Marketing Leader Interview with Crimson Marketing’s Glenn Gow

Glenn Gow founded Crimson Marketing, a technology marketing firm, in 1991 which became one of Inc 500 fastest growing companies. You can get his book Revenue and the CMO via Kindle. I particularly enjoy his posts on #BadMarketing which play fun at common mistakes we marketers often make, which mirrors some of my own posts on this blog.

What company is an example of good marketing today? Who do you admire?

Cisco. They are extremely focused on understanding their buyers and making it easy for them to buy from Cisco. They are constantly studying their buyers and what is important to them. In addition, they track the buyers’ journey to an exceptional degree. Impressive.

Glenn Gow founded Crimson Marketing, a technology marketing firm, in 1991 which became one of Inc 500 fastest growing co...

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12 Key Business Lessons from Steve Jobs

12 Business Lessons from Steve Jobs

How much can we learn from Steve on Innovation, Marketing and Business Strategy?

A few days ago I stumbled on this video where Guy Kawasaki shared 12 lessons he learned from Steve Jobs. Guy worked with Steve in the early days of the Mac. This presentation was delivered a few hours after Steve passed away. It is been viewed almost a half a million times, but it is 47 minutes long. I thought I should share a summary from my notes:

  1. Experts” are clueless – There are many people who will claim to be gurus and experts. Don’t trust them. They are more often mistaken.
  2. Customers cannot tell you want they need –” Back in 1984 they would have asked for a faster, cheaper Apple II (not a Mac). The day you hear Apple is using focus groups to create future products, that’s the day to short the Apple stock”. For more, here is a post on Steve Job’s Genius Ability to Innovate.
  3. The biggest challenges beget the best work – If you are going to change the world, you need to work on challenges no one else has solved before.
  4. Design matters. “Design is the product.” Especially for Apple, but true for more and more industries today. Another post on the importance of design.
  5. Use big graphics and big font in your presentations. Jobs was a master presenter. His slides make bold statements and don’t compete for attention with what he is saying.
  6. Jump curves, not better sameness – What Guy means is that Steve was not interested in incremental improvements, but on disruptions that completely change the game, Guy uses the example of the change from ice factories to having ice available in your refrigerator.
  7. It either works or does not work – “Don’t worship religions and fads. We did not care if it was ‘open’ or ‘closed’ only that it worked.”
  8. Value is different than Price. I could not agree more. Here are a few posts on the topic.
  9. Hire A players exclusively . A players hire A players. B players hire C players. As Jim Collins wrote: the most important thing is people – ‘who is on the bus’.
  10. Real CEOs can demo. Meaning executives need to be users of the products they sell, they need to be competent and demonstrate their passion.
  11. Entrepreneurs ship, not slip. Steve pushed his team to deliver on time. He did not wait for a perfect product (the first iPhone had many limitations) but it was developed in record time. Then there is time for continuous improvement.
  12. Somethings need to be believed to be seen. “If you wait for proof it will never happen.” This is so true

If you want to watch the entire video, you will find it here.

Guy Kawasaki Lessons from Steve Jobs

How much can we learn from Steve on Innovation, Marketing and Business Strategy? A few days ago I stumbled on this video...

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Are Super Bowl Ads a Good Investment or a Giant Waste of Money?

SuperBowl Ad ROI

Measuring the effect of advertising has always been a significant challenge for marketers. The Super Bowl presents a particularly interesting opportunity to study individual ads that reach millions of consumers and represent a major investment for brands at $4 million plus production costs.

I will use two sources of data to look at this problem: Un-aided recall by a random sample of consumers and sales results achieved by Go Daddy after their investment in Super Bowl ads.

Measuring the effect of advertising has always been a significant challenge for marketers. The Super Bowl presents a par...

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10 Marketing Observations from the 2014 Super Bowl Ads

Surprisingly, the Super Bowl is not the most-viewed sports event in the world. At some 150 million viewers, it represents a fraction of the estimated 720 million viewers for the FIFA World Cup final.  Despite this fact, it remains the largest advertising event in the world.

According to an informal survey we ran last week, over 60% of Super Bowl viewers claimed to watch the game just as much, or more for the ads.  Welcome to the Ad Bowl.

Why do people watch the SuperBowl

By now there are probably a couple dozen lists of top Super Bowl ads, and everyone has begun expressing their own opinions. In this post, I will share my observations on the marketing strategies of the brands and the effectiveness of their ads, as well as general advertising trends. Please add your observations in the comments section.

Surprisingly, the Super Bowl is not the most-viewed sports event in the world. At some 150 million viewers, it represent...

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Innovation – How Silvercar is Disrupting the Car Rental Business

Disruptive Innovation Example

It is a cycle we see too often: companies grow successful; an industry matures adopting many common practices, some good and some bad. Then these companies get complacent and fall asleep at the wheel. They stop innovating and often try to take advantage of consumers because of their position. And by doing so, they and create an opportunity for new entrants to disrupt the market.

It is easy to point at history and study how companies that were market leaders fell in this trap: Blockbuster, Motorola, Circuit City and Radio Shack are good examples. It is a lot harder to predict which markets or companies will be disrupted. But it is much more interesting to observe when it is actually happening in front of us.

This week I witnessed disruption in the rental car industry. I traveled to Dallas for a day and decided to give Silvercar a try. I am glad I did. How is the Silvercar experience better than the established companies who are asleep at the wheel? Let me recap my experience:

It is a cycle we see too often: companies grow successful; an industry matures adopting many common practices, some good...

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True Leadership is Invisible

Leadership is Invisible

Maybe you have had an opportunity to observe  leaders who are quick to accept credit and seem more interested in receiving attention and merit. Another style of leadership is one for whom the top interest is in creating a better future, offering new ideas and building the capabilities of the team, resulting in an organization that continues to thrive even when the leader is not present anymore. These are two styles of leadership, except only one of them is truly a leader.

Maybe you have had an opportunity to observe  leaders who are quick to accept credit and seem more interested in receivi...

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Marketing Should be the Value Engine of your Company

Marketing the Value Engine of Your Company

This post originally appeared as a guest contribution in the Blog for the Austin chapter fo the American Marketing Organization

Peter Drucker, the father of modern business thinking, said that only marketing an innovation create value – everything else is basically overhead. He also said that marketing is the distinguishing function of an organization. Quite an endorsement about the Marketing function – but also a great responsibility.

In contrast, many people consider marketing to be deceptive, superfluous and buzz-wordy. Unfortunately, some marketing is one or all three of these. Unfortunately, marketers rank right next to used car salesmen in terms of reputation and trust. Interesting dichotomy.

What other teams in your company think about the marketing department: is it creating value for the company or spending money on funny ads? Maybe more importantly, we should ask ourselves, was Drucker wrong?

This post originally appeared as a guest contribution in the Blog for the Austin chapter fo the American Marketing Organ...

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Marketing, Pricing and Value: what I learned during Black Friday

This post originally appeared as a guest contribution on Rags Srinivasan’s Iterative Path blog.

Like most people in the US, during Black Friday week my inbox received an onslaught of promotional emails from every company I have done business with. All of them, without exception were promoting sales and discounts.

In a previous post on this topic we established “When a marketer’s creativity runs out he defaults back to price discounts. “ Creating a promotion or a sale is the default way to generate sales in the short term. Even though we know, deep down, that short term discounts erode value and train customers to expect discounts as JC Penney learned the hard way.

It was Black Friday and we decided to stop by the Factory Outlet in San Marcos – my daughter had an eye on a pair of UGG Boots that I was hoping to get at a good price. This is what I found: It was not that surprising to find a line outside a popular store, especially on Black Friday, but there were a couple facts that made this experience interesting for me as a student of marketing and consumer behavior:

This post originally appeared as a guest contribution on Rags Srinivasan's Iterative Path blog. Like most people in the...

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No Excuses. The Ball is in Your Court.

During a leadership meeting at Rackspace this week, Jo Dockery, one of the smartest Rackers, was presenting. She had a slide with a great quote:

Never Gets Easier You Get Better

I loved the quote. What made it special is that it puts the ball on your court. Stop complaining about external circumstances. It encourages you to stop blaming external factors. They are just excuses. Life is hard, deal with it.  

You might have heard Have you hear a story about the guy who gets shot. As he is lying in the ambulance, he is smiling. The paramedics are puzzled as to why someone who has been shot might appear happy and ask him about it. He said “I have been shot, there is nothing I can do about it. I can choose to be happy or sad. I choose happy.  ” You don’t control the circumstances but you control how you will deal with them. 

The grass always seems greener o the other side.  If feels like other people had it easy: They are lucky,  they inherited money, are liked by the CEO, were at the right place at the right time, etc. – and you didn’t.  Maybe that’s why you are not successful. I have thought about this myself, maybe even more than once. Let’s call bull. Life is hard, maybe even unfair. Work is hard. Everyone has problems.

Stop blaming the environment. Stop blaming others. Stop blaming your situation.  You won’t change the world around you, You won’t change your boss. But you can change you.  The ball is on your court. You can do something about you. You can change your attitude, your behavior and your skills.

The alternative is to sit tight, delay success, and wait, hoping things will improve and everything will be easier. It never happens. Life is now.  

You just get better. 

You become clearer on your goals. You figure out how to win. You acknowledge your limitations. You ask for help. You learn. You plan. You study.  You spend time and effort to improve.  You get more resilient. You work harder. You get smarter. You practice.  You ask for help (yes, again). You keep trying. You keep getting better, and better, and better.

How are you getting better today? 

People say I am lucky. But a funny thing happens: the harder I work, the luckier I get” – unknown

Picture courtesy Brian Hindle via Flickr under Creative Commons – http://www.flickr.com/people/dryrot/

During a leadership meeting at Rackspace this week, Jo Dockery, one of the smartest Rackers, was presenting. She had a s...

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How can a higher price result in more sales?

Value and Price

The concept of sales going up with a higher price is counter intuitive. It goes against the basic concept of price and demand taught in school. It defies the ‘law’ of demand. But it is real. Here are a few examples:

  • I wrote about a post about doubling price with no decrease in sales and a dramatic increase in profits in A Pricing Lesson from the Concorde it’s one of my most popular posts.
  • Here is a story of doubling the price of software and selling ten times as many copies.
  • Another software product originally selling at $3K was doubled in price with no impact to sales volume.
  • An entrepreneur quadrupled subscription prices with no impact on unit sales, effectively finding a 4x sales increase with the same demand..

But the question we need to ask us is Why? Increasing price is fantastic for any business because the additional revenue goes straight to the bottom line. If you have been reading this blog, you know I am a fan of leading with value rather than discounts. Not that I every advocate abusive pricing, which is simply a form of bad profits.

Back to the question – Why is it that customers are willing to buy more products at a higher price? The answer is straightforward: price communicates value. Maybe we can be bolder: price establishes value in the mind of customers.

Imagine I told you I just found a wonderful whiskey that sells for $5 a bottle. It is not credible. Your first thought may be that I don’t even know what is good whiskey (and you’d be right, but that’s another story). Conversely, when you are at a restaurant and you see a bottle of wine priced at $150. you immediately assume it is of very high quality.

You can charge more money for a product and see higher sales when your price and the value you deliver to customers is not aligned. In other words, when you are leaving money on the table.

How do you know if you are in this situation? The first and most common clue is when the price for your products or services is determined using a cost plus model. You have a target profit margin that gets added to your total costs and that becomes the price. This happens often when finance is in charge of pricing. The alternative is value-based pricing.

Building a value-based pricing model requires understanding your customers, what aspects of your product or service they value, and how they quantify that value. Often times, the value customers put in a product or service is determined by pricing anchors. Pricing anchors are prices in the mind of the customer that provide a range of costs for a product, a service or to solve a problem.

Pricing anchors are the reference points customers use to judge the relative price of your products. In a future post, I will explore how you can set these anchors using techniques such as Goldilocks Pricing.

For now,  imagine you need to replace the furnace in your home. You may think a furnace is going to cost you somewhere between $700. and $1200. (these are the numbers that came to my mind)  Whether those figures reflect the range of prices in the market is irrelevant. When you call the repairmen you will judge the price based on the range established by these anchors.

As in the post about the pricing lesson of the Concorde, when your price and the expected price are misaligned, you can make a correction without an impact to demand. You can also do this with products that don’t have a strong price elasticity.

Understanding your customer segments, their anchors, their values and their price expectations is fundamental for value-based pricing.

Let’s look at another example: As told in the book Playing to Win , when P&G was re-launching the Olay brand they did test on three prices:

  • At $12.99 the sales were good. It was affordable to the mass market.
  • At $15.99 sales tanked. Not expensive enough to be considered a premium cosmetic for the mass market, and to cheap to be a credible quality product for the prestige shopper
  • At $18.99 sales were great. A good value but not too cheap for premium shoppers, yet credible as premium and still affordable for Mass market

Launching at $18.99, Olay became a $2.4 billion dollar business for P&G with double digit growth and fantastic margins.

Pricing can make or break a business. I want to suggest another resolution for the new year (the first one is at the end of this post): understand the value model for your products and services, and use it to review your pricing strategy.

The concept of sales going up with a higher price is counter intuitive. It goes against the basic concept of price and d...

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