Marketing Expert's Corner

This article written in 2008


In the early 90's, a couple of advertising guys dreamt up some rules, and had the audacity to claim they'd found 22 laws that governed the universe of marketing.  Read the book now, and you realize that most of their ideas aren't really laws and have proved to be quite mutable.  But this didn't stop them from selling zillions of copies to impressionable CEOs.

Me, I'm doing it a little differently.  I'm going to give you what I believe really is universal and lasting about marketing -- for free.   Most of these apply both to consumer and B2B marketing, and are equally true internationally and domestically.  While I've entitled this issue "the 10 commandments," because I'm from the computer industry "10" is in hexadecimal so there are actually 16 of them.  It's ok if you don't get the joke... but I do welcome your comments and reactions on this issue.

The 10hex  Commandments 

1.  You have to look bigger than you really are This is true for any company, because even Microsoft looks small in any new initiative.  Perceived size really matters, to suppliers and partners, as well as customers.  To follow this law means focusing on visibility, credibility, influence, alliances, and customer references.  You never succeed alone.

2.  What other people say about you is more important than what you say about yourself.   Word of mouth -- the good things your customers and colleagues say about you -- is everything.  Following this law means making sure your customers' experience is memorable and positive, plus further focus on alliances and customer references.  Nothing is as credible as someone who has nothing to sell.

3.  It is more profitable and easier to sell to existing customers than to develop new ones.  Despite the thrill of the chase and Wall Street's focus on new customer acquisitionnew customers are almost never profitable.  The real profits come form upsells, expansions, and the quick sales cycles from working existing customers.  Depending on your industry, repeat business is won with 1/3rd to 1/10th the  time, effort and money.  To follow this law means optimizing your cost of customer acquisition, and focusing on long term account value.

4.  It is more important to be the trusted vendor than to have the best product.  Build a better mousetrap, and the world won't beat a path to your door:  the world won't even notice.   Be a trusted vendor, and customers will follow your advice.  It's this effect that lets Microsoft release three versions of products before they get it right.  Following this law means to understand whom your customers trust and why, and to earn trust through quality product and great service.  

5.  If your channel is not motivated, the product will not sell.  There are lots of examples of great products that were uninteresting -- or worse, posed problems -- to the channel.  Nothing kills a product faster than a pissed-off sales guy.  Whether you've got direct reps or a complex distribution network, the channel must be explicitly and repeatedly motivated to make sales happen.  Following this law means (of course) money, but it also means removing channel conflict, getting the comp plan right, making the product fun to sell, having a strong and memorable message, and living up to your commitments.  Sales reps and dealers are coin-operated.  

6.  Emotion makes the Sale.  Everybody knows that 80% of decisions are made on an emotional basis, but almost nobody in high tech markets that way.  We're all speeds and feeds, feature / benefit / advantage.  But what actually clinches the deal is how the customer believes he will feel after he has purchased the product or service.  The emotional drivers -- fear of making a mistake, worry about job security, trepidation about a security breach or a SarBox compliance problem -- have been dominating the IT market for several years.  To follow this law is to be attuned as different emotions start to come into play, and to make the emotional drivers at least part of your pitch. 

7.  Perfectionism doesn't pay.  Casting a perfect illusion is absolutely required, whether you're selling a user interface or a fine hotel.  But trying to be absolutely perfect is at least impractical (costs more than it's worth) and at worst is a huge distraction.  Perfectionists in companies large and small usually over-invest time and resources on things that really don't matter -- or would be best ignored in the first place.  What does pay is being really easy to do business with, flexible yet consistent, and providing customer delight.  Follow this law by practicing value engineering:  put resources only into things that will actually make a difference to the customer.

8.  First movers have an advantage, but the costs of being too early for a market can kill you.  The corollary to "There's nothing more powerful than an idea whose time has come," is "Nothing is more tragic than an idea whose time hasn't yet arrived."  Timing -- being in synch with demand -- is critical.  To follow this law is to listen very carefully to how customers and non-customers are responding to your marketing, to note what they actually buy vs what they flirt with, and to never invest ahead of demand.  "If we build it they will come" is usually an expensive fantasy -- particularly with a direct sales force. 

9.  No customer buys because of your logo or your tag line:  they buy because of the value they believe you'll provide.  Branding and ad campaigns are nice, but awareness and visibility will take you only so far.  Purchase decisions are made because the customer believes your product or service will deliver better value than the alternatives.  Following this law means having a very clear target customer, making sure prospects have a clear sense of what you can do for them, and consistently delivering to expectations.

A.  Price is almost never the problem.  Unless you are selling a complete commodity -- and therefore by definition not practicing marketing -- price is not the issue getting in the way of sales.  Of course you can't charge $50,000 for a $5,000 product, but I've found that reducing the price from $50k to $5k doesn't make sales go up much even on a unit basis.  The issue at work here:  does your product provide so much value in the customer's mind that its price is an economic bargain?  Does the product pay for itself with savings?  To follow this law s to make sure you have a tight definition of who the customer is and a clearly expressed value proposition for them.  Keep perceived value greater than perceived cost.

B.  You don't position yourself:  the market positions you.  Many CEOs and Sales guys take repositioning way too lightly:  all you have to do is dream up a new story, right?  But the customer won't buy it:  changing their opinion requires that you provide a new value proposition.  A new value proposition for a product requires new features, and if you need to reposition an entire company -- well even Steve Jobs can't do that without a bunch of hot new products.  Follow this law by realizing that positioning is like a reputation, which must be built through the right behaviors and consistently superior products and services.  The market's positioning of you will lag the realities by at least a year.

C.  Everybody wants to be cool.  Every market niche has a different definition of "cool," but people are willing to sacrifice a lot to fit whatever they think cool is.  People will do almost anything to be admired or envied, to feel smart or part of an avant garde.  Cults really work. They are part of human nature, and being part of a special community with its own set of beliefs and practices is an important psychological impulse.  This works just as well for geek products (think "O-O" in the 90s or "open source" now) as it does for cosmetics, so don't ignore this one!  To follow this law is to create a sense of exclusivity or importance about your product or company.  Read The Tipping Point to learn more.

D.  Being #3 doesn't matter if it's a two-horse race.  All too often, customers will really only support a "main vendor" and one alternative.  A key indicator of this is when market share numbers for the top two are 65% or more.  Unfortunately, there are an awful lot of markets with 10 competitors, and in the long run, GE's Jack Welch was right about exiting markets if you can't be #1 or #2.  Following this law means finding market niches that aren't overpopulated, yet are substantial enough to make your business happen.  There's nothing wrong with being the leader of a small, profitable niche market.

E.  It's going to be much easier to change your product, or even your company, than to change customer behavior.  Any product strategy requiring a change in customer behavior is doomed to a long uphill battle.  If you can make that shift, though, as Sony did with the VCR and the Walkman, the gains can be enormous.  For most mortals, however, following this one means customer-focused product design.  It's not a bad thing to design your whole company around the target customer and the channel needed to get to them.

F.  Timeliness, responsiveness, and flexibility count for a lot in getting and keeping customers.  Making the customer feel attended to -- attentively listening and rapidly responding -- is a key part of building trust and long-term relationships.  In IT customer support, for example, it's been shown over and over again that actual quality and time- to-fix are less important than the speed, frequency, and courtesy of the support team.  To follow this law is to know that form is as important as function:  style and content are equally important in making people feel good about your company and its offerings. 

10.  Commerce is a Conversation.  The best and most profitable customer relationships are continuous and two-way.  If you don't want to believe the Cluetrain Manifestolook at the way business is done in Japan and China:  tight, long-term relationships are what drive their most profitable businesses.  Follow this law by finding ways to actively listen in every department of your company.  Make sure the customer's message gets up to high enough levels so you take action.  Further, open up your "outbound" conversation so that customers are in the loop on important decisions and can tell that you've been listening.  Finally, know that in conversation nuance and style are key elements to success. 

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