Archive for October, 2010

Pros and Cons of the Traditional Marketing Tools in Selling Technology Products and Services

October 28, 2010

Over the last many years, I have had the opportunity to play a close role in defining and planning the Strategy and Marketing of multiple products and offerings in my current organization. Sometimes indirectly and very recently more directly. The key successful ones amongst them were for GlobalLogic Velocity (Product Engineering Platform which won the Infoworld Top 100 Innovation Award), Version 1.0 Offering (End-to-End Idea to Launch Services Offering for Early Stage Products), and very recently with the Cloud Computing and Enterprise Mobility offerings within the Consumer and Enterprise (C&E) Business Unit. In addition to these direct ones, I have till-date assisted more than half-dozen early stage product companies with their Launch Strategy and Marketing.

For many who know me personally or through my blog – would know that I come from a technology/engineering background. So it was not only enriching to understand, learn, and implement various Strategy and Marketing activities but also has given me a chance to think about the all the established practices in Strategy and Marketing from a completely different/new angle. So in some sense the Engineering/Analytical mindset in me did affect my thinking in my new role. And considering that I work for a Technology R&D Services organization certainly made me think more analytically.

When I started in this Marketing role – a large chunk of marketing strategy was (it is still a big part of our strategy) driven using more of the traditional marketing tools which typically were very content driven. Be it using the collateral artifacts (case studies, brochures, white papers, etc.), web sites, email campaigns, webinars, etc. Over the years the sophistication and quality of such marketing tools has certainly improved a lot and I have seen it able to hit and target and reach more and more varied customer base. However, the effectiveness from the perspective of sales converts of this Content-Driven strategy leaves a lot to desire. Here are some of my thoughts on the effectiveness of many of such existing marketing tools -

Case Studies -

Case Studies - Tool for creating perception

Case Studies - Tool for Creating Perception (Note: Perception is Reality!)

Case Studies are the marketing collateral that tells the stories of other customer’s beneficial experiences with the product or service offering. Case Studies as a Marketing Strategy has been age-old; sellers and buyers are well-aware of this concept; and is considered to be a no-brainer to be implemented if there are enough evidences of successful usage of the product/services being marketed.

From an ROI perspective, however I have always questioned the marketing value of case studies. Here are my reasons why -

  • Regardless of how one writes it – it is very difficult for the reader to draw/conclude definite cause-effect conclusions from a case study. And this defeats the whole purpose of writing the case study.
  • Biases – Perceive and writing down beneficial experiences of the customers from a delivery side is always filled in with biases.
  • Eternal Truth – From a buyers perspective – the needs for every buyer are different. What has worked for another organization may not work for them. It is typically very hard to generalize from a single case.
  • Lastly, if standards and best practices associated with writing a case study are not well implemented in an organization it sucks up a lot of time and effort to create them while the returns on such efforts are always questionable.

For me the real challenge in case studies is not in its creation – but in spending enormous number of hours in trying to determine that one golden standard which is most applicable to the product/services. After so many years, I have come to the conclusion that no such golden standard exists for creating Case Studies!

According to me, the strategy around Case Studies should be more directed towards creating a perception around the product/services. Expecting that it would help in influencing a buyer’s decision would be far-fetched in terms of expectations, IMHO. Few of my colleagues have argued that creating a good perception and influencing a decision is one and the same thing. However, any good Marketeer would say – good perception only creates an environment to buy – however decision to buy is based on many other factors. With this in mind, I strongly believe that it is not the number of case studies we have in our repository which matters – but it is about whether those case studies are helping in creating the perception around the product/services or not. I have seen many organizations unfortunately fail to think about it in this way.

Brochures -

To Inform - Core purpose of Brochures

To Inform - Core purpose of Brochures

Especially in the technology sales world, I personally find this particular marketing strategy i.e. creating brochure to be the least effective one. Historically brochures typically seem to have a flashy or cutesy embodiment associated with it – and this typically does not go well technology-oriented products and services. Second – Brochures  typically are a print-based strategy and not associated with the digital world. This might be the reason why I feel this way about Brochures considering that this is the most commonly used thing which we all see around us today – especially in the Consumer world.

As a rule of thumb – brochures in marketing is used to let your customers know about your offerings. However, considering the much better effectiveness of online medium in technology world to let others know about your products/services –  brochures have a very limited applicability in the technology world.

White Papers -

First, my definition of what White Papers means is based on how Michael Stelzner, author of the book “Writing White Papers: How to Capture Readers and Keep Them Engaged” describes it -

The term white paper is an offshoot of the term white book, which is an official publication of a national government. A famous white paper example is the Winston Churchill White Paper of 1922, which addressed political conflict in Palestine.

A white paper typically argues a specific position or solution to a problem. Although white paper take their roots in governmental policy, they have become a common tool used to introduce technology innovations and products. A typical search engine query on “white paper” will return millions of results, with many focused on technology-related issues.

White Papers - Tool for Lead Generation

White Papers - Tool for Lead Generation

In the Technology world, White Paper has been an age-old popular marketing strategy. In my experience, I have seen White Papers – if implemented and delivered properly – as an effective tool for Lead Generation. But beyond the purpose of Lead Generation, I have always felt that the effectiveness of White Papers is very limited based on how and where it is used. The second challenge I see in White Papers is in how organizations confuse them with Articles or Brochures. Important thing to keep in mind is that White Papers is kind of a hybrid between both. Articles are typically based on informative content whereas Brochures are more persuasive.

Web Sites -

Web Sites - Facilitates Push or Pull Marketing

Web Sites - Facilitates Push or Pull Marketing

As much as there is an inherent desire from any Marketing professional to use push mechanisms of reaching out to their potential customers – pull still remains more prominent than the push in terms of engaging with the customer. Towards this Web Sites – from many other purposes it also serves – remains and will continue to remain a prominent tool in the Marketeer’s hands.

In my personal opinion – not many companies still have completely cracked the mystery of how to use Web Sites effectively as part of their marketing strategy. One of the biggest challenge, IMO, is the reducing attention span of the readers and the increasing number of choices they have. (Jakob Nielsen’s article – “How Users Read on the Web?” is a good read to understand the challenges facing Web Sites)

Webinars -

One to Many Outreach

Webinars - One to Many Outreach

Compared to the above tools – Webinars (Web + Seminar) is relatively newer marketing tool which has come into prominence in the recent 5-6 years. Once again a powerful tool and with an increasing ease from a technology perspective it is starting to become easier to implement it too – but the jury on this one too is still out on how best to use this mechanism to reap the maximum power to reach out to the potential customers. In some sense – the current challenge is once again to attract the attention of the target customer to the webinars.

IMO, the key thing for successful webinars – topic, presentation style, and the follow-ups. There is enough science out there to help on all these three and can be a topic for another thread itself.

Once again, this blog is a dump of my conclusions about these tools typically used in marketing drawn from my experience and observations. I would love to hear experiences from others too.

Time Bomb of Longer Lives & Magic by Numbers

October 20, 2010

Few very interesting and thought-provoking articles appeared in New York Times over the last few days

The Financial Time Bomb of Longer Lives -

Talks about the good and bad news. The good news is that “we are all living longer and healthier lives than ever before” and then comes the bad news “at this rate we also cannot afford to live so long!”.

Source of this article as been the Global Aging report from Standard and Poor’s (S&P) titled – “Global Aging 2010: An Irreversible Truth

Few thought provoking points from this article -

  • For the first time in human history, people aged 65 and over are about to outnumber children under 5.
  • The average life expectancy of human beings around the world has nearly doubled since the start of the Nineteenth century (around 47 in 1900 to about 80-82 in 2010)
  • However, in the same period the retirement age across the globe has merely increased from about 58 to about 62-63 years.
  • As the article says – no other force is likely to shape the future of national economic health, public finances, and policymaking as the irreversible rate at which the world’s population is aging.

On the side note – the way NY Times reported this concept of imbalance in age group across the world in a pictorial format is commendable. I am linking it to the same below.

 

The Financial Time Bomb of Longer Lives

The Financial Time Bomb of Longer Lives (NY Times)

 

Magic by Numbers -

Daniel Gilbert, Professor of Psychology at Harvard describes nicely how certain numbers (he calls them as the magic numbers) don’t just dominate our thoughts and dictates our words; but also drive our most important decisions.

For example -

  • Weekly or the 10 day medicine prescription dose given by the doctors are most of the times not driven by any scientific or medical evidence – but more from the psychology around the comfortableness around certain numbers.
  • Stock prices typically tended to be clustered around numbers around 5 or 0.
  • Sound of how the numbers sound to the ear can influence our decisions many a times.

Venture Capital’s Disconnect with Clean Tech

October 19, 2010

CleanTech Investments

Many entrepreneurs today are focusing on startups associated with CleanTech/Environment. For these entrepreneurs – the following article and review done by Joseph Lassiter, Professor of Management Practice at Harvard Business School, titled -“Venture Capital’s Disconnect with Clean Tech” would be a worthwhile read.

Interestingly, we at GlobalLogic had similar fears on the points raised by Professor Lassiter last year as we were in process of defining our technology services offering. This article certainly does a great job in articulating such fears.

Few key highlights which entrepreneurs trying to focus in this area should take away from this article -

  • Be ready to face and live through the ‘valley of death‘ – the painstaking stage between researching and developing a product and going to the market.
  • Unlike their cousin startups in the area of IT, Software/Internet and Telecom/Communication space, startups in CleanTech typically have a catch-22 challenge – they cannot prove their ability to scale without actually scaling. An absolute must for modern day VCs to be excited about a business.
  • Huge amount of dependency of the CleanTech ideas on the Public Policy. Interests in it tends to change from one political administration to another.
  • Extremely low VC investments (average ratio of one investment for every 100 ideas)

Personally, as mentioned above I had my inhibitions about entrepreneurship in the area of CleanTech – however it would also be of interest to me to hear (possibly from Professor Lassiter himself) as to how the VCs should try to structure their investments in such ideas/companies. In our internal study about a year back – we had seen that the same investors who were making investments in Consumer/Technology/Healthcare related ideas were also making investments in CleanTech. Just felt that this was a odd combination to have in a portfolio considering the differences in mindset required towards such investments.

Kickstarting Organization’s Centers of Excellence (CoE) Strategy – Part I

October 19, 2010

[This is the first in a series of blogs which I am writing to capture some of my thoughts and associated work which went through in providing my expertise around streamlining my current Organization’s Centers of Excellence (CoE) Strategy. The content in these blog posts are my views/observations/thoughts; and may or may not reflect the views or implementation strategy of my past or current employers]

Kickstarting CoE Strategy

Unless you are working for a  IBM or a SAP or GE or Keizer – who have done and dusted their organization’s Center of Excellence (CoE) Strategy – chances are that you are possibly working for an organization which fervently supports the CoE idea; have had several flings in defining and rolling out it out operationally; and yet find the strategy of CoE still sputtering to give them the desired results. I have had a chance to work for few of the organizations like that, including my current one. Over the last few years, I have been part of a team responsible to rekindle this CoE efforts within the organization. This (and the next few ones on this topic) is a summary of my thoughts/learnings about how to run a CoE within the organization.

Before I start jotting down my thoughts – it is important to understand what drives organizations towards CoEs. First, considering the published success of many bigger Fortune 100 organizations of using CoEs to manage complex organizational changes has encouraged many other organization to see if they can replicate the same success. Second, today’s business issues requires a more collaboratively determined solutions. Here again, the concept of CoEs is becoming an important strategic tool for managing such complex issues.

Step 0 – Understand what Center of Excellence (CoE) means?

Notice that I have given this step a count of 0. In order to build a robust CoE framework within an organization the need for understanding what CoE means to the organization is very important. I have sat across important members of the organizations and have heard incoherent answers from many of them about CoE means. They could answer what HR does in the organization; but could not do the same for CoE. Here are some of answers which I have heard about what CoE means from the important stakeholders in the organization. To which I have typically followed up with a question to test their answers.

  • “CoE is a group which builds expertise in a technology or domain or process in a Organization.” – How is this different from what Training Group does?
  • “CoE is a group which helps Sales in selling to the prospects” – Then is this the pre-sales group or the advisory group as many companies typically have?
  • “CoE is a group which looks at newer/future expertise over the horizon” – Why is there a need to do that? (the answer here would again point to the first two points. Hence I did not like this answer)
  • “CoE is the group which would have all answers or could get the answer” – Really?
  • “CoE is a group of like-minded people with common expertise/interests working together or CoE is a group which gives our smart people something exciting to work upon so that they stick with us.” – For this my follow-up question would typically get replaced by a silence. This silence is then followed by the question – Do you have a better answer than this?

Needless to say Center of Excellence is about many of the things above collectively and many more.  But the important part here is to go through such responses to understand and bring together a set of common assumptions and purposes associated with CoEs. Do not try to search for a perfect definition for CoE used in the industry. It is hard to find one. However, from the above Q&A types, try to create one for your organization.

Step 1 – Create a Mission/Charter for the CoEs. The Do’s and Don’ts!

Typically CoEs are created as an horizontal group within the organization which means it needs to serve a multi-departmental purpose. In my experience, creating the right mission/charter for CoEs in a multi-department organization is one of the biggest challenge considering that each departments has a different way to deliver to their goals. Also the key is not to have the charter of the CoEs to be very abstract. For example – charter such as “helping to drive products faster to the market” can be too broad.

Here are some of the standard charters which I have seen being used for the CoE along with my opinions on the same.

Charter My thoughts
Establish and drive successful deployment of best practices (standards, procedures, governance, etc.) supporting … Very operational charter
Provide thought leadership in the company in the area of … Too abstract; needs to drill down to next level
Serve as the single point of contact for .. Seriously, this cannot be the charter!
Responsible for Knowledge Management and Continuous Improvements for .. Good, but charter has to be bigger
Drive training, mentoring, and consulting for .. Good, but charter has to be bigger
Manage complex change initiatives within the organization … Good
Help organization to transform information and knowledge about a utility/emerging trends/technology/best practices to a competitive asset. I like this one

While the charter/focus of CoEs may change from organization to organization – IMO, the best charter which I personally like about CoEs is the following -

Centers of Excellence (CoE) exist to bring about an enterprise focus to anything which seems to be important for the business – from the perspective of data integration, marketing and sales, communication, project management, enterprise architecture, business and IT optimization, and enterprise-wide access to information.

In the next part in this series, I will talk about areas where CoE creation makes sense and where it does not; how to measure CoEs; and how to drive multiple Center of Excellences in the Organization.

In the meanwhile, I look forward to hearing your experiences in the area of CoE along with thoughts and comments about this particular post.

The Economics of Building and Selling iPhone Apps

October 15, 2010

About a month back I came across this interesting blog post by Tomi T. Ahonen  which talks about what is the economics of building and selling iPhone Apps? In other words is this a profitable business?

iPhone Economics

iPhone Economics

The title of the blog certainly sounds to be quite depressing to the millions of iPhone App Developers who are are looking at the App Store in the same way as the California Gold Rush – Full Analysis of iPhone Economics – it is bad news. And then it gets worse. And it also got a review on NY Times – Is Investing in iPhone App Development ‘Fool’s Errand’?

Personally – while I am not sure what is the data source which the author has used – but my gut feeling based on various other readings is that he might be about right on his analysis.

For your convenience, I am summarizing some of my takeaway/summary from the two articles –

  • Increasing number of App Stores – Similar to iPhone App Store there are possibly about 30 new app store in process of getting launched in the mobile industry. IMO, an impending ‘nightmare’ for the content/app providers (their chances of recovering costs of app development will significantly reduce from the current state); but possibly here is where an opportunity for software service providers like GlobalLogic lie.
  • Downloads are increasing; Revenue is not! – On iPhone AppStore – even though the number of downloads have increased more than 100% year-after-year; the average revenue per app download seems to reducing every six months. (decline of about 4-5% per year)
  • Free is good!- Duh, you say! Sure, but look at it from numbers perspective. Per various studies – the average iPhone App cost is around $1.95. Average revenue per app download is around $0.24. Needless to say the traffic of download is more towards free apps. What this means is that downloads is not translating into revenues. (in Sept 2009, Yankee Group surveyed actual iPhone App users and found 18% of their apps they had were paid, 82% were free)
  • Norms around app pricing seems to be setting in – For consumer-oriented apps – the thumb-rule of best bet of pricing an app is between $0.99 – $3.83
  • Expected Revenue/device (not App) – Considering the number of iPhones sold over the last two years and based on total cumulative app revenues – each device generates almost $14 of app revenues per year or nearly $28 over the 2 year period.
  • How much does the average App Developer pocket over two years? – You might have heard of some App Developer hitting a jackpot. But how much does a typical App Developer expect? By rough guesstimates – an ‘average’ typical paid iPhone app for its 2 years of existence on store would have earned about  $1948. Apple typically keeps 30% of the revenues. So from this an average app developer would have earned about $1363 over 2 years ($682/year). (keep in mind though that there is a long tail here)
  • Average Cost of Developing an iPhone App – Two surveys have reported that most apps cost anywhere between $20-$50K to develop. (an update typically cost around $10K) (Mobile web site development costs on WAP or Web is about $3K according to Internet Retailer, on May 1, 2010)
  • When does it break even then? – Considering the above two points – the author says that it would take about 51 yrs to break-even (take this with a pinch of salt)
  • Is iPhone a big market? – Does not seems like. Worldwide there are 80 million iPhone compatible devices today in use. That seems like a big number. Except, that compared to just the installed base of smartphones at the end of 2009, it is 13%
  • iPhone vs Mobile Web Development – This is always a contentious point. Compared to iPhone App Development vs. Mobile Web App Development – development costs for iPhone are 10 times bigger, but the audience reach is 50 times worse

Happy Analyzing…


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