The Fine Art of Marketing

The Extremes of the Sales Funnel

2011-07-22T15:51:00.045+02:00

Opening disclaimer: To prove the validity of this post not everyone should read it until the end.

Why? Read until the end if you like, but then I risk you prove it wrong, just by reading it?!

This post will indicate some dangers to avoid when optimizing sales processes.

If you are professionally involved in sales process, you must have already stumbled upon the concept of a sales funnel. Either you were asked to design or manage a sales process or you were reminded by a boss about your priorities and responsibilities using a diagram of a sales funnel.

In short we can say that a sales funnel is a model of a sales process which defines sequential steps that are required to extract revenue from a given market potential. The model strives to be optimal in the sense of revenue versus sales costs index. In other words, the model shows how much effort should be invested at a given stage of a sales process to maximize the overall revenue gain.

An example of a sales funnel.

Image courtesy of www.getentrepreneurial.com

A typical sales funnel has a shape of a cone. An example is illustrated in the image on the right. It is wider at the top and gets narrower as we move down. The top of the funnel is abstract and strategic, the bottom is objective and tactical; the top deals with (almost) infinite number of instances, the bottom deals with relatively small number of instances; the top is handled by marketing departments, the bottom is handled by sales departments.

The cone shape of a sales funnel tells us that in order to be optimal we should address a wide audience at the top, but spend relatively little per each instance. On the other hand, we should carefully select a smaller subset of instances at the top and spend progressively more per instance as we move down the funnel.

There are numerous indicators which describe the properties of a sales funnel. I would like to point out one such indicator to show how misleading sometimes a very straightforward goal to optimize a sales process is.

Let us take a look at the conversion rate indicator. This indicator tells us what percentage of instaces is moved to the next stage in the sales funnel.

Suppose we have a company with an infinite market, meaning there are more potential sales opportunities than we can theoretically close. In other words, the potential exceeds the capacity of the company.

Consider now this case, "The company claims they have a 100% conversion rate. Is this optimal for the company?"

What does this mean? A 100% conversion rate means that every instance entering the sales funnel is also exiting it at the very bottom when the sales successfully closes the case. This also means a sales funnel is no longer cone shaped, but cylinder shaped structure. This company has a sales cylinder.

Is this good or bad?

It depends upon which cylinder it is. Consider the two diagrams below.

Type A and Type B cylinder shaped sales funnels.

The company may think they have a type A cylinder, but I claim they have a type B cylinder, since type A is theoretically impossible. Remember, there are more sales potentials than the company can service.

This means this company is exposed to huge risk. This does not mean they can close every deal that they pick; this means they have to close every deal to survive. They are suffering from low market awareness, which is why they have to take any deal that comes along. There is no room for optimization. Every deal has to be closed.

If they had a cone shaped sales model, they would have the luxury to pick opportunities and optimize. Sure, their conversion rate would be less than 100%, but that is good. That would give them the leverage to optimize.

A cylinder shape would only be acceptable in cases where the market potential is small. Meaning the company has the capacity to theoretically service all the customers in the market. But then again, that case is not very interesting by its definition.

Therefore, when optimizing a sales process, analyze all stages. Remember, your prospects have to come from somewhere, and some of your leads have to be positively closed to have a successful sales process.

Do not overoptimize! Some instances will fall out of the process and that is good!

Closing disclaimer: I hope not every one of you is reading this, as this would prove the post is meaningless.

Only the Best Products Get Sold!

2010-07-28T21:26:00.056+02:00

This is obvious, and yet many product managers do not pay enough attention to it. Every time a product is sold, the buying decision is made on assumption of the best choice made by the customer. Therefore it is always the best product which gets sold. The customer would never go for his second or third best choice. The purchase decision is always customer's first best choice.

Why?

Nobody can force the customer to buy anything less than the best according to what he is looking for. There exists no other force, which would influence the decision. Naturally, the customer always chooses the best product.

Still you can find many products on the market, which address the same problem. Yet this is not contradictory to what is said above. The premise states that the customer always decides for the best product for him. Different customers usually make different best choices. This means that customers possess different criteria for selecting the best product. In other words, different customers have different ways of satisfying the same need, but each particular purchase decision is made on assumption of the best product selection for that particular customer.

What does this tell us about product design strategy?

If you want the product to be sold - ever, it has to be designed in a way that it will be selected by at least one customer as his best choice. Not second best or third best! It has to be the best for at least one customer according to his purchase criteria.

Have this in mind when designing a product. It is by far the worst strategy to design a product in a way that it is mediocre in every aspect. Not only it will never be selected in purchase decisions of your customers, it will also mislead your market research. You will detect a lot of interest, a lot of potential, which will later on never be realized. You will always lose, maybe just by a little bit, to the best product for the customer. Think about it, if this is frequently happening to you.

What you should do is think carefully about your product. Is there at least one criteria according to which your product is the best on the market for a customer segment that you are aiming at? You need to be clearly the best! Do not fool yourself by thinking that you can get away by being among top three. On the other hand do not worry, if there are some other criteria and customers according to which you are not very good at.

Sometimes a purchase decision criteria is combined from several elementary ones, like for example price/performance ratio. Nevertheless, it is still a single criteria and it should be considered as such, if you decide that this is where you want to build an advantage with your product.

Remember, being always in the middle is not a good strategy for product development. Find at least one purchase criteria for a product, where you can clearly deliver and present the best solution in the market and make sure you execute that strategy perfectly, then your success will come naturally.

What's Happening? Who cares!

2009-11-19T23:38:00.015+01:00

Until recently Twitter prompted us with a question "What are You Doing?", which is personal and so common that it automatically challenges a reader into reaction. This question has been replaced now with a more distant phrase "What's Happening?", which is less personal. It also does not draw as much attention as the first question did.

Why?

Because it is not about me - the average user and because I do not care what is happening, unless it is happening to me.

It is true on the other hand that Twitter has grown a lot since its beginning. It has been used for many different purposes from personal status updates to all kinds of marketing and social networking. Looking from this perspective, the old question looks a bit narrow, but I think the authors could have come up with a better question.

Let me give some suggestions what would work better and still be aligned with today's multipurpose social hub that Twitter certainly is.

What is Happening to You?
What do You Have to Say?
What would You Like to Share?

These questions are focused on the user. They show interest in the user's opinion and they want to hear his/her particular statement. Questions like these are much more likely to generate (enthusiastic) response than the new official question.

What do You think about this article?

Trade Shows, Why are They (Still) Here?

2009-09-22T21:27:00.024+02:00

If you are coming from IT industry, then you have probably already heard this claim, "Public business events are going to be replaced with internet technologies like web, webinars and social media."

And yet trade shows are still here. Why?

One thing is true. Internet technology offers strong means for almost any company to present their products and services to the world. Besides presentation there are also several options available for promotion like sponsored links, banners and promotional video clips. In most cases a company can build a technically more convincing presentation on the web than at the trade show. A promotion on the web can last forever. Usually, a web based promotion costs less than a public appearance at the trade show.

But trade shows have one unique advantage, which could never be replaced with web. They are personal, first hand, human, if you will. They are more aligned to a human nature than internet technologies. People go to trade shows not just to see products, but mostly to meet people, potential business partners and customers. Intuition and intangible quality play a major role here.

That is why I think trade shows are still around and they will be here for quite some time, until we discover a way to transfer authentic personal touch over the web - if ever.

Competitive Edge is Really an Edge

2009-08-14T11:27:00.111+02:00

This post is a bit more formal. It contains some definitions and graphs. Generally I try to avoid abstract language, but in this case I found formal explanation to be very suitable to carry my message across to you. I hope you will find it useful and inspiring too.

Start-ups and companies undergoing radical reforms at one point or another start thinking about their product portfolio. The most mind-boggling questions are; Which capabilities should I turn into products and offer to the market? How wide should the portfolio be? How will I satisfy my customers who want the impossible t.i. the best products (not just good!) for all their demands?

Since I was recently involved in similar processes several times, I have given a lot of thoughts to this matter. I found out some clues which, I hope, will help you design your product portfolio.

Let us start with some definitions. Say your company operates in some particular field of business. Let us denote this area with D - domain of your business. Domain D represents all the possible products you could provide for your customers. In other words, D represents all possible needs or problems your customers could have.

Your company, which operates in this business delivers products, which satisfy some of the customers' needs. Some needs are better addressed than others, but in general your offer for the market could be represented as a function of added value over your domain v(d). See example in Figure 1.

Figure 1.

The curve in Figure 1 shows that you are covering approximately one third of customers' needs and that you are particularly good at solving problems near the peak of the curve. Let us denote the problem for which you provide the largest added value as D₀. In other words D₀ represents your company's competitive edge. See Figure 2.

Figure 2.

If provided value V₀ is one of the largest in the market, then you are probably the market leader for product D₀. But what if this is not the case? What if there is a competitor providing much better product than you are? Let us denote your competitor's added value for product D₀ as V_M and let us say that this is the current maximum value provided for the market. Therefore your competitor is also a market leader for the product D₀. This situation is sketched in Figure 3.

Figure 3.

As you can see in Figure 3, the value provided by your company is much smaller than the value provided by your competitor and market leader. To make things even worse, this is happening where your biggest strength should be - at the peak of the curve. Obviously, you need to "grow" the peak to match your competitor.

Can you?

Yes, you can!

Here is how. The area under curve is your company's capacity, which is constant. The capacity, let us call it C, is limited by the resources of your company. These are people, knowledge, brands, capital, etc. See Figure 4.

Figure 4.

Therefore, you can not expand the capacity, but you can modify the curve as you like as long as you preserve the area under curve. For example, you can decide to widen you product portfolio (Figure 5) or you can decide to shrink it (Figure 6).

Figure 5.

Figure 6.

Which one do you think will reach the customers? Offering lots of (under) average products or offering a small set of exceptional products?

My bet is the latter.

I would go even further and I would not settle for "just good" products. Just good is not good enough. It is too risky. I would squeeze the value curve as much as needed so that the top would stick out of the current best offers. Today, in globally connected world, it is really hard and risky to offer "just good" products. The customers have lots of information and relatively easy access to any company in the world.

Now, let us say you specialize. You focus and dedicate your resources to the product you are the best at. Unless you are a giant multinational corporation, your value added curve looks similar to that in Figure 6.

When you visit some customers, you find out that they expect the best products, but at the same time they expect you to address a majority of their demands. Let us sketch their expectations with a value added curve. See Figure 7.

Figure 7.

That might seem scary at first. Your company clearly cannot realize their expectations, since the capacity in Figure 7 greatly exceeds your realistic capacity. Compare Figure 6 and Figure 7. Area under curve in Figure 7 is much larger than that in Figure 6.

What now? Did we get it all wrong?

No.

It is time that you get partners t.i. companies which deliver the best products; products which you intentionally left out to be the market leader for D₀. Look for companies, which are similar to you, which have a narrow added value curve and which curves do not overlap too much with your curve. This should not be hard now. Almost every company, which operates in a niche wants to cooperate with the best companies which help it complete its portfolio just like your company.

Imagine how impossible this would be, if you had a wide, flat added value curve. Like that drawn in figure 5. Do companies want a partnership with another company which offers (under) average products? Do they want a partnership with another company which offers competitive products besides a little bit of everything that it does? I guess not.

When you go looking for partners, make sure they are the best at what they do and that their product portfolio does not overlap too much with yours. Only this way your company and your partners can realize your customers' expectations. Figure 8 shows an example. See how this figure is getting closer to Figure 7, which shows customers' expectations.

Figure 8.

Connect as much partners as needed to complete customers' vision, but be very conservative when thinking about delivering some new product far away from D₀ yourself.

When Challenged Use the Chicken Argument!

2009-07-31T18:33:00.058+02:00

Today's topic is not a new one. I decided to write a few words about it, because I still face this issue from time to time. It is about speaking the right language, knowing your customers and knowing who is on the other side, when you are trying to get the message across. The problem was extensively studied by several authors Adele Revella, David Meerman Scott, Steve Johnson and others.

So, what is it all about? Years ago, when I started my work as a product manager, whenever somebody asked me if I can create a presentation of a product, I immediately knew what to do. My presentation was done in a very short time; it required no particular input from colleagues or customers (I knew it all, I was a product manager!) and it spoke a magnificent persuasive language.

Which language?

My language.

There was a problem with that. The customers were not product managers. They saw the product through their eyes. They were expecting answers to their problems, not an expose of my beautiful achievement. The message did not get to them, because there was no message for them.

I figured it out, eventually. In order to be listened to, I needed to convey the value of the product from the customer's perspective. Although there was a single product, there were as many perspectives as there were distinctive market segments. I needed a customized presentation for each market segment.

Since then whenever somebody asks me to prepare a presentation of a product, I immediately ask back "Who will be listening?" In some cases I still get a strange look questioning me "am I trying to avoid the task by asking annoying questions?" In these cases I need a simple persuasive argument to explain why knowing a listener is so important. Here is what I am using. You can try it too.

"Let us say you would like to present the value of corn to a farmer. How would you do it?

Further on, how would you present the value of corn to a cook?

Would you be more persuasive with two presentations or just one for both of them?

If you still think that corn is corn and there is no reason to present it differently to a cook as you would present it to a farmer, try this one -

- How would you present the value of corn to a chicken?"

Long pause.

"Are you kidding me?! You need a break - soon. Here is your customer profile."

;)

How I Fought 12 Buyer Personas and Survived

2009-07-20T20:29:00.042+02:00

Bottom Up Approach to Market Segmentation Using Buyer Personas

My latest post on buyer personas caused quite a strong response from you - the readers. I guess this is a hot topic and a lot of you are involved daily in tasks which require some kind of market understanding. Buyer personas help us understand how our market is segmented and what kind of distinctive problems do buyers from different segments have.

If you want to have a good understanding of the market, the number of personas has to be just right. Have too much personas and you will not see a thing (a pattern) about the market. Have too little personas and your communication will be too general and nobody will listen to it.

When first managing a project involving buyer personas I had two questions in my mind: How do I know which is the right number of personas for my market? Is there a methodology which would lead me to a good number of personas?

I discovered that in my case buyer persona identification is a two dimensional problem. The first dimension is represented by the industries that we want to address and the second dimension is represented by the business roles that buyers have inside industries.

In my case there were four industries and three business roles. Three business roles are quite common, if you are working in B2B market. Usually you need to convey value to three distinctive roles in an organization: commercial buyer, technical buyer and user.

I did a simple sketch, showing my personas in a grid.

A quick look at the grid and a simple math told me I am facing a huge task, if I would really need to create and maintain 12 buyer personas.

With confidence that there must be something along the way to help me overcome this number, I started with buyer persona profiling project.

Luckily, I found out through the process that there are some persona profiles which should be merged, because they represented buyers with equal problems and they also spoke practically the same language. It turned out that technical buyers from all four industries could be effectively represented with a single buyer persona and also that end users from the first three industries had a single persona. I updated my grid immediately like this.

In this stage I had 7 buyer personas. Therefore, I managed to cut initial number almost in half without losing the specificity given our market structure.

During this process, it was also decided that we were going to address industry D through industry C, which removed additional two buyer personas, so I was left with a manageable size of 5 buyer personas.

In conclusion let me answer my initial two questions in short. Start a buyer persona identification process so that each industry and each business role from that industry is represented with an unique buyer persona. Look for similar profiles and merge them. Stop when you cannot find any more profiles to merge without introducing impurity in descriptions of their problems or solutions to their problems.

This method worked well for me, I hope you will find it useful too.

Buyer Personas and a Practical Dilemma

2009-07-07T21:59:00.045+02:00

I got the opportunity to devise a new marketing strategy for my current employer, which is great, by the way! We decided to use buyer personas to gain insight into our target markets. The concept really works well in practice. It gets people, who are involved in marketing process, thinking and focused on real issues t.i. understanding the customer and his problems. Another good thing is that it provides a method, which is usually missing in marketing. Marketing is too many times perceived as a tactical process, although it should be exactly the opposite. Marketing should result in a deep intelligence about the customer and should provide a strategy for sales process.

One of the things you could use buyer personas for, is design a product's web site. This approach would give you a quite unique web site. The content would be mostly focused on customers, understanding their problems and presenting solutions for their problems, which you would hopefully have. Looking at your competitors' web sites, you would notice that they are quite different. They would focus on presenting their company, their products and solutions and they would talk very little about customers. This is at least true in our case.

And now the dilemma ...

What do your customers really want? How would they be satisfied? By finding what they expect to find on a product page, because the industry has trained them for years to sift through lists of products, features and system schemes or do they want to recognize their story on the vendor's page and look for answers to their problems there. In other words, while it is clear that the right, properly targeted content answers the questions more quickly for the customer, he may be more satisfied with the conventional way of presentation of products and he may find searching for a solution as an essential part of his buying process. And to make things even more complicated, this preference may change over time as more and more vendors use customer based presentations on their web sites.

What we will do? I do not know at the moment, but you are welcome to check out BeeSmart.tv in the near future. Feel free to comment this post, I am very interested in your opinion.

So Simple, You Simply Must Love It!

2009-06-28T10:37:00.033+02:00

Sometimes I just want to send a larger file to a friend or a colleague. I am not at my own computer, so I do not have all the tools available. It turns out; it can be quite frustrating sending bigger files, especially if you do not have a generous e-mail service provider, who allows e-mail attachments of hundreds or even thousands of megabytes. What I usually do have available on this host desktop is a web browser, which is available on almost all desktops today. This issue is addressed by a genius idea, which was brought to life by FilesOverMiles creators.

In a nutshell, FilesOverMiles is a browser to browser file sharing service, as the site itself claims "Your files are sent the shortest way - direct between you and the recipient. There are no intermediate servers slowing down the process." The user interface design follows a Google philosophy. A no nonsense user interface, straight to the point approach with just one button to operate the service. With a click on a single button, the sender selects the file to send. The service responds with a web link where this file can be accessed. The sender gives this link to a receiver, who can download the file using a regular web browser. File transfers are direct without any intermediate servers, which maximizes the transfer speed and the content security.

With all the nice features, there is one issue still left for the authors to resolve. While the service is particularly useful for exchanging larger files, smaller files can be exchanged via email, the size of the file is limited by the size of computer memory. This is due to limitation in Adobe Flash Player which the service is based on. Removing this limitation is important, because it hinders one of the site's biggest advantages. "Hopefully, upcoming versions of Adobe Flash Player will remove this limitation and then FilesOverMiles will have no file size limits." claim the authors and I wish them good luck!

Simplicity is one of the strongest advantages of FilesOverMiles. It is well positioned in terms of the problems the users have when in certain situations they want to exchange files. It really solves your problem, when all you have is a web browser and a big file to exchange. And above all, it is free. We all love free lunch, don't we?

Come Close to Your Users, Go Social

2009-06-09T21:38:00.071+02:00

There are services where application of social component is obvious. There are also new services which were born out of social media. And there are services, which are social, although it is not obvious at first sight how they could utilize this social component. When a company adds a social component to a service, where everybody in the industry, including competition, is not offering it, it likely gains an important competitive edge or opens a completely new market.

I have a nice example for you. Check out Flusta. This is a social betting service. It is social in every aspect. The users create new bets, participate in bets of other users and even decide on the outcome of bets. The content is entirely in the hands of the users. They provide it and they love that concept. They love to be a part of a group which is running the show. They are even willing to contribute relevant data to keep the show running. This behavior is even exaggerated, if the contributor gets extra credit for his work. This is probably a historically conditioned behavior.

The users perceive their contributions as something beneficial, if those contributions are given back to the community and if they get the credit for their work. It is also interesting that social communities grow wherever they get a chance. What is required is a social platform - a way to create and share information and a distinct subject which connects a certain community. This is a relatively small upfront investment for a service provider, considering the benefits which are gained from free content in increasing volumes as the community grows.

Take Flusta as an example. It would require enormous effort to resolve all bets which are in progress there. Even, if there was an inner process for resolving bets, it would probably not be so well received, because by taking away this process from the user, we are distancing ourselves from the customers.

Flusta creators clearly understand this concept, which is why they managed to create another unique service in the social media domain. Try it out, I bet you will like it!

Use Artificial Intelligence Wisely

2009-06-01T18:27:00.064+02:00

I really like it, when I find a service which is not based on an entirely new concept, but its execution is so thoughtful that it stands out of the crowd.

Supercook is your personal cooking assistant. It is capable of recommending a variety of recipes based on provided ingredients. Supercook is a meta-service, actually. It aggregates content from several specialized recipe web sites. It is focused on providing top quality recommendations and leaves recipe databases to other specialized services in the field, which is another important lesson to learn from Supercook. You will notice also that the service does not force you to sign up to use it. This alone greatly improves the exposure of the service to new potential users.

Artificial intelligence (AI) and a very intuitive user interface is present throughout the whole browsing experience. In my opinion this is the most important strength of this service. You can start using Supercook right from the front page. You type in your cooking ingredients. As you type, auto-complete function kicks in, providing you a really fast text entry. After you enter your first ingredient, a tag cloud appears below the ingredient list with most useful extensions of the existing list. On the right hand side, there is a list of dishes which you can make, based on the ingredients that you have. The list even contains dishes which require one or two ingredients, which you do not currently have. This enables you to discover more dishes and gives you an idea what else you could cook, if you had those ingredients. And when you think you have seen it all, check out My Account section. You will find a shopping list there. This shopping list is a list of items which will greatly broaden a variety of dishes that you can make in your kitchen.

In conclusion let me summarize the most important lessons to be learned from this nifty service. A service provider should only provide those benefits for the user where he is distinctively better than the competition. He should seek for partners, to provide other benefits for the user, where he does not have a distinctive competitive edge. The service should be open in a sense that it allows a relatively easy trial. If you have a practical use for AI, use it, but pay special attention when implementing it. Think about the user. Think about how does this AI feature bring added value to your users, who are the most important evaluators of your work at the end.

Invite Me Nicely

2009-05-21T08:41:00.040+02:00

It happens quite often, that one needs to share some content with a group of people in a way that requires more than just downloading it. When you are in a such situation, I recommend you to check out drop.io. In addition to content exchange, you will get a strong, real time collaboration tool with a high level of usability.

Besides nice features and real time collaboration, it was something else that drew my attention in the first place. What I noticed immediately was how easy it is to start using the service. There is no sign up required; you can set up your own space, called a drop, literary in a few seconds.

Why is easy access so important? It is important, because it leaves me, as a user, enough time and space to develop a relationship with this particular service. This is where many web services fail. Almost all services require some kind of sign up before they let you try them out. Why would I give my private email address and bother with entering all the data for the sign up, if I am not convinced that I want to use this service in the first place? Highly unlikely! To be honest, this kind of openness is not easy to achieve in many cases, because easy access means a lot of accidental users and this means a lot of resources. Particularly among services where space or bandwidth increases rapidly with scale this open approach is very rare. I think drop.io is in this league and yet it offers a completely open service in this sense.

Drop.io is a nice example of how understanding the user gives you the ability to focus on the relevant features for him. Giving the user enough time and not bothering him with unnecessary requirements in the decision phase is crucial for the user to adopt a new product. Drop.io was clearly developed with an understanding of this concept and this gives it an important positive differentiation on the market.

Understand, Then Focus!

2009-05-14T09:40:00.109+02:00

Discovering Joobili was a pleasant surprise for me, firstly because I find it unique in a pile of travel related web services and secondly, because it is perfectly aligned with my needs as a user.

How did the site manage to get my attention? It is really a bold decision to offer another travel site, but if you know what the market is craving for even a crowded market and a fierce competition are nothing to worry about. Joobili demonstrates an excellent user problem understanding and a nice utilization of social media.

The user persona in this case could be any person who needs detailed information about available travels in a predetermined time span. With Joobili this information is available only a click away. The user selects the desired time span and the service offers interesting events, which are taking place in the selected period. The value of the service lies in its simplicity and a goal oriented approach. I immediately noticed a very intuitive user interface, which is self explanatory and directs you straight to results. The results are cleverly handled. You can check them in a list or in a map format. You can also filter them according to their content and view their details. When you drill down to the details, there is another pleasant surprise for you. There is a social network established to help you connect with similar travelers and share your opinion.

Although it is hard to take a critical stand with Joobili and point out some possible improvements, let me try to speculate what could be done anyway. It would be useful, if there was a reverse search option, where the user would mark an area on the map and the service would respond with dates and events in this area. It would be also useful, if the system could find similar travelers, based on their history of travel, and suggest them to connect for possible common travels in the future. My last suggestion is about content. It is very important that the data is comprehensive. As a user I would like to be confident, that the system responds with all important events to my enquiry. To encourage organizations to provide information, some kind of a beneficiary program could help. In its most straightforward form a beneficiary program means advertising, which needs to be approached carefully not turn off users.

Joobili represents an excellent user understanding and a perfect execution of the idea which is 100% focused on a very realistic user need. I am sure Joobili has a bright future!

We have not seen a real video Twitter yet!

2009-05-11T13:57:00.115+02:00

You are probably aware of the popular micro blogging service Twitter. It differs fundamentally from other blogging services, because it shifts focus from individual posts to a stream of micro posts. Instead of well constructed, essay-like posts it captures tiny pieces of information, which are collected over time by each individual. It is functionally similar to a TV station. Each user is a broadcaster, who broadcasts his own micro packets of information. The reason for extreme popularity of Twitter is in its alignment with a modern lifestyle. Most users today find it hard to take time to write long stories, but a lot of them are willing to dedicate micro time gaps of their available time to post micro blogs.

With Twitter, each user is a broadcaster, who streams his own stream of information which can be regarded as a channel in TV analogy. There is one big difference to a TV channel though. Twitter channels are text based, whereas TV channels are video based. There is an obvious question, which poses itself "Can Twitter be upgraded to support video broadcasts?"

There are some services, which are already offering, what is believed to be a video version of Twitter 12seconds.tv, seesmic.com and phreadz.com. I believe this not to be true. These services are offering an alternative of Twitter, which supports video the same way Twitter supports text. Instead of focusing on the user experience, these services focus on upgrading Twitter. I am not saying that these services are not useful. On the contrary, each of them offers an interesting service and already hosts several users. What I am saying is that these services are not providing the service in video domain which is analog to Twitter in text domain. What would be a real video Twitter service then?

Let us take TV analogy again and let us look at TV service from a user's perspective. A TV channel is a constant stream of video content. It is live, always present and broadcasted to a wide audience. Twitter is providing such a service for a text based content. It even extends the TV paradigm by including each individual as a broadcaster. On one hand each user is streaming out his own text stream and on the other hand he is receiving a mash of streams, which he is subscribed to. A real video Twitter should do just that for video content. This means each user should stream out his own video channel - a real, live channel, not a list of text posts with video attachments! The content in these outbound streams would be quite sparse over time. The inbound channel of each user would be a time mash of channels he is subscribed to. In case there would be more than one post at a time to the inbound channel, the content would be queued and streamed out sequentially. The final result in user experience should be the user being able to tune into his inbound channel, sit back, relax and enjoy personalized video content.

I firmly believe that this will be the big next thing in the domain of social media. Entrepreneurs, if you are looking for a new business opportunity, please contact me, I am open for further discussion on this topic.

A Case Study in Blog Service

2009-05-06T09:07:00.087+02:00

Today I stumbled upon a simple and yet innovative blogging service Posterous. I think Posterous is a nice example to explain a few important points in a new product development. Let me state right up front that I have no background connection to this site and its owners.

There are many blogging services around. It looks like the field is crowded and there is nothing much you can do stand out of the crowd and yet Posterous managed to deliver a solution with a significant added value for the user. This service, unlike others, allows posting without an account. The users can publish posts by sending an email to a dedicated address. For each email address Posterous creates a new blog and sends back information how to access it.

Without doubt this solves a problem of taking lots of time and hassle to set up an account just to try a new service. This also solves a problem of data that one needs to manage to use several services, each with its own account.

Let us look at the development of such a service from a marketing perspective. Here are some important steps required to deliver it.

Market Analysis

This part is mostly involved in listening and understanding the customer. Many companies approach this part too literally. Unfortunately, determining the real needs of a customer is not as simple as asking them what they want. This is a sales approach. Although it might work in some cases, in most cases it does not. This is because the customer knows his/her problems, but does usually not know what is required to solve them. In case of Posterous a simple observation of a new user behaviour when trying to set up a new blog account could do the trick. Also questions like this might reveal the problem: "What holds you back from trying this service?", "Why did you leave the sign in page?", "How many services do you try each week and how much time does this take?"
Product Strategy

The most important with strategy is having a valuable solution to a real market problem. In case of Posterous, let us say we figured out a market problem for blogging services. The problem here is having too many accounts and the time needed to set up another account. To address this issue, we would need a solution, which allows using blogging service without creating an account for it. People who normally have solutions for such problems are technicians, developers, IT pros, etc. It is time to involve them and a product manager to evaluate solutions in the customer's perspective. Notice how a market demand is transformed into a technical language here. "Saving customer time and hassle" is translated into "using a service without an account". If a product manager does this right, there is much a bigger chance for a development team to come up with the right technical innovation.
Product Planning

Since the technical solution to a market problem in case of Posterous is not a very complex one, I will not touch technical activities such as roadmap, requirements and release milestones. Instead, let us take a look at positioning. Positioning is a process that focuses on conveying a product value to the market. The result is usually a collection of documents which supports outbound communication. The tagline of Posterous is maybe a bit overdone "Posterous is the dead simple place to post everything. just email us." I think "dead" is unnecessary, besides it also has a negative sound to it. It is also not quite clear what is the meaning of "email" in this context.

Taglines are weak links in many companies. Either they are cute and they do not convey a meaning, or they convey the meaning but they are awkward in expression. You probably remember some of the best taglines like "Got milk? (1993) California Milk Processor Board", "Just do it. (1988) Nike", "Think different. (1998) Apple Computer". I also have some bad ones for you "We make people fly. Lion Air" (too obvious), "Not as good as Pixar. Weakend productions" (too honest ;) , "Where Excellence is not Optional. Troy chemical industries" (too weird).

Let us return to the Posterous case. While it may have an issue with tagline, the first supporting message right below the tagline is perfect! The value is not even articulated. It is shown with a stroked through step in the description of posting process.

The product is also nicely represented with regards to user personas. A persona concept in marketing represents a typical user with a detailed description. It serves almost all steps of product development from planning to product marketing. In case of Posterous this concept was used to create a customized product positioning for four typical users. On the top-right side of the page you will find four personas. Each one of them has a customized product presentation with slightly different positioning. Nice job!

Please do not take this post as a complete product management tutorial, because it is not. I just wanted to point out a few important things which I noticed when browsing Posterous site. I know it sounds simple in theory and it is much harder in practice, but the good news is, it can be done!

Marketing, Reductio Ad Absurdum

2009-04-28T18:50:00.067+02:00

These days I had an opportunity to talk with several top managers about the role of marketing in their organisation. There is something important I noticed that is worth sharing, I think.

If your field of interest is marketing and you are looking for a job in ICT sector, I do not advise you to present yourself as a marketing person, because you will receive a bunch of scepticism and zero respect for your knowledge and experience. Now, being curious enough, I was not satisfied with a simple fact, I wanted to know why this is so.

I think that at the roots of this problem there is a big misunderstanding and a bad current practice. If you talk further with top management you will find out that in many cases they equate marketing to marketing communications, where in fact the latter is just a small fraction of the former. In some cases even worse, marketing is regarded as a sales support function. For these companies marketing is a part of the sales process. Looking from this perspective, it becomes obvious why marketing is perceived as a relatively simple, straightforwad and uninfluential process in an ICT company.

If you go further and ask why are they looking for a marketing person anyway, you are told that they would like to be a more marketing oriented company, so they figured out it is best to have a separate person to prepare collateral for their sales personnel. Besides the fact that this proves the perception of marketing as a sales support role, it is also clear that they are missing the most important role of marketing, which is listening to the market and responding with real value products or services.

There is also something wrong in saying "to be marketing oriented". Actually, marketing does not matter at all. Marketing is a business process inside the company. Being marketing oriented would mean focusing on internal process, which is probably not what the company wants. What matters is the market. The company should strive to be more market oriented instead.

What should you do, if you are a marketing person at a job interview? First, please do not say you are a marketing professional. This is like an oximoron to many companies in ICT. Take this as your first task, which you must perform perfectly with the right marketing approach to get respect and position in this company.

Instead of decribing your "features" listen and talk to your customer, khm... employer, about the issues they might have in the company. Suggest improvements, show them how you can bring a substantial value to the company with your knowledge and experience.

For example, you may bring out the issue of knowing what the market wants and knowing what valuable the company can do for the customers in this market. Remember, top managers are very smart people. They know what is needed to run a successful business. They are just not used to talk to a marketer about these issues. If you address their real problems, they will listen.

After all, finding out what their real problems are is your job. If you can do this right, you have good chances to get the position, because you really are good at what you do.