Archive for July, 2008

No Such Thing as a Functional Vertical

July 29, 2008

Generally it is not considered polite to correct someone’s grammar in public. So forgive me for this post.

I’m starting to hear even seasoned marketers use the term ‘functional vertical’. That’s a contradiction. There many types of market segmentation, but three big ones come to mind:

  • Vertical Segmentation – segmenting by industry. Why is this called vertical? For the same reason that vertical integration is called vertical integration – it refers to acquiring companies or competencies in the value chain for a given industry
  • Functional Segmentation – segmenting by role or function within a company
  • Geographic Segmentation -segmenting a market by region

Why say ‘functional vertical’ when ‘functional segment’ is easier? And you have the added benefit of not contradicting yourself.

The Fantasy of Executive Fiat

July 24, 2008

Citizens of corporate America often speculate on how quickly an issue could be resolved if the top exec in the organization were involved. She’d tell them to get that system fixed NOW, no excuses! Get that product out NOW or heads are gonna roll! This ain’t no democracy. Our feudal roots are exposed. It’s clear who’s in charge and who the peons (and peed-ons) are. Want action? Use executive fiat*. Executive mandate.

That’s a nice fantasy. It’s an empowerment fantasy, like Dirty Harry. “Man, if the cops would just pull out a .357 and deal out some justice, I wouldn’t be afraid on my way to the bus stop.” Sorry, Dirty Harry’s not real. Neither is Superman. Batman’s not real either, but the new movie is more realistic in that the machinations of power are dirty, complicated and full of gray areas. The gangbangers will still be hanging around the bus stop on your way to work tomorrow. When you get there, the system won’t work and the project will be delayed.

Can an executive mandate something and get it done? Sure. Happens all the time. I’ve seen product launches accelerated by executive fiat in several companies and industries. They got action. They hit their timelines, too, and were bonused accordingly.

A funny thing happened down the road, though. The laptop launch that was mandated led to an absurdly high number of returns with cracked screens. The seven-day fix on the internal system missed a key pain point (that the boss didn’t really understand, not being a user of the system), so a whole new set of workarounds was developed. The software…well, who expected the Russian hackers to pwn it so quickly?

I don’t intend to mock hubris here (it’s tempting, but The Onion is better at it). Nor am I saying that it’s OK for projects to languish in the pipeline or to have scope and timelines decided by consensus. Death by consensus is worse than executive fiat, as I’ve made clear before.

All I’m trying to point out is that executives are not nearly as powerful as we think they are. They can drive action anytime they want, but results don’t happen without collaboration. The smart ones know this. They’re the ones who don’t just mandate things, they ask penetrating questions first. Why? Their skill is to first understand the problem and then abstract it up to the appropriate level to solve it without getting mired in the executional weeds. They’re decisive but only after enough facts are in to be reasonably sure of making a sustainable decision. That won’t happen with fiats or consensus. It only happens with true collaborative leadership.

*Okay, nobody uses the word ‘fiat’ anymore outside of political wonks. It means ‘mandate’. But it sounds more hierarchical and feudal and less beaureaucratic. And it goes nicely with ‘fantasy’ in the title. And it’s my blog and I’ll use the words I want to.

Photo by ┬«oberto’s

Do I Look Fat In This Blog?

July 16, 2008

Unlike many, I’m in favor of targeted advertising. I’m happy with the idea of seeing only ads that are relevant to my interests and needs.

But come on, don’t insult your target audience. The ad above showed up on my Facebook homepage yesterday. It says “47 Yr Male Overweight?”

Age and gender from my Facebook profile, I get it. But did you look at my picture and say “what a wide load?” Or are you just taking a shot in the dark on the ‘Overweight’ part? And this on the day I’m getting back to the gym! Forget it, I’m heading for the donut shop instead.

Today’s ad in the same position is worse. It offers to remove unwanted body hair.

Laugh all you want. At least I’m not in Zack’s Jimmy Choos. Facebook served him an ad headlined ‘Panty Time!’ He claims to not know why, but there’s gotta be something juicy in a profile on him somewhere.

If It’s Such a Great Pitch, Why Don’t They Buy?

July 14, 2008

You’re asked to prove the ROI on your product for your customers. You come up with a model that demonstrates how much time is saved by your solution and then quantify that in dollars. Instant ROI! Provable, not just marketing mumbo-jumbo! You love it. The executive team loves it. Sales wants an Excel sheet so they can ‘prove the value’ to their prospects. Great work!

Except for one thing. The customers don’t care. Yes, they ask for proof of ROI. Yes, they listen politely when walked through the third-grade math. But they don’t care. And this time-saving pitch doesn’t make them buy. If you gain their trust, they’ll tell you so. Why?

When the vacuum cleaner was introduced it was supposed to save time – a clean floor in minutes instead of hours of sweeping and scrubbing. How much time was saved? According to Digital History, none. As cleaning got more efficient, standards were raised. Houses became much cleaner. And the average full-time homemaker continued to work 50-60 hours per week, the same as before the invention of the vacuum cleaner and the washing machine.

This isn’t just about vacuum cleaners. Think about email. Fast, frictionless communication. It should save the average office worker many hours of phone calls, opening mail, licking stamps, etc. Unfortunately, we spend that saved time weeding through hundreds of emails. Another example: is it easier to connect with people now that you have a cell phone? Sure. Does that give you time back? No, because you have exponentially more telephone calls than you did before.

If you’re asked to prove ROI and want something senior management will love, do the time-saving pitch. You’ll get a gold star.

To produce a pitch your customers will love, start by asking them what ROI is. It’s selling more, it’s making more money, it’s almost always about the revenue line. Time-saving is about the expense line…nice, but not as compelling. And the time-saving pitch sounds fishy to anyone who has a vacuum cleaner or email.

As long as your customers aren’t familiar with those technologies, you’re good to go. If you’re unlucky enough to sell into a market where vacuum cleaners and email are commonplace, consider another approach to proving ROI. Like maybe getting your best customers to talk about what ROI is to them and how your product provides it in credible, well sourced testimonials.

Nifty Daylight Savings Time watch photo (notice the two hour hands?) by Petoo