July 29, 2008

The Last Lecture - Leaving a Legacy Behind

A few days ago, Randy Pausch passed away. He became an Internet viral video sensation with his "The Last Lecture."  Historically, the last lecture is one given by a Carnegie Mellon professor each year designed to answer the hypothetical question, if you were about to die and had a chance to give only a final last lecture, what would you say?

As fate would have it, Randy Pausch was diagnosed with terminal pancreatic cancer before giving this lecture, so it in fact was his "last lecture." It was recorded and made its way to the Internet where it was circulated around the world as an inspirational talk.

I've included it here in case you didn't see Diane Sawyer's one hour special on "The Last Lecture," or it didn't pass through your email in box from a friend.

The Last Lecture

In the trail of his worldwide fame, Randy Pausch decided to invest the time in his final days writing a book also titled The Last Lecture. Selfishly, I am so glad he did. I ordered the book and can keep it on my shelf to always remind myself of the life lessons he shared.

Reportedly, he received a $6 million advance on the book, providing financially for his wife and three children (all under 6 years of age) even though he won't be around. I imagine the money didn't hurt, but suspect the opportunity to leave his legacy behind in print was a big draw.

He has always said "The Last Lecture" was intended to be a guide to life for his children, something they could turn to when their dad was no longer there. I imagine his book takes that idea one step further.

Amazingly, he left his legacy behind, got the financial stuff taken care of for his family (at the very last minute, no less), and seemed to live his life to the fullest.

He may not have lived a very long life, but he sure did live it well.

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July 25, 2008

Blogging for Leads

Lately, I've been quite interested in the potential for using blogging for lead generation. I've prepared this brief guide of my research, thoughts and ideas.

Let me start by saying my views on blogging is pragmatic. Unlike many quite enthusiastic bloggers that think blogging is the next best thing since sliced bread, my current perspective is that it's definitely very interesting, worth exploring, but is by no means a proven, consistent, and highly scalable medium for lead generation. There are definitely other very good reasons to blog, but this post is specific to the topic of lead generation.

I come from a direct response background. That is to say, I believe marketing is only good if it produces a desirable action,such as a sale, and it's bad if it doesn't. I also believe in counting your numbers so that you can objectively and numerically determine if your marketing is any good.

In looking at a number of prominent direct marketers who have historically used print ads, direct mail and Internet advertising to generate leads, I've found that most are using blogs as a way to communicate with their existing lists of customers and leads generated from non-blog sources. The most common model seems to be using the blog as a way to archive communications that would be normally sent via email.

From what I gather, the thinking is that some people are email people, while others are blog people. Blog readers typically use something called an RSS reader that essentially pulls posts off of a blog and puts them into a sort of an inbox for blog posts. Google Reader is one example of a fairly common RSS reader.

Here's how blog readers would typically use an RSS reader. They would set up a Google Reader account, and then click a button on a blog titled "RSS" or "Add to Google." By clicking on the link, all subsequent posts from the blog would be "sent" to the RSS reader inbox.

While many direct response marketers that I know are using blogs to communicate with their house lists, few to none are interacting with the blogosphere. The blogosphere is the name given to the community of interrelated blogs on a particular topic.

Typically, interaction with the blogosphere involves more than just posting content on your blog. You do things such as link to other blogs as a way to get other blogs to link to yours, or to comment on other people's blogs.

This is a very different approach to the idea that you should put a fence around your customers/audience and prevent them from discovering other bloggers/vendors in your market. When you interact with the blogosphere, you deliberately send your visitors to other related websites and blogs. The general idea is that by referring readers to other great resources and blogs, they will be appreciative and you will generate goodwill in the process.

What's important to understand about blogging is that all blog software platforms are designed to facilitate links from one person's blog to another. For example, if you put a link from your blog to this post and mark your post with the trackback link at the bottom of this post, it automatically sends a message from your blog to mine that such a link exists. This appears in my alerts and I will know that you thought enough of me/my post to link to it. In short, by doing so I'll notice you and your blog. This interconnectedness is the nature of the blogosphere which is different than just positing on your own blog as if it were some web archive of sending email to some email list.

Here's a simple example. I just finished reading a post from Debbie Weil who is the author of The Corporate Blogging Book. Notice that I just linked to her blog and to her book on amazon.com. These are unpaid referrals and I do so for two reasons. First, she does know her stuff and her book is quite a good guide for people new to blogging. So if you want to learn more about blogging, you'll find her book useful. I'm betting that if you decide to buy the book, you'll think to yourself, "Hey, that Victor Cheng guy was spot on" and remember that you got the recommendation from me.

Ideally this builds goodwill between us and you may refer others to my blog, refer potential clients to me or tell others to read my blog–all good things and indirectly beneficial to me.

Now getting back to what I was saying, I was reading a blog post that Debbie wrote titled Million Dollar Consultant Alan Weiss Says Social Media Is a Waste of Time for Consultants. (Yes, that's a link to her post). In creating the link, I put a reference in my blog post called a trackback URL, the thingy I mentioned earlier. This means that an excerpt of a post you're reading now will appear on Debbie's blog.

This has two consequences. First, the readers of her blog may now discover my blog (for free). And second, since my link to her blog post will appear in her alerts, Debbie may notice me and my blog. She of course can approve or disapprove this cross reference and whether or not an excerpt of this post appears on her blog, but my guess is she won't disapprove. Why? Because my post explains to the reader that she's a fantastic resource to learn more about blogging. It's a compliment.

In this post I've told the world how good she is and plugged her book because I do genuinely think it is a very useful guide for employees in the marketing department of a corporation who want to figure out this blogging thing.

In the blogosphere Debbie is a prominent blogger. Her audience consists of CEOs and marketers in medium and big size companies–hey that's my audience too. Perhaps through this link she might notice my blog and my book Bookmercial Marketing: Why Books Replace Brochures in the Credibility Age. Perhaps someday she might mention my blog or my book on her blog.

Of course, I'm being unusually transparent about this and typically none of what I explained is ever expressed explicitly. Being completely open and transparent IS part of the culture of the blogosphere. Being overtly commercial such as "buy here, buy now" is still somewhat looked down upon. (More on this later This is the collaborative marketing nature of the blogosphere. I raise my own profile in the blogosphere by referencing or complimenting the posts of other blogosphere bloggers.

The irony of this particular approach is that Debbie herself did this in her post. In her post, Million Dollar Consultant Alan Weiss Says Social Media Is a Waste of Time for Consultants she linked to two other prominent bloggers Alan Weiss, author of Million Dollar Consulting (also a very good book on selling value in consulting engagements) and Seth Godin, author of Permission Marketing: Turning Strangers Into Friends and Friends Into Customers (the seminal book on the whole opt-in marketing approach that's essentially THE standard for online email marketing) and too many other good marketing books to mention.

In Debbie's post she references and links to Alan Weiss' post titled Blogs, Facebook, Twitter, and Chance. Unfortunately, Alan's blog doesn't provide something called a trackback URL so this post will not automatically appear on his blog as a related item.

The only way to appear on Alan's blog is to leave a comment on it. This is what Debbie did when she essentially said, Alan, you're wrong. Corporate people do read blogs. (See her comment in response to Alan's post)

Notice how Debbie lists her name as "Debbie Weil author of the Corporate Blogging Book" (nice plug and socially acceptable too). I do the same thing when I post, Victor Cheng author of Bookmercial Marketing (see another excuse to plug myself without being overly overt about it… damn, my secret's out now… sorry Debbie, but I out'ed you.)

While one strategy is to link to others in the blogosphere and identity it as interesting reading or a useful resource, the other approach is to create controversy. This is exactly what Alan Weiss did in his post Blogs, Facebook, Twitter, and Chance. In his post, he says blogs are a waste of time unless you've already established a brand… OMG (Oh My God)… this is like heresy in the blogosphere. All the other bloggers out there go absolutely nuts. You'll notice there are some 70 comments in response to Alan's post.

Leading the charge in response is none other that A-list blogger Seth Godin. An A-list is sort of a like a celebrity blogger that's widely read and extremely influential. For example, reporters at Time Magazine, Newsweek, Inc. Magazine, Entrepreneur Magazine, and Business Week that cover online marketing all read Seth Godin's blog to see what he's talking about… betcha didn't know that… starting to see how this thing works?

Seth responds to Alan's post by saying that he is wrong, wrong, wrong (read Seth's comment on Alan's blog here). He cites a few examples and says he started blogging well before he was known as a marketing guru.

This controversy of course gets Alan Weiss all riled up and he decides to create another blog post as a follow-up. See Blogs, Facebook, Twitter, and Chance Redux. More controversy, more comments, more readership.

How's that for a case study?

Okay, now back to blogging as a lead generation tool.

I've been looking for blogger success stories and found one example of a company growing from $1 million to $10 million in sales in two years. I found this case study in the book Groundswell a bestseller by Charlene Li and Josh Bernoff about Stormhoek Winery and how blogging delivers five-fold increase in stormhoek sales in less than two years.

But I have yet to find any case studies of companies generating more than say $20 million a year just from blogging. In virtually every other advertising medium (and perhaps its not right to call blogging an advertising medium) you can find endless examples of companies making $20+ million. This is true for pay per click advertising, print advertising, direct mail, telemarketing, infomercials, but not blogging.

What does this mean?

I'm not entirely sure. Perhaps it's too early. Perhaps there are limitations to how scalable blogging is as a lead generation medium. Perhaps blogging isn't a great lead generation medium, but a better thought leadership medium (probably).

I have seen numerous examples of very large companies that have ignored the world of social media and blogs and paid dearly for it. Just google "Dell Hell" and "Kryptonite Locks" and you'll see what I mean–tons of negative publicity that's forever carved in "digital granite" on the Internet.

(Here's one lesson especially for a big company: Never, ever tell an A list blogger to f***off…. they get mad, and boy do they get even.)

The prevailing notion seems to be that blogs are best for disseminating a big, new idea (think: 4-hr work week by Tim Ferriss who incidentally had a hilariously funny blog post on Warren Buffet) and for building market awareness, establishing thought leadership, and indirectly generating the potential for business.

The general idea is that reporters read blogs to get ideas for stories (think Lewinski), and bloggers read other blogs (and press release from prweb.com) to get ideas about what to blog about.

The blogging culture remains a bit noncommercial (the capitalist in me hates that), so participating in the blogosphere is more of a "everyone at the bar talking shop" rather than someone listening to someone give a sales presentation. It is peers talking amongst peers and occasionally referring one another to other resources, vendors, etc.

In case you haven't noticed, the main currency you play with in the blogosphere is links. If I want a top blogger to notice me, I link to his/her blog and say he's a genius or a moron. Instant presto, I get noticed. The blogger might link back in response, retaliation, or to remind readers how brilliant he/she is because someone else put him/her on a pedestal.

An example of this is Google "1000 true fans". It's a very insightful blog post by Kevin Kelly about online niches that were linked to be a number of prominent bloggers including Seth Godin. In fact 1,400 web sites link to kk.org (the site that hosts the blog). The 1000 true fans post has a Google Page Rank of 7, which is a rank of its importance in the Google search engines (which incidentally is the same Page Rank rating as the home page of borders.com). All this is from one really, really good blog post. Amazing!

Think of the 1,400 links as 1,400 lead generation ads on the Internet that are for free for a long time to this site. It seems terribly seductive to the direct marketer in me that's used to paying a lot for advertising.

The one glaring weakness I've seen so far is few bloggers have built a good linkage between getting traffic via a blog and putting them into a sales pipeline of some sort. If you look at income surveys of
bloggers, it's incredible low–like 95% make less than $4k a month kind of low.

This is by no means to disparage bloggers or place value judgment on income levels. It's just that, having worked at McKinsey & Company and given speeches at Harvard Business School on marketing, I'm accustomed to big business.

Even the A list bloggers, who have extensive readership and are followed by reporters from Time, Newsweek  and the trade mags, don't do a good job at converting blog viewers into buyers.

Many don't even try.

I'm not sure if this is just the culture of the blogosphere or if the bloggers are blogging for psychic benefits
(e.g., fame, respect, notoriety). Many A list bloggers are New York Times bestselling authors, reporters for major magazines, and have a "day job" separate from blogging.

I do think a potentially reasonable blend of blogging and direct response lead generation is to participate in the blogosphere and from time to time embed free offers in your blog posts. For example from time to time, I could give away a few dozen copies of my book, Bookmercial Marketing, as a freebie to start what Seth Godin calls the permission marketing process.

So long as the majority of the posts or of each post are insightful and useful, I think the approach might be able to work. However, this is still a theory and I'd feel a lot better about it if I saw some more people pulling this off–doing the commercial stuff extremely well from a revenue standpoint, but still playing nice within the culture of the blogosphere.

Two books worth reading on this, in priority order: Groundswell by Charlene Li and The Long Tail by Chris Andersen (get the paperback version, read the additional last chapter on marketing in The Long
, and especially pay attention to the discussion of links as the ultimate in online currency.) These books explain a very, very different way of thinking about business and lead generation online.

Blogging to a house list seems to make sense if that's how they prefer to read your stuff. In these cases, you've already generated the lead and the blog is just to communicate with a lead, rather than using blogging as way to generate leads.

Blogging as a way to prevent a major crisis that brings down a Fortune 500 company makes sense as a disaster prevention type of communication tool. However, from a revenue generation standpoint, there are a few success stories, but by no means is lead generation from blogging (via the blogosphere) a slam dunk.

Most people who cite success stories, can only point to a small handful of examples, perhaps a dozen. I'd certainly like to see hundreds, if not thousands, of success stories. All the other major advertising media have these examples.

Finally, the last major drawback is it's incredibly time consuming. In order to participate in the blogosphere, you have to keep tabs on everyone else's blogs. That takes time. As another example, I'm finishing this blog post at 5:49 a.m., and it has just dawned on me that I've been up all night and essentially pulled an all-nighter. That was certainly not my intention. I thought I'd just write out a quick little post, but it clearly took more time that I thought.

I'm not looking forward to explaining to my wife why I'm a zombie tomorrow morning (okay, like in an hour). Um honey, I was writing on my blog tons and tons of stuff about blogging so that others can figure out what to do with it, and this was after spending weeks reading everything I can on blogs, immersing myself in this thing called the blogosphere.

She'll of course ask, "And exactly how does this produce more business?"

And my answer will probably be, "That's a very good question!"

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July 24, 2008

Communicate Your Unique Advantage… Constantly

To market effectively, you need a great product and something unique you can take to the market, preferably something unique the market actually values. But even that's not enough. In addition, you have to constantly communicate that uniqueness to customers and prospects. Constantly is the key word here.

I came across an interesting example the other day. I was calling the customer service line of some company, probably my credit card company. When I got the person on the line, it was clear she was an American. How refreshing!  You certainly don't see that too often these days.

What made this conversation memorable was how the customer service agent introduced herself. She said, "This is Mary Jones in Tempe, Arizona. How may I give you great service today?"

Hmm… how interesting.

She could've just said, "Hello."

But now, her intro script specifically required her to say where she was located (a U.S. city perceived by many to be an advantage when it comes to customer service) and set the expectation that she would deliver great service.

Incidentally, on that last phrase, it's actually intended more for the customer service agent than the customer. Lots of psychology studies will show you that if you get someone to make a public commitment like that, they find it very difficult to do anything other than what they promised they do. Turns out the threat of hypocrisy is a powerful motivator.

Getting back to my original point, I found it fascinating that this customer service agent would mention her location. My best guess is they were trying to demonstrate an advantage they offered versus a competitor. Probably not a bad way to improve job security either.

In any case, this company had an advantage and they weren't shy about telling you about it–on every phone call. You gotta have something unique to offer and it's not a bad idea to constantly remind people about it all the time.

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July 23, 2008

The 1st Job of Every Marketer Is…

The first job that any marketer must accomplish is simple–GET ATTENTION.

Until you have someone's attention, nothing else matters. Your products don't matter. Your services don't matter either. Nothing else matters until you have someone's attention.

It today's information overwhelmed economy, this is no easy feat. A recent article, "The Digital Age is Destroying Us by Ruining Our Ability to Concentrate," explains that as technology has advanced, we now have more ways of being distracted than ever before.

Twenty years ago, the only distraction your customers had was a ringing telephone or a colleague stopping by to say hi. Today, your prospect has to deal with the cell phone ringing, the text message, the email inbox, the fax machine, the land line phone, instant messager, digital alerts, the PDA buzzing, and more.

We're now so distracted that even our distractions are being distracted by other distractions. Did you follow that?

So more than ever, job #1 is to get attention. In Seth Godin's book Permission Marketing he talks about the value of getting a prospect's attention initially and then asking for permission to continue to the conversation. He speaks to the idea that it's easier to communicate with someone who invites your communications than someone who is trying to tune you out. It's a solid concept that I certainly agree with, use in my own business and encourage others to use.

But how exactly do you get someone's attention in the first place so you can ask for permission ? There are two methods that have worked extremely well for me. Both of these methods come from two underlying rules of thumb. Let me start with the rules first and then the specific techniques.

Rule #1: Be relevant

I recently bought a pair of shoes from Endless.com. What a great online shoe store! I can finally find shoes that fit me (I have wide feet), and if they don't fit, I can send them back and they pay the shipping. So I like the store and have had good experiences with them.

But they keep sending me promotional emails for these 5 inch high heels. Umm… I don't exactly wear high heals. You would think they would know this considering my orders have male shoe sizes associated with them, yet they keep sending me the promotions anyway.

I tolerated it once or twice, but now I've marked their emails as spam and I'm officially ignoring them.

Rule #2: Be Different

If your marketing looks just like your competitor's marketing, it's bad marketing. The best marketing is stuff that is different. It doesn't matter so much how it's different, so long as it's really, really, really different.

The psychology behind this is fairly simple. To function in a world with massive information overload, we have to take mental shortcuts. If you're walking down the street and you see some furry creature with four legs on a leash that goes "woof" "woof", you take the mental shortcut that the animal is a dog–even if you've never seen that particular breed of dog before.

That animal fits a certain pattern in your head of what constitutes a dog. If you love dogs, you'll probably say, "Oh, how cute." If you hate dogs, you'll probably start walking to avoid crossing paths with it. Either way, you're using a mental shortcut to facilitate your decision making.

Not only do you do this, but your prospects do too.  When they see something that looks similar to all the sales, marketing and advertising they've seen previously, they automatically categorize it as sales, marketing or advertising.

What do people in the information overwhelmed economy do when they see sales materials?  That's right; they ignore it. This is why we have caller ID, spam filters, administrative assistants, Tivo devices, do not call lists, and do not fax laws. If it looks likes marketing, it must be marketing.  And we all know what to do with that. We throw it in the trash.

So these are the basic rules of thumb. Now let me share with you two specific marketing techniques I use to get attention.

Method #1: Be Exceptionally Authoritative

All else being equal, an idea communicated by an authority figure carries more weight than an idea communicated by someone who's not.  When your doctor says to lose 10 pounds or you're going to drop dead from a heart attack, it carries more weight than if your mother-in-law tells you to do the same thing.

Same message, different delivery method, different results.

This is why marketing messages carry more weight when they are delivered in the context of an article published in a major magazine, a recording of a speech given at some notable industry event, or covered in a book or Bookmercial you've published.

The source and packaging of the message matter.

Method #2: Be Outrageous

The technique at the total other end of the attention-getting spectrum is to be totally outrageous. For example, when I send direct mail to prospective clients, I will often include bizzare objects within the envelope. I've mailed direct mail pieces with megaphones, toy cars, stethoscopes, silver platters, Tylenol tablets, $2 bills, toy marraccas, and more.

Sure it's a gimmick. If that's all you do, does it work? No. But if you combine the attention-getting gimmick with a message that's very relevant, it works quite well.  The sole purpose of the outrageous gimmick is to force the prospect to turn off his or her mental autopilot and actually consider the information you've sent.

Whether I send marketing that's highly authoritative, like a copy of one of my books, or something that's outrageous (I usually alternative between the two), I always offer something for free to kick off our relationship in a way that favors the prospect–something that's valuable and also relevant to what I'm selling. Then we're off to continuing the dialog, steadily escalating the communication and the prospect's commitment until a certain percent  of them proceed to the sale. While sale is the result of the process, it all starts first with getting the prospect's attention.

This post is based on the ideas outlined in my book Bookmercial Marketing: Why Books Replace Brochures in the Credibility Age available from Amazon.com or for free from our website while supplies last..

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July 22, 2008

Do You Market for Applause or Revenues?

To oversimplify, the world of marketing breaks down into two camps, those that market for applause, admiration, and awards, and those that market to generate revenues.

Make no mistake about it, the two are very different.

One of the founding fathers of modern advertising, Claude Hopkins, wrote the seminal book on the topic, Scientific Advertising. The book gave birth to modern direct response. You could apply it to Internet Pay-Per-Click advertising and it's dead-on accurate in its conclusion.

The fascinating thing is that Scientific Advertising was written in the 1920's. To have a work that is as relevant today as it was nearly 100 years ago is brilliant and amazing!

Legendary ad man, David Ogilvy, was once asked about the best way to prepare for a career in advertising. He said without hesitation, "Read Scientific Advertising 7 Times."

The second chapter of Scientific Advertising alone is quite frankly more useful than any marketing MBA degree. It's titled "Just Salesmanship." Here are a few excerpts.

"Advertising is salesmanship. Its principles are the principles of salesmanship… Thus every advertising question should be answered by salesman's standards. Let us emphasize that point. The only purpose of advertising it to make sales. It is profitable or unprofitable according to its actual sales."

"Advertising is multiplied salesmanship… Therefore every ad should be a super - salesman."

"There is one simple way to answer many advertising questions. Ask yourself,… "Would it help me sell them if I met a buyer inperson?" A fair answer to those questions avoids the countless mistakes. But when one tries to show off, or does things merely to please himself, he is little likely to strike a chord which leads people to spend money."

"Some argue for slogans, some like clever conceits. Would you use them in personal salesmanship? Can you imagine a customer whom such things would impress? If not, don't rely on them for selling in print."

"Some say 'Be very brief. People will read for little.' Would you say that to a salesman? With a prospect standing before him, would you confine him to any certain number of words? That would be an unthinkable handicap."

So it is in advertising. The only readers we get are people who are interested in our subject. No one reads ads for amusement, long or short. Consider them as prospects standing before you, seeking for information. Give them enough to get action.

(From Chapter 4 on Mail Order)

"The motto there is, 'The more you tell the more you sell.' And it has never failed to prove out so in any test we know."

These are brilliant ideas that are as applicable today as ever. So the lessons are:

  1. Market to sell something
  2. Ask yourself, if it were read out loud face-to-face with a prospect, would your marketing work?
  3. Tell a complete story in your advertising to get the buyer to the next step in the sales process

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July 19, 2008

The Mental Recession

In recent remarks, Phil Gram, John McCain's campaign co-chair, has been getting a lot of flack for describing the current economic situation as a Mental Recession.

While the primary fallout has been his related comment that America is a country full of whiners–always a good way to win the goodwill of voters–his characterization of the mental recession has some factual basis.

Q1 2008 GDP numbers show 1% economic growth (US Bureau of Economic Analysis). If you look at every economic forecast for GDP for 2008, all of them show POSITIVE growth. Fed Chair Bernanke in his address to Congress and the Senate two days ago announced the Fed expects 2008 GDP to end up in 1% to 1.6% growth range. Using the two consecutive quarters of negative growth definition, we're not in a recession.

Now the average person on the street is feeling uneasy about the economy. That's for certain. We may fear that we're in a recession or that a recession is imminent, even though factual data show we have not been in one and are unlikely to be in one for 2008.

That being said, inflation particularly in energy and commodities (food) is a serious concern and is probably the primary driver of consumer unease (along with the credit crunch). So  concerns about inflation are definitely justified. Does this have some medium and long-term consequences for the economy if not addressed?  Certainly, but inflation concerns versus recession concerns are different.

The average consumer may may not distinguish between the two, but if you're in business it's a big mistake to get the two confused. How you run your business in response to a recession versus an inflationary economy is vastly different.

Here's what this mean to CEOs, business owners and marketers.  First, don't let your own decision making be influenced by the mental recession. For example, there is no point in cutting prices and voluntarily reducing your profits in a recession that doesn't exist.

This is especially dangerous if inflation continues to be high, which is a very legitimate concern. There's nothing like cutting revenues through price cuts while your costs are being inflated. The margin squeeze can be quite painful.

If anything, in an inflationary environment you want to be looking to increase prices to protect your margins. This is the total opposite of what you might consider doing in a recession. Don't get the two confused!

You can raise prices through creative bundling, improved marketing and by passing along temporary fees such as fuel surcharges that most buyers don't associate with your prices. This is similar to how mail orders companies charge $X + shipping and handling. They don't even quote the shipping and handling, and most customers don't treat a $1increase in price the same as they do the $1 in shipping and handling.

Second, keep in mind that as as far as your customers are concerned, perception is reality. If customers think there's a recession going on, mental or otherwise, well, then it's a significant issue for you. This is the point that Gram completely missed. Even if it's mental, it doesn't mean that it's not a real concern.

For several months now, I've been advising all of my clients to start weaving in "the recession" into all of their marketing. Think of it as another sales objection. As any sales professional knows, an objection is an objection is an objection. And all objections must be addressed.

So if you're in retail, you should be throwing "Recession Blow Out Sales."  Any excuse for a sale is a good idea, and a recession is just as good an excuse as anything else.

If you sell luxury goods, you'd better be explaining why making such a purchase now is a wise financial decision. You'd better be using words like investment, return on investment, and not necessarily prestige and status.

If you're in services, you want to be talking about how to make your business "recession proof" or how to invest in ways to "weather the storm."

At the end of the day, you make decisions on your internal operations based on the factual economic data. You make marketing decisions based on your customer's perception of the economy. You definitely don't want to get the two mixed up.

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July 17, 2008

How to Reach C-Level Executives

A recent Forbes.com and Gartner Group survey of C-Level executives concluded that this coveted audience has stopped reading offline media and can be found primarily online.

I first came across this survey from Jon Greer who was understandably excited by the conclusion of the research. However, there's one major flaw in the research that should be pointed out. It's a problem known as sample bias.

Sample bias occurs when the sample used in a research survey does not accurately represent the overall population being studied. In this case, the Forbes.com sample consisted of visitors to the Forbes.com website and a panel of web users who've agreed to fill out online surveys.

The sampling methodology consisted of surveying online users about their media usage habits. Naturally, web users will say they rely on the web a lot. This does not necessarily mean that the C-level executives who rarely use the web and were excluded from the sample would agree with them. This doesn't mean C-level executives can't be reached online. Some of them can. However, I only know of one way that a marketer can use to consistently reach all C-level executives in an industry.

This magic bullet, if you want to call it that, isn't cheap, but it definitely gets your message delivered. Whether they respond is entirely up to how you targeted the message and whether it's something they're interested in.

So what's this C-level magic bullet?

It's direct mail, and specifically it's FedEx.

When was the last time you got a FedEx and threw it out unopened? When was the last time your assistant received a FedEx and threw it out unopened?

Considering that sending a single piece of paper via FedEx can cost up to $50, it's by no means the cheapest way to reach C-level executives. But it works. They all have a mailing address, and they all open FedEx envelopes and packages. I've used FedEx for direct mail numerous times, and whatever I send always gets noticed, seen and considered. Sometimes I miss my mark in targeting and the recipient just isn't interested. But the point is that the message got considered.

Try that with any other media.

If you rely strictly on cold calls, you're going to get voicemail or the gatekeeper the majority of the time.

If you send regular US Postal Service direct mail, most of that ends up in the trash.

If you spam an executive, it's most likely ending up in the spam filter unseen.

If you run banner ads on forbes.com, 99% of the C-level executives won't even notice the ad. It will just hit their blind spots.

So what's my underlying point to this post? I have two.

1) Survey research must be scrutinized before you accept its conclusions. My time in Stanford University's Economics department and time at McKinsey & Company taught me this.

2) In today's information overloaded world, how you package your marketing message matters a lot. Send something wrapped in a FedEx envelope and it gets considered. Send the exact same message via a spam email and it gets ignored. How a message is packaged and delivered matters. Credible and trusted delivery formats do make a difference.

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Filed under Marketing Credibility by Victor Cheng

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July 16, 2008

How to De-Commoditize Your Commodity Business

It sucks to have to market a crappy product or service. It also sucks to market something that isn't unique.

I'd rather market a very unique product that has some major flaws (so long as there are some major strengths that certain kinds of customers appreciate), than one that is virtually identical to offerings from a dozen other companies in an industry.

While most everyone I mention this idea to understands it, they get stuck on how to de-commoditize their business. In fact, there are very few businesses that are truly commodity businesses. For example, everyone thought coffee beans, a commodity that's literally traded on the commodities, is a commodity.  Yet Starbucks and their billions in revenue proved that one wrong.

You could say a head of lettuce is a commodity, but look at my grocery bill from Whole Paycheck, ahem… I mean Whole Foods, the organic supermarket that's the fastest growing chain in the country, and you'll see that a head of lettuce is definitely not a commodity.

So if you don't want to be in a commodity business, but feel like you're in one, here's how to de-commoditize your business.

There are three ways to do this:

1) Solve a unique problem

2) Solve a common problem, but in a unique way

3) Solve a common problem in a common way, but for a unique audience

I suppose the "all of the above" option should be mentioned of solving a unique problem, in a unique way, for a unique audience.

Incidentally, hands down, one of the best academically oriented business books I've read that speaks to this topic is Blue Ocean Strategy. As an ex-McKinsey guy and someone who has been a featured speaker at Harvard Business School, I've come across a lot of MBA-oriented books. Most propose interesting theories to think about, but Blue Ocean Strategy is actually practical.

You can actually read it, be exposed to a new idea, AND immediately start doing something about what you learned. Very few business books pass that test. I certainly aim to do that with my books and appreciate others who do the same.

Okay, so let's get back to the three ways to de-commoditize your business.

1) Solve a unique problem

Here are a couple of examples of businesses who do this.

  • FedEx - get stuff there overnight when nobody else in the world offers to solve this problem
  • Costco - buy large volumes of stuff cheap. Sure, you get like a one-month supply at a time, but darn it's cheap. If you don't want a month's worth of supply, you go to a grocery store. But if you need to, say, feed an army, you go to Costco.

Solving a unique problem always gets you some interesting solutions and opportunities. Just be sure it's a problem that customers actually have and are willing to pay to solve.  In other words, don't create the world's greatest solution to a problem nobody has.

2) Solve a common problem in a unique way

Many of us need a kick of caffeine to get us started in the morning. Sadly, I'm no longer such a person and have switched to decaf. But the point is that we all need a way to get our day started. Starbucks offers to do it for us in an "affordable luxury," "just for us"  kind of way. They sell decent coffee with a heck of a pretty good experience to go along with it.

It's not like coffee hasn't existed for a hundred years. It's not like we haven't been eating breakfast for a hundred years. Everyone and their brother and mother know what breakfast is, so this get your morning started problem isn't all that unique, but Starbuck's approach to it is.

3) Solve a common problem, in a common way, for a unique audience.

Black Enterprise Magazine = Inc Magazine for African American Business Owners

Do African Amercian owned businesses have problems with generated sales? Certainly. Do they have problems with managing people? Yup. Do they want to move their businesses online? Certainly. Are they worried about having a good retirement? They sure are.

So what in the world are they concerned about that's different than business owners of other ethnic backgrounds? As far as I can tell, 90% - 95% of what they worry about is very similar. So Black Enterprise Magazine solves a fairly common problem of business owners wanting more useful business information. They solve this problem through a magazine format that's very similar to existing magazines in the category, but, and this is a big one, they target what they offer to a specific audience.

It's the uniqueness of the targeting that sets them apart. It's very simple. If you own a business and you are African American, you're just supposed to subscribe to Black Enterprise Magazine. Doesn't it just feel like an automatic, "of course you would" type of decision? This is the power of targeting a unique audience.

Targeting can be by demographics, industry, region, specific types of problems, and by countless other ways. In fact, targeting a business to a specific market is the easiest way to stand out in crowded market.

You don't have to change what problem you solve. You don't have to change your product or service. The core of the business can remain the same. But once you target an audience that's desperately craving the attention, it becomes very easy to stand out and get new business.

What Now?

Pick whichever approach makes the most sense and make sure you stand out in some way to some audience.

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Filed under Positioning by Victor Cheng

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July 12, 2008

Market Positioning - Be Unique

In a previous post, I mentioned that It's Hard to Market Crap. To succeed, do you just do the opposite? Do you market something really good instead?  It's a start, but the reality isn't so simple.

Marketing an extremely good product or service is just the starting point of marketing. That alone doesn't get the job done. For example, Silicon Valley is littered with the carcasses of companies that created great products.

The marketing challenge is more complicated. Your company, products and services have to stand out by not only being good, but by being extremely unique too. The concept of unique market positioning was popularized by Jack Trout and Al Ries in their classic marketing book Positioning: The Battle for Your Mind

Offering something unique works for a number of reasons, all good:

1) When your company is unique, it's much easier for existing customers to remember to buy from your company, so uniqueness improves repeat purchases.

2) When your company offers something unique, you make it much easier for your customers to tell their friends about it, so uniqueness improves referral attempts.

3) When you offer something unique, you make it much more likely that the people who hear about your company from your happy customers will remember what their friends told them, so uniqueness improves successful referrals.

4) When you make a unique offer to your marketplace, you make it easy for prospective buyers to consider you. If you're just one of a dozen companies that all look the same, it's a dime a dozen. There's no need to seek your company out. 

But if you offer something very different, a buyer feels like there's something they need to look into further. They have to turn off what I call "Automated Rejection Mode."  Uniqueness forces the buyer to turn off autopilot and take a real look at what you have to offer.

5) When you offer something unique and easy to understand, you encourage nonindustry referrals, such as from your stock broker, barber, neighbors, college classmates, and the countless people you've met in your life who aren't really in your industry, but are likely to know buyers who are.

A unique, and extremely simple, message about what you do makes it easier for these outsiders to refer to your company. Try doing that with some "me too" messages that are overly complicated by gobbledygook. It doesn't work. Try describing what your company does to your mother-in-law, who tells her neighbor, who tells a friend that's a potential prospect for your company, and see if that prospect calls you.  If so,  you likely have a clear, and unique message. Otherwise you don't.

Stay tuned for my next post where I'll explain how you create something unique to offer your marketplace when you're just one of many very similar competitors.





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Filed under Positioning by Victor Cheng

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July 7, 2008

It's Hard To Market Crap

Guy Kawasaki often says, it's hard to market crap. Here's a brief excerpt from when he was interviewed by Lee Odden:

"The only tip that really matters is this: 'Market something good.' That’s the secret. It’s very hard to market a piece of crap. It’s very easy to market something good. I believe all marketing is based on good products and services" (Original Post)

Seth Godin commented on this recently in his post on Should Small Businesses Whine? 

I'll add my two cents. Somtimes, okay oftentimes, there IS a reason why small businesses are small and big businesses are big. I recently had an experience at my local Pete's Coffee in Los Altos, CA (on the corner of El Camino and San Antonio) that genuinely astounded me.  I'm a customer of both Starbucks and Pete's, but find Pete's coffee just tastes better.

However, I find the service at Pete's to be really subpar, especially in comparison to Starbucks. I've seen the staff get in arguments, not with customers, but with each other. (Like any barista at Starbucks would be caught dead doing that.) 

Even worse, the other day I went in for my regular Large, Iced Decaf Coffee and was surprised to discover there were no straws left in the condiments bar.  Tsk, tsk… I went to go ask for more and when I did, I was told, "We ran out."


We ran out? You've got to be kidding me. When was the last time you went to McDonalds and they ran out of hamburgers and fries?  Never.

This of course prompted all three employees to jump into a joint discussion as to why they don't have any more straws. Three people, three excuses.  I asked, "Well, when do you expect to get more straws?"  Afterall, it's kind of pointless to get a cup of iced coffee to go if you can't actually drink it while in the car.

They looked at each other and just shrugged their shoulders. The main barista said he's just been so busy that he hasn't had time to go to the local store to buy them. Why this isn't auto replinished I'll never know. My reaction, of course, was well, if you continue to have an out of stock situation on straws, I'm sure that business problem will take care of itself. 

Of course, I was the only person in the store talking to three employees.  Sheeshh… give me a break.

This goes back to a fundamental of lesson of marketing that's important to remember: It's Hard to Market Crap. In software, we used to call this "Putting Lipstick on a Pig" — at the end of the day, it's still a pig.

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Filed under Marketing Fundamentals by Victor Cheng

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