Author Archives: admin

Brand Bonuses

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“You can get better quality than we offer, but you can’t find a higher price than ours.” Oddly, that pitch works when not stated so bluntly. Known in marketing circles as the Mercedes Effect, it shows that people are willing to pay money for no added value aside from perception. Mercedes, Coach handbags, Apple computers and many other products have remarkably higher prices and margins than competing products of equal functional value. The difference is almost entirely because people want to own the brand and enhance their sense of self-worth by proxy. There are other reasons for cultivating cult brands aside from getting obscenely rich. Great brands, well-crafted and relentlessly enforced can: Create buyer/market/investor faith in the product/company/cause. Bias purchase decisions, thereby increasing the number of conversions per promotional dollar. Create a sense of mystic relevance (or as the authority on propaganda calls it, perceived hidden underground knowledge). Allow you … Continue reading →

Lavish Leadership

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“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 … Continue reading →

Buzz Kill

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Two cynical definitions of language neatly describe many marketing communications: The music with which we charm the serpents guarding another’s treasure … and The source of misunderstandings. Marketing’s job is to charm people out of their money, preferably by articulating the true value of necessary products. Yet many marketing managers slip straight to snake oil salesmanship and leverage a ton of text and bunkers filled with buzzwords to attempt recruiting prospects. Misuse of language is a chief cause of unhappy customers and board members. The first task in marketing communications is to promote value. Here at Silicon Strategies Marketing, we defined (copyright alert) value as “the intersection of need and differentiation.” Value intersections tend to be precise, and the language used to describe a particular value must be as well. Generalized and buzzword-heavy statements like “the most cost-effective, easy-to-use, and universally accessible” detract from precise value articulation. The results are … Continue reading →

Managing Market Movement

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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 … Continue reading →

Evil Email

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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 … Continue reading →

Wanting Needs

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No marketing person has ever created a “need.” It is an enduring myth that marketing creates needs, which in a moment you will see is simply impossible. Many marketers have found other careers after beating their heads against the wall that separates “need” from “want”, and marketing products in exactly the wrong way. This flat forehead syndrome exists because of myth alone, and it is time to slay it. Needs are preexisting conditions. As Maslow so painfully noted, there is a stacked list of needs. Yet Maslow was mistaken about the definition of “need” himself, for as you ascend his pyramid, his “needs” become aspirations. Maslow may have maladjusted marketers by creating a false sense of what a need is. Food, water, shelter are personal needs. Accounting and inventory are corporate needs. “Wants” are a different subject. When new products are created, they are never “needs” at first and thus … Continue reading →

Smart Non-Money

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Spending money to compete toe-to-toe is dumb. But this hasn’t stopped start-ups from doing just that. Most start-ups are about as broke as college kids (and from the looks of their management team photos, may well be staffed with the same). They do need to spend money on marketing, but competing is foolish. For every face-off, someone loses face. Slugging it out with gorillas is fast suicide and shin-kicking many small competitors is the slow form. In every market, you can outmaneuver competitors, even gorillas. By understanding the position of each competitor or how they approach buyers, you can compete without competing, which is more cost effective and more effective in general. SuSE Linux remains my worn-out example because it worked against the sitting gorilla. Back when Linux was only starting to be seriously considered for mission-critical IT infrastructure, the U.S. market was owned by Red Hat and littered with … Continue reading →