By Dave Taber
In the early 90's, a couple of advertising guys dreamt up some rules,
and had the audacity to claim they'd found 22 laws that
governed the universe of marketing. Read the book now, and you realize
ideas aren't really laws and have proved quite mutable.
But this didn't stop them from selling a million copies to impressionable
Me, I'm doing it a little differently. I'm going to give
you what I believe really is universal and lasting about
marketing for free. Most of these apply both to consumer
and B2B marketing, and
are equally true internationally and domestically. While
I've entitled this issue "the 10 commandments," because I'm from the computer
industry "10" is in hexadecimal, so there are actually 16
of them. It's ok if you don't get the joke... but I do
welcome your comments and reactions on this issue.
The Tenhex Commandments
1. You have
to look bigger than you really are. This
is true for any company, because even Microsoft looks small
in any new initiative. Perceived size really matters, to
suppliers and partners, as well as customers. To follow this
means focusing on visibility, credibility, influence, alliances,
and customer references. You never succeed alone.
other people say about you is more important than what
you say about yourself. Word of mouth -- the good
things your customers and colleagues say about you -- is
Following this means making sure your customers' experience
and positive, plus further focus on alliances
and customer references. Nothing is as credible as someone
who has nothing to sell.
is more profitable and easier to sell to existing customers
than to develop new ones. Despite the thrill of
and Wall Street's focus on new customer
customers are almost never profitable. The real profits come
from upsells, expansions, and the quick sales cycles from
working existing customers. Depending on your industry, repeat
business is won with 1/3rd to 1/10th the time, effort and
money. To follow this means optimizing your cost of customer
acquisition, and focusing on long term account value.
is more important to be the trusted vendor than to have
the best product. Build a better mousetrap, and the
world won't beat a path to your door: the world won't even
notice. Be a trusted vendor, and customers will follow your
advice. It's this effect that lets Microsoft release three
versions of products before they get it right. Following
this one means to understand whom your customers trust and
why, and to earn trust through quality
product and great
your channel is not motivated, the product will not sell. There are lots of examples of great products that were
uninteresting -- or worse, posed problems -- to the channel.
Nothing kills a product faster than a pissed-off sales guy.
Whether you've got direct reps or a complex distribution
network, the channel must be explicitly motivated to make
sales happen. Following this means (of course) money, but
it also means removing channel conflict, making it fun to
sell, and living up to your commitments. Sales reps and dealers
makes the Sale. Everybody knows that 80% of
decisions are made on an emotional basis, but almost nobody
tech markets that way. We're all speeds and feeds, feature
/ benefit / advantage. But what actually clinches the deal
is how the customer believes he will feel after he has purchased
the product or service. The emotional drivers -- fear of
making a mistake, worry about job security, trepidation about
a security breach or a SarBox compliance problem -- have
been dominating the IT market for several years. To follow
this is to be attuned as different emotions start to come
into play, and to make the emotional drivers at least part
of your pitch.
doesn't pay. Casting a perfect illusion
is absolutely required, whether you're selling a user interface
or a fine hotel. But trying to be absolutely perfect is at
least impractical (costs more than it's worth) and at worst
is a huge distraction. Perfectionists in companies large
and small usually over-invest time and resources on things
that really don't matter -- or would be best ignored in the
first place. What does pay is being really easy to do business
with, flexible yet consistent, and providing customer delight.
Following this by practicing value engineering: put resources
only into things that will actually make a difference to
movers have an advantage, but the costs of being too early
for a market can kill you. The corollary to "There's
nothing more powerful than an idea whose time has come," is "Nothing
is more tragic than an idea whose time hasn't yet arrived." Timing
-- being in synch with demand -- is critical. To follow this
is to listen very carefully to how customers and non-customers
are responding to your marketing, to note what they actually
buy vs. what they flirt with, and to never invest ahead of
demand. "If we build it they will come" is usually
an expensive fantasy -- particularly with a direct sales
customer buys because of your logo or your tag line: they
buy because of the value they believe you'll provide. Branding and ad campaigns are nice, but awareness and visibility
will take you only so far. Purchase decisions are made because
the customer believes your product or service will deliver
value better than the alternatives. Following this means
delivering solid value and making sure prospects have a clear
sense of what you can do for them.
is almost never the problem. Unless you are selling
a complete commodity -- and therefore by definition not practicing
marketing -- price
is not the issue getting in the way of
sales. Of course you can't charge $50,000 for a $5,000 product,
but I've found that reducing the price from $50k to $5k doesn't
make sales go up much even on a unit basis. The issue at
work here: does your product provide so much value in the
customer's mind that its price is an economic bargain? Does
the product pay for itself with savings? To follow this is
to make sure you have a tight definition of who the customer
is and a clearly expressed value proposition for them. Keep
perceived value greater than perceived cost.
don't position yourself: the market positions you. Many CEOs and Sales guys take repositioning way too lightly:
all you have to do is dream up a new story. But the customer
won't buy it: to change their opinion requires that you provide
a new value proposition. A new value proposition for a product
requires new features, and repositioning a company requires
new products at the very least. Follow this one by first
realizing that positioning is like a reputation, which must
be built through the right behaviors and consistently superior
products and services. The market's positioning of you will
lag reality by at least 6 months.
wants to be cool. Every market niche has
a different definition of "cool," but people are
willing to sacrifice a lot in order to fit whatever they
think cool is. People will do almost anything to be admired
or envied, to feel smart or part of an avant garde. Cults
really work. They are part of human nature, and being part
of a special community with its own set of beliefs and practices
is an important psychological impulse. This works just as
well for geek products (think "O-O" in the 90s
or "open source" now) as it does for cosmetics,
so don't ignore this one! To follow this is to create a sense
of exclusivity or importance about your product or company.
Tipping Point to learn more.
doesn't matter if you're #3 when it's a two-horse race. All too often, customers will really only support a "main
vendor" and one alternative. A key indicator of this
is when market share numbers for the top two are 65% or more.
Unfortunately, there are an awful lot of markets with 10
competitors and it's just hopeless for 8 of them. In the
long run, GE's Jack Welch was right about exiting businesses
if you can't be #1 or #2. Following this one means finding
market niches that aren't overpopulated, but are substantial
enough to make your business happen. There's nothing wrong
with being the leader of a small, profitable niche market.
going to be much easier to change your product, or even
your company, than to change customer behavior. Any
product strategy requiring a change in customer behavior
is doomed to a long uphill battle. If you can make that shift,
though, as Sony did with the VCR and the Walkman, the gains
can be enormous. For most mortals, however, following this
one means customer-focused product
design. It's not a bad
thing to design your whole company around the target customer
and the channel needed to get to them.
responsiveness, and flexibility count for a lot in getting
and keeping customers. Making the customer
feel attended to -- attentive listening and rapid response
-- is a key part of building trust and long-term relationships.
In IT customer support, for example, it's been shown over
and over again that actual quality and time-to-fix are less
important than the speed, frequency, and courtesy of the
support team. To follow this is to know that form is as important
as function: style and appropriate content are equally important
in making people feel good about your company and its offerings.
is a Conversation. The best and most profitable
customer relationships are continuous and two-way. If you
don't want to believe the Cluetrain
Manifesto, look at the
way business is done in Japan and China: tight, long-term
relationships are what drive their most profitable businesses.
Follow this by finding ways to actively listen in every department
of your company, and to make sure the customer's message
gets up to high enough levels so actions can be taken. Further,
up your "outbound" conversation so that your
customers are in the loop on important decisions and can
tell that you've been listening.
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©2005 ChainLink Research, Inc.