Ten marketing quotes as a thought for the day this Thursday:

10.  “If you wait until there’s another case study in your industry, you will be too late.”  ~  Seth Godin, keynote speaker and author of Permission Marketing

9.  “No matter what, the very first piece of social media real estate I’d start with is a blog.”  ~  Chris Brogan, keynote speaker and founder of New Marketing Labs.

8.  “Instead of one-way interruption, web marketing is about delivering useful content at just the precise moment that a buyer needs it.”  ~ David Meerman Scott, author of The New Rules of Marketing and PR

7.  “Your culture IS your brand.”  ~  Tony Hsieh, CEO of Zappos.com

6.  “Focus on the core problem your business solves and put out lots of content, enthusiasm and ideas about how to solve that problem.”  ~  Laura Fitton, founder OneForty.com

5.  “You can’t just ask customers what they want and try to give that to them.  By the time you get it built, they’ll want something new.”  ~  Steve Jobs, CEO of Apple

4.  “Make the customer the hero of your story.”  ~  Ann Handley, Chief Content Officer of MarketingProfs

3.  “What makes content engaging is relevancy.  You need to connect the content with the context.”  ~  Gail Goodman, President of Constant Contact

2.  “Audiences everywhere are tough.  They don’t have time to be bored or browbeaten by orthodox, old-fashioned advertising.”  ~  Craig Davis, Partner at J. Walter Thompson

1.    “We have embarked upon the world’s largest and longest cocktail party, and every issue imaginable is up for grabs.”  ~   Geoffrey Moore, author of Dealing with Darwin

As an outside consultant in Digital Strategy, I believe that sometimes my role should be the Question Asker, not the final provider of answers.  And so, especially during the early stages of an engagement, I find myself asking the following questions:

1. Is the organization as ready to digitally transform itself as I think it is?
2. How can we accelerate the growth of the company by transforming the “how” of what they do and not just “what”?
3. By focusing on human beings and user experience, can I help reduce the uncertainty in the client’s business?
4. Do the people who work at the client company believe they know more than the CEO does?
5. Do they actually know more than CEO does?
6. What will help the client company grow faster:  more control or more value creation?
7. Should people who create value be governed by people who control it?
8. Is the client company C-suite too focused on control?
9. Are they obsessed with control?
10. How can I encourage giving more control to others in the organization, especially employees who create value?
11. What rules could the client company get rid of today that would increase their ability to create value?
12. Could we throw out the entire company rulebook?
13. Would my (hypothetical) children want to work in a company like this one?
14. Would the C-suite’s children want to work in their company?

Any suggestions for other questions?

A big problem with most marketers is that too much time is spent on familiar territory… rearranging the deck chairs rather than looking for new worlds to conquer.  When a new CMO is appointed, and his/her first six months are consumed with reviewing agency assignments, refining media mixes, and touting brand-perception levels and “likes” on Facebook, this executive is probably headed for trouble.  Making matters worse, marketers seem to be in a parallel universe when it comes to communicating with top management, not to mention the sales operation.

CEOs and sales have little patience for the soft and fuzzy yardsticks marketers use to measure their progress.  As an example, the new CEO of IBM (who came from the marketing department), Virgina Rometty, has built a career on pushing herself into unfamiliar territory.  “Growth and comfort do not co-exist,” Rometty told Bloomberg Business Week.  One reason Ms Rometty made it to the top at IBM is that she had broad enough strategic responsibilities to make things happen.  In 2009, she was appointed Senior Vice President of Marketing, Sales, & Strategy, and a big part of her job was to bring software and consulting services to emerging markets, where growth is a lot more robust.  “Whatever business you’re in, it’s going to commoditize over time, so you have to keep moving it to a higher value and change,” says Rometty.

The marketing function, strange as it seems, is oftentimes not as connected to the sales function as it should be for optimum results.  The metrics that marketing people use are not in sync with how salespeople measure themselves, and sometimes it seems marketers want to abdicate their brands’ destiny to forces beyond them.  Sales guys don’t understand talk like “empowering the consumer.”  Therefore, sales and marketing should sit under the same strategic corporate-messaging and consumer-facing umbrella so that both sides can communicate for a common goal.  By combining sales and strategy with marketing, companies can not only align all the revenue-producing components under one roof, but can create clear-cut goals that everyone understands and buys into.

excerpted from Rance Crain’s Opinion article in November 7, 2011 issue of Advertising Age

6.  Repetition is Usually Redundant- Good Advertising Works the First Time:  Use direct response advertising (call-to-action to a phone number or web site) that is uniquely trackable, fully accountable advertising, instead of image advertising, unless others are pre-purchasing to offset the cost (e.g. “If you pre-purchase 300 units, we’ll feature you store/URL/phone exclusively in a full-page ad in…”).  Don’t listen to advertising salespeople who tell you that 3, 7, or 27 exposures are needed before someone will act on an advertisement.  Well-designed and well-targeted advertising works the first time.  Cancel anything that cannot be justified with a trackable ROI.

7.  Limit Downside to Ensure Upside- Sacrifice Margin for Safety:  Don’t manufacture product in large quantities to increase margin unless your product and marketing are tested and ready for roll-out without changes.  If a limited number of prototypes cost $10 per piece to manufacture and sell for $11 each, that’s fine for the initial testing period, and essential for limiting downside.  Sacrifice margin TEMPORARILY for the testing phase, and avoid potentially fatal upfront overcommitments.

8.  Negotiate Late- Make Others Negotiate Against Themselves:  Never make a first offer when purchasing.  Flinch after the first offer (“$3,000!?!” followed by pure silence, which uncomfortable salespeople fill by dropping the price once), let people negotiate against themselves (“Is that really the best you can offer?” elicits at least one additional drop in price), then “bracket.”  If they end up at $2,000 and you want to pay $1,500, offer $1,250.  They’ll counter with approximately $1,750, to which you respond:  “I’ll tell you what… let’s just split the difference.  I’ll overnight FedEx you a check and we can call it a day.”  End result?  Exactly what you wanted- $1,500.

9.  Hyperactivity vs. Productivity- 80/20 and Pareto’s Law:  Being busy is not the same as being productive.  Forget about the startup overwork ethic that people wear as a badge of honor… get analytical.  The 80/20 principle, also known as Pareto’s Law, dictates that 80% of your desired outcomes are the result of 20% of your activities and inputs.  Once per week, stop putting out fires for an afternoon and run the numbers to ensure you’re place effort in high-yield areas.  What 20% of customers/products/regions are producing 80% of the profit?  What are the factors that could account for this?

10.  The Customer is NOT Always Right- “Fire” High-Maintenance Customers:  Not all customers are created equal.  Apply the 80/20 principle to time consumption, also.  What 20% of people are consuming 80% of your time?  Put high-maintenance, low-profit customers on auto-pilot… process orders but don’t pursue them or check up on them.  “Fire” high-maintenance, high-profit customers by sending a memo/email/letter detailing how a change in the business model requires a few new policies:  how often and how to communicate, standardized pricing and order process, etc.  Indicate that, for those clients whose needs are incompatible with these new policies, you are happy to introduce other providers.  You may be thinking, “But, what if my largest customer consumes all of my time?”  Recognize that 1) without time, you cannot scale your company (and, oftentime, life) beyond that customer, and 2) people, even good people, will unknowingly abuse your time to the extent that you let them.

11.  Deadlines over Details- Test Reliability Before Capability:  Skills are overrated.  Perfect products delivered past deadline kill companies faster than decent products delivered on-time.  Test someone’s ability to deliver on a specific and tight deadline before hiring them based on a dazzling portfolio.  Products can be fixed as long as you have cash-flow, and bugs are forgiven, but missing deadlines is often fatal.  Calvin Coolidge once said that nothing is more common than unsuccessful men with talent.  I would add that the seconf most common is smart people who think their IQ or resume justifies delivering late.

originally by Tim Ferriss  www.fourhourworkweek.com/blog

Based on Tim Ferriss’ interviews with high-performing CEOs in more than a dozen countries, here are the 11 basic tenets of the “Margin Manifesto”… a return-to-basics call that gives permission to do the uncommon to achieve the uncommon:  consistent profitability (or doubling of it) in 3 months or less. 

1.  Niche is the New Big- The Lavish Dwarf Entertainment Rule:  Several years ago, an investment banker was jailed for trade violations.  He was caught partly due to his lavish parties on yachts, often featuring hired dwarves.  The owner of the dwarf rental company, Danny Black, was quoted in the Wall Street Journal as saying: “Some people are just into lavish dwarf entertainment.”  (Is that the quote of the year, or WHAT?!?!)  Niche is the new big.  But, here’s the secret… it’s possible to niche market and mass sell.  iPod commercials don’t feature dancing 50-year olds, they feature hip and fit 20-30-somethings, but everyone and his grandmother wants to feel youthful and hip, so they strap on Nanos and call themselves Apple converts.  Who you portray in your marketing isn’t necessarily the only demographics who buys your product.  It’s often the demographic that most people want to identify with or belong to.  The target isn’t the market.  No one aspires to be the bland average, so don’t water down messaging to appeal to everyone… it will end up attracting no one.

2.  Revisit Drucker- What Gets Measured Gets Managed:  Measure compulsively.  Useful metrics to track, besides the usual operational statistics, include CPO (“Cost-Per-Order,” which includes advertising, fulfillment and expected returns, chargebacks, and bad debt), ad allowable (the max you can spend on an advertisement and expect breakeven), MER (media efficiency ratio), and projected lifetime value (LV) given return rates and reorder percentages. 

3.  Pricing before Product- Plan Distribution First:  Is your pricing scalable?  Many companies will sell direct-to-consumer by necessity in early stages, only to realize that their margins can’t accommodate resellers and distributors when they come knocking.  If you have a 40% profit margin and a distributor needs a 70% discount to sell into wholesale accounts, you’re forever limited to direct-to-consumer… unless you increase your pricing and margins.  Look for hidden costs by interviewing those who have done it:  will you need to pay for co-op advertising, offer rebates for bulk purchases, or pay for shelfspace or featured placement? 

4.  Less is MORE- Limiting Distribution to Increase Profit:  Is more distribution automatically better?  No.  Uncontrolled distribution leads to all manner of headache and profit-bleeding, most often related to rogue discounters.  Reseller A lowers pricing to compete with online discounter B, and the price cutting continues until neither is making sufficient profit on the product and both stops reordering.  This requires YOU to launch a new product as price erosion is almost always irreversible.  Avoid this scenario and consider partnering with one or two key distributors instead, using that exclusivity to negotiate better terms.  From iPods to Rolex to Estee Lauder, sustainable high-profit brands usually begin with controlled distribution.  Remember, more customers isn’t the goal; more profit is.

5.  Net-0… Create Demand vs. Offering Terms:  Focus on creating end-user demand so you can dictate terms.  Often one trade publication advertisement, bought at discount remnant rates, will be enough to provide this leverage.  Offering terms is the most consistent ingredient in startup failure, so cite startup economics and the ever-so-useful “company policy” as reasons for prepayment and apologize, but don’t make exceptions.  Net-30 becomes net-60, which quickly becomes net-120… and then you’re out of biz.  Time is the most expensive asset a startup has, and chasing delinquent accounts will prevent you from generating more sales. 

Remaining six to come tomorrow… STAY TUNED!

originally by Tim Ferris,  www.fourhourworkweek.com/blog

If you are interested in submitting a pitch, create a video no longer than 60 seconds in length.  A technology startup’s CEO or founder should use that time to explain the company’s products and how they are intended to make money.

Imagine you’re in an elevator and have only one chance to convince a VC or executive that you deserve a follow-up meeting.  Be sure to focus on your company’s big picture while avoiding too much detail about particular products.

Wow!  What awesome way to practice your pitch and vet comments to improve it even more BEFORE you’re in front of that big VC firm, angel investor, or private equity group. 

The old adage for raising money is that investors invest in the team first and the product/service second.  Therefore, if investors are primarily investing in people, then what they are really investing in are relationships built on trust.  This is why entrepreneurs tend to raise money from friends and family first.  Though it’s not easy, trust can be created from scratch.  That said, if you’ve burned through all your immediate prospects with whom you have significant pre-existing relationships, you need to be prepared for the consequences:  fundraising will take a long time.

As an entrepreneur looking to raise capital, the approach cannot be to simply sit back and email executive summaries blindly.  An email, even a pitch, is not a trust building event.  It’s really just a foot-in-the-door.  The best entrepreneurs understand this difference and figure out ways to use it as a launching pad for relationship development.

If you’re serious about raising money, you need to be serious about developing relationships.  Instead of emailing, attend events to meet people personally.  After a pitch, follow-up religiously with contacts… why not invite them to coffee to find out more about what they do and who it would benefit them to know?  You could possibly be the gateway and then they owe you a favor… a great position to be in! 

Do’s

1. Do ensure for yourself (as founder or chief) that you are addressing a real market and a sustainable one; where the exchange of value is transacted and measured in U.S. currency
2. Do only hire for pre-identified expertise, operating need, and the energy to accomplish excellence; if you get more, great; don’t hire otherwise
3. Do always know your cash level, weekly cash spend and receipt rates, cash-runs-out date, and close-up liabilities amounts; start finding funding choices when you hit t-minus 6 months until operating cash runs out
4. Do money deals with money people (e.g. Angels, VC’s, banks, and credit unions); do product deals with product people (eg. Commercial companies); and do risk deals with risk people (e.g. Insurance companies). Don’t get these confused. If a product company wants to invest in your company, can they afford to take the whole thing? If not, then not.
5. Do ensure that at least one of your early formal investors has the financial wherewithal to keep investing in subsequent increasing rounds many years down the road; do make sure your different investors are really compatible
6. Do always accumulate choice; two by definition, three of four is better; then make decisions and have a back-up
7. Do let the stress of overload and/or capacity strain the triggers for expansion; demand flexing the edges of the system is usually the truest sign of real growth
8. Do track revenue and cost per employee; have trigger thresholds for when to add staff or subtract. Human efficiency and innovation is what creates value

Don’ts

1. Don’t hire of goodness of heart or friendship
2. Don’t hire anyone who you and your team are not genuinely excited about
3. Don’t tolerated mediocre engineers; for that matter, mediocre anyone. An early sign of mediocrity is when you downgrade tasks and expectations to align with an employee
4. Don’t count on your investors to take care of you when things get rough and/or protracted
5. Don’t over interpret or count on the stated operating “value-add” from investors during their solicitations during fundraising
6. Don’t build out your staff or infrastructure in expectation of rapid growth; be strong enough and tolerant of market back-pressure or order/service backlog
7. Don’t keep the same sales and marketing execs if the business isn’t growing or charging for growth; no sales and marketing VP was ever fired prematurely
8. Don’t over delegate to consultants, accountants, or lawyers; even the great ones are only as good as you are as an engaged client; read and understand everything; if left alone, you must have a point of view, right or wrong

The following list can help create a more effective strategic planning meeting:

1. The meeting should be held off-site in a casual setting so participants will feel relaxed but away from distractions.

2. Make sure everyone knows that each person will be treated as an equal and everyone will have an equal voice in terms of suggestions and criticisms.

3. To promote a more comfortable atmosphere, have everyone dress in casual clothing.

4. Encourage discussion of subjects mentioned in the meeting. This will not only encourage more brainstorming as the meeting progresses, but it will also serve to fully define the subject and determine its merits.

5. Don’t let the meeting digress into endless criticism. Point out areas that merit praise, and when discussing areas of weakness, explain how certain suggestions may not fit into the overall scope of the company’s strategy.

6. Don’t try to prioritize items brought up in the meeting. The strategic planning meeting is mainly a brainstorming session where ideas are explored in relation to their strategic impact on the business.

7. Don’t assume that everyone will come with a notepad and pen. Make sure you provide both.

8. Make sure you cover each topic thoroughly before progressing to the next. Keep in mind that you are exploring strategic solutions. When discussing each subject, apply timelines for specific actions after the meeting has been adjourned.

9. Write a summary of the meeting and circulate it to everyone who is part of the strategic planning team. Then, make sure you have follow-up meetings to review each person’s progress.

10. Wrap up the meeting with allowing everyone to share their biggest success over the last year and how that knowledge and experience will be utilized moving forward into the next.

Sometimes CEOs are so busy trying to keep their business alive that they forget the people that got them there. Don’t ignore your stars. If you ignore them and assume that they will just keep on giving above and beyond for too long, they will go elsewhere just to be appreciated. And, they’ll even take less money for it.

Every business owner out there has experienced this scenario: an employee with key knowledge walks into your office and says, “I love you and I love working for you, but I have an offer I just can’t refuse.” Most of the time, the CEO finds extra money or whatever is necessary to keep the employee. My suggestion is to be proactive about keeping key people in the first place.

Pay increases and performance bonuses are more than extra money to an employee. It’s your way of saying, “You are valuable around here and I appreciate you.” Try giving that key employee 1/4th of the money you would have to give them in the “I’m quitting” scenario. See what kind of loyalty and morale you build then.