MarketingFree

The sandpile and the avalanche

I was power-buying at Costco recently when I discovered, situated between the tube sock 12-pack display and the bulk yard fertilizer (enough to fertilize a golf course), a brand-new book: The Age of the Unthinkable, by Joshua Cooper Ramo.

Full disclosure:  I haven't finished the book yet, and Ramo seems to have a knack for using a lot of words to not get to the point - but, I find the book intriguing just the same.  And, applicable to Postmarketing.

A central concept that Ramo talks about is the unpredictable nature of sandpiles, as studied by a Danish scientist named Per Bak.  Bak created sandpile after sandpile, by systematically dropping sand one grain at a time, and then observing at what point a grain of sand dropped and set-off a chain-reaction avalanche that caused the whole pile to disintegrate.  His conclusion?  There is no way to predict which grain of sand will cause the avalanche, or the extent of the damage.

For Ramo, this is a useful analogy to the seeming chaos of the current geo-political environment, with terrorists, quasi-nation-states, separatist groups and transnational organizations all vying for power.  Even with all of the intelligence in the world, there is no way to predict the event that might change everything, or the extent to which any single event will alter the future.

Lest I fall victim to not getting to my point quickly, here it is:  the worlds of marketing, social networking, media and technology are being mashed-up in ways that can't be predicted, meaning that the old ways of looking at marketing (like the 4p's) are increasingly irrelevant, and potentially even flawed.  One can no longer predict market acceptance, because the grain of sand that causes an avalanche of adoption can't be predicted.

Postmarketers must be scientists (experimental and analytical) and deconstructionists (of existing methods and assumptions) so that they raise their probability of finding the grain that sets-off a chain reaction of adoption.

Now, I'm going to go finish that book...

Postmarketing: Why Lexus ads make me queezy

This post relates to the Postmarketing presentation.  Check it out.

With all due respect to the quality of Lexus automobiles, Lexus ads now make me queezy.  Do you remember those Holiday ads with the red bow around the Lexus?  Honestly, how many of you have bestowed a $50,000 Christmas present on a loved one (without any twinge of buyer's remorse)?

But since we're all being open with one another here, I didn't begin to feel this way until sometime last summer - when the economy started tanking.  Why?  Because I was used to luxury, and I was used to luxury being marketed to me.  I haven't owned a car without leather seats in years (my Accord even has seat-warmers!).  I expected Ritz Carlton-level service everywhere I went, and whined when I didn't get it.  I looked at a house with 3 garages last year, and justified what I might do with the 3rd bay (didn't buy it - whew!).  This is not because I had some great windfall of cash - rather, it was because we had all come to expect that we can afford (and even deserve) luxury, and we had a seemingly endless windfall of credit to pay for it.  Luxury had been commoditized.

That was last year.  Now, luxury is being returned to its rightful place among people who can afford it (with cash) and, even there, luxury is having a rough go of it.  Luxury is not only expensive again, but it's out of style... said another way, Less is the new More.

The implications for marketers are profound.  How do you market less?  Green marketers have certainly led the way on this, although even green marketing to-date has been "more - and green too!".  I believe the path forward is simple: market genuine value (thanks to Chris Grams and David Burney for blazing this trail at Red Hat).

In order to avoid being irrelevant (or, worse, nauseating), marketers must focus on truthful, straightforward messaging about the actual value of their products & services.  Slathering on generous amounts of luxury positioning was an easy cheat during the boom - but it wreaks of excess & consumption in the postmarketing world.

It would be a luxury for me if you commented on this post - please indulge!

Postmarketing - New principles for a new age

Soapbox time!  I've been thinking a lot about how the dramatic changes in the global economy might affect my job as a marketer, and I have had the privilege to speak to a number of companies about how they are rethinking marketing.  So, I thought I would share my ideas with you via a SlideShare preso.

Please check it out, send it to others who might like it, and rate it.  I would love to hear your comments and feedback here, or in SlideShare.

*Disclaimer:  this is a preso, meant to be presented, so it leaves a bit to the imagination.  I will delve deeper on some of the concepts in the coming days, in blog posts.  Enjoy!

Postmarketing - new principles for the postmarketing age

View more presentations from tbarr. (tags: media social)

Must read: Enough of Too Much

I've been thinking a lot recently about how these drastically different economic conditions are going to change marketing, and I came across this must read:  Productivity:  Enough of Too Much (free registration required - sorry!).  The author, J. Walker Smith, is President of a marketing research company - but, more importantly, has more degrees from UNC than I do (which means he must be right).

Key takeaway:  Less is the new more.

Stay-tuned to marketingfree, as I will be publishing a lot more thoughts on post-meltdown marketing.

Marketing vs. sales is so last year

I came across a biased, uninformed, largely inflammatory (but otherwise a great read!) BNET post today called How Technology Killed Marketing.  While Geoffrey James's description of how the Internet has changed marketing is largely on-point, the conclusion is dead-wrong.

James contends that the ability to track the effectiveness of every lead (closed-loop marketing) has exposed, and therefore killed, marketing.  Sorry Mr. James, but the opposite is true.  The ability to track the effectiveness of every lead ALL THE WAY through to every sales channel and person only make marketing both more effective and more strategic.  Now, good messaging, positioning, creative and programs can be more easily and more quickly distinguished from bad... and good sales channels and sales people can easily be distinguished from bad - based on the right metrics.

At a previous company that I worked for, sales continually pined for "more leads".  But once we had the right closed-loop marketing systems installed and integrated into SF.com, we began to uncover interesting truths, like: the good sales people indeed did need more leads, but the bad (and quiet) ones actually were sitting on leads that good people could have closed; some leads were going into "black holes" because of empty territories, cherry picking, or someone's assumption that "all trade-show leads are bad"; etc.

Armed with the right tools and data, marketers helped sales come up with better lead distribution (including pushing many to the channel), improve programs to improve lead quality, and actually expose under-performing sales resources.  Not exactly what Mr. James had in-mind, I think.

For smart companies, marketing vs. sales is not an issue any more.  As I have often said, marketing is just selling to many, while sales is marketing to one.  The skills might be different, but the goals are algined.  Let's bury the hatchet.

How Wacky Wally weed-whacked his weputation

Marketing lesson of the day:  in the reputation economy, you can run, but you can't hide.

The guy who takes care of my yard has branded himself Wacky Wally (it's actually not Wacky Wally, but it's similar - names have been changed to protect the guilty, in this case).  When you say it, it kind of makes you chuckle and it's easy to remember - probably a pretty good idea for someone who, theoretically, grows his business based on word-of-mouth and a good reputation.

Trouble is - Wacky Wally isn't a very good yard guy.  I would fire him, but my landlord pays for it so I don't really care that much.  I might have just concluded that Wally was just really busy and in-demand, so that's why he lets my yard grow uncontrollably for weeks.  And, if I got frustrated enough and really did fire him, he probably could have talked me into a second chance or, worst case scenario, just lost one small customer.

But that's not how Wally rolls.  Recently, Wally sent out an e-mail to all of his customers to ask them to vote for him in the latest Austin Chronicle Best-of-Austin poll for Best Landscaper, with the subject "LOVE".

Mistake number one was that he didn't BCC everyone, so we all saw the entire e-mail list of his customers (making it easy to Reply-All).  But mistake number two actually happened awhile ago:  Wally provided bad service, and didn't fix it.

Two replies (and only two) came back to the entire list almost immediately:

Reply #1: 

"Are you kidding?  You were the worst experience we ever had regarding yard men!"

Reply #2: 

"Hi Wally,

My puzzlement notwithstanding - if you will do something about those dead plants that you charged me for after your costly and protracted landscaping effort, I will not only vote for you several times but will forget that you did not return my "four" related messages begging you to deal with my plants.

I am not only forgiving, but easily bought off; if you fix my plants - I will vote my ass off!!

Best regards,

-Larry Hiller (name changed)

With LOVE, of course."

Final score:  Angry Customers 2, Wally's reputation 0.

So, in the course of one e-mail, Wally pretty much weed-whacked his entire reputation and pruned his business quite substantially.  Wally, I think you might want to try becoming a xeriscaping expert.

WFH: Weapons, Fear & Hopelessness

Ever since I have been of the house-buying age, I’ve been on a quest for the perfect home office.  Quiet, secluded, spacious... with large picture windows overlooking a natural scene... deer and bunnies munching on natural grasses surrounded by wildflowers, and a babbling stream feeding a waterfall gently cascading into a koi pond within a peaceful Zen garden. My office would have an eclectic mix of vintage antique finds in an office motif - an old credenza, with an antique typewriter... a quill and various-sized jars of ink... brass scales, and a Newton’s Cradle - and a functional, oversized modern desk, with lots of brushed steel and glass.  I would have a sitting area, with a lamp, vintage leather chairs, and a small table with brain-stimulating toys like a Rubik’s Cube and one of those Pin Art things that looks like a little tiny version of Uncle Fester’s bed.  I would have old, but not too old, copies of Inc., Fortune, and Wired (I’m still a Gen-X’er) laying neatly on an ottoman, and a small wooden bookshelf filled with classics like Art of the Deal, Crossing the Chasm, the Goal (I’m a big Herby fan) and Glengarry Glen Ross (just to make any sales guys squirm).  The lighting would be exquisite, with counter-balanced swing arm lamps and recessed halogens on a dimmer, and I would have a motion-detector so that when I entered the room, the lighting would ease on as I settled into my Aeron chair.  I would have a speakerphone with a wireless headset so that I could walk around the room on important calls, spinning stainless steel baoding balls in my hand and gazing into my nature scene, looking like a man at the helm of the universe.

It would be such a fabulous office that I would actually wake-up, take a shower, dress business casual, and put on loafers before entering the home office.  I would say to my wife, “Darling, I think I’ll work from home today so that I can get some things done without people bothering me.  I’ll be in ‘the home office’.”  She would respond, “Okay, sweetheart.  I’ll bring you a skinny latte and some steel-cut oats in a little while, and I’ll make sure that the kids don’t disturb you.”  And I would proceed to enter my sanctuary of commerce, where I would produce copious amounts of completed work in mere hours of undisturbed serenity.   I would be so productive in that office, that the IRS would ask - even beg - me to deduct 100% of my office expenses, because it is so clearly a thriving hub of economic activity for the nation.  My work colleagues would stop by “just to say hi”, when indeed they were on a religious pilgrimage to lay their eyes on the Mecca of productivity.  As they walked in, wide-eyed, awestruck, I would fix them a scotch on the rocks from the office bar, as they would gush, “Soo, this is the place where your best ideas - the best ideas - come from.  No wonder you work from home so often... I would too if I had an office like this.” And I would beam proudly behind them, secretly winking, pointing, and mouthing, “you-da-man” at the commissioned self-portrait above the mantle (did I mention the office has a fireplace?).

The unfortunate reality is that, absent the aforementioned home office, working from home for me consists of a laptop, an internet connection, a cell phone, juveniles who keep wanting to try-out their latest joke, a dog who wants walked, a lot of things to do around the house, a constant source of snacks, ESPN, espn.com, the Wii, a comfy bed, and good music.  In fact, that description sounds eerily like WFFH - working from frat-house - and I am indeed about as productive as when I was WFFH (which is to say, just barely productive enough).  Yes folks, it’s time to own-up to the truth:  WFH is not good for you or your business.

As near as I can tell, WFH has simply replaced the concept of “sick days”, but with a more flexible definition of acceptable use cases.  Here is my best, most comprehensive list of the possible meanings of WFH:

Working following Hibernation (I’m tired today, so I’m going to stay home and sleep awhile)

Waiting for Handbags (I ordered some stuff over the Internet, and it’s going to be delivered today)

Wasted from Hangover (I overdid it a bit last night)

Winner! Free Holiday! (I just freakin’ need a day off, so I’m takin’ it)

Waiting from Hell (I just ordered cable service, and the cable guy said he’d be here between 9 and noon, and it’s now 1pm...)

Wind for Hammock (First day of spring weather and it’s beautiful outside).

Wheat Farmer Here (Okay, if you are a farmer, working from home is okay.  But be sure to get to that feed store once or twice a week.)

But if lack of productivity isn’t enough to justify stopping WFH, consider this:  isolation drives people crazy.  Humans are social creatures, meant to interact together in order to grow and thrive.  Yes, people in cities sometimes go postal - but the really dangerous people live alone, way out in the country, and are much more prone to building bunkers, stockpiling weapons, and thinking the government is about to invade them.  When your only connection to the outside world is network TV, bunkering down seems like a pretty good idea.

Working from home has similar mental hazards.  If e-mail and conference calls are your only interaction, you begin to read subtle messages into every email and every conference call comment.  What did he mean by that?  What did she really mean by that question?  Why did he copy my boss?  Is he out to get me?  Next thing you know, you’re going to be sharpening all of your pencils to a lethal point and stock-piling Slim Jims in your desk drawer.  Folks, it’s just not worth it.  Get up, get a shower, kiss your spouse and kids, pet the dog -  and get your butt to work.  Humans just weren’t meant to work from home.

Twitter moves to 139 characters, saying "Rails just won't scale to 140 anymore"

Dateline: Thursday, May 1st, 2008 - The day Rails scalability was the news.

In a sharp response to TechCrunch's erroneous report that Twitter was divorcing Rails because of performance issues, Twitter management responded, "No, that's just not true. However, we have decided to limit users to 139 characters, because 140 is just taxing the system."

Furious Twitter power-users didn't hesitate to respond. A common comment was, "How am I going to punctuate my tweets?". From another user, "Oh, I thought that number meant I had 140 seconds to finish my tweet". Finally, James Buck, maybe the most famous Tweeter of all, said, "Sure, my first tweet was one word. But my second tweet was the name of the Egyptian prison I was in, and it took all 140 characters... I still might be there if it wasn't for that 140th character."

Twitter also promised additional changes to the UI, in response to all the alleged performance issues by the press. Said management, "We are taking a bit of a sharper tone with users, in hopes that they will stop the bitching."

In other news, Lew Cirne launched his new Rails performance start-up today. Welcome to the party, Lew.

I'm initiating coverage on RHT: Strong Buy

*DISCLAIMERS*
- I am not a registered, certified, credible, gifted or even competent securities analyst. I wouldn't take stock advice from myself.
- My recent track record commenting on stocks is suspect.
- I used to work at Red Hat, but there is no insider information here. Just opinions.
- I really want RHT to go up to about $25 by next week. I have a small truck-load (a hand-truck) of options at $23.50 that expire next week, and the kids need new shoes.

OKAY, now that we have that out of the way (and if you're still reading, bravo!): I am initiating coverage on Red Hat (RHT) as a Strong Buy, with a 3 day price target of $25. Yesterday's sluggish MSFT earnings put me over the edge on this - as Red Hat said a couple of years ago when it acquired JBoss, open source is "changing the economics of IT in favor of the customer", and I believe it is starting to show-up in the earnings of proprietary-only software companies.

More importantly, though, the macro-economic conditions are worsening (trust me... I'm trying to sell a house right now), which is a perfect time for low-cost replacements that can help corporate IT organizations cut costs without losing performance. In fact, when Red Hat first launched Enterprise Linux back in 2002, the economy was slow - the message of replacing Unix with Linux resonated because CIOs needed a new approach, and RHEL launched like a rocket (a million servers sold in the first 3-ish years!).

I suspect that cutting costs will rise to the top of the list again for CIOs toward the end of this year, and into next - which is the perfect environment for a strong Red Hat (and other open source players) to accelerate adoption of low-cost, open source replacements for virtualization, proprietary middleware (like JBoss), databases and developer solutions (like Ruby on Rails). At FiveRuns, we are seeing acceleration in adoption of Rails for some of the same reasons, I think.

So, buy RHT. And fast (like today, or early next week would be good).

Google App Engine tanks Google's (GOOG) stock price

When Google launched the much anticipated App Engine last week, I immediately sold all of my GOOG shares... uh, I mean, share (I'm diversified). Why you ask? Recently, I had a very interesting conversation with an old Red Hat colleague of mine, rPath founder Erik Troan. We were talking about EC2, Joyent, Mosso, and the like, and I asked him why Google hadn't yet come to the hosting party. Erik pulled out his UVA economics degree, and wisely pointed out that hosting would "kill their margins." A week later, enter Google App Engine.

If you think about Erik's comment, he's right. Google's operating margin is 30+%! I challenge you to find any hosting company who has operating margins outside of single digits, no matter how efficient they are. Hosting is a competitive, cut-throat business, and it's only going to get more competitive as anyone who has an under-utilized "cloud" will try to enter this space. Conversely, Amazon's operating margins are in the 5% range, so it's a fair bet that better utilization of their IT assets just might improve their margins. Unless Google figures out how to drop ads into every app in App Engine, you can bet that they will be giving away a lot of free hosting so that they don't materially affect their margins, so drink up.

And if that's not enough to make you short the googster, here's the kicker: App Engine doesn't support Rails apps. Python is sooooo 2005.

(Seriously, though - Larry or Sergey, call me if you want FiveRuns to help you with the whole Rails support thing. We don't want to see your stock price tank or anything.)