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Strategic marketing framework

The ultimate building block...

Want to know the seven commandments of influence?

The father of influence, Robert Cialdini, will show you the way...

What is customer segmentation?...

...and pass the aspirin while you're at it...

Getting to know your product

There are few greater career levers in marketing and product management than having a deep understanding of your products & their consumers.  When colleagues, partners, and management see that you've gained such mastery, your ability to influence & drive business decisions grows substantially.

One method I've found for quickly infusing yourself with a healthy dose of product insight is running your product through what I've dubbed the ProductBuddyTM tool (think of it as the equivalent to a nice cuddling session with your product).  ProductBuddyTM can be especially powerful for helping you quickly get up to speed on a new product.

ProductBuddyTM is powerful because it not only equips you with critical insight into your product's category, but also provides you with:
  • Ideas for making product enhancements & innovations 
  • Ideas for improving your marketing strategy & marketing programs 
  • Visibility into aspects of your product where you require greater insight & understanding

ProductBuddyTM Tool & universal product attributes 
The ProductBuddyTM tool is used for assessing your product category across a number of universal product dimensions & attributes – by universal, I mean those dimensions & attributes that can be used to describe any product or service category, from productivity apps for your iPhone to vacation rentals and dish-washing detergent.


Examples of universal product dimensions & attributes include:
  • Consumer interest level.  Cars would represent a product category with very high consumer interest levels while car oil would be on the very low-end of the scale.  
  • Ease with which consumers can experience the product's value.   Insurance products would be on the “difficult” end of the scale as compared to pain relievers such as Tylenol or Advil on the “easy”-end.  
  • Aesthetics & design importance.  I'd put sneakers on the high end of this scale and home-repair tools on the lower end.  When was the last time you purchased a wrench because of its vibrant hue and charming shape?   
  • Pleasure producer vs. pain & stress reducer.   Restaurants & televisions would go on the pleasure-producing end of the spectrum in contrast with mental-health therapy on the pain- & stress-reducing side.  

Example of the ProductBuddyTM tool in action: College

ProductBuddy: College Example


















While I've only included a sample of universal product attributes in our "college" example, just from looking through the scoring you can immediately get a feel for the dynamics of the college “product category”:
  • College: a difficult, high-stakes, extremely pricey purchase with profound influence upon one’s identity and sense of self.  Now imagine running a product category like "toothpaste" through the same exercise... same product dynamics as college?  Certainly not.   

List of universal product dimensions & attributes for ProductBuddyTM Tool
While the list below is by no means exhaustive, it includes enough different types of product dimensions to provide you with a well-rounded understanding of the dynamics of your product category.

A few important notes about universal product dimensions & attributes before you start scoring your product category using this list:
  • Some are very much associated with specific stages in the consumer/purchase life-cycle (demand/interest, research & selection, purchase, installation, usage, maintenance, re-purchase, disposal, etc.)
  • Some are more relevant to internal, organizational considerations while others are externally focused on the consumer and the market for your product.
  • Some are more relevant to certain product categories than to others.        

Universal Product Dimension / Attribute Relevant Stage(s) in Consumer Lifecycle
Consumer interest level (cars vs. car oil) NA
High/Low price point NA
Number of scenarios / use cases in which product is used/needed NA
High/low purchase frequency - e.g., car vs. toilet paper NA
Social pressure / reflection of one’s identity related to product category (e.g., type of car you drive vs. brand of rubber bands you use) NA
Most important reasons consumers become interested in product (key triggers)  Demand/Interest
Importance of aesthetics & design (form vs. function) NA
Provides Pleasure vs. Reduces Pain/Stress/Risk/Loss  NA
Number of options/different features  NA
# of different pricing configurations NA
Predictability of demand for product NA
High/low effort - physical / mental energy required Relevant to each part of lifecycle
Speed & ease-of-access to information would want to have/know Research & Selection
Ease of communicating benefits of product Research & Selection
Cost of channels that can effectively market product Research & Selection
# of specific features that drive bulk of purchase selection decisions Research & Selection
Easy to assess/research pricing; ease of making product comparisons Research & Selection, Purchase
Importance of Price in determining purchase decision Research & Selection, Purchase
Emotion-based/Logic- or Functional-based Research & Selection, Purchase
(Perceived) Risk & consequences of making a bad purchase (e.g., purchasing a used car vs. a piece of fruit) Research & Selection, Purchase
Ease of making & completing purchase Purchase
Cost of channels that can effectively sell product Purchase
Steepness of product learning curve  Research & Selection, Usage
Easy to use/complex Usage
High/low post-purchase costs & maintenance Usage
Speed at which product fills given customer need/achieves customer goal Usage
Value derived by product per unit of effort (mental or physical) Usage
Speed in which value can be derived from product (e.g., eating chocolate vs. SEO) Usage
Level of pleasure derived while using (mental, physical) Usage
High/low-touch Usage
Ease of receiving & setting up product Usage
Ease-of-seeing value provided by product Usage
Cost of channels that can effectively service product Usage
Diversity of consumption patterns for product - does everyone use or consume product same way or is their great variability? Usage
Ease of repurchasing product Repurchase
# of ways consumers can currently repurchase product Repurchase
Main reasons why consumers do not repurchase product Repurchase
Ease of disposing of product Disposal

How should I use this list?
  1. Copy the list into a program like Excel, and score your product across each dimension. (Feel free to skip those dimensions that are not relevant to your product category)
  2. Add more dimensions to the list and score your product across those as well. (Just by going through the list you'll come up with additional dimensions for assessing your product category) 
  3. For each dimensions, ask yourself whether there is an opportunity for enhancing your product or improving your marketing or operations.  For example,  

...and before I go
Please, please let me know if you have any questions - shoot me an email, leave a comment below, etc. More to come on this topic. Getting to the essence of your product -- to that the juiciest part of the steak -- is where the greatest opportunities await.

Recommended books for getting to know your product better

    

Also, check out all of my business book recommendations.








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Can you afford your new brand positioning? Ask HSBC, the former "World's Local Bank"

It happens time & time again... some bright, creative marketers or agency folks devise a clever new brand positioning for a company or product... so far, so good... The problem, however, is that the clever new positioning rarely gets vetted, analyzed or market-tested to determine the associated benefits and costs (one-time and ongoing).  And, of course, the bitter irony is that the more successful the new positioning is the more money the company may lose as the operating costs associated with the new positioning run out of control.

Case in Point: HSBC -  fka "The World's Local Bank"
HSBC invested millions and millions of dollars back in the early 2000s to "plant a chip" in the minds of consumers that it was, "The World's Local Bank".  And, the bank was quite successful in its campaign as evidenced by the millions of people who would pass by an HSBC branch and instead of saying, "let's stop off at the HSBC ATM," they would utter, "let's stop off at the ATM of the world's local bank" (okay, perhaps I'm embellishing a bit, but the new positioning was quite successful).

But only a few years later, HSBC discovered something rather unfortunate.  The ongoing investment in marketing & operations to support HSBC's "World's Local Bank" positioning was outweighing the benefits. The negative ROI of the new positioning was going to cause the global bank to become much, much smaller. Think "The World's Local Bank" without the word, "World".
HSBC: The World's Local Bank.  
Not pretty, especially to shareholders.   The company was gushing money, and, in a post-Lehman Brothers world, even bank's like HSBC which had successfully weather the financial storm-of-the-century were still extremely vulnerable.

What?!?  My local HSBC branch has no phones?  The Cost of Branding Success...
HSBC's "World's Local Bank" brand positioning was so successful that even a few years after ditching it, many people, including fifteen-year customers like myself, still thought HSBC was the undisputed king of glocal* banks (i.e. the world's local bank).

Which brings us to a few days ago when I needed to call my local HSBC branch to find out whether the only branch employee with the power to guarantee signatures was in the office.  Despite my best Google ninja-searching, the only phone number I could find was HSBC's general customer service number - i.e., the 800 number that connects customers to low-cost call centers typically located 1,000+ miles from my local branch in New York City.  As I learned from my subsequent joyful visit to my branch, local branches no longer provided contact numbers to their local banking customers.

How could The World's Local Bank not provide customers with the phone numbers of its local branches?!?  I was outraged... and as I found out only a few hours later, the answer was quite simple.  HSBC was no longer the world's local bank.  It was just another huge, impersonal bank with a new brand positioning that was apparently so powerful, so captivating that I cannot even remember it.  And, of course, just like any other enormous, impersonal bank, the whole notion of local anything, including the phone numbers of local branches was no longer necessary.  HSBC now has a new image to uphold - one of "global impersonalism". Local phone numbers begone.


Recommended reading


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*In case you're wondering, yes, it was painful for me to go with an over-used business buzz word like "glocal," but how much better the sentence flows with its inclusion :)






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21 Great Questions to Generate New Product Innovations

As I always say, if you can't beat 'em, re-publish 'em - with the proper sourcing, of course :)   With a career that has focused deeply on product (management, marketing, development), I'd like to think I'm quite the connoisseur of the finest of writings on such topics.  Below is a terrific set of questions for getting you out of your box and into your mind's innovation lab.  The questions were first published in an HBR article in December 2007.  Enjoy.

21 Great Questions for Developing New Products
“De-average” buyers and users
  1. Which customers use or purchase our product in the most unusual way?
  2. Do any customers need vastly more or less sales and service attention than most?
  3. For which customers are the support costs (order entry, tracking, customer-specific design) either unusually high or unusually low?
  4. Could we still meet the needs of a significant subset of customers if we stripped 25% of the hard or soft costs out of our product?
  5. Who spends at least 50% of what our product costs to adapt it to their specific needs?

Explore unexpected successes
  1. Who uses our product in ways we never expected or intended?
  2. Who uses our product in surprisingly large quantities?
  3. Look beyond the boundaries of our business
  4. Who else is dealing with the same generic problem as we are but for an entirely different reason? How have they addressed it?
  5. What major breakthroughs in efficiency or effectiveness have we made in our business that could be applied in another industry?
  6. What information about customers and product use is created as a by-product of our business that could be the key to radically improving the economics of another business?

Examine binding constraints
  1. What is the biggest hassle of purchasing or using our product?
  2. What are some examples of ad hoc modifications that customers have made to our product?
  3. For which current customers is our product least suited?
  4. For what particular usage occasions is our product least suited?
  5. Which customers does the industry prefer not to serve, and why?
  6. Which customers could be major users, if only we could remove one specific barrier we’ve never previously considered?

Imagine perfection
  1. How would we do things differently if we had perfect information about our buyers, usage, distribution channels, and so on?
  2. How would our product change if it were tailored for every customer?
  3. Revisit the premises underlying our processes and products
  4. Which technologies embedded in our product have changed the most since the product was last redesigned?
  5. Which technologies underlying our production processes have changed the most since we last rebuilt our manufacturing and distribution systems?
  6. Which customers’ needs are shifting most rapidly? What will they be in five years?




Recommended reading






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Strategic Marketing Framework to print out & hang on your wall at work

I've found this framework to be immensely helpful to me throughout my career.  Particularly during those fire-fighting, short-term focused periods of work that we all experience from time to time, this framework has always helped me to reorient myself & recalibrate.     

There's a lot more to come with the framework - I'll be drilling down into the different dimensions in more detail so you can have a richer understanding for how to use it to develop robust new marketing strategies and to improve existing ones.

Please feel free to email me if you have any questions about how to put the framework to use within your business.

strategic marketing framework












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What is customer segmentation?

Like so many buzz words in marketing, "segmentation" is one of those that is interpreted by folks to mean many different things. If the word "segmentation" were blurted out in a room of 20 business people, chances are it would conger up 20 different images of all colors, shapes & sizes.

So what is segmentation and how can you use it to propel your business?

Segmentation defined
Customer segmentation is simply the grouping together of customers based on similarities they share with respect to any dimensions you deem relevant to your business.  Dimensions could include customer needs, channel preferences, interest in specific product features, customer profitability - the list goes on.

The key is for you to determine how to segment (or group) your customers in a way that will have the biggest impact on your business.  You *could* decide to segment your customers by hair color - brunettes here, blondes there, red heads over there... but to what end?  How would segmenting your customers by hair color help your business? (Hair salons notwithstanding)  Goal-directed segmentation is the only segmentation worth pursuing.  It's purely a means for achieving your business ends.  


What are the business goals of my segmentation?
The only way to answer the question of how to best segment your customers is to first define what your objective is for the segmentation. In other words, you must first define what you want the segmentation to "do for your business".  Examples of common segmentation objectives include:
  • Develop new products
  • Create segmented ads & marketing communications
  • Develop differentiated customer servicing & retention strategies
  • Target prospects with the greatest profit potential
  • Optimize your sales-channel mix

A brief example: segmenting for customer win-backs
Let's say you manage Toade-ALL, the fee-based music subscription service for Toade, a new Pandora competitor. One day your boss asks you to optimize Toade-ALL's win-back strategy.  The win-back strategy is presently comprised of three different sets of win-back tactics targeting people who have recently canceled their subscriptions (aka "attritors"). Toade has taken this approach to win-backs ever since Toade-ALL was launched.  Selecting which of the three win-back tactics a recent attritor receives has until now been based on "intuition" (aka guessing).


Step 1: Clearly state your segmentation objective (and ensure you & your boss are aligned!).
In this case your goal is to optimize Toade-ALL's win-back strategy for recent attritors. This is shorthand for saying, "I want to a segmentation scheme that maximizes the ROI on the money I spend to win-back recently-canceled customers". 

Step 2: Determine how effective each win-back tactic would be for each attritor
Without getting into the "calculus", what you want to do is estimate the expected ROIs associated with each of the three win-back tactics for each & every recent attritor.  For each tactic, this will enable you to identify those attritors with the highest expected ROIs (i.e., those attritors most likely to re-enroll in Toade-ALL after receiving the tactic and then providing Toade with future profits that well-exceeded the cost of the tactic).

Step 3: Identify what the high-ROI attritors have in common 
For each win-back tactic you want to identify those attributes which the high-ROI attritors have in common.  This will allow you to create a profile or persona for "high-ROI attritors" for each tactic.

Step 4: Operationalize & execute your plan
The final step is to "operationalize" the three attritor profiles you've created so you can use them to determine which of the three win-back tactics, if any, to send to future attritors.

So how would this work?  You would implement a process in which future attritors would be matched up against the three profiles to determine which, if any, best describe them. A more sophisticated approach would be to build predictive models to calculate the expected ROI for each tactic for each attritor, and then employ the tactic with the highest expected ROI to the attritor. And, for those attritors in which all three tactics have negative expected ROIs you may decide not to do anything.

Closing thoughts on segmentation
In closing, segmentation can be tricky and complex, and no doubt requires real expertise & experience. Putting in place a flawed segmentation strategy can be far more detrimental to a business than not having one at all.

However, when designed the right way, segmentation strategies can provide tremendous returns relative to default, "one-size-fits-all" approaches. In future posts I will tackle other types of segmentation strategies, including those involving new product development and portfolio management.  







More posts on segmentation & marketing strategy:


Great books & articles on segmentation:







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