Wednesday, May 31, 2006

Beware of Marcom Consultants

In the latest issue of AdvertisingAge, Al Ries laments creativity in ads. He attributes the overemphasis on creativity to the following phenomenon:
"It used to be that the objective of an advertisement was to sell something to a consumer. Today, the real selling takes place in the boardroom, where the agency tries to sell the advertising to the client."
When you hire an advertising agency or marcom or brand consultant, beware of this phenomenon. Keep in mind that what matters is not whether an ad or marketing campaign appeals to you, but that it appeals to prospective customers and will make them more likely to purchase your product. Solid market research is necessary to understand the market for your product and what will appeal to it.

Tuesday, May 30, 2006

Steve Johnson on Problems, Features, and Requirements

In an article in the latest productmarketing.com magazine, Steve Johnson hit the nail on the head (as usual):
"One more point about market facts: We’re not interested in what features customers say they want as much as an articulation of problems they have. Henry Ford reminds us that if he had asked the market what they wanted, they would have asked for a faster horse. Customers will ask for more of the same while continuing to struggle with problems. Product managers need to identify those problems, not ask for the customers’ wish list of features.

Great product managers observe the problems and report them to Development—in the form of requirements."
Documenting product requirements is nothing more than restating problems that prospective customers face in terms of the conditions that must hold to solve or avoid them.

Monday, May 29, 2006

Thoughts on "Simple is Better"

Simple user interfaces are catching on. Sparse user interfaces generally make for products that are easier to use. The main Google search page is a model of simplicity, and it is one of the most visited pages on the web. It is almost difficult to do anything but search when you visit the page. But the simplicity of Google's search page is likely something that has been under constant attack.

Usability trades off against features. Forces within Google are no doubt constantly pushing to add features to the search page. The temptation is great for two reasons:
  • Since the page is so popular, you can guarantee traffic for whatever link or feature you add to it. When Google releases a new product, think of how tempting it must be to add a blurb to the main search page urging visitors to check out the new product.
  • Google could implement more flexible and customizable searches if it included some options on the main search page.
Resisting this temptation is hard. Whoever is resisting it faces "death by increment" arguments: "I know simplicity is important, but don't be unreasonable! What could be the harm of adding just one new feature to the page?"

For this reason, it's helpful to define usability metrics up front. The metric might limit the amount of time it takes for a typical user to accomplish the most common and important tasks. Or it might measure the likelihood that a novice user will perform these tasks successfully when visiting the page. Each new feature Google adds to the page will tend to increase the amount of time and decrease the likelihood that a visitor will perform the most common and important searches successfully.

Sunday, May 28, 2006

25 Worst Tech Products of All Time

PC World has an article on the 25 worst tech products of all time. Not surprisingly, a few Microsoft products made the list. But a couple of (older) Apple products also are on the list. Most interesting is reading the reasons that the products are on the list.

Saturday, May 27, 2006

Some Sort of Techno

I have a problem. I like the some of the trendy music they play at the bars I frequent. But I can't for the life of me figure out how to get a hold of the music so I can play it at home.

When I ask them what kind of music it is, people at the bars tell me "techno" or "house". But I've downloaded dozens of songs categorized as techno or house, and I have yet to find a single one that sounds like the music I hear at the bars.

The music is hard to describe except that it
  • is extremely repetitive
  • has no vocals
  • has a silly beat which almost makes me laugh
  • has a lot of bass
Any suggestions?

Friday, May 26, 2006

Importance of a Product Manager

James Shore writes about how important product managers are to a company. Excerpt:
"So... get a good product manager. If your company won't commit the resources for this critical member of the team, maybe your product isn't valuable enough to be developing in the first place."
Via Michael.

Thursday, May 25, 2006

Selling an Eleven Year Old Car

Every once in a while I hear a story about how increasing the price of a product stimulated sales. I feel compelled to repeat or cite the story here as a real-world example of the evils of price discounting. I've mentioned the free fridge story and the jewelry store "sale".

Now Chuck McKay has a story about selling his eleven year old car.

Wednesday, May 24, 2006

Dave Nicolette: Slouching Towards Waterfall

Dave Nicolette recently wrote an article entitled "Slouching Towards Waterfall". In it, he explores the tendency of software product development organizations to practice "fake" agile development or to slide back into waterfall development.

The article emphasizes the need for a change in mindset and the people to make agile happen.

Via Cote.

Tuesday, May 23, 2006

Comments on Better MRDs

Via Tyner Blain, I went to Michael's tips on writing better MRDs. Overall, I think Michael gives good advice. I left comments on both part 1 and part 2 of his entry. Check 'em out.

Monday, May 22, 2006

Temporal Segmentation

Laura Ries wrote (and recently updated) a blog entry on Wal-Mart a couple of months ago. The issue was Wal-Mart's experimenting with opening upscale versions of their stores with expensively-priced items. For various reasons about which I've written before, she did not consider the effort promising.

But then she wrote something somewhat obvious but that few product managers incorporate into their strategic recommendations:
"The notion that there are two types of customers, low end and high end, is a fallacy. The same customers will shop in different stores for different things at different price points on different occasions."
When you segment the market into various types of customers, you may have some overlap. Customers can belong to more than one segment; a single customer may fit a certain psychographic profile in one context but a very different one in another context.

Sunday, May 21, 2006

Water Tchotchkes

Today I volunteered for the Downtown Austin Neighborhood Association's Downtown Living Tour. I helped take payments and check people in at the Plaza Lofts.

To keep people hydrated and cool, several sponsors of the tour provided bottled water tchotchkes. The practice seems to have become more and more common; companies giving away bottled water with a custom label at events.

After downing a couple of bottles of water, I realized I had hardly even looked at the custom labels. It would be interesting to conduct a study of how many people do look at them.

Saturday, May 20, 2006

CEO Golf Rankings

Golf Digest has a biennial CEO handicap ranking in which they rank the best golfers who just happen to also be chief executives. The last rankings came out October of 2004, and we can expect new rankings later this year.

You can view highlights, facts, and figures here and the full rankings here.

Friday, May 19, 2006

Location-Based Scenarios

A friend recently forwarded me some articles about location-based businesses. Reading the articles, it occurred to me that the key to making strategic decisions about such businesses is to examine what I'm going to call location-based scenarios (LBSs).

Recall that a scenario describes a step-by-step user experience with your product or service. For location-based businesses, you can focus on the possible user experiences that involve your location. E.g.:
  • Neighborhood resident drives to store
  • Commuter visits store on way home from work
  • Distant resident makes special trip to visit store
And you'll want to include various permutations of these scenarios based on the customer's mode of transportation (walk/drive/bus) and what she buys/does at the store.

Then, as you study your market (by interviewing and surveying prospective customers), you profile the different types and determine the likelihood that each of them will participate in a given use case. You locate and position your business by choosing the scenarios that will be most profitable. You optimize the customer experience for these scenarios.

Thursday, May 18, 2006

Why Brands Have Real Value for the Consumer

Branding seems to a lot of people to be a lot of smoke and mirrors. In short, they consider it "marketing bullsh*t". But brands have real value.

As I've mentioned, brands have real value - not just for a company, but for the consumer - because they simplify consumer choices. It's worth something to the consumer to buy a trusted brand. They are willing to pay for the convenience of not having to thoroughly research all the pros and cons of competing products.

That's why it's rational - and not "marketing bullsh*t" - for strong brands to command a higher price.

Wednesday, May 17, 2006

Michael Antman on Qualitative Research

Michael Antman writes at MarketingProfs.com that qualitative research can be the most effective form of market research, despite the fact that it lacks rigor and requires the researcher to act on intuitions:

Money quotes:
"But the most-effective research isn't necessarily the most rigidly designed. In fact, a loosely designed program—whether qualitative or quantitative—may not appear as 'scientific' at first glance, yet sometimes can do far more to reveal real truths than more carefully crafted and comprehensive research programs."

"In short, rigidly designed research doesn't allow anything to fall between the cracks—because there are no cracks. Yet it is the stray answer, the unexpected insight, and the uncategorizable response that often creates the greatest opportunity for genuine insight on the part of the marketing professional."

Antman goes on to describe five ways for a market researcher to ensure she facilitates the surprise answers to questions that can't be scripted.

Tuesday, May 16, 2006

Caesuras

Your sales people and product managers have a powerful tool at their disposal: caesuras. A caesura is a pause in prose or melody, but it also is a pause in a conversation.

Sales people have long used the caesura to generate mild discomfort to stimulate concessions during negotiations. People feel compelled to fill lulls in conversation.

A product manager can use this technique as well. When conducting one-on-one interviews, sometimes the best approach is to be quiet and let the prospect say something unsolicited. Not only does the interviewer not know all the answers, she also doesn't know all the right questions.

Monday, May 15, 2006

Spiceworks Marketing

Some of the founders of Motive have started a new company in Austin, Spiceworks. From their web site, it appears that the company is working on some sort of IT product or service.

Several things about the web site impressed me:

  1. Almost every page on the site had the same call to action.
  2. The call to action was to sign up to be a co-creator of the product, which is powerful for generating word of mouth.
  3. For the most part, the content of the site is simple, direct, and avoids meaningless marketing jargon.
  4. The 'about' page succinctly states the problem the product is supposed to solve.
Here is an excerpt from the 'about' page:

"After talking with dozens of IT pros in small businesses, a team of systems management pioneers had their suspicions confirmed: these pros don't like the complex and expensive IT management solutions they're forced to choose from today. But no one has been listening to them... until now.
We listened carefully to what these weary IT warriors said. And now together, we're creating a simple, easy to use, yet powerful solution -- one that will help them win their daily IT battles."
The one criticism I have is that they do not state what their product does. I suppose they don't want to divulge much before the product debuts. It may also enhance the "whisper" campaign to be somewhat secretive. But I'm not sure how many serious prospects are going to enroll in their alpha program if the web site doesn't give them a bit more information.

Sunday, May 14, 2006

Marketing DK Sushi


Some Austinites know about DK Sushi; others don't. The Korean/Japanese restaurant opened more than 11 years ago, and it has almost a cult following of loyal customers. The restaurant is very successful despite the fact that not all of the Austin masses are even aware of its existence.

How has the restaurant achieved this success? Not through advertising. I've lived in Austin for 32 years, but I didn't even know about the restaurant until a year ago. The restaurant has no sign indicating its name and is located in a small shopping strip. The restaurant's marketing success has stemmed from the word of mouth generated from its good food and the personality of its owner.

The owner, D.K., dons a seventies outfit every Monday night and leads the restaurant in karaoke, interspersing the amateur musical performances with his own verbal raunch and sexual innuendo. On these special nights, he (or his alter ego, "Sushi Pimp") will spare no woman lewd or demeaning comments as they enter the restaurant. After D.K. gongs a karaoke performer, he downs a sake bomb with them.

His personality and performance on Monday nights distinguishes his restaurant from any other restaurant in town, and it's controversial enough to generate word of mouth. That word of mouth is all the marketing D.K. has needed to make his restaurant a success.

Saturday, May 13, 2006

Stock Market Indicators

I use the following three indicators to predict the behavior of the stock market:

  1. Energy prices. The two prices I monitor are crude oil and natural gas. Every single business and every single consumer experiences higher expenses when these prices increase.
  2. Interest rates. High interest rates not only dampen economic growth (and sometimes cause recessions), but they also compete for investment dollars. Why invest in the stock market if safe, interest-bearing investments yield a high rate of return?
  3. Business cycle. If the stock market and economy have been growing in a speculative fashion, expect a decline when the other two indicators are not favorable.
At this point, the indicators do not bode well for the stock market. The only positive factor is that the price of natural gas has actually plummeted since December of last year.

Friday, May 12, 2006

Recruiting for Usability Testing

One of the biggest obstacles to a successful product is usability. Many of the most successful products in today's economy (e.g. Google and iPod) have their usability to credit largely for their success.

If you don't measure usability, you likely will not end up with a product that's easy to use. Measuring usability requires:
  1. Specifying the metrics by which you will measure usability.
  2. Continually testing your product to ensure it meets the measurable constraints you specify.
The first task is simply a matter of specifying usability requirements and acceptance criteria. You can accomplish the second task a number of ways, but perhaps the most effective is to recruit outside test users.

If you plan to recruit outside test users, check out this guide from Jakob Nielsen, "Recruiting Test Participants for Usability Studies".

Thursday, May 11, 2006

Acceptance Criteria

When your QA team tests your product before release, you want it to satisfy the requirements that your product manager has specified. But as I have mentioned before, while requirements should always be testable in principle, it is not always practical to test them directly before release. When a requirement is not directly testable before release, what should your QA do to ensure the product satisfies it?

Your product manager, designers, and QA team should collaborate to agree on acceptance criteria. In many cases, acceptance criteria for a product are exactly the same as the requirements. But when it's not possible to test a requirement directly, you can define separate acceptance criteria that indirectly give you confidence that the requirement is met.

One example I have given of a requirement that may not be practical to directly test before release is:
Take, for example, the requirements for a new, super-reliable model of car. We might specify that the car should last seven years without repairs as long as the owner maintains the car according to a certain maintenance schedule and doesn't have a collision. But it is not possible to directly test whether the product meets these requirements without producing the car and driving it for seven years.
What corresponding acceptance criterion could you use to test this requirement before release?

The question becomes: "What can I test about the car before release so that I can be confident that the car would last seven years?" Designers and testers will be most qualified to answer this question, but one possibility is to set up a simulation that accelerates the wear and tear on the car. If the car lasts one week in the simulation, then we might be able to extrapolate that it would last seven years under real-life conditions.

Wednesday, May 10, 2006

Pricing in a Nutshell

Joel Spolsky wrote one of the best articles on pricing I have seen. It is a rather long article (yet well worth the read), but here is a "Cliff's Notes" version for you:
  1. The simplest theory of pricing is that you plot a demand curve (units sold versus price) and choose the single price for your product that maximizes profit.
  2. More complex pricing involves segmenting your market based on what they are willing to pay and pricing your product differently for each segment (e.g. via "Professional" and "Home" versions of the product).
  3. Segment-based pricing tends to turn people off, eroding customers' attitudes about your brand.
  4. In some markets, there are certain "magic" pricing thresholds. For example, software that costs over $1000 typically requires "serious corporate signoffs".
  5. Focus groups are a poor way of assessing the best price for a product.
  6. A high price often will positively impact the perceived value of your product, so the demand curve sometimes is upward sloping (more units sold at a higher price).
The one thing Joel leaves out is using negative pricing to determine the price of your product.

Tuesday, May 09, 2006

Seth Godin on Focus Groups

Looks like Seth Godin shares my attitude towards focus groups. Money quote:

"What focus groups can do for you is give you a visceral, personal, unscientific reaction to little brainstorms. They can help you push something farther and farther to see what grabs people. But the goal isn't to do a vote or a census. Any time your focus group results include percentages, you've wasted an afternoon."
One-on-one interviews, surveys, and ethnographic studies are usually more informative.

Monday, May 08, 2006

Bob Corrigan on Value Propositions

Over on his ack/nak blog, Bob Corrigan shares some sage advice on formulating value propositions. He references a useful value proposition template from Wikipedia.

Sunday, May 07, 2006

Availability

Your product has little or no value if its functionality isn't available to users. Bugs, crashes, and network outages are examples of what might make your product's functionality unavailable at times.

Product managers therefore typically attach an availability constraint (nonfunctional requirement) to each functional requirement of the product. If one of the functions of the product is to generate reports, for example, a product manager should specify how likely it should be at any particular time that a user will be able to use this functionality.

The question with nonfunctional requirements is always the metric - how you measure them. How do you measure availability? Here are some options:
  • mean-time-between-failures (MTBF) - the average amount of time elapsed between failures to deliver the functionality.
  • failure rate - the frequency that the product fails to deliver the functionality. Failure rate is the reciprocal of MTBF, and often is expressed in terms of failures per hour.
  • uptime - percentage of the time that the functionality is available.
  • downtime - percentage of the time that the functionality is not available.
  • mean-time-between-system-abort (MTBSA) - the average amount of time elapsed between complete "reboots" of the system.
  • mean-time-between-critical-failure (MTBCF) - distinguishes between critical and noncritical failures.
  • maintenance free operating period (MFOP) - the average amount of time that the functionality is available without any special intervention or system maintenance.
Of course, a prospective customer will always want 100% uptime, but such availability is typically not practical to achieve. If you base a contract on 100% uptime, you will almost certainly be in violation of your contract at some point.

UPDATE: Scott Sehlhorst adds a number of important observations in this entry's comments. One thing he notes is that I neglected to mention MTTR:
  • mean-time-to-repair (MTTR) - the average amount of time it takes to repair the system after its functionality becomes unavailable. For hardware products, it usually refers to the time to replace a module or part. For software products, it can refer to the amount of time it takes to reboot or restart the system.
Also, some people use "availability" to refer strictly to uptime, and consider all of these parameters to be "reliability" metrics.

Saturday, May 06, 2006

Exurbs

I enjoy living in downtown Austin. Living in the suburbs would require a complete change in my driving habits. Recently, I've heard the term "exurb".

According to Wikipedia, exurbs lie beyond the suburbs of an urban area. A few miles of rural, wooded, or agricultural land typically separates exurbs from the suburbs. Note that:

"Many environmentalists, architects, and urban planners consider exurbs to be manifestations of poor or distorted planning. Extremely low densities - often featuring large lots and "McMansions" - create heavy car dependency (a very deliberate design choice). This also makes the construction of municipal infrastructure and deployment of services unusually costly and inefficient."
Economic and tax policies that fuel the proliferation of exurbs thereby exacerbate the energy-dependence and environmental problems associated with automobiles. Lately, Austin municipal government officials have recognized the importance of density and have adopted policies that encourage urban over suburban and exurban development.

Friday, May 05, 2006

Apprenticing

Some product managers employ ethnography to strengthen their understanding of the market for their product. These product managers observe prospective customers in their natural environment.

A related concept is apprenticing. In Mastering the Requirements Process, Suzanne Robertson and James Robertson describe apprenticing as follows:
"Apprenticing is a wonderful way to observe the real work. Apprenticing is based on the idea of masters and apprentices. In this case, the requirements analyst is the apprentice, and the user is the master craftsman. The apprentice sits with the master to learn the job by observation, asking questions and doing some of the work under the master's supervision."

"If the user is doing his job in his normal workplace, he can provide a running commentary and provide details that may otherwise be lost. It is probably only while working that the user is able to describe his task precisely, tell you why he is doing things, and what exceptions can occur."
Apprenticing is a hybrid of ethnography and one-on-one interviews.

Thursday, May 04, 2006

Job Seeker as Product

This morning I had a lengthy conversation with a friend who is looking for a job. He is a lawyer at a law firm but wants to switch to a different one that specializes in oil and gas. He is worried that some of his paper credentials will work against him. I asked him:

  • What is the one thing about you that differentiates you most from other oil and gas lawyers? (distinctive competence)
  • Who are the people who will make the hiring decision, and what is the process they use to come to the decision? (buying process)
  • What are the major day-to-day headaches that the hiring partner experiences? (prospect problems)
Job seekers are products; the same marketing principles apply to them as to other products.

Wednesday, May 03, 2006

Starbucks, the Name

"Starbucks" is an example of a great brand name that is not descriptive of the product or company.

Erik Neu gives us a concise explanation of how the founders chose the name:
Moby Dick was indeed a book beloved of one of the Starbucks founders. He proposed naming the company Pequod, after the ship. "Pee-quod" was nixed by his partners, and they cast about for a name with some local flavor (local to Seattle, Washington). They came upon the name Starbo, from an old mining camp on Mt. Rainier, and liked it. Then the Moby Dick fan drew a phonetic connection between "Starbo" and the novel--the Pequod's First Mate named Starbuck. And Starbucks it was.
Contrary to popular myth, Starbuck was not a known coffee-lover.

Tuesday, May 02, 2006

The Importance of Patience and Consistency

We at Cauvin, Inc. counsel our clients to be patient and consistent with the marketing strategies we recommend. For example, when we recommend orienting marketing collateral and programs around a particular message, we caution that there will be many temptations to change the message or pollute it with other messages. The Law of Focus is hard to follow, but fundamentally important to your marketing efforts.

Lawson Abinanti recently wrote about this topic:
"Depending on the frequency of your marketing message's exposure, give it nine months to a year for it to start to sink in and establish a mental space in your target audiences' mind. You'll be tired of your message long before your audience is."
Don't forget that last sentence. Inside the bubble, your perspective is very different from your prospective customers'.

Monday, May 01, 2006

The Role of Brands in the Buying Process

Part of the reason brands are so important is that they simplify customers' buying decisions.

Making a decision to buy can be complex. Imagine what your customers would have to do to be thoroughly informed about their buying decisions:
  • Carefully consider all of the features that are important to them.
  • Spend time to determine all of the competing products.
  • Spend time collecting information on all of the different products.
  • Compare and contrast all of the information.
To be truly informed, a customer almost has to perform an exhaustive competitive analysis. Even if your customers were qualified to perform such analyses, it would take them days, if not weeks or months.

Brands simplify the buying decision. A trusted brand is like a trusted movie director. It's by no means full-proof, but can get some idea of whether a movie is good by whether a movie director you trust directed it.