Marketing – how individual biases play havoc

Individual biases influence on both sides of a transaction – the buying side and the selling side.

Today I will look primarily at the selling side of a transaction and how our individual biases tend to make a mess in a marketing activity.

A simple example could be the way our website should be organised. Depending on the kind of dispensation in the marketing team you could have a staid looking website or a very aggressive looking website. There is nothing wrong in either of these extremes or even in something in-between. The point that needs to be kept in mind is about – who is the customer you are targeting.

If you are targeting a mature audience and you present a staid looking website which is very functional , it might work very well. On the other hand a startup might create a very good user interface for the younger generation but the older generation is not able to get their arms around it.

Since we think the world sees everything the way we see something, these challenges arise. The way we see things is a function of our exposure, our biases, our mindset and our capabilities.

I have a personal bias against doing news paper advertisements. Its just my belief that our kind of business does not have a mass appeal and therefore a newspaper is not the best place to spend money. As a matter of fact you would have noticed this bias in some of the posts that I have put out earlier. Having said that this bias could also be limiting our growth because we have never tried to see its proof.

Another place I see this happening very frequently is summarily dismissing a segment of the market that may not buy. Again I will give my examples so that you know none of this is theoretical. Today itself I had one interaction where I was told that the hospitals are investing a lot of money in IT especially after Covid. I have had this personal bias that hospitals invest in medical equipment, in faciliies but only invest the basic minimum in IT and therefore we have not invested in that area.

Biases happen because of our experiences, so there’s nothing wrong, as long as we are willing to question them from time to time, it should not become an ego issue, otherwise we can lose on lots of opportunities.

Till next time then.

Carpe Diem!!!

Serendipity – 2

Partners, Serendipity

A few months back towards end of January I had written a post on serendipity. Serendipity is defined as events which happen by chance in a happy or beneficial way , where you had not sought for or expected anything even remotely similar to what has happened.

I tend to think of serendipity also in parallel to chance and luck though they are technically different as per the literal meanings.

However I tend to believe that a lot of serendipity, chance or luck happens because you are “doing” things to get some result and then something totally unrelated happens and takes you in totally different direction which is even more beneficial. Most people – especially the “filmy” kind use this term with respect to romance. But I tend to see it happen so often in business that it ends up creating a completely new and beneficial set of opportunities.

I keep talking about seeking partnerships to help you build your go to market strategy in a low cost and high speed way. Last year we had done an event with a industry body in India. This event was targeted at the members of the industry body where we were seeking partnerships to go into that industry. We happened to put out the video we had created onto YouTube after the event.

Now see the sequence of serendipitous events which took place over the next 8-10 months.

One sales person of an OEM happened to see that video and connected to me via Linkedin and then contacted me. This conversation led us to build an application on top of the OEMs platform , which they were so amazed that they started giving us support to work further. Now this sales person also connected us to one of his other colleagues who asked us a question regarding the capabilities we had on another product of this OEM. At that point in time we had only a sketchy knowledge but because this sales person and the earlier one had suggested we invested in this new product and built a prototype from scratch.

Suddenly when we showed this prototype, all of a sudden there was “domino effect” or a “tipping point” such that not only was this OEM’s team taking us to prospective customers, but other partners in other geographies were also asking us on our capabilities in this area. To think about it, 3 months back we had no knowledge about this tool, and today we are talking to so many possible prospects.

All because one sales person happened to see our video on YouTube and decided to connect with me. I had no plans whatsoever of connecting with this OEM, even in my wildest dreams, but today we have so many proposals happening because of them.

Till next time then.

Carpe Diem!!!

Product Management concepts for a consumer company

B2B, differentiation, ideal customer, Marketing, Product Management, Profitability, Risks, single target market

When you see the large venture capital backed companies burning cash month on month you wonder if the general concepts of Product Management / Marketing are valid, these days, for a consumer facing company.

There is one dynamic to keep in mind – the principles of Product Management / Marketing have not changed, what’s changed is the availability of money at extremely low rates – in most developed countries the interest rates are hovering at or less than 1% on bank deposit . In Japan just a few months back interest rates had actually gone negative.

If you keep this in mind where cost of money is so low, people are looking for ways to get a higher return on their investment so the propensity to take risk is higher. If the cost of money would be say at about 5% on bank deposits, then the propensity to put in risk capital would be different. That’s also one of the key reasons that the stock markets are at a record high even though countries have been facing lockdowns.

Now inspite of this these VC based companies are generally not stupid. The VCs do put in checks and balances to ensure their money does not sink.

So the burning of cash is part of a strategy to acquire customers. This would only succeed if the life time value of a customer is known. This principle is true for any kind of product or service you get into. If you know the life time value of a customer then you can actually buy customers because you know that if they are happy they will buy more often from you and also refer others to you.

The second is the convenience factor / inertia factor. Once you have given some customer a good service and they get used to the convenience of working with you, they will generally end up buying from you because the cost of getting another vendor is quite high. In case of B2B customers the number of processes to complete to get a new vendor empanelled are so large that procurement teams want to limit their vendors. In case of consumer products, its so difficult to understand another new “app” to order items. So you go ahead and order again on an “amazon” just because your card is already loaded and you can buy without hassle.

The other factor is critical volume . In the “app” based consumer companies the network effect plays a big role. So the larger the customers and vendors on a platform they feed into each other to create a positive snowball effect. Due to this in any market you cannot have more than two “amazon” or more than two “uber” kind of companies.

In B2B business also something similar happens with critical volume. If you look at it about 25-30 years back there were at least 5-6 prominent ERP vendors including SAP, Oracle Financials, MFG Pro etc. today there are only 2 primary companies in this arena. This is because based on the number of installations, the number of technical people needed goes up, so do salaries so more people train themselves to avail this opportunity. Slowly the availability of trained manpower becomes one of the key reasons to choose a product.

So in my opinion the principles of product management / marketing don’t change. The methods / platforms for delivering the product / service may change as technology changes. In my next few posts I will cover other principles like Single Target Market, Ideal Customer profile etc.

I would love to know if any of you thinks otherwise.

Till next time then.

Carpe Diem!!!

Ferocity

Energy, Habits, Human Brain, Marketing, problem solving, Sales

This is another of the new words which have got added to my Lexicon after reading Steven Kotler’s book The Art of the Impossible.

The word ferocious is a well understood adjective generally used with wild animals and people who are very savage or intensely angry kinds.

However Steven over here is using the word as a noun and is calling it a habit. Now that is what I found unique.

Ferocious, fierce are all words which are generally used in the negative or wild sense. I have not found them being used in positive sense and that’s why I thought of sharing this with you.

Here Steven has made it an essential habit if you need to have enough motivation to achieve the impossible. If you know the big dreams you want to pursue ( he calls them MTPs and HHGs) then you need to be at them day -in and day – out for a long period of time. The impossible is not something which can be achieved in the short term.

But if you attack your dreams by ensuring you are continuously solving the big problems that come your way, sooner rather than late you keep getting better at it. Then it becomes a habit. Once something becomes a habit it takes less energy. Something similar to what I was talking about in my post a couple of days back. Once the habit gets ingrained into your system the brain goes into automatic mode. It does not need to spend energy. As I have mentioned in my earlier posts, the brain uses almost 25% of the requirement of energy that the body has. By making something a habit you conserve energy.

The advantage of this is 2 fold when you attack the challenges with ferocity and make its a habit – the first is the saving of energy which means you have more energy to handle other tasks and the second is that you save time. If you can solve more problems in the same time than I can, you will be way ahead of me. This attribute of being able to save time in the long helps you target impossible dreams.

The bigger the problems you solve, and more problems you solve, the more valuable you become. The more valuable you become the more people get aligned with you.

This is true in all facets of life. Even in sales / marketing, the more prospects you interact with, the more challenges you handle, the better your responses become, faster. You therefore are able to handle even larger number of prospects. If your sales team has the habit of ferocity to target a large number of prospects in a limited amount of time, success will be with them. We generally use the term fire in the belly of the sales person. Now this is a new term I have learnt to push my teams

Till next time then.

Carpe Diem!!!