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Quotes to Think About as Marketers

While the presentation is focused on M&A considerations, I think it is a good set of quotes for Marketers and Product Managers to embrace strategically, even if some of the personalities quoted might not be a traditional source for marketers to reference.

Marketing Statistics Are Hard . . . Sometimes It’s Just Easier to Make Them Up

Some fun quotations . . .

  • “42.7% of all statistics are made up on the spot.” — Steven Wright
  • “There are three kinds of lies: lies, damn lies, and statistics” — Benjamin Disraeli
  • “Figures don’t lie, liars figure”– Mark Twain
  • “There are two kinds of statistics, the kind you look up, and the kind you make up.” — Rex Stout

I’ve been doing technology marketing for over 20 years.  One of the hardest things for marketing teams to do is to come up with credible ‘proof points’ to help justify the hard and soft benefits of their solutions.  A proof point is supposedly a fact-based statement backed up by a tangible reference.  A classic example would be “Our customers reduced their operational costs by 8% in the first year and achieved a 213% ROI in less than two years”.  The challenge is that most marketing teams have never built valid case studies that could give rise to real proof points.  The teams often lack the financial literacy to actually calculate the proof points and they rarely can get access to or permission from real customers to do this type of analysis.  When push comes to shove from the sales team, marketing organizations often just make up proof points and hope that no one ever challenges their validity.

The Wall Street Journal’s ‘Numbers Guy’, Carl Bialik, just published an article entitled ‘Marriage-Maker Claims Are Tied in Knots.  The subtitle of the article is ‘Online Dating Sites Say Hordes of People Ultimately Marry, but Their Methods Have Plenty of Hitches of Their Own.’  In the piece Carl talks about the bogus nature of online dating sites claims of the number of marriages that have occurred as a result of people hooking up on the site.

“Online-dating sites have changed romance for millions of Americans. But claims that such dating leads to hordes of newly wedded couples may be fairy tales.

EHarmony claims in television or online ads in the U.K., U.S. and Australia that 2% of Americans who got married last year met through its site. But the stat is based on an online survey. Similarly, a media kit claimed that 12 marriages a day trace their roots to the site, but the company now says it’s inaccurate. And Markus Frind, chief executive and founder of Plenty of Fish, doesn’t advertise about marriages, but says his site brings about 100,000 marriages a year, a figure based in part on “some study I found online.

. . . Mr. Frind, of Plenty of, scoffed at the dozen nuptials per day, noting that eHarmony claims 10 times that number. He says that his site creates 800,000 relationships each year, according to exit interviews with departing members. He says that works out to about 100,000 marriages per year, based on a study, the details of which he couldn’t recall, that says 10% to 15% of relationships lead to marriage.

The only statistic Mr. Frind knows with certainty, he says, is the number of members who have self-reported success stories on his site — now around 2,000. “I don’t want to pay $200,000 to a research company to find out how many marriages I have per year.”

It’s clear from Carl’s reporting that the dating sites basically made up their claims and are not too interested in investing the time and money to find out what the real numbers are.  I was surprised to learn that there is a lot of formal research on this topic.  Terms such as Ipse-Dixitism and Argumentum ad Verecundiam have been used to describe this syndrome before.  Argumentum ad Verecundiam or argument from authority is defined in Wikipedia as “Argument from authority or appeal to authority is a logical fallacy, where it is argued that a statement is correct because the statement is made by a person or source that is commonly regarded as authoritative.”

The most common tactic employed by technology marketing organizations to overcome a deficit of proof points is to hire an industry analyst firm like Aberdeen Group, Forrester, or AMR Research.  These firms all provide consulting services to technology providers to help them research, position, and prove the effectiveness of their technology solutions.  Typical services include sponsored white papers, research studies, webinars, or speaking engagements.  In general, these firms do a very good job at providing these types of services.  During the height of the Internet Bubble some analyst firms were accused of being paid shills for some technology providers.  While there may have been some truth to certain allegations the industry as a whole has significantly cleaned up their acts since then.  Most notable is the Gartner Group.  Gartner created the Office of the Ombudsman whose mission is “to openly and assertively address issues of analytical independence, accuracy and integrity through compliance with Gartner’s Principles of Ethical Conduct.”

The primary challenge with working with industry analyst firms is cost.  A single project can cost anywhere from $25,000 to $50,000.  Analysts and consultants conduct dozens of engagement in a year – they have a very wide and deep experience base.  Since they’ve worked with so many technology companies they have a pretty good idea about what works and what doesn’t work.  In today’s tough economic times a lot of marketing teams cannot afford to make single project investments of this scale.  If your company is in this kind of situation I have a plan that you could execute on your own to build and leverage credible proof points for your solutions.

The core of this project is helping customers document and then promote their own success using your solutions.  Everyone likes to have their horn tooted.  By helping your key users or champions demonstrate the wisdom of their decision to acquire and deploy your solution you can create a win-win scenario.  For lack of a better term I’ll call this a ‘Customer Success Program’.  The goal of the program is to get 6 to 12 customers to participate in a study to document the business impact your product or service has had on their organization.  The deliverables of the program will be individual case studies and a micro site or blog.  While the customers who participate in the program can distribute the case study internally, as a vendor you will anonymize their identity in any external presentation of the information and only use summary information.  This approach has two benefits.  First, by creating a solid, fact-based analysis of the customer’s success you enable the key users and champions to tout their success inside of their company.  By anonymzing their identities and using only summary information externally you can typically get over any of the typical hurdles customers have with public endorsements of your products and solutions.

Your real goal in this project is to develop 3 to 5 rock solid proof points that you can make about your products and solutions.  To make this work you’ll probably need to approach a pool of 30 to 40 customers, split up into three to four verticals.  If you can get 6 to 10 customers to participate, you will have hit a home run.  Also, you’ll need to identify inside of your organization whom has the best personal relationship with the target customers and users – sales, professional services, customer services, etc.  You will need to develop a basic survey instrument – situation assessment, business problem, decision making criteria, hard and soft benefit categories, risks and risk mitigation strategies.  Leveraging your firm’s best personal contacts, ask for a brief teleconference with your targeted users/champions to explain the program and ask for participation.  Emphasize that this is a fact finding mission on how effective your product or service has been and that you are interested in learning how you can improve your offerings even further.  Stress the anonymity in the use of any results from a marketing and sales perspective and emphasize the benefits of having a documented case study for internal consumption in the customer organization.

You will learn a lot of things in the execution of this kind of project.  First you will find out who inside of your company really does have good relationships with key people at your customer organizations.  Second, you’ll learn that a lot of people are passionate about your technology and more than happy to share their experiences.  Third, it is inevitable that you will learn somethings about your product, services, and company that you did not want to hear but definitely need to be fixed.  Finally, you will be able to harvest real fact-based information to support the proof points you need to effectively market and sell your solutions.

While it may be easier just to make up some marketing statistics and claim victory, the process of actually talking with your customers and documenting their success will actually make your company successful.

Marketing IS in the Middle: Steve Johnson

The last in the series is the first person who really taught me marketing from a product perspective.  Real world product marketing, not theoretical.  I took one class in Atlanta soon after getting my first PM job and I was like “Thanks for helping define what I do and how to express what I do to the business”.

Steve Johnson is an industry thought leader on Product Marketing and is quickly becoming the leader on how to integrate Agile with product management successfully.  Steve has held most every job in a technology business and shares his ideas and expertise as one of the first folks at Pragmatic Marketing and continues to learn the state of the market as he engages companies and speaks nationally.  Steve is not your average marketer – no tagline, no brand discussion – just problems, product and revenue.  Not enough about Steve? Here is the excerpt from his corporate bio which says it the best:

“A biting sense of humor”, “credible” and “feels my pain as a product manager” are just some of the words attendees use to describe the experience of being taught by Steve. He is able to convey his experiences of living the life of a product manager in a unique and entertaining way.

I’m definitely thankful for his time on the phone and his candor on marketing and product management.  Steve blogs frequently on Product Marketing and has distilled many of his ideas into a free eBook on “The Strategic Role of Product Management“.  Below is his take on the questions for the series….
What marketing roles have you had and in what markets?

I’ve had most every role in technology – programmer, sales engineer and full-on sales, While in sales I stumbled into product management.  I was a sales engineer and knew the product inside and out and began positioning it on my own and being successful in accounts.  I didn’t use the stuff marketing gave me, since that wasn’t how customers were really buying.  After a while of developing my own mode of operation, I was asked to train others in my group on how I was generating sales. All the sudden I’m training sales and the VP of Marketing was like “who is this guy and why is he doing the PM’s job?” Next thing you know, I’m in product management. That’s where I met Craig Stull who later founded Pragmatic Marketing.

I bounced around a few more companies in more senior roles and then I came on board at Pragmatic Marketing and have been there ever since learning what’s happening in the marketplace and sharing the Pragmatic Marketing practices and processes.

When you look at your career in marketing, what discipline/component have you found most interesting/challenging?

I guess it’s just the concept of being in marketing.  The word marketing means different things to different folks.  1/3 thinks it is advertising, 1/3 hear MARCOM and the remaining 1/3 think it is strategy and products.

The confusion of what marketing is challenging for a lot of people in marketing roles.  With the latest downturn I’m seeing more and more people who are being downsized.  The biggest driver for this for many is they didn’t explain their role and the value they bring.  Or perhaps they don’t really know their role. One company asked the product managers to focus on sales support and two years later, fired them because all they do is sales support. Sad really. PM’s do a very poor job of helping the rest of the business understand what they do; and those that don’t define and market what they do may not make it very far.

Of course a lot of marketers don’t want their role defined –  they say “it’s an art” and art can’t have reports built.  Define the role, instrument your activities and produce metrics on what worked and what didn’t and let the organization know…. The “Trust me, you can’t metric what I do” folks are just not going to survive.

What do you feel is the most important component of a successful marketing gig?

It’s how you approach the market.  The concept of the marketing mix is off, at least in technology, since the four P’s don’t account for Problems and problems are what drive revenue.  To that end, an intense focus on problems is required. Companies who focus mainly on innovation and not innovatively solving problems have a tough time succeeding.    Cool stuff, but not saleable doesn’t work.

There are other examples of problems which are solve in an innovative fashion that are out of tech.  Think about Zip cars from an innovation perspective – you can rent a car for a couple of hours. Doesn’t sound too innovative or to solve a problem for the most part. Until you live in a city. If you don’t live in a city, you can’t really understand the problem. That’s why there are no Zip cars in suburban DC. But if you live in a big city and only need a car a few hours a week, ZipCar is ideal.

So you need a problem.  Figure out the problem, understand the market opportunity and needs, build the right product and enable sales to go after real problems.

Another real problem that many of us don’t have in technology is the cell phone.  What we have today isn’t for everyone. Many people over 60 want big numbers and simple controls.  Enter the Jitterbug Phone.  The jitterbug has no camera, no email and no internet; it’s just a phone.  They brought 2 models to market – one has 10 numbers and a send key – works like an old school phone – dial tone and all.  The other has 3 buttons, Emergency, operator and “my daughter”…..  If you need another number a human operator connects you.  In this model, the operator manages your address book, you just tell them who you want to call by name and they connect you from your personal phone book in their systems.

Jitterbug solves a problem for a very small part of the market, sure, but they solve it completely. Other products focus on most of the features that everyone everywhere needs and they fail to satisfy.

So to be successful you have to solve problems.

Since you selected problems, how has that contributed to revenue?

Simple – no problem, no revenue. We’ve all seen products that the developers and executives were sure would be a hit and they just fizzled. Why? Because people ought to want them doesn’t mean that people actually will want them. Tecnhology and innovation without a focus on solving problems is usually a waste of time. There are some exceptions–accidental successes–but innovations without a problem focus typically fail.

What experiences brought you to this conclusion?

Talking to people, looking at successful product and seeing what does and doesn’t work.  I ask people in my classes and most everyone can come up with a forced example, like the pet rock.  That’s an accident or a fad – but it’s not sustainable. Enduring products solve problems.  Sure there are successful companies which manufacture all kinds of stuff, like Sony, but the see what happens model can’t be taken by most business. What new  business or product can absorb that risk? not that many.

If you could design the perfect corporate environment for a marketer to be successful what would that be?

Organizational changes seldom solve problems – organization changes in bad organizations often make problems worse.  Good organizations for marketers have support in the leadership for what they want to do and understand what they are supposed to do.

One of the best ways to know that the leadership is aligned with the market is that the VP of Product is an executive peer.  There are other configurations which may work at different stages of the companies lifecycle, but the team needs to allow Product to plan, prioritize and execute.  They also need to allow for development to make product based on market requirements. For that to work, product management in development is a tough configuration.  Very often when product management is in development, they become more tactical.  Rather than researching market needs, they support development with beta testing and project planning. The Agile role of product owner is an example of this.  The product owner isn’t necessarily the product manager, but often this is how it works out when product is in development.

The other fairly common organization is for product management to report into marketing. However, in this role, they are often relegated to sales support – more sales tools, more presentations, more sales calls.

In my perfect corporate environment, Product drives, development makes, marketing promotes and sales sells.  With that being what everyone does it is fairly straightforward.  One thing I think might help is a new title in technology companies – Instead of a VP of Marketing, maybe we should call it the VP of Promotion.  It seems to me that everyone claims to be a marketing expert but not very good a promotion.

Regardless, if you have a firm definition of what you do, then it can be tracked, improved and managed more effectively. So first you need an organization that empowers product to deliver to the market and defines everyone’s role based on what they do and what they own.

There are other bad organizational configurations out there that don’t work, probably the worst are those poor souls who are VP of Marketing and Sales – a no win job.  In this role, you need to hit your numbers this year AND plan for next year. I’m not sure how that works when you are 30% off of quota.   I’m pretty sure you’re just out selling to keep your job and you will figure out next year when you get there, if you do.

By the way, I’ve also always been annoyed with Finance groups who just manage the cost numbers;  after all, they aren’t accountants, they are Finance and so, need to be strategic.  Shouldn’t they be tracking meaningful metrics beyond revenue and costs? They need to let everyone know the REAL metrics and help drive awareness on performance.  In the accounting style of finance, product managers must cobble together information from multiple systems and create their own view of the world.  The only real way to manage is against the financials and you can’t do that if you aren’t managing from the real numbers and trends which drive executive decisions.   Companies which leverage finance strategically can solve problems in a product or business together, rather than debating whose numbers are right or why one set of numbers aren’t right.

How far is this from reality?

Not far in some, but I definitely think there is a business in helping make this reality.  Helping organizations to let CFO’s to be leaders and not scorekeepers and training CFO’s on how to be strategic, if they aren’t already.

What’s next?

2009 will be a difficult year for many companies–certainly most US companies. The first reaction will be to cut costs across the board but another strategy is to focus on development of products, promotion, and people. Many companies have excess resources for the first time. Rather than fire them and lose their domain knowledge, we can focus them on creating new revenue opportunities for 2010. The economy will recover. Now is the time to set up interviews and customer surveys that we never had time for before. Now is the time to get everybody trained on best practices in product management, agile approaches to development, and new ways of promoting products such as video brochures, blogging, social media, and user-generated content. Now is the time to ensure that the buying process is well-understood and documented. Now is the time to set up systems to measure product success.

It’s so common to hear people say “if I only had time.” Now you do! Let’s not waste it by purging excess people but let’s take this rare opportunity to grow the business internally to prepare for a resurgence of business in years to come.