you start marketing.

• What other lessons can we learn from the movie industry?
• What other movies had a notoriously awful marketing campaign or an outstanding one?
• What else can you learn from looking at an industry other than your own?

“Aspiring ‘to be the market leader’ or ‘to be seen by our clients and partners in their success’ is admirable, but lacks the specificity and clear linkage to action and measurable results to propel go-to-market efforts.”

— IT Industry research leader, Gartner, Inc.,
on the importance of tying goals to actionable strategy and results.

On December 3, 2001, the Segway was unveiled to the public. Dean Kamen’s new invention, the now-infamous self-balancing motorized scooter, was surrounded by buzz twelve months before its release. After the built-up hype, the Segway was expected to sell 10,000 machines a week, instead of the actual 24,000 sold in the first year.

On January 27, 2010, the iPad was revealed to the world. The revolutionary tablet computer was also released amidst a flurry of anticipatory buzz. Within 80 days, Apple sold three million iPads, and once again changed the way people use technology.

Two products. Two releases. Two (drastically) different outcomes.

These stories remind us of the basic questions: What are the key ingredients to a successful product launch? How can you protect your product from failure?

One quick Google-search of “Product Launch Strategies” will reveal that these are the questions people are asking – no matter the business, no matter the product, no matter the current strategy. Although there are a variety of ideas and quick tips out there for perusal, I really think your Go-To-Market strategy can be boiled down to three simple rules. Now, there’s an important distinction between the terms “Go-To-Market” and “Marketing” – at least in the common understanding of most professionals I deal with. “Go-To-Market” captures the thought of introducing a specific product into a specific market context. It is more “action-y” than “marketing,” which can be applied more broadly to all the activities traditionally associated with strategy, pricing, positioning and so on. “Go-to-Market” can serve as a rallying point for your team as it is generally seen as very time-bound (“now”) and results oriented (“launch this product”). (I realize this is not exact – but it is a reflection of how I’ve heard these terms used over the years.)

So here are the three overarching principles for effective Go-To-Market strategy:

1) Define Your Objectives Carefully

If you don’t know where you’re going, it doesn’t much matter which direction you take the organization.

Objectives are necessary in order to have a clear and clean-cut view of where the organization is going. They should be built around a central concept of messaging, representing a set of promises that your target market will agree is innovative, indispensable, and inspiring (I³). Keep objectives as clear and specific as possible. Use time-bound targets that are measurable. (For example: Sell 100,000 units by May of 20xx for revenue of $$$ million.)

• Strategic objectives are the high-level goals that drive strategy and long-term direction. These include corporate goals, financial goals, and market impact goals.
• Tactical objectives aren’t tasks, per se, but are more immediately tangible than strategic objectives. They reflect the key areas of project management, overall efficiency and time management, and translate easily into “to-do list” items.

2) Ask the Right Questions

Throughout the formation of the your go-to-market strategy, four question areas will arise:
• What major issues must be faced?
• What key decisions must be made?
• What information are we missing?
• What expertise or “know how” will we need to carry out this plan?
   

First, identify major issues as they surface, noting where “gaps” still exist. These issues are either internal or external roadblocks to success. Some issues will require conversations or actions to mitigate their impact on your plans. In other cases, these issues might not be obstacles but rather create other, unintended complications. For example, a particular launch may negatively affect a long-term partner because it has competitive elements within it. This doesn’t necessarily hinder your go-to-market efforts, but it has ramifications in other aspects of your business.

Next, make the necessary decisions. All issues require one or more decisions – even “do nothing” is a decision. So, break down these major issues into key decisions that need to be made while going to market. Frame the decision along with its stakeholders and its impact on the key factors in the overall strategy.

Finally, determine what information and expertise is needed to execute your plan. How will you fill these gaps? All elements should be articulated and measured in terms of their relationship and interrelation to the strategic and tactical objectives of your go-to-market messaging process.

3) Don’t Get Stuck

Ironically, the most difficult task for companies is often not development of go-to-market strategy, but actually the execution of those plans. It is critical that you keep the elements of your overall strategy at the center of your conversations and current strategic discussions.

When you consider new business opportunities that might interfere with your current go-to-market tasks, ask: Is this consistent with our overall objectives? Our timeline? Our goals? Will this take the focus off of our strategic business initiatives?

Also, go back to the four question areas. They are simple yet valuable tools. Consider the simplicity and power of asking:

• Is this an issue that really requires more discussion and understanding?
• Do we need to make a decision which presupposes a defined set of outcomes to choose from?
• Is this an information gap (a lack of appropriate or sufficient information)?
• Do we have a “know-how” gap (the lack of a specific skill or domain expertise to fulfill the mission)?
   

Teams can develop a “shorthand” that moves them quickly from an emotional read of the situation to an objectively based one. Be sure to round out your discussions and conversations with an action orientation. You should always “map back” to your overall project plan, and stay rooted in your overall messaging strategy.

Do you have any success/horror stories about product launches?
How have you seen marketing strategies either help or hinder the product’s success?

Alright. Maybe I was a little harsh in the last post. But I promise I’m not heartless. Even though I believe there were a lot of crucial missteps on behalf of Microsoft, I can also see their perspective. There is a need for competition in the closed-systems smartphone market. There is a need for better cohesion in closed systems. It’s just a matter of playing the game well – and smart – enough.

The bottom line: there is still hope. More specifically, I believe there is still hope for Microsoft.

Innovation is Not Dead

Remember AOL? Dial-up modems? Palm Pilots? Floppy disks?

To throw in the towel and declare that innovation in a certain market is over is a mistake, and every entrepreneur knows it. But the thing with innovation is that it’s exactly that – innovative. Good, strategic innovation has to at least change the rules ever-so-slightly – not too much that people fear the change, and yet dramatically enough for people to take notice. In order to change consumer habits, innovation – especially in the smartphone market – needs to cause people to stop and say, “Hey – this is clearly better.”

Innovation is not dead in the smartphone market – I’d say it’s just beginning – and Microsoft should be able to think through their smartphone product to create a somewhat different paradigm.

Closed-System Competition

Monopoly is only fun if you’re winning, and if you’re the consumer, you’re usually not winning when a company has the monopoly on a market. Apple has arguably earned their place as the king of closed systems, but there’s no reason it can’t be challenged. If Microsoft finds the right strategy, it could become a game-changer.

We need a little closed-system competition – for the sake of the consumer and at the very least, to ensure that Apple stays on their “A” game.

Surprise Attack

In the last post, I was very fond of the phrase, “too little, too late,” but Microsoft could use their late arrival to their advantage. It’s possible that Apple and Android feel invincible, and now could be Microsoft’s chance to come in from [way] behind and make a sneak attack. Microsoft should take bold chances – and I’d say, the bolder, the better.

You know what they say – “Never underestimate the element of surprise!”

The Secret Weapon

Microsoft could also gain an edge by jumping on the biggest chance they have: INTEGRATION. People are still looking for a cohesive way to jump between tablet and phone and computer without searching for their information, and neither Apple nor Google has successfully wielded this “secret weapon” (although they sure are trying).

Dan Lyons, technology editor at Newsweek, said in regards to this type of integration, “So far, no tech company can deliver this [type of integration]. But Microsoft has all the pieces. It just needs to bring them together.” And if anyone can speak with authority on this subject, it would be Lyons. He recently conducted an experiment in which he used only Microsoft products for a month. His conclusion? Well, I’d recommend reading the full article, but I especially liked his ending insight. He acknowledged that despite being impressed by Microsoft, he wasn’t about to switch his iPhone for a Windows phone; however…

“…later this year or early next, when Lenovo comes out with that slick Windows 8 tablet-slash-laptop, I might just buy one. That’s how change begins. That’s how Apple won people over, including me, over the past decade. It started with iTunes and an iPod. Then I got frustrated with Windows and tried out a low-end Mac Mini. That worked, so I made the leap to an iMac. Then an Apple TV box. Then a MacBook Pro. Then an iPhone. And on and on. So that’s what Microsoft needs to do. Find a product that gives it a toehold and build from there.”

So, Microsoft: hope is not lost. As harsh as the smartphone landscape may appear – and even as harsh as I may have been in the previous post – I firmly believe that you have a fighting chance.

And I can’t wait to see what you do with it.

• How do you think Microsoft can “come back swinging” with a fighting force?
• What is Microsoft’s best bet when it comes to strategy to win the market?
• Do you think there is still hope for Microsoft, or are you more apt to agree with the previous post?

When did Pop-Tarts start selling as fast food?

When I was a kid (apparently back in the Stone Ages, as my kids like to remind me), they were sold as something that had to be toasted first. Pop-Tarts were only for breakfast – end of story.

Today, Pop-Tarts are anything but “only for breakfast.” Here in our office, they are a staple snack item. And I’ve learned we’re not the only ones.

In 2010, Kellogg (owner of the Pop-Tarts brand) opened a Pop-Tarts store in Times Square, joining M&Ms and Hershey. This bold move, as the NY Times points out, is focused primarily on “marketing and visibility.”

And Pop-Tarts wants to be visible, but not as a breakfast food. At the Pop-Tarts store, not only can you simply enjoy your favorite Pop-Tart variety as a snack, but you can create your own Pop-Tart, eat a Pop-Tart sandwich, and (I kid you not) try something called Pop-Tart “sushi” (but don’t ask me what that is, because I’m not quite sure – although I’m fairly certain raw fish is not involved).

So this is the Pop-Tarts evolution, and I have to say: hats off to their marketing team. If Pop-Tarts were merely a breakfast item, I certainly wouldn’t be a customer any more – trading my childhood breakfast items for grownup things like oatmeal and eggs. Yet since they’ve been marketed as a snack, I have been a loyal customer – I, and the rest of the “grownups” in my office (yes, in spite of the carbs and calories – after all, genius needs fuel).

The Pop-Tart brand is a perfect display of what can best be called “evolutionary marketing.” Instead of remaining in their proverbial box, they’ve reached out and redefined their brand in order to make Pop-Tarts more widely marketable.

Without changing the product, they changed its purpose.

Surprisingly, the term “evolutionary marketing” doesn’t yield as much on Google as I would have thought. It appears to be a potential business buzzword that has yet to take definite shape. However, there were a couple (read: exactly two) posts out there that started a good conversation.

One article on Thoughtlead was written by Seth Rosen, in which he defined evolutionary marketing as, “seeing all available marketing strategies and tactics as potentially valuable to our efforts to sell our products, services, or messages; and … pursuing all of them with an eye on where we can go as a culture, and as a human race.” In response to this post, Kathy Bayer of KB Marketing & Consulting added her own thoughts to the idea of evolutionary marketing. I especially liked what she had to say at the end: “Evolutionary Marketing by definition has to be constantly changing and evolving, so anyone can jump into the conversation any time and take it forward.”

Well, allow me to “jump into the conversation,” “take it forward,” and suggest yet another definition.

I would venture to argue that this new term moves beyond the evolution of marketing strategies available (with a heavy focus on SEO and social media). I believe evolutionary marketing can describe the evolving branding strategy of a product or service. It’s about the way a product evolves over time, utilizing the technology and trends available, but strategically revamping its brand and purpose, to keep it relevant.

In other words, it’s the difference between Pop-Tarts and Kodak. Pop-Tarts kept its competitive edge, and even brought it up a notch, to remain relevant in today’s market. Kodak – arguably a more versatile business than Pop-Tarts – failed to evolve (and we all know what happened there: extinction).

Brian Solis recently posted about Digital Darwinism, and discusses how to avoid extinction in a world where, as he cites from a Babson College commercial, “Over 40% of the companies that were at the top of the Fortune 500 in 2000 were no longer there in 2010.” That’s a sobering thought, and hopefully a wake-up call to those of us who believe ourselves immune to extinction. As always, Brian adds an insightful take to this idea, and the following quote is an apt description of evolutionary marketing: “Everything begins with embracing a culture of innovation and adaptation – a culture that recognizes the impact of disruptive technology and how consumer preference and affinity is evolving.”

So as I grab for yet another 3-o’clock-Pop-Tarts-pick-me-up, I ask myself the question: Am I evolving with the market, or am I in danger of becoming extinct?

What about you?

• How would YOU define “evolutionary marketing?”
• What other products have you seen evolving with the times in an effective way?
• What other products have you seen becoming extinct?

Do you Yahoo?

If the numbers are any indication, then you probably don’t – you’ve probably taken your search to Google, your social interaction to Facebook, and your entertainment to YouTube. Over the last few years, Yahoo! has been floundering to find its identity, to say the least.

Enter new CEO Scott Thompson (former executive of PayPal) to save the day. His previous experiences make him an odd choice for a company turnaround: he’s been a product manager instead of a media executive, he helped a small-but-healthy business grow – but has no experience turning around a flagging business, and he unabashedly confessed to knowing barely anything about advertising. And yet he is the chosen one to relaunch the suffering search engine company – he is the one responsible for branding Yahoo! with a new identity.

And what will that identity be, exactly?

It’s hard to say, but Yahoo! seems to be focusing its efforts on online entertainment. The close of 2011 brought announcements of partnerships with Bill Maher and Funny or Die comedic videos, as well as launching original video content. A few days ago, Yahoo! also reported their sponsorship of the Sundance Festival – mainly by partnering with the festival to air 12 short films on their website.

So, judging from the recent press releases, I gather Yahoo is re-branding itself as… an online media giant? …a social-networking culture hub? …generally cool and relevant? Or… what? To be honest, I can’t really make heads or tails of their re-branding scheme, and I think that’s a problem. There’s no clear indication of the direction the company is heading in, and I’m fairly certain the audience they’re attempting to reach out to (the young, hip, “YouTube generation”, I presume?) won’t be taking this [vaguely positioned] bait.

And not to beat a dead horse, but doesn’t this seem all-too-familiar? –A little too much like Yahoo! re-branding déjà vu?

Need I remind everyone of former Yahoo CEO Carol Bartz – who, with her ascent to executive power, brought a massive re-branding campaign to Yahoo in 2009? The “Y!ou” campaign sought to humanize the company – playing off of the rise of me-centric internet browsing (made popular, if not invented, by Facebook). That campaign made much more sense than the current one: it was streamlined, seemed relevant, and was bound to work.

Except it didn’t.

So why does Yahoo! think their current re-branding efforts will work? What’s the difference?

If they’re hoping for a new audience from the Sundance folks, they’re probably out of luck. YouTube partnered with Sundance only two years ago, allowing viewers to watch full-length Sundance films on streaming during the festival events. The films chosen were obscure, the audience drawn in was smaller than anticipated, and YouTube has chosen not to partner again with Sundance in this way. If YouTube – an internet giant with branding built on online videos – couldn’t snag the hipster Sundance audience, how will Yahoo! attempt this feat? Unless Yahoo! has some blockbuster short films up their sleeve (does such a thing exist?), it seems doubtful that the Sundance partnership will do much, if anything, to turn the company around.

Yahoo! keeps missing the mark on re-branding because they are failing to capitalize on their current strengths. The fact is that they still get 700 million visitors each month as an online leader in news and sports. They would do better making efforts to become innovators in the world of online news – to re-brand themselves as a “trusted online news source.” They should attempt to cater to their current audience – perhaps offering specialized sports programming, such as the UFC (which, with 50% of their audience between the ages of 21 and 34, is just the type of demographic Yahoo! seems to be coveting[i]).

Instead of focusing on completely changing their identity, Yahoo! should stick to what they’re already doing that’s working – and bump it up a notch. Attempting to copy Facebook and YouTube (or trying to make a new hybrid) is not smart re-branding. The mistake here is that their overhaul will leave people scratching their heads, wondering why exactly they should even consider using Yahoo! in the first place.

Listen, I’m interested to see how this all plays out. Maybe there will be a sudden resurgence of loyalty for Yahoo!… but it doesn’t seem likely. Unless and until we see a miraculous turnaround for the company, there a few re-branding lessons we can take away from this whole situation:

• Innovate – Don’t Copy: Facebook and YouTube became internet giants because they offered something new to the internet consumer. The reality is that, for the time being, they are ahead of the game. Unless your company can offer something truly new to these audiences, don’t attempt to become a copycat. Instead, find a new way to deliver what your company has to offer. Simplify it, humanize it, and streamline it.
   
• Know and Capitalize on Your Strengths: Yahoo! has an audience through its news and sports offerings, and yet they seem to be ignoring this strength staring them in the face. The only justification (if you can call it that) for this is that they must not realize their strength in this area. Don’t follow suit. Figure out who your best and real audience is, what they want, and then give it to them – pronto!
   
• Make Re-branding Clear and Focused: Let’s say you’ve come to the conclusion that you must completely overhaul your company’s branding. Fine, but make it clear. Don’t be vague, and don’t be irrelevant. Re-market your brand in such a way that anyone who sees your company’s logo and messaging will know exactly why they need you.

What do you think of Yahoo’s recent re-branding strategy?

How would you re-brand the company?

I’ve written before about the lessons we can learn from Research In Motion’s failure to keep ahead of their market (and we all saw how the market reacted to Netflix’s little flub), but with 2011 now behind us, I think there are some lessons worth revisiting.

Let’s take a closer look at two companies that were clearly top players: Research In Motion (RIM), once again, and American Airlines. Notice: the key word in that sentence is, “were.”

Here’s the bottom line, and the biggest lesson we’ve learned from 2011: even though you may be on top, it doesn’t mean you’re invincible. The problem with rising to the top is getting too arrogant – too cocky – and not bothering to maintain your competitive edge. We saw this hubris clearly displayed by RIM and American Airlines.

RIM taught us that even though you may be on top – even though you were the first in your industry to release a groundbreaking product – it doesn’t mean you can get away with releasing bad products. The customers are too smart for that, and they will take their smartphone business somewhere else (and, in fact, they have).

American Airlines taught us that it doesn’t always pay to be the lone wolf, and that there is safety in numbers. In the wake of a faltering airline business, we saw two great mergers: United and Continental, and Delta and Northwest. While the other major airlines combined forces, American tried to tough it out alone… And they failed: AMR went from being the largest airline in the US to small potatoes, barely eking in at third place behind the other major carriers.

What were the underlying culprits behind such poor business decisions? What were the causes that issued these companies their death sentences? Without being on the inside, it’s hard to say, but we can certainly take heed of the warnings in these tales of woe.

1) Stay On Your Game (Don’t Be Lazy)

When you’re on top, you could easily buy into the lie that you’ve done the work, and now is your time to reap the rewards. Not so fast. This is an ever-changing, dynamically-demanding world. Every day, technology is evolving and customers want the newest and flashiest technology available (e.g., iPhone 4S). If you decide to take a break from researching and releasing groundbreaking products, expect the customers to take a break from you (and possibly never return).

2) Stay In Your Game (Don’t Lose Touch with Your Market)

While the rest of the world was rapidly moving to touch screens, RIM was releasing the same old models. What’s more, they weren’t even good models. The promised QNX-based smartphones have been delayed twice, and RIM’s customers (and stockholders) are rapidly losing hope. Failure to keep your head in the game – and pay attention to what your competitors are doing and what your customers want – will cost you your competitive edge, your stockholders, and your customers.

3) Gather Your Allies (Don’t Be Afraid to Ask for Help)

All seemed hopeless for the airline industry until the two mergers were announced. Combining forces was the way to go, but American Airlines missed out. Either they thought they were untouchable in this market, or they just missed the boat. In either case, it’s better to ask for help than file for bankruptcy. Allowing your past success to cloud your current judgement might result in the collapse of your company.

4) Treat People With Respect (Don’t Forget the People that Make Your Business Run)

When you’re on top, it’s an easy trap to start thinking of yourself as better than the people who work for you. American Airlines went into tense negotiations with their pilots, and the reality is that how you treat your staff translates into how your staff treats your customers (i.e., not well). So not only was AMR receiving bad press from filing for Chapter 11, but now they were playing the “bad guys” in the battle with their own staff. Not a great move. When you’re calling the shots in a company, make sure you respect the people who work for you; they are a huge part of the reason you’re succeeding, and should be treated as such.

So as we get into the swing of 2012, take these lessons from 2011 to heart. As a business leader, it’s your job to say “when” – when to jump ahead of your market, when to protect your business, and when to show your customers/employees/stockholders you appreciate them. But, as we witnessed through various companies in the past year, just make sure you say “when” before it’s too late.

We’re all familiar with this story.

A business is at the top of its game, makes a trajectory-decision based on an assumption, and subsequently misses the mark. In this case, the business is Netflix, the assumption was about its customer base, and – as we all witnessed (and were perhaps, as Netflix customers, privy to the news via e-mail) – Netflix missed the mark.

A year ago, if anyone had said that within the span of one month, Netflix would lose 800,000 customers and its stock would plummet, that person would have been laughed out of the “society of business punditry.” Netflix was the game-changer of how people consumed movies – arguably responsible for the closure of Blockbuster Videos around the country, as well as much of the Internet’s traffic. There was basically no current competition for Netflix; the business was at the top, gaining two-plus million new customers every quarter. Things were golden, until…

…until a haphazard blog post announced a price hike of 60%.
…until CEO Reed Hastings issued a disarmingly casual “I-messed-up” e-mail.
…until they decided to split the service into two different services
     (instant streaming staying as Netflix, and “Qwikster” for DVDs by mail).
…until they retracted that decision.

Netflix had a good business model. They had loyal customers. They had happy stockholders.

What went wrong?

First: Netflix made an assumption about their customer base, and this assumption was egregiously incorrect. They assumed that their customers were passionate enough about Netflix to stick by the business – that no matter what, these customers wanted their movies and would continue to use Netflix’s services. Although Netflix was right about their customers being passionate, they didn’t realize the passion would be railed against the company itself. In response to a price hike and change of services, Netflix’s customer base passionately informed the company of their disappointment and disapproval, and 800,000 of them jumped ship.

Second: Netflix employed poor communication and execution of the changes in service. Whether or not the new business model was good or necessary is one thing, but the way Netflix both announced and unveiled the changes fell short of their game. The announcement of changes first came through a seemingly slap-it-together blog post late at night, which sent the Internet ablaze in fury. Then Reed Hastings sent out an e-mail one might expect from a college buddy rather than the CEO of a company.

Finally, they retracted their decisions within a month of the first announcement. In the meantime, amidst all of these embarrassing communication flubs, the Qwikster website was not ready when the service launched, and the Twitter account was already in use by a drug-using teenager with foul language. All in all, the launch was sloppy. It seemed uncoordinated – like a last-minute decision gone awry.

We could spend all day disputing and defending the good and the bad and the ugly of Netflix’s recent business decisions, but I’m more interested in discussing the implications every business can take from this situation.

So what can we learn here?

What we can learn is that when you’re on top – when you’ve positioned yourself as a leader in your market, even if its just your local market – each decision must be well thought out (and hopefully the right one).

In the fast changing business world of today, it’s sometimes necessary to make drastic changes to a working business model. But before you are ready to go to the presses (or your customers) with these changes, make sure the model is carefully thought through in minute detail. Not analysis paralysis – but at least a thorough vetting with trusted voices. You have to at least try to do everything right or don’t do it at all.

If you are going to make business decisions based on assumptions, make sure they are the right assumptions. Validate them. Test them. Make sure you have the data to back it up before you go ahead and change your business model.

Once you have your facts in place, make sure you communicate well to all affected stakeholders. When you’ve amassed a loyal customer base, you need to keep them by respecting them, and respect comes through how you communicate. When all of these factors are set in place, ensure that your new business model is ready to launch from all sides of the company. You can’t cut corners – the market is too demanding and too connected for that.

Recently, there’s been lots of news covering Research in Motion, the Canadian-based company behind Blackberry. Although Blackberry has entered the lexicon as a standard reference to smart phones – frequently referred to in movies, TV shows, etc. – the reality is that for the last five years, Blackberry has been losing market share, and losing its position as the definer of email-enabled phones to iPhones and Android.

What must be particularly galling to Research in Motion, more so than the iPhone’s success – which was a truly groundbreaking product (which RIM tried to imitate with their touch product) – is the onslaught of Android, coming at the market from a completely different angle and making major headway. All in all, it has not been a good couple of years for Research in Motion.

So, what’s the lesson here for us?

Well, there are a couple. One is that when trends start shifting, you have to look down the road to see what’s really going on, and what you might need to do to respond.

The fundamental problem with the iPhone being better than the Blackberry was that it wasn’t really better, at least by many measures. Some people prefer a physical keyboard. Some people thought (and for a while it was quite true) that for corporate networks, Blackberry email had much more advanced security than Apple’s initial offering, and more so than Google’s Android system.

Where Research in Motion dropped the ball for Blackberry, however, was not looking at the trajectory of things. What was happening was that people were taking to the touch model very easily, and so that became a major new trend. Secondly and perhaps more importantly, they were looking at the empowerment of a large screen. Third, consumers become almost instantly enamored with having an almost infinite array of creative applications at their fingertips. So in many ways, the App Store and all the things related to customizing your experience were what set apart the iPhone, and later Android-based phones.

Look down the road at where your competitors are going. This is especially true in a highly-competitive market, and particularly if you are a leader in a category. Do not be dismissive of what the new competitor’s bringing to the table. Instead, ask yourself, What really changes, if I could fast-forward where they’re taking this? What is possible? What has been impossible for us, but maybe is possible for this new model – and can we adapt? Can we “join in”?

Without asking those questions – and it’s not likely that RIM’s executive suite were asking those questions, because that’s what happens when you’re on top – it’s easy to look down your nose at everything else that’s coming. It’s easy to only see the deficiencies of those players, missing where their strengths could develop, given enough time.

Given that this was Apple and later, Google, entering the market, it was arrogant to be dismissive of their ability to hammer away at a potential advantage, and make it the actual point of differentiation of their value proposition.

Apple didn’t just represent email, but functionally – from a user interface point of view – better email, and not just phone, but equal phone capabilities. The iPhone doesn’t just have download-able widgets – which Blackberry already had in some interesting little applications – but formed an entire ecosystem of completely flexible applications, that would not feel like, look like, or function like everything else that was previously available.

It was truly groundbreaking stuff, which of course is Apple’s strength. For all of us not competing against an Apple-caliber corporation, there still is a lesson to be learned about really “fast-forwarding” your competitors’ advantages to Where does that leave us – one-, three-, five years from now?

5 Reasons Why Social Media is a Fad and Not Relevant for my Business.

Social Media is a fad. It’s something that will go away soon. It clearly is not going to be all that it’s being presented to be by the press and the pundits who want to promote it as something new and important.

Social media clearly does not apply to my business. This is true for the following five reasons:

1. It really doesn’t matter what people say about my company on the web. The only people who care about finding recommendations via the web are people who have too much time on their hands, and are not likely to be my real customers.
2. Being plugged in to social media can only give me an inaccurate view of my competitors. In fact, it will often mislead me, in terms of thinking they are more important or relevant, or being talked about more than they really are.
3. Social media is a real “time sink”– an almost total waste of time. I can’t “tweet,” update Facebook, update LinkedIn, participate in discussion groups, and still run my business effectively. After all, it’s not like that really impacts my customers.
4. I have a website, literature, and brochures. My sales teams do a more than adequate job of communicating why my products and services matter to my customers, and I believe my customers really make their evaluation based on those materials, not through social media.
5. I’ll always be able to catch up later… even if it is a real, significant trend in the way companies communicate with prospects and customers. I’ll just hire the right consultants and apply the right techniques then. After all, what can it hurt me to be a year or two late on something, if I have the budget to just throw at it later on?

If you read the above, and it sounded like what you’ve been thinking about, be prepared for your cheese to get stolen out from under you.

First of all, it’s important to remember that Social Media, and the proper use of it, is self-reinforcing. What this means is that the sooner you start and the more (of the right things) you do, the stronger your position vis-à-vis your competitors. You can’t suddenly create an active conversation around things that you could listen to and learn from your customers, and things you want your customers to listen to and learn about you – from scratch, overnight. It takes time.

Social Media for business is more like a farmer planting seeds, tending the field, and reaping the harvest than going shopping at Acme.

Top strategists have noted that social media is different from everything else in at least three key dimensions:

1. It’s bi-directional – and it’s not just communication that is bi-directional, it’s also bi-directional in terms of determining what happens in the conversation. “Listeners” or the other participants have as much to say about what happens as the people who might be sponsoring the venue.
2. It takes longer to gestate, but…
3. It also connects deeper with people in their passions – the things that really matter to them.

So does your business connect with your best prospects and customers on a dimension that really matters to them?

That’s really the question, and social media and the variety of tools, technique, approaches, and strategies available to businesses of all sizes afford a new opportunity to connect with your audience, in a deeper way and on a different timeline than traditional marketing and advertising.

Ignore at your own peril.

The Bottom Line:

• Every part of your organization has to work toward sales transactions.
• Pricing establishes the revenue and profits from those transactions.
• Pricing determines the volume, velocity, and value of your sales.

Every part of your organization, from product development, to manufacturing, to marketing and sales, is working toward one thing: sales transactions. Customer service supports those transactions, looking to create repeat and referral transactions.

Pricing is the mechanism which establishes how a company generates revenue and profits from transactions. That is, pricing establishes what a company expects customers to be willing to exchange for your offering.

When you price correctly, your revenue stream will be as profitable as possible. Set the price too low, and you are exchanging margin (and total profitability) for volume – too high, and you may limit or throttle sales altogether.

Therefore, pricing determines the volume, velocity, and value of your sales.

• Volume: The total amount of sales revenue generated by an offering. This can also be seen as potential share of a given market realized by the offering.
• Velocity: The speed with which sales transactions take place. This can be the speed of transaction growth between time periods (i.e., month to month growth), as well as the typical “sales cycle” for transactions.
• Value: The profitability of transactions at a given price point. Marginal revenue and marginal profits are largely a function of optimal pricing.

What would be the likely impact on total sales and total profits, if we lowered our prices by 10%? Raised our prices 10%?

It would be great if pricing were a simple gradeschool math equation:

A + B * (X / Y) = Ideal Price

If you’ve priced anything before, you know it’s just not that simple. Pricing is complicated. Finding the ideal price for your product, in your target market, accomplishing your revenue goal, is NOT simple.

The key to remember is that, as much as any factor regarding your value proposition, pricing establishes the competitive context for your product.

Now, a multitude of factors play into the equation, so the math is messy.

You can get solid numbers like Fixed and Variable Costs from your Finance department. Competitors prices can be gleaned via a little research.

Then there are the fuzzier numbers, like price elasticity, the demand curve and perceived number of potential buyers. Demand will change when price changes (think back to Econ 101). Estimate the impact each potential price point will have on demand. The change in demand will also impact the number of transactions or volume you’re likely to generate.

And finally, the marketplace comes into play: expected rate of price increase, relative position in the market, customers’ perception of value, and regulatory oversight costs.

Just about everything is important in understanding the context of the pricing environment. Leave out one factor and you may have left out the component that eats your profit margin. And of course, customers don’t always make rational buying decisions, either. Your pricing has to make sense to the buyer, not just your team.

You need to be relentless in managing your pricing strategy. Wow! That’s depressing.

Ok – here’s the thing: no one can dial in on this 100%, 100% of the time. It’s a discipline and it requires vigilance. But remember, literally perfect pricing is impossible because the market doesn’t stand still. Your special deal pricing will prompt your competitors to counter. The new level of pricing sets a new expectation among your customers. And.. new entrants can price above or below you with some new features (or trim some features) – so it starts looking like new product categories have appeared within your space.

Keep your head about you. Test. Talk to customers. Watch competitors. Test again. Check the financial return. Watch costs. Rinse. Repeat.

Quick questions to ask yourself:

• How do you get a handle on all this?
• How are you testing pricing and its effect on sales?
• How often do you check your competitors?
• How deep a dialogue have you had with your best customer on your proposed pricing?

As an entrepreneur, product manager, or CEO, you have to be vigilant of what is going on in the marketplace. Are you taking a holistic view of both competitors and even more importantly, trends? Ask yourself: are you really offering something that has a truly distinct Value Proposition? If not, someone else will.

The following are practical suggestions for keeping up with Competitors, Alternatives, and Disruptors in the Marketplace:

1. Talk to your customers and prospects. Tell them that you really want to understand them and the marketplace better. Ask them: what other companies and products have you been looking at? Make this a conversation, not a survey process (although a survey is valid and good – it’s just different than talking to them).
2. Talk to your sales force. As hard as it may be to get real answers, you have to ask them about lost deals. Have you lost deals to specific competitors? Who else are prospects mentioning they are considering? Track this information but keep it simple. If you’re a one-person sales force, still do this as a “getting real” exercise.
3. The Internet. This one’s obvious – but it still requires that you take the time to do it! With the breadth and depth of web resources available, you can find out a lot about your competition at the click of a mouse. Enter key words of your value proposition into google and you will most likely locate your competitors. Create a Google (or other RSS-based) news feed with the key words included in your Value Proposition and check it daily. This low cost and easy dashboard is useful in keeping up with the marketplace. The more tightly defined your value proposition is, the more quickly you can start doing research and locate your competitors quickly.
4. Commission or purchase market research. While news may sometimes be “after the fact”, industry research houses (such as Gartner and Forrester in IT) discuss new products and technologies with vendors before they enter the marketplace. Professional research provides insight into the direction of companies within your industry. Analysts develop opinions about where a market is going. While no one is right all the time (most research firms overstated the dot-com revolution, for instance) – they provide another valuable voice to the discussion your firm needs to have regarding competitors, alternatives, and especially, disruptors.
5. Build relationships with key people within your specific trade press. These professionals closely follow your market and they can be critical for not only providing press coverage of your company and product, but also for sharing conversations about what’s going on in the marketplace and what’s coming down the pipeline.

Buyers are, after all, only human.

By their nature, humans do not always make rational decisions.

Their buying decisions are no different. Not only are not not always rational – they don’t even repeat the same decision with certainty.

Pricing is a critical component of your product, service or business’ Value Proposition. And good pricing strategies must take into account the psychological effect a given price has in the customers’ mind. A price is not just seen as the amount a brand wants in exchange for their product. Prices are relational. That is, they are related to your product, to customer expectations of features and value, and even to customers’ perceptions of themselves.

Within every product category there are pricing anchors. These are prices for services the buying public is conditioned to accept as reasonable and expected for a given category. To go above those anchor price points your product needs to have significant value added features which resonate with the buyer’s sense of value. In other words, bumping your price up to the next price range in the category, buyers expect your product to have certain features. If they conclude your product doesn’t meet that higher expectation, their disappointment is startling.

Buyers who pay a bumped up price, higher then the expected “anchor,” may not be buying your stated feature package. They may be buying based on their perception of themselves, “I can afford better than the cheapest model.” In other words, overbuying to ensure quality, hoping to lengthen the time before needing to replace their purchase (“I bought the Sony because it’s more reliable than the Vizio” – although both could be the exact same TV!)

If you chose to go with a bumped up price, set the price so it’s clear that it’s an upgrade from the anchor. When a price is only slightly higher than anchor pricing, buyers’ perception may be that you are “just slightly better than,”  or even “just more expensive than” – and not truly an upgrade from the low-price alternative. And of course you must deliver quality that fits hat perceived position. Your product must rise to meet buyer expectations.

One of the most common and obvious other pricing strategies is charm pricing – setting prices slightly below a round number, such as $29.99 vs $30. There is a proven rationale for this, even for luxury brands – it works! Consumers rationally know $29.99 is $30, but their perception is that the price is in the $20-$29 range rather than the $30-$40 range. Therefore, they perceive the price as lower.

• What anchor price exist in your product niche?
• What bump price points exist and what feature expectations do buyers have at those price points?
• Does your price point end in 9? If not, why?

Ironically, the least successful and most difficult task for companies is often not development of go-to-market strategy, but actually the execution of those plans. It is critical that you keep the elements of your overall strategy at the center of your conversations and current strategic discussions.

When you consider new business opportunities that might interfere with your current go-to-market tasks, ask: Is this consistent with our overall objectives? Our timeline? Our goals? Will this take the focus off our strategic business initiatives?

Also, go back to the four question areas. They are simple yet valuable tools. Consider the simplicity and power of asking:

• Is this an issue that really requires more discussion and understanding?
• Do we need to make a decision which presupposes a defined set of outcomes to choose from?
• Is this an information gap (a lack of appropriate or sufficient information)?
• Do we have a “know-how” gap (the lack of a specific skill or domain expertise to fulfill the mission)?

Teams can develop a “shorthand” that moves them quickly from an emotional read of the situation to an objectively based one. Be sure to round out your discussions and conversations with an action orientation. You should always “map back” to your overall project plan, and stay rooted in your overall messaging strategy.

Former Avaya CEO Louis D’Ambrosio’s frames strategic planning this way: “We’ve established three key priorities: strategy, execution and culture. What’s most important is the interrelations between the three.” Given the formation of the your go-to-market strategy and its objectives, actions and resources, four question areas will arise:

• What major issues must be faced?
• What key decisions must be made?
• What information are we missing?
• What expertise or “know how” will we need to carry out this plan?

First, identify major issues as they surface, noting where “gaps” still exist. These issues are either internal or external roadblocks to success. Some issues will require conversations or actions to mitigate their impact on your plans. In other cases, these issues might not be obstacles but rather create other, unintended complications. For example, a particular launch may negatively affect a long-term partner because it has competitive elements within it. This doesn’t necessarily hinder your go-to-market efforts, but it has ramifications in other aspects of your business.

All issues require one or more decisions – even “do nothing” is a decision. So, break down these major issues into key decisions that need to be made while going to market. Frame the decision along with its stakeholders and its impact on the key factors in the overall strategy.

Finally, what information and expertise is needed to execute your plan? How will you fill these gaps? All elements should be articulated and measured in terms of their relationship and interrelation to the strategic and tactical objectives of your go-to-market messaging process.