What do you sell? I guess there’s already many ways of classifying this, nevertheless I would like to add one more. Do you sell a product or a commodity? Our economy grew out of what were largely commodities; agricultural products were traded in markets, often at market prices. Cotton is cotton, the only differences between vendors are price, quality and quantity.
As our society closed in on the industrial revolution we made a leap forward, we started making products. Pants are not equal to each other, even if they are made from the same material. The reason is that when we add some sort of processing to our commodities, we make them into products, but a side effect is that products vary more in terms of (perceived) quality than commodities do. Sure there’s good cotton and bad cotton, but nothing that justifies the kind of price differences we see in for example clothing.
This insight is something that is often overlooked, especially in economic theory. After all, consumer’s perceptions are hard to measure in numbers and models, and are thus often let out of the equation altogether – just represented by the demand function. The solution for this is usually to assume perfect markets, which, if they exist at all, mainly describe commodity markets. This is the source of our propensity to think that price is the only thing that matters. If the market leader in an industry is about to launch a product that competes with mine, the instinct is to lower price or increase quantity. This is often the wrong thing to do.
Economic theory has however also created useful tools. One of the best ideas, in my opinion, is the concept of utility. In all simplicity utility is a measure of the relative satisfaction from, or desirability of the consumption of various goods and services, and can as such contain whatever criteria consumers (or businesses) use to decide on which product to buy. In this view utility is the only reason people buy products, and the explanation why people buy something is simply that it yielded the best utility for the price.
Though many would disagree with me, utility is in my mind what sets commodities apart from products. By this I’m not saying that commodities don’t have utility, of course they do, or people wouldn’t buy them. What I’m saying is that it’s the very nature of the utility that sets them apart. For commodities the utility is given, there’s no added value, just “real” value. For products utility is made up, it’s socially constructed; it’s whatever you think it is. This is where you can charge more for your products than they cost to produce.
So what do you sell? Do you sell a product or a commodity? If you sell a commodity you would want to switch to a product at once. Cotton can be de-commoditized by adding socially constructed value, “It’s organic!” The same applies to other commodities. If, on the other hand, you sell a product then you should understand what “utility” constitutes in your marketplace. The utility of clothing is certainly not only that they cover up parts of our bodies we don’t want others to see, or keeping us warm – if that was true, clothes would be commodities and priced close to production price.
So ask yourself - and don’t settle for the first answer – "What do I sell, and what should I do about it?" It may be the first step to really understanding branding at it’s core.
Showing posts with label marketing. Show all posts
Showing posts with label marketing. Show all posts
Friday, 25 June 2010
Wednesday, 2 June 2010
Killer apps and USP’s – find them, use them!
New products need to provide value. We all know that. But further than that it needs to be clear what the product does and why people should care. This will let your product escape the trap Google Buzz, New Coke (or even better Crystal Pepsi), Cosmopolitan Yogurt, Palm, other PDA’s, and countless other products that no one in the world could understand what were good for went right into. Products need to have a clear intrinsic purpose, and they need a company around them that clearly explains externally what the product is, what it does, and why we should care.
New products should have a killer application. For example Twitter’s killer app was status messages that fit into a text message. Now it’s important to note that a killer app isn’t necessarily what you will end up doing. The killer app is what you start out doing! Today I don’t care if Twitter updates fit into a text, now I use it because I already am. Killer apps allow you to find a niche that’s big enough for you to start growing your business. For example I think that in [insert random number here] years there will be a big company that deals in robots, kind of like a Microsoft of robots. If I wanted to start that company today, I wouldn’t care what robots would be in 20 years, I would find a small niche in which to start making robots today that could provide me a basis for new niches and eventually a world leadership in robots. Maybe I would start with toy robots? Certainly I could make a lot of fun stuff without requiring too much AI at the offset? Nevertheless a killer application is something more specific. It’s something that makes my robots intrinsically better than other robots. Maybe my toy robots could play board games? Certainly the technology to allow robots to play the games already exist, the only technological challenge left would be to get the robot to recognize the game, the location of the pieces and give it the ability to move the pieces autonomously.
USP’s are something else, they’re extrinsic, but they are very much related to killer apps. A USP is a Unique Selling Proposition, to understand it fully you should go to your local supermarket, locate the aisle that has toothpaste and read the tag lines. Every brand will have toothpaste for whiter teeth, cleaner teeth, anti-bacterial, anti-bad breath and a few that attempt to do it all. Think about it, do you really think there’s a lot of difference? Most of the toothpaste is just filler anyway, the parts that differentiate the products are measured in parts per million, so it likely wouldn’t be all that difficult to put all the good stuff in a single ultimate toothpaste. Continuing the robot example above, we could for example use “A friend for life”, or “Playmates forever” as a USP. This is how people understand your product. Notice that the USP don’t only separate the product from other robots, but other toys as well.
The difference between the two is that the killer application is the use of your product; the USP is what separates your product from all those others in the mind of the consumer. For start-ups however you often find yourself being so original that your product will be mentally sorted in a new category. In these cases, it pays to use the killer app to create a USP because you fortify your position as the one that provides that application. Combining a clear view of killer apps, niche markets, product positioning and business strategy will align different interests in your company so that product designers, business strategists, marketers, finance people, sales people and so on all understand what the company is setting out to do, and can agree on it.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
New products should have a killer application. For example Twitter’s killer app was status messages that fit into a text message. Now it’s important to note that a killer app isn’t necessarily what you will end up doing. The killer app is what you start out doing! Today I don’t care if Twitter updates fit into a text, now I use it because I already am. Killer apps allow you to find a niche that’s big enough for you to start growing your business. For example I think that in [insert random number here] years there will be a big company that deals in robots, kind of like a Microsoft of robots. If I wanted to start that company today, I wouldn’t care what robots would be in 20 years, I would find a small niche in which to start making robots today that could provide me a basis for new niches and eventually a world leadership in robots. Maybe I would start with toy robots? Certainly I could make a lot of fun stuff without requiring too much AI at the offset? Nevertheless a killer application is something more specific. It’s something that makes my robots intrinsically better than other robots. Maybe my toy robots could play board games? Certainly the technology to allow robots to play the games already exist, the only technological challenge left would be to get the robot to recognize the game, the location of the pieces and give it the ability to move the pieces autonomously.
USP’s are something else, they’re extrinsic, but they are very much related to killer apps. A USP is a Unique Selling Proposition, to understand it fully you should go to your local supermarket, locate the aisle that has toothpaste and read the tag lines. Every brand will have toothpaste for whiter teeth, cleaner teeth, anti-bacterial, anti-bad breath and a few that attempt to do it all. Think about it, do you really think there’s a lot of difference? Most of the toothpaste is just filler anyway, the parts that differentiate the products are measured in parts per million, so it likely wouldn’t be all that difficult to put all the good stuff in a single ultimate toothpaste. Continuing the robot example above, we could for example use “A friend for life”, or “Playmates forever” as a USP. This is how people understand your product. Notice that the USP don’t only separate the product from other robots, but other toys as well.
The difference between the two is that the killer application is the use of your product; the USP is what separates your product from all those others in the mind of the consumer. For start-ups however you often find yourself being so original that your product will be mentally sorted in a new category. In these cases, it pays to use the killer app to create a USP because you fortify your position as the one that provides that application. Combining a clear view of killer apps, niche markets, product positioning and business strategy will align different interests in your company so that product designers, business strategists, marketers, finance people, sales people and so on all understand what the company is setting out to do, and can agree on it.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Monday, 24 May 2010
What Facebook is missing out on...
It strikes me as somewhat absurd that Facebook don’t see the opportunity they are presented with in face of the recent criticism. The criticism, as you are probably well aware off, is in my view best summed up in Leif Harmsen’s words “It is not ‘your’ Facebook profile. It is Facebook’s profile about you”, he considers it a repressive regime akin to North Korea, and he’s not alone. Yet this isn’t anything new. It’s more a case of the “commoners” starting to question what the more tech savvy ones of us have questioned for quite some time, and thus the topic has gained some momentum in the mainstream press as well.
The problem is obvious, as problems often are, but the solutions keep escaping the minds of clever people. Or does it really? A related debate I have followed since I first heard a discussion about social networking 3.0 at Stanford in 2007, is about how we can transfer ownership, and more importantly control over user information to the users. The simplest solution is of course just to pressure sites like Facebook to change their terms of use, but a more lasting solution would include the possibility for users to bring their friends, pictures and other information with them between social networking sites. Undoubtedly there are many design issues for such a system, for example I certainly have multiple online identities; my Facebook content isn’t really suitable for my LinkedIn page and so on. And where would my information be hosted? Would I have to buy server space in case someone wanted to view my profile while I was online? Would the standard allow new networking sites to add slots for specific information that were only suitable for that site (like favorite recipes for a cooking site, or where I’ve been for a scuba diving site), and how would I controll what and how much information is sent to each site I visit?
This however isn’t the biggest problem; the reason why such systems haven’t been implemented is that no one with the leverage to create this system has done it yet. This system has to be made by the right people, people that can reach critical mass. At present, only geeks and idealists would bother to learn how to use a totally new system, especially because something like that sounds very complicated. The average user doesn’t want complicated stuff, they want simplicity, and they just want to use the product. So to reach critical mass for such a system you would have to have some way of gaining a lot of users for it fast. Like a big already existing user base, like Facebook has, but wait - why should Facebook make this system? Facebook like it the way it is, they own your content (or their content about you to be accurate), and can use it for pretty much whatever they want. In addition to this Facebook enjoys users that have extremely high switching costs, something which might be their biggest competitive advantage. It seems that Facebook is in a perfect place.
So why should Facebook do it?
The first reason why Facebook should create a system for sharing information is that it would buy them credit. It would buy them credit with the tech community for being open and with the media for listening to them. It would buy them credit with normal users because they would feel safer and because they have the option to leave. Remember why some people escaped the Matrix? It turned out that given an unconscious choice nearly 99 % of test subjects would accept the program anyway. I see no reason why this shouldn’t hold true for Facebook as well, as the primary reason people leave is because they are malcontent by Facebook’s closed systems and strict privacy policy (at least if we believe random Internet chatter - which we do).
Secondly, and maybe more importantly, I believe that if Facebook don’t do this, others will. Services such as Google Accounts and Open ID don’t have a long way to go to allow users to store information that at their request can used by third party sites. Right now Facebook can deny Open ID and other such services to provide login to their site, but can they still do that in 3 years? Right now they can delay the inevitable move to such services, but as I wrote in a blog post some time ago, change happens when change is due. Change isn’t always created willingly, it’s just there and those that catch the wave gain momentum, furthermore no surfer ever caught the back of a wave. If people gets used to logging in to their favorite sites through a third party provider, I’m not sure Facebook can withhold the pressure.
The third reason Facebook should use their user base to create an open, user owned system that can transfer information easily from site to site is that whatever disadvantage Facebook sees in having users logging in to their site via a third party provider will be Facebook’s advantage against new social sites. If users are used to using their Facebook login when they log into pages on the net, they will expect new sites to follow this convention, thus granting Facebook some limited power to monitor and control new services.
The fourth reason Facebook should do this is because there’s bound to be a business model in it. What this model is, I’m not sure, but it could for example be that commercial sites would have to pay a small fee to use the service, or that when you log in you get redirected through Facebook’s ad page.
The fifth and final reason is that this would be a good first step towards extending into new forms of web services. When users already have a login, it should be easier to gain momentum for new and exciting products. Google has already realized this when they launched both Wave and Buzz (though this seems to be bad examples, as both services are virtual ghost towns). Having a customer base like Facebook’s is an incredible asset, in the case of Facebook an asset that remains close to unexploited. Surely marketing new web services through Facebook would ensure enough users to create critical mass for many services?
Maybe Facebook as we know it today is just a stepping stone? I certainly think that they should consider expanding their services, and specifically they should start making a product that they could easily gain market leadership with almost immediately, namely an open profile service that provides an API for other services to let users log in with their Facebook profiles. With the share number of users Facebook has it shouldn’t be a problem becoming the market leader in this "sort of related" market.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
The problem is obvious, as problems often are, but the solutions keep escaping the minds of clever people. Or does it really? A related debate I have followed since I first heard a discussion about social networking 3.0 at Stanford in 2007, is about how we can transfer ownership, and more importantly control over user information to the users. The simplest solution is of course just to pressure sites like Facebook to change their terms of use, but a more lasting solution would include the possibility for users to bring their friends, pictures and other information with them between social networking sites. Undoubtedly there are many design issues for such a system, for example I certainly have multiple online identities; my Facebook content isn’t really suitable for my LinkedIn page and so on. And where would my information be hosted? Would I have to buy server space in case someone wanted to view my profile while I was online? Would the standard allow new networking sites to add slots for specific information that were only suitable for that site (like favorite recipes for a cooking site, or where I’ve been for a scuba diving site), and how would I controll what and how much information is sent to each site I visit?
This however isn’t the biggest problem; the reason why such systems haven’t been implemented is that no one with the leverage to create this system has done it yet. This system has to be made by the right people, people that can reach critical mass. At present, only geeks and idealists would bother to learn how to use a totally new system, especially because something like that sounds very complicated. The average user doesn’t want complicated stuff, they want simplicity, and they just want to use the product. So to reach critical mass for such a system you would have to have some way of gaining a lot of users for it fast. Like a big already existing user base, like Facebook has, but wait - why should Facebook make this system? Facebook like it the way it is, they own your content (or their content about you to be accurate), and can use it for pretty much whatever they want. In addition to this Facebook enjoys users that have extremely high switching costs, something which might be their biggest competitive advantage. It seems that Facebook is in a perfect place.
So why should Facebook do it?
The first reason why Facebook should create a system for sharing information is that it would buy them credit. It would buy them credit with the tech community for being open and with the media for listening to them. It would buy them credit with normal users because they would feel safer and because they have the option to leave. Remember why some people escaped the Matrix? It turned out that given an unconscious choice nearly 99 % of test subjects would accept the program anyway. I see no reason why this shouldn’t hold true for Facebook as well, as the primary reason people leave is because they are malcontent by Facebook’s closed systems and strict privacy policy (at least if we believe random Internet chatter - which we do).
Secondly, and maybe more importantly, I believe that if Facebook don’t do this, others will. Services such as Google Accounts and Open ID don’t have a long way to go to allow users to store information that at their request can used by third party sites. Right now Facebook can deny Open ID and other such services to provide login to their site, but can they still do that in 3 years? Right now they can delay the inevitable move to such services, but as I wrote in a blog post some time ago, change happens when change is due. Change isn’t always created willingly, it’s just there and those that catch the wave gain momentum, furthermore no surfer ever caught the back of a wave. If people gets used to logging in to their favorite sites through a third party provider, I’m not sure Facebook can withhold the pressure.
The third reason Facebook should use their user base to create an open, user owned system that can transfer information easily from site to site is that whatever disadvantage Facebook sees in having users logging in to their site via a third party provider will be Facebook’s advantage against new social sites. If users are used to using their Facebook login when they log into pages on the net, they will expect new sites to follow this convention, thus granting Facebook some limited power to monitor and control new services.
The fourth reason Facebook should do this is because there’s bound to be a business model in it. What this model is, I’m not sure, but it could for example be that commercial sites would have to pay a small fee to use the service, or that when you log in you get redirected through Facebook’s ad page.
The fifth and final reason is that this would be a good first step towards extending into new forms of web services. When users already have a login, it should be easier to gain momentum for new and exciting products. Google has already realized this when they launched both Wave and Buzz (though this seems to be bad examples, as both services are virtual ghost towns). Having a customer base like Facebook’s is an incredible asset, in the case of Facebook an asset that remains close to unexploited. Surely marketing new web services through Facebook would ensure enough users to create critical mass for many services?
Maybe Facebook as we know it today is just a stepping stone? I certainly think that they should consider expanding their services, and specifically they should start making a product that they could easily gain market leadership with almost immediately, namely an open profile service that provides an API for other services to let users log in with their Facebook profiles. With the share number of users Facebook has it shouldn’t be a problem becoming the market leader in this "sort of related" market.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Thursday, 22 April 2010
How to start a movement!
Many startups rely on word of mouth and so on. Maybe it’s even too many; at least VC’s would have us believe that you should do something else too. Because, more often than not, others might not be as excited about your product or company as you are. This being said, if you are going to start a movement around your product or service, or around an issue that you care about, it’s not as easy as you think. Look at this goodie from the internets (sic), and watch a real life case study of a movement starting up and catching on. I wonder if entrepreneurs that rely on word of mouth, viral marketing and communities have something to learn from this!
Talk: Derek Sivers: How to start a movement at TED 2010
Talk: Derek Sivers: How to start a movement at TED 2010
Monday, 1 March 2010
Thoughts About Way Too Needy Products or The Microwave that Went ”Me! Me! Me! Me!”
We have so many manufactured items around us that we often forget they are manufactured goods that at some time got bought, paradoxically we rarely think about many of these products. While we live in a mutually dependent relationship with these items, some product developers don’t understand that new products have to fit into the already existing eco-systems that are our lives.
In our everyday lives we interact with hundreds and maybe thousands of products, in fact mostly anything that we use are products of some sort, (look around you now, how many things that’s not some sort of a product can you find?) We once created all these items, but they also influence us back. I like to think about manufactured goods, services and anything that for some reason can be called a product as living in a symbiotic relationship with mankind, we depend on them, they depend on us. The reason we keep them around is because they (help) perform small tasks that makes our lives easier, for example a door can be opened or closed – a very practical notion that allows us to separate rooms and give them different functionality, different rooms are equipped with different products that perform tasks that naturally occur in that room, for example toilet paper, one of my favorite products, belongs in the bathroom and makes the tasks performed in there easier to handle.
The paradox is that we rarely think about how many products we are surrounded by in our lives, if you ask people how many products or items that was once manufactured they own, most people would grossly underestimate the number. This is because we only think about our iPhones and laptops and televisions or whatnot, we don’t think about door handles and the paint on our walls, we don’t think about that stack of newspapers or that jar of jam in the fridge. The fact of the matter is that we have so many things around us that are products that we can barely wrap our minds around it, which is a good thing. If we constantly went around being reminded of all our products we wouldn’t find time to do anything, and that’s why most products are made to blend in to our lives. So why does some product developers feel that their products are so important that they can disrupt the natural flow in the eco-system of man and his creations?
Let me give a couple of examples: Fire alarms beep too often and too loudly when the batteries go out, I get it! It’s important, but seriously, it can wait until morning. Some microwaves do the exact same thing, every 10 second it will let out a beep until you have opened the door. Why? Maybe the stuff I was heating said to let it rest for a few minutes, can’t I watch TV until then? Yet another example, to quote David l. French: “My Pantec phone...is so needy that in addition to sucking down juice like a college kid on St. Patty's day it makes you press 3 buttons before it even allows you to make a call.” Facebook e-mails you each time something barely happens, and it’s too damn hard to turn off (I just set my spam filter to catch *@facebook.com), I had to delete iTunes, because it kept downloading updates the size of entire musical albums every month, and frankly I don’t use it that much. And what’s with trying to force me to install Safari? I don’t want it!
Needy products are becoming an epidemic, and it needs to be stopped. If you are a product manager, try to think less about how important your specific product will be and more about how your products can fit into the lives of your customers. Products exist to make our lives easier or better, and people making products need to realize this and start focusing on the users’ interaction with products within the context of their lives. Products should not act as high-maintenance girlfriends or drama queens. Get serious guys; start making products that I want to keep around me.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
In our everyday lives we interact with hundreds and maybe thousands of products, in fact mostly anything that we use are products of some sort, (look around you now, how many things that’s not some sort of a product can you find?) We once created all these items, but they also influence us back. I like to think about manufactured goods, services and anything that for some reason can be called a product as living in a symbiotic relationship with mankind, we depend on them, they depend on us. The reason we keep them around is because they (help) perform small tasks that makes our lives easier, for example a door can be opened or closed – a very practical notion that allows us to separate rooms and give them different functionality, different rooms are equipped with different products that perform tasks that naturally occur in that room, for example toilet paper, one of my favorite products, belongs in the bathroom and makes the tasks performed in there easier to handle.
The paradox is that we rarely think about how many products we are surrounded by in our lives, if you ask people how many products or items that was once manufactured they own, most people would grossly underestimate the number. This is because we only think about our iPhones and laptops and televisions or whatnot, we don’t think about door handles and the paint on our walls, we don’t think about that stack of newspapers or that jar of jam in the fridge. The fact of the matter is that we have so many things around us that are products that we can barely wrap our minds around it, which is a good thing. If we constantly went around being reminded of all our products we wouldn’t find time to do anything, and that’s why most products are made to blend in to our lives. So why does some product developers feel that their products are so important that they can disrupt the natural flow in the eco-system of man and his creations?
Let me give a couple of examples: Fire alarms beep too often and too loudly when the batteries go out, I get it! It’s important, but seriously, it can wait until morning. Some microwaves do the exact same thing, every 10 second it will let out a beep until you have opened the door. Why? Maybe the stuff I was heating said to let it rest for a few minutes, can’t I watch TV until then? Yet another example, to quote David l. French: “My Pantec phone...is so needy that in addition to sucking down juice like a college kid on St. Patty's day it makes you press 3 buttons before it even allows you to make a call.” Facebook e-mails you each time something barely happens, and it’s too damn hard to turn off (I just set my spam filter to catch *@facebook.com), I had to delete iTunes, because it kept downloading updates the size of entire musical albums every month, and frankly I don’t use it that much. And what’s with trying to force me to install Safari? I don’t want it!
Needy products are becoming an epidemic, and it needs to be stopped. If you are a product manager, try to think less about how important your specific product will be and more about how your products can fit into the lives of your customers. Products exist to make our lives easier or better, and people making products need to realize this and start focusing on the users’ interaction with products within the context of their lives. Products should not act as high-maintenance girlfriends or drama queens. Get serious guys; start making products that I want to keep around me.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Tuesday, 9 February 2010
Why brands matter
I came across a quote the other day, and I’ll poorly paraphrase it here. The quote explains why the Coca-Cola Company and many other firms have market values that are way above their physical assets and reminds us all that brands matter. Allegedly the brand manager for Coke in the 80’s said that, and I paraphrase to the best of my ability, “if all the factories and inventories of the Coca-Cola company burned down tomorrow, we would be back in business in 2 months, making just as much as we do today, if however, all knowledge of Coca-Cola disappeared from people’s minds tomorrow it would take us 100 years to come back”.
Building a brand may often seem costly and pointless, but keep in mind how important the brand has been for companies that target consumers directly. A brand may not always be the right solution, especially in cases where you only buy once (like building a house), or where the market is driven largely by price (like aluminum), but when it is the solution you had better take it seriously!
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Building a brand may often seem costly and pointless, but keep in mind how important the brand has been for companies that target consumers directly. A brand may not always be the right solution, especially in cases where you only buy once (like building a house), or where the market is driven largely by price (like aluminum), but when it is the solution you had better take it seriously!
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Wednesday, 3 February 2010
Choosing a company name
There are many things to consider when choosing a name, for a product or for a company, the central concept to keep in mind is that this is your brand name, not just a name that should appear in a business registry somewhere. The first thing to consider is your product, if you chose to market your product on the basis of a certain aspect of it, what is called a Unique Selling Point (USP), you should have a name that describes the benefit. Examples of this strategy are Duracell (durable battery cells), 7-Elleven (from the original opening hours) and Microsoft (small and therefore effective software). When your product is branded on the basis of more experience related aspect, names that trigger the imagination around the experience is more suitable, examples of this include Bounty (chocolate), Nike (the Greek god with wings on her shoes) and Häagen-Dazs (made up "to convey an aura of the old-world traditions and craftsmanship"). In this way company names can help the marketing of the product.
Another way to look at it is to classify names from fictive to descriptive on a continuum, on one end you have totally made up names, like Kodak, and on the other end you have names that describe the product, like Kellogg’s Corn Flakes. Descriptive names can also describe the situation of use, like After Eight, the target group, like Teen Magazine, or other aspects that are relevant to the product. In between you have names that are based on other things that are relevant to the company but not to the product, like Six Apart, that took their name since the two founders were born six days apart, names based on place of origin, like Scania, which is Latin for the place in Sweden the company was founded. Names can also be descriptive without it being of the product, like Camel for cigarettes or Amazon for the online bookstore. Yet another approach in here is to describe the product in another language, such as French, Latin or Greek. By choosing names that are not related directly to the product you lose the customers instant realization of what the company does when hearing the name, but you can make names that are more distinct from others, reducing the risk you will be confused with competitors.
A third way to name a company can be based on rhetorical principles, meant to induce people to remember the name better. One way is alliteration, the repetition of consonants in the word, like Coca Cola, if you repeat the vowel, this is called assonance, for example Poco Loco. You can use rhymes or imperfect rhymes, Poco Loco again, or Black and Decker as an imperfect rhyme, names can also rhyme in the beginning of the word, Copenhagen Consulting Company is an example of this. My personal favorite are oxymoron’s, United Nations is a good example, Soft and Crunchy another. Metaphors are popular, Microsoft Explorer or Apples Safari. Palindromes are word that can be read the same both ways, like Omo, the Norwegian detergent. Spelling errors annoy people, but it does stick to the brain, just make sure it’s obvious that it’s on purpose, have you for example seen del.icio.us? or Reddit (read it in) for that matter?
Just remember to pick a name that fits your product, that is unique, that is not too long, that has a free domain name, that is easy to remember, that doesn’t have alternate meanings in other languages where you plan to enter (like the Finnish anti-freeze Super-Piss) and that doesn’t get confused with other brands.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Another way to look at it is to classify names from fictive to descriptive on a continuum, on one end you have totally made up names, like Kodak, and on the other end you have names that describe the product, like Kellogg’s Corn Flakes. Descriptive names can also describe the situation of use, like After Eight, the target group, like Teen Magazine, or other aspects that are relevant to the product. In between you have names that are based on other things that are relevant to the company but not to the product, like Six Apart, that took their name since the two founders were born six days apart, names based on place of origin, like Scania, which is Latin for the place in Sweden the company was founded. Names can also be descriptive without it being of the product, like Camel for cigarettes or Amazon for the online bookstore. Yet another approach in here is to describe the product in another language, such as French, Latin or Greek. By choosing names that are not related directly to the product you lose the customers instant realization of what the company does when hearing the name, but you can make names that are more distinct from others, reducing the risk you will be confused with competitors.
A third way to name a company can be based on rhetorical principles, meant to induce people to remember the name better. One way is alliteration, the repetition of consonants in the word, like Coca Cola, if you repeat the vowel, this is called assonance, for example Poco Loco. You can use rhymes or imperfect rhymes, Poco Loco again, or Black and Decker as an imperfect rhyme, names can also rhyme in the beginning of the word, Copenhagen Consulting Company is an example of this. My personal favorite are oxymoron’s, United Nations is a good example, Soft and Crunchy another. Metaphors are popular, Microsoft Explorer or Apples Safari. Palindromes are word that can be read the same both ways, like Omo, the Norwegian detergent. Spelling errors annoy people, but it does stick to the brain, just make sure it’s obvious that it’s on purpose, have you for example seen del.icio.us? or Reddit (read it in) for that matter?
Just remember to pick a name that fits your product, that is unique, that is not too long, that has a free domain name, that is easy to remember, that doesn’t have alternate meanings in other languages where you plan to enter (like the Finnish anti-freeze Super-Piss) and that doesn’t get confused with other brands.
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Wednesday, 20 January 2010
Do I launch my product or do I develop it further?
As a start-up you will eventually end up in a situation where you have to make a choice; do you spend your last money on improving the product, or do you spend it on launching your product and marketing it? Most marketers will tell you that you should always have a perfect product (you see the “product” is one of the four P’s in marketing). But I disagree.
Imagine that you have $1000, but you are afraid it will get stolen, the only way to avoid this, it seems, is to buy a safe. Unfortunately the safe cost $1000. Would you buy the safe? The same concept applies here, do you make a fantastic product that no one will hear about or do you make a mediocre product that many hear about? I would chose the latter and then use the money I make to improve the product later. This will grow your company quicker. And let’s face it, you have no idea what the consumer want in a product anyway. Just face it.
This is of course assuming this is a new product to some extent, you probably don’t know what people want, even if you think you do. Edison started rolling out electricity at an alarming rate, the killer application, was of course electric light. This meant that when people first got electricity, the outlet was a socket that matched the light bulb, not the socket we know today. Little did Edison know that washing machines and electrical irons would come along and that a socket where you had to screw in the cord would become dangerous. Everything, as we know now, worked out well for Edison, but he had no idea what electricity was going to be, or how big it was going to be. Start rolling out your product, make money and adapt your product to the feedback you get, who knows, maybe the technical improvement you have in mind isn’t what you should improve at all?
I also talked to a former product developer at Phillips once, he now runs his own company. He explained that Phillips, and the other big ones, never launch with their best product. Launch with your number two, price it in the stars, and then when your sales decline, introduce the next generation at the same price and lower the price of the last generation. And never launch a new generation until the next is in a drawer somewhere ready to launch
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Imagine that you have $1000, but you are afraid it will get stolen, the only way to avoid this, it seems, is to buy a safe. Unfortunately the safe cost $1000. Would you buy the safe? The same concept applies here, do you make a fantastic product that no one will hear about or do you make a mediocre product that many hear about? I would chose the latter and then use the money I make to improve the product later. This will grow your company quicker. And let’s face it, you have no idea what the consumer want in a product anyway. Just face it.
This is of course assuming this is a new product to some extent, you probably don’t know what people want, even if you think you do. Edison started rolling out electricity at an alarming rate, the killer application, was of course electric light. This meant that when people first got electricity, the outlet was a socket that matched the light bulb, not the socket we know today. Little did Edison know that washing machines and electrical irons would come along and that a socket where you had to screw in the cord would become dangerous. Everything, as we know now, worked out well for Edison, but he had no idea what electricity was going to be, or how big it was going to be. Start rolling out your product, make money and adapt your product to the feedback you get, who knows, maybe the technical improvement you have in mind isn’t what you should improve at all?
I also talked to a former product developer at Phillips once, he now runs his own company. He explained that Phillips, and the other big ones, never launch with their best product. Launch with your number two, price it in the stars, and then when your sales decline, introduce the next generation at the same price and lower the price of the last generation. And never launch a new generation until the next is in a drawer somewhere ready to launch
If you liked this post or any other post feel free to click the “follow” button to the right to stay tuned to new posts when they appear. You can also follow me on Twitter as @vetleen.
Wednesday, 21 October 2009
How to decide the size of your marketing budget? or Viewing marketing as an investment instead of cost let you make a better decision
I, and I suppose most of us, have often heard people asking questions along the line of “What is a reasonable marketing cost as a percentage of revenue?”, which is an interesting angle to determining marketing spending. I would argue that if marketing only represents a cost for you then you might as well cut it out. The purpose of marketing, as I am sure most people would agree, is to make more money. Thus, marketing should be viewed as an investment. Marketing as an investment is difficult to understand, partly because the long term effects are hard to measure.
I would pose that if you knew exactly how much you would have to spend in marketing to get one extra sale then you would be able to determine your marketing budget quite easily and logically. This however, to the dismay of many marketers, is a difficult and often impossible task. But if we stick to the economic assumption that the first marketing activity you buy is the one that gets you the highest yield/cost ratio, and when that resource is exhausted you move to the next best, then the marginal returns of marketing does decline. In this case the marginal ROI (the derivative of ROI) will eventually reach a point in which adding extra money to marketing, is equal to adding that extra money to the second best investment (let’s say new production facilities, or a better webpage or whatever). Identifying this point is of course impossible for most businesses.
One way to approach logical thinking is to ask, if I add x money to the budget, how many more customers will that buy me? And if so, what happens if I add 2x, and so forth. Correspondingly, you should ask, if I don’t add x, what else could I use that money on, and how would that effect the value of my business? What if I remove x? The problem with this approach is that it may to some extent be based on a gut feeling rather than on actual performance metrics, in a scientific sense, but still this may be a better way to think about marketing. I would also like to note that the practice of assigning a given percentage of revenue, or budget or whatever to marketing is one that is widely criticized, because it does not look at what your business actually needs. The main lesson here is to think “what does that next dollar buy me?” and “what else could I have bought for that dollar?”.
I would pose that if you knew exactly how much you would have to spend in marketing to get one extra sale then you would be able to determine your marketing budget quite easily and logically. This however, to the dismay of many marketers, is a difficult and often impossible task. But if we stick to the economic assumption that the first marketing activity you buy is the one that gets you the highest yield/cost ratio, and when that resource is exhausted you move to the next best, then the marginal returns of marketing does decline. In this case the marginal ROI (the derivative of ROI) will eventually reach a point in which adding extra money to marketing, is equal to adding that extra money to the second best investment (let’s say new production facilities, or a better webpage or whatever). Identifying this point is of course impossible for most businesses.
One way to approach logical thinking is to ask, if I add x money to the budget, how many more customers will that buy me? And if so, what happens if I add 2x, and so forth. Correspondingly, you should ask, if I don’t add x, what else could I use that money on, and how would that effect the value of my business? What if I remove x? The problem with this approach is that it may to some extent be based on a gut feeling rather than on actual performance metrics, in a scientific sense, but still this may be a better way to think about marketing. I would also like to note that the practice of assigning a given percentage of revenue, or budget or whatever to marketing is one that is widely criticized, because it does not look at what your business actually needs. The main lesson here is to think “what does that next dollar buy me?” and “what else could I have bought for that dollar?”.
Wednesday, 23 September 2009
Story-telling as a way to convey meaning
Visions, or mantras or values have no meaning to people. Ask a random person what their company’s vision is and most people are blank. Visions, in my view, are usually the product of forced group efforts in companies that do team building activities once every two years. A company’s vision (or mantra or values) should justify its existence. How does your company make a difference in people’s lives? How is it meaningful?
Meaning exists between humans. Only when a business has a reason for existence does it have potential for meaning. Let me give an example: to me it seems Universal Records have no purpose; they don’t add value to society, and because of this I don’t care about them, they have no meaning to me. Thus, i don't care to buy their products. But how do companies, brands, organizations or products become important to us?
Let me tell you a story. There once was an African American boy. At the age of two this boy’s father dies, and the boy is left with only his mother to take care of him. His mother moves away to remarry, so his grandmother raises him, spending her every moment with the boy. At an early age, this boy earns a scholarship that will change his life; he gets in to a expensive private school. His hard work and the help from his grandmother lead him to Columbia University and later Harvard Law. The boy later becomes the first African American President of the United States. When this man said he had come a long way to change America, people believed him. This is really an epic story about a boy, victim to society, left alone by his parents, raised by his loving grandmother (to whom he often referred), that traversed the challenges in his way and rose to become a modern day icon. This is an icon I can care about, because it has meaning to me. Barack Obama has a vision – he wants change. And he has the stories to back it up. He is a story teller.
I often hear people tell me that Barack Obama became president because he was on facebook and twitter. Let me tell you right now; that’s a misunderstanding. He became president because he could convey meaning through stories. As a part of an organization, or a company ask yourself “What justifies our existence and how do we create meaning in peoples lives?”.Only when you know why you do something, beyond reward, can you create actual meaning, and that is when you gain followers; be it customers, voters, employees or fan groups.
Meaning exists between humans. Only when a business has a reason for existence does it have potential for meaning. Let me give an example: to me it seems Universal Records have no purpose; they don’t add value to society, and because of this I don’t care about them, they have no meaning to me. Thus, i don't care to buy their products. But how do companies, brands, organizations or products become important to us?
Let me tell you a story. There once was an African American boy. At the age of two this boy’s father dies, and the boy is left with only his mother to take care of him. His mother moves away to remarry, so his grandmother raises him, spending her every moment with the boy. At an early age, this boy earns a scholarship that will change his life; he gets in to a expensive private school. His hard work and the help from his grandmother lead him to Columbia University and later Harvard Law. The boy later becomes the first African American President of the United States. When this man said he had come a long way to change America, people believed him. This is really an epic story about a boy, victim to society, left alone by his parents, raised by his loving grandmother (to whom he often referred), that traversed the challenges in his way and rose to become a modern day icon. This is an icon I can care about, because it has meaning to me. Barack Obama has a vision – he wants change. And he has the stories to back it up. He is a story teller.
I often hear people tell me that Barack Obama became president because he was on facebook and twitter. Let me tell you right now; that’s a misunderstanding. He became president because he could convey meaning through stories. As a part of an organization, or a company ask yourself “What justifies our existence and how do we create meaning in peoples lives?”.Only when you know why you do something, beyond reward, can you create actual meaning, and that is when you gain followers; be it customers, voters, employees or fan groups.
Subscribe to:
Posts (Atom)