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The Blackberry Open Letter To Stockholders
For 18 months now, I’ve been ripping Blackberry on this blog. Just yesterday and I mocking their announcement that we’re going to be blown away by the new phones they will be releasing. As I told my friend that I’ve heard that before, he asked me an excellent question.
He asked, “Doug, what would Blackberry need to do or say for you to compliment them on their actions?”
My first thought was probably nothing. I realized that wasn’t fair, or true. Blackberry still endears very positive feelings from many. In many ways they remind me of Apple when Steve Jobs returned. While I highly doubt Blackberry will turn it around, I took my friend challenge and wrote the letter that I’d like to see Blackberry’s CEO, Thorsten Heins, share (Thorsten, feel free to use):
Dear Shareholders;
We screwed up, and on behalf of the board and executive management team I apologize.
You see, we forgot who we were. No, strike that. The truth is we never really knew who we were. We got so successful, so fast, we never had to figure that out.
Do you remember when you saw your first Blackberry? You probably laughed, thought was an ugly, cumbersome pager, and wondered who in the world would ever pay a monthly fee to get their email. Heck, many of you probably didn’t even have email accounts when the first Blackberry came out.
But, boy did we delight high volume email users and “intelligence” workers. We freed you from your desks. We made the 15 minutes between meetings productive. We turned libraries into communication centers (if you know what I mean).
We were engineers and innovators and we built a company. Even more, we built a brand. We became rock stars. We could do no wrong. We created a whole new product category – the smartphone. And, we thought we owned the category.
It was a great story. Unfortunately, the feeling that we owned the category turned into feeling that we were entitled to own the category. It’s not really that we lost sight of what was happening in the market, or how our customers were changing; in actuality we never paid attention. We didn’t need to.
It’s easy to blame our problems on the introduction of the iPhone, but that would be lazy. The problem is that we forgot that innovation isn’t a one-time event, and successful innovation isn’t just pumping out new versions or introducing things that don’t matter. We learned that innovation certainly isn’t copying others (sorry, Apple).
Here’s what we’re going to do about it:
- We’re going back to our very first principles that started the movement. We are going to be engineers and innovates, not gurus.
- We’re going to stop touting our products. Our customers and fans will speak for us.
- We’re going to stop competing. This is what caused us to make all the mistakes I’m apologizing for. Instead, we’re going to focus on wowing and amazing our best customers. This means that many of you may be confused or disappointed by what we develop – that’s okay; we learned that trying to be all things to all people is bad for your stock price.
- Last, and most importantly, we’re going to focus on creating value again. We’re going to really focus on our best customers and biggest fans. We’re going to ask – and answer – what problems, challenges or desire do they have that we are uniquely capable of solving. This means that we’re going to have to accept that we’re a smaller company. We’re going to reengage with our startup roots and look to build and create a brand new category. I can’t tell you where that journey will go, or end. I know that many currently with us will not stay, and while unfortunate, it is certainly understood.
I hope you’ll join us.
Growth Lessons From Google
Over the years, I’ve lauded Google’s approach and admonished them. Either way, you’ve go to credit Google as one of the great American business success stories.
This weekend, there was an excellent article about what small businesses can learn from Google. I encourage you to read it.
The author identifies five key principles that drive Google’s culture. I agree that if you live by these five principles you’ll be happy with the outcome:
- Launch and iterate.
- Fail fast.
- Focus on the user (customer).
- Ask forgiveness, not permission (internally).
- If you see a void, fill it.
As with most successful philosophies, there’s nothing complex here. It’s all quite simple; just not common. As the summer months begin, make a commitment to live by these five rules and see what happens.
Kudos to GM
After years of being able to use GM as a prime example of what not to do, they buck a trend and announce that they are revisiting their entire spend on Facebook.
My favorite quote from the story: “The sources said GM executives found the paid ads had little impact on car buying.”
How about that. GM, one of the kings of advertising, finally learning that paying for ads, especially on social sites, has little impact on car buying.
GM is not giving up on Facebook altogether, as they find that can be an effective way to engage with their consumers and share content. GM spends $40 million on Facebook, and I for one am quite confident that if they take that $40 million and reinvest in sincere, authentic approaches that, as my friend and client Steve Randazzo says, create deep emotional connections, they’ll find far greater returns.
I love the fact that GM is finally looking at results and not just process. Maybe there is a rebirth in Detroit after all. (I know, I know…don’t get carried away.)
Here’s the other quote I love. It’s from Steve Goldner, a senior director at digital-media agency MediaWhiz. He says this move “reflects that GM does not know how to integrate social-media into a winning marketing play.”
Well, maybe. Or maybe it’s just that paid advertising doesn’t actually drive behavior. Maybe there are more effective marketing “plays” that make a bigger difference. As I share with my clients, just because something is popular doesn’t mean that it works.
For too long, marketing agencies and consultants have been making the marketing process and complex and trendy as possible to enable them to justify exorbitant fees and to hide from accountability.
I congratulate GM for stepping up. I hope they follow through. Then maybe, just maybe, I’ll be sharing other examples of GM is doing that should emulated.
Is It Too Late To Save BlackBerry?
In January 2010, I wrote a blog post asking if BlackBerry was a dead product walking. In the post I put forth the theory that BlackBerry’s envy of Apple’s customers was one of the primary reasons for the decreasing performance of the company.
In the last year the story of BlackBerry’s failure is well known. The failure led to management shakeup where the co-CEOs and founders left the company and a new CEO was put in charge. Yesterday, he announced that BlackBerry, for all practical purposes, is giving up the consumer market and is focusing on their more traditional markets of businesses and enterprises.
While this was certainly the primary recommendation I made almost 15 months ago, my question now is, “Is it too late?”
Apple, Android and others have all continued to advance their technology, build deep emotional connections with their customers and to exploit the Blackberry’s missteps. I certainly hope RIM’s decision, and the implementation/execution of the strategy works for BlackBerry.
I think it’s good for the world that there is a strong BlackBerry out there to provide competition for the Apples of the world.
The lesson for fast growth executives is to remember to stay true to your core, don’t lose your plot and always stay focused on who you are trying to serve and how you can be the best.
A Crucial Decision to Drive Your Profit Formula
I often talk about how salespeople and companies can Move Beyond Price to put the focus on what your products/services are worth instead of what they will cost. As part of the process, I explain that price is really a signal, telling both buyer and seller how the other values of the proposition being put forth.
The implications of The Drought we find ourselves in as we continue to emerge from the deep recession puts more pressure on sellers to justify their prices and margins. Sellers must be able to answer a very simple, clear question: Why should a buying organization give your products/services a favored status, allowing you to earn higher prices and margins?
Increasingly sellers are failing to have compelling answers to this question. In my experience, the underlying reason for this is because sellers are either unwilling to put forth the effort to offer propositions that are truly different and better than others, or sellers are merely afraid to make a compelling promise.
Companies have a crucial decision they must make:
- Do they want to focus their profit formula on enhancing and growing margin? or
- Do they want to focus their profit formula on growing volume faster than anyone else?
Companies that choose the former must go further and ensure that their value proposition connects more deeply with their customer’s businesses. They must find and/or enhance their ability to make their customers more efficient and effective.
Companies that choose the latter must aggressively eliminate costs within their organizations so they can continue to deliver their products and services faster, cheaper and better than their competition.
Either road is difficult, but today, more than ever, you must make a choice. Straddling these two approaches is simply becoming too precarious and risky to sustain.
To get you started, here are two articles I just read that show how other companies are meeting this challenge.
- USAToday shares insights into how FedEx and UPS are deepening the value proposition and building adjacent business to drive their growth.
- In the recent filing for Facebook’s public offering, founder Mark Zuckerburg shares the Facebook philosophy with what he calls The Hacker’s Way. Every entrepreneur should read this (regardless of how you feel about Facebook or Zuckerburg). My favorite quote in the piece: We don’t build services to make money; we make money to build better services.
What choice are you going to make?
Don’t Be A Pigeon (Why Selling Is Dead)
Traditional selling techniques are no longer effective in the twenty-first century. A study conducted by Harvard Business Review revealed that only 1 in 250 salespeople actually creates positive economic impact for their companies, and less than 37% of salespeople meet a profile deemed to be “effective.” It is time to end the traditional approach to sales, where most salespeople are considered pests or peddlers and transform that approach so that salespeople are perceived as the valuable assets they can be.
Through 20 years of research, I have learned that the problem is a systems problem, not a people problem. To drive profitable growth, companies must adopt new systems, develop new skills and apply new disciplines to be effective. The good news is that companies that make this transformation gain disproportionate rewards – often 5 to 10 times average rates of return.
The fundamental problem with traditional selling is that it structurally places the focus on the commodity value. If your goal is differentiation and earning margin premiums, then you must work against traditional selling tactics. For six years, the focus of this blog has been to support the development of a better approach to selling. Consider this post a 30,000 foot review of six years of content (with the links to previous posts to support it).
Here’s the problem with traditional selling:
- It is solution-focused. When you begin with the focus on the solution, you are focused on the commodity portion of your proposition. As I’ve written before: solutions are worthless – until there is a problem.
- It views your difference as a “value-add,” rather than as core to your proposition (think IBM pre-1995).
- The playing field is defined by your competition, and the focus is “winning the business.” This make the process far more adversarial than it should be. From a customer perspective it makes it a hodgepodge of “sameness.”
- Because it’s solution-based, the go-to-market focus is broad; too broad. The approach is based upon “who can use the solution,” rather than on where the selling organization can be best.
- The sales and marketing approach are silo’d within the selling organization – leading to misalignment, confusion and brand degradation.
A new, far more effective model of selling flips these issues on their head. The focus is on creating value throughout the entire sales/marketing process. Rather than merely fulfilling demand (which is akin to being a pigeon trying to compete for a piece of bread) the focus is on creating demand – what I call Demand Creation Selling.
- It focuses on critical results – and the barriers that prevent those results – rather than on solutions. It focuses on the problem, and enabling the customers/prospects to better understand their problems and the causes and consequences of those problems.
- Rather than viewing your difference as the “value-add,” it focuses on your difference, your business’ intelligence if you will, as the core of your offering. I refer to it as making The Shift from selling stuff to selling your ability to create results.
- The focus is on creating demand (and markets), and as such, you eliminate competition and you own markets, rather than compete.
- You focus and allocate your resources where you can be the best, and you ignore areas where you’re a “me-too” company.
- Instead of focusing on the solution, Demand Creation Selling means that you manically focus on understanding customers – better than the customers understand themselves.
- Sales and marketing are fully integrated, and the company goes-to-market in a clear and powerful manner. There is no need to differentiate, because you are different.
- Expertise is defined by how well, and how deeply, you understand your customers and their issues, rather than how well you know and understand your solution.
Growth is tough enough as it is. Businesses can no longer rely on systems and approaches that work against them. The time has come to change the way you sell – and the rewards await.
Don’t’ Hire Someone to “Figure it All Out”
The following is a guest post by Bob Corlett, President of Staffing Advisors. Bob is a genius when it comes to staffing issues and, in his own words, is a “Staffing Consigliere.” Bob writes a great blog on strategic staffing issues called The Staffing Advisor. I encourage you to check it out.
To run a company is to confront one complex problem after another. In fact, if you are not frustrated then you are probably working on the wrong problem. But it is always a mistake to hire someone to solve a problem you do not understand. You should never “outsource all your thinking” to a new hire. As an executive search consultant, I know you are in trouble when you can’t tell me your strategy to overcome obstacles, but instead tell me “If I hire the right person, they will be able to figure this all out!”
This is an epidemic problem in sales. Somehow, many people came to believe (incorrectly) that “a good salesperson can sell anything.” Some managers even seem to also believe the reverse is true – that if you cannot sell (whatever it is your company sells), well then it must be because you were not a very good salesperson. These frustrated managers often say: “Where are all the good salespeople? Doesn’t anyone want to work anymore?” Actually, the answer to their question is obvious:
The great salespeople are all out selling for organizations that have a working sales strategy. They are working for companies that already figured out who their customers are, what their value proposition is, and where their sales prowess is handsomely rewarded.
An excellent salesperson cannot make up for all the deficiencies in your product offering. Founders and owners can and often do sell past those obstacles, but you didn’t see top sales pros gravitating into buggy whip sales after Henry Ford came along with the car.
It’s great to collaborate with outside consultants, but please don’t bother trying to recruit an employee to “figure it all out” for you – that is just lazy thinking – and lazy thinking is not attractive to top performers. (I should point out that lazy thinking is very powerfully attractive to other lazy thinkers – the big talkers who want a place to hide out, where the expectations are fuzzy, metrics nonexistent, and the boss is not paying attention … because that is exactly what you end up with, when you start out lazy).
Great salespeople have business acumen. And one of the first things that smart employees look for is your ability to confront the challenges facing your organization. Of course you will have challenges, but what draws top people is your plan to attack those problems. So hire someone who buys into your vision, but please don’t even think about filling a job you do not understand.
The Only Research That Works
I got an email today from a marketing consultant cautioning everyone to be careful not use customer satisfaction surveys when double blind market research is more appropriate. The consultant warns, in surveys, “customers often rate everything as important.”
While I certainly agree with the assessment of how surveys provide less than reliable data, I couldn’t resist commenting on the idea that double blind studies “make the information you get more actionable.”
Maybe if your Proctor and Gamble, Microsoft or Coca-Cola market research may really matter (though it’s interesting that even Proctor and Gamble, the father of modern market research has turned away from traditional research).
However, if you’re a small or mid-sized business, and you feel you need to do formal market research, then you should be treated as the commodity that you are. The problem with market research is that it creates a feeling of certainty where there is none.
There is only one type of research you should consider doing: spending time with customers, learning absolutely everything you can about them. Watch what they do, listen to their goals and what’s frustrating them, etc. What are they saying, and more importantly, what aren’t they saying. Understand them better than they understand themselves.
Then take that knowledge, connect to your expertise, and you’ll have actionable research that actually drives sales and margins.
Great Wine
If you follow me on Twitter, you know that I just got back from 10 days in Vancouver speaking with companies about Creating Demand. I met and talked with CEOs and senior executives from a wide variety of businesses who are all taking up the challenge of moving beyond good to great with gusto.
On my last night there, I had a terrific opportunity to take in a Vancouver Canucks game with one of the executives. He’d just begun a new endeavor for a major western-Canadian organization with the edict to build a powerful brand from the company’s resources.
So in between goals, (the Canucks won 3-2 in an exciting game) we discussed how he may be able to do that. This executive came from the premium wine business, so we talked a lot about wine as well.
Returning to my hotel I realized just how much great wine can teach executives about great branding. So if you like wine or branding (or, even better, both), I share with you nine lessons great wines can teach us about building a great brand:
- Great wine is the result – not the process. There is not such thing as “wine-ing” (except when my kids do it, and it’s spelled differently) and there shouldn’t be anything called branding – a brand is an end, not a means.
- The people who drink the wine are ultimately the ones that decide what a great wine is. It is your customers, and the people who come in contact with you, who decide if you are a great brand.
- All the publicity in the world does not make a great wine. All the publicity in the world does not make your brand great.
- To be a great wine, the wine must deliver the goods. Just because the winery says the wine is great doesn’t make it great. Just because your website says your brand is great doesn’t make it so.
- The most powerful marketing component for a wine is inside the bottle. The marketing component that actually drives and creates your brand lies in what you do and/or deliver, not in your advertising, brochures, or logo.
- Wines have good years and bad years, and while good years help, great wines find a way to be great regardless of circumstances. Great brands deliver regardless of circumstances.
- When a great wine becomes popular and the producer or bottler tries to exploit it by ramping up production to “sell more,” the wine inevitably loses its aura, its specialness, and it fails. When businesses start getting traction and they exploit their brand to drive short-term revenues or profits, the brand loses its authenticity and inevitably fails.
- As anyone who enjoys wine knows, it takes a certain amount of time for a wine to gain its flavor, and you can’t short circuit that time. If you open a wine “before its time,” you lose. Building a company that becomes a great brand takes time and you have to give it that time.
- Great wines age well. It’s not about being the first, it’s about being best. Great brands age well. It’s not about being the first, it’s about being best.
What do you think of these lessons? Do you have any to add?
Leno & Lessons for Fast Growth
With the official announcement that NBC is killing the Jay Leno in prime time “experiment,” I’m reminded of the post I wrote questioning the decision and I can’t help but notice some important lessons we should all learn from it.
- NBC focused on its needs while ignoring its customer’s needs, then rationalized that what is good for NBC is good for its customers. Had they considered the world from their viewers’ perspective, their affiliates’ perspective or even their advertisers’ perspective they would have made a different decision.
- NBC kept calling it an experiment and then went all in. As I wrote in my previous post, Jay Leno one, even two days a week, may not have been so bad. Had Jay done well one night, they could have added a second and so on. If they made the change incrementally, a) it would have had a better chance of working, and b) NBC wouldn’t be in the bind that they are, with virtually no programming to fill the five hours. I see businesses do this all the time. They allocate critical resources from their core business on “experiments” and end up weaker all around.
- NBC viewed the world from their competitor’s eyes and were more worried about what they could lose than strengthening what they had. The original move was made more than five years ago, when NBC was worried they’d “lose” Conan O’Brien. They put Leno in prime time, not because it was part of a strengthening strategy, but because, having contractually promised The Tonight Show to O’Brien, NBC was afraid they would “lose” Leno. Strategy and growth are all about making and managing trade-offs. When you try to keep it all, you often times lose it all. I see this happen when businesses keep ineffective employees, especially salespeople, because they’re afraid the person may go to the competition.
- The entire rationale that was announced was one about managing weakness, as opposed to becoming stronger. NBC insists that Leno’s performance from a ratings and corporate perspective are what they expected. That even though the ratings are down by more than 30%, the show was still more profitable because it was cheaper to produce. That’s the attitude of a growth business – not! Businesses are acting this way every time they use the recession as a reason to cut or “control,” rather than to become stronger. The only way to get stronger is to focus on growth.
So what do you think? How can you apply these lessons to your business?
The Beginning of the End For Google?
Okay, I admit it – maybe that headline is a slight overstatement. Uhm, on the other hand, I’m not so sure.
Google (and Bing) have gotten a lot of press and attention for their real-time search function. I have to admit that I’m quite impressed by just how quickly I post something with my name in it, and Google lets me know it’s out there.
But, I’ve got to tell you – I don’t like it. Frankly it’s increased the noise level, without providing any real value or benefit. Sure, I get the value it may provide for “brands” who are trying to “listen” to what others are saying. And if someone starts saying something bad about you, knowing sooner would certainly help.
However, Google has always succeeded because it focused on benefiting the searcher, rather than the searched. Google’s famous algorithm was tremendously valuable because it filtered a lot out. It made my life (and the lives of millions of others) simpler and easier.
The benefit of Google was very similar to the original benefit of mutual funds. When they came into existence (in 1929), their fundamental value was that they enabled people to make sense of a very complicated investment world. Paying attention to every potential stock was (more than) a full time job. Amateurs just couldn’t keep up with it.
So, mutual funds filtered the stock world for investors. While the average investor didn’t have time to research every stock, they didn’t have to. They could simply select a mutual fund – and the mutual fund manager did the filtering for them. Mutual funds are one of the primary reasons that America became an investment culture.
This worked great until the 1990s. That’s when more mutual funds existed than stocks. The product designed to simplify the world by limiting choice became more complex than the world it was supposed to simplify. It’s no wonder that the underlying performance of these funds deteriorated.
I’ve always lived by the philosophy that just because you can, doesn’t mean you should. I think Google could learn from this as well. While Google focused on more (and focused on matching its competition), I think they’ve opened the world up for a competitor that provides the very proposition that Google originally offered.
Fast growth companies can learn from this. In today’s complex world, customers are looking to you to make some choices for them. To filter the world a bit. Sure, the decisions you make will annoy some (just ask Apple), but done properly they’ll delight a few. The key to real growth – and real profit – in the future isn’t making everyone happy; it’s in delighting the few.
What do you think?
The 10 Most Popular Fast Growth Posts of 2009
2009 was a challenging year for many companies. It was one of the most rewarding for The Fast Growth Blog. Here are the 10 most popular posts from 2009. Thank you for your readership; I look forward to continuing the conversation this year.
- Why Brochures Kill Profits – a focus on why traditional marketing and the constant focus on “we-do’s” gets in the way of making sales and standing out.
- The New Marketing Funnel – one of our breakthroughs of 2009. The New Marketing Funnel provides a new model to guide your marketing investments and to understand the buying cycle better.
- Good is No Longer Enough – our theme going into 2010. This post focuses specifically on sales efforts and sales people.
- The New Marketing Funnel In Action – a primer on how to utilize The New Marketing Funnel.
- Is It Time to Kill The Cold Call – this post stimulated a lot of conversation and several additional blog posts. The title speaks for itself.
- The Inspiration For Fast Growth – this was a very personal post for me that resonated beyond my intention. A tribute to my dad, Philip Davidoff, who passed away last year.
- Can You Give Me A Price – this was the post that surprised me the most. I found a Dilbert cartoon that I thought was funny and insightful. I’ve already used it with buyers who are unreasonable.
- Mistakes-Improvements – a focus on some of the most common and critical mistakes made in the sales process – and what to do about it.
- Are You a Pest, Peddler or Demand Creator – another breakthrough for us in 2009. I introduce the five levels of sales performance and the implication of each level.
- Driving Sales With Content – content was the hot topic in marketing circles in 2009. This post connects the issues around content marketing to the sales process.
Welcome Back AOL
Today marks the end of what has been called the worst corporate acquisition of all-time – AOL’s acquisition of Time Warner, as AOL gets listed on the NYSE. While AOL works to redefine itself and its underlying value proposition, it’s worth taking a moment to review some important lessons that AOL/Time Warner taught us.
- Profits, and by extension stock valuations, are an end – not the means. When the focus becomes “profit” rather than on value creation, the strategy is doomed to failure. The AOL/Time Warner merger was hailed under the banner “synergy,” but when pressed to answer the question “what would be different & better for the consumer” there was no answer.
- Mergers rarely work. The opportunity costs related to lost focus are most often far, far greater than any perceived gain.
- When I was a new advisor at Merrill Lynch, cold calling my way to appointments and overcoming objections to get those appointments, my Managing Director gave me some great advice. He said, “Doug, if they tell you they don’t have any money – believe them.” I’ve taken that lesson and created a new one, “If you can’t figure out how they are making money – they’re probably not.” The merger has been called the worst purchase ever. The reality is that this is not true. Remember, AOL bought Time Warner. For AOL, it was a great purchase. They took an inflated asset (their stock) and bought real revenue. Had AOL not had Time Warner, they would probably not be in business today. Steve Case didn’t make a mistake buying Time Warner, Gerald Levin made a big mistake selling to AOL. Why did he sell (and the board and stockholders agree)? Because he was envious of AOL’s “profits.” Had he focused on his core business, rather than chasing the “greener grass,” Time Warner would be in far better shape, and its stockholders would be much more wealthy.
- Which brings us to our fourth (and probably most important) lesson. Don’t confuse brains with a bull market. I caution CEOs in every speech I make – just because the fish are jumping in your boat doesn’t mean your an expert angler. AOL’s success had far more to do with the market, the environment and the timing than it did with any business strategy. Just today, I was asked about all the apparent exceptions to The Five Unbreakable Rules for Creating Demand. I responded that while there are certainly exceptions, and that more businesses than I can count have done the wrong things, and still succeeded. But note that if the success isn’t replicable, there is no lesson worth learning. AOL’s problem was that what they did to be “successful,” simply wasn’t replicable. Had they kept that clear, they may have altered their business model and could have found themselves in a much healthier place today.
What lessons can you apply to your business?
Brand Destruction
Verizon Wireless and AT&T are in an ad war right now. First, Verizon came out with their “There’s a map for that” ad promoting their cell coverage while insulting AT&T’s. Then AT&T sued Verizon and lost. After that, AT&T fought back by hiring actor Luke Wilson to sling mud about Verizon’s network – and back and forth they go.
At the end of all this, the net result will be that both AT&T and Verizon will have spent hundreds of millions of dollars and the negatives towards each company will be heightened, causing consumers to like each company less. My bet is little to no market share will actually shift as a result of this.
The easy reaction to this is to sigh and mutter, “What a waste!” While this would certainly be a very reasonable response, there is an instructive lesson and huge warning sign for growth oriented companies.
When companies fail to consistently create value – and by extension create demand, competitive pressures become increasingly intense. The challenge that both AT&T and Verizon Wireless have is that neither of them does anything particularly special. While Apple, Google, Palm and other handset makers continue to innovate and search for new ways to delight customers, AT&T and Verizon Wireless are left fighting over who’s 3G network is better. I wrote about this six years ago: “We are better” value propositions don’t work.
The Warning Sign
This entire ad war reminds me of political campaign and negative campaigning. When you play the competitive game I call Demand Fulfillment, you are increasingly vulnerable to competitive attacks and mudslinging. The solutions focus of demand fulfillment makes compelling differentiation virtually impossible. Features and benefits become commodities. Developing new applications become increasingly expensive and risky. Because margins are tight, companies desperately search for quick hit tactics that can “have an impact.”
What’s the quickest, easiest tactic? Insult the competition. Sure, we all know that we’re not supposed to say bad things about the competition (that’s what I was taught in sales training), but politicians proved years ago that scaring buyers voters about their opponent had far more immediate impact than building themselves up. Of course, if the company being insulted is vulnerable to competition, they must fight back, and before you know it millions (or for small businesses – thousands) of dollars are wasted on inane messages, rather than on developing deeper understanding and connections with core customers.
The Lesson
Companies that create demand are increasingly immune from competitive pressures. Their maniacal focus on their customers – and solving their customers problems – give them a competitive-free like status. So long as they continue to build deeper relationships with their customers and desired markets, attacks from competitors have no impact.
The lesson for every company, even especially those companies in difficult markets, is to stop playing the traditional game. If you do, the AT&T – Verizon Wireless war is your future.
Start creating demand. Determine the results your customers want, help them understand the problems they don’t understand that are preventing them from getting those results, and sell a new solution. Don’t tell me people won’t pay more or do different things in this market, because I know that will. It’s your choice!
So, what are you going to do differently to create demand?
The Commoditization of Microsoft
In the wake of Google’s announcement that they will buy Doubleclick for $3.1 billion dollars, several companies are encouraging the Justice Department and antitrust regulators to take a closer look at the deal (Wall Street Journal, April 16). While the news itself is no surprise, I found it rather ironic the company pushing hardest for more government scrutiny is none other than Microsoft.
Wasn’t Microsoft the company that told the Justice Department years back that the market is more efficient at determining what’s best for the economy? Add this new propensity for encouraging government interference to the growing list of symptoms seems to indicate that Microsoft is no longer the energetic, fast-growth company it once was. In fact, if you ask some analysts, they will tell you Microsoft’s shareholders might be better served if the company spun off some of its fast-growth components instead of having them bogged down by the quickly maturing and sluggish core business.
For other fast-growth executives out there, my recommendation is to spend less time worrying about what your competition is doing and more time figuring out what it is your customers and potential customers really want. Fight tomorrow’s wars, not yesterday’s.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
