Modern medicine is evidence-based. The adoption of evidence-based medicine saw our lifespans double in the space of 50 years. That’s a remarkable achievement.

Sadly, evidence is missing in modern marketing practices. We rarely see any marketing discussion mention anything about significance, confounding variables, or correlation versus causation. Most blog and social media recommendations are anecdotal evidence masquerading as statistics. Overall, there is a disturbing lack of anything that one could fairly call evidence in recommending any particular marketing practice.

This becomes apparent when you start asking some simple questions about “statistically” justified marketing recommendations.

1. Are these numbers for B2B or B2C?

2. What is the impact of brand and market Leadership on these numbers?

3. What is the impact of fashionable trends on these numbers?

4. What is the sample size?

5. What is the breakdown by industry? Company size?

At this point, you are probably not getting your emails answered or your phone calls returned.

Some of these questions and related concepts have obvious ramifications- brand leaders are usually older, more mature, have larger budgets, and are more likely to optimize existing processes. So…any numbers hinting at a best practice and revenue growth needs to control for brand and market leadership. And any recommendation needs to be prefaced by “it depends”.

Generally, any statement like ’65% of best-in-class companies use X and grew an average of 20% more year over year then non-best-in-class companies’ is meaningless, or should be treated as meaningless without access to the support data and methods used. Without decent evidence and analysis there is absolutely no reason to make ANY kind of inference here between the use of X and growth. And even given that data and where there is a strong causal effect, there is the important question of whether the principle is applicable to other industries, markets, or business models.

In medicine, there is a very cool organization called The Cochrane Collaboration which aims to improve health care by providing systemic reviews of the quality of evidence being used to propose and select treatments- i.e. which studies are good, and which suck. Even in esteemed scientific circles peer-reviewed journals aren’t enough, and The Cochrane Collaboration aims to raise the bar by provide systemic evaluation of the quality of studies and the quality of how they are published. Is the data available? Can the study be repeated? These are other markers of quality are emphasized and graded.

Evidence-based medicine had doubled our lifespans. Would evidence-based marketing double our revenues? Is it even possible with so many confounding variables at play in the business world?

Test-Driven Marketing has been published in the October 2010 Pragmatic Marketing newsletter!

Pragmatic Marketing October 2010 Newsletter- Is Sales Becoming Marketing Tech Support?

Have a look and let me know what you think.

If you like this article, consider reading a few of our other marketing strategy posts:

When Being Customer Driven is Dangerous

The Dark Matter of Selling: The Missing 90% of the Sales Process

Please Stop Generic Enterprise Marketing!

and my personal favourite

Can Subject Matter Experts Destroy Your Company?

And please say hi-  leave some comments and if you liked what you’ve read subscribe to the Test-Driven Marketing RSS feed and follow @weerdlogic on Twitter.

Oh, and there is also a new Test-Driven Marketing LinkedIn
Group

The Dawn of the Hyper-Literate Society

In Why Marketing is Becoming Like Software Development we discussed how marketing was becoming Test-driven and Agile, driven by the demands of the Internet business environment.

The basic reason for this was that the Internet has created hyper-literacy in buyers, radically changing the sales process in ways companies have been very slow to respond to.

Much like how the printed word extended the reach of general information to the masses, the Internet has extended the reach of specialized information to the masses. Literacy has been replaced by hyper-literacy, and this has radically influenced many of our institutions and behaviours. Patients know almost as much about their illnesses as their doctors, dieters are reading primary research on nutrition and arguing about causation versus correlation on diet websites. And buyers in B2B marketplaces are driving sales people crazy.

This raises the question- how much are sales and marketing changing? Will sales still matter?

New Channels of Communication Change The Game

Sales used to be the primary conduit for the customer to learn about a product or solution. There were essentially no other channels. A few brochures and white papers would be produced, but that was only in support of the sales interaction- that collateral wasn’t meant to sell, and never fit that closely to the customer’s specific reality. And this was the necessity based on reality- to do it any other way would have required the sales team dropping a file cabinet off at a customers site.

As a result, marketing wasn’t that important. Couldn’t be that important. Marketing worked on lead generation and trade shows because that was the best they could do through the limited customer communication channels available to them. Brochures were background value-add to the sales process, but often unread due to their being so generic.

That has changed, and companies are just starting to get it. The Internet has opened up many other channels for the customer to get information, and provides an encyclopedia of knowledge that allows him to find it.

When you hear about about “buying cycles” replacing “sales cycles” in sales strategy, this isn’t just an improved understanding of purchasing psychology. It’s something that has been enabled by a fundamental change in the environment.

Customers buy on their own terms because they can. And as a result, marketing has become far more important then it was 10 years ago, and the role of sales has changed – or should have changed- dramatically.

Marketing Has Become a Larger Part of Selling

The result of the Internet channel dominating the sales conversation (especially when we, the vendor aren’t present) means that Marketing has to become a much larger part of sales.

To do so, Marketing must do two essential things- support the Internet customer communication channel, and measure that channel through analytics.

Marketing Needs to Generate Content That Sells Rather then Supports Selling

Why? Again because the customer is consuming this information on his own via the Internet. If you aren’t providing it, someone else will.

This content also needs to be more specific and relevant to the buyer. There is no sales team present to interpret and communicate a deeper message- this is your chance to get your message through. Traditionally marketing content was marginally relevant due to no delivery channel to the customer (reference the awkward file cabinet point above) and a resulting generic message. That channel is now there, and better yet, it allows content to be filtered for the customer. It may be a huge virtual filing cabinet, but search engines and other technology allow the customer to quickly find what appeals to him, leaving him feeling like he’s reading a nice little on-demand magazine.

The Content Must Fit the Customer Need, No Interpreter Needed

Another challenge is that your sales team isn’t there to interpret the content or get feedback from the customer regarding the content. So, the content must be a near exact fit for the customer, necessitating a much different type of marketing collateral then has been previously the norm. This is the most significant challenge of the online marketing environment, and brings us to our next topic.

Marketing Needs to Do Lead Nurturing

Lead nurturing use to be clearly a sales function. It requires a soft touch, an understanding of the customer, and solution selling to present the information in a meaningful and manageable way.

This fails today for two reasons, one traditional and one purely a result of the modern marketing reality.

The Economics of a Sale Are Becoming More Challenging

A 30% cost of sale can’t be supported by most companies. It’s as simple as that. You can’t spend enough time with the customer to help with his education, and that means he’s on his own more often.

The Customer is On The Internet While You Are Busy Doing Other Things

The customer isn’t paused until the next sales meeting, waiting to be feted and wowed by your solution selling greatness. That’s now a small channel to his mind. He’s on the Internet, researching, browsing your website, browsing your competitors websites.

10 years ago the Internet was 4 years old from a business perspective and there wasn’t much content. The Internet was a small channel to the customer, smaller then the sales engagement.

5 years ago the Internet was 9 years old. There was some content, but it was still classic corporate brochureware. However, blogs were starting to take off, and more print industry articles and insights were available on the web. An expectation of useful information started to blossom in customers, and almost all of our customers were now active Internet users.

Today, the internet is 14 from a business perspective. It’s got attitude, and it thinks it knows everything. It doesn’t but it’s getting really close- at least outside of B2B marketing.

The expectation of content from people who use the Internet is now extremely high. It’s the first stop for information.

Marketing Needs to Do Analytics

The other side effect of the customer pursuing information on the Internet is that you aren’t there to interpret the customer reaction. Broader, deeper content is being put out to the Internet so the customer finds his knowledge from you, but what is his reaction?

That’s why analytics are essential. Without it, you are flying blind.

Online content allows you to measure your audience’s response and gain critical insight into customer outlook and behaviour. Five years ago this may not have been so certain- poorer content and a uncertainty if your buyers were represented in your website traffic made measurement hard.

Marketing Needs to Go Where The Customers Are, And Where They Are Listening

The Internet being the dominant channel of communication to customers clearly explains why there is now an exploding market of marketing automation vendors. Your customers are online, doing research, and becoming experts- your sales channel can’t compete. You can talk to them for an hour a week, but the Internet is there for them 7×24. They want to find answers, and they aren’t waiting for you.

This changes the value and purpose of content radically.

Is Sales Becoming Marketing Technical Support?

10 years ago content had to be presented face-to-face to customers because there were no other viable channels of communication.

Now, most content needs to be presented indirectly through the Internet because it is the most prevalent channel of communication. This also means that content (and marketing) end up doing more of the selling.

What does this mean for sales? Are they destined to become technical support for automated marketing efforts?

Not likely. Some radically new very early markets may be beyond effective marketing reach. And in all non-trivial markets relationships are still central to any sales or buying process, . In fact, properly managed, sales can focus on more value-add activities in marketing-sold markets, handling more accounts and driving more business. In most cases, the early soft touches guiding prospecting and lead nurturing need human contact. The flow of marketing content to the prospect needs guidance and filtering based on human contact. Facilitation, problem discovery, solution mapping- sales is becoming a lot more about consulting and project management. But the fact remains- that beast called the Internet is sitting there, humming away 7×24, always ready to hop in as a sales advisor to your hyper-literate prospect whether you participate or not. There is no stopping it, and this change in marketing is becoming a necessity, not a choice.

Software development is influencing marketing a lot these days with the emergence of Agile Marketing and Test-Driven Marketing- Agile and Test-Driven concepts being two concepts that have dominated software development for the last 5 years.

The reason is not a fad crossing over, but rather a more fascinating and powerful phenomena. As the Internet has become pervasive in our lives Marketing has become testable, much like software, as well as more impactful due to the amount of reading buyers now do during the buying cycle.

Agile software development embraces change and measurement, allowing responses to “market” signals that are leading indicators of failure. Signals include early customer feedback, early robustness feedback from automated tests, and ongoing feedback from regression testing, which captures failures due to the landscape changing.

But so what, you might ask? Marketing has become testable. Whoop-de-do. I’ve been marketing for twenty years, and we’ve done just fine without testing.

My answer? Marketing mostly sucked from a customer perspective. And this was effective and professional because there wasn’t much other option. Marketing wasn’t sales, and sales was the group responsible for strongly targeting messages to buyers. Marketing was background support. Marketing didn’t have access to the customer mind, by message or by volume of content (diversity in customers makes available volume of content critical for targeted messaging), and as a result marketing was largely product focused.

That’s no longer the case. Where sales was once needed to deliver targeted content, buyers now look for the content themselves online. And if they don’t find yours, they’ll find someone else’s. Last generation marketing that was background to the targeted sales message is now leading in the foreground, and landing with a awkward thunk.

In the new marketing environment, we need marketing to work well or we’ll fail. The Internet has changed how we sell, and marketing does a lot more of the selling because that’s where the customers are- at their computers researching their own needs. Selling has become buying facilitation, and if marketing doesn’t step up and do more of this type of selling with relevant targeted messaging, failure is almost unavoidable.

The other massive influence in the new marketing environment is that we can now measure if marketing is working. Considering that we now need marketing to work, that is very good thing.

Inbound marketing, Internet lead generation and Pay-Per-Click advertising (PPC) all test marketing through conversion rates on multiple website goals such as newsletter signup, RSS subscription, Facebook fans, white-paper downloads, requests for a demo, successful multiple touches, purchases, and so on. There are literally hundreds of amazing measurements and tests that can be applied- either on existing data or on data created from intentional tests.

This is enabling marketing to be test-driven, and in complex markets, it’s providing the tools for marketing to become agile. This is exactly what happened in software- the focus on feedback from customers and tests enabled software development to become agile. Indeed, the concept of Agile Software Development was somewhat meaningless until the feedback mechanisms were there.

Marketing has become like software. You run it, test it, and it either works or it doesn’t.

The bottom line is that today we must sell with marketing, and we can now measure our marketing. These two incredibly strong influences have combined in a way that will fundamentally change the entire business world.

And that means we can start applying some of the same processes- agile responses to market signals, testing for user adoption, testing for relevance, and actually building our marketing collateral so that it is in fact testable.

If you think marketing automation and automated lead nurturing are a fad, you better have lots of brand equity to ride on. Because if you don’t, you are not going to be able to build it in this brave new world.

For more on this topic, I recommend checking out some of the new wave of marketing automation vendors- Marketo, Manitcore, Eloqua , MarketBright or Hubspot, as well as the Analytics vendors such as Google Analytics, Yahoo Analytics, and Omniture and see what they are saying.

And if you are convinced and want more details, or unconvinced but open to the possibility, subscribe to this blog via the Test-Driven Marketing RSS Feed or subscribe with the simple email subscription form over there on the right sidebar. Our next post, Is Sales Becoming Marketing Technical Support?, goes deeper into the changing roles of Sales and Marketing.

Malcolm Gladwell on spaghetti sauce | Video on TED.com http://bit.ly/9K6Amd

A great video on how testing uncovered hidden diversity that 20 to 30 years of asking questions didn’t and led to the creation of extra-chunky spaghetti sauce.

Another interesting example from the video- creating one coffee roast for a group would test an average of 60/100. Segmenting the group into 4 and creating their ideal coffee would test an average of 75 or 78/100.

The practical result?

According to Gladwell, “the difference between coffee that makes you wince, and coffee that makes you deliriously happy”. The same process taking into account diversity led to a product that was fantastic compared to a product that was bland and distasteful.

Bottom line- seeking universal principles can give you something no one cares for and severely undermines opportunities for success. Testing and segmentation provide the means for radically improving your performance.

This has been well proven in all kinds of business, where even slight change in operating model can segment a market quickly by making one segment happier. However, much of this segmentation happens by chance as vendors evolve accidentally in different directions.

Product marketing and marketing, if they can harness this principle, can also shift buyer responses from wincing to deliriously happy.

(Note: this post was originally titled ‘Are You Serving Extra Chunky Products and Messages?’)

People have an expert problem. When faced with an expert, they become dumb.

So when you place a subject matter expert in the middle of your company or group, does your group become smarter or dumber?

A bit of both, depending on the personality of the subject matter expert and the personality of the people in your group. How much of each could make the difference between a killer, high flying team tearing up a market, and a passive group of automatons parroting the status quo- people who broadcast rather then communicate.

Studies have shown that the critical thinking parts of the brain crater when faced with an expert. There is a host of supporting evidence and studies, often highlighted by the strange things people do when prompted by an expert. Like the nurse who famously put ear drops in the r.ear of a patient at the doctors written command.

Experts Not Always Trustworthy

To make matters worse, consider the recent Time article on experts, their studies, and their tendency to be wrong:

Experts and Studies: Not Always Trustworthy

The nutshell- we tend to follow experts who tend to be wrong due to the complexity of the world.

This raises an interesting question- we want to be market driven, and the key to that is market knowledge which we often get from subject matter experts.

The Challenge

Herein lies the challenge.

Now, in many cases we have a simple product, need, and market. A SME tightens things up, makes our prose a bit better, helps us know the customer better to create better relationships and empathy. Success!

Sadly, in my many years in the B2B enterprise software world I’ve never run into that. More often then not I’ve seen customers shaking their heads annoyed with our lack of a clue.

I remember one job at an apparel company where the vendor kept bringing in product development experts from an aerospace company. These were experts in experience, but not in mind. They could do nothing but try to apply airplane configuration management theories and practices to clothing development. It almost killed the seven figure deal.

And this is reality. You may end up with an aerospace expert, but apparel customers. The above scenario also played out in electronics, medical devices, and pharma. Early aerospace experts who were experts in experience, not mind, creating massive damage from what should have been a massive success.

It can be even more devious then that- simply taking an expert in the end user problems can drown out our understanding of the management problem- the clash between user personas and buyer personas. Take CRM- the user wants a faster, easier job and the manager wants business insight through operational dashboards.

You have the right industry, the right expert, the right solution, but the wrong understanding of the buyer and you have no clue that this is what’s killing lead generation and sales cycle progress.

In fact, early customers created a legion of ABC experts, and those experts can blunt both the voice of other industry experts but also the CREATION of those experts, because they weren’t certain of their instincts and didn’t pursue the signals they were seeing in their market contacts.

Now imagine promotion of the early experts with their industry wins, and you know have petrified your organizations learning and agility top to bottom.

The Solution

The solution? There are a few key steps to overcoming the expert problem.

First, if you get a real subject matter expert, make sure you get the best of the best- sharp, creative and able to think outside of the box. An expert in experience AND mind. This allows him to communicate his knowledge in a manner relevant to the team members and customers that knowledge is being shared with. Hire a master of “it depends”, who asks clarifying questions and creates the knowledge that the situation demands. Hire someone who never gives the same answer twice, and never answers which asking his own questions first.

This is critical to give actionable knowledge to your team (relevant and applicable to their needs), but also to teach them the thinking behind the knowledge. This helps mitigate the expert problem because they are getting knowledge + context, which enables them to apply their growing knowledge in a flexible, and hence relevant, manner to their activities.

This is also important because opening up new markets means become deeper experts in multiple aspects of the business, users, and buyers, across various industries.

The second key is having enough expert minds (as opposed to specific expert knowledge) across your organization. Market knowledge linchpins who understand the expert problem and work aggressively to overcome it, always learning and always becoming the expert themselves. Placing these throughout your organization you ensure the movement of actionable knowledge and ensure your company is always communicating, never broadcasting.

To make a soccer/football analogy, these are your Xavis, Schneiders and Iniesta’s- the creative midfielders who are always learning and creating knew knowledge and plans in an ever changing landscape.

The biggest challenge for most tech companies is marketing. You often hear companies lamenting poor technology winning out due to superior marketing.

I’m not sure if this is true. Maybe it was poorer technology (read less cool) but was it a poorer solution?

I don’t believe you can have a superior solution without superior marketing. If you can’t tell the market what you are have in a compelling manner, then how can you tell yourself what you need to build?

Generally speaking, companies that market poorly are probably in the wrong solution space, no matter how awesome their technology. There are exceptions of course, but many of these exceptions are tagging along in a market defined by other players and their marketing is largely irrelevant- a large tide raises all boats.

But what is superior marketing anyway? To me, it’s resonating and being relevant to the customer in both practical and emotional matters.

Sadly, very little marketing does that. Much of what is produced is a tired summary of product features and generic value propositions that apply to any piece of software imaginable.

The Generic Marketing Template From Hell

Due to XYZ, companies today need to streamline and achieve greater cost efficiencies and productivity by centralizing all their BLAH BLAHs on our market leading, scalable, easy-to-use, flexible, powerful, end-to-end enterprise solution.

The rest of the material is describing features and benefits ad-nauseam, as if volume will make things more relevant. Sadly, more is less since the core value is lost in the volume and fear of complexity and irrelevance raised in the reader. Every item you mention that is irrelevant bores and alienates the reader- that’s if it doesn’t scare him.

Say you are looking for expense tracking software- are you going to look at the software that also includes asset management and a general ledger? If so will you think that it’s too complicated and that the expense software is a suboptimal module in  larger, more complex solution? Of course there are viable package software markets such as ERP. But they especially refrain from carpet bombing their readers and they focus on a specific audience and market for the integrated solution.

Part of the problem is being sales-driven rather then marketing-driven: a strangely contradictory situation that hurts sales as mentioned in When Being Customer Driven is Dangerous last month. The result is consensus marketing that appeals to everyone and no one.

How to avoid this? You need to pick your battles and this is hard work. Do your background work and identify your real target customers. This is NOT who might be interested in your software. This is who you want to build software to sell to.  This is the big difference between software and other products- software is never finished, and what you add determines who you can most effectively sell to. And who you sell to defines your market, making it easier to sell to similar people.

Here is a Formula for Complex Enterprise Software Success

In my mind, product marketing should be called market producting. That would in one stroke fix most of the issues in B2B marketing, most of which stems from the thought that we are taking a product and marketing it, rather then finding a market and building a product for it.

Here is my mathematical equation for marketing success. It’s a bit contrived, but it captures the interdependency and momentum building effect of a proper market producting approach to software.

FEATURES + REFERENCES + MARKET AWARENESS + DEEPER PIPELINE =  more leads, shorter sales cycles, higher close rates and profitability

All four items on the left are more powerful if focused on specific market segments because they are all interrelated IF and ONLY if focused sufficiently in a market solution space. To do this, the economics of software force us to pick our battles intelligently so that our expenditure on features and marketing create tight market fit and expand market awareness. This in turn generates good references and further advances this virtuous cycle. Even our sales pipeline must be aligned with this equation because your “failed sale” is one of your most significant marketing touches to a customer. When you revisit one to three years later these activities primed the base of your pipeline.

And guess what? Generic marketing doesn’t get you there. It fails in reaching the customer AND it fails in defining your market understanding to build your solutions towards. And, most painfully, it fails in creating the focus outlined in the above equation.

You need to find the core: the urgent, pervasive problem that is relevant and resonates with the target customer, and hence the market he is in. Then you need to build and message around that.

This is hard, strategic work that requires deep research, lots of market interaction, testing, modelling and realistic market development and product develop estimates to ensure positive cash flow before the money runs out.

And if you can’t find that core? Maybe it’s not there, leaving you with a slow growth, tenuous, hopefully profitable company. Maybe you are somehow attached to another fast growing market, catching the spill-off, and it will still last for a while. Overall, your options are 1) find a comfortable niche to stay in business, 2) change direction by radically improving your market producting, or 3) close shop.

Is Being Customer Driven Great?

Being customer driven is great. Tap into the voice of the customer, and channel his wants and needs into compelling products and messages for rapid business growth, high profits, and stellar performance.

How can that be dangerous?

Simple- the wrong customer. You don’t tap into the voice of your TARGET customer in your TARGET market. And the ideal customer for you is often hidden in the silent majority- people who aren’t talking to you now because you aren’t talking about their needs, busy as you are talking to existing, different, customers. This is often seen where companies struggle to grow by focusing on departmental solutions, whereas a competitor pops up, sells enterprise solutions focusing on a different pain, and rapidly grows dominant and displaces them.

Being  customer driven can be dangerous because ultimately you don’t want customers, you want markets. So, if you are going to be customer-driven, make sure you pick customers that define the market you want go after.

Most companies fail here because they chase revenue. A noble and necessary pursuit, but one that is often contrary to defining and owning markets. They get a few customers or potential customers and start building to those customer requests. Building specific features for a market segment is not done because they aren’t current customers and they aren’t the generic customer profile that encompasses the entire market.

Worse yet, companies don’t want to lose any potential revenue and builds products for ALL markets.

They are customer-driven, but by current customers and/or all potential customers when they should be driven by target-customers as defined by identified market segments and marketing and sales strategy.

The result: sales cycles stay long, sales repeatability is random, and your success or failure is based on randomness of a few lucky breaks in both leads (in a single year you close 4 large deals instead of expected 2) and talent (the sales person who can really find and develop customers for new technology).

Geoffrey Moore makes this point very well in Crossing the Chasm, where the chasm is where sales are hard and expensive due to there not being a developed market and it’s associated product awareness, sales pipeline maturity, and potential purchase budget allowances.

Moore defines market as a group of people who have the same problem, the same solution need, and who reference each other. Two doctors needing billing software is a market, a plumber and a dentist are not.

A Specific Market is Easier to Market and Sell for Many Reasons

1. Your message gets passed along and discussed among like-minded people
2. Your early wins become strong references and encouragements to other companies in that market
3. P.R. and advertising is more powerful due to the potential of multiple touches to the same audience and single touches being passed along
4. Your website inbound marketing activities can be optimized to that group of people, needs, and solution requirements.
5. Your product development efforts focus on unique needs for that market rather then the generic market as a whole, making the product more exciting and usable, and hence more desirable and likely to be purchased.

You can find lots of counter-examples to this: Microsoft desktop products being a large one. They sell to everyone, and the market is everyone.

But these counter-examples share some common attributes: low value, low risk and low complexity in both product and sales process (complexity being the main cause of risk). This results in short sales cycles, simple buying processes, and little formal budgeting or planning (excluding bulk buys and standardization decisions).

People don’t really use these tools for much other then basic activities- writing and tables of data with some minor calculations. They know what the product does quickly, and can evaluate it’s usefulness and value quickly. If Microsoft desktop products suddenly disappeared, most people (the ones not using macros) wouldn’t be that impacted. They would switch to another tool and grumble for a couple of weeks. You can see the proof of this now where people are switching to a Mac for fun and change of pace with no real sense of loss or significant impact.

However, if SAP or Oracle disappeared, companies would be in serious trouble. The global economy would collapse, businesses would lapse into chaos, and it would take three or four years to switch to other solutions and recover.

This kind of software is high value, high complexity, and high risk.

This is where unique segments exist in desktop software: high value. A market segment that uniquely needs some functionality that is valuable to them. WordPerfect has survived in  the legal market, and other new markets have emerged profitably: screenwriting software such as Final Draft, novel writing software such as Scrivener for Mac, and Journal writing software such as MacJournal or Evernote.

A unique pain offers a market segment that can be chased and owned. The problem arises when you are first to market or near first to market. All that opportunity! Go for it all!

The problem with this and complex software is the high risk and diverging needs:

1. It’s scary and expensive to buy a high cost software. Even if the ultimate promise is positive, the chances of failure are high. Look at the early days of ERP with tens of millions of dollars routinely being written off.
2. It takes many years to have a complete product. If you focus on what’s common, segments will be better addressed by vendors focused on the value in those segments. If that value is more urgent, that vendor will rapidly become bigger then you, and, possibly, expand into your other segments and crush you.
3. Your sales cycle will remain long and extremely expensive since your product is high risk for everyone instead of being more fully developed and proven in a smaller market segment. This is product, brand, and solution category awareness- all of which much exist for several years to allow faster creation and processing of sales pipelines.
4. Your reference accounts are in different businesses and don’t really talk to each other. And if they do talk to each other (through you rather then ad-hoc conversations, job changes, magazine articles or other PR magic), they’ve solved problems that are different enough to not mitigate the high risk that scares them.

So this gets back to listening to your customers. Your customers, in large, will be a bit random and opportunistic. They are bits and pieces of problems and needs and they are all over the map. They are not a market- a coherent, focused set of people with similar problems, needs and who talk to each other.

There is a simple answer: define your target customer. This should take a lot from your existing customers, but narrows the focus to target fewer markets, thus going to market with higher value (from focused product development) and greater trust and awareness (from references as well as market awareness of you and your product category).

But while the answer is simple, the execution is not. Revenue pressures break the discipline needed to chase markets rather then sales. While this can be unavoidable in some cases, it is often self-inflicted by trying to grow fast when finances, market models and sales cycle models don’t support those goals. Chasing outside of your target customer profile is often wishful thinking and risk is loss of critical time and financial resources. Some detailed analysis of your lead generation, sales pipeline, and web site analytics can lead to a right size model for your company. However, in enterprise software, there is often no answer that isn’t burning money- hence crossing the chasm requiring venture capital.

You Are Probably Wrong

The theme of this blog is “You Are Probably Wrong. Prove Otherwise”. My second choice was “Only The Paranoid Market Well”.

These are the premises behind TestDrivenMarketing.com- that reality is complex enough that we would do well to test our assumptions, and test them often. Some examples of tests would be win/loss analysis, measuring the value of marketing collateral or campaigns, or using response-testing for messages or website content.

For more about me, read the About section. It’s a deeper explanation of me the philosophy behind this blog.

Prove Otherwise

However, I believe that testing is a mindset, and can be applied qualitatively or quantitatively to a far broader set of the marketing journey, whether it be testing the message, testing market assumptions, or testing core concepts and beliefs at each stage of the marketing journey.

The hallmark of many great managers is their inclination to ask questions rather then tell people the answer.

You could think of them as not managing, but assumption-testing and analysis coaching. The question, in the end, is the most pervasive and valuable test. And learning to ask questions of your self and others in a productive, open-minded manner is the foundation of test-driven marketing. Indeed, you could think of a cross-functional team as largely beneficial as a structured testing-by-question environment.

In many ways, “test” simply means think harder, observe more closely, and find clever ways to find out about information sooner rather then later.

Marketing, ultimately, is about improved communication and shortening the learning curve for both our customer AND us.

And the best way to do that is to find out what works as specifically and and as fast as possible. As a parting thought, the upfront work in testing and planning leads us to this goal:

Strive to make planning hard and execution easy.

Where planning is collecting and processing inputs (win/loss, value metrics, constraints, project and launch plans), and execution is generating output (positioning, messaging, content, collateral, training).

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Thanks,

Nick Van Weerdenburg