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What Pisses off the Man Who is the Face of 3D Printing

May 19, 2014 by

MakerBot, a manufacturer of desktop 3D printers priced at the level of a decent laptop, is the best known of companies producing a product that has already been raised to PC-level stature in terms of its potential impact on business and society.

Bre Pettis, the CEO of MakerBot, has become the face of this long-simmering but suddenly hot business (3D printers – the really expensive kind, anyway – have been around for decades) in part because he had lots of practice being a public face long before he ever thought about launching his company.

That background is why he was so pissed off at the recent Front End of Innovation conference, where he gave a speech about his approach to innovation.

What Caused the F-Bomb
Now, it’s important to put pissed off in proper context when talking about Pettis, who, when it comes to being the face of a new technology, hews much closer to Apple’s polite, tranquil (and nearly forgotten) co-founder Steve Wozniak than the other Steve. Besides some hair gel to sweep back a thick shock of salt-and-pepper hair and some long, hipsterish sideburns, Pettis wears the uniform of the typical sloppy, slack, sneakered, untucked anynerd and seems utterly comfortable in the skin beneath it.

That’s why when he uttered the F-bomb on stage (he apologized in advance) it came as a bit of a shock. He was talking about the US education system, saying that it is “f***ed.”

After his speech to the conference at large, Pettis held a Q&A in a small side vestibule where he was asked to explain what makes him so angry. Basically it’s the things we tamp down with Ritalin today: “We don’t let kids be playful, explore, or help them understand who they are,” he said.

A CEO Who Lived the Crisis in Education
Pettis is one of the few CEOs today who can speak about the education system from experience. He taught art in the early ’00s in a middle school in a poverty-stricken Seattle neighborhood. “If you are white you can basically skip school and not miss anything,” he says bitterly. “If you’re poor, you need the structure of the school system. About half the kids I taught got their breakfast through the school.”

With kids like these, many of whom lacked a consistent adult presence in their lives, Pettis discovered that using the medium that the kids were growing up with, video, was a good way to reach them. He did a series of videos of himself demonstrating how to make art projects and then had the eerie experience of playing the videos in class while standing next to the monitor. “They retained the information better when they watched the videos than they did when I taught in person,” he recalls.

Viral How-Tos
Not that Pettis was a bad teacher. Indeed, when he began uploading the videos to the internet (this was pre-YouTube days), they got tens of thousands of views. That led a publication called Make to approach him to make a series of weekly how-to videos for more pay than he was getting from the Seattle school system.

An obsessive, energetic tinkerer from an early age, Pettis couldn’t resist the offer. The connection with Make eventually led him east, where he co-founded NYC Resistor in a warehouse in Brooklyn so that people like him could get together and spend evenings cobbling weird stuff together.

From that base emerged MakerBot in 2009, which was co-founded by Pettis and two others. NYC Resistor is now housed in space upstairs from MakerBot’s Brooklyn factory.

Bringing Playfulness to Schools
As he demonstrated at the conference, Pettis hasn’t lost his passion for education. In 2013, the company launched a program called MakerBot Academy, in which teachers can request a 3D printer for their classrooms through DonorsChoose.org, a crowdfunding site for educators. Pettis pledged personally to supply every high school in Brooklyn with a printer, and has enlisted hackers on the company’s 3D print-plan community sharing Web site, Thingiverse, to develop a curriculum for teachers to download and plans for printing objects in the classroom. “I want to put a 3D printer in every school in the US so kids can feel empowered to create,” he said.

Of course, he wants those printers to be made by MakerBot, but what keeps his pledge from sounding like another one of those attempts to burnish the company image and revenues while doing good is the personal connection Pettis says he still has to teaching. “My skill is that I know how to gather people to do wonderful things,” he said. “I couldn’t be a CEO without having been a teacher first.”

When we think about the industrial supply chain, we can’t forget the resources that ultimately make it happen when they grow up: children.

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Patents Are Dead

May 5, 2014 by

I have always associated innovation with patents.

It’s the classic vision of the lone, wild-haired inventor in a grimy white lab coat putting himself and his family (assuming they’re still hanging around – he spends all of his time in the basement tinkering and cursing) through abject poverty until he finally hits on something useful and a huge conglomerate buys his invention and he moves to a mansion.

Thanks to something called a patent.

Patents Make Things Valuable Through Scarcity
Patents were first invented by the Venetians back in the middle ages to stimulate the wild-haired inventors (in this case glass makers) to invest the kind of obsessive energy required to create new things by protecting them from copycats and by giving them a financial reward for their work.

Ever since then, patents have created what economists and lawyers call artificial scarcity. For a certain period (usually 10-20 years) one else is allowed to make or sell the product (or service) besides the inventor and the company he or she chooses to make the patented product so that they can recoup the investment made to invent, design, manufacture, and distribute the product and make a tidy sum besides – basically whatever price the market will bear.

Things Were Fine Until the Internet Came Along
But the patent system assumed that the promise of financial reward for their efforts was what motivated the wild hairs to keep at it. Turns out that’s not the case, at least not anymore. As the entertainment and publishing industries have discovered much to their chagrin, people just like to create things, solve problems, and get public recognition for it, even if that recognition doesn’t involve financial reward.

And patent holders can’t even use patents for their more dystopian purpose anymore: to discourage copycats from getting in on the action. Despite unleashing tens of thousands of copyright infringement lawsuits (copyright is a kind of more relaxed hippie cousin to patents) upon internet music and video pirates, the entertainment industry has failed to stop the practice.

Yet despite widespread piracy, musicians produce more music now than ever and quality has not suffered. Publishing has endured the same fate, yet more books are being churned out than ever. And let’s not even get started about YouTube.

The Suits Lose, Artists Keep Suffering
It’s really only the suits that are losing out. The artists are simply continuing to suffer just as they always have.

What has kept musicians and inventors in the basement for all those years wasn’t the promise of financial reward (though that certainly helped), it was that the costs of producing and distributing the thing they wanted to do were just too high for them to bear on their own.

But that’s all changed now. As I explained in a recent post, the costs of producing and distributing books and music have dropped to nearly zero. Just set up a free blog or download free audio recording software to your computer and you can stream your creations to a nearly limitless audience for free.

The Costs of Production Approach Zero for Everything
But publishing and entertainment aren’t anomalies. There are three other areas where the costs of production will soon reach zero, according to a fascinating academic article (in this rare case that’s not an oxymoron) by Mark A. Lemley, William H. Neukom Professor of Law at Stanford Law School:

  • 3D printing. You’ve already heard how physical items can now remain in the nearly cost-free form of bits and bytes until they reach a really cheap printer in your bedroom or office.
  • Synthetic Biology and Bioprinting. Scientists have made entirely new forms of bacteria different than anything found in nature. It’s not easy. But it will get easier. Synthetic biologists are developing collections of “biobricks” – individual modules that can be put together in organisms. Because these bricks are information, they can be shared and recombined in numerous ways, says Lemley. Just like music and publishing, development and distribution costs will approach zero.
  • Robotics. Honda predicts that it will sell more robots than cars in 2020. Sounds like a market that it could try to sew up through patents. Yet even the realm of super-expensive and complex robotics is vulnerable to a loss of scarcity. Just like PCs, the value of robots will be not in the hardware but in the programming – what we can get the robot to do besides clean floors or weld cars – and we already know that there’s a robust open source community for programming on the internet.

Can the patent survive in a world without economic scarcity? Lemley, who is one of the world’s leading authorities on patent law, isn’t so sure. Intellectual property law’s original justification, that it stimulates innovation, seems to be a myth. Instead, patents encourage commercialization – the financial return that investors see in bringing a patented idea to market.

But patents don’t even do that well. Lemley argues that patents actually discourage commercialization; inventors and investors are too concerned about patent turf to invest in competing (as opposed to copycat) products. For example, a government report found that patents in the field of genetics actually limited patient access to genomic testing that would have helped them determine whether they had potentially life-threatening genetically-based diseases.

Lemley predicts that industries that see their profits threatened by the democratization of production will do just what the music and entertainment industries did: try to sue the threat out of existence, with the same costly failure for the suits and the same flowering of innovation for the wild hairs.

Patents will not disappear anytime soon, Lemley says. It’s still simply too expensive to bring a blockbuster movie or drug to market for patents and copyright to become completely irrelevant. But increasingly, high-cost products “will be islands of IP-driven content in a sea of content created without the need for IP.” (See, I told you this guy can write.)

As for me, I will never confuse patents with innovation ever again. How about you?

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How Do You Market Something That’s Worthless?

April 28, 2014 by

I come from an industry (publishing) where the cost to produce the product has dropped to zero. Today, anyone can go to WordPress.com, set up a Web site, and begin publishing news and information to the world – for free. (I know, tell you something you didn’t already know, right?)

It Won’t Stop with Virtual Goods
But here’s the new wrinkle. The publishing industry is imploding because its products can be produced entirely via bits and bytes and therefore, the marginal cost, as Jeremy Rifkin puts it so eloquently in this interview and video, has dropped to zero. It becomes extremely difficult for a publisher to sell a Web site subscription when so much is available for free.

But what happens, asks Rifkin, when you cross the line from the virtual to the physical? Seems pretty hard to bring the cost of producing a cell phone to zero right? And remember how economists have been saying that localized service jobs (plumbing, hair cutting, etc.) are immune to this kind of disintermediation?

Not so, says Rifkin.

Beyond the Hype of 3D Printers
What’s refreshing is that Rifkin doesn’t just list the in-vogue economic disruptors of the moment, the 3D printer and the Internet of Things, as the reasons why physical products and services will go the way of publishing. Rather, he combines them together into a compelling vision of overall economic transformation.

The missing piece of the puzzle that fell in place for me as I listened to him talk was that since the World Wide Web came along we have been continuously training generations of people to do things themselves and in collaboration with others. For example, we figure out how to get a free WordPress blog ourselves online or through word of mouth and then we learn how to collaborate with others through social media.

Pretend the Industrial Revolution Never Happened
In a sense, we are training people to pretend that the industrial revolution never happened and that we can go back to making things the way we used to before factories and steam engines came along: by ourselves or in small (or, thanks to the near ubiquity of the internet) large collaborative groups.

Given access to the same easy-to-use, free tools that I use for publishing, I could produce a cell phone that does exactly what I want it to (my iPhone 5S doesn’t). But it won’t look like something from a Lego box because of another important development: I will be able to gather data about what the cell phone can and should do and what it should look like from my friends and the general public. These things all have GPS devices in them that only do location today, but will do much more very soon. Already app writers are pushing the boundaries of GPS on cell phones.

Monitoring – the Good Kind
As we become more comfortable having monitors on ourselves all the time (which means we will also very soon need something equivalent to the Bill of Rights for data), we will demand them on our products and vehicles, too. And that will give us access to extraordinary amounts of valuable data that until recently were only available to governments and big companies, as well as apps that make analyzing and interpreting that data as easy for us as it is for them (okay, so it’s not so easy yet).

We will have the power and information to invent or at least easily assemble many things that we have relied on companies to do for us and it means that for companies, innovation, rather than plants and machines, will be the key to survival.

My question to you is, How do we market in a world of zero marginal cost?

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How Manchester United Revolutionized Sports Marketing

April 3, 2014 by

Manchester United image for Koch blog postAsk me which English soccer, uh, football team I would support and I would say Liverpool. Not for any defensible reason; it’s just because that’s where the Beatles are from and because I know next to nothing about that kind of football (I think they made us play it once in gym class when I was in 7th grade).

I would expect that most other similarly ill-informed, old-fart American Boomers who were raised on other sports like me might say the same thing (Stones fans, don’t look for a “London” team to root for because it doesn’t exist).

However, among young people, not only is English Premier League football way more popular than any sport I watch, but one of those English teams, Manchester United, is the most valuable sports franchise in the world. According to a controversial poll commissioned by the team, 650 million people worldwide say they support the team.

Have a Backstory
Why do so many people around the world support a team from a little known, struggling industrial city in the northern part of England? Well, partly it has to do with tragedy (a plane crash in 1958 killed some of the team’s youngest, most promising players), a dramatic comeback (After being a perennial loser, Man U began winning a lot – and everybody loves a winner), and a charismatic manager named Sir Alexander Ferguson.

But Man U also did something else really smart. It didn’t just try to cultivate a fan base in England, it went global. Man U began enlisting players (and sponsors) from countries around the world and embarked on frequent tours of those countries. The franchise leadership also invested in marketing not just Man U but football itself as the true global sport.

What Happens When You Start to Lose?
But now that “Sir Alex” has retired and the team is slumping, how does Man U avoid the fate of the Dallas Cowboys, who were once known as “America’s Team” until they weren’t?

Research by my colleague Rob O’Regan has found that hanging onto the kind of global popularity enjoyed by Man U requires focusing on four key channels:

  • Social media. As part of its sponsorship of UK soccer team Tottenham Hotspur, Under Armour ran a social media contest that attracted entries from fans in more than 50 countries. Liverpool FC maintains 17 local language Twitter accounts.
    Some teams have set up “war rooms” to monitor fan sentiment and weigh in when appropriate. “Teams are paying a lot more attention to social media, because that’s where the younger generation of fans talks about sports,” says Mark Lehew, SAP’s Global Head of Sports & Entertainment Industry.
  • Fantasy sports. There’s real money in fantasy sports, which has grown into a billion-dollar industry. More than 36 million people from the U.S. and Canada spent an average of 8.7 hours a week playing fantasy sports in 2013, according to the Fantasy Sports Trade Association. For example, the time fantasy players spend managing their National (American) Football League teams throughout the week – making roster changes, proposing trades, researching players – leads to a “halo effect” that drives engagement with other NFL properties such as the league’s website, individual club sites, TV programs, and game broadcasts. Fantasy league members generally view about seven times more content – text, video, and data – on NFL.com than non-fantasy users. 
  • Web/mobile content. Fan bases aren’t just becoming more global – they’re also becoming more mobile. Approximately 70% of the traffic to NFL.com comes from mobile devices – up from 10% just a few years ago.
    The NBA’s stats.NBA.com website, which houses player and team statistics from the league’s 67-year history, has helped double time spent on NBA.com while generating more than 9.5 billion page views last season – an all-time record for the site. The site has also emerged as part of what NBA officials see as a burgeoning second-screen experience for fans watching NBA games on TV.
  • Loyalty programs. One club in England’s Football League, trying to address the implications of an intimidating atmosphere during its home soccer matches, created an engagement program as part of a broader initiative to bring back lapsed fans and new generations of supporters to its matches.
    Swiping a season ticket card when entering the stadium would tip off fan experience personnel to acknowledge fan milestones such as a child’s birthday. “A family receptionist would greet them and offer a surprise like a seat upgrade, a free gift, or a chance to meet a player,” says Mark Bradley, founder of The Fan Experience Company, a consultancy that worked with the club. Sales of family season ticket plans increased from fewer than 500 in 2009 to more than 7,500 in 2012.

As for me, I’m going to watch a Liverpool match but I can’t forget the team that did all the work to pique my interest in English Premier League Football: Man U. I think I could be easily converted.

How about you, do you root for a team that’s on another continent yet?

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How Jimmy Fallon Redefined the Celebrity Biography

January 31, 2014 by
English: Jimmy Fallon CES 2009 in Las Vegas, NV

English: Jimmy Fallon CES 2009 in Las Vegas, NV (Photo credit: Wikipedia)

Jimmy’s Fallon’s career – and much of who he is as a person – can be summed up in eight minutes.

Look, I don’t mean that as an insult.

Fallon has risen to become a star by doing just one thing: being himself. And that self is on full display in an eight-minute video made in 1998.

According to a profile of Fallon in the February issue of Vanity Fair (an unsatisfying excerpt of which is available online.), Fallon’s sole ambition growing up was to be a cast member on Saturday Night Live.

He insisted on watching the show alone so he wouldn’t have any distractions, and he spent most of the rest of his free time watching tapes of the show so he could practice the skits and develop his impressions of celebrities.

The Only Job He Ever Wanted
The moment Fallon says he had been waiting for all his life came when he was just 24: an audition for Lorne Michaels, the creator and lead producer of SNL.

Michaels has a practice of filming auditions of potential cast members so that he and the other principals of the show can review them later and decide who makes the cut. The auditions are completely unscripted. Just a camera sitting on a tripod with the record button on.

A YouTube Prototype
When Fallon did his audition in 1998, YouTube didn’t exist. However, in hindsight, his tryout seems like a prototype for the site’s most successful content: It’s unscripted, it’s funny, it’s a snapshot in time (spoiler alert: he’s skinnier), and perhaps most importantly, it’s short (just eight minutes).

But the Fallon video is also more than that. The bits are funny, but beneath them, the video hums with Fallon’s trademark genuineness. His voice shakes with nervousness in between bits when he explains to Michaels and the crew what he’s going to do next.

A Preview of the Everyman Talk Show Host
And at one point, he loses it and cracks up at one of his own jokes, giving us a quick preview of the guileless, almost childlike enthusiasm that has propelled him to the pinnacle of late-night franchises, the Tonight Show.

Whether it’s all a put on (Vanity Fair strongly suggests that it isn’t) Fallon comes across in 1998 just like he does now, as the kind of charming, funny person we would all like to be and, uniquely, the only one we can imagine being.

Michaels, the TV industry’s heat-seeking missile of undiscovered comedy talent, saw something unique in Fallon. “There’s a sweetness to him,” he told Vanity Fair. “I only hate to say that because it looks lame in print.” According to the article, Michaels offered Fallon his dream job soon after the audition.

A New Kind of Online Bio
What’s interesting about the video is that it captures the most important historical event in Fallon’s career while also offering insight into who Fallon is as a person. It’s a kind of encapsulated biography online.

Increasingly, this will be how we come to know famous people, for better in Fallon’s case, or worse, in Paris Hilton’s case. Online video is a new source for journalists and historians to profile their subjects. Indeed, the Vanity Fair author cites Fallon’s audition video and notes the nearly 3 million views it has had so far.

That’s a lot of views. And they happened despite the video being really hard to find. Unless you Google “Jimmy Fallon SNL audition,” the video won’t show up in the magic first two pages of a Google search and it is nowhere featured on Fallon’s NBC website.

Should the Industry Try to Capitalize on It?
From a business perspective the question becomes, what should the entertainment industry do with video moments that capture the history and personalities of their stars like this. Right now, the practice is to simply excerpt bits from their shows in “best of” compilations and market them.

Yet unscripted moments from people’s lives are increasingly becoming the way we learn about famous people (and everyone else). Ultimately, these moments will have a longer shelf life for celebrities like Fallon than clips of their latest performances. They are a new way for entertainment companies to market their celebrities and to track them over time without waiting for the book or the movie.

We’ve been talking to some entertainment industry experts at SAP and other companies to figure out how online will affect the future of entertainment. We’ll let you know how that turns out.

Meanwhile, what do you think?

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The last of the anti-social marketing tactics

November 11, 2011 by

Taglines are the last bastions of a classic, one-way marketing messaging strategy, preserving marketing’s perceived right to tell customers what to think.

In truth, customers have never listened, except in a few cases of companies with the budget muscle to pound the tagline into customers’ heads over and over again though mass marketing and TV.

In B2B marketing, we’ve never been given the right to tell customers what to think, much less the budgets to pound a tagline into their minds. I’ve spoken to hundreds of CIOs in my career as a journalist and I can tell you that at best, they ignore taglines; at worst, they feel their intelligence insulted by them.

And yet we keep spending hard-earned shareholders’ dollars creating these shallow soundbites that are supposed to protect our brands, even though the transparency of the internet, and now social media, have rendered such defenses useless.

Not that the defenses were much more than Maginot Lines to begin with. I recently did a search on some well-known B2B technology brands and compiled their taglines in the list below. Many of these companies compete with one another. Can you imagine being a buyer surfing providers’ websites and seeing even a handful of these in quick succession? I put them in alphabetical order so that you can feel the “Power of Repetition” in the words and “Experience the Selling.” I mean, some of them are just plain incomprehensible, communicating to buyers that we live in “A Certain World of Connected Freedom for Caring People to Passionately Inspire the Valuable Impact of More Enterprise Silliness”:

  • A world of communications
  • Agility made possible
  • Applying thought
  • At the speed of ideas
  • Building a world of difference
  • Building tomorrow’s enterprise
  • Confidence in a connected world
  • Creating business impact
  • Cutting through complexity
  • Experience certainty
  • Experience the commitment
  • Freedom to care
  • Inspire the next
  • Passion for building stronger businesses
  • People matter, results count.
  • The power to know
  • The power of we
  • The power to do more
  • Results realized
  • The value of performance
  • Working with clients, not just for them

It is also interesting to note how many well-known B2B technology companies do not use taglines (at least not that I could see on their home pages): BMC, BT, Cisco, Deloitte, EMC, Juniper, Lenovo, Microsoft, Nokia-Siemens, Oracle, Pitney Bowes, Xerox. Are the marketers at these companies not doing their jobs? Or have these companies decided that they are going to stop trying to sell themselves in a couple of hackneyed words and instead do it through relationships and experience?

There’s even one company, IBM, which inverts the focus of the tagline from internal “capabilities” to something that customers may actually care a whit about: Smarter Planet.

'a Smarter Planet' logo

Image via Wikipedia

Actually, calling Smarter Planet a tagline does it a disservice. Unlike traditional taglines, which generally hang on the corners of websites like misplaced socks, with no discernible connection to anything around them, Smarter Planet is paired up with a lot of interesting thought leadership content that lines up with IBM’s business strategy—it’s a business theme rather than a tagline. I predict that we’re going to see a lot more B2B companies moving in this direction in the coming year.

What do you think? What am I missing about the value of taglines?

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6 lessons on how NOT to market to customers

July 22, 2011 by

Here’s the kind of pressure that social media puts on us: After not posting anything to my blog in nearly six weeks, I feel compelled to offer an explanation. Isn’t that sad?

Hey, but that’s how it is. Social media are like a school of sharks; keep moving forward or sink lifelessly to the bottom.

Well, I have an explanation, or an excuse, and a damned good one at that. I broke my hip about four weeks ago (my bike slid from underneath me on a rainy morning on my way to work). More specifically, I broke my femur at the hip, which left me with a decision to make: pin together a 51-year-old femur (with its attendant wear and tear) or lop it off at the top and get a brand new, shiny fake hip. Since I can’t resist that new hip smell, I opted for the stainless upgrade.

Now, don’t think I’m looking for an outpouring of sympathy. I’m telling you this because:

  1. I don’t want to lose any more credibility and subscribers than I already have during this lull in activity (as any social media “expert” will tell you, six weeks may as well be six years—unforgivable, unimaginable, and definitely under caffeinated. As one “expert,” (who showed no evidence of ever having blogged herself) once sneered to me, blogging is as easy as “doing email.” Oh, I guess that’s why my inbox is so crammed all the time.)
  2. During my time on serious, hard drugs (narcotics, shh!) I realized that I really have become one of you marketing types. Any time anyone delivers a service to me now, I immediately start thinking about how the service is “being positioned,” and whether the “value proposition makes sense.” I’m a goner. A marketing geek. (I thought drugs were supposed to prevent that sort of thing.)

All of which is a lead-in to this week’s entry, which is what we as B2B marketers can learn from health-care marketing.

The answer is: nothing.

Healthcare marketing is awful, practically non-existent. Sure, healthcare knows how to sell drugs, but in terms of preparing the customer for the experience of service delivery, fuggedaboudit. Here are some examples:

  • Educate the customer—or don’t. Many of us in B2B can be proud of how we educate our customers and prospects on the business issues they face—from current regulatory changes to future “sea changes.” We help ease them into the idea that they need our services and solutions to solve these problems so that the experience of spending all that money feels a little less like stepping off a cliff. Here’s how a doctor introduced himself to me in the emergency room: “Hi, I’m Doctor X. We’ve looked at your x-rays and you’ve broken your hip. You’re going to be going to surgery. Somebody will be in to talk to you about it.” And then he excused himself and left the room and I never saw him again. I wanted to get right up and walk out of there. Oh wait, right…
  • Whatever you do, don’t let the customer meet the people who will actually be doing the work. Unfortunately, this one does often ring true in B2B, at least in my experience in consulting. Send your top dog, most empathetic, articulate, industry-savvy, alpha salesperson in to market the service, and then show up to do the work with the freshly-minted biz school grads and the interns.
    In the trauma ward of the hospital, perversely enough, it’s the opposite. Twenty-something interns come in and tell you how awesome the trauma surgeon is and how awesome your experience is going to be. Then the interns show up again together later on in a big group trailing behind an older, more confident surgeon (surgeons seem to have no shortage of confidence and gain more as they age), making it clear that the interns are still being educated by this person and/or institution, thereby calling into question any of their assessments of the awesomeness of the surgeon. But this guy still isn’t the surgeon. He’s a colleague. Then, as you are lying on a bed outside the O.R. waiting to be worked on, you meet the doctor who will be doing the work. (Thank goodness for Google—the day prior I found that he got five-stars on a health review site! Operated on a New England Patriot!)
  • Delight the customer with an upgrade—for awhile. In both B2B and B2C, we’re getting better about throwing unhappy customers a bone. A discount here, an upgrade there. The short-term costs are marginal compared with the longer-term goodwill they buy. When I finally made it out of the ER and was given my hospital room, I couldn’t believe my eyes. It was a huge room and I had it all to myself, in a newly constructed wing of the hospital. And the nurses were unbelievably attentive. One of them finally acknowledged that I was in the intensive care unit for heart patients (there wasn’t room for me in orthopedics) and that she was “used to giving constant attention to people with zippers in their chests.” Caring for me was “like a vacation,” one of them said. I was in heaven. All the ginger ale I could drink and nurses compulsively asking me what I needed or wanted whenever I opened my eyes.
    Then, the day after surgery, the nurse informed me that I was being moved to be “with my own kind” over in orthopedics. Now, the only time I got ginger ale was when it was delivered on a tray with green Jell-o and chicken broth at mealtimes. But the reduced attention did come with a benefit—I got a little “drug remote” with a red button I could push to administer my own morphine. Later that day, they took away the remote and gave me a roommate.
    Could you imagine after clawing your way to the suite upgrade at a hotel having the desk clerk say, “We’ve found a room like the one you were originally supposed to get—with cleaner carpets this time—and we’ve taken the liberty of moving all your stuff from the suite into that room. Enjoy the rest of your stay.”
  • Segment your audience. In B2B we pride ourselves on knowing our audience. We have marketing designed for the C-level executive, the buyer, the influencer, and the front-line types. Meanwhile, 51 is pretty young for hip replacement. I’ll probably need to have it done again if I hit the average life expectancy of an American white male and manage to hang onto some form of health insurance. Most people who have hip replacements are older. That must be why the exercise sheet they gave me pictured a balding man with white hair and extra lines drawn in his face, a floppy tank-top t-shirt covering a paunch, and spindle appendages meant to approximate arms and legs, wheezing his way through leg lifts. Motivational.
  • Market your strengths. The highest production-value material I received upon discharge was a two-color, 24-page glossy magazine entitled “A Guide to Taking Warfarin.” (They put me on blood thinners for a few weeks after surgery.) The guide to what I should do after having a hip replacement (including exercises) was five Xeroxed pages stapled together.
  • Above all, empathize with the customer. I think we do this pretty well in B2B. We hire marketers and salespeople with direct experience in the customer’s industry so that they can talk to and sympathize with the customer’s pain points. During one of my two two-minute conferences with the doctor in charge of the orthopedics wing (not my surgeon), I made the mistake of asking what sort of pain killers I could expect to receive upon release. He interrupted me with, “No one said hip replacements aren’t supposed to hurt.” Thanks, Doc.

Of course, I can’t complain. I have health insurance, I’m walking again, I’ll be able to ride a bike again, and the accident could have been a lot worse than it was. But healthcare sure could use some help on the marketing front. Anybody got any ideas?

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How to measure influence in social media marketing

May 6, 2011 by
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Measuring influence is the new obsession in the social media world—adding another layer of anxiety to the dark cloud of existential dread that is marketing ROI.

Social media present us as individuals seeking status within a community, which is something that humans have been working at since our days as monkeys. Indeed, science tells us that monkeys would rather look at pictures of high-ranking members of their troop than eat. The only difference between us and the monkeys is that we usually remember to eat while we watch the Oscars or check our Twitter follower counts.

Influence is the ability to affect others in their thinking or actions. But we need validation that it is happening. Since social media leave digital footprints, companies create complex algorithms to come up with simple answers to measuring social media influence. These fall into two categories:

  • The number generators. These tools assign a number to influence based on factors such as popularity, number of connections, and share of conversation. The best of these is still Technorati, because blogs are, in and of themselves, the most influential channel within social media. Face it, unless you can come up with enough to say to sustain a blog, it’s difficult to become influential. Others include Klout and Twitter Grader, which focus on the social networks. Another category of tools “gameify” influence by giving us fake shiny objects as rewards for engaging others. These include Foursquare and Empire Avenue. But all these numbers have little use beyond the ego stroke.
  • The monitors. These include the proprietary tools that look across all the online channels to determine how brands are being talked about. These social media monitoring tools have more use for marketers, but they require significant human intervention and can easily become very expensive versions of the number generators if not used with a goal in mind.

How to measure social media influence in a marketing context
Influence is usually presented in the context of figuring out who is engaging us and who we should be engaging with. But I think as marketers, we need to think bigger. I’d like to suggest that we look at influence as part of an integrated marketing strategy. In this context, influence has little to do with algorithms and more to do with something that marketers have been measuring for a long time: perception.

The two most important components of influence
I see successful marketers getting their companies to set two reference points to measure influence across all their marketing programs:

  • Who we are. Through surveys, both qualitative and quantitative, marketers ask their target audiences to tell them how they perceive the company. Classic versions of this are unaided awareness (“Name five IT services providers”) and aided awareness (“Have you heard of x company?”).
  • Who we want to be. This is where the strategy comes in. This reference point is in the future and requires careful definition. It requires all the key players in the company to decide how they want the company to influence the market in the future. For example, many ITSMA members are companies that began by selling B2B products but are now trying to become known as full-service solution companies. They have built or bought services divisions and created services offerings, but they cannot yet influence their target audiences to see them as anything other than product providers. Marketing’s job is to influence buyers to move from the existing perception to the new one—using all the available tools at its disposal.

Over time, we measure our influence by asking our target audience if they see our companies as we want them to be seen. Looked at this way, measuring influence becomes simpler and clearer.

What do you think?

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What the slow death of B2B publishing means for marketers

March 4, 2011 by

Marketers always struggle with what to do next. There so many channels out there and so little time. But if you step back and think about where the real opportunity is for B2B marketers, it is idea marketing. Start with a good idea and the channel questions will resolve themselves.

B2B buyers are tired of marketing, but they’re not tired of ideas. In fact, buyers are hungrier than ever for good ideas presented in an objective way that target their specific needs. The people who used to do that, B2B journalists, aren’t doing it so much anymore.

This cartoon making the rounds online captures the frustrations of trade journalists--and reveals the opportunity for B2B marketers.

The business model is broken
It’s not that the journalists have gotten lazy; it’s a problem with the business model for B2B publishing. The business side of these organizations is trying to maintain profitability by slashing staff and by maximizing online traffic to make up for lost print ad revenue (and other desiccated revenue streams like events).

But unlike the old print subscription models, where publishers qualified their audiences by setting minimum requirements for things like role in the organization and buying power (which allowed them to justify high prices for advertising), online traffic is essentially random. Today, publishers must substitute traffic quantity for quality of subscribers to get advertisers to buy. That drives publishers to produce a lot of short content designed to reach the broadest possible audience (at least one online story about Apple per day for a technology pub, for example).

Half your ad dollars wasted? Try all of them.
Meanwhile, B2B buyers still hunger for good, specific content just as they always have. But because advertisers don’t believe in print anymore, the economics aren’t there for publishers to provide it. We keep hearing that quote from John Wanamaker about how half of his print advertising dollars were wasted. Trouble is, with online that figure is closer to 100%. Advertisers have abandoned print display advertising that at least had some degree of targeting for online display ads that have no targeting at all.

It’s a no win for everybody except the ad agencies. Publishers are left with a trickle of revenue and B2B companies discover just how uninterested a generic online audience is in their products and services. Meanwhile, Google, which has become the biggest ad agency of them all, gets rich by presenting hungry content seekers with links to JC Penney.

From the ashes of trade journalism, an opportunity for marketers
However, the tragedy that has become trade journalism is an opportunity for B2B marketers.

Providers have the opportunity to fill the content gap themselves. Too bad more of them aren’t doing it. Though most respondents in our How Customers Choose research said the quality of their providers’ thought leadership was pretty good, nearly 40% said it could be better. The number one suggestion for improvement: Focus more specifically on buyers’ particular business segment and needs (which B2B print publications used to be measured on each year in reader surveys).

This longing for personalization isn’t just heard in the context of thought leadership, however. When asked to name the number one factor in choosing a provider, variations on the “know me” theme came through 42% of the time.

Measure relevance, not output
But most marketing organizations don’t measure relevance; they measure output—whether it’s in leads or downloads. Marketers need to invest their money where B2B publications used to invest it—in constantly researching their target audiences and identifying the trends and ideas that are most relevant to them. Then marketers need to provide that relevant content.

When they do, they win business. In our recent survey, How Customers Choose Solution Providers, 2010: The New Buyer Paradox (free summary available), nearly 60% of respondents said that idea-based content plays an important or critical role in determining which providers make it onto their shortlists. But if providers go farther and use thought leadership to help companies clarify their business needs and suggest solutions, 30% of respondents said they are more likely to choose those providers. Even better, more than 50% of this group said they would consider sole-sourcing the deal. And this potential windfall isn’t limited to new prospects. Existing customers are also looking for new ideas. There’s no reason you can’t explore the epiphany stage with them more than once.

Does that help clarify what to do next?

What do you think?

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15 things marketers should stop doing and thinking in 2011

December 28, 2010 by

Here’s a list of things I wish we would stop doing and thinking as of December 31st:

Social media

  • Social media cause people to waste time at work. Companies have a long and pointless history of resisting new forms of communication. From Facebook to email to putting telephones on employees’ desks (remember, the telephone started as a “consumer” communication technology, too), companies think that every new wave is going to lead to gajillions in lost productivity. Dude, this stuff isn’t heroin, okay? The problem is not with employees or with the communications technologies, it’s with the premise that employees come into work determined to waste time. Guess what companies, people wasted time at work long before Facebook came along. If the company is well managed, people who waste time will get fired. People who sell your trade secrets on the internet will go to jail. Stop wasting money on pointless, ineffective efforts to block this stuff and start finding ways to make these channels pay.
  • Social media relationships are shallow and meaningless. We all know twitter can’t start revolutions or substitute for gazing meaningfully into someone’s eyes over dinner, but what I don’t understand is why the critics can’t see a link between the bonds that we form on social media and the deeper links that we forge offline. For example, the viral relationship model of Twitter adds a new dimension to relationships, it doesn’t subtract. You meet tons more people than you would in more traditional permission-based environments and some of those relationships will wind up becoming the kinds of deeper, more meaningful exchanges that the critics say we are losing through social media. I’ve formed a handful of excellent business relationships on Twitter this year—we know each other on sight and (gasp) we’ve even spoken to one another. Now, are a handful of real relationships a good return considering that I have 1400 followers on Twitter? Yes, because these relationships would not have happened otherwise. Shallow relationships don’t have to remain that way and existing relationships don’t have to go all shallow just because you start interacting in social media.
  • Interactions substitute for relationships. Many seemingly logical, intelligent people send me automated direct messages (DMs) when I follow them on Twitter, making them seem like robot spammers rather than people. They think that by throwing that extra interaction in there that it is somehow going to deepen our relationship. Soon, we’ll be able to automate our social media relationships through bots that can judge sentiment. The theory is that social media powered by humans doesn’t scale well. It’s nothing new; authors automated their interactions with readers centuries ago with the printing press. Just don’t go believing that these interactions can ever be substitutes for a human relationship.
  • Filtered conversation reduces risk. The ultimate risk in business is that your customers stop buying from you because they don’t trust you. Preventing employees from speaking to customers because they might make a mistake ignores this much bigger risk—which existed long before social media came along. Customers want to speak to the people they will be working with. That’s why employees and subject matter experts should be on the front lines of social media rather than marketers or PR people.
  • External social media marketing is more important than internal social media collaboration. We did some case studies at ITSMA this year that showed that companies could easily blow up half their offices and do away with most of their administrative and bureaucratic structures without a single customer noticing. The technology for virtual collaboration is finally catching up to the promise of internal knowledge management that we’ve been hearing about for years. Plus, it can make both employees and customers happier than they are now.
  • More volume creates more influence. In traditional media, influence comes from sheer numbers—the more subscribers to your newspaper, the better. But influence in social media isn’t purely a numbers game (though numbers can certainly help). It’s also about the degree of interconnectedness. There’s a scary analogy here, to viruses. Viruses ultimately benefit more from infecting 100 people who travel widely across the world than from infecting 10,000 people in one place. The most influential people in social media will be those who can combine large followings with diverse groups of followers who themselves also have many diverse followers.
  • Social media has ROI. Unless you are selling products, and inexpensive ones at that, it is impossible to track a tweet or a blog post directly to a sale. For expensive, complex B2B products and services, social media can improve relationships with customers and increase awareness. Do you call that ROI? I don’t. ROI should be measured on a higher level—as in the ROI of all of marketing to the business.

Mobile

General Marketing

  • Analytics can wait. We need to close the loop on what buyers do with our content and use that insight to predict what they will do next. Buying marketing automation tools or social media analysis tools aren’t enough. You need people who know how to create analytical processes and algorithms and all that stuff. Wall Street is already trying to make sense of the massive river of online conversation for business purposes. We need people who can do it, too.
  • We must measure the ROI of social media (or any other individual marketing tactic). CEOs don’t care about individual tactics; they want to know whether marketing in general reduces the time to revenue and improves the productivity of sales. We need to start measuring the larger impact of marketing rather than measuring activity or individual tactics.
  • Publish it and they will come. We have a crisis in marketing channels. All year, marketers have been telling me that they are having a harder and harder time getting noticed in traditional channels like white papers, email newsletters, and events. This is a typical comment: “I’ve got plenty of content. It’s getting people to pay attention to it that’s the problem!” We need to mashup some new channels out of combinations of new and old to stand out and be heard now. A few examples of things that ITSMA clients did this year:
  • Describing what you do is thought leadership. Creating compelling offers and descriptions of products and services is an art, it really is. But it ain’t thought leadership. Customers want ideas for fixing their problems and proof that they can trust you. Most companies still try to sell what they have rather than figuring out what customers need.
  • Sales support is marketing’s primary role. Many companies think that they are maximizing their investment in marketing by limiting it to sales support. What they don’t realize is that buyers have removed salespeople from the earliest stages of the buying process by doing their own research with colleagues, peers, on the web, and in social media. Marketing is most effective at this stage, when buyers want nothing to do with salespeople. Marketing organizations that don’t break out of the sales support role will be trapped in a Catch-22 of increasingly poor performance and waning confidence from the business side.
  • Email will always be cool. Hey, we’re humans. We resist change and we have irrational hope for the future. So we keep doing stuff we’re comfortable doing for longer than we probably should rather than embracing new stuff. Email is inconvenient, impersonal, slow, rife with spam, and not particularly intelligent. But we’re used to it. The kids have already dumped it in favor of texting and social networking. Email won’t go away tomorrow but it will gradually be starved of all meaningful human interaction until it becomes a graveyard of official business communications and, wait for it, marketing. We should probably start planning for email’s funeral now so we don’t miss it.

What things do you wish we would stop doing and saying in 2011?

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