As you my have heard, my new book is coming out on June 2. At that time, this site will be replaced with an entirely new resource website for the book, so that you can access diagrams, worksheets and additional resources. So stay tuned…
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It’s been awhile since I’ve posted, and some things have evolved since then. As an updated summary of what a Go-To does differently (the series I last published), I have an Infographic to offer, with an eBook to soon follow.
Tip: For daily inspiration, print the infographic on legal-size (8-1/2×14″) paper as a poster for your office – and please do share.
(Click on infographic or here to zoom in or save via browser)
If shared online, please include a link back to this post, with attribution to www.apollomethod.com.
This is the seventh installment of a multi-part series to talk about what a Go-To does differently from the me-too pack:
Now what?
The world is continuously changing, and a Go-To keeps an eye on the horizon to constantly adapt to market conditions, evolving customer needs, and other factors that impact a company, like the economy, politics, regulatory policy, technology and so on. It even reinvents itself, when necessary.
A Go-To maintains humility and a healthy paranoia. I remember being in meetings with the senior leadership at Accenture when it was flying high with record growth and profits, and you’d have thought from the conversation that the company was on the verge of going out of business. The executives in the room understood that Accenture’s fortunes, like those of any company, could turn on a dime. The team took the same earnest attitude toward its strategic planning activity as a struggling startup does.
A Go-To also understands that, regardless of how unique its current offerings are, it will face competition. The market will invariably begin to fill up with me-toos going for a slice of that pie, so the Go-To must watch its back and work to stay ahead of the pack.
Technology companies, in particular, can’t stand still for three seconds before a competitor pops up or market conditions change. Oracle started as the only relational database company, but of course competitors came along, followed by new technologies. Though Oracle, by far, still maintains a solid leadership position in that space with nearly 50% market share, it is no longer the same company. It has built on its strengths to broaden into many technology and software solution areas, including numerous specialty niches, such as inventory management for communications service providers.
As of this writing, Apple, Google and Microsoft are the world’s three most valuable brands according to Forbes, but you’d never know it from the healthy paranoia pulsing throughout the headquarters of all three. None look the same as they did in the early days, and they all know that their offerings could become obsolete at any moment. They are always working intently on their next innovations.
A Go-To understands this: Companies that don’t change or don’t change fast enough often perish. As Andy Grove put it in his book, Only the Paranoid Survive:
…the person who is the star of a previous era is often the last one to adapt to change, the last one to yield to logic of a strategic inflection point and tends to fall harder than most.”
In recent years, some stalwarts within their markets, like IBM, have suffered for not embracing the trend toward cloud computing quickly enough. Over the next decade, it will be companies that don’t embrace the Internet of Things trend.
To really bring this point home, consider the S&P 500 Index. According to an Innosight 2012 study summarized in the briefing, “Creative Destruction Whips Through Corporate America,” an S&P company is replaced every other week; and whereas companies in 1958 stayed on the index an average of 61 years, today the average tenure is just 18 years. In the decade leading up to the study, over half of the companies had been replaced.
Whether you are part of a large company or a startup, be sure you are constantly monitoring market changes and trends on the horizon and then analyzing how they might impact you. Look at what you need to do to adapt. The “Creative Destruction” paper I referenced above offers some pointed advice applicable to any company and talks about how P&G is doing it successfully, and I’ll be sharing additional tips in forthcoming posts.
Subscribe to the blog and stay tuned for some tactical how-to guidance.
This is the sixth installment of a multi-part series to talk about what a Go-To does differently from the me-too pack. Remember that a Go-To is the market leader – the first name to come to mind when folks in the market think about a particular business problem and who can fix it.
The next thing a Go-To does differently profoundly affects customers.
When you are pitching your offerings, it’s not enough to talk about the problem and what should be done about it – a Go-To also actively solves the problem for customers and delivers a result.
If you in need of a meal, Target will sell you the pieces – food, plates, utensils, etc. – and send you on your way. A fine restaurant will sell you a complete, satisfying dining experience. Taking that several steps further, the Go-To local restaurant will do this and be a gathering place for birds of a feather, know your name, know your food sensitivities, make a custom dish at your request and send you special offers.
The most important dimension of this is that a Go-To doesn’t market a laundry list of generic services or talk in terms of “capabilities” the way most service providers do. It doesn’t sell functions and features the way most product companies do. Instead, it sells impact. The best ones offer a very specific, and sometimes even quantified, value proposition. It talks in terms of specific business outcomes – e.g., how much more quickly, less expensively or more profitably you’ll achieve your business goals and at what cost. A Go-To already understands your business problem and walks in with a prescription for solving it. A Go-To doesn’t answer your question of “What do you do?” with “What do you need?”
If customer dissatisfaction is a problem, would you rather buy software (or software as a service) that will track customer dissatisfaction, or would you rather buy an offering that says, “We’ll increase the net promoter score of your unhappiest customers by __% within six months”?
Would you rather buy from a public relations (PR) firm that charges a monthly retainer to execute a nebulous publicity program or one that says, “We’ll charge you $XX to achieve 100% aided awareness and 60% unaided awareness among your top __ prospects within the next year”?
If part of a large company, would you rather buy from a firm that says, “For a set fee of $__ thousand, we’ll review the bills you are receiving from your communications service provider and let you know if/when they are overcharging you,” OR would you rather buy from the company that says, “We are confident that your communications service provider is over billing you by at least __%, but don’t pay us a dime unless we find something. If we do, split the savings with us.”?
Because it is so focused, a Go-To is able to do all of this through efficient, behind-the-curtain operational excellence. It has a low cost of delivery relative to someone doing the same thing on a one-off basis through tools, processes and, technology. A Go-To hires and trains people focused on its area of expertise who can jump in and immediately add value. And it has a “trusted partner offering superior results” value system and culture.
Unlike retailers in the mid-1990s who jumped into the online channel as a side business, Amazon made the online channel its only business, initially focusing just on books. In fact, its operation was so efficient that, rather than create their own online channels, companies like Toys R Us, Target, Sears Canada, and Lacoste contracted with Amazon to run their retail websites. Another major key to Amazon’s success is its fulfillment operation, which reduces its shipping, inventory and other operating costs. Wired Magazine once called it, “the world’s most nimble infrastructure for the transfer of things….”
This fascinating video shows just how efficient their operation is, using robotics and analytics to fulfill an order with barely any human involvement.
Use the above as a checklist. Where is your company currently falling short, and how can you redefine your offerings to be outcomes oriented rather than selling capabilities or mere products? Is there anything you can do to quantify your value proposition? Are you currently transactional, or do you take a longer-term view of your customers’ businesses and play a more ongoing, impactful role? And what can you do to create community among your customers – what can you do to build a following among them and between them?
If you’re struggling, there is more on this topic to come. Subscribe to the blog and stay tuned for some tactical how-to guidance.
This is the fifth installment of a multi-part series to talk about what a Go-To does differently from the me-too pack.
What next?
Once it has declared ownership of the problem, a Go-To develops a prescriptive point of view on what companies need to be doing to solve that problem and widely evangelizes that point of view. Guy Kawasaki would describe it as a “cause.” This is not a sales pitch. The point of view is a genuine perspective on what needs to be done, with or without the Go-To’s help.
The Stanford Technology Ventures Program (STVP), which is part of the Department of Management Science and Engineering in the School of Engineering at Stanford University has become the Go-To for technology entrepreneurship education, as evidenced by (among other things) the fact that the National Science Foundation chose it over numerous other institutions vying for a rare $10 million grant to help engineering students across the United States become more entrepreneurial and innovative. STVP firmly believes that all students can benefit from learning entrepreneurial leadership skills regardless of their major or intended career.
STVP faculty, staff and affiliates travel extensively and maintain close relationships with other leaders and influencers in technology entrepreneurship education and research. Almost everyone in entrepreneurship education around the globe knows or knows of STVP Professors Tom Byers, Kathy Eisenhardt and Tina Seelig, who are fervent evangelists of STVP’s point of view. They are so prolific in their “market,” that all of them have won numerous awards for their work and impact. Kathy Eisenhardt’s research is so influential that she was noted in 2008 as the most-cited research author in strategy and organization studies for the past 25 years, ahead of renowned Harvard management professor and author, Michael Porter. Byers and Seelig won the prestigious Bernard M. Gordon Prize for Innovation in Engineering and Technology Education for their influence in this area. Presented by the National Academy of Engineering (NAE), then-president William Wulf said the NAE created the award as “essentially the ‘Nobel Prize’ for engineering educators.” All of them have written books regarding STVP practices and insights.
A Go-To understands the value and power of engaging audiences’ emotions with storytelling and drama. The problem provides dramatic tension as the villain, and the prescriptive point of view saves the day as hero.
In the early days of Salesforce.com, Marc Benioff clearly saw installed software as a villain. He firmly believed that software-as-a-service was the hero that could come to the rescue. Everywhere he went, he got up on his soapbox and delivered the same impassioned message: Companies are better off with software-as-a-service instead of buying enterprise software packages that require dozens of people, millions of dollars and many months to install or even modify, once installed. This point of view was espoused in every facet of Salesforce.com’s activities and interactions with the market.
A Go-To understands the soft-sell power of thought leadership.
When Frank Vain of private club industry consulting firm, McMahon Group, stands up in front of an audience of private club general managers, he doesn’t talk at all about McMahon Group. He educates the audience on the core problem facing the private club sector and McMahon’s research-based point of view on what club leadership teams can do to solve this problem. By the time he’s done openly and freely sharing his expertise, he’s essentially given a credentials presentation while keeping the audience hanging on his every word. It’s like standing outside a restaurant giving free samples of your most delicious dishes. Customers can’t help but want more.
A Go-To also understands the power of building a following, so that others in the market place start doing your selling for you.
In a prior post, I referenced my involvement in selecting the McMahon Group for a private club member research project. While meeting with us, Frank Vain didn’t sell us on buying services from McMahon Group, our own general manager did! Another example is Apple, which has an entire army of rabid fans who spread the Apple gospel on its behalf. Mozilla, proud provider of Internet browser, Firefox, actually engages its users in helping to maintain and improve the product through the Mozilla Project – they work for free, because they believe in the cause: choice and control online.
STVP has created a “community of believers” throughout academia, who also share its passion and belief in STVP’s philosophy. For many years, STVP led a series of annual conferences in Europe, Asia, Latin America and the U.S. to bring together entrepreneurship educators from across these regions to advance entrepreneurship education. STVP would share its approach and encourage others to to the same. Professors around the globe have tremendous respect for STVP’s approaches and its role as a thought leader in this field. More importantly, there is incredible bonding that took place among the participants. There was a deep sense of camaraderie and mutual support. STVP provided these events as a service to their peers, but the events paid immeasurable dividends back to STVP in terms of what it learned, brand building, and other opportunities the events created for STVP.
Now, to you.
What does your company stand for? What do you believe your market needs to be doing differently? And how might you build your following?
[If you’re stumped, subscribe to the blog – I’ll be posting a how-to series on this later.]
This is the fourth installment of a multi-part series to talk about what a Go-To does differently from the me-too pack.
Now we’ll talk about a Go-To’s purpose in life.
A Go-To says, “I’ll take this one. I’ll own this problem.” A Go-To fixates on a market problem (or opportunity) and declares intellectual ownership for that problem or opportunity, effectivel
y becoming the ringleader, the primary thought leader, for related discussions and market activity.
Cisco doesn’t talk endlessly about sensors and routers, it talks endlessly about how the “Internet of Everthing” will save lives or reduce risk for companies. GE has taken intellectual ownership for the “Industrial Internet of Things.”
Kaiser Permanente, the large health maintenance organization (HMO), doesn’t just offer an integrated delivery system – where you and your family can get all of your health care in one place, with a single set of medical records and a multi-disciplinary team devoted to your well being – it believes this model is the way of the future. Kaiser has been running its “Thrive” campaign for over ten years, offering tips for healthy living. Many of its ads don’t talk about Kaiser at all. 
They address Kaiser’s higher purpose. One print ad shows an image of a jump rope curled into the shape of a human brain, with the copy, “Exercise doesn’t just make you feel better, offering a good defense against depression and anxiety. It helps you stay more alert and focused. Something you can think clearly about as you knock out just one last set. To learn more go to kp.org/thrive.”
According to Kaiser’s Diane Gage Lofgren, senior vice president, brand strategy, communications and public relations, and Debbie Cantu, the company’s vice president, brand marketing and advertising, Kaiser wants to play the role of health advocate “completely dedicated to health and well-being with the fact that, no matter what their stages of life, people want to be as healthy as they can be.”
Salesforce.com was founded to solve the problem of expensive enterprise software implementations, with an initial focus on the salesforce. Facebook’s goal is to connect everyone on the planet. Apple created iTunes to make it easy for iPod users to legally download songs vs. illegal options that were rampant at the time. Cybersecurity firm, RSA, is regarded as one of the most trusted brands in its space and, as a demonstration of its “ownership of the problem,” hosts the world’s largest and most respected annual information security conference.
So it’s not just about solving a market problem. It’s also about keeping the conversation alive and working with the market to make continuing, collective progress against the problem.
What problem do you or will you own?
This is the third installment of a multi-part series to talk about what a Go-To does differently from the me-too pack. Part 1 talked about how a Go-To focuses. Part 2 talked about the importance of establishing a beachhead. Next up: The importance of obsessing over what you do.
I used to have an old Mercedes diesel sedan and would take it to the San Francisco Go-To for these cars, Fred, at Silver Star Motor Services. Fred didn’t just work on old Mercedes diesels. He loved them. He was an aficionado. He was constantly thinking about them, reading about them, learning more about them. And he had strong opinions about them. He could bend your ear for hours talking about the ins and outs of these cars. He wasn’t showing off, he was waxing poetic about something he was passionate about. He would just light up at the thought of these cars. It wasn’t a business or job for him – it was his life.
A Go-To doesn’t just specialize. A Go-To is a passionate aficionado, a devotee. A Go-To obsesses. And a Go-To is very opinionated when it comes to a particular market issue.
Steve Jobs was obsessed with distinctive design. He insisted that Apple’s mantra be simplicity. In his mind, consumer technology was too complex, hard to use, and ugly. As a result, the company has always been obsessed with creating innovative, easy-to-use technology that people have an emotional connection with. When Apple started to work on the iPhone, Steve Jobs didn’t instruct the development team to create a device that would put a computer in your pocket. His directive was: “Create the first phone that people [will] fall in love with.” According to Former Apple product manager, Bob Brochers, “The idea was, he wanted to create something that was so instrumental and integrated in peoples’ lives that you’d rather leave your wallet at home than your iPhone.” Steve Jobs was clearly passionate, obsessive and strongly opinionated about how people should interact with technology, and these qualities have informed everything Apple has created, even after his passing.
When Marc Benioff founded Salesforce.com in 1999, he was absolutely passionate about the need for companies to move away from installed software and to adopt the software-as-a-service (SaaS or “cloud”) model. I saw him on stage at a conference in 2006, and he relentlessly and completely unapologetically pounded on his primary thesis that installed enterprise software was on its way to extinction. At the time, it was still an emerging idea, but Salesforce.com was so passionate about the idea that it put a “stamp” of the word “software” in a red circle with a slash through it on every ad, on its website and any other bit of material associated with the company. Benioff wore a trademark pin of the image everywhere he went, including on the stage that day. It is difficult to find an article or presentation by him that does not espouse his point of view on this topic.
I’m obsessed with the importance of companies becoming the Go-To in their markets. What are you obsessed with?
This is the next installment of a multi-part series to talk about what a Go-To does differently from the me-too pack. Part 1 talked about how a Go-To focuses. The next thing a Go-To does differently is build from a base of strength.
Rather than a hodge podge of messages, products, services and activities, a Go-To builds its brand around a central theme/market, and every fiber of its being revolves around that theme until the company has enough of a dominant position to broaden from there into adjacent markets. Its activities aren’t all over the map. They are highly, highly focused.
Look around. Just about any large company you can think of started with a beachhead.
Geoffrey Moore discusses the importance of a beachhead in market dominance strategy in his seminal strategic marketing book, Crossing the Chasm, which I highly recommend as a marketing primer to newbies and as a great refresher to everyone else. Using a D-Day analogy, he explains the importance of focusing your scant resources to secure a stronghold and then building from a base of strength. Much of what he talks about are principles many MBA students learned but have proceeded to ignore at their peril. It’s truly excellent and is a quick read well worth your time. Buy your own physical copy, mark it up and keep it near your desk for frequent reference.
One of the metaphors he references in explaining market dominance strategy is the use of kindling to start a fire.
The bunched-up paper represents your promotional budget, and the log, a major market opportunity. No matter how much paper you put under that log, if you don’t have any target market segments to act as kindling, sooner or later, the paper will be all used up, and the log still won’t be burning…this isn’t rocket science, but it does represent a kind of discipline.
— Geoffrey Moore
The key, then, is to figure out a beachhead – which market will you seek to own first before broadening?
This is the beginning of a multi-part series to talk about what a Go-To does differently from the me-too pack. Firms that achieve Go-To status in their chosen markets follow a particular set of strategies that me-toos typically don’t. Let’s look at the first thing a Go-To does differently and how entities like Intel, Lego and the Apollo Space Program put it into action.
A Go-To focuses on a specific market that is large enough to provide opportunity but specific enough to allow the company to concentrate its finite resources in order to capitalize on synergies. Focus is not “a” way to gain market traction but “the” way. Andy Grove, the longtime Intel CEO who transformed the company from a me-too chip manufacturer into an innovative Go-To for microprocessors, had this to say in his book, Only the Paranoid Survive:
A question that often comes up at times of strategic transformation is, should you pursue a highly focused approach, betting everything on one strategic goal, or should you hedge?…I tend to believe Mark Twain hit it on the head when he said, ‘Put all of your eggs in one basket and WATCH THAT BASKET.’ It’s harder to be the best of class in several fields than in just one…Hedging is expensive and dilutes commitment. Without exquisite focus, the resources and energy of the organization will be spread a mile wide—and they will be an inch deep.
— Andy Grove
Having the honor of sitting next to Apollo astronaut Dick Gordon at a business dinner some years ago, I asked him for the most significant lesson learned from the Apollo Space Program. “The power of focus,” he said. “Anything is possible when you have a very clear desired outcome shared by everyone and around which all action revolves. In our case, it was the moon.”
He explained that prior to Apollo, the United States (representing the free world at that time) was losing the space race to its Cold War opponent, the former Soviet Union. U.S. space exploration consisted of a hodge-podge of initiatives, none of which worked together. There were numerous independent projects in progress, spread among multiple government agencies and contractors, involving thousands of people and investments of billions of dollars per year.
“The only driving theme was speed, to be the first at something, anything,” Gordon said. “All of that time and money was being expended while the Soviets kicked our butts with one historical achievement after another.”
In his bid to win the Space Race of the 1950s and 1960s, John F. Kennedy didn’t go broader, he went narrower. He said, “…I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.” With those four words, “man on the moon,” he instantly focused the resources of all involved in the space program on one specific goal, one specific domain.
He didn’t do it quietly either. He launched it with a grand gesture in the most public way possible. He made a historic speech to Congress on May 25, 1961 that the entire world heard. He put a stake in the ground with a proud declaration of a singular goal. No one knew at the time how to do it; but if achieved, this feat clearly would establish the U.S. and the rest of the free world as the dominant force in space.
The book, Focus: The Future of Your Company Depends On It, by legendary marketer, Al Ries, is now considered a marketing classic and makes a strong case for focus. It landed on my radar screen while reading an article years ago in Inc. Magazine about Bill Gross, the famed serial entrepreneur and founder of startup incubator, IdeaLab, in which he was extolling the virtues of focus, raving about how the book had changed his mind on the topic and also his fortunes. Here is an excerpt from the book’s introduction that sums it up:
The sun is a powerful source of energy. Every hour the sun washes the earth with billions of kilowatts of energy. Yet with a hat and some sunscreen you can bathe in the light of the sun for hours at a time with few ill effects.
A laser is a weak source of energy. A laser takes a few watts of energy and focuses them in a coherent stream of light. But with a laser you can drill a hole in a diamond or wipe out a cancer.
When you focus a company, you create the same effect. You create a powerful, laser-like ability to dominate a market. That’s what focusing is all about.
When a company becomes unfocused, it loses its power. It becomes a sun that dissipates its energy over too many products and too many markets.
— Al Ries
In 2003-2004, Lego was in a state of crisis, with falling revenues following a long period of 
stagnation. When new CEO Jorgen Vig Knudstorp came in, he declared Lego would go “back to the brick” by concentrating on core products and core customers. As detailed in the book, Brick by Brick, the company cut back on many of its brand extensions, cut the number of brick designs by 46%, and re-narrowed its market focus to kids ages five to nine. The next year, sales increased 12% and LEGO had come back from a $292 million loss in 2004 to a pre-tax profit of $117 million in 2005.
Focus lets you concentrate your resources. It lets you concentrate your message, so that it speaks directly to your targets’ pain points and needs in their own language. It helps unqualified prospects self-select out, before they waste your precious selling energies. It tells employees what you don’t do, so they stay focused on the right priorities.
So make it your mantra: Focus, focus, focus.
B2B marketers have always relied heavily on “content marketing” going back decades now, mostly in the form of thought leadership. Because the concept is relatively new to consumer marketers and is buoyed by social media, it gets a lot of hype these days and generates infographics like this one. Nonetheless, I like this infographic for the useful statistics. It may help as ammunition for B2B marketers who need to justify their thought leadership programs and budgets. This is focused on the online, but there are many offline opportunities as well (e.g., conference presentations).
In planning your programs, be sure to take a strategic approach to the thought leadership you put out into the market place – it should revolve around the unique positioning you are after as a Go-To in your target market. Keep the content focused. Make sure the messaging differentiates you.
I wrote recently about the McMahon Group and their Go-To status in the private club sector. Every bit of content McMahon puts out into the market is aimed at educating private clubs on strategic planning, operations and member experience. It never deviates. And all of the information McMahon provides is useful and actionable.
Do an audit of the content you’ve produced over the last 6 months. Lay it all out – does it hang together? Does it revolve around a singular theme? Does it support the positioning you’re after? Does it distinguish you? And what can you do to improve going forward?
I’ve talked a lot recently about the advantages of being the Go-To in your chosen market and have offered up a couple of high-profile examples. But there are plenty of examples in specialty markets the average person isn’t exposed to. An example is McMahon Group in St. Louis, the Go-To for private club strategic planning and consulting, and I experienced the power of their Go-To status while playing the role of buyer.
I was once helping a premiere private club that was falling prey to the same tough trends impacting all private clubs across the U.S., if not the world – an aging membership, flat membership numbers that would decline if the club didn’t change, and less-than-optimal utilization of club facilities and programs – despite this being a club that was highly respected. I was on the long-term planning committee tasked with addressing this problem. One of our first steps was to seek out a firm that could help us conduct a member survey and determine a plan of action based on the results. In this situation, you can imagine how price sensitive the club was. However, results were more important. We could have sought out a generic market research firm. Afterall, how hard is it to put together a bunch of questions about how and why members use club facilities and what they felt was missing from the member experience? Heck, we could have done it with a free online survey tool.
We weren’t just after a survey, though. We were after a long-term plan that would improve the club’s future. We needed expertise. As it happens, there is an entire sub-specialty of private club market researchers and consultants we could turn to. Who knew? The club leadership agreed that it made perfect sense to hire a firm that understands the unique issues and trends impacting private clubs, even if it was going to cost a little more. We knew that member feedback and input was just one piece of what the club ultimately needed, and we wanted a firm that could help us ask the right questions, interpret the feedback appropriately and guide us toward best actions.
Then it became a matter of selecting the firm. The private club sector, like most industries, is a tight community at the upper leadership levels. Just like any industry, club managers all belong to one leading professional association, see each other at meetings, read the same publications, network with each other, and progress from club to club as they climb their career ladders. As a result, the general manager already knew of the top three consultants in the business, telling us that one, in particular, was the Go-To; so we interviewed all three. Two were impressive – they had great credentials, stellar reputations, and “trusted partner” status with their clients; had done many similar projects; obviously had deep expertise in this specific area; and offered strong teams. The cost of their services was also extremely reasonable and competitive. We knew they could each do a great job.
The third firm, McMahon Group, was all of that and much more. In addition to the above, it was the thought leader in the field. McMahon didn’t just serve the industry; it led the industry by proactively investing in, conducting and sharing private club trends research, not just on where the industry had been and where it currently was, but also on where it was going. When we had lunch to interview the company’s president, Frank Vain, he humored us by listening to our litany of the club’s challenges and problems; but he could have told them to us himself, because they were no different from what he saw at every club McMahon Group works with. He was finishing our sentences. And further, he laid out the trajectory we were on. Most of all, he prescribed the solutions right then and there – told us exactly what we needed to do.
In talking to Frank, it was clear that McMahon Group lived, ate, and breathed private club trends and operational excellence best practices. This is all it does. It knows everything going on in the industry. It knows all of the key players. At its own expense, it studies and watches the trends on everyone’s behalf and warns the industry of what’s coming on the horizon. McMahon has taken spiritual “ownership” for understanding and solving the industry’s most pressing problems. And when you hear it talk about the industry, you can tell this company cares.
In the end, we hired McMahon, even though it was about twice as expensive as the other options. The reason is that we felt the club would get great value and an accelerated
path to results – we knew McMahon would not just execute a survey to tell us what the members wanted but would help the club quickly take the optimal actions as a result. We weren’t buying market research services – we were buying a treasure trove of expertise, experience and wisdom. It would help the club solve the problem – and fast.
That’s exactly what happened. We did the survey. It told us precisely what Frank had told us it would at lunch that day (yes, we could have saved a lot of money by letting him just give us the answers…but we needed to hear it from the members). The action plan ended up being exactly what he had prescribed during that same conversation. As a result, membership growth and club utilization have soared. The Club has since been thriving and doing better than ever, even through the “Great Recession,” when many clubs suffered badly.
The private club sector might sound like a small, limited market for a company like McMahon Group to target, but it’s about a $26 billion market consisting of 14,000 clubs in the U.S. alone. McMahon doesn’t have to capture much of that market to have a great business. And by capturing the top end of that market and charging a premium price for premium value, McMahon has built quite a profitable business with a reputation that precedes it. It is, indeed, the Go-To in its space.
Give some thought as to what your company can do to establish this kind of reputation and make this kind of contribution to individual customers and your industry as a whole.
I recently posted twelve reasons it’s better to be the Go-To than a me-too and then four examples of Go-To brands. Here’s just a bit more on they advantages of being the differentiated Go-To.
The greatest advantage is that you compete less on price, if at all. In fact, you can usually command much higher prices than the competition, because you offer a unique approach and can promise stellar results. The buyer considers the benefits you offer to far outweigh your cost.
Another big advantage is that you are no longer part of the pack – you stand out. You are the first name that comes to mind when the buyer has a particular problem. And that buyer often will proactively seek you out, particularly when time is of the essence (as in the case of C. C. Myers when the freeway melted).
Often selling costs for a Go-To are much lower, because you’re not starting from ground zero in a sales situation. Your reputation precedes you, so you don’t have to work as hard as a lesser-known competitor to establish your credibility. You don’t have to prove yourself as much. You can cut right to the customer’s situation at hand and how you can help.
As the Go-To in a particular field, you wield great power and influence in the marketplace. You aren’t just part of the fabric of the industry, you sit at the top of the pyramid. You help set the direction of the industry. You have a vision others want to follow. As the Go-To, you are in a position to fundamentally alter the direction of the market.
Doesn’t all of this sound much better than scraping for business as a me-too and being pushed to cut your price?
This is a follow-up to my previous post and infographic, “Twelve Reasons It’s Better to Be the Go-To Than a Me-Too.” As it illustrates, achieving market dominance as the differentiated Go-To in one’s market offers lots of advantages. I thought it would be fun to provide a follow-up with some well-known names that people in tech can relate to, though there are many, many more out there. Though all of these serve a variety of markets now, they all started with a laser focus on one core offering, establishing market leadership before branching into other areas. Once again, enjoy and share. Better yet, send me your own examples of Go-To companies.
Market dominance simply means becoming the Go-To brand for a particular market need and being so superior at solving that market problem that you are able to command premium prices, work with premium customers, and hire premium people. Any company, no matter its size, can pursue it. Your goal is to get people to seek you out and have them so firmly believe in your ability to make a unique contribution that they will pay you whatever it takes.
The alternative is to be a me-too that has to scrape for business and compete on price.
There are at least twelve reasons it’s better to be the Go-To, and I’m sure you can think of even more. Enjoy the infographic and pass it along…
Are prospects begging you to solve their problem asap? If not, consider this…
Your primary positioning goal should be to establish your company as the Go-To in your chosen market, so that you can eventually name your price and increase margins as opposed to watching prices and margins shrink under competitive pressure. This is the intent behind the Apollo Method for Market Dominance (TM).
If you’re currently in the position of trying to figure out what you’re going to offer the market, there are two keys to the equation. The first you’ll hear often: Focus your offerings on large, common critical market problems. Yes, that’s essential, but it’s not enough. People will buy…eventually…and at some price. Just maybe not the price you want. Especially if they have competitive alternatives.
Here’s the common missing piece: Focus on urgent common, critical problems. The more urgent it is, the more quickly the customer will buy and the more the customer will pay to stop the pain.
So ask yourself: “How urgent is the problem we’re solving?
I’ve been away from this blog for awhile to focus on client work. And some of what I’m seeing – that tempting siren song of losing focus and veering into me-too territory – is making me more determined than ever to get through on why it’s so critical to specialize, especially when you’re not a global behemoth and have limited resources.
Let’s take the case of the melted freeway as a great example of the power of being the best at what you do…
At 3:41 a.m. on Sunday, April 29, 2007, James Mosqueda was driving a tanker carrying 8,600 gallons of unleaded gasoline to Oakland, California. He ascended the ramp onto one portion of the MacArthur maze a little too fast and clipped the guardrail. What seemed like an innocuous bump proved too much for the truck to take at that velocity, and over it went. Within 21 minutes, not only had the truck become a fireball, but the concrete and rebar overpass upon which it rested had completely melted and collapsed onto the freeway under it. Poof. A major commuting artery serving 80,000 cars a day in the San Francisco Bay area was gone. This was an economic and logistical disaster.
Source: Contra Costa Times
The MacArthur maze in the San Francisco Bay area is a complex set of interchanges where several major freeways come together. On a daily basis, it is central to the movement of 280,000 vehicles passing east, west, north and south. The damaged portion was what formerly took cars off of the Bay Bridge from San Francisco or allowed them to move southbound through Oakland. Even without traffic anomalies, gridlock and slowdowns are a way of life in this area. Construction projects of this magnitude are usually measured in years, but in this case, California Department of Transportation (Caltrans) officials knew that every month, if not every day, would count.
They needed to find a construction company with incredibly deep expertise. It needed to have done this exact project so many times before that it could walk onto the job with an extraordinarily efficient delivery mechanism — people with the right skills, established suppliers who were willing to ship as soon as possible, and a proven approach to rapid but safe freeway construction. In short, they needed the Go-To.
In this case, speed and quality mattered more than money, so CalTrans was willing to pay the winning contractor a whopping $200,000 completion bonus for each day it could shave off the already-aggressive deadline. C.C. Myers Inc., a Sacramento-based contractor with a reputation for making rapid emergency highway repairs stepped up to the plate. Caltrans required a completion time of 50 days. To collect the maximum bonus of $5 million, the firm would have to deliver in 25 days. C.C. Myers Inc. had crews on the job site within an hour of signing the contract and delivered in 17 days, not for money (there was no financial incentive to beat 25 days), but for pride and reputation. Even still, its profit margin on the project was 50% plus millions in public relations value. The entire Bay Area bowed on its knees in gratitude as C.C. Myers executives opened the new road in time for Memorial Day Weekend. They were heroes.
In contrast to commodity players fighting to preserve their margins, why is it that certain firms seem to command more margin, more attention, and more respect than others? And why is it that they rarely find themselves in competitive situations, clients usually seek them out, and clients will pay almost any price for the privilege of working with them?
It’s because they own their markets. They dominate their spaces. They are Go-To brands in their domains. C.C. Myers clearly owns “emergency bridge and highway repair” in Northern California. McKinsey & Co. is not the largest in its category, but it owns “boardroom strategy.” Accenture owns “large-scale, high-risk systems implementation projects for large enterprises.” Salesforce.com owns “salesforce automation.” Gartner Group Inc. owns “IT market analysis.” Heidrick & Struggles owns “CEO executive search.” SAP owns “integrated enterprise resource planning (ERP) software” Those firms have defined, committed to and established a unique market position. Anyone else in that space becomes an also-ran. Each is the first name to come to mind in its category. Each is regarded as the de facto standard in its respective markets. Each has survived during severe market downturns while competitors perished. And each is a premium provider that frequently finds itself in the luxurious position of being sought out by prospects, as opposed to having to fight its way through a crowded, time-consuming and expensive request for proposal (RFP) process. It often turns work away. It names its terms. Prospects sometimes even compete for its business, not the other way around.
It’s one thing to differentiate and focus. But taken a step further, it’s incredibly powerful and profitable to take the next step and become the Go-To in your chosen markets. In addition to obtaining sustainable differentiation, your firm will maintain healthy margins and grow revenues over time.
One of my all-time favorite sayings is by my very dear friend and close colleague at Stanford, Professor Tina Seelig, ad I try to always keep it in mind: “Never miss an opportunity to be fabulous.” It applies not just to each of us as individuals but also to our companies and the work we do that represents our companies.
Tina first talked about this in her seminal Entrepreneurial Thought Leaders lecture, “What I Wish I Knew When I Was Twenty,” which also became a best-selling book that I highly recommend to anyone of any age.
You can watch her talk about her advice to be fabulous in this brief video clip.
The idea is to always go far beyond striving for excellence and doing your best.
Knock their socks off.
Blow their minds.
Do the unexpected.
Dazzle them with a new, creative approach. Be completely fresh and different.
It’s shocking as to how rarely this shows up in the work place. It’s shocking as to how rarely this shows up in customer service. It’s shocking as to how rarely this shows up in work product, even by marketing people who are supposedly creative and out of the box. No, I see the same old Powerpoint slides in presentations. I see the same old tired language in collateral. I see the same “just trying to get it off my to do list” approach. We all fall into that trap, of course. I see it most at client companies where the people are beyond overloaded.
But try to make a conscious effort. Ask yourself, “What can I do with what I’m working on at this very moment to be completely and utterly fabulous? What can our company do right now to be absolutely fabulous?” And then go for it.
If you are at all interested in entrepreneurship and would love to leapfrog your way to becoming a Silicon Valley insider in just seven weeks, read on…
One of the many novelties you’ll find on site at Draper University
I was recently at Draper University to lead a half-day working session with the leadership team on branding and market dominance strategy for the school itself. I LOVE this place. It makes entrepreneurship and education so fun.
If you’re not familiar with it, Draper University was founded by the legendary venture capitalist, Tim Draper, because, “the world needs more heroes.” The goal is to equip potential heroes with the entrepreneurial skills to go out and make something big happen in the world, whether it’s a for-profit business or some other undertaking that has a positive impact. Located in Silicon Valley, it offers an immersive seven-week, live-in program that packs more into a given day than many schools do in a week.
Draper University is a school for innovators. We are helping people do the great things they are capable of. Expect to be inspired. To do things you didn’t think were possible. To be fearless. To build a network of friends, mentors and colleagues that you will take with you on your path. Every student will create a company, with mentoring and coaching from experts, and have the opportunity to pitch for funding from Silicon Valley VCs.
The program runs seven days a week for the seven weeks and includes lectures from Silicon Valley superstars, like the founders of Tesla, Zappos, Box, Intuit, Electronic Arts, Yammer, Kiva, and more. But the lectures are only a small part of the program. Most of it is doing – hands-on experiences to really burn in the skills. I’m also amazed at the access the students get to the Who’s Who of Silicon Valley. And I’m really amazed at how personally involved Tim is in the program, spending lots of time with the students himself.
If you have entrepreneurial aspirations, especially if you want to pursue them in Silicon Valley, I can’t think of a more cost-effective (both in terms of time and money) to get a jumpstart – in seven weeks you’ll get further than most people get in years.
Hear it from students themselves on the Draper University Blog. The program accepts students from all over the world.
In Hollywood, it would be the equivalent of having Steven Spielberg surround you with the biggest names in Hollywood to coach you on your screenplay, teach you the art and business of filmmaking and then let you pitch your movie idea to the major studios and decision makers. 
For those already in startup mode, Hero City at Draper University is a co-working space that promotes innovation, collaboration, and entrepreneurship. The doors to Hero City at Draper University are now open in San Mateo, the new entrepreneurial playground between Silicon Valley and San Francisco. If you are interested in becoming a member of Hero City at Draper University, click here.
All of the information about Draper University and how to apply is on their website. Check it out.
I’ve written the introduction to my book and wonder if some of you could read it (see below) and let me know whether it makes you want to read the book. Please also share why or why not (assuming the topic is applicable to you, of course). Would love your feedback in the comments section. Thanks!
How In the World Is That Person Making $30,000 a Day?This is the question that started it all.
About six years into my consulting business, one of my colleagues told me about her close friend who had less hands-on client experience than either of us and was commanding $30,000 a day to provide expertise to top executives. The consultant’s name was Martha Rogers of Peppers and Rogers, the firm famous for One-to-One Marketing, which revolutionized direct marketing and spawned digital marketing. I was at once terribly envious and incredibly inspired. (You’ll hear Martha explain it later in the book.)
This conversation occurred while I was in the midst of a reevaluation of my firm’s strategy, because we, on the other hand, were being forced to lower our prices. Somewhere along the way, our consulting services had come to be viewed as commodities, even by loyal clients who knew our capabilities well, understood how deep our expertise was and had been engaging us for years. They were starting to put pressure on us to lower our fees and talk about replacing us with less expensive, less experienced consultants as though we were interchangeable parts. We were also getting pushed further down into the organization, with less and less influence.
Meanwhile, and quite ironically, we were finding it increasingly difficult to convince our clients that they didn’t look, sound or act any different from the competition; that it wasn’t clear as to who they were trying to serve; and that they didn’t have a clear message that resonated with prospects. Even software companies were beginning to face the same challenges, as competitors started matching them on functions, features and price.
These experiences were in stark contrast to my earlier experience in helping to launch and grow what was then called the Telecom Industry Group (TIG) at Accenture. Starting from ground zero and operating much like a venture-backed start-up, we had lots of market forces working against us and still managed organic growth to over $250 million in five years…in the midst of a recession. This despite the fact that, at the time, if you weren’t a telephone company, you had no credibility in that industry; no one knew who we were or what we did; there was no existing market for what we were selling; the industry was already dominated by a few gigantic, well-entrenched providers; and in many ways, we didn’t know what we were doing. Nonetheless, we managed huge and very profitable year-over-year revenue growth, became the dominant player in our target markets, and laid the groundwork for what is today a multi-billion dollar business unit.
What did Martha Rogers and TIG do right? What did my firm and most business services and software companies need to do to achieve this kind of sustainable differentiation in order to ensure ongoing margin and revenue growth? Somehow, certain companies were each succeeding at becoming the dominant Go-To player, actively sought out by customers and able to command huge prices relative to the competition, while everyone else languished as Me-Too providers competing on price. I became obsessed with figuring out the recipe, embarking on an intensive research and analysis effort.
One day, on a plane to Chicago to meet with clients, I sketched out a strategy for my company. With so many years of Accenture’s methodology and project management training ingrained in me, naturally it was a step-by-step framework in the form of a flow diagram. I looked at it for a few minutes and said to myself, “This is what all of our clients need to be doing! This is how companies dominate a market space and become the Go-To.” It was the basis for what has become known as the Apollo Method for Market Dominance.™
That was 1998. Since then I have been seeking out the method’s weaknesses. I’ve gone inside companies as a full-time strategy and marketing executive to find out what’s hard about implementing it in practice. I’ve looked for better alternatives. I’ve continued to research it. I’ve lived through the “dot-com bust” of the 1990s and the Great Recession circa 2008-11. And I’ve watched hundreds of companies go out of business, because they didn’t implement one or more of the key elements.
Through all this, it became clear that the approach works, especially now that enterprise customers are starting to demand solutions to their problems and not just generic products or services, a key underpinning of the Apollo Method.
My research and experiences have resulted in some fascinating stories, examples and analogies, which I share in this book. You will learn market dominance strategy and marketing lessons from the Apollo Space Program, which declared its “Moonshot” goal and set out to dominate outer space against all odds. You’ll learn how to build momentum in the market place around your point of view and solutions the way successful companies have done it; the way campaigns build awareness and support for their candidates; the way Al Gore raised awareness of Global Warming; and the way rock bands build a following. You’ll also learn why clients with specific problems will be just as likely to seek you out over me-too alternatives as heart patients are to seek out cardiac surgeons over general practitioners. You will read inspirational stories about how companies like Google, Oracle, Cisco, and many others each became the Go-To in a relatively specific area of focus and then built from there. And you will find out about spectacular failures and lessons learned, including some of my own.
This book is for you if your company operates in a highly competitive market full of me-toos. It’s for you, if your company is having trouble differentiating from the competition and is competing on price. It’s especially for you, if your company sells some kind of intangible product or service to businesses – the kind of product or service that is difficult for customers to hold in their hands, evaluate or compare to others until they have bought and are using it. This includes IT services and technology service providers, software and software-as-a-service (cloud) companies, some product companies, computing and telecommunications providers, management consulting firms and other service providers. It also includes industries with similar business fundamentals and competitive challenges include architecture and engineering, law, environmental consulting, and other professional and business services. Regardless of the sector, you will find that many, if not all, of these principles apply and can improve your margins and prospects for growth.
What role do you play in your company? This book is for you if your work has a direct or indirect bearing on revenue and/or margins. This includes direct or support roles in business unit operations and management; sales, business development, and partner relationships; marketing; product, service, and/or solution development and maintenance; client delivery and support activity; human resources and training; infrastructure and information systems; and financial management.
One of my frustrations as a practitioner is that I’ve yet to find a book or even a piece of paper that lays out a step-by-step rationale and approach for executing a particular strategy or marketing program. I myself have written or created generic strategic planning and marketing methodologies, but they are templates – they don’t explain how to achieve a particular business outcome. There are plenty of methodologies for systems development, project management, process improvement, and even generic marketing plan development. But the weakness with most marketing plans is that there is a terrific analysis of the situation, the market, the competition, the strategy, etc. and then one big giant bucket of tactics you may as well call “Stuff.”
I’ve never found anything that tells you, step by step, how to win in your market. Neither have I seen anything that shows a methodology for deciding which strategy or marketing tactics to choose and how to best implement them. Shockingly, no leadership executive or board member I’ve ever worked with has asked for one. In presenting a plan, I’ve always expected questions like, “Of the thousands of options to choose from, how did you decide on those specific tactics? How do the pieces fit together and build on one another? How are these going to develop the market? How will they lead us to market dominance and attract clients? What’s the long-term roadmap – how do these build on each other over the next few years to build our brand and entrench us? How do these investments tie to business outcomes and how are you going to measure them?”
This book will give you answers. Chapter 1 talks about your commoditization challenge and why that is a serious a problem for your business. Chapter 2 makes the case for aiming to become the Go-To, as opposed to a Me-Too commodity competing on price and scratching for business. Chapters 3-7 take you through the Apollo Method for Market Dominance, step by step. In addition to a conceptual overview, you’ll get practical advice on how to execute key components. You’ll also see examples of how other companies have successfully implemented them. Chapter 8 gets you started by helping you develop a simple but profoundly powerful one-page plan to get you started. You’ll walk away with a game plan that you can start implementing immediately and refine as you go.
There is no reason why any business should have to languish as a thin-margin, Me-Too player when there is the option to become a Go-To. The key is figuring out how to deliver such superior business impact that your clients will not fixate on price but rather on the value you deliver. This book will show you how to do that.
Branding. One simple word. So many meanings.
I’ve written before about how frustrating it is to try to have a discussion about branding without creating all kinds of confusion. (See “Who’s on First?” about “brand” vs. “identity.”)
I recently had an epiphany about this and thought I’d share…Perhaps this will clear it up for others of you as well.
Many people claim to do branding or brand building, but like the adage, “To a hammer, every problem is a nail,” you’ll get an interpretation based on the branding expert’s specialty. Graphic designers tend to talk about branding in terms of visual identity (logo, look and feel, etc.). Strategists think of it in terms of the market positioning, the offering portfolio, etc. Publicists associate it with reputation building. And so on.
Meanwhile, clients without marketing backgrounds throw the term around with vague intention but without really knowing what it means.
Even though my company, Lina Group, has done an enormous amount of “branding” work over the last 20+ years, we don’t like to use that word to describe our work, because of this very confusion. Nonetheless, we have been working with several companies lately on what they call “rebranding” efforts. In trying to communicate the scope of these initiatives to executives, it became clear that we needed a way to distinguish between “branding” as what you do and stand for vs. “branding” as what you look like.
In other words, substance vs. style.
Some brands are all about substance. Some are all about style. And the most powerful brands are a strong combination of both.
Let’s break it down.
This is the meat of your company – your raison d’être – why you exist. When thinking about branding, you need to start here. Substance should be grounded in genuine competence.
Apple makes innovative technology products that are easy to use. Lexus vehicles are of premium quality and exceptionally reliable. UPS gets your packages from point A to point B on time at a reasonable price and without damage.
Brand substance is a big part of what the Apollo Method for Market Dominance “Launch” phase addresses – What is your market focus? What do you want to mean in the market place? What do you stand for? What market problem do you want to “own” and be associated with? What is your unique solution to that problem?
All of the things we look at in the initial vision and strategy work is focused on defining this. Your value proposition, product strategy, pricing strategy, distribution strategy, sales models, etc. all come into play here as well – everything that goes into what you’re going to deliver to customers.
In developing your vision and strategy, there are a lot of decisions you will make that will utlimately lead to brand meaning in the market place for your company, but many organizations make these decisions without thinking of them as part of a branding exercise. It’s useful to do so, however, because they ultimately impact your image and, when done well, lead to valuable brand equity.
Substance is a necessity. Without it, you get nowhere. And you can get by on substance alone, if you choose. It’s better, however, if you add a little style to the mix.
Style is the way you go about delivering your substance. It’s your personality, the way you package yourself. It’s the flair (or lack thereof) that you bring to what you do. This is what many people typically associate with “branding.” There is usually a heavy emphasis on the visual aspects, but there are many non-visual aspects as well, like tone, values and behaviors that define your brand.
Apple places a high value on simple elegance, which extends not just to the visual elements of its brand and products but also to the verbal and written elements. Lexus dealers treat their customers like royalty. The UPS style is no-frills – efficient, friendly drivers and brown trucks.
Style must be completely authentic. You aren’t going to fool anyone. It won’t work to package your company as hip and edgy if, in reality, it’s fairly conservative. The market will see right through that and dismiss you as a fraud. Define a style that fits the company and culture. Or build a company and culture that fits the brand you’ve defined. Either way, make sure they are in sync.
Style is a nice to have. You can develop a strong brand with little or no style. Companies do it all the time. However, distinctive style really makes a brand sing and differentiates you that much more. Microsoft is an example of a company without much style. Apple has both substance and style, and look at what a difference it makes in terms of brand equity.
Celebrities provide a great illustration of this concept of Substance+Style. Someone like George Clooney represents a very clear, strong brand. He clearly has a lot of substance – he’s a talented actor and director. He delivers the goods. If all he offered was his performance as an actor and director, he’d be a successful brand. If you never read about him in the press, he’d still have a strong brand just on the basis of the results he delivers on screen. However, he takes it a step further by also having fabulous, distinctive style. He’s intelligent, grounded, urbane, passionate about human rights issues, and politically involved. He has a great sense of humor and is down to earth but also sophisticated and debonair. Together, his substance and style define his brand.
Many people change careers (substance), but their basic tone and personality (style) – who they are deep down – remains basically consistent over time. It’s the same with a company. The substance of what the company provides to the market place must constantly adapt. But the fundamental brand personality – the deep-seated, core values and how they’re expressed in the company culture and behavior – should be enduring. Yes, the company might update its logo and visual identity the way a person updates his or her wardrobe. But when you’re defining your brand, don’t think merely in terms of logo – think in terms of overall image.
The offerings of Apple, Oracle, Salesforce.com, Accenture, etc. change and adapt every year. But each of these companies also has a strong personality and image that hasn’t changed much over time.
It’s great to have a well-defined style, but make sure you put most of your emphasis on substance – this is what will ultimately make or break your company. Many of the names on this Forbes list of the world’s most powerful brands made it on the basis of substance. Great style doesn’t help long term if you don’t have substance to back it up. Many a sexy, attention-getting technology startup with cool offices and abundant buzz have flamed out, because they didn’t have the substance piece of their branding worked out first, with differentiated products that met urgent market needs and commanded healthy margins.
Ideally, the two are so tightly integrated that you can’t tease them apart. Apple style, a passion for elegant simplicity, is infused throughout its substance (products). Lexus’ “relentless pursuit of perfection” is woven throughout both its substance and style.
Whatever you decide, just make sure you can deliver on the brand promise.
Disclaimer: This is unedited draft material that is a work in progress. The book will contain revised and refined material with additional citations.
If you have a great offering but still find yourself competing on price in a crowded field of me-too competitors, you’ll relate.
I once spent a Saturday night in Atlanta’s Fulton County jail with renowned actress Candice Bergen. We had both been arrested.
When the guy on the other side of the bars yelled, “Cut!” it was a relief to step out of that nasty, smelly cell. The outcome of that evening was a really bad, low-budget movie called, “The Mayflower Madame.” Fortunately, the scene was short. If you blinked, you missed me.
By day I was a buttoned-up young management consultant doing communications company billing system design for Accenture clients. By night, I fed my creative side with acting and improvisation lessons. It was in this offbeat world among my eccentric acting friends that I learned some of my most powerful lessons about differentiation when you’re marketing something intangible – why it’s hard to achieve, why it’s even harder to sustain, and most importantly, why it’s so crucial to survival in a competitive environment.
One of my first big insights was in going to acting auditions and having no real way to obviously stand out. I remember the irony of one audition in particular. It was for a television commercial. The character was a young corporate type exactly my age, and those auditioning were to wear formal business attire. Easy for me. I just took a break from work and arrived in my regular dress-for-success uniform – suit, blouse, high heels. I looked very prim and proper. I thought, “How hard is it going to be to play myself?”
Silly me.
I received a script with just one line of dialogue. They provided no story or other context about this person or situation, except this: I was to run from one corner of the room to another carrying a football like a running back, while shouting, “Get out of my way!!!!!!”
The worst of it was that at least 40 other actresses showed up looking just like me. We all wanted to think we were different, but we weren’t. Short of being obnoxious in some way, there was nothing any of us could do to stand out and increase our odds of being selected for the part. Yes, we all had relevant experience, training and talent; but those were our tickets to entry, really. You didn’t get invited to the party if you didn’t have the requisite credentials. We were complete commodities with zero control over our destinies. There was no way to be memorable or offer more value than someone else. It was a crapshoot. I’d have had better odds playing the lottery.
I found that aspect of the acting world to be completely absurd. Half the time, judging from the array of people at a given audition, the directors didn’t even know what they were looking for – they’d “know it when they saw it.” I understood that it was just how the game was played, but I quickly figured out that going from one cattle call to the next wasn’t for me. There was no going-in advantage, no control, no way to distinguish yourself in advance or afterward, no way to get your distinctive qualities across (as if they mattered), and low odds of success relative to the investment of time, energy and ego required.
Years ago, the global management and technology consulting firm, Accenture, was losing competitive opportunities to install SAP software at very large companies, a service that had become quite commoditized, despite the high degree of expertise required. Accenture had what it felt were superior credentials, so the company decided to dig into what was happening. It hired an outside firm to conduct some win/loss analyses and prepare a report it called, “A Primer on How to Beat Accenture.” The outside firm interviewed client people involved in evaluating proposals, and this response from one executive summed up the problem:
“Our evaluation of a variety of things that all the vendors threw up was that they were pretty much equal on them. For example, when you talk about tools, software development tools, development centers, client lists, the pace of their approach, and even things like what Accenture would call Business Integration. We found that all the respondents were the same. And we rewarded zero points to those.”
When you look and sound like everyone else, then promoting your company story in the market place or selling to a prospective customer feels a lot like those cattle-call auditions. Like 99% of the companies out there, you are failing to differentiate in a way that’s blatantly obvious to customers, which makes you a Me-Too commodity forced to compete on price when competition increases and/or demand ebbs.
For those of you who aren’t wine connoisseurs, can you distinguish between an “oaky” wine versus one that is “reticent”? In a blind taste test, can you tell which is the 98-point wine and which one rated merely 86 points? If you are a connoisseur, how much study and practice – how many sips of wine – did it take for you to start detecting subtle differences? Think of your customers as wine novices. To them, distinguishing your company from the competition is like trying to describe what makes an Alexander Valley pinot noir different from a Russian River pinot. As non-connoisseurs of your business category, the differences are not just subtle, they’re impossible to detect.
We see this all over the place, but intangible products and services are especially susceptible, because differences between offerings are difficult or even impossible for prospective buyers to discern, especially before the purchase. Almost any professional service category is a great example. Go out to the websites of various doctors, lawyers, graphic designers, advertising or graphic design agencies, Silicon Valley venture capital firms, architecture firms, information technology service providers, communications service providers, etc. and try to figure out what makes them unique. Chances are that you can strip the names off the boilerplate paragraphs for companies within a category, mix them up and find it impossible to know which paragraph belongs to which firm.
Over the last twenty years, I have had thousands of conversations with senior executives, and when I’ve asked for one sentence or phrase that sums up their biggest business problem, the refrain has remained the same. Here are direct quotes. Note the theme.
“How to avoid becoming a commodity — It’s very difficult to differentiate ourselves from the competition.”
“How to protect our margins — We have to be competitive, and clients are pressuring us to reduce our prices.”
“How to establish awareness in the marketplace — we are a well-kept secret, and it’s been hard to stand out from the crowd.”
“How to get people don’t understand what we do and what makes us different.”
“How to improve our business model to do ‘repeatable projects,’ so we can leverage our experience and reduce service delivery costs.”
“How to attract and retain the right people – we’re competing against other employers for the same, limited skill set.”
“How to get the right business – We have a lot of business, but it’s not of the quality that will build our future.”
The implication of all of these trends is that many products and services, particularly in the business-to-business and technology arenas, are struggling against commoditization and must, by default, compete on price. When you boil down all the problems and challenges affecting the health of these companies in the past, present and future (anomalies like a global financial meltdown aside), it all boils down to commoditization. That is the single biggest competitive threat they face.
Commoditization is a gigantic issue that plagues executives everywhere, and almost no one worldwide is immune in today’s global economy. Even back in the early 2000s when Cisco was clearly the Go-To for routers and other networking equipment, a senior strategic planning executive there told me that the market for “filling space in the rack” was full of me-toos and that commoditization was becoming a huge problem that Cisco was working hard to address. An example that many Americans can relate to on a more personal level is the movement of thousands upon thousands of even high-skill jobs to India, because labor is so much less expensive. But in a dramatic twist of fate, even India is feeling the squeeze from other coutnries, like the Philippines. In other words, someone will always find a way to look like you or be cheaper. Here’s why.
Even if you are in the luxurious position of being unique in some way, me-too copycats will always come after you.
Let’s look at how this happens. Let’s suppose that you’ve entered a relatively new market with a unique or proprietary (e.g., patent protected) offering, whether it’s a product or service. Initially, your customers have few options to choose from. You enjoy reasonable market share, are able to charge a healthy price and earn nice margins.
Inevitably, competitors emerge with their own proprietary offerings or copycats of yours. Or perhaps your patent expires. Suddenly, customers have more choices, and providers have increasing difficulty standing apart. The differences between offerings become less and less discernable to the naked eye. At 50,000 feet, customers can no longer distinguish one provider from another. Each sale starts to take longer and cost you more time, effort and money. You start cutting your prices to close deals.
Then the market matures even more and completely fills up with competition. Supply has grown faster than demand, and the market is full of Me-Toos. Everyone looks and sounds the same. It takes a lot of time on the part of a prospect to even begin to understand what makes one provider different from another – more time than they are usually willing to invest. Customers now have their pick of who to work with. They start to put minimal effort into coming up with a short list, and begin operating under the assumption that the offerings are basically all at parity; they start shopping completely on price.
You’re really in trouble when the procurement department gets involved. In this Design Intelligence article by Joan Capelin, “Confronting Commoditization,” Edward Bond, Jr, CEO since 1983 of Bond Brothers, a fourth-generation construction and construction management company, describes a classic scenario:
“When I first started in the construction industry, I had one energy client that provided 90 percent of my revenue. It wasn’t long before I heard Death knocking at my door. The icy-cold purchasing agent state that my price was too high and that, if I wanted to work with them, I’d have to drop my price. ‘Purchasing’ was clearly not interested in understanding why my fee was what it was; rather, Purchasing’s job was to get the lowest price from vendors and professionals alike. I was cornered without an informed economic decision maker to whom to appeal about value versus cost.”
Meanwhile, your costs have gone way up – you’re having to invest and scramble to develop the next generation of your offering; your sales costs have skyrocketed, as sales cycles get longer; your pipeline of work is spotty, leaving lots of your people underutilized; and industry advancements are pressuring you to invest in skill enhancement for your client delivery people. In short, your margins are sinking like a stone.
This is the cycle you can expect. It’s Economics 101. Without making any fundamental changes to your business, there are only three realistic forces that will allow your margins to temporarily (and only temporarily) go up again without changing anything else: A bunch of competitors disappear (bow out or go out of business); a disruptive technology or trend suddenly removes significant cost (e.g., outsourcing software engineering work to India and China), or demand surges.
History is rife with examples of companies falling into the commodity trap and struggling. Let’s take the late 1990s and early 2000s with the rise of “web integrators,” companies that helped dot-coms and corporations develop websites, build eCommerce capabilities and develop applications that would run on the Internet. This is useful, because we are going to see the same wave, only bigger, with the “Internet of Things”) trend making all devices smart and connected.
The initial web integration market was huge, because dot-coms were popping up all over the place and needed to get their websites up and running ASAP. All one needed in order to enter the web integration business was some web development skill and a business license, so loads of companies sprang up. These web integrators all looked and sounded the same. It didn’t matter, however, because the supply still didn’t meet all of the demand. On July 23, 1999, the trade publication, Computer Reseller News, declared, “Web Integrators’ Revenue Soars.” On November 22, 1999, PC Week trumpeted, “It’s a seller’s market for e-business service providers.”
Then the dot-com market fell apart, and within 18 months of those exuberant headlines, most of those companies had gone under or been acquired for pennies on the dollar. Suddenly this huge collection of Me-Toos had become complete commodities in the face of limited demand relative to the supply. Me-Toos struggled to close deals, the cost of doing business continued to increase, and margins grew smaller over time. Ultimately, many went out of business, exited markets or simply struggled until investors pulled the plug. Only a few managed to survive. I witnessed it firsthand, because I worked for one. We were one of the lucky survivors, only because we took a solutions approach and had begun to target and penetrate an emerging market, what was then referred to as “brick and mortar” companies, as opposed to dot-coms. Even with that, we only limped along. As a venture capitalist so eloquently put it while onstage at the AlwaysOn Silicon Valley Innovation Summit I attended years later, “Those were rough times. The year 2000 really, really sucked.”
Let me give you some examples of how hard it becomes for customers to distinguish one service provider from the next in a market full of Me-Toos. Here are actual elevator statements (taken verbatim from their websites or from statements by executives) of five different companies offering web-related development services. Pretend you are an executive looking for web development help. Would you have any clue as to what separates one from another?
“With a unique combination of strategic thinking, creativity and technological expertise, we design and build powerful, meaningful Internet solutions.”
“Our [branded methodology] approach is really a blueprint for Internet success. We blend strategy, technology and market skill sets to deploy mission-critical Internet solutions. We boil down these three skill sets into best practices and deliverables. I don’t believe anyone in the [Internet services] space has as much of an integrated offering.”
“We work with our clients to create e-transformation. From designing a new breed of business strategy to the rapid deployment of forward-thinking Internet solutions, [company name] offers a comprehensive set of strategic Internet services designed to generate success for our clients.”
“[Company name] is a leading Internet consulting firm that helps diverse clients in a broad range of industries plan, build, and launch digital businesses… has become a trusted partner to both Fortune 500 and emerging companies. “
“We deliver electronic business solutions to create market leadership, breakthrough positions, and shareholder value.”
As a prospective buyer trying to figure out who to call, you’d basically have to roll the dice. As a company trying to stand out, you have the same odds I did in that acting audition. Getting selected becomes a matter of dumb luck, and that’s no way to run or market a business.
Sadly, nothing has changed. Here are short descriptions taken from the websites of the Automotive Industry practices at three leading strategy consulting firms.
We work with OEMs, suppliers, distributors and dealers on strategic, organizational and operational issues along the entire automotive value chain. We help our clients to build and adjust their growth and brand strategies to cope with emerging challenges.
___ helps automotive manufacturers, their suppliers, and their distribution partners respond to these significant challenges [earlier web site text omitted here]. We do this by providing cutting-edge ideas that reach beyond the limits of traditional business models.
As one of the leading management consultants to the global automotive industry, ___ has helped senior executives at OEMs and suppliers in North America, Europe, and Asia address such critical strategic, operational, and systems issues. ___ has helped clients turn marginal market returns into exceptional returns. It is not just a single service offering, but the resulting integrated changes that truly differentiate players and help clients to not only take cost out but also to attain margin improvements.
Try this in your own competitive sector. Enlist the help of someone not associated with your company but who knows the industry. Give them the names of 5-10 of your closest competitors. Have that person pull from the company websites the one to three sentences that best summarize what each company does, remove the names, shuffle them around, and give them to you. This is what a prospect encounters when shopping for your services, software or products. You will probably be shocked at how me-too all of you sound.
This problem spans nearly every sector in the business-to-business world, most professional services sectors, nearly all technology companies, and even many consumer-oriented companies. For example, I ran into this very same issue in looking for a literary agent when writing this book. One of the big complaints a lot of agents have is that they get inundated with author submissions that are completely inappropriate – genres they don’t represent and material not packaged in the manner they prefer. They also really stress the importance of a great hook in your pitch – your first sentence – in order to get their attention. The industry emphasizes that authors need to stand out and distinguish themselves from the get go. To help me avoid this problem, I did a lot of homework before approaching agents, including buying the standard industry guide, which provides a profile of each agent. In this, agents have the opportunity to specify what they’re looking for.
What was fascinating is that out of the hundreds of agents I read about, only a handful distinguished themselves in any way whatsoever. A good 99% of them all looked and sounded exactly the same. For a group of people so flooded with bad material, you would be amazed at how few agents took the opportunity to be extremely specific as to what they like to represent. I found it really ironic and amusing.
This Me-Too trap is something very few executives in business services, software and solutions companies understand or appreciate. I’ve been watching déjà vu all over again for 25 years.
Several trends are forcing companies to reevaluate their competitive strategies, what they offer, and the way in which they approach marketing. First, it’s becoming increasingly difficult for customers to see what makes one company different from or better than another. This results in price-based competition.
Second, the barriers to entry are dropping rapidly. In many industries now, especially those that are technology driven, your competitors need almost no capital to threaten you with cheaper or better alternatives. They can launch a website through any number of free services, build an app, or start offering a service. With a 3D printer, they can build sophisticated prototypes at the kitchen table. With Amazon.com, eBay and other online retailers, they can sell and ship products globally. As a result, dozens of new entrants jump into any given market every single day.
Meanwhile, it’s never been easier for your customers to shop around. They literally have access to anyone in the world. Even disciplines we’ve always thought of as high-touch and requiring physical proximity are being off-shored. IBM, Home Depot and many other companies have moved thousands of higher-salaried, professional positions from the U.S. to India, including finance and sales roles. If companies are treating their own employees, who are professional staff, as commodities, you can bet they are doing this to suppliers. Likewise, companies like IBM are feeling the squeeze from their own customers, as they come under increasing cost pressures themselves.
For business-to-business sectors, enterprise business problems, processes and technology infrastructure have become so complex and interdependent that customers want vendors to bring them complete, integrated business solutions, which are often a combination of products and services. Sometimes, they’re even provided by several companies partnering together. This requires a business model that’s very different from what most companies have.
For emerging sectors such as “green” products and services or the “Internet of Things,” there is a significant market development challenge. Providers are rapidly introducing new technology or new ways of doing business; they are asking customers to buy an entirely new type of product, such as solar technology; they are asking customers to use familiar products in new ways, like controlling one’s home security system from a mobile phone app; or they are somehow changing the customer’s business processes. This calls for positioning and marketing practices that go beyond traditional approaches.
Another challenging trend is the speed at which some markets and competitors move. Software providers, particularly those offered as a service via the Internet, can match one another on functions and features in a matter of hours or days. Even highly specialized products such as optical technology or telecommunications routers and switches rapidly become commodities. These companies are so accustomed to operating in fiercely competitive environments that they are very nimble and responsive to market changes. As soon as one competitor adds a new product or set of features, others match it.
Many products are software driven, meaning what used to be physical features are now software. A simple and very familiar example is smartphones, but it’s happening to devices and products anywhere and everywhere. Before, a change in a product feature set meant a change to the manufacturing process and possibly even the supply chain. Changes were not easy to make, so competitors couldn’t match each other quickly or easily. Even if they could, they still had to get customers to buy the new version of the device. Now the competitor just modifies software code in one place and pushes it out to customers’ devices. Function and feature barriers have almost evaporated.
If you think you have a lot of competitors now, just wait.
It used to be that the distinctions between market categories were very clear. Let’s take the marketing arena, for example. An “advertising agency” once just did ads, which ended up on TV or in print. In order to come up with the ads, they had to figure out how to boil your message down, so by default, they also created your positioning, tagline, etc. A “public relations” agency dealt with the media, events, and market influencers. A “direct marketing” company put together your mail pieces or catalogs. Your printer was down the street, because you had to be able to go to where the equipment was and check the “blue lines” (industry jargon for a test run), before they started the presses and printed 30,000 copies. A graphic designer helped you with presentations, documents and brochures. A photocopy company serviced your copiers or you used a service down the street. Your sign company was also down the street. When social media first came along, there were people who specialized in just that.
Today, all of the above do all of the above. FedEx stores are a source for printing, high-volume copy jobs, graphics support, signage and more. Ad agencies do online advertising and other interactive marketing. Interactive agencies give advice about how to integrate print and package design with online campaigns. Almost any company involved in marketing execution does social media. Someone in India can design a new logo for almost nothing.
In the IT industry, it used to be that services, software and hardware products were three distinct sectors with very different business models operating fairly independently of one another. Customers bought each individually and then put the pieces together themselves. That’s no longer the case. Business problems, processes and technology infrastructure have become so complex and interdependent that customers want solution providers – vendors that will bring them complete, integrated business solutions. They also expect vendors to understand the unique intricacies of their industries and businesses. This is forcing vendors to change their business models and/or partner with others, including, on occasion, competitors. Therefore, the definitions of these companies have blurred as they operate across multiple categories. Most business software companies also offer professional services; many business services companies also sell their own or partners’ software or products; product companies go to market through value-added resellers, offer some services of their own, and partner with other companies. We should now really refer to this collection of sectors as the “solutions provider industry.”
Many software and product companies are finding that associated support services are not only in demand by their customers but can also offer higher profit margins and strong cash flow. They are increasingly adding services to their solution portfolios, yet the requisite marketing and operations approaches are much different from those of pure products. These professionals are often not aware of what these differences are or how to implement them.
Let’s look at an example of all of this blurring in the real world. Suppose you’re looking for a company that can help you do some online marketing to your extensive customer database. You aren’t quite sure what you need, so you find some rankings and pick three companies from each of the following categories: interactive agencies and database marketing service providers.
Here is what you get from their websites, but the names got separated from the descriptions. Are there any meaningful differences between them?
___ is the first global interactive agency network, leading a new generation of creative marketing and media agencies designed to unleash the full possibilities of a digital age.
_____ is the largest independent interactive agency in the world, and the first of its kind. We’re the only interactive agency to take creativity, strategy, and technology out of silos, and develop a truly blended approach to creating emotionally resonant, online brand experiences. Our creative studios – spanning from (list of cities) are home to award-winning creative strategists, designers, writers and developers, singularly focused on initiating and perpetuating a mutually beneficial dialogue between a brand and a consumer.
____ is a leading database marketing agency. We offer quantitative, information-based solutions that maximize return on marketing investment (ROMI). ____ provides the framework for organizations to aggressively apply database marketing strategies to their marketing programs. For over a decade, Our [brand name] approach has produced superior results for many world-class marketers. The core of our solution is our highly-flexible and scalable marketing technology platform coupled with our award-winning analytics and creative, driven by our highly-disciplined consultative approach. It is the integration of these competencies that creates superior results for our clients.
___ helps industry leaders build great brands by creating engaging experiences for consumers wherever they live in the digital world, ranging from Surface screens to blogs. We believe the future of marketing is not about recycling TV spots or banner ads on websites. Marketing is all about harnessing the social and immersive nature of digital to build memorable experiences with consumers and empowering those consumers to share your brand with each other.
___ is a Marketing Optimization solution provider that leverages predictive intelligence, strategic and analytic services and marketing automation to maximize marketing spend productivity, strategy and results for its clients. Founded in 1984, ___ has built core competencies in data management, database services, analytics and strategy which are delivered by highly skilled professionals. ___ supports over 250 clients across its marketing services, vertical industry solutions and teleservices business units.
“All in all, you’re just another brick in the wall.” Pink Floyd
This quote may seem like a rather cold thing to say to someone, but when it comes to business-to-business companies, it is ohhhhh so sadly true.
Let’s look at consulting companies as an example of what goes on. They provide lessons for all businesses, because services are becoming such an integral part of product company offerings. This will especially be true in the Internet of Things era.
I’ve had many a debate with consulting colleagues and clients who insist that they are absolutely different from the competition. When I ask, “How?” I get one of two responses. Either they give me the same spiel I hear from every other company in their space (a la the above), or it takes them about 20 minutes to explain it to me. The most common refrain is “best people and track record of client experience.” Yeah, right. So, does your competition say, “We hire crappy people and have no relevant experience”?
I can almost guarantee that if you and one of your competitors each sent over a team of people, it would be impossible to tell which team came from which company. Their resumes would look the same, the people would look the same, they’d probably even be dressed the same and spewing the same jargon. Sorry, “best people” doesn’t cut it as just one point of differentiation much less your overall positioning.
The same goes for your project management methodology, your creative abilities, your technology skills and fundamental infrastructure, your approaches to change management and strategy. If you are a software company, it’s highly likely that if your competitors can’t already match you on functions and features, they’re only a few months away. In many cases, ditto if you are a product company, especially if you sell to enterprises.
The bottom line is that if you can’t convey what makes you unique and of particular value to a particular market in only a moment, you are a me-too in the eyes of the market, which is the only place where it matters. If a prospect, a market influencer, a prospective employee, a supplier or someone who could potentially refer you to a possible buyer can’t quickly figure out what makes you special, you’re a me-too.
Were you able to answer these questions differently from your competitors in a way that would make it obvious to prospects? And in a way that is valued by prospects?
If you’re feeling a little beat up right now, don’t, because it’s really tough to stand out in a market like yours. Let’s find out why.
Let’s look at how most companies in a small sampling of sectors typically state their differentiation and why it’s not adequate. If you don’t believe me, check out some websites and see whether you can figure out what makes one company different from another.
Imagine you’re a prospective buyer, and see whether any of these turn you on.
Most of these claims to differentiation are meaningless, because everyone else makes the same claims. None are sustainable, because competitors can easily match you and invariably do so. What you end up with is a serious outbreak of Me-Too Syndrome. Everyone in the space is basically offering the same thing. Everyone looks and sounds the same.
Commodity status is like a nasty undertow pulling at your business. It will always be there. The key is to understand it, accept it, and have a game plan in place for dealing with it.
The Me-Too Death Spiral is a matter of simple arithmetic and economics. Revenue minus costs equals profits. If revenues are increasing at a greater rate than costs, profits are rising. If revenues are decreasing at a greater rate than you can decrease costs, then profits are shrinking. We all know this. But here is the rub. The cost of skilled people rarely decreases and usually increases over time.
If you provide any kind of service; if you have a product that is highly variable from customer to customer; if human expertise is a big portion of your value proposition, you have a business that is dependent upon highly skilled people. Your costs will always rise. You will need to continually be training and developing your people in order to keep up with industry and market trends. Your people will need, at a minimum, cost of living raises. If you want to keep them motivated, they’ll need more than that. Employment overhead such as taxes, healthcare, insurance and so forth rise over time.
The people are just one dimension of your cost structure. Growth costs money and requires investment in R&D. You likely operate in an industry that changes rapidly, particularly on the technology front. It takes investment to keep up with advancements if you want to remain relevant. Factors such as facilities, support infrastructure, and other operations costs also creep up over time. In any highly competitive environment, you need to invest properly in marketing and sales support unless you want to rob your future. While you may be able to find ways to cut in the short run, long-term costs will only rise.
Meanwhile, cost-based pricing doesn’t work in a business like yours, if that means you’re going to raise prices every time your costs go up. Business customers will revolt. They only pay higher prices when they’re receiving higher value. Sure, they may accept it to a point, but a comparable provider has only to swoop in and offer a slightly lower price for the same value, and you’re sunk.
I experienced this when I moved the Lina Group, Inc. base of business from Atlanta to Silicon Valley. Do you think our existing Atlanta-based clients were willing to absorb a 100% increase in prices just because some of our costs suddenly increased 100%? Of course not. It sounds like an absurd question, but providers try to do this to their customers all the time. Perhaps the methods and messaging are more subtle, but that’s what it fundamentally boils down to.
Bottom line: Since your costs are always going to rise at least linearly, if not exponentially, you had better be doing one of two things, if not both: figuring out how to raise the value of your services proportionately in order to raise your prices at least proportionally; and figuring out how to get the most leverage possible out of your intellectual property and people. For example, if you currently provide professional services and bill by the time unit (hour, day, etc.), you can start providing services that enable you to price based on the service you provide, rather than the time you spent doing an activity.
If you don’t figure out a way to justify higher prices and/or reduce what it costs you to deliver your products and services, you are slowly, if not quickly, on your way out of business.
When I share these stories with others in the industry, they nod their heads. “That should have been us on that conference agenda!” The person next to you on the plane exclaims, “If only we had known about you. We just hired some consultants to do…” Yes, everyone can relate. It’s frustrating, unnecessary, and worst of all, the opportunity cost of not being differentiated, not standing out, is huge.
But suppose you were given a choice. You could continue to look and sound like everyone else, compete on price, and scrape by for each dollar of declining profit you earn until you finally go out of business. OR you could be absolutely unique in a particular market, offer something of very high value that is in high and urgent demand, and charge high prices while prospects line up at the door. Which would you choose? In case there is any hesitation, let’s look at what the latter offers.
(Up Soon: Draft Chapter Two – The Remedy: Be the Go-To for the Solution to a Business Problem)
Now I know how my grandparents must have felt. “Everything old is new again.”
There are a lot of “new” sales, marketing and product management techniques coming out of the tech world today and being touted as groundbreaking, when they are actually fundamental marketing principles at work, enabled and turbo-powered by advances in technology. Bear in mind that I’m all for packaging your thought leadership and unique approaches into methodologies and promoting them. This is a major tenet of the Apollo Method for Market Dominance™. But I address this mostly to students of marketing when I urge you, however, to proceed with caution before jumping on some of these bandwagons.
The ultimate example is “Growth Hacking,” which is floating around the tech scene these days. Synonyms include hacking marketing, growth hacker marketing, etc. If you haven’t heard of this, you’ll find this definition on Wikipedia: “Growth hacking is a marketing technique developed by technology startups which uses creativity, analytical thinking, and social metrics to sell products and gain exposure.” Anyone who has been in the marketing world for more than a day can tell you there is nothing new about using creativity, analytical thinking and social metrics to sell products and gain exposure. Fortunately that first sentence of the article is followed by the very accurate statement that: “It can be seen as part of the online marketing ecosystem, as in many cases Growth Hackers are simply good at using techniques such as search engine optimization, website analytics, content marketing and A/B testing which are already mainstream” (italics are mine). Elsewhere, I found the following comment that tries to make Growth Hacking sound revolutionary, which genuinely made me laugh out loud: “A growth hacker doesn’t see marketing as something one does, but rather something one builds into the product itself.” This is just silly. Any marketer worth a grain of salt sees marketing that way.
I really love this post by Muhammad Saleem on Marketing Land, “Growth Hacking is Bull.” He does a beautiful job of articulating what is not new about Growth Hacking. More importantly, he provides a nice marketing lesson and a good introduction to terminology that non-marketers might enjoy learning about.
On the other hand, you’ve got to love the brash, enthusiastic, I-just-invented-water! attitude of some of the folks touting these supposedly groundbreaking techniques, which are essentially new words for old methods. And you definitely have to admire their talent for self-promotion as gurus and stirring a movement. Many of these people are instinctively good marketers who figured things out on their own and therefore think they have invented these techniques. Forget the thought leadership content of these gurus and just study them. Notice how appealing it is to the market place when a person or company packages their approaches into a methodology, even if the approaches aren’t new. These methodologies give the audience something to latch onto, which is especially helpful when you’re dealing in esoteric concepts, business strategies and intangible tactical activities. Notice how the gurus promote their thought leadership. Notice how they seem to ignite the market place and lead a movement. Notice how they rally people around themselves and ideas. Therein lie the great lessons!
You may have more in common with Gwyneth Paltrow than you think. And not in a good way.
Yes, oops, she did it again. Headlines like CNN’s “Gwyneth Paltrow Makes People Mad — Again” are blaring, and even a Green Beret vet has entered the fray with a scathing reprimand. He and others are offended by a recent interview during which people perceive she was comparing online insults aimed at her to the ravages of war. The was an uproar over this, even though business people and many others use war analogies every day. Before that people were annoyed, because they perceived she was saying her career as a movie star is more arduous than a regular “office job.” She again attracted a rash of criticism for the way she went about announcing her pending divorce from Chris Martin. Meanwhile, she is genuinely perplexed and frustrated by all of the hoopla. And her faux pas seem relatively harmless compared to the tangible damage done by some celebrities. Why do people find her so annoying? Why was she recently voted most hated celebrity?
Looking at this through a marketer’s lense, “perception” is the pivotal word. Apparently, the very people she markets to perceive that she is out of touch. They see her as pretentious and oblivious to what life in the real world is like for the average woman. She may be completely tuned into what they go through, but perception is reality through the eyes of the market. Via her lifestyle blog and site, Goop, her goal is to “help her readers save time, simplify and feel inspired.” Rather than feel inspired, many of these readers, judging from online commentary, merely roll their eyes at the $185 faded cutoff denim shorts, $163 t-shirts, and recipes calling for sea urchin tongues and Maldon sea salt, and tune out. Wearing their best discounted TJ Maxx attire, they feel lucky if they get from work to the day care center before closing time. A successful dinner is mac and cheese from a box and maybe a canned vegetable.
President George Bush, Sr. can relate to Gwyneth’s plight. In the midst of a recession and his reelection campaign in early 1992, he toured exhibits at the National Grocers Association convention, and his enthusiastic reaction to bar code scanners became a symbol for how seemingly out of touch he was with life for the average American. It didn’t matter whether the incident was fact or fiction. The story resonated with the public and became a defining moment in his reelection bid and ultimate loss to Bill Clinton, who campaigned on “It’s the Economy, stupid.”
Are you guilty of being out of touch with life in the real world of your clients?
Like the Gwyneth “haters” and 1992 electorate, company executives often express their own flavor of open disdain — it’s aimed at the likes of management consultants, enterprise software companies, and other service and technology providers for how out of touch they are, and it’s no wonder. I remember being a young consultant at a large provider with a reputation for arrogance, only to see it was rooted in reality when I heard my colleagues mock the illogical and inefficient processes at client companies. It would have taken just one day in their client’s shoes to realize how those byzantine processes had evolved to where they were and why it was difficult to change them. The attitude in some places is that “clients are stupid, and we’re here to save them. We’re so smart.”
How often have you been guilty of this, even just a little? Check yourself. It’s a slippery slope. And clients hate it. This is one reason I’ve periodically gone to the other side – joined a company either outright or as a virtual CMO – to get a good strong dose of hard reality. It’s incredibly humbling. There is a huge difference between being on the outside and spouting advice and wisdom vs. being on the inside trying to do your regular job, navigate politics and deal with the myriad other tasks and responsibilities that get thrown your way. And of course, reality is never as clean as theory. A technology, process, strategy or marketing approach (including the Apollo Method) can sound so clean and easy on paper. But trying to implement these in the midst of the unpredictable, ever-changing chaos that your clients live every day is quite another task.
If you find your company being bashed in the press or receiving what you feel is undue criticism from clients; if, like Gwyneth, you or the company often feel misunderstood, maybe it’s time for a reality check.
Remember: Stay in touch.
Many years ago a new COO came into a company I was working with and dramatically declared, as if he had just discovered life on Mars, that we were going to shift to relationship-based selling. I was genuinely perplexed.
I asked him, “In what company like ours would you not sell based on relationships? It’s not possible to sell what we do without strong relationships, trust, etc.”
He had made his declaration as though this was revolutionary, whereas to me it sounded too fundamental to merit discussion. Relationships were not going to be enough.
I do think I took for granted at the time that everyone knew and understood this. Even today, whenever anyone gets on a soapbox to talk about relationships selling, my reaction is that they are behind the times.
Sales consultant and author, Tony Hughes, sums it up nicely in his book, The Joshua Principle: Leadership Secrets of Selling, with this passage on page 78 of the revised edition:
The more dependent a sales person is on relationship selling, the more they belong in the world of selling low-value commodity products, or transactional selling.
High-value solution selling, however, demands that you understand the customer’s problems and align with political and commercial drivers – measures and outcomes. Positive relationships are good but should be with the right people and desired by them because of the perceived value you offer.
No one likes being sold to, but everyone wants people around them that can help in achieving their desired outcomes or objectives. You need to help and ask, rather than tell and sell.
You must also distinguish between relationship selling and a relationship strategy. The problem with relationship selling is that it is the default operationl mode of most sales people and the only kind of strategy they know.
A relationship strategy, on the other hand, has to do with becoming trusted by the right people in the organization as a colleague and partner with their best interests at heart and who has a company behind you with offerings that will truly create value (which is different from a value proposition).
In short, don’t think that going out and generating a bunch of relationships at target accounts is going to be your ticket to achieving your revenue and margin goals. For a deeper explanation, read Tony’s book.
I’m especially fixated on business development (BD) and sales right now, because one of the companies I work with is in transition and working to crack this nut. While there is a lot of overlap between BD, sales and marketing in the types of companies I work with, I don’t claim to be a sales guru. That’s why I have so much respect for Tony Hughes and other professionals I’ve been talking to lately who really know how to break into, manage and grow large enterprise accounts. More than that, they know how to teach other people to do it and coach them during sales situations, which is a real skill in itself. I’ll be introducing you to more of those people soon, because I’ve yet to run across an organization that has really mastered this type of selling across its sales organization. They may have rainmakers who have mastered it, but the rainmakers are usually naturals (“unconsciously competent”) and are, by definition, the exception rather than the rule. It’s also tough skill to transfer, so people like Tony are worth their weight in gold, especially when you are talking about average deal sizes in the millions, if not higher.
As a start, it’s worth sharing Tony Hughes’ “Value Quadrant for Professional Sales.”
From the RSVP Selling Framework by Tony Hughes
Many models talk about delivering customer value, but they don’t talk about how your sales activity should also be delivering value to your organization by uniquely positioning you and your company as an influencer with the customer who can solve their business problems, reduce risk during the process, and take them into the future. It’s easier for a sales person to be positioned in that upper left quadrant when the overall company story is one of clear, differentiated, problem-solving value (which is where the Apollo Method for Market Dominance comes in). But stellar sales people can get by even without that. And often they play a role in helping to define that theme for the entire company by talking to customers and finding the patterns of common problem areas across companies and feeding those back to the strategy and marketing teams.
There is a nice walk-through of the model on Tony’s website. On the surface, the labels in the box seem obvious and intuitive. But read his explanation for some nuances that are very important. This matrix offers a nice starting point for shifting your sales and business development organization toward truly delivering distinctive value to customers.
This is your first step toward Market Dominance: Figure out what you want to “own.”2. Develop a Point of View (POV) with Particular Characteristics:
3. Develop a Solution with Particular Characteristics:
This is a sales presentation flow designed to reel in your audience. Too many presentations jump right into the solution without a set-up – like telling the punchline and then winding your way back through the set-up when the joke falls flat. You might recognize this flow from the Stanford Pitching and Presenting JOLT -“How to Make Your Story Compelling.” Also use this for thought leadership presentations without as much emphasis on what you’re selling, unless it can be presented without seeming self serving.
This flow applies to presentations of any length, but you would cut down or omit slides for shorter time frames. The slide specs below are primarily designed for a one-hour presentation to be delivered to a captive audience (and your job is to make them captivated). You would not talk “at” an audience like this in small-group customer settings – you might, however, use this flow (with or without – mostly without, slides) as the basis for a conversation with the client or prospect. Too often we walk in with a stack of sides expecting an executive to sit through them – not going to happen.
Guidelines:
Please give attribution when sharing this information: Copyright © 1999 by Lina Group, Inc. from the Apollo Method for Market Dominace™.
I plan to post an early draft of Chapter 1 of my book shortly, but in the meantime, there is another book you should read. I couldn’t put it down, and I can’t recommend it highly enough: The Joshua Principle: Leadership Secrets of Selling by Tony Hughes. You can buy it on Amazon. It’s available in hardcopy and for the Kindle. It’s also available as an ebook and audio book for other formats. It’s fine to listen to it, but I would read it as well — my copy is all marked up and dog-earred, and I refer to it constantly. Tony has done such a great job of articulating the rationale for the type of selling you need to be doing when targeting large, complex enterprises with technology, solutions or services that I just refer people to passages from his book when trying to educate them. I also send people to his website, where there are lots of useful tools and additional information on “RSVP Selling,” the framework discussed in the book.
I don’t write many reviews on Amazon, but I felt spontaneously compelled to write one for this book:
“If you are associated with a company that sells to enterprises (particularly if you sell technology, software or services), you should have every person in the company read this book. Tony Hughes does an outstanding job of explaining “how it’s done” – how companies like yours need to be approaching sales and business development. It’s an excellent primer on what your overall sales and business development philosophy should be. It also lays out how your client-facing people need to be engaging with customers in a way that will differentiate your company and deliver value. Excellent, excellent book. Because it is written as a novel about a sales mentoring relationship, it is a page-turner that delivers a rich explanation of concepts while explaining the “RSVP Selling” approach (which is a wrap-around for whatever sales methodology you use) – his excellent writing provides a fun, rewarding read and great way to level-set your organization. Tony clearly has deep, deep experience and a long track record of success in this field. I am grateful he shared his insights in this book, and now I try to get all of my clients to read it.”
Watch for upcoming posts on RSVP Selling and passages from the book. Tony’s thoughts and approach are worth sharing.
Being a marketer through and through, I’m always interested in market feedback and input. So I’m going to start publishing pieces of my book on the blog for your comments and input. Below are a draft synopsis and table of contents. The bullseye audience for the book is executives responsible for the profitable growth of certain types of companies – those that are prone to commoditization, because customers can’t easily see, touch or experience the offering’s points of differentiation prior to the sale. These include B2B professional or technology services, technology-based products, innovative offerings, or intangible offerings rooted in expertise (e.g., professional services, educational services). Technology entrepreneurs will find it very useful. There are lots of other audience categories the book applies to – if you aren’t the prime target but are trying to stand out in a crowded field and avoid competing on price, read on in case you can relate and benefit from the insights.
Draft Synopsis
Why are seemingly excellent products or services forced to compete on price as me-too commodities, while other offerings have strong brand equity, command premium prices, and stand out as the Go-To in their markets – the first name that comes to mind for customers as the superior option? They leverage the four pillars of differentiation to uniquely brand themselves and delivery superior value. Through extensive research and 25 years of personal experience working with both Go-Tos and Me-Toos as a practitioner and consultant, the author has noticed a pattern of what the Go-Tos do differently, particularly when a company’s offerings are rooted in technology, innovation, or intellectual expertise. She lays out these four pillars as a step-by-step strategic marketing framework called the Apollo Method for Market Dominance™, named for the Apollo Space Program, the ultimate against-all-odds success story under circumstances paralleling those of competitive markets. Sharing numerous examples and practical how-to tips, the author says that nearly every company can use the four pillars of differentiation to call its own “moon shot” and dominate its chosen markets for huge profits and sustainable growth.
Did it grab you at all? Did it make you want to read more? Why? Why not? What would make it better?
Part I: Why You Have a Problem
Introduction: How In the World is that Person Making $30,000 a Day?
Chapter 1: Commoditization is Enemy #1
Part II: What to Do About It
Chapter 2: Be the Go-To for the Solution to a Business Problem
Part III: How to Do It: The Apollo Method for Market Dominance
Chapter 3: Overview
Chapter 4: Launch Phase
Chapter 5: Ignite Phase
Chapter 6: Navigate Phase
Chapter 7: Accelerate Phase
Part IV: Getting Started
Chapter 8: Your One-Page Plan
I realize it’s hard to comment without seeing more, but at a glance, does the table of contents look enticing and logical? (Note: Yes, Ignite comes after Launch. You’ll see why when we get to that.)
Thanks in advance for your suggestions!
I’m about to recommend an article. Marketers and designers: Print it and bring it to your meetings with each other.
The other day I was interviewing a creative director and, once again, felt like I was part of an Abbott and Costello “Who’s on First” comedy routine.
It seems that whenever marketers, designers and even operations executives and VCs start throwing buzzwords around, like “branding” and “identity,” we get each other completely twisted up. Our lexicons contain the same words, but we use them to mean very different things. One of my biggest peeves is the way “brand” as a term gets abused and confused. We think we’re in sync when we aren’t. And we think we aren’t in sync when we are. That’s why I was excited to run across this fabulous article on the Creative Market blog, “Designing a Brand Identity.” It offers a very simple, clear explanation of the distinctions between “brand” and “identity,” for example. From now on, I’m going to distribute this before meetings to make sure we’re all on the same page and speaking the same language. Check it out. You may find it useful.
Be the Go-To 