Category Archives: Running a Business

01.10.17
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Marketing Doesn’t Work. Or so I’ve Been Told…

In my consulting practice, I focus on helping B2B companies begin or renew their revenue growth through marketing.  I find many small companies that have never marketed, some who have done it poorly and others that just aren’t happy with their results.  I also find the occasional CEO who tells me, point blank: “Marketing doesn’t work.”

Not that these small-company CEOs have ever actually tried marketing, often they have not.  But that doesn’t stop them from holding the belief that it doesn’t work. Entrepreneurial CEOs are seldom at a loss for confidence and I often chuckle at the confidence they display when they explain, sometimes at length, why marketing won’t work in their business.

marketing man

Sometimes I wonder why then would the CEO even meet with a marketing guy if they don’t believe the solution works.  I think they do it sometimes to appease others on the staff.  Perhaps, they do it to satisfy their own curiosity. Or maybe they enjoy telling me marketing doesn’t work.

In trying to understand and manage this,  I came up with four potential reasons for this somewhat widely held belief.

  • They have never actually seen marketing work.  The CEO has never seen it work, ergo, it doesn’t work.  Often a minor side point is that it’s never been tried, so it has never worked.
  • They base all of their observations on “sales”  CEO says “ I talk to customers all the time. They don’t want marketing.”  What happens in the last mile of a long sales cycle is not marketing, it is closing the sale.
  • They can’t bear to spend the money.  With no confidence that any marketing spend will provide value, they spend nothing.  Some CEOs spend almost nothing on anything, and marketing is way down the priority anyway.
  • Somehow, they don’t notice their competitor’s marketing.  A failure to look at your own web presence (or to have issues pointed out and not care) and compare it to a couple close competitors is an easy and often valid way to view things from a customer perspective.  Why then do so few companies do it?

I’ve recently had the chance to check in with some companies I spoke to last summer. Each of the CEOs told me they didn’t think marketing would work in their business.  When I asked around to see how they did now 5-6 months later, I found even more issues.  We have a “serious sales issue” said one company.  “Money is still really tight” was the feedback at a different company.  The sales manager was let go at another.  I felt like I had predicted all of it.

I should feel vindicated with the negative feedback from those that did not want my advice.  I don’t.  I feel sorry for these folks, as I or some other marketing professional could have helped them avoid the very dilemma they face today.

Hopefully, we can win over these doubters and have them see the light, one CEO at a time!

Have your experienced executives who did not believe in marketing?  How do we turn them around?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

09.11.15
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Productize Everything Now!

I’m going to admit it up front; I really like both the word and the concept of “productization.”  Love to “productize” things.  To me, it speaks to making something the best that it can, using the core techniques of product management.  These techniques can be applied to (almost) anything and used to manage and enhance that “thing.”

My thesis applies to your daughter’s annual Girl Scout cookie sale, your corporate staff department or your book club.  It can be applied to every service your company offers.  Marissa Mayer, Yahoo! CEO and one of the Silicon Valley’s breed of new talent, did just that in her 13-year career at Google; methodically productizing Google’s portfolio of services into industry leaders and building that company into a powerhouse.  Maybe you can do this at your company?

Productize definition

Still not convinced?  Let’s go a little deeper.  Here are some specific elements of basic product management techniques that can help in a wide range of situations.

Finding what and where the opportunity is.  Product managers might refer to this as “market assessment.” Does the market have a need for what we are providing?  Is there an opportunity to differentiate the product or go to market with a superior design and gain market share? While these concepts sound like “business buzzwords” to the layman, they are real questions that should be addressed about every outgoing entity.

Create a product roadmap.  A product roadmap for a 4-person accounting department might sound crazy to some, but it’s not.  It’s a good way to set goals for improvement and upgrade of skills to meet customer’s needs better, etc..  Even the Girl Scout Cookie example can use a roadmap; looking at the sales as a three-year project that you want to get better at each year likely yields a whole different mindset and strategy than just getting it done and off your plate ASAP.  What if your daughter is the one who maintains and grows an email list of interested customers and communicates with them regularly with attractive emails or accepts credit cards and PayPal as payment.  It’s all quite easy to do.

Understanding requirements.  The product manager is the customer’s advocate within a business. They need to understand the needs of the customer inside and out.  Every product, service, business or institution can gain by understanding their customers’ requirements better than their competitors.  How do your Girl Scout Cookie customers want to order, pay for and receive their Thin Mints?

Monitor product performance to goal.  Metrics and analyzing results are a big part of what product managers do. It’s an important part of this concept as well.  How do you determine the success or failure of a venture or project?  You create ways to monitor performance and create goals for the resulting performance gauges, then compare.  As you drill down from there, the numbers show you where to spend your time improving the product for maximum positive effect.

As I like to say, there is “some there there” on this productization  idea.  I hope it turns into a movement; long live those who productize.  Each of us can learn from watching what product managers do and applying the same techniques to your world.  Start now!

What aspects of product management do you already use in your world?  What unique situations can you see product management techniques being helpful?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

01.14.14
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Is Customer Service Dead or Have We Just Conceded it to Amazon?

During this holiday season I had the chance to visit a number of retail establishments that I do not frequent often.  I also had the opportunity to interact with the staff at these establishments and to take a look at their selections.  I have to say, the results were disheartening, so say the least.

The most memorable of those visits took place just after Christmas.  I went to Best Buy to (hopefully) purchase a few Bluray disks with some Christmas cash I’d received, take a look at the musical instruments I’d heard they have and also check out a dishwasher.  After that visit, I had an even better view of the issue.

Best Buy

Upon arriving in the store, I went directly to the dishwashers and found what I was looking for.  Then, a helpful salesperson, a woman, asked if she could help me.  I won’t go into the specifics, but her complete lack of knowledge and deer-in-the-headlights look was not the help I was looking for.  Turns out their musical instruments were a joke and they had none of the 5 Blurays (all released in November) I was looking for.

The experience left me wondering about the future of the in-store purchase.  As I went over what happened, I came up with these three observations:

  • Our online shopping expectations are different.  The cost of an online shopping session, in terms of effort and commitment is nothing compared to driving to a store.  Expectations are low, the session can be ended at any time and there’s no commute time.  This is a bit different to the store visit where you drive over to the store thinking about your potential purchase and leave disappointed if you do not find that item.
  • When it comes to raw knowledge, it’s hard to compete with a computer.  No matter how good the in-store salesperson is, they’ll never even approach the speed and accuracy a computer has.  Amazon’s website and engagement process do a superior job suggesting additional or alternative purchases, as well as answering all questions related to the item.
  • Has the “big box” store concept run its course?  There’s a huge irony to me that the so-called “big box” stores came along 20 years ago and replaced mom and pop shops in all sorts of industries and now, Amazon is returning the favor.  I think it will depend on the industry, because some industries, e.g. office products and musical instruments, still thrive on the big box stores.  However, for general consumer electronics, computers, TVs and appliances, maybe the writing is on the wall.

As I was leaving the store, a young gentleman was stationed by the exit asking each exiting customer if we found what we were looking for.  I replied with a laugh that, no actually I did not find anything I was looking for.  I felt bad as I walked to my car, as I had found the dishwasher, so I did see one of the three things I was looking for.  I did not go back and tell him.

The moral of the story? I ended up buying the Bluray disks from Amazon. Best Buy should not hold its breath waiting for my next visit.

What has been your recent experience with retail?  Are you on top of your company’s retail experience?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

11.19.13
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The Marketing Budget; How to Invest Strategically

Each and every year we go through the budgeting process.  Marketing’s part in that process is often significant, as a large percentage of the “discretionary” budget belongs to marketing, earmarked for trade shows, out bound campaigns, advertising, etc.  We plan the budget, execute marketing throughout the year and review results at the end.  Then we start the process over again.

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How then do we improve, get better and grow year over year in marketing?  The answer is to invest some of your marketing budget for “strategic” purposes.  These are expenditures designed to move the company’s marketing along, improve the ability to execute and keep up with trends.  Here are three significant ways you can invest strategically in your marketing:

  1. Train your staff.  Sometimes it’s hard to find money for training.  Not everyone believes it has a positive ROI.  However, in the marketing world, things have been changing rapidly and you and your team need to take on new responsibilities, to understand the latest and greatest marketing techniques and tools.  Often, this requires a bit of time and money set aside for training.
  2. Develop great content.  Today we live in a “content marketing” world.  “In your face” marketing is out, educating the potential customer is in.  Quality content is required to make this happen.  It’s an investment because good content can be used and reused and help fuel the marketing engine for years.  Don’t wait until you need it; create content now that is topical and current.
  3. Invest in marketing tools.  The marketing world has been rich with new tools; marketing automation platforms, social media tools and the like give us capabilities and options we never had before.  However, these tools not only cost money to acquire, there is a learning curve to getting the most out of them.  So you’ll not only be investing dollars to get the system, you’ll also be investing staff time in learning to use the tools.  However, once these investments are made, they pay considerable benefits for years into the future.

It is important to keep your eye on the big picture in marketing.  If you aren’t bringing on new people regularly, you risk falling behind in best practices and the latest marketing techniques.  Applying some of your marketing budget to longer term items such as these will keep you and your team up to date.

What strategic items have you invested in?  What benefits do you expect?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

07.30.13
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Are You Missing “The Big Picture?”

Sometimes looking at the “big picture” helps you understand business issues the best.  Once you are in the weeds and dealing with the day-to-day ups and downs of running a business, it really is hard to see the forest for the trees.  You can become so obsessed with fighting fires and making this months’ numbers that you never consider the macro issues.

Of course when you first join a business, there is a period of time, aka your honeymoon, when you use your big picture tools to understand things.  Soon enough, however, you get brought into the weeds.  I had this exact experience after joining a small technology company.  During my honeymoon period, I walked around asking questions, trying to figure out what was preventing the business from really taking off.  I got lots of very detailed feedback from the team.  “We should do this, we should do that.” All tactical actions. None of the suggestions seemed to me to be the answer.

And then it came to me:  we were “stuck in the middle.”   I dug out a book I’d studied in B-school and found this chart:

Relationship Between ROI and Market Share

Michael Porter suggests that each industry can support a small number of industry leaders, each with 10-25% market share.  These firms will have cost leadership, economies of scale and well-known brands, leading to a high return on investment.  Industries can also have many niche players, each with small market share, but, since they serve the needs of a specific customer set better than the industry leaders, they can command higher prices and hence earn a high ROI.

Then there is a set of competitors that have none of the strengths of these two segments.  These firms have smaller market share, but no close association with a particular customer set.  They lack the economies of scale or brand recognition of the leaders.  They are often relegated to competing on price, lowering their already depressed ROI.  These firms are “stuck in the middle.”

Let’s be clear however, that firms can remain in the stuck in the middle state for decades and in fact, if the industry growth rate is high, experience reasonable growth.  This earns the management bonuses and if publically traded, may also grow the stock price.

However, this is not the place you want to be.  I heard one well-known strategy guru call this the “Bermuda triangle of business.”  Companies that remain here too long can disappear.  They are either divested by their owners or acquired by the industry leaders at low valuations as a market share play.

I shared my epiphany with the CEO, the entrepreneur that started the business.  He wasn’t impressed, and in fact, argued with me.  He was very focused on emulating the industry leaders and wasn’t going to give up that dream easily.  Unfortunately, I had to be the bearer of bad news: Our best chance to survive and grow will be as a niche player.  We were unlikely, given our position, the strength of our competitors and our limited resources to compete across the board and win.  My suggestion was trim the product line to the best-selling product and go after two specific markets exclusively.

To the CEO’s credit, he let me present this analysis to our board of directors.  I went to the white board and drew the chart above and went through my analysis.  It took about three minutes.  After I was done the Chairman said, “It’s clear to me what we need to do.”  The other board members chimed in with agreement and we changed the course of the company right then and there.

We followed that strategy successfully for several years. It was the single most important decision in the company’s history.  All done with one slide, in three minutes.

The moral of the story?  Don’t forget the big picture.  Make sure your analysis of  business issues includes a review of the overall market and your company’s position within it.

Are there big-picture business issues you have ignored?  What would an outsider say about your business strategy?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

07.25.13
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Is Your Company’s Strategy in Focus?

I did a stint in a corporate planning department some time ago.   It was a large sector of a Fortune 100 company, with global operations in OEM automotive components.  During my tenure the company was doing a major strategy review.  They hired the well-known strategy gurus of the time as consultants, including strategy king Michael Porter.  They trained key executives and division general managers in the process and tasked them with articulating the strategies for their business units.  I had the interesting experience of participating in several of their presentations and the resulting feedback the corporate team gave.

The first thing that made an impression on me was that every one of the presentations by these divergent business units were almost exactly the same.  I think I can sum their strategies up this way: “We will be all things, in all places, at all times, to all customers in every geography that we can reasonably reach.”  These division general managers waxed eloquently about how they would grow their base business and also expand into new products and geographic areas.  There was little justification of the market conditions that would allow such expansion, but they sure seemed certain they could do it.

The response from the consultants and corporate planning people was also the same for every presentation: These were not strategies likely to be successful.  They wanted these business units to be the leaders in their main products, increase efficiency and maintain the customers they had.  The corporate folks articulated the “be first or second in a market or be sold” portfolio mentality often ascribed to GE.  Not surprising, since several of the folks in the room, including my boss the Planning VP, came from GE.

I saw the light right away, unlike some of the GMs of the business units.  The “kitchen sink” strategies spread the resources too thin and seemed to leave the base business open for attack.  Plus, in a large multinational organization with dozens of business units, which new product or geographic areas to go after and what resources to use to execute on them is a top down decision, not a bottom up one.

The main take away for me was once again, focus.  These businesses served competitive markets in an ever changing landscape and would need every resource to protect and grow their base business.  In businesses where I have had my hand on the steering wheel, I have always pushed for focus.  Let’s become leaders in our key area and have a profitable and defensible base position.  Then, and only then, can we think about adjacent markets or bringing out new products.

My observation is that far too many businesses ignore this.  They go forth, believing that every potential customer in the world can’t wait for their cool product and end up looking mediocre next to firms that focus in on serving a tighter set of customer needs. They often don’t know who their customer really is and frankly, that one sin will destroy you quite quickly.

Lastly, this is not a limiting strategy.  If you quickly establish strong positions in your core markets, you can use that success and cash flow to go after the next one.  The quicker you execute these advances, the larger you grow.  It’s the age old saying “How do you eat an elephant?  One bite at a time.”

How has your business grown?  Are you a leader in your core markets?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

07.23.13
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Should Marketing Without a License be a Felony?

Marketers occupy a unique position within a business.  What we do is by its nature public and visible.  Others within the business can see exactly what we are doing and also what our competitors are doing.  Every one of us consumes marketing messages all day, every day, so we feel like experts.  This all seems to give every employee the ability to comment, review, critique and suggest alternatives on every aspect of the marketing mix.

I call this “marketing without a license” and I believe it is a very serious issue. Maybe it’s not a felony, but certainly something that should be addressed.

After all, few folks will ever march into the CFO’s office and suggest a different way to amortize goodwill or recognize revenue.  No one visits the corporate council with ideas about the company’s legal structure.  Why then do folks from every level of the company feel empowered to stop the head marketing guy in the hall and say “have we ever considered” or” how come we don’t…”

It really doesn’t matter why.  The fact is marketing needs to find a way to get ahead of the curve and deal with this.  To not do so can threaten marketing’s credibility within the organization.  Without knowing the strategies and constraints marketing has, key constituents within every part of your company can lose faith in marketing.  When that happens to the sales team, the results can erode the gains you make in the market.

How then to avoid this?  I suggest it’s a matter of communication.  Share your marketing plans and the strategies that underlie them.  Tell the company and especially the sales team, where you are going this month/quarter/year.  Explain why.  Articulate what results are expected.  Let’s be clear that I am not talking about sending out a 50-slide PowerPoint and thinking you have completed the task.  It needs to be a dialog.  You’ll also likely get some good ideas from the sales team, as they are out fighting at the front lines of your industry.  Once they understand the method behind marketing’s madness, they can become your ally and will articulate your message better when they need to.

If you do this (as I have) you’ll discover that a good portion of the team didn’t fully realize the thought behind the company’s core strategy or market targets.  Subtleties that marketing folks take for granted such as the reason the logo is red or the thought behind the tagline, are not obvious to most people.  But if you bring them into the fold and the light bulb goes on for them, you’ve likely made them an advocate.

Give this one a try.  It will pay benefits on several levels.  In the all-important relationship between sales and marketing, it will strengthen the bond and help you work together as a team.  It will also hopefully change the “marketing without a license” conversations to a more useful exchange.

Have you ever experienced this phenomenon?  Do all of your employees fully understand where marketing is going?

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm