Marketing Memos

Receive Marketing Memos via Email

By APNWLNS payday loans

October 25, 2011

Cult Brands

A cult is a religion with no political power.
— Tom Wolfe

Cults are good in the context of marketing, though not so much in real life. Religions are slightly more respectable, though each views the others as large cults. Yet the mechanics of cults, religions and matters of faith are informative in shaping a corporate brand.

The difference between fanbois and followers is thin.

brand-cultIn the early iPhone era, Apple customers were called a cult. Early adopters of iPhones were evangelical to the point of annoying. Regardless of personal motivation, iPhone fans fawned and proselytized the new portable computer. While their numbers were small and their zeal was large, the cult moniker was apropos. With relatively no market (political) power, the iPhone faithful were as bedeviling as Jehovah’s door knockers.

Today, iEverything is a religion because the masses have adopted most, and sometimes all of the doctrine.

Cults, religions and brand loyalty are all based on faith. Granted, good products build faith through experience, but it remains an article of faith about the value delivered by the product. To build brand religion requires first cultivating a brand cult, then establishing enduring doctrine concerning core values. It is impossible to leap from and unbranded product to a brand religion without first forming a brand cult.

Attempting it will brand you as a false prophet, and we know what happens to those folks.

Harley Davidson is an example. For whatever reasons, post WWII soldiers lacking domestic thrills rivaling shooting Nazis sought motorcycles, whiskey and women. These were the early bikers, who were positively tame compared to today’s MC members. They preferred Harleys and no “real” biker would be caught riding a Triumph or Indian, and mentioning Honda, Yamaha or Kawasaki with reverence would get you beaten. Thus, images of people who shunned societal conventions and lived on the wild side were Harley’s first cult. This cult image was amplified when the American Motorcycle Association claimed that 99% of all motorcyclists were law-abiding citizens and the “real” bikers started calling themselves the one-percenters.

Later in history, aging baby boomers who could afford a Harley without spending their kid’s college fund donned biker garb and hit the highway. These Rolex Riders expanded the Harley brand cult into brand religion. Yet potbellied CPAs would never have given Harleys a second glance had not the mystique of the one-percenter cult driven the Harley brand image.

The marketing strategy here is tricky, but if you understand the brand-cult-religion progression, it is manageable and can be expedited. New products often have identifiable early adopters who are anxious to promote your wares. Identifying all their drivers — but most importantly the values that have deep emotional bases — is your starting point. Cull from the short list of deeply emotive cultish motivations those that appeal to the wider population. These become the core values of your brand. Saint Peter may have preached many things, but saw that the doctrine of a loving God was more marketable than the ornery fellow found in the Old Testament.

Peter found the common value that took Christianity from a cult into a religion.

Brand religion is the marketing strategist’s Holy Grail. To obtain that blessed state you must cultivate your cult, find what the fanatics have in common that also applies to the wider population … and pray.

October 18, 2011

Intent Investors

Angels and VCs meet a lot of liars.

Not intentional liars, but overly optimistic and undereducated entrepreneurs who slap together business plans that are best filed under “fiction.” To egotistically quote from my own book on the art of propaganda “We accept a modicum of lying when the negative impact is limited.”

Throwing away a few millions dollars of other people’s money is not “limited impact.”

underware-gnomesHence, VCs and other investors have developed a large set of buncombe detectors. After all, they are in the risk business — risking money provided by other people on relatively long-shot bets in rapidly evolving markets. Investors have better odds in Vegas, but Sin City payoffs are not as big. Trying to cash-in on the next Google requires VCs to lose quite a few bets. But like the card shark who took you for your last nickel, they play the odds.

Many start-ups come to me seeking advice on business plans, believing that a good business plan is the end-all for obtaining investor lucre.  It is important to have a good business plan, if nothing else for internal use. Indeed, one of the best rules I offer entrepreneurs is that if they would not invest the same amount of money sought from VCs into their own company — based on just their business plan — then they should expect less than nothing from Sandhill Road residents.  A business plan has to reflect reality in order to pass the VC smell test.

There are a few hundred red flags that VCs watch for in pitches and business plans. The most common ones over which founders trip include:

Confusing potential markets with realistic ones: When I sit on pitch panels, the question I most often ask is “How will you sell to the two billion people in your market definition?” Entrepreneurs often mistake all potential buyers (the total market) with the buyers they can realistically reach (the addressable market). Worse yet, they have no idea how to define the latter from the former. Bragging to VCs about huge market potential marks you as an amateur.

No segmentation or growth plan: Most founders don’t understand the interplay between market segments, whole product definitions and positioning, and how this all drives defining their addressable markets. They also do not see how knowing these factors allow them to plan growing revenues through a well-constructed product development and segment assault plans (the “bowling alley” analogy). Thinking this through shows due diligence and improves the odds of landing funds.

No clue about how to sell: Even start-ups that have narrowed down their addressable market are utterly vague about how they will sell their products, using naked statements like “We will use social media to build awareness.” When I ask what their social media strategy and processes are, they often have no coherent answer. VCs need to know you have a product, a market and a valid plan for selling. The first two are meaningless without the third.

Yet a good business plan is still fiction.

People execute plans. VCs want to see a team that can turn a good product and a good plan into a ton of revenue. This is important not only for the practical reason of needing to execute, but also because no business plan is perfect. Teams will adjust plans to meet unexpected realities, and those appear daily in fast moving technology markets. Investors take faith in people with track-records who will turn investment into returns.

Get your business plan right before infesting investor offices.  Realistic market definitions, properly segmented, with valid go-to-market action plans backed by a viable team are the primary requirements for investors to take your business plan and you seriously.

October 11, 2011

Simple Statements

dr-johnDr. John, the King of New Orleans, sings a song that advises other musicians to “Keep That Music Simple.”

The same concept applies to market messages.

Rushing to tell every audience everything about your product leads to muddled messages. Your headline and opening blurbs have a 15 second shelf life before a reader’s attention wanders. Instantly connecting their motivations to your value proposition requires keeping the message simple.

Oracle has a long history of being blunt in their marketing. Their magazine ads were once the most direct in the business, targeting techies and laying out Oracle’s performance superiority. Prospects instantly understood the value offered by Oracle and thus acquired a bias for the product. Instant believability based on instant cognition.

For contrast sake, let us look at IBM’s top-line message for their DB2 database. It reads “DB2 for Linux, UNIX and Windows is optimized to deliver industry-leading performance across multiple workloads, while lowering administration, storage, development, and server costs.” Aside from run-on sentences being unreadable, it says nothing aside from common claims made by all competitors. No differentiation, no proof, nothing which a buyer might instantly believe.

Tech web sites are filled with even worse messaging. One example of an opening subheadline I recently saw was “ZZZ is both our company and our technology. Our employees, processes, and tools help people solve a range of business intelligence problems to unlock the potential of their organizations.” Simplicity was lost thanks to saying nothing that a customer needs to know, convoluting many non-product elements and omitting anything that resembled a value proposition.

My dictionary defines message as “a communication containing some information, news, advice, or the like.” Pretty simple, no? Do your messages contain essential elements stated simply? Keep that music and those messages simple.

October 4, 2011

Shifty Soil

When the earth quakes, you either endure the trauma, relocate or eventually get swallowed by a gaping hole that appears beneath.

fault-lineMarkets often have tectonic transmutations whereby old terra firma is relocated. This occurs with alarming frequency in technology markets — the upper rings of Hades are littered with tech companies that did not move quickly enough (you have long teeth if you remember names like Ashton-Tate and VisiCalc). Yet fault line spotting is a rare sport in high tech, and even catches change makers by surprise.

One massive market plate is on the move, and television as we know it is about to disappear.

Commodity broadband is making highly selective, on-demand video entertainment a reality. In the bad old days (last year) one consumed video entertainment by subscribing to ever expanding channel bundles packaged by cable and satellite companies.  The economics of broadcast television — where producers, networks, cable companies and affiliates all got a piece of the action — caused prices to rise and competing providers to package bulkier sets of networks. We long for simpler times when there were 57 Channels And Nothin’ On, not 999 channels with even less worth watching.

The same companies who made residential broadband affordable also provided the means for Hulu, Netflix and Amazon to entertain you, without rigid schedules and no packages of unwatched programming that rivaled food for a chunk of the family budget. Now cellular providers are entering the same space, making video entertainment an always-on and on-demand experience. Who cares that you missed The Simpsons on Sunday when you can replay that episode whenever and wherever you are, and pay nothing or very little (I survive on a $100/year Netflix habit while my neighbor pays that much per month for cable).

This shift is forcing cable and satellite companies to unbundle channel packages. After years of raising rates 6-10% a year, cable companies are facing an a la carte future. But unbundling is only half the shift, the part that frees customers from the unwanted expense of renting unwanted programming. The other half is on-demand viewing of all content types. Cable and satellite companies have offered on-demand movies, but customers are now acquainted with on-demand everything. Want to see last night’s Colbert Report, reruns of All In The Family or even live concerts? It is all available and you don’t have to pay your cable company a dime more than your monthly internet connection fee.

Cable companies may devolve into mere broadband providers as the market eliminates many middlemen (as I write, independent producers are getting their materials online in near-direct distribution arrangements, promoting via social media). Cable companies didn’t see the shift they themselves created, and built no replacement. Unbundling channels is a delaying tactic, but one that will not stop the inevitable downhill slide.

The marketing lesson is that you must watch for fundamental changes in technology that fundamentally change your markets, or conversely create those technologies and predict where the earth will open. Failure to do so means watching everything get swallowed and ground between moving plates.

 
Contact    Site Map    Search    Privacy    Copyright