By APNWLNS payday loans
May 14, 2013
To dominate or not to dominate. That is the non-rhetorical question.
Being a former IT guru, I hang-out virtually with some of my former peers in forums where we argue about everything from driver code to global warming. Many years ago I announced to that cabal that Android would dominate the smart phone market due to its business model. iPhone fanbois who littered this clan insinuated I had lost my mind – that Apple’s elegance, simplicity and market lead would forever overwhelm Android’s then 3% market share.
This week Gartner announced Android makes up 75% of all new smart phone sales.
My prognostication was based on market mechanics while my techie chums were enamored by Apples early technology differentiation. But like Microsoft before them on the desktop, Google decided to use the ecosystem to spread an operating system, which is a good way to get a lot of companies to drive sales and share. Google’s goal was to dominate the market and gain profits by means other than hardware sales.
Which was never Apple’s objective.
There are many ways to make money. In smart phones Apple and Google have different objectives based on how they plan to grow richer. Google wants to be the center of people’s online universe and to sell advertising. Theirs is a low margin, high volume end-game. In order to make mega money in mobile, Google had to dominate the market to drive tangent revenues.
Apple makes money via margins. Recent studies of the PC market show that Apple has insanely high margins, allowing them to be vastly more profitable on a per PC basis than every other vendor. The same strategy is at play with smart phone and anything else Apple sells. The only thing Apple has to do is maintain and extend the impression that they provide the slickest and easiest to use technology on the planet (this was their brand until the infamous Apple Maps fiasco and the seemingly interminable wait for a much more clever iPhone 5).
Marketers often lose sight of corporate objectives. Marketing strategy exists to achieve corporate strategy. Yet many marketers spook when confronted with seemingly superior competition using different business models. Google measures their success differently than Apple because they have different objectives. I’m sure hands are being wrung at Apple given the rapid market dominating success of Android, and there are temptations to fight Google on Google’s turf. Rumors abound that Apple will release a cheaper iPhone just to stem the bleeding (even though their sales are rising despite people delaying handset upgrades, awaiting an updated iPhone 5). Apple’s strategy – to invent, create insane brand loyalty and charge obscene prices – is good and remains sound. But Apple has to stick to it and not chase Google’s model.
All marketing actions – in Apple or your organization – must drive the corporate objective. Only when those objectives prove flawed and are changed should marketing change their strategies. Measure your success against metrics that make sense for your corporate objectives. HP measures PC unit volume (the highest in the business) and because of that is less worried about their low margins. Apple measures success by margins and less so by units. Always avoid using your competitors’ measurement of success … doing so causes failure.
April 30, 2013
“Maybe Microsoft suffers from too much leadership.”
That surprising statement came from an industry analyst with one of the major groups. We were recently splitting lunch and enjoying some obscenely great Silicon Valley weather, discussing the tech industry as a whole and wondering if Microsoft might soon be known only as “The Xbox Company.” We mutually marveled at how seemingly inept Microsoft has become, with one market disaster after another. Since we both had experience with start-ups and big vendors alike, the discussion focused keenly on leadership and ossification.
You never want to be the leader for the former.
Microsoft has two primary problems when it comes to innovation, the first of which is that they remain consumed by former glories and the old ways of thinking. This same analyst told me that – at least until recently – Microsoft sized their markets based on the number of PCs in an organization, not the number of information workers. Like the IBM of old where all activities revolved around the mainframe, Microsoft revolves too much of its thinking around desktops. Given mobility and Microsoft’s late/flawed strategy for making mobile work, it may be that their PC inertia is throttling their other ambitions.
This is sadly amusing given that mobile is a very personal computing experience and Microsoft started as a personal computer company. To flounder so badly at this fundamentally personal computing pivot point would be perplexing were it not for historical comparisons. The most vivid is IBM, who despite bringing Microsoft to fame via the original PC, was myopically focused on their mainframes. Indeed, much of IBM’s PC business was constrained by making the little machines part of the mainframe ecosystem, not letting it evolve and profiting from that evolution. One could argue (and I will) that Windows 8 was an attempt to bridge mobile to maintain desktop superiority, and failed both markets.
This may be why my analyst friend thinks Microsoft suffers from too much leadership, for they led the Microsoft troops into creating a digital Frankenstein monster that was universally repulsive.
The intersection of markets, trends, leadership and management is conceptually simple. An organization is either ahead or behind a trend (really great companies create trends out of stuff thinner than air). This is where leadership is essential, because leading requires creating and communicating a vision of something that doesn’t exist. Even Microsoft demonstrates this from time to time as they did with their Xbox project, which was so tangent to desktop computing that Microsoft had no choice but to let the Xbox team take their own path.
Management is the essential antithesis of leadership. It is a more mechanical process, one driven by numbers and bureaucracy. Leadership into new markets requires decentralization and flexibility, whereas maintaining a product line leans on management. The tangent problem herein is that management can be infected by inertia, such as Microsoft counting PCs and not people as their market. For Microsoft to have a chance requires delivering different products to different groups, and this requires different groups within Microsoft lead by different visionaries, bridging teams only when necessary. It is a really good to have a single underlying software architecture, but leave the user experience and marketing thereof to decentralized team leaders. After delivering a core OS, separate servers, desktops, mobile and games entirely. Leave the applications group to decide on which platforms they can make a buck.
Microsoft may not have too much leadership, but what they have is too highly concentrated in a single place.
April 9, 2013
You have to go through Step-B before reaching Step-C … or Step-Z.
Try telling that to a start-up CEO and you’ll earn some nasty looks.
One of the greatest errors of leaders, political or business, is to move too fast. Many militarists believe Hitler could have ruled Europe had he taken his time and not rushed to open fronts everywhere at once. Great products have vanished because CEOs aggressively tried to push it into every segment simultaneously. Make too many changes while delivering too little value and you’ll have too few customers.
This topic gurgled forth because J.C. Penny, a company born over 100 years ago and thus slightly older than my jokes, ditched their CEO. His overhaul spiraled the once legendary retailer nearly into ruin and its share price was cut in third. Nothing nice has been said about CEO Ron Johnson’s re-rigging, but a common complaint was that he attempted a blitzkrieg and changed everything overnight. One analyst opined “He tried to do too much too soon. He had a lot of very radical and bold ideas, and he tried to execute them all simultaneously.”
People (and hence markets) tend not to be revolutionary. Even new products and technologies with obvious benefits meet suspicion, investigation, trials, slow roll-outs and finally mass acceptance (virtual machines on commodity servers looked weird when first conceptualized, but now the world runs on them). Marketing must often lead buyers through multiple steps before making a sale, and lead markets through chained-discoveries before achieving wide-spread interest. Marketers must also lead product development in delivering solutions to satisfy one segment (one battle front) before opening the next.
Which brings Windows 8 into question. The newest Microsoft Windows OS tries to move an entire market (the installed PC base) too far, too fast, with too many changes and has met with derision more bitter than any lodged at J.C. Penny CEOs. In all too typical a style, Microsoft abandoned existing user interface elements (start buttons, hierarchical menus, etc.) and tossed a revolutionarily limited user experience in peoples’ laps. Microsoft did not ease folks through the changes nor offer them a way to maintain their old computing habits while exploring new possibilities (much like they did not do with Office and the hateful “ribbon” paradigm). Microsoft did too much too soon and lobbed at their customers a lot of very radical and bold ideas, trying to execute them all simultaneously.
The management lesson herein is to manage movement. Rushing anything produces poor results. Customers always have options, just as J.C. Penny’s had the option of canning their CEO. Take markets and customers step-wise through discovery, leading them to one level gratification after another. Hit them with too much and they will hit back.
April 2, 2013
The worst thing you can do to a good bar is to make it popular. Once everyone goes there, it isn’t worth going there anymore.
Email advertising and online surveys used to be good bars. When email first commercialized, it was a great and inexpensive tool for lead generation, prospect follow-up and brand reinforcement. But as emails popularity exploded, so did the number of marketers who abused the process. Today people dread reading their morning email – it has become a disappointment filled chore. Email open rates have been dropping. This has caused some marketers to get smarter and create better and more targeted emails.
Lousy marketers just find bigger lists and thus annoy more people, which will continue to drive down open rates.
Something related is occurring to surveys. Once online survey tools became cheap and easy to use, every man, woman and hermaphrodite with an email account started receiving survey invitations … hourly. The result is that participation rates, which were typically low before the Survey Lounge became popular, have dropped to rates less than 0.1% of invitations. People have started to auto-reflexively ignore emailed survey invitations unless the subject line is well targeted and offers some reward. A recently conducted survey went to a very tightly targeted audience with a combination of incentives (personal and charity donations) and managed a 0.2% response rate, which these days is better than average.
Anything that becomes frequent creates fatigue. Sending too many emails to one prospect, without adding new value at each step, will cause your email address to be added to a spam filter black list. Sending to people uninterested in your offering will only speed the process. To make email marketing effective again, you need to take a few logical steps:
Make it count: Emails must be meaningful, from the subject line through the last message and calls-to-action. Refine, refine, refine until it is right.
Target precisely: It is always a temptation to cast a wide net, but that has become ineffective and can land your email server on a black-hole list. Buy good lists with great hygiene and segment them relentlessly. Treat your house list the same way.
Eliminate barriers after contact: I have started abandoning pages that require registration for simple “Five ways to …” type articles. I’m not alone. Reduce friction everywhere, and raise barriers only after some form of commitment from the recipient has been made.
Keep trying alternatives and shift budget accordingly: Email is only one tool. If it is becoming less effective for you, then be bold and shift budget to places where you will get better results.
February 19, 2013
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Perception is reality, until reality overrides perception.
Marketers are branded as liars in no small part because many of them are. So pervasive is the trait that certain smart people have made good money writing on the subject. Marketers are charged with promoting products, which entails setting public perception about the product. In modern use of the word, this often devolves into propaganda instead of persuasion. Effective in the short term, setting unrealistic public perception about a product will eventually backfire.
This happens to politicians all the time.
Since perception is reality, at least in the short term, you need to have a clear notion of the reality you create for the market. Like the elastic in a fat fellow’s waistband, it can only be stretched so far before it fails. Since product disappointment is the essence of negative buzz, the greater the degree of potential disappointment you create, the harder the fall once the market commences complaining.
And they know how to complain. I recently read a restaurant review where one consumer said “If they offer to pay you to eat there, Sweet Jesus, don’t do it!”
The market ultimately decides reality, and in doing so redefines your brand. No amount of remessaging or repositioning will change the soiled mind of the market once it has been misled. Criminally insane marketers (no, that is not a redundant phrase) often double down on deceit once their preliminary propaganda pops. Large amounts of otherwise good money is wasted in trying to force a market to disbelieve what it already believes, which is slightly more difficult than changing the moon’s orbit. It also tends to invite mockery and an accelerated decline in brand value.
It is up to you to define reality. But keep in mind that the market is not composed of idiots, despite the outcome of some elections. Your product promotion should nudge people in the direction of the desired perception, letting the market accept the possibility of your chosen product position. The distance between reality and the reality you try to create should be short … so short that you could easily augment the product into that condition. Making reality and positioning one and the same is even better, but foreshadowing your eventual position through current promotions is not unthinkable.
The marketing lesson is that honesty is one of the better policies. The backlash from setting unrealistic expectations is often and deservedly disastrous. “Keep it real” has real meaning.