The Best Marketed Software Ever!

I have recently been advising a client on how to improve their marketing and sales effectiveness. The company is a very innovative manufacturer of industrial equipment and despite the economy, they are in rapid expansion mode. One of their key goals is to implement an integrated marketing and sales platform to more quantitatively manage direct sales, channel sales and marketing activities. The company has decided to move forward with Salesforce.com, a decision I wholly endorse, and a platform that I have led the implementation of twice in the past. But I digress, this post is not about the criteria for selecting an integrated sales and marketing platform, rather it is about excellent marketing. 


After (re)evaluating the current features of a handful of CRM competitors like SugarCRM and Microsoft Dynamics CRM, Salesforce.com takes the cake. Their feature checklist keeps them in the game, but it is their marketing, sales and positioning that really makes them standout. Can't say it's surprising. Since Salesforce.com burst onto the enterprise software scene in the late 90's, they have year-in and year-out done an excellent job of positioning their solutions, defining value props and making it easy to try then buy. First, it was "No More Software" and "Lower TCO", then it was extendability within their ecosystem with AppExchange, now it is about "the Cloud" and the volume of success stories (1.5million success stories and counting) using their service.


Effective Positioning (Product Marketing & Product Management) is obviously critical, but the Promotion (PR, Product Marketing and Field Marketing) then Sales (Direct Sales / Indirect Sales) is where Salesforce.com really shines versus their competitors. They are the company getting the awards, driving the industry buzz, showing up everywhere and growing at an industry leading rate.


I guess if you are the segment leader in CRM, it is almost expected. So how could you replicate Salesforce.com's success? A good team and strategy is important, but Marketing & Sales spending is where the difference really comes in. Microsoft, CA and Intuit all have strong teams, sound strategies and are certainly no slouches on the Marketing & Sales front, but the discrepancy in marketing spend is astounding:


Sales & Marketing as a % of Total Revenues From Most Recent Financials:
Microsoft spent $12,879m on $58,437m [22%]
Intuit spent $927m on  $3,183m [29%]
CA spent $1,214 on $4,271m [28%]
Salesforce.com  $534m on $1,076m [49%]


What is even more remarkable, is that Salesforce.com is essentially a one trick pony (i.e. CRM). All the others have broad portfolios of products and services.


Bottom Line:  While business success requires excellent Marketing and Sales execution, outspending your competition and blowing the doors off of industry spend comparables, certainly doesn't hurt.

Good list of social media Do's and Don'ts

Dave Nelsen of Vistage has written a good list of the 10 Do's and Don'ts of Social Media. I highly recommend it for anybody thinking about getting started in Social Media. Check it out.

Design Thinking: 1+1+1=5

Tim Brown of IDEO recently delivered a tremendous presentation at TED on  "Design Thinking" or System Design and System Thinking.  His ideas focused on design "interactions" versus just individual design "points". Basically the system is more than the sum of the individual components. The concept really resonates with Rule #5 for successful Social Media: Be Excellent . Let me explain.

 

In today's world of 360 degrees of transparency and millions of eager bloggers and tweeters ready to broadcast their complaints in 140 characters or more, any design inefficiencies or breakdowns are public knowledge. Rewind just 10 years and things were very different. If a product was badly designed and failed, customers had very few options. They could call customer support, they could get a lawyer involved or they could "deal with it".  Today, consumers have much higher expectation levels and a design (product or service) doesn't have to fail for there to be an instant outcry. If a design does not meet a user's expectation levels the outcry is on Facebook, Twitter, Stumble Upon, and all rest.

 

Looking more broadly, effective System Design  has contributed to many leading technology organization's success.

 

• Salesforce.com's low-cost, high-volume business model is dependent on customers subscribing and using the system without a lot of human intervention. To facilitate this, Salesforce.com has a very easy sign-up process, an intuitive interface, great user help documentation and lots of recorded training. Could Salesforce.com  be successful without all these System Design component in place? I don't think so.
• On the other end of the business model spectrum is SAP. A notoriously expensive and complex application to implement, SAP has focused on big ticket sales with significant revenues going to consulting partners.  To make their partners successful, SAP provides significant training, certification and extensive configuration options.
• It is impossible to discuss design thinking without including Apple. iPod / iTouch + AppStore + Physical Store + Genius Bar combine to deliver a system nobody can match. Apple takes Design Thinking and System Design to a totally different level than Microsoft Mobile and Blackberry come close to.

Different businesses and different models, yet all three have been successful through great end-to-end System Designs.  Want some more examples? Here's a handful of smaller companies (strangely they are all SaaS) that embody design thinking and deliver excellence:

• Spreedly -  online subscription billing
• Get Satisfaction - customer support community
• Less Accounting - SMB accounting package
• Balsamiq Mockups - software mockup tool (very cool and future blog posting)

Bottom Line: Design Thinking is the way to go. The sum of the parts result in competitive differentiators and a greater whole. Half-baked solutions just won't survive in a world of complete transparency and instant feedback.

5 Steps For Steering Rolling Boulders (and your Social Media activities)

So how do you guide the Rolling Boulder of social media? In my last post I covered why marketers have lost control of their brands. Now what? First, lets take the "glass is half-full" approach. As a marketer, you may have lost some control, but you now have significantly more tools to get your message out than ever before. If you are a corporate exec, you are closer to your customers and you can get much more info from them real-time. Great - now let's talk about how you can implement a social media program and steer the online conversation.

As a framework for your social media program, I suggest using the 4 steps of "OMMI" + 1 bonus rule. OMMI stands for "Objectives - Measures - Methods - Initiatives".  Let's see how OMMI translates into practise:

1. Set Your Social Media Objectives

Unless you know what you want to achieve, you social media initiatives will drift. So, determine your Objectives first. Naturally the objectives or a well established consumer brand will be quite different from those of a marketing agency or "brick and mortar" business.

Here's are some examples: I am working with two very different companies on their social media programs; a growing industrial equipment company and an international child safety products company. The industrial equipment manufacturer has the following two social media Objectives: (1) establish themselves as "the most innovative company in their segment", and (2) build their online brand presence for their target demographics. In contrast, the child safety products company's objectives are: (1) any time somebody researches "car seats", they want feedback on their products from across the web to show prominently in the search results, (2) any valid, negative online feedback of their products need to be addressed with a company comment, and (3) they want their brand to be associated with being the safest seats out there.

2. Identify how you will Measure success.

Tracking your efforts using KPIs to quantitatively measure your progress is critical. The effectiveness of different Social Media mediums need to be evaluated using different metrics. If you aren't sure which KPIs to use or don't have the resources, consider a specialty analytics agency like Maass Media.

As you experiment and iterate, you will generate quantitative data and be able to refine your campaigns to increase demand, increase satisfaction, reduce costs, etc. It is quite likely that your KPIs will evolve over time as well.

3. Implement the Methods (People, Process and Technology) to achieve the Objectives.

Identifying all the possible Methods for managing your social media activities is beyond the scope of this post, but here are a handful of conversation starters:

Technology
There are a variety of different technologies that can be deployed to enable and monitor your social media initiatives. In fact, some of the technologies will be part of your social media campaign. This posting can't cover all the different technology components, but there are a few "minimum requirements":

To track your metrics you need tools for Monitoring and Measuring

• Omniture or Google Analytics for your website visits, blogs and microsites. They also can be used to track which social media outlets are driving the most site visitors
• Twitter Search allows you to search for keywords or phrases. You can also setup realtime alerts using tweetbeep when someone mentions your particular keyword/phrase/product/etc
• Google Alerts allow you to setup your Dashboard widgets and emails to track your particular keyword/phrase/product/etc
• Track everything in one place with Squidoo's - Brands In Public tool
• Monitor with services like Nielsen's Blog Pulse

To drive the conversation you need tools for Community Engagement (beyond the social media sites themselves)

• Get creative and co-opt the conversation - build plug-ins and widgets that your customers can embed in their blogs. For example, Huggies released a “Baby Countdown” widget for customers to add to their desktops. Guess what brand of diapers they will be thinking about when they go to make a purchase.
• Timberland built an iPhone app that has a compass, click to talk, provides trail maps and other cool stuff that reinforces their brand using social media. 
• The American Cancer Society has a Facebook page with over 1 million fans that participate in their promotions. Don't want to build the promotions yourself? Use Wildfire to do the heavy lifting for you.

To make it easier to contribute to the conversation you can use Social Media Enablement tools like:

• TweetDeck
• Hootsuite
• BigTweet

Process
Your Social Media activities cannot be addressed ad-hoc. There has to be a structured, process-centric approach. From a process standpoint, there are proactive and reactive components that need to be addressed:

• Proactive Actions - establish the tasks that need to be performed on a consistent, scheduled basis. For example, weekly blog posts, daily comments on industry articles, hourly Tweets and periodic LinkedIn answers to industry relevant questions.
• Reactive Actions - establish how negative issues will be addressed and then implement a process to make sure that plan is followed. For example, if there are customer complaints, what's the decision tree cycle on when to respond and how to respond to the complaints. You might not want to respond to all online complaints individually (that would circumvent your customer support processes), but if there are a lot of similar issues, use a template response to ensure consistent communication. You could even host a community forum with a recorded video (on YouTube of course) to discuss how the issue is being addressed. 

People
Social media (guiding the boulder) is NOT just a marketing and PR function. Let me repeat.....social media is NOT just a marketing and PR function. It is a corporate function. Product Management must take customers feedback and incorporate it into the product, Support must know about issues and work to proactively resolve the issues, Finance (if publicly traded) should know about the online buzz as well. Marketing must be the leader however.

So, to be successful, you need to build an organization that can manage your social media processes and respond to changing dynamics. Each company will need to figure out which structure meets their own needs best - whether its a Chief Community Officer and a team of Social Media Ambassadors, whether it is 100% outsourced (which I don't recommend), or some other structure, there needs to be an organizational mindset that goes beyond just marketing and PR.

4. Initiatives
We are so early in the Social Media cycle that there are no right or wrong approaches. However, if you don't get started, execute on a few initiatives and learn from your own results (?mistakes?) your learning curve will just get steeper and steeper.  Like any initiative, track success against your metrics and aim to get 360 degree feedback from customers, employees, partners and pundits. Then evolve your campaigns and processes based on the results, experimenting and testing is a lot cheaper online than offline - do it.

And finally, Rule #5 for guiding your Social Media initiatives: Be Excellent

Lastly, but probably most importantly, BE EXCELLENT. As with all great brands and reputations, excellence is critical. It doesn't matter how much you invest in guiding the online conversation, if your product or service in not excellent, you will not be able to succeed. With social media your strengths are magnified, but so are your weaknesses.

Reinforcing this idea of Excellence as the foundation of social media comes from online guru Dave Evans: "... Marketing sets the expectation, marketing creates demand, marketing helps a consumer differentiate why one choice is better than another choice. Operations delivers. Any gap between the two drives a conversation on the social Web."

If your product or service is not excellent, the conversation can quickly turn into an incident.

The Bottom Line: We are very early in the social media lifecycle and there are no industry wide best practises. So, experiment, iterate and chart your own course.

Rolling Boulders and Social Media

If you are a marketer, it's time to face a hard truth.....the world has changed and you have close to zero control over your online brands. This is a big contrast to the good old days of advertising and communications, circa 1998, when you could still exert tremendous brand control through advertising, promotions and PR.

Am I exaggerating? Maybe a bit, but let me use a rolling boulder analogy to explain. Here are two scenarios:

1. Flat Ground - image a big boulder sitting in the middle of a nice flat lawn. To move it, you simply push that rock in the direction that you want. The more people (or $) you throw behind the effort, the further and faster you can get the boulder to move.
2. A Hill - now imaging the same boulder perched on the side of a hill. Once you get the boulder rolling, gravity is in charge. You can maybe guide this big rock with a nudge here and a push there, but as it gains momentum you lose true control.

Controlling rolling boulders is not too different from trying to control brands and your online image in today's social media world. With the gravity of  bloggers, tweeters and all the other social media options, it is practically impossible to maintain control over your brand, there are just too many possible alternative viewpoints and inputs.  So, your brand is no longer just what you say it is, your brand is what the social media crowd influences your brand to be. All is not lost.....being a part of the online conversation is good and you can still guide it.

The Bottom Line: If corporations, agencies, marketing / communications execs have no true control of their  online brands, what can they do? Well, that's a billion $ question and the answer is "5"... as in come back soon to read my next post on the Five Rules For Steering Rolling Boulders (....and guiding your Social Media programs).

Google Wave - The Opportunities Are Tremendous

I just previewed Google Wave and the opportunities for extension & integration are tremendous. I am excited to see the apps from B2C developers (Lonely Planet already has a cool tool) while B2B SW companies have an awesome new platform / capability to integrate and extend their functionality (and value props) with.

Starting out, SAP and Salesforce.com have developed two elegant apps for BPM and Customer Support respectively. The SAP BPM solution raises the bar on competing BPM designers and workflow tools, while the Salesforce Robot concept is very innovative.

There is tremendous value for B2B SW apps that require sequential tasks to now be done collaboratively in real-time. Once you add in voice integration and text transcription capabilities that Ribbit has developed, you can get a really differentiated solution (until the competition catches up). For example, if you need to design, review and iterate something, Google Wave now makes it possible to do the three steps at the same time. Off the top of my head, the following companies can (or will need to) leverage Google Wave like functionality to deliver an enhanced user experience:

• iRise - application designs and interactions can now be developed and reviewed real-time with playback;
• Pegasystems / Lombardi / etc. - SAP is raising the bar on collaborative process design. These BPM companies will need to match capabilities;
• AutoDesk / PTC / Dessault - developing and reviewing engineering blueprints can now be done more interactively;
• Adobe - real-time reviews of visual deliverables and copy will be tremendously valuable when the editors and reviewers can all work on the same information.

It will be interesting to see how Google Wave evolves and how B2B and B2C developers leverage the platform.

Cloud Computing is THE SaaS killer...with a little help from some friends.

Did the title make you go "HUH"? Let me explain.

First a couple of definitions:

• SaaS or Software as a Service [from Wikipedia] - "is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand." Key characteristics:

• network-based access to, and management of, commercially available software
• activities managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
• application delivery typically closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
• centralized feature updating, which obviates the need for end-users to download patches and upgrades. 

• Cloud Computing [from Wikipedia] - "is a paradigm of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet.^[1][2] Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them. Cloud computing customers do not generally own the physical infrastructure serving as host to the software platform in question. Instead, they avoid capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, while others bill on a subscription basis. Sharing "perishable and intangible" computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development). 

SaaS has differentiated itself based on being more cost effective and easier to deploy than traditional SW tradeoffs are that all customers (tenants of the SaaS infrastructure) are updated at the same time, customers are locked into the deployment and customization is virtually impossible. Now there is a way for Independent Software Vendors (ISVs) to deliver the ease and cost effectiveness of SaaS without many tradeoffs. How? By combining three evolving technologies:  Cloud Computing + Software Appliances + Automated Provisioning Management. Let's call this solution combination: Cloud Application Deployments or CLADS. 

How CLADS can work is pretty simple:
1. As part of a standard Software Lifecycle, a Software Appliance would be developed for each released build.
2. These Software Appliances would be made available for distribution
3. For a "SaaS Like" distribution, the Software Appliance could be automatically provisioned to a Cloud Computing provides like Rackspace or GoGrid.

Here are just a couple of ISV business use cases where CLADS levels the playing field:

• Providing Demo / Trial Accounts:  'Free Demos' are a staple marketing component of SaaS providers. For ISVs, creating demo and trial accounts is often difficult, time consuming and costly. There are multiple components and ISVs typically do not have the hosting infrastructure expertise that a SaaS provider has. Also, creating demo environments based on a dedicated physical infrastructure can be very CLADs. With CLADs, ISVs benefit because:
• Hosting is provided by a 3rd party with infrastructure expertise
• Costs are variable based on actual usage - you only pay for what you use
• The ISV can maintain strategic focus
• Deploying Implementation Environments:    Enterprise deployments (ie. non-SaaS) often require multiple environments for development & configuration, for staging, for issue validation and for production. Each of these environments requires upfront setup and then on-going maintenance. With CLADS, ISVs benefit because:
• Customers can get their different environments provisioned and ready to use very quickly with minimal effort
• Upgrades to customer environments are easier since they can be done when the customer choose to have the upgrade, not when the SaaS provider chooses to do the upgrade

Bottom Line: With  Cloud Computing + Software Appliances + Automated Provisioning and  Management, ISVs (open source and closed source) are able to eliminate many of the advantages that SaaS providers have used to differentiate themselves without losing the benefits that ISVs have traditionally had. The next logical conclusion is that without their differentiators, many SaaS options (see my blog post on different SaaS types for why I say "many" not "all"***) will be at a competitive disadvantage versus traditional ISVs.........and that's how Cloud Computing (with a little help from some friends) is THE SaaS Killer.


*** Note: SaaS will not be going away as a delivery model. However, undifferentiated offerings  (ie. those that don't bring a special sauce" will have a very  tough time going forward.