The Purple Wonder himself, Mr. VON, has a very good post about innovation. But Jeff, please don't think you are alone in this battle. Others of us like David Beckemeyer (PhoneGnome), Alec Saunders (iotum), Jeff Bonforte (Yahoo), Craig Walker (GrandCentral), Luca (Abbeynet), Michael Robertson (SIPPhone), Jim Tobin (Comcast), Jeff Black and John Todd (TalkPlus), Surj Patel (eTel's conference chair), AOL's Sr. VP of Voice Services Ragui Kamel and even I have been on this same kick for about as long (even if some of us weren't blogging back in 2002.)
But rather than take a purple sky view through mauve colored glasses, something we all have been guilty of more than once, let's start with where the problems actually lays. A fundamental lack of knowing how to market to consumers that exists in so many companies that are trying to bring consumer products and services to market today.
Here are some thoughts on this which may likely cause discussion, some discomfort, some angst and even some indigestion…but better over a blog post than over one’s career or investment dollars I figure.
1. To sell new and innovative products and services requires marketing, not just selling. And marketing requires real dollars. Demand either exists and that need can be satisfied, or demand has to be created. Marketing finds the need, and satisfies the want, by knowing how to tell the market why it needs it.
2. Most venture backed voice related companies are led by people who don't have a clue what it really costs to market a product or service to consumers. They have great ideas, but no experience.
3. The reason the cable MSO's are winning in VoIP over the upstarts is simple. They have all kinds of marketing and promotional inventory to use to get the attention of the customers. Backing a play without the right marketing dollars in the funding round is a recipe for disaster, unless owning the Intellectual Property is the play from the start.
4. It's not about selling in. It's about selling through. Too much time and energy is spent getting the deal, and not enough time is spent on what to do once the customer signs on. I call this the B2B2C paradox. You have the deal, but have no way to fufill it.
5. Most companies in the start up phase hire an experienced B2B marketer to get deals done. This is the same person, because of their success at getting the deals done, who ends up running the B2C business into the ground. Why? Because a real consumer marketer doesn't speak the right "tech speak" or VC speak language. There's a reason for that. The consumers don't either.
6. To continue the sell in vs. sell through point, to sell through means you need to know thy customer. To know thy customer means to conduct two types of research.
A. Primary, meaning you do it for your company directly with the customer segments and
B. Secondary, meaning you review what is publicly available from sources that matter and apply it.
I don’t know how many startups I have suggested hire a real consumer marketing company to help with market segmentation, usage and attitude studies and more. Few take us up on that offer. Why? Because their investors don’t take the time to understand how to take a new product to market, have never spent a day in consumer marketing at the face to face level or have almost no consumer marketing agency experience to know what is needed. The most successful companies we all know of all research how they research, constantly improving their processes. Who does this best? TV Networks. Packaged Goods companies and yes, even the established telcos. Funny, aren’t those the companies that online companies are trying to better..hmmm..
7. Not enough customer centricity...The products that get launched today are so non-customer centric it's scary. It’s not that consumers wouldn’t want to buy and use them, it’s just that they have too many challenges learning how and just give up.
How do you take a new product to market? By putting it in the hands of thousands of people in one-on-one and focus groups to find out what they think and then boil it down to where it is plain dumb simple to use. I don't know how many of the executives in the emerging VoIP plays have ever done a real focus group in their lives, or spent time selling to the public, but I do know that Level3 has done just that to enable their clients, mostly the Cable MSOs, to know more about what their customers want and it shows. Cable VoIP sales are up vs. the other guys, and Level3's stock is up. Someone at Level3 should give Cynthia Carpenter a huge raise for that study alone as she quarterbacked the project under the now departed to Verisign, Charlie (Two Buck Chuck) Meyers.
8. Distribution---the web is a lousy distribution outlet. I repeat. The web is a lousy distribution outlet.
The web is a great marketing channel for awareness and serves as a wonderful delivery vehicle via download or for order entries and sign up. So you ask, why isn’t it a great distribution outlet for everything? Well for starters it’s a lousy way to interact with consumers who have questions. FAQ files only frustrate the masses and you have to know exactly the right words to use the search tools.
Now compare this to going into a specialty retailer.
For starters when I'm in a specialty store I can get questions answered in real time from people who should have some product knowledge (okay CompUSA is the exception but they are a big box store without any specialty vs. Frys or Best Buy which actually trains people as product specialists.)
Most online services want the customer to email and then WAIT for a reply. Or worse, you call up, and experience what we all now accept as normal. A call to some outsourced service provider in some foreign land who doesn't even know what day it is, let alone have the basic level of product knowledge of a web page that does.
Compare this to QVC, HSN or even going to a Costco. There you get answers and you get service and it happens more often than not, almost right away.
9. Retail is still important.
Building retail distribution takes money. But having retail distribution will make you money. I'm continually amazed how clients and companies we interact with won't spend one day looking at how to get their products to retail, and yet will spend months trying to figure out how to optimize their web sites for higher Google rankings. Believe me. Selling services in 10,000 convenience stores sure made a lot of money for the calling card folks, so one has to wonder why no one is really pushing VoIP in Radio Shack or at the independent cellular stores let alone selling new services at 7-11.
10. Sample This--nothing works better than sampling. I'm continually amazed that services that offer trials don't do more sampling. Not on the web. Offline.
At start-ups the pressure to start showing uptake is enormous. But you can’t have uptake if you don’t reach you’re the potential customers. If they would sample more, in more places the awareness and uptake would be far greater
Heck anyone with an email account can keep sampling or keep trying free services online. What amazes me is the lack of sampling of a service where people are. People are not just at home on their PC's they are at events, in malls and on the street.
Apple gets this idea better than anyone with their Apple stores. Consumers come in and try out an iPod, a MacBook and then order from somewhere. For Apple the sales at Apple stores are a bonus. Secretly Apple doesn't care where you buy Apple products just as long as you buy Apple. The whole facade of exclusivity is just that. It's a cachet and Apple does it as well as a Ferrari or Porsche dealership can. Cisco practices a similar marketing approach. Buy from them. Buy Cisco from someone else, but at the end of the day, they are happy if you just bought Cisco (or Linksys.)
Nokia understand this too and with their Nokia World locations is taking the same approach. Show people what they didn’t know about. Let they try the product and then let them buy it there, on the web or anywhere, but just buy Nokia.
But the path to success has its failures. Gateway failed at this with Gateway Country stores, but it wasn't for lack of trying. It was because Gateway didn't have the rest of the retail market channels in place the right way. Before Apple launched Apple Stores they already had stores within other computer stores staffed by Apple people. Gateway didn’t. Oh.there’s that research thing coming up again. And oh, there’s that lack of sampling and trial. And oh, there’s that selling in, not selling through mentality at work.
Innovation isn’t dead. It’s being killed. And the killers are the people who give birth to the ideas by practicing the worst form of euthanasia. They kill off their young not because their idea isn’t right. Because they’re not the right people to innovatively market the idea.
In this changing game from where technology has gone from geeks to the general market, the time for innovation in marketing is here. To market innovatively takes money, or at least some clue.