Morettini on Management

General Management and Marketing Advice for Software and Tech Companies

Year: 2005

High Tech Product Promotion

I’ve discussed many topics related to software and hardware companies over the last several years. One fundamental subject I haven’t explored in detail is the promotion of technology products.

This is a favorite topic of mine, since I tend to become heavily involved with promotional activities with clients as part of my consulting practice. Many of my clients are at a stage where gaining (or regaining) market traction is crucial to moving the company forward. So finding successful, profitable promotional programs is quite often one of the key activities that we’re concentrating on early in a consulting engagement.

Same old, same old doesn’t work

So what’s the best way to promote software and other technology products? If you’re asking that question thinking there’s an actual answer, you are likely on a path to failure. One-size-fits-all promotional programs rarely work, and if they do, it’s probably just lucky. The most important thing to remember about promotion (and marketing in general) is that each company and product line is a unique situation. Even with the exact same company and product line, a promotional program that worked 12 months ago has a high chance of failure today. Markets are not static, particularly fast moving, high growth technology markets. And there is a wide range of market types within the high technology business sector. The proper promotional approach for a $100,000 software package with 1000 potential customers is far different from the best approach for a $49 software package with 5 million potential targets. If you find yourself falling back on some tried and true formula, you’re thinking “behind” the market, not “ahead” of it. I always chuckle a bit when I see ads for a new VP Marketing that is seeking candidates only from 10 specific software companies that have had recent success in a particular market. It’s very likely that one of those candidates will bring along the “formula” that made “Giant Software Company C” a huge success. Unfortunately, the strategy may be terribly inappropriate for their new company, particularly at a new time/market stage. This is an example of “shooting behind the market”—and with promotional programs, thinking ahead of the market is required.

The reason is what usually works best in promotions are novel new approaches (or new spins on old approaches, or approaches from other markets). Once something works, others in the market take notice, and the copy-cat campaigns flood the communication channels, and greatly reduce a successful program’s effectiveness. Nothing works forever, so you need to constantly being trying to find the next new promotional program—again, out ahead of the market. It’s similar to when the coach of a sports team installs a new system for his team—it throws the competition off balance for a time, but they eventually adjust and match or counteract what is providing the advantage.

First Art

So how do you approach finding a successful promotional program for your company—do you just guess? Well, not quite. I always say that promotion is a combination of “Art” and “Science”—with unfortunately, the Art coming first. The thing is, you will NEVER know with any level of certainty whether a promotional approach will be successful, until you do it. So there is a bit of Art in formulating the initial “test programs”. But of course you don’t guess. The initial program is put together utilizing the experience of the marketer, their past experience with programs in similar market conditions, a snapshot reading of the market conditions and product position currently, the amount of budget available, and of course the goals of the company. So up front, the key is to make small, intelligent bets.

Then Science

The key word in the above paragraph is “test”. This may be the most important concept in the whole topic of promotion—and unfortunately, one that is dramatically underutilized.

Marketing promotional programs are all too often put together haphazardly, without much analysis of the specific situation. Often they are designed in a certain way because the VP Marketing or CEO has always done it that way, or are comfortable with it. Executives without much marketing experience like to see print ads, because in their minds, that’s marketing promotion. If the VP Sales is involved, trade shows and conferences might be what he’s used to. Or seminar promotions might be preferred, if the executive comes from a market with high price points. While all of these methods may be very applicable to an individual situation, they are, on average, some of the higher cost, lower return activities in the promotion bag of tricks. I see thousands (and sometimes millions) of dollars wasted on programs that have been given very little thought prior to large execution expenditures. Worse yet, these programs are often approved and implemented with no ability to judge whether or not the chosen programs end up being a good investment for the company. This brings me to the measurement part of promotional marketing.

I’ve never been a big fan of marketing programs which aren’t measurable. When measurement doesn’t occur, it’s often because program implementation just isn’t thought through well enough and accurate measurements could have been put in place—but aren’t. Some programs however, such as “Image or Brand Advertising”, just don’t lend itself to correlating the program results to the corporation’s performance. While there is a place for such programs, I recommend that they be left to those monster corporations who can afford ambiguous results within some segment of a very large budget. For the preponderance of companies out there for which every nickel counts, I highly recommend that you stubbornly stick to programs with results you can measure.

Formulate, Test & Measure

So the formula uses some judgment to place your initial bets. Always make sure that you objectively test different key elements(such as price) of your offer with several controlled options, and measure the results. Good marketing programs are always testing and measuring new versions of each key element, which allows you to continuously improve and refresh a campaign. Also remember, measure-ability doesn’t just happen—it needs to be “designed in” upfront. If you don’t think about measure-ability for a specific program until after the fact, you’ll likely have lost the opportunity to measure it at all—or at least as well as you could have, with some simple planning prior to program execution.

Top 6 Bets

As I stated above, every promotional marketing program needs to be individualized for the current time, market, product line and budget. You’ve got to start placing your bets somewhere (the “art” segment of finding great promo programs, as discussed above). For someone out there just getting started, or trying to evaluate where to go next, here are some great programs to consider first:

Press Relations (PR)—generally my favorite marketing program for most high tech companies. This activity is intended to provide your products and company with reviews and publicity in high tech trade journals, and depending upon the product, possibly general circulation newspapers and magazines, as well. If you have a good product that fills a need, getting positive reviews will provide your company with tremendous leverage and credibility, filling the prospect pipeline with eager potential customers. Depending upon your particular market, hiring a PR firm or a “do it yourself” approach might be most appropriate. But nearly every company with a real solution for a particular market needs to have an active PR program of some sort. The key here is that you need real “news” the press will be interested in–or your campaign will fail.

Search Engine Optimization (SEO)—unless you’re selling a $1,000,000 product with a potential customer universe numbering less than 100, this is something almost every company should be doing. SEO is the activity which helps your website be found “higher up” in the results of a search conducted by someone using a search engine such as Google, Yahoo or MSN. No time to go into the details here, but it is a high return activity. A little investment of time or money upfront can yield a strong return in revenue and profit gains. Much like PR above, even with no budget to outsource this to an expert, you can conduct an SEO review and make improvements to your website on your own.

Social Media Marketing – This is the lastest new marketing craze that has gone mainstream. There are many social networks out there, the most well known are Twitter, Facebook and Linkedin. There are also many good vertically-oriented social media sites. Depending upon your business, some or all may be applicable. It’s important to know what you’re doing before charging headlong here–the important thing is not in-your-face aggressive marketing, but providing useful content, advice and establishing thought leadership. If you haven’t embarked on this successfully yet, it’s best to seek advice when starting.

Direct Email to House Lists—if you’re not doing a good job of capturing contact information on your customers and prospects, shame on you! Lack of doing a good job in this area is one of the more striking deficits that I see in the marketing efforts of high tech companies, particularly the early stage variety. It’s especially critical to capture email addresses, and do it in such a manner that the customer or prospect grants you explicit permission to contact them by email. You’ve spent a lot of money making contact with each of these prospects or customers, and a well-executed direct email campaign to sell them additional products and services can a bring quick boost to your revenue, with nearly zero incremental costs. Every High Tech company should strive to have an active direct email campaign of some sort, to allow your brand to maintain mindshare within your target audience.

Pay-Per-Click Advertising—while this area has gotten quite a bit more competitive over the years or so I still highly recommend it as a preferred marketing program for a great majority of high tech companies. These are the small “text ads” that appear next to organic Search Engine results and are labeled typically as “Sponsored Links”. Pay-Per-Click programs are an internet advertising analogy to prints ads in the printed media world, much like organic search engine results are the online analogy to editorial placements in the print world. The two best known Pay per Click service is Google Adwords. Although profitability has declined with this method–for companies with highly target-able or niche markets, this can be a very cost-effective and rewarding activity.

Direct Email to Rented Opt-in Lists—this is also an activity that has taken a hit in popularity over the last few years, due to the problem of SPAM, and over-saturation of email in general. But if you’ve done a good job in target marketing overall, and you have been successful with emailing to house lists and Pay-Per-Click advertising programs, focused direct email programs to targeted lists may still be quite successful. Shot-gunning almost never works, and can harm your brand if poorly done. B2B is much more viable than B2C email marketing. Just remember, direct marketing in every medium is all about the offer and the list. So if you have a strong offer, and are able to rent a list that fits closely with your target audience, email to outside lists can be a strong contributor within your overall promotional plan.

I hope that this is has been a useful outline of the basics of high tech promotion. As always, I’m very interested in your feedback. Post a comment with your own views.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

2 Comments by admin on December 22, 2005

filed in B2C, Online Marketing, Product Marketing/Management, Promotion, Social media

Email Deliverability

I want to discuss a topic that is important to nearly every company today. If you use the Internet at all for communications, SPAM is a topic that affects you—from one end or the other. As an email recipient, SPAM can greatly reduce your productivity, if you don’t have an effective SPAM filter or service. If your SPAM filtering is too effective, however, it can cause a critical document to be delayed reaching you—or even lost in the most extreme case. So even as a recipient, email deliverability is an important issue to most business people.

On the other side, almost all companies today use email to deliver something to their clients and prospects: receipt of orders, regular newsletters, product update information, special sales offers, company new, responses to customer support inquiries, etc. For those on the sending side of email, deliverability has become a CRITICAL issue in the last few years. If time isn’t spent on optimizing delivery, the usefulness of your email communications will be greatly reduced.

On this note, I wanted to let you know about a couple of great resources on this topic that I have come across. The first item is a free, quick and dirty tool available on the Internet: SPAMCHECK, from a company called SiteSell. This site allows you to either enter your email message into a box on the site, or alternately send a test email to their diagnostic address. You will instantly be returned with a list of attributes of your message that raises the risk of being caught in a SPAM filter, and therefore not delivered as intended to the recipient. It’s very easy to use, for even the most novice of emailers, and returns practical, actionable advice on how to make your email message more deliverable. I highly recommend it, and use it myself. It can be useful as the only deliverability test for low-key email usage, or as a “first-pass” for a more sophisticated, high cost campaign.

The other resource you should be aware of is Return Path, a well known email marketing company. Return Path is particularly well known for their email delivery services. They have a comprehensive set of tools that are widely used by email marketers. The Return Path site contains a large amount of great material for the education of email marketers. I highly recommend that you visit their site and sign up for one of their newsletters, which contain a wealth of information on this dynamic topic.

Just remember, all the time you spent on your value proposition, marketing message and offers are of no use if your email doesn’t reach the target audience! Let me know if these resources are helpful.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

No Comments by admin on December 8, 2005

filed in B2C, Marcom, Online Marketing, Promotion

Favoritism in the High Tech Workplace

I’m going to address a topic that isn’t often discussed formally by top management within a business, certainly not out in the open. It’s a major topic in HR circles, I’m sure. It’s also a major topic in hushed tones around the water cooler and during lunch among friends. But regardless of how little formal attention it gets, this is an important issue that exists in nearly every workplace, large and small. While it’s not something that gets addressed in management meetings or SEC filings, I’d venture to guess that it can have as much effect on a company as most “high profile” management topics.

The Problem

The issue that I’ m referring to is workplace favoritism. If you’ve ever worked in an organization larger than two people, I suspect that you’ve seen it. Favoritism is part of human nature. No two people interact similarly to any other two, so it’s impossible for all workplace relationships to be “equal”. It’s only natural to gravitate to people that you share common interests with and with whom you have an easy rapport. And of course, there’s nothing wrong with any of this, on the surface. The problems surface when one of three distinct things occur:

When a good rapport and shared interests lead to a PERCEPTION that an employee is getting favored treatment from a manager
When a manager ACTUALLY PROVIDES unfair preferential treatment for one employee at the expense of others
Nepotism, the granddaddy of workplace favoritism

So you might be thinking, hey, this is pretty subjective stuff. There are many people in the workplace who are extremely sensitive, and are looking around every corner for perceived slights and injustices. Women can be suspicious that they’re being shut out of participation in the best projects, or advancement, because of the “Old Boys Club”—oftentimes with good reason, unfortunately. There are also many under-performers who look at others relationships, in an attempt to convince themselves that it’s something other than their own shortcomings that is preventing them from getting ahead.

What defines favoritism?

I don’t believe that you can, or should, treat everyone the same. I’m not an advocate of communism. People who perform well should be rewarded. And a single management style doesn’t work equally well with all employees. Some people need more attention to fulfill their potential, while others excel with less attention and more autonomy. And speaking strictly about nepotism, just because an employee is related to someone in a position of power doesn’t ensure they are lazy or incompetent regardless of perception or popular opinion.

So when does smart, individualized management of employees cross the line into unfair favoritism?

It crosses the line when an employee receives extra benefits that are perceived to result from a “special relationship” rather than from excelling in job performance.

The actions in question can be pretty subtle, and the employees who feel slighted might be very good at hiding their true feelings. So it’s also very easy for a manager to think there’s no real problem, and often be totally oblivious to perceptions of favoritism.

But it is extremely important for management to be hyper-sensitive to this issue. While this is a universal business issue, I feel it is particularly important to high technology enterprises. High Tech companies, particularly startups, are built to move very fast. A big aspect of that speed advantage is often the company culture, which tends to be open and collaborative. To ignore this issue in a High Tech business is to invite a loss of productivity, or in extreme circumstances, an actual destruction of the company culture that you’ve worked hard to create. Resentment can build quickly when favoritism is suspected. Resentment quickly becomes bitterness, and bitterness leads to all sorts of behavior which creates problems for companies. Plummeting productivity, divisions between the perceived “haves” and “have-nots”, absenteeism and attrition. All of this has the potential to slow down or even stop a fast-moving, but embryonic, High Tech business very quickly.

Perception, not reality

I want to emphasize that it’s the PERCEPTION of favoritism that does the damage. If there is actual favoritism, you can argue that management is just getting what they deserve. But I’ve seen proud managers who think that since they’re not actually doing anything wrong, that should be enough—people will recognize it and the perception will eventually match reality. They may also feel that they are too busy worrying about “real” business problems that are critical to the business in the near term, to be concerned with such “soft”issues. They’ll let HR worry about such things. Or since they’re not actually guilty, they believe that they just don’t need to defend themselves further. Lastly, they might think that since they’re the “all powerful” boss, they can do what they want, and no one will challenge their decisions.

In nearly all cases, no matter how right or wrong, the companies of managers who ignore perceptions of favoritism will suffer as a result of the oversight.

This is a pretty confusing topic, with a lot of room for mis-perception on both the management and employee sides. But it’s extremely important for management to directly address the issue head-on. So what’s a manager to do to avoid the PERCEPTION of favoritism, which as discussed above, can be just as damaging as actual favoritism?

Common Sense Approach

I propose that it’s not hard to take a common sense approach to favoritism. Here are the rules I suggest management try to live by:

Do everything within your power to ensure that advancement, perks and compensation are based strictly upon objective performance measures
Strive to treat everyone fairly, if not necessarily the same
Put yourself in your employee’s shoes–think back to before you were a manager, and evaluate whether you might feel a particular action feels like favoritism
Create an environment where any employee feels comfortable discussing a perceived injustice with management—this enables managers to nip misconceptions in the bud
Practice an open door policy—this also contributes to a culture of trust, which can sooth ruffled feathers before hurt feelings can fester and turn a situation far more sour
Manage potential perceptions of favoritism proactively—it’s much easier to nip the mis-perception in the bud up front, than it is to “put out the fire” once it’s raging
If at all possible, avoid family relationships within the workplace. If this isn’t possible, apply the highest performance standard possible to the relative in the junior position

Do you have an experience with the perception of favoritism that adds to the discussion? Post a comment so we can all benefit from the lessons learned.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

No Comments by admin on November 30, 2005

filed in Corporate Strategy, General Management, Operations, Startup/Early Stage

tagged CEO, consultant, consulting, employee perception, favoritism, high tech, HR, management, Phil Morettini, PJM Consulting, strategy, tech, technology, workplace

Google PageRank Calculator Tool

Hi everyone,

Here’s another neat little tool on the Web that I’ve been putting to good use. It’s called ThinkBling, and it’s a Google PageRank calculator.

For those of you who are unfamiliar, a webpage’s Google PageRank provides a rough estimate of its “desirability” to the Google Search engine. Basically, the higher the PageRank that a webpage has, the more likely it will be to pop up on a keyword search done by someone using the Google Search Engine. There are a lot of calculator’s out there, but this one I’ve found to be the friendliest to use. You simply enter up to 50 webpage URLs and the ThinkBling PageRank calculator quickly determines the PageRank of each webpage, and returns those value to you. It couldn’t be simpler, and provides you with a great starting point on how your website is doing in the Search Engine wars.

Your Google PageRank is a great indicator of how easily people will be able to find your site. You may have built a great looking site with excellent content, but if no one can find it, it won’t do your business nearly as much good as it could. I liken it to building a grand casino or retail superstore in the middle of a cornfield, 100 miles from the nearest town and with no roads leading to it. That’s the real world analogy to an attractive website with a low PageRank.

You can use the PageRank calculator to determine what pages on your site need work, to appear higher in the search rankings. There are many things that go into getting your pages to have a high listing during a keyword search—applicable content is obviously important, as well as keyword density. But relevant links into a page is critical for a high PageRank, and something everyone should be working on, if they’re not already. The discussion on improving your site’s SEO is a long and somewhat complex discussion (way too complex and detailed for this article). However, everyone should become aware of its importance to their company’s business, and find out where they stand. Only by knowing where you stand can you then learn what changes can improve your rankings. The stakes of doing a good job on SEO are huge—and ThinkBling’s Advanced Google PageRank Checker is a great place to start. I recommend you give it a test spin!

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

No Comments by admin on November 22, 2005

filed in Marcom, Online Marketing, Promotion, Social media

Publicize your News for Free

I wanted to let you know about another great online resource I’ve been using for a few years. It’s call PRWEB, www.prweb.com

PRWEB is a “free” Internet-based, press release Newswire. I have found it to be a great service. Previously I used PR Newswire and BusinessWire. They are excellent services, and not tremendously expensive. But I’ve found PRWEB to be just as good, if not better, in many circumstances.

Sending out a basic press release is free, although PRWEB does request “donation” support. Even a small donation gives you access to value-added services, to further distribute or track the results of your press release campaign. A number of them are well worth it.

There is no excuse not to write press releases with such a great, inexpensive service available. It’s one of the highest return activities a high tech company can do, as I’ve stated before. And the cash outlay is practically nil, so even the thinnest market budget can issue a press release in a very professional manner.

There are several other similar services available. PRLeap (www.prleap.com) is another I’ve heard is good, although I haven’t used it personally.

So make sure you don’t ever use cost as an excuse again to prevent you from writing and publicizing your new product news.

No Comments by admin on November 9, 2005

filed in B2C, Marcom, Online Marketing, Promotion, Startup/Early Stage

Should You License Your Technology?

So when should you license your technology to other companies? This can be a complicated question, since I always say “no one sells your product like you do.”

Depending upon your tendencies, there is a bias toward holding everything you develop close to the vest, unwilling to give that hard-earned technical advantage to another company. Or you may be on the other side of the fence, and want to very quickly “cash in” on a technological development—thinking that there are very large companies out there that can do a much better job selling the product than you can.

So really, what’s the right approach? Just like most other decisions facing managers of technology companies, there is no one simple answer. It really does depend on your situation.

Have a Process

The best way to approach a decision of this nature is through a methodical, logical process. It shouldn’t be done emotionally, or without proper data. To come to the optimal answer, you need to be very honest about the position of your own company in the market, your priorities, company strengths and weaknesses, and the level of resources available to you. In addition, you need to have a solid understanding of the potential of the technology in the market, whom might be an attractive licensee, how interested they may be, and “can you license to someone else and still sell your own version”?

These, and many other questions, should be answered before you reach a conclusion. All too often, however, I see companies make a snap decision on whether to pursue a licensing strategy or not. This is very strategic question for a company, yet I have seen the decision made on a whim—with less thought than “where should we have lunch today?”

What have you got?

So let’s walk through an example process. First of all, what have you got–really? Is this IP something that is a fundamental step forward, or a “nice to have?” Things that are fundamentally unique, you will want to think very carefully about before sharing with others. It may be the best thing to do, but I would recommend thinking it through most carefully, if you have something truly unique and desirable. Lesser inventions carry lesser risks of lost opportunity costs, if they are licensed out.

Does it fit the Core Business?

Second, how does it fit with your current business? If it doesn’t fit with your core business, and you have no reason to “run away” from your core business, the decision becomes a lot easier. If your current business is thriving and you have quite of bit of runway left to pursue in that market, opening up a second business has a high likelihood of becoming a distraction—potentially harming the core business. Plus, it is very likely in this instance, that you will not be able to do the new opportunity justice, anyway. So to avoid sub-optimal outcomes in both business areas, it almost always makes more sense to license the technology to another player, whose business is a better fit—and one who will dedicate the resources required to gain success.

Can you “have your cake and eat it too”?

Third, if it does fit the core business, can you license it to other segments on a non-exclusive basis? This is an important question to consider. If the answer is yes, I call this “having you cake and eating it too.” The answer to this question is dependent upon a couple of things. Are there “fences” that can be set up between your market segment, and that of the potential licensee?

As an example, let’ say you have a new enterprise application that is different, but complementary, to your existing core product. This new product can be sold to the same type of large corporate customer that your existing product is sold to. But this new application also has strong potential in government markets, where you have no current presence. The government market is very different, and contacts are crucial to success. Instead of trying to build distribution into this new government market from scratch (which can be time-consuming), it is potentially a very wise move to license the new product to a company with existing, strong government business. They can sell it under their own label, put marketing money behind it, provide support, etc. In this way you have accessed that market, without entering into an area outside of your core competency, and without spreading around your scarce resources.

Non-exclusive licensing can be a great compromise

This is the type of “complementary” licensing deal that can be very effective in optimizing your total return on a technology. The key to this strategy is for there to be a good “fence”, so that you don’t create channel conflict between you and your licensee. In this example, you’re in the corporate market, and the licensee is in the government market. So it’s very clean and complementary, basically incremental revenue with little costs.

There are other examples of non-exclusive licensing where you end up competing with your own product under a licensee’s label. This can work as well, but it’s a lot trickier to manage. You will run into channel conflict issues, much like selling your own labeled product through reseller channels, with the added twist of another brand involved in the competition.

The final thing to consider is timing. How well protected is the technology, and how fast is the technological curve moving in this market space? If the market isn’t moving fast technologically, there may be no one overtaking you quickly. A sleepy, slow moving market tips the scales toward keeping the technology and developing the market for it in-house, rather than aggressively licensing it to others. Regardless of your resources, it becomes more likely that you will have time to exploit the IP, when there is little fear of someone leapfrogging your technology. If on the other hand, you’re positioned in a brutally competitive market with rapidly evolving technology, the arrow moves the other direction. In this case, IP is a fleeting advantage, and one that better be used ASAP, before it becomes obsolete. This scenario begs for a strategy of aggressively licensing the technology, to obtain the best return possible, in the short period of time that the IP will be relevant.

There is, of course, much more to consider when undertaking a decision to license/not license out your technology. This discussion provides an introduction to some of the major points that should absolutely be reviewed in any licensing discussion.

I’d love to hear some stories about your own licensing efforts, and hear points of view from a different angle. Post a comment or email me your thoughts.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

No Comments by admin on October 21, 2005

filed in B2C, Business Development, Business Models, Corporate Strategy, Distribution Channels, Mergers & Acquisitions, Pricing, Startup/Early Stage

tagged B2B, business model, consultant, consulting, consumer software, fences, hardware, high tech, IP, management, marketing, Phil Morettini, PJM Consulting, software, software licensing, strategy, technology, technology licensing

Morettini on Management

General Management and Marketing Advice for Software and Tech Companies

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Favoritism in the High Tech Workplace

Publicize your News for Free

Should You License Your Technology?

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