Who Should We Market To

Marketers often talk about who we need to market to, and how we should be market-driven, customer-driven, buyer-centric, and at all costs avoid being product driven.

However, there is a danger here. It doesn’t consider the the question of who we can effectively market to.

Say you’ve done all the modern marketing activities perfectly- you have a buyer, a problem, a need, and a market. Now I’m going to do the unthinkable and suggest that maybe you should NOT market to this buyer.

Why? Because he’s not obsessed.

Seth Godin, in this TED video, makes a good case that markets develop around otaku, a Japanese term for an obsessed audience, and if you can’t find an obsessed core, then the chances of building a big market are limited.

“Hot sauce has otaku, mustard doesn’t”, and that’s why there are thousands of hot sauces and 4 or 5 mustards according to Seth Godin in the above talk.

This is not a concept we embrace often in B2B marketing- that people might be excited about what we are offering. But the truth is, lots of people are, and in many cases we might do well targeting those pockets of obsession, even if they aren’t our direct target.

In a new market, you need to consider who is obsessed and what impact this will have on your ability to spread your message.

Early Market Otaku

In Crossing the Chasm, the obsessed are the visionaries who are interested in frameworks because they have a need that isn’t common to a market- indeed, the market isn’t developed yet- and their only path is a framework. Indeed, I’ve met many potential customers building their own solutions not realizing a solution built for another market is a perfect fit for their requirements. And when presented with the solution they often think the vendor is exaggerating.

If a visionary is looking for a framework to create his vision, this requires content that explains how technology can be applied to creating a solution. This is not product-centric, but rather solution-centric- you are messaging to the audiences interest in applying technology to solve a problem. The business problem is accepted and the buyer’s problem is how to solve the business problem. The most successful business Intelligence vendors excelled at this, weaving both the business problem and the solution problem messages together to answer both questions for different audiences.

This is the holy grail of the early-market: the rare risk taker who will embrace and sponsor a new technology to feed his obsession.

Your Visionaries May Not Be Who You Expect

If you want to make a sale early in a market, you need a visionary- an obsessed person desperately wanting a solution. This often is, contrary to popular thought, IT leadership. They are tasked with maintaining information systems for competitive advantage and they love solving business problems. They often see the need before business does and they are obsessed with the general concept of solving business problems with IT.

In the early markets I’ve been in, about half of the early sales have been to obsessed IT managers looking for ways to help their business. Either they were replacing a system, or fixing a problem that they were given responsibility for and had a discretionary budget for. They sold the business leadership on the merit of looking at a new solution, often against significant initial business reluctance or indifference.

Economic Buyers Are Not Usually Thought Leaders

What are some of the other centers of obsessions that we can build a marketplace around?

In many complex B2B markets those that are obsessed are the thought leaders. It’s almost a given that some level of obsession is what produces thought leaders. Some are professional obsessors- the journalists, analysts and marketers (hopefully) that are obsessed with finding meaningful patterns of need and value. Others are obsessed only in their own key fields like accounting, governance, product design, and quality, but still offer recommendations to buyers.

The challenge with thought leaders is that they are often not buyers, or even users. Indeed, it’s rare that economic buyers are thought leaders- they are too busy being management leaders.
So this type of marketing is more removed from the sale. It’s awareness marketing, and attempting to bridge awareness from an interested group to a currently disinterested or unaware group.

Indeed, with leads and sales you may be able to create equivalent excitement in thought leaders and buyers, but thought leaders spread ideas, buyers generally do not, and buying feels a lot less risky when you seem surrounded by an idea from multiple sources.

If you are not explicitly marketing to thought leaders, you may knocking at the door of an empty home.

There is a possible pain and need, but nobody has been talking about it and without any immediate familiarity with your message, there are a lot of other pressing issues to crowd out the issue you’ve so artfully raised with your economic buyer. He’s not emotionally able to buy in to your message, and he’s not going to talk about what you just communicated to him.

Regarding obsession at the economic buyer level, there are some exceptions. Executives are obsessed with data and knowledge that improves their ability to manage- hence the meteoritic rise of CRM and business intelligence solutions in general. But even that field was driven by an incredible amount of activity in the business thought leadership of consultancies and vendors.

The good news for marketers is that many markets are overflowing with thought leaders and their problems, and no solutions are directed at them. They sit there befuddled by all the noise they hear from vendors that doesn’t speak to their passion and needs. This creates great opportunities for penetrating the noise in a market and getting your message heard in a compelling manner.

Standard “It Depends” Disclaimers Still Apply

In some markets you focus entirely at the economic buyer-level. You get the meeting, he hears you out, and he passes you on to his thought leadership team for evaluation and due diligence. Selling to VITO (very important top officer) at it’s best. But this isn’t most markets, especially early ones. You need to test whether you have that access to the buyer AND his passion if you are targeting him. If not, go lower, tickle the centers of obsession, and have them bubble you up to the buyer-level you ultimately need sponsorship from.

Two Key Factors for Obsession-Driven Marketing

If a market is created by spreading an idea, you have two variables to consider: how good the idea is, and how obsessed the audience will be with the idea.

Some good ideas can’t connect with an obsessed group, and there is no way to make the idea much better. Then this will probably be a tough market to grow.

But if there is an obsessed group near your markets, addressing thought leaders allows you to tap into the potential obsession that surrounds your market.

And that’s it- two simple factors for thought leader marketing strategy. Next comes execution- where to find and how to message thought leaders.

Where to Find Thought Leaders?

Blogs disproportionally influence thought leaders. You don’t see people posting “Hey check out this whitepaper” on websites and in conversations. They are posting links to blogs. Look at Twitter- are they posting links to the front page of vendors sites? No, they are posting links to blogs that talk about a business problem, a vendor, or even the vendor talking about the business problem.

And as mentioned earlier, your technical buyer is often your thought leader in a business solution market. Having implemented solutions for other business areas, IT leadership can be obsessive about the value to doing something similar for a similar business problem. And if there are not enough obsessive, well-heard business thought leaders in the business, press or analyst community, this may be a good channel for your message.

How to Message Thought Leaders

Direct, formal messages will invariably be weaker coming from a vendor. Due to historical communication channel constraints, vendors felt they had to share all their information at once.

The Secret of Being Boring is to Say Everything – Voltaire

Like a good short story, the best bits are the bits that are missing and engage the concern and interest of the reader.

So, to effectively message thought leaders, you need to break your message up into shorter, singular pieces that discuss a concept, but don’t teach it.

Compare the following two themes:

“Interesting ways that ERP can change organizational behaviour”
vs.
“How ERP Drives Improvements in Organizational Behaviour”

I would be partial to click on the first title, but would be hesitant to click on the second.

Traditional marketing channels don’t really allow the possibility to communicate in an interesting way. Too much generic information needs to be presented in a communication channel of limited size, and most of the formats are already stigmatized as vapid and meaningless vendor self-promotion as a result.

Blogs offer a great opportunity here. Blogs are informal, personal opinions that allow a wide variety of styles, but that emphasizes short, interesting and concise pieces.

Blogs also allow a stream of content over time that fits buying cycles and allows an expansion of content.

White papers that launch from the blog and keep a similar focus (2-4 pages, valuable, interesting content) also offer great value.

Finally, to message to thought leaders and other audiences marketing needs to drastically reinvent their website and collateral architecture to support a massive increase in specialized content that can be found by the each unique audience.

But you can start with a blog, and get a lot of value from it immediately. Also, a blog will often suggest a good content architecture as more more content emerges- something you won’t be able to plan upfront effectively (blog posts are great tests of content).

So, the suggestion is start with blogs and whitepapers written in a similar single-theme manner, and then use the feedback from that to evolve a content architecture.

While marketing is resource limited and we can’t market to everyone who may influence our market, thought leader personas should be front and center with economic buyer personas in almost any new, complex market. In later markets, thought leaders become a critical additional channel to reach and gain mindshare in your buyers.

So maybe give your traditional Economic Buyer Persona’s a break for a few days, and start developing some Thought Leader Personas.

And consider subscribing to this blog to get our followup posts on marketing content-architecture and how to test your content-architecture over the next few weeks.

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.

The alternative to testing? Segment your market until it fits all your assumptions, biases, inclinations and beliefs. Otherwise known as do nothing. Sadly, confirmation bias often leads great volumes of work to the same conclusion as the do nothing process.

You may get lucky, and do well. However, alternatively, the market might not:

1. be big enough to generate enough revenue,
2. be coherent enough to develop mindshare and communication channels,
3. have enough urgency around the problem, either currently, or permanently, or
4. be stable enough to stay around for long.

In which case, you have a product and a market you can’t reach, or a market you can reach but doesn’t care, or a market that slowly disappears due to commodity pressures or encroachment from other solution types. Or you might have hit onto something that is simple, stable and meets your business growth desires. In which case, congratulations, and I invite you to read on for fun and future reference. You never know when the market might change.

So, even if you don’t test now, you will probably need to soon enough to 1)grow, and 2) stay relevant to the changing market.

And how to avoid the nasty influence of confirmation bias? That’s a topic for a future post and includes the importance of testing your message AND your assumptions.

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